Case Name: RALPH H. WHITE and HENRY A. BELCHER, Plaintiffs, v. SAMUEL EISEMAN and MOSES L. EISEMAN, Defendants, Impleaded, etc.
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1890-12
Citations: 65 N.Y. Sup. Ct. 484
Docket Number: 
Parties: RALPH H. WHITE and HENRY A. BELCHER, Plaintiffs, v. SAMUEL EISEMAN and MOSES L. EISEMAN, Defendants, Impleaded, etc.
Judges: 
Reporter: Supreme Court Reports (Hun)
Volume: 65
Pages: 484–491

Head Matter:
RALPH H. WHITE and HENRY A. BELCHER, Plaintiffs, v. SAMUEL EISEMAN and MOSES L. EISEMAN, Defendants, Impleaded, etc.
Limited partnership—money paid in by special pairtnersby a check, not cashed when the affidavit and certificate were made—liability of the special pmtners.
Where an affidavit and a certificate, made under section 8 of title 1 of chapter 4 of part 2 of the Revised Statutes (1 R. S., 765), relating to limited partnerships, states that $10,000 contributed by two special partners, named therein, to the common stock, has been actually and in good faith paid in cash, and it appears tha<, in fact, no cash payment had been made by the special partners at the time the affidavit was verified, but a check for $10,000 had been drawn on that day by such special partners, which was certified on the following day, and was deposited to the credit of the partnership on the next day thereafter, on the afternoon of which latter day the certificate and affidavit were filed and recorded in the proper county clerk’s office, and that the next day the check was paid in due course of business to the bank in which it had been deposited.
Held, that the special partners were liable for the debts of the partnership. (Barrett, J., dissenting.) . .... .
That the truth of the affidavit was to be determined at the date at which it was sworn to, and not as of the date at which it was filed in the county clerk’s office, and that the affidavit was, therefore, false.'
Exceptions ordered to be heard at the General Term in the first instance, after a trial at the New York Circuit on October 15,1889, at which a verdict was directed in favor of the plaintiffs for $1,463.
The action was brought to recover from the defendants, who were special partners in the firm of Spencer & Perkins, a demand existing in favor of the plaintiffs against that firm, on the ground that the defendants were liable as general partners.
The complaint alleged, among other things, “ that the amount of capital stated in the said certificate and affidavit to have been paid in cash by the defendants, Samuel Eiseman and Moses L. Eiseman, had not, either at the time of the execution or filing of the said certificate and affidavit, been paid in cash, and that such certificate and affidavit are false.”
Charles Austin McMahon, for the plaintiffs.
A. Blwmenstiel, for the defendants.

Opinion:
Bartlett, J. :
Section 1 of the title of the Revised Statutes relating to limited partnerships (1 R. S., 165), requires that at the time of filing the original certificate an affidavit of one or more of the general partners shall also be filed in the office of the county clerk, stating that the sums specified in the certificate to have been contributed by each of the special partners to the common stock have been actually and in good faith paid in cash.
The next section (§ 8) is in the following words: "No such partnership shall be deemed to have been formed until a certificate shall have been made, acknowledged, filed and recorded, nor until an affidavit shall have been filed as above directed; and if any false statement be made in such certificate or affidavit, all the persons interested in such partnership, shall be liable for all the engagements thereof, as general partners."
The question in the present case is whether the defendants Eiseman are liable as general partners in the firm of Spencer & Perkins by reason of the fact that a false statement was made in the statutory affidavit. The affidavit was made by Sidney S. Spencer, one of the general partners in the firm, and was sworn to in the county of Rensselaer on the 3d of August, 1886. The certificate, which appears to have been executed and acknowledged by all the partners on the same day, specified $10,000 as the sum contributed by the special partners, Samuel Eiseman and Moses L. Eiseman, to the common stock. The affidavit stated " that the sum specified in said certificate to have been contributed by the special partners to the common stock has been actually and in good faith paid in cash." As a matter of fact, however, no cash payment of the contribution of the special partners had actually been made at the time this affidavit was verified, nor was any cash payment thereof actually made at any time on the 3d day of August, 1886. A check for $10,000 on the Pacific Bank, payable to the order of Spencer & Perkins, was drawn by the defendants in the city of New York on August 3, 1886, and delivered to Sidney S. Spencer, the general partner who made the affidavit. The check was uncertified, but was certified on the following day, the fourth, and was deposited to the credit of the partnership a day later, on the fifth, in the city of Troy, at two o'clock in the afternoon. The certificate and affidavit were filed and recorded in the office of the county clerk of Bensselaer county on the same afternoon at a quarter to five o'clock. The check was paid in the due course of business on the 6th of August, 1886, to the Troy Bank in which it had been deposited.
Upon these facts the plaintiffs insist that the defendants Eiseman are liable as general partners, because, at the time the affidavit of the general partner was made it was not true, as therein stated, that the contribution of the special partners had been paid in cash; while the defendants contend that, inasmuch as the check had been certified and deposited in the bank account of the firm before the certificate and affidavit were filed, the statement contained in the affidavit must be regarded as true, because the affidavit is to be deemed to speak, not from the time when it was verified, but from the time when it was placed on file in the office of the county clerk.
The defendants, in support of their position, cite the various decisions holding that a substantial compliance with the terms of the statute concerning limited partnerships is all that will be insisted upon by the courts; that mere defects of form may be overlooked and'disregarded ; and that the provisions of the act should not be too strictly construed. There is no occasion to question the correctness of any of these propositions in the slightest degree in the case before us. Here, if there has been any failure to comply with the requirements of the statute at all, it is a failure in a matter of substance. The truthfulness of the statutory affidavit-is made, by the very terms of the law itself, essential to the valid constitution of a limited partnership, so that the only test which it is necessary to apply is a reference to the facts to ascertain whether they accord with the statement in the affidavit. In the present case it is plain that they do not, if the affidavit is to be construed as speaking with reference to the existing state of things at the time when the general partner swore to it. On that day there had been no act by or in behalf of the special partners which amounted to a completed cash payment of their contribution to the capital on any theory. The defendants cite Durant v. Abendroth (69 N. Y., 148) and the Metropolitan Bank v. Sirrett (97 id., 325) as authorities to the effect that the giving of a certified check is equivalent to a payment in cash; but whether that be so or not, no one pretends that the giving' of an uncertified check by the special partners to the general partners constitutes the cash payment which the statute prescribes. The question upon which the case at bar, therefore, turns is simply this: Is the truth of the statement contained in the affidavit to be determined as of the time when the affidavit was filed with the county clerk, or with reference to the time when the affidavit was actually verified by the general partner who made it %
So far as the certificate is concerned, it has been held to be sufficient that it shall be true at the time of filing and recording it. (Ropes v. Colgate, 17 Abb. N. C., 136.) It may well be that this unverified instrument can properly be signed before the events of which it is intended to be evidence have actually come to pass, so long as the signers are actuated by the intent that it shall not be used in any manner until the statements which it contains actually accord with the facts. Under such circumstances, until the certificate is placed in the hands of the county clerk to be filed and recorded, it is like a deed in escrow. But I do not see how any such view can possibly be taken of the affidavit. An affidavit must be true when it is made or it can never be true at all. The subsequent occurrence of the events therein stated to have happened cannot make the statement true that they had already happened at the time the affiant swore to it. In other words, affidavits cannot be made in escrow, because the affiant hopes or believes that what he swears to will afterwards come true. To tolerate or sanction the doctrine that an affidavit' speaks only from the time when it is used, instead of from the time when it is made, would be to encourage careless swearing and perjury.
I see no room for doubt in this case that the statement contained in the affidavit of the general partner was false, and, therefore, rendered the special partners liable for the engagements of the firm. It is my opinion, therefore, that the exceptions in behalf of the defendants Eiseman should be overruled, and that the plaintiffs should have judgment upon the verdict.