Case Name: Peter Suau, Respondent, v. George Caffe and Adele Marie Caffe, Appellants
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1890-10-14
Citations: 122 N.Y. 308
Docket Number: 
Parties: Peter Suau, Respondent, v. George Caffe and Adele Marie Caffe, Appellants.
Judges: 
Reporter: New York Reports
Volume: 122
Pages: 308–322

Head Matter:
Peter Suau, Respondent, v. George Caffe and Adele Marie Caffe, Appellants.
The common-law disability of a married woman to engage in a business as a copartner or jointly with her husband was removed by the provision of the act “concerning the liability of husband and wife” (Chap. 90’ Laws of 1860), which authorizes a married woman to “ carry on any trade or business * * * on her sole and separate account.”
When, therefore, a husband and wife assume to carry on a business as. copartners, and contract debts in the course of it, the wife cannot escape liability on the ground of coverture. (Haight, Potter and Bbajdley, JJ., dissenting.)
Ohcmhovet v. Cagney (3 J. & S. 474), so far as 'it holds that husband and wife cannot be copartners, overruled.
(Submitted April 25, 1890;
decided October 14, 1890.)
Appeal from judgment of the General Term of the Supreme Court in the first judicial department, entered upon an order made December 31, 1886, which affirmed a judgment in favor •of plaintiff entered upon a verdict.
On the 29th of January, 1881, the defendants, then and now husband and wife, executed, and June 1, 1881, recorded in the office of the cleric of the city and county of New York a certificate by which they assumed to form a limited partnership pursuant to the ¡Revised Statutes for the purpose of importing and dealing in foreign goods at the city of New York under the firm name of “ George Caffe,” -which was to continue from February 1, 1881, to February 1, 1886. The husband was the general and the wife the special partner, she contributing §25,000. Thereafter they carried on a business of the kind specified at the city of New York, under the firm name selected, until after the debt to the plaintiff was contracted. Between ¡May 23, 1882, and December 6, 1883, the plaintiff loaned money to “George Caffe,” on account of which the defendants conceded that there was due the plaintiff January 1, 1884, $26,799.93, to recover which this action was brought. The defendants interposed two defenses: (1) That the partnership or business relation, whatever it was, which had existed between them before May 16,1882, was on that day dissolved with the knowledge of the jilaintiff; (2) that a husband and wife cannot, under the law of this state, be partners in business; and that although they agree to become so, transact business and incur liabilities as such, the wife is not liable to the creditors of the firm.
The first question, an issue of fact, was contested before a jury and determined in favor of the plaintiff.
The second question, an issue of law, was decided in favor of the plaintiff at the Circuit, which ruling was affirmed at the General Term. From this judgment the defendants appealed to this court.
William Tharp for appellants.
The defendant Adele M. Caffe being a married woman, could not bind herself by contract unless (1) the obligation was created by her in or about carrying on her trade or business, or (2) the contract relates to or is made for the benefit of her separate estate, or (3) intention to charge the separate estate is expressed in the instrument by which the liability is created, or (4) the debt was created for property purchased by her. (S. C. Bank v. Pruyn, 90 N. Y. 250.) There can be no valid business partnership in this state between husband and wife. (Chambovet v. Cagney, 3 J. & S. 474; Laws of 1884, chap. 381; Noel v. Kinney, 15 Abb. [N. C.] 403; Jacquin v. Jacquin, Id. 400; Fairlee v. Bloomingdale, 67 How. Pr. 292.) At common law, a business copartnership between husband and -wife was impossible. They were regarded as one person, and no contract could be made between them. (2 Kent's Comm. 37, 129; Bertles v. Nunan, 92 N. Y. 160; Johnson v. Rogers, 35 Hun, 269, 270; Potter’s Dwarris on Stat. 185; Noel v. Kinney, 15 Abb. [N. C.] 407; Bogert v. Gulick, 65 Barb. 322; Coleman v. Burr, 93 N. Y. 25; Savage v. O'Neil, 42 Barb. 364; White v. Wagner, 25 N. Y. 328; Aultman v. Obermeyer, 6 Neb. 260; Hooker v. Boggo, 63 Ill. 161; Plumer v. Lord, 5 Allen, 402; Laws of 1884, chap. 381; Coles v. Coles, 15 Johns. 159; Lawrence v. Taylor, 5 Hill, 107; S. C. Bank v. Pruyn, 90 N. Y. 250; Nash v. Mitchell, 71 id. 199; Cashman v. Henry, 75 id. 114; Lord v. Parker, 3 Allen, 127; Lord v. Davison, 3 id. 131; Edwards v. Stevens, Id. 315; Haas v. Shaw, 91 Ind. 384; Scarlett v. Snodgrass, 92 id. 252.) If the partnership sought to be established was one to which the defendant Adele M. Caffe had no legal capacity to belong, or if she could not form a partnership with her husband, then any representations that may have been made by her to the plaintiff do not estop her from setting up coverture. (Plumer v. Lord, 5 Allen, 460; Brewster v. Striker, 2 N. Y. 19; Bodine v. Killeen, 53 id. 96; Baker v. U. M. L. Ins. Co., 43 id. 283; Hutchins v. Hubbard, 34 id. 24; Baker v. Lamb, 11 Hun, 519.) Although the money may have been advanced by the plaintiff, relying in part on the credit of the wife (Adele M. Caffe), yet the wife is not liable. (M. B. & M. Co. v. Thompson, 58 N. Y. 80; Baker v. Lamb, 14 Hun, 519; S. N. Bk. v. Miller, 63 N. Y. 639; S. C. Bk. v. Pruyn, 90 id. 250; White v. McNett, 33 id. 371; Yale v. Dederer, 68 id. 329; Bertles v. Nunan, 92 id. 160; Cashman v. Henry, 75 id. 103; Frecking v. Rolland, 53 id. 422; Tremeyer v. Turnguist, 85 id. 516; Laws of 1860, chap. 96, §§ 1, 7; Nase v. Mitchell, 71 N. Y. 199; McVey v. Cantrell, 70 id. 295.) The exce]ption of defenaants to the admission of the certificate of partnership in evidence upon the ground that at the time of making and filing it there could not be any valid partnership between the defendants, they being husband and wife, was well taken. (Nash v. Mitchell, 71 N. Y. 199, 204; Zimmermann v. Erhard, 83 id. 74; Bertles v. Nunan, 92 id. 152; Lynn v. Smith, 20 Wkly. Dig. 459; Johnson v. Rogers, 20 id. 568; Fairlee v. Bloomingdale, 14 Abb. [N. C.] 341; Noel v. Kinney, 15 id. 403; Jacquin v. Jacquin, Id. 408; Kauffman v. Schœffel, 22 Wkly. Dig. 51.)
Abram Kling for respondent.
In accordance with the provisions of the Devised Statutes, where parties enter into a limited c^artnersliip and there is a violation of its 2>i’ovisions, the S2>eeial partner becomes liable as a general |)artner. (2 D. S. [6th ed] 1154, § 8; Sharp v. Hutchinson, 100 N. Y. 533; Durant v. Abendroth, 97 id. 122; Bodine v. Killeen, 56 id. 93; Noel v. Kinney, 106 id. 74.) The defendant Adele was liable as to creditors of the firm of “ George Gaffe ” as a partner, though not liable as between her husband and self. (Bitter v. Rothman, 61 N. Y. 512; Scott v. Conway, 58 id. 619; Noel v. Kinney, 106 id. 74; Hamilton v. Douglass, 46 id. 218; Zimmermann v. Erhard, 8 Daly, 311; 83 N. Y. 74; Armitage v. Mace, 96 id. 538.)

Opinion:
Follett, Ch. J.
But a single question is involved in this appeal, which is whether a married "woman who contracts a debt with her husband in a business carried on for their joint benefit can avoid liability for it on the ground of coverture. The second section of chapter 90 of the Laws of 1860, provides that: " A married woman may carry on any trade or business * "x" on her sole and separate account." It is urged that this language is not broad enough to authorize married women to engage in business as partners or jointly with others, or at least with their husbands, but .that the statute simply confers power on them to contract by themselves and apart from others. This construction is too narrow and fails to express the evident intent of the legislature, which was not to prescribe the mode in' which married women should carry on their business, but to free them from the restraints of the common law and permit them to engage in business in their own behalf as free from the control of their husbands as though unmarried. Before this statute, the profits of their business belonged to their husbands and the' words " sole and separate account " were intended to convey the idea that the beneficial interest of any business in which they might engage belonged to them and not to their husbands. Since the enactment of this statute it has been held that husbands and wives may legally contract with each other in reference to their separate estates (Owen v. Cawley, 36 N. Y. 600; Bodine v. Killeen, 53 id. 93); that they may become agents for each other (Knapp v. Smith, 27 N. Y. 277), and that a husband may assign to his wife a chose in action (Seymour v. Fellows, 77 N. Y. 178).
In Freeking v. Rolland (53 N. Y. 422), it was held that .a wife could not escape liability on a joint promissory note given by herself and her husband in payment for property purchased by her by reason of her coverture, nor by reason of the fact that she contracted jointly with her husband.
In Scott v. Conway (58 N. Y. 619), the defendant and her husband were engaged in running a theatre under the name of " Mrs. F. B. Conway's Brooklyn Theatre," pursuant to a contract by which the profits and losses were to be equally shared between them. To an action brought for the recovery of the value of goods sold the wife interposed the defense that she was not liable for the debt, because it was not contracted in any trade or business carried on for her sole or separate account or benefit, but for the benefit of a business carried on by herself and husband for their joint benefit. This defense was overruled in the Supreme Court and in the Court of Appeals.
Bitter v. Rathman (61 N. Y. 512) was an action for an accounting between partners. The plaintiff, a married woman, had been engaged in business with the defendant under the name of IT. Batlnnan & Co. The trial court found " that the plaintiff, in secret trust for her husband, was the partner of the defendant," and that " in respect to the public she was to be regarded as the real partner," and ordered an accounting as to the partnership affairs. Gbay, Commissioner, said: "Yet she, having suffered herself to be regarded by the public as a partner, was liable as such to the creditors of the ostensible firm; and having thus exposed herself to such liabilities, if any should be found to exist, she had to any such extent no right, as against either the defendant or her husband, to be protected out of the share which would belong to her in her capacity as trustee for her husband, at whose instance she undertook the trust." This case does not decide that a wife may or may not be a partner in business with her husband, but it, in effect, decides that a married woman may be a partner with a third person, and that her husband may act as her agent in the business of the firm.
In Noel v. Kinney (106 N. Y. 74; 15 Abb. [N. C.] 403), an action w.as brought against the husband and wife on a note signed " J. P. Kinney & Co.," payable to the plaintiff. The complaint charged that the defendants were liable as partners under the name signed to the note. The husband made default, but the wife answered that she was a married woman, and that the note was executed by her husband. On the trial the plaintiff put the note in evidence, and it appeared that the defendants were husband and wife, and there was evidence that the note was given for mirrors placed in houses owned by the wife. A motion to dismiss the complaint on the ground that the note on its face showed that it was not given in respect to her separate business or her estate, was overruled. In considering this question Daufobth, J., speaking for a unanimous court, said: " In the case cited (Frecking v. Rolland, 53 N. Y. 422), she became a joint contractor with her husband, but she was as much bound to perform the joint engagement as if the undertaking had been several, and she did not escape liability because her joint contractor was her husband. It was not necessary to inquire in that case whether the one paying could obtain contribution from the other, nor is it necessary to go into that question here. In that .case both undertook to pay the creditor. Can it make a difference in 'the measure of liability that in one case the married woman entered in her own name and her husband in his name in the execution of a joint obligation, and in the other case adopted a name which represents a joint liability, -which may, in effect, also be several ? Partners are at once principals and agents — each represents, the other — and if in the relation of partnership there are obligations which a married woman cannot enforce against her husband, or the husband against the wife, they involve no feature of the present action, which asserts only the obligation of a debtor to discharge her debt, or the obligation of a promissor tó fulfill her promise."
Partners are the agents of each other and are jointly and severally liable for the debts of the firm, these being two of the essential elements of a contract partnership. It being settled that husbands and wives may be the agents of each other, and that they may bind themselves by joint contracts, entered into with third persons, we see no warrant in the statute for exempting them from liability to creditors for debts incurred by firms of which they are members. It has been so held in Graff v. Kinney (37 Hun, 405; 15 Abb. [N. C.] 397); Zimmermann v. Erhard (8 Daly, 311; 83 N. Y. 74). Opposed to these are Chambovet v. Cagney (3 J. & S. 474); Kaufman v. Schoeffel (81 Hun, 140); Fairlee v. Bloomingdale (61 How. 292; 14 Abb. [N. C.] 341; 38 Hun, 230).
Hpon principle and authority, we think that when a husband and Avife assume to carry on a business as partners, and contract debts in the course of it, the wife cannot' escape liability-on the ground of coverture.
The judgment should be affirmed, with costs. .