Court Opinion

ID: 6143919
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:52:18.631406+00
Date Added: 2024-06-11T08:54:46.677249
License: Public Domain

Hilton, Judge.
Where a copartnership has become insolvent, no doubt can exist as to the power of a court of equity, upon the application of either partner by a proper complaint, to appoint a receiver to take charge of all the partnership assets, and close up its affairs. (Adams’ Doctrine of Equity, 241, 243; Story's Eq. Jur., §§ 672, 673; Law agt. Ford, 2 Paige, 310; Egberts agt. Wood, 5 id. 517, 525; Story *274on Part. §§ 228, 229; Hitchcock agt. St. John, 1 Hoff. R. 501; Martin, agt. Van Schaick, 4 Paige, 479.)
The motion, therefore, presents the question, whether the ■ execution and delivery of the assignment so made by the defendants Schlieper and Haarhaus, purporting to convey and transfer all the partnership assets to the defendant Bohnstedt in trust for the creditors of the firm, can be considered as an impediment to the exercise of this power of the court, and prevent its granting the plaintiff the relief he asks. During the existence of a partnership, each partner is clothed with, and possesses an equal and general power and authority, in behalf of the firm, to sell, loan, pledge, dispose of its effects and property in any manner within the objects of the part.nership, or necessary or proper in the ordinary prosecution of its business.
By the act of copartnership, each partner has these powers communicated to him, but they are personal to himself, and cannot be delegated to another without the assent or concurrence of his copartners. (3 Kent's Com. 40 ; Story on Part, §§ 101, 102 ; Collyer on Part. § 384; Egberts agt. Wood, 3 Paige, 517, 525 ; Havens agt. Hussey, 5 id. 30; Fisher agt. Murray, 1 E. D. Smith, 341; Mabbett agt. White, 2 Kern. 442.)
No other powers should be implied except such as are sanctioned by the usage of the trade or business in which they may be engaged. (Hays agt. Heyer, 3 Sand. S. C. R. 297; Hitchcock agt. St. John, 1 Hoff. Ch. R. 511; Fisher agt. Murray, 1 E. D. Smith, 341, 343.)
Upon these views of the powers of each partner, it has been .frequently decided that an assignment made to a trustee of all the partnership assets, for the benefit of the creditors of the firm, but giving preferences to certain creditors over others, is void, unless made with the assent or concurrence of all the copartners ; upon the ground that authority to make such an instrument is not implied by the act of copartnership or the copartnership relation, and consequently cannot be inferred or presumed. (Anderson agt. Tompkins, 1 Brock. Rep. 456 ; Harrison agt. Story, 3 Cranch Rep. 289; Havens agt. Hussey, 5 *275Paige, 30; Deming agt. Colt, 3 Sand. S. C. 284; Fisher agt. Murray, 1 E. D. Smith, 341; Kemp agt. Carnly, 3 Duer, 1; Haggerty agt. Granger, 15 How. Pr. R. 243; Everson agt. Gehrman, 10 How. Pr. R. 301; Dana agt. Lull, 17 Vermont, 390.)
Wow if the power does not exist in any number of partners less than the whole to make such an assignment giving preferences, by what process of reasoning can it be determined that any one partner can vest the entire partnership assets in a trustee by an assignment, as in this case, without preferences ?
By either assignment, the whole property of the firm is wrested from the non-concurring partners, against their will, placed in the possession and under the sole control of a trustee, in whose selection they have had no voice, the business of the firm wholly suspended, and the copartnership itself virtually dissolved. A careful examination of the elementary books treating of the law of partnerships, and of the decisions cited, fails to show that the power exists in either case.
Courts should not imply authority of this extraordinary character, unless the parties intended to grant it, and it never should be presumed, unless the'evidence of such intention be express and positive.
Upon the views thus briefly stated, having arrived at the conclusion that the assignment by Schlieper and Haarhaus, without the assent or concurrence of the plaintiff, is absolutely void, and no obstacle in the way of granting the plaintiff the relief sought by him in this action, it follows a receiver must be appointed of all the property of the partnership of Wetter, Schlieper and Haarhaus, and the injunction now existing, continued until final judgment herein.
A reference to appoint said receiver will be taken .to Hamilton W. Bobinson, Esq., as referee.
Ordered accordingly.