, 1873-02-05
The Cook County National Bank
Fail to Recover.
The Silent Partners Held to 30 IRE.
sponsible for HUM {; Seett's
Debts.
Application Of the Law to Dormant
Members Of Firms.
Opinion Of Judges Hopkins and
Blodgett.

lSlOuSctts
In tho United States District Court, yesterda;
morning, Judge Hopkins delivered tho joint
opinion OF the Court in the Mum i Scott case.
Before doing 30 he read the following
COMMUNICATION FROM Mr.. AnxoUn:
wish to state ccrrccion OF ny testimony that
the n1ms Of Mum Scot: in beLaIr Of tho elevator
firm answered no. sSould have answered that
did not unless note given for coal Of abou. $780, to
10 used 1t the eeT.tors and note for machinery
to be used at the elevators, we're such inztauccs
answered truly at tbs time, far remembered,
cation with ar Wheeler desire to be eatrc!; acca-
rate and therefore n2 lie ha statement snd vii answer
further ii the parties wish me- to do 60. -
1asroe tia: the foregoing may be fled Al part Of
The evidence GEORGE c. GA.1pEELL,
Attorney for the Petitioner.
TIE COURT THEN SAID:
In order to clear understanding Of decision, 1t
will bo necessary to state the issues between tho par
extent. The Cook County National Bank flied pett-
ton Ia bankruptcy against he firm Of Mum Scott,
in Which they aieeo that such firm Is composed Of Ir
Munger, Hiram Wheeler, Charles II. Wheeler, dec-ge
T. Wheeler. James +. Mckay, Perry H. Smith, and
indebted to the bank upon tso notes Of 900 each,
executed 6y 4 snd IL tso h. ,,a name of Mum 4
to George Z. Cilttnden order tue other bearius
date on tho 11th Of October 1872 due in ninety days,
PAYABLE to eaii htnk, executed By 11unn Scott.
tlsa. the nr1n Of Mum Scott, being traders, had
stopped payment Of their commercial apor Uhs notes
described) nnd had not resumed within reI.od Of
fourteen dayr up to the time Of filing tho petition
second that tho firm Of Mum l. Scott, tho o5d Of
September 1874 transferred its property end effects to
of ii tho parties constituting tie frm cf a1una
ssa3 asspS r:a : ss'sy :aa
third, that the firm ot Mum Scott. The 23d of
September, 1872 transferred to George Armour Co.,
George Armour and others, for its uee, I'll the pro
erty and asses, hinder and delay Tic creditors Of
Mum l. Scott.
The prayer Of the petitioner fe, that th5 firm Of
petition, may DO adjudged bankrup.s All the p.rtt1s
named, except Ira Y. Munn and George l. Scott, At
lie notes set up denying aat they executed tho notes,
or that they members Of the firm Of Mum
Scott, who executed the notes, and denying a the
acts Of bankruptcy stated In the petition. Upon the
Issues thus Joined the parties proceed to trial.
by the testimony introduced, appears that before
unn seo sa md interssted ste IN
that the business Of receiving, storing, shipping,
business. It also appears that PORTION of tie other
parties doing like business under other na1nes,
&c. is so and oxnne II sd
business ct the other clevnsos in this city, entered IL
o t. e se4 az 'ssd ss ts to sassss
Ping p'a eran, n and ssf'sa 70 avid. tfo proats
the agreement. That agreement rcl.tcs ouy to tho
business Of recertn storing and shipping grain, In
eading he ksspng in 5spas the slsva.o5s 9 .nd ms
pairs and the rebuilding in case Of destruction. Ihe
business was to be carried on nte:r Two names that
Scott, City sud Union In tho ct Mum l. Scott
and that at the elevators On the North Side IN the nane
ot Munger, Wheeler Co. Receipts for grain received
n
name Of 1unn Scott, aad at the lastsr In the nans
of l Munger, Thssf cg .aSns ta saznos' of
nrn, OF "pooled.3 Is It was Called, and
divided IN certain .greed portion. after paying the
Of m the r., rnS1
done in that way by that firm unti the ed Of Sep
teraber, 1877. Some new pcrttes having been intro
tire Of the date OF the rft note mentioned in the ret
ton, the Parties named In the petition wero members
that partnership to do the elevator business Ira L:
Munu and George L. Scott, under the name Of Mum
h Scott, continued to do business firm o'1tside Of
grain and produce and otler speculattous whclly
distinct from the elevator business, aud
no NJ atsrest aH1 or conpecon wsterer Il also appears
that in 1855 1866 Mum Scott entered into part
ner1h1p with otEer parties under the nrm name OF
Mum, Norton + Scott, which sst firm engaged In
general commission business. Tho firm Of Mum
Scott, composed Of Ira Alunn and George L. Scott,
alone continued to do business until the bankruptcy
proceedings wers commenced against tho firm of
Mum. Norton Scott on OF about the LIST Of
Inst 1t does not appear known to others than
the members OF the firm themselves, who composed the
firm doing warehouse elevator business, until after
bankruptcy proceedings zero coinrnenced against
recepta ] were signed NUM- / scott,n and another
portion 81 Munger, Wheeler l. Co." There u no evl-
dence that the public, the dealers with the Arm,
know VII that any other peraons were interested IN
that business than the parties whose appeared
upon tho receipts, OF hat tie tTo firms we're composed
fart that in fhA
that he understood bound anybody but Kim
sell aud Nj. Scott; and Mr.. Armour, anotEar
py unn e' so e nGn' Lis s neweae Sed
cept two, one being fur supplies and Tie other Tor ma-
It appear that tie elevator firm did any other bus
ness interested in any business except the re-
eeyng storing snd shipping Of grain IS IN mentioned
produced goes that Company never incurred any la
bility in any other manner OF form than by giving
warehouse receipts for grain stored II their eesator
or for expcneea incidental to conducting their bua-
ness; vho Mum Scott, as separate aEIn Tese ere,
%ars ana IN as Say ao and
using their firm and individual credit
apfe rSs eSs1 ns both H,s e hess se
firms wero in good credit until the latter part Of An
gust last when they became involved IN wheat cor
These the facts established By the evidence N
relation the partnership Of the respondents and the
business do ne by them a. such partnerf n1a, anG 81
connection with the firm is very slight but In view OF
the couzse pursued uponthe trial may the alsenco
OF any rebutng testimony, be considered a. euiiens
It preferable also to dispose Of this case 2pon me
merits, rather than upon . technical onjec-
ton Of that kind taken nfter, tls elose los.
Of the trfa or evidence. II the counsel for the peu
toner had omitted inquire Of the parties "aen upon
the stand particularly In reference to their being mem
brs under the impression that had been proven the
Court would have allowed him to supply 1t even after
tho commencement Of the argument Of the case FROM
these facts it would appear that all Of The nebers q
tho elevator firm, except those whose names wete ussa "a
were silent or dornsnt Partners end are only 10 %
held liable such. On the face Of these notes the ony
names are Mum Scott; tho other respondents are
strangers to the transaction The contract o1 discount
was made with Mum Scott aud does not Perse ereate
any liability ~ to the others. The liability Of
= partner ariscs from rlcdsing big name;
/. bis name is introduced into the urn,
thereby holding 1t cat security to the community,
or from RECEIVING profits II he Is secret partner Tho
nrincinla upon witch the liability as secret partner
rests i essentially d1crc2t from that Of known OF
omen PARTNER whose name appears IN tue btslness
secret rrtpcr ts Liable not because credit 10 supposed
to have becn given the firm By reason OF his eonncc-
tfon with H. bu: because he is of the contracting
1arfs audi benefited by the profits Of the contract 70
that in o-er charge secret partner foE debts con-
tr,rtcd in the name Of the firm OF which he Is dor
mant r.r.ucr s necessary to sho* that such DEBTS