Case Name: Lawrence L. Levy against James Lock, Impleaded
Court: New York Court of Common Pleas
Jurisdiction: New York
Decision Date: 1874-02
Citations: 5 Daly (N.Y.) 46
Docket Number: 
Parties: Lawrence L. Levy against James Lock, Impleaded.
Judges: 
Reporter: Daly's Common Pleas Reports
Volume: 5
Pages: 46–49

Head Matter:
Lawrence L. Levy against James Lock, Impleaded.
The statute for the ereatiou of limited partnerships (1 R. S. 764, as amended by L. 1862, c. 476) does not require that the certificate provided for by the act, should be filed contemporaneously with its execution or with the formation of the partnership, in order to make the partnership a limited one as to those parties whose claims against the partnership accrue after the certificate is actually filed.
Where the certificate was not filed until 28 days after its execution, Held, that the partnership was a limited one as to a creditor whose debt accrued subsequent to the filing.
. Appeal by defendant from a judgment of the general term of the Marine Court, reversing a judgment of that court, entered on the decision of a judge thereof, alter a trial before him without a jury.
The action was brought to recover the balance due on two promissory notes made by the firm of White, Son & Whitmore, of which it was claimed the defendant Lock was at the time of making the notes a general partner.
Lock defended, claiming that his liability was not that of a general partner, but of a special partner, under the statute (1 R. S. 764, as amended by L. 1862, ch. 476, p. 880).
The facts on which the plaintiff claimed that Lock had failed to bring himself within the provisions of the statute are fully stated in the opinion.
Joseph C. Levi, for appellant.
G. A. Seixas, for respondent.

Opinion:
Larremore, J.
On the 15th of March, 1871, the firm of White, Son & Whitmore (of which the defendant claimed to be a special partner) made two promissory notes to the order of plaintiff, at five and seven months, for $644 19 each. Judgment was rendered in the court below against the defendant as a general partner of said firm, and from the reversal of said judgment by the general term of that court this appeal is taken.
The evidence discloses the following facts, to wit: That James M. White, Charles C. White, Stephen O. Whitmore and James Lock (respondent) entered into a copartnership agreement, dated April 25th, 1870, in which it was stated that the partnership thereby formed should commence May 2d, 1870, and continue for two years. That said Lock should contribute $5,000 to the capital thereof as a special partner, which he was thereby declared to be. It was therein further provided and agreed that the usual statutory proceedings should be instituted immediately after the execution of said agreement to secure Lock his rights and immunities as such special or silent partner. On May 17th, 1870, the said partners duly executed and acknowledged the certificate required for the formation of a limited partnership, together with the affidavit showing the payment of the special capital, which said certificate and affidavit were duly filed and recorded on the 14th of June, 1870, and publication thereof duly made for the time and in the manner prescribed by the statute.
It does not appear when said firm commenced to do busi ness, or that any business of any kind was transacted by it prior to June 14th, 1870.
On this statement of facts the liability of defendant as a general partner of said firm is to be determined.
All that the law requires in the formation of a limited partnership is a substantial compliance with its provisions (Bowen v. Argall, 24 Wend. 435 ; Madison Co. Bank v. Gould, 5 Hill, 309 ; Argall v. Smith, 3 Den. 479). The object of the statute is to compel those who claim the benefit oE its exemptions to , give public notice of the terms of the partnership, that all who deal with it may know the extent of the credit and liability which it assumes.
The statute referred to (1 R. S. [Edm. ed.] 716, 717), as preliminary to the formation of such a partnership, requires that a certificate thereof, with an accompanying affidavit, be filed and recorded in the clerk's office of the county, showing the title of the firm, the names of the partners, the general nature of the business, the amount of capital contributed in cash by the special partner, and the period at which the partnership is to commence and terminate.
The certificate and affidavit filed by the defendant and his copartners on the 14th of June, 1870, and the publication of the terms of the said partnership were each and all of them in conformity with said statute.
That said certificate and affidavit were not filed and recorded on the day of their execution (May 17th, 1870), but twenty-eight days thereafter (June 14th, 1870), could not affect the validity of said partnership as to those who dealt with it after the date last named. On that da/y the special partnership was duly formed, and as to the plaintiff (whose claim accrued nine months thereafter) was as effectually and substantially formed as though the papers had been filed and recorded on the day of their execution.
There is no requirement of the statute that such execution andBfiling shall be contemporaneous acts. The only disability imposed by it is, that until such record is made, no special partnership is formed.
Nor should the plaintiff be permitted to assail said partner ship on the ground that it was declared to have commenced at a period prior to the filing of said certificate. His debt, as before stated, was subsequently contracted, and he was in no way prejudiced or misled.
This distinction was recognized in the case of The Madison Co. Bank v. Gould (5 Hill, 315), where an error occurred in the notice of the partnership, which stated that it was to commence ¡November 16th, instead of October 16th, and Judge Bronson says: " If this contract (the one in suit) had been made before the time mentioned in said notice for the commencement of the partnership had,arrived, the objection would be fatal." In that case it was assumed that the partnership was properly formed, although the judgment was reversed upon other grounds.
The rulings in Andrews v. Schott (10 Penn. [4 Barr] 47) are not in point. That case decides that the use of the word " Company " in a firm name was in violation of a statute of the State of Pennsylvania, and that the special partner was liable for that reason, and also for the fact that third persons entered the firm as general partners.
The obligation in this case having been incurred after the special partnership was formed, the defendant cannot be charged in solido, nor made liable beyond the amount of his capital.
The statute under which said partnership was formed was intended for the mutual protection of the special partner and those dealing with him.
It should be construed in the spirit with which it was framed. To invite capital, it offers the inducement of a limited liability on the part of the investor. And while its provisions should be rigorously invoked and applied in behalf of one who suffers by their violation, a wise discrimination should be exercised in their application to one who seeks to obtain an undue advantage thereby.
The judgment appealed from should be affirmed.
Daly, Ch. J., and Robinson, J., concurred.
Judgment affirmed.