Case ID: nys_33/html/0121-01.html
Source: Caselaw Access Project
Author: {"author": "BRADLEY, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

(85 Hun, 591.)
    VAN VOORHIS v. WEBSTER et al.
    (Supreme Court, General Term, Fifth Department.
    April 12, 1895.)
    Partnership—Firm Property.
    Under a partnership agreement which requires one of the partners to “furnish for the use of the copartnership, during its continuance, all necessary teams, * * * in conducting the business,” teams owned by such member, and applied by him to the use of the firm, do not become partnership property.
    Appeal from special term, Monroe county.
    Action by John Van Voorhis against Hawley E. Webster, Ella A. Webster, and Hannah F. Brown. From an order denying a motion to vacate a warrant of attachment, Charles E. Bostwick, as receiver of the firm of H. E. Webster & Co., appeals.
    Reversed.
    Argued before DWIGHT, P. J., and LEWIS and BRADLEY, JJ.
    Arthur Sutherland, for appellant.
    John Van Voorhis,'for respondent.
   BRADLEY, J.

The defendant Hawdey E. Webster, by means of false representations, obtained of the plaintiff $500, on the credit of his firm of H. E. Webster & Co. Afterwards, on September 27, lS9á, this action was commenced, and the warrant of attachment issued therein was levied upon partnership" property of the defendants, composing such firm. On the following day, in an action for the dissolution of the firm, etc., Charles E. Bostwick was appointed receiver of the partnership assets, and his motion to vacate the attachment was shortly thereafter made. The grounds recited in it are that the defendants have disposed of and are about disposing of their property with intent to defraud their creditors, and that they are secreting themselves, and keeping themselves concealed, to avoid the service of a summons. The motion to vacate the attachment was made, not only upon the papers on which it was allowed, but also upon other affidavits and papers. The latter ground so recited in the attachment was unsupported by the affidavits. The defendants did not seek to keep themselves concealed, and there was nothing in the affidavits tending to indicate that any of the defendants other than Hawley E. Webster sought to do so (Bogart v. Dart, 25 Hun, 395); and as to him the charge is not well sustained.

The question is whether or not the attachment is supported on the ground that the defendants had assigned or disposed of their property with intent to defraud their creditors, or were about to do so with such intent. The defendant H. E. Webster, having the office of postmaster at Brockport, H. Y., had appropriated to his own use government funds derived from the business of the post office to the amount of about $2,000. He was unable to pay it. The persons who were his sureties paid the amount. Thereupon he and his wife, Ella A. Webster, individually, and as members of the firm of H. E. Webster & Co., sold and transferred to them all their right, title, and interest in the partnership, together with their interest in the accounts, notes, claims, and demands belonging to the partnership, including the lease of the coal yard. They also conveyed to the same persons a farm of 60 acres. Mrs. Webster conveyed to them the premises on which the coal yard was located, and the lot on which she and her husband resided, and Mr. Webster transferred to them his horses, wagons, harnesses, etc. Those conveyances, sales, and transfers were made to secure and indemnify those persons on account of the liability they had assumed as sureties in the execution of Webster’s official bond as postmaster. The support of the attachment is dependent upon the fact that such sales and transfers were to some extent fraudulent as against the creditors of the firm. The articles import a limited partnership, of which the defendant Brown was a special partner. The casé, as presented here, does not show that all was done which was requisite to constitute her a special partner, within the statute. 1 Rev; St. pp. 764, 765. But, by the articles of copartnership, it was provided that she should, as a special partner, furnish $6,000; that Ella A. Webster should contribute to the capital stock of the firm the use of the coal yard, office, and appurtenances; and that Mr. Webster should “furnish for the use of the copartnership, during its continuance, all necessary teams, wagons, sleighs, and tools necessary to use in conducting the business; the teams, wagons, etc., now owned by said Hawley E. Webster being estimated to be worth $1,200.” The prescribed time of its continuance was until April 30, 1896. The title to the premises constituting the coal yard was in Mrs. Webster, and the title to the teams, wagons, sleighs, and tools seems to have remained in Mr. Webster while they were in the use and service of the firm. By transferring her right as lessor in the lease given to the firm and the coal-yard premises, Mrs. Webster transferred only her individual property; and by transferring the horses, wagons, etc., Mr. Webster sold no partnership property. And the assignment of their interest in the firm and in its assets by Mr. and Mrs. Webster was necessarily subject to all its debts, and” could result in nothing unless a surplus remained after all such debts were paid. Hayes v. Reese, 34 Barb. 151; Mowbray v. Lawrence, 22 How. Pr. 107.

It is urged on the part of the plaintiff that the sale by Hawley E. Webster of the horses, wagons, sleighs, and harnesses in the use of the firm was a sale of the partnership property. The fair construction of the terms of the articles of copartnership does not seem to characterize that as firm property. Webster did not agree to furnish any particular horses, wagons, etc., for the use of the firm, although he contemplated applying those he had on hand to such use. He merely undertook to furnish, for the use of the firm, all teams, wagons, sleighs, and tools necessary to use in conducting the business. This was his contract. It was a mere matter of undertaking on his part. He might at his pleasure, without breach, take any of those things out of the business, and put in others suitable for the service. The title remained in him. He might also perform Ms undertaking by furnishing to such use teams and tools belonging to others, and hired by him for the service. In transferring the horses, etc., Webster sold no property belonging to the firm.

It is urged on the part of the plaintiff that the use of the firm name in making transfer of the partnership property was unnecessary, and that the sale by Mr. and Mrs. Webster, who were the general partners, of their interest in the partnership property, apparently carried the title to the property of the firm. That proposition is not deemed sound. Treating this as a limited partnership, and the defendant Brown as a special, and not a general, partner (which cannot well be done as against creditors), the partnership business could properly be conducted by the general partners only; and although the special partner could not, without becoming a general partner, participate in the conduct of the business, she had an interest in the partnership property and business; and for that purpose, and tó compel the general partners-to account, she had, as between them, the same rights they had. 1 Rev. St. p. 766, § 18; Bank v. Colgate, 120 N. Y. 381, 24 N. E. 799; Bank v. Strauss, 137 N. Y. 148, 32 N. E. 1066. They, by the articles-of copartnership, adopted the firm name of H. E. Webster & Co., as that by which the partnership contracts could be made in the business by one or more and less than all of the partners. As has been suggested, the defendant Brown had a due proportionate interest with the others in the partnership property. The transfer made by the other members did not purport to, nor did it, include anything more than their interest in it. Those two could do no .more-than that without using the firm name in making a transfer. Bank v. Thomas, 47 N. Y. 15, 19. It is not seen that Mr. and Mrs. Webster attempted to dispose of the property of the partnership for the purpose of securing or discharging his individual liability. But it does appear that there was a consideration for the transfer which he made, and procured his wife to make in his behalf. There is no reasonable opportunity for imputation that in its purpose it was done with intent to defraud the creditors of the firm. And, as they disposed of no partnership property for his individual purposes, there seems to be no support for the attachment.

The order appealed from should be reversed, and the motion granted. All concur.