Case Name: David Kingman versus George Spurr et al.
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1828-10-30
Citations: 7 Pick. 235
Docket Number: 
Parties: David Kingman versus George Spurr et al.
Judges: 
Reporter: Massachusetts Reports
Volume: 24
Pages: 241–245

Head Matter:
David Kingman versus George Spurr et al.
Where a partnership, for the purpose of running stagecoaches, issued to its members certificates of their shares in the joint stock, containing a provision that the shares should not be transferred without the consent of the directors and treasurer, and the plaintiff, to whom a share had been assigned without such consent, brought a bill in equity to compel the company to account, alleging himself to be a partner, it was held, that he was not a partner, and that the bill could not be sustained.
This was a bill in equity to compel the respondents, associates in an unincorporated company, to account with the plain tiff, the bill alleging that the plaintiff was a partner, that the respondents had the management and control of all the joint stock and property, consisting of horses, stagecoaches, Saz. The respondents pleaded that the plaintiff had no interest in the company, and that he was not a partner or associate. Issue was taken upon the plea.
Oct. 30th.
The case was submitted to the decision of the Court upon the following facts.
On the 33d of June, 1827, Daniel Robbins received from the treasurer of the Boston and Providence Commercial Stage Company a certificate as follows : — No.-. This certifies that D. Robbins is owner of two shares in the stock of the Boston &c. Company by his having paid to the treasurer the sum of 200 dollars, which shares are not transferable without the consent of the directors and treasurer. I. W. Goodrich, Treasurer.
Robbins went to the store of the treasurer and paid up the amount of arrearages and received the certificate. After receiving it, he expressed a desire to dispose of the shares to the company, and offered them to the treasurer, who was neither a director nor a stockholder. Goodrich replied that he would first consult the directors, and if they agreed, he would give an answer in a week. Upon this, Robbins went away, and on the 30th of the same June, without the consent of any of the directors, sold and assigned the shares to Edward Kingman. On the 2d of July following, E. Kingman, without making application to the treasurer and directors, assigned his interest to the plaintiff. Robbins was present at the original meeting and formation of the association, and it was agreed that the certificates of the property should be issued in the form above set forth. The assignments were indorsed on the certificate. The first,' dated June 30,1827, was thus, — “ For value received, I hereby assign all my right, title and interest in the within shares to Edward Kingman, jr. Daniel Robbins.” The other, dated July 2, 1829, from Edward Kingman, jr. to the plaintiff, was similar, with the addition, — “ I am to pay back arrearages.”
W. Parker, in support of the bill,
contended that the plaintiff was a partner, by virtue of the assignment of the two shares. It will be objected that the certificate was not transferable with out the consent of the directors and treasurer. To this several answers may be given. 1. The certificate is only evidence of property, but not essential evidence. Alvord v. Smith, 5 Pick. 232. —2. The condition does not affect the property; it was only an agreement of Robbins, for the breach of which the company have their remedy against him personally. The company could not make a by-law of this kind without authority from the legislature. Lloyd v. Loaring, 6 Ves. 773 ; Davies v. Hawkins, 3 Maule & Selw. 488. — 3. It does not appear that the alienation of certificates was restrained by a unanimous vote of the members ; and if the company is a copartnership, one partner may rescind the vote. Tillier v. Whitehead, 1 Dallas, 269.—4. The vote of a majority of the members would not bind an individual who did not assent, the company not being an aggregate corporation, and it does not appear that Robbins assented to the restriction. Livingston v. Lynch, 4 Johns. Ch. R. 573. — 5. The restriction is against law, being in restraint of trade, unreasonable, and fraudulent as against creditors. Balmain v. Shore, 9 Ves. 501 ; Quiner v. Marblehead Soc. Ins. Co. 10 Mass. R. 476.—6. If the transfer is not good in law, it is in equity ; and the assignee has a remedy in his own name in a court of equity. Ward v. Lewis, 4 Pick. 523 ; Peters v. Ballestier, 3 Pick. 495 ; Mitford v. Mitford, 9 Ves. 98 ; Russell’s Ch. R. 349 ; Master v. Miller, 4 T. R. 340; Gomez v. Graham, 9 Mod. 287.
If the plaintiff cannot sue in his own name, he will be allowed to amend by making the administrator of Robbins a party. Taylor v. Wrench, 9 Ves. 315 ; Tappan v. Norman, 11 Ves. 563 ; Good v. Blewit, 13 Ves. 397.
Mann, contra,
said the company were a partnership, and that one partner cannot by selling his interest make the purchaser a partner, against the consent of the rest. Gow on Partn. 2, 3, 6, 270, 272 ; The King v. Dodd, 9 East, 516; Murray v. Bogert, 14 Johns. R. 318 ; Marquand v. New York Manuf. Co. 17 Johns. R. 535 ; Pearce v. Chamberlain, 2 Ves. sen. 34. Supposing the assignment of these shares to De valid, it is only a transfer of the property, and not of the relation of partnership.
The restriction upon alienation was known to the plaintiff, and the purchaser of a chose in action must abide oy the situation of the vendor. Ensign v. Wands, 1 Johns. Cas. 171; Ex parte Agace, 2 Cox’s Ch. Cas. 312 ; Taylor v Stibbert, 2 Ves. jun. 437 ; Davies v. Austen,1 Ves. jun. 247
The act of a majority of the partners binds the rest. Kirk v. Hodgson, 3 Johns. Ch. R. 400.
If the plaintiff has no right to be in the case, he cannot call in the administrator of Robbins.
Metcalf replied.

Opinion:
The opinion of the Court was afterward drawn up by
Parker C. J.
We think it very clear that the plaintiff did not become a partner or member of the association, by the assignment to him of Robbins's interest. It is a .settled principle, that a company or copartnership cannot be compelled to receive a stranger into their league. These associations are founded in personal confidence and delectus personarum. It is even held, that an executor or heir of one of the members does not become a member, unless by consent or by the terms of the compact. Cow, 270 ; Murray v. Bogert, 14 Johns 318 ; Marquand v. New York Manuf. Co. 17 Johns. R. 535 The case in Russell's Reports in Chancery, 349, cited by the plaintiff's counsel, recognises the same principle, for it was only upon the implied assent of the Duke of Beaufort that he was supposed to be held to admit purchasers in lieu of the lessees who were his tenants. And even with such implied assent the case was considered doubtful and was compromised.
What interest then did Kingman acquire by the assignment to him, and what means shall he resort to, to enforce it ?
It would seem that any member who had paid in his proportion of stock, had an assignable interest in it, subject to the claims upon it by the company for losses, expenses and advances, and that the gains, if any, followed the principal. His creditors have a right to avail themselves of it by attaching his proportion of any chattels belonging to the company, but this right is subject to the proper charges against him by the company, and also to the right which creditors of the company first have to secure themselves upon the joint property. The members, or those who hold the funds, may be charged as trustees of any individual member so far as to De obliged to pay over any profits which may belong to him, and perhaps to the extent of his proportion of the fund, deducting their just claims upon it. An assignment cannot have a more extensive effect. The assignee becomes tenant in common only, and as such may have a right to an account, and to the proportion of profits. We are not prepared to say that the stock itself can be withdrawn.
The case in 5 Pick. 232, Alvord v. Smith, is very different from this. The action was brought for the price of a share in a distillery, in which there were many partners. The sale was made, and the defendants were before members, and actually enjoyed the right and interest which they purchased. There was no prohibition to sell; on the contrary, it was provided in the articles, that purchasers should become members of the association. All that was required was, that the certifi cate of the sale should be entered by the clerk in the books of the company. The Court held that the interest of the plaintiff was assignable, and that as the defendants actually used and enjoyed the plaintiff's share, the certificate was not essential to their title. But in this case, by the terms of the association, there could be no sale to bind the company without their consent or that of their agents.
This bill must be dismissed with costs, and the plaintiff must resort to such other remedy as he shall be advised to
See Collyer on Parta. 4, 5, 83, 486, 648; Alvord v. Smith, 5 Pick. (2nd t d.) 235, note 1; Gilmore v. Black, 2 Fairfield, 488.