Case ID: abbn-cas_8/html/0076-01.html
Source: Caselaw Access Project
Author: {"author": "Neilson, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

LUNT v. LUNT.
    [No. 1 of this name.]
    
      City Court of Brooklyn; General Term,
    
      May, 1880.
    Fabtnebship.—Fictitious Names.
    Under the statutes forbidding the carrying on of business in the names of fictitious persons, it is not enough that the partnership had business relations with foreign countries, or had, for a period of five years or upwards, carried on business in .this State, under the name which is continued; but the requirement of the statute in respect to filing and publishing a certificate, &c., must also be complied with.
    Form of an answer setting up this defense to an action on a contract by the firm,—Held, sufficient.
    Appeal from judgment for defendant on demurrer to her answer.
    George D. Lunt and John Hegeman sued Elizabeth H. Lunt, alleging that at the times mentioned in the complaint, plaintiffs were, and have ever since been, copartners in business in the city of New York, under the firm name of Lunt Brothers. That defendant was. administratrix of the estate of Benjamin P. Lunt, and that they had paid her $1,899.55 proceeds of insurance of a steamers on her agreement that if any demand was made on the owners of the steamer she would repay such proportion as would belong to the estate of her intestate to bear.
    That thereafter such claims were made on them and plaintiffs were obliged to pay them ; and they sought to recover the proportionate share.
    The defense in the amended answer, upon which the decision turns, was pleaded in the following form :
    
      [Title of the cause, &c., <&c.]
    
    “ Second. And for a further and separate defense to the complaint herein, the defendant alleges upon information and belief, that at the times mentioned in the complaint, and while plaintiffs were carrying on business under the name of ‘ Lunt Brothers,! as therein alleged, the said name of ‘ Lunt Brothers ’ was a fictitious name, in that there were no Lunt Brothers in said firm, and was used by the plaintiffs in violation of the penal laws of this State (passed April 29, 1833, and the acts amendatory thereof); that said firm was not a commercial copartnership located and transacting business in a foreign country; and that all business done by them under said name was void and illegal, and that the transactions referred to in said complaint were made by plaintiffs under said name of Lunt Brothers.
    
      “ II. That at all the times aforesaid, the said plaintiffs were carrying on their said business without having signed and acknowledged any certificate declaring the person or persons dealing under the said name ‘ Lunt Brothers,’ and without filing the said certificate, so signed and acknowledged, with the clerk of the county-in which their principal place of business was at said time, and without publishing said certificate in a newspaper, as required by the statute of 1854, to relieve themselves from the provisions and penalty of said law of 1833, above referred to.
    “ III. That in consequence of the premises the contract sued on herein was and is illegal and void.”
    Plaintiffs demurred, and defendant had judgment; from which plaintiff appealed.
    
      Won. H. Taggart and John P. Adams, for plaintiffs, appellants.
    I. Plaintiffs are not within the object of the statute and amendments. That object is, to prevent any individual engaged in business from continuing to use the name of a firm with whom such person had been associated, or of using the name of a person not interested in such firm (Wood-r. Erie R. R. bo., 72 iV. T. 198). It does not appear from the second defense, that plaintiffs had been “associated” with any other person in Lunt Brothers, or used the name of a person not interested in such firm. The act of 1854 (also relied on by defendant) is entitled an act allowing the continued use, &c., and provides that “when the business conducted by any copartnership name shall be continued by some or any of the partners, it shall be lawful to continue the use of such name, provided that, in every change of the persons continuing such use, a certificate shall be filed.” It does not appear that plaintiffs continued to use the firm-name of Lunt Brothers after it had been used by some other person, nor that such firm-name ever existed before the plaintiffs used it, nor that plaintiffs are the survivors of a deceased partner, in whose lifetime the name of Lunt Brothers was used. The answer should have alleged that certain persons, naming them, had been associated in business under the name of Lunt Brothers ; that some, or one of such persons, naming them or him, had left the firm, or died, and that the plaintiffs, their assigns or appointees, were continuing the firm under the same name, or in the name of a person not interested in the firm, and that said firm-name did not represent an actual partner or partners.
    II. The transaction is not within the statute, because such transaction was not, in fact, and is not alleged in'the second defense to have been, a part of the regular business of the plaintiffs, such as a dealing between plaintiffs as “ vendors,” and the defendant as “ vendee,” or between plaintiffs as “ employers,” with the defendant as “ employee,” and beyond such dealing the statute cannot be extended by implication, or even by liberal construction (72 N. Y., above cited, p. 199). In that case the court says, “the shipping of the carriage was merely incidental to plaintiffs’ business—a separate and distinct matter, and in nowise in violation of the statute.” The same view is taken in Swords v. Owen, 34 Super. Ct. (2 J. & S.) 227; S. C., 43 How. Pr. 196, where the court admits that if the subject of the complaint had been a collateral transaction, instead of a part of plaintiffs’ regular business, it would not have been within the statute. The transaction in the present case was such a “separate and distinct matter, a collateral transaction,” and the answer in the second defense does not allege it to have been any other, nor to have been any part of plaintiffs’ regular business. The transaction was simply a payment to defendant of money belonging to her intestate, under an agreement signed by defendant, that if certain claims were presented to plaintiffs, and paid, they should be reimbursed by defendant personally.
    III. The act of 1833 is highly penal, and will not be extended by implication or construction (Wood v. Erie R. R. Co., 72 N. Y. 198). Plaintiffs are neither within the “mischief” nor the “terms” of the act; and if there is a reasonable doubt plaintiffs are to have the benefit of it (Chase v. New York Central R. R. Co., 26 N. Y. 525).
    IY. There should have been some distinct averment showing wherein the statute was violated, so that a distinct issue could have been raised (Austin v. Goodrich, 49 N. Y. 266).
    Y. The answer should show that the clauses of the amendatory statutes that would apply to plaintiffs, or would relieve plaintiffs, if liable to the statute of 1833, from its provisions and penalty, were not resorted to by plaintiffs (Langworthy v. Bowen, 29 How. Pr. 92).
    YI. Before the court will declare the plaintiffs remediless it will require defendant to observe precisely and minutely, all the forms (if the court should hold that plaintiffs are within the statute), and will put the defendant to an action for the penalty, with all the strict observances required in such actions (Lathrop v. Lathrop, 47 How. Pr. 533). Indeed, plaintiffs have a right to adopt any name for the transaction of their business (Crawford v. Collins, 45 Barb. 269), and even to bind themselves by different partnership names in their different places of business (Wright v. Hooke, 10 N. Y. 51).
    
      Lewis & Beecher, for the defendant, respondent,
    Cited: Wood v. Erie R. R. Co., 72 N. Y. 196; affirming 9 Hun, 648; Swords v. Owen, 43 How. Pr. 176, and cases cited; O’Toole v. Garvin, 1 Hun, 92.
    
      
       See 7 Abb. New Oas. 295, and cases cited.
    
   Neilson, Ch. J.

It is claimed on behalf of the plaintiffs that the statutory prohibition as to carrying-on business under the names of fictitious persons did not apply to them or to their claim ; and that if it did the answer to which the demurrer was interposed was sufficient.

The act of 1833 (L. 1833, c. 281), which provided that “no person shall hereafter transact business in the name of a partner not interested in his firm,” has been modified in some respects. The act of 1854 (L. 1854, c. 400), which allows any of the copartners, in continuing the business of a firm, to continue the copartnership name, applies only to copartnerships having business relations with foreign countries ; and the act of 1863 (L. 1863, c. 144), confers the same right upon members of firms having such relation, and of firms whose business had been carried on in this State for the period of five years or upwards. But under those statutes of 1854 and 1863 the partners thus electing to continue the firm name must file and publish a certificate of the facts as therein provided.

I am of opinion that the claim which the plaintiffs seek to enforce was not collateral to or a mere incident in their business., In this point of view the case may be distinguished from Wood v. Erie R. R. Co. (72 N. Y. 198), and from Hoyt v. Allen (2 Hill, 322).

It appears from the complaint, that at the time mentioned therein, the plaintiffs were and have ever since been copartners in business in the city of New York under the firm, name of “ Lunt Brothers.” The defendants’ agreement with Lunt Brothers and the business to which it related' are then set forth and judgment demanded. Thereupon the defendant, by her answer, claiming that the said firm name of Lunt Brothers was used by the plaintiffs in violation of the statute, and that the business done by the plaintiffs under that name was illegal and void, alleges that the said name of “ Lunt Brothers ’’ was a fictitious name in that there was no Lunt Brothers in the said firm. That was an issuable fact; and the allegation, if true, would have been sufficient under the statute of 1833. The answer further states, to meet the provisions of the act of 1849 (L. 1849, c. 347), “that said firm was not a commercial copartnership located and transacting business in a foreign country.” , If not, thus located the firm might have had “ business relations with foreign countries.” But as the answer set up and the demurrer admits, that the required certificate was not signed, acknowledged, filed or published, it was not necessary for the pleader to take up the other clauses of the acts of 1854 and 1863 and negative the supposed claims of the plaintiffs under each of them. If the plaintiffs had been members-of a prior firm known as Lunt Brothers, and in continuing the business had elected to continue the use of that firm name, if the firm had business relations with foreign countries, or had carried on business in this State under that name for a period of five years or upwards, it would still remain for them to observe the other requisitions of the statutes.

The act of 1833 is highly penal in its nature,and operation, and is not to be extended by construction to the transactions not within the spirit and terms of its prohibition. But, fairly applied, it is salutary and favorable to legitimate business. Its object was well stated by Miller, J., in 72 N. Y. 198. He says, “It is quite obvious that the object in view was to prevent an individual engaged in business from continuing tb use the name of a member of the firm, with whom such person had been associated, after such member had retired from the concern, or of using a name of a person not interested in such firm, and thus to induce credit to be given by those trading with such person, and so impose upon-the public. It was in fact to prevent such person from obtaining a false credit on the strength of a name which had been withdrawn, or which he had no authority to make u e of.”

It is equally obvious that in amending the statute the legislature intended to qualify its severity only in favor of those persons who should conform to the conditions imposed. If the certificate, showing who were in fact the members of the copartnership as con-tinned, and what former member was concerned in it no longer, be filed in the proper clerk’s office, a matter of record, and be published, persons having business transactions with the firm would be properly advised. Thus, and only thus, would parties in interest be protected.

With these views I am in favor of affirming the judgment appealed from, with costs.

McCue, J., concurred.