Case Name: White et al. v. Eiseman et al.
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1890-12-29
Citations: 12 N.Y.S. 885
Docket Number: 
Parties: White et al. v. Eiseman et al.
Judges: 
Reporter: West's New York Supplement
Volume: 12
Pages: 885–889

Head Matter:
White et al. v. Eiseman et al.
(Supreme Court, General Term, First Department.
December 29, 1890.)
Limited Partnership—Affidavit—Vaudit?.
The affidavit required by Rev. St. N. Y. (8th Ed.) vol. 4, p. 2492, § 7, relating to limited partnerships, to be filed with the certificate of formation of such a partnership, stating that the sums contributed by each of the special partners have been actually and in good faith paid in cash, speaks with reference to.the time when it is sworn to; and such a statement in an affidavit made on payment of the capital of a special partner by an uncertified check is a false statement, within section 8, and subjects all persons interested in the firm to liability as general partners under that section, although the check is certified and deposited to the credit of the firm before the. affidavit is filed, and is afterwards paid. Barrett, J., dissenting.
Exceptions from trial term, New York county.
Action by Ralph H. White and Henry A. Belcher against Samuel Eiseman, Moses L. Eiseman, and others. At the trial the court directed a verdict for plaintiffs, and ordered defendants’ exceptions to be heard in the first instance at the general term. .
Argued before Van Brunt, P. J., and Bartlett and Barrett, JJ.
Charles Austin McMahon, for plaintiffs. Blumenstiel & Hirsch, for defendants.

Opinion:
Bartlett, J.
Section 7 of the title of the Revised Statutes relating to limited partnerships 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 (section 8) is in the following words: "Ho 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 Hew York oh 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 4th, and was deposited to the credit of the partnership a day later, on the 5th, in the city of Troy," at 2 o'clock in the afternoon. The certificate and affidavit were filed and recorded 'in the office of the county clerk of Rensselaer county on the same afternoon át a quarter to 5 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 statements 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 oh any theory. The defendants cite Durant v. Abendroth, 69 N. Y. 148, and Bank v. Sirret, 97 N. Y. 825, 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.