Court Opinion

ID: 6951367
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:32:12.609904+00
Date Added: 2024-06-11T16:08:05.549053
License: Public Domain

Mr. Justice Breese delivered the opinion of the Court: Strong Wadsworth and James Wadsworth, in the year 1857, failed in business in Chicago, having been partners in banking. They were indebted to Williams, the appellant, about eight thousand dollars. In February, 1861, Strong Wadsworth and one John C. Ambler entered into an arrangement by which the latter furnished to the former the sum of fifteen hundred and eighty dollars, belonging to his mother, Mercy Ambler, residing in Massachusetts, and Wadsworth recommenced the banking business in Chicago, under the name of S. Wadsworth & Co. A written contract was entered into between Ambler, acting as agent for his mother, and Wadsworth, by which Wadsworth was to attend to the business on a salary of ten dollars per week, and to have an interest therein beyond his wages, the profits and losses to accrue to Mercy Ambler. When, however, they made the first settlement, the profits were found to be larger than had been anticipated, and Ambler allowed to Wads-worth one-half the profits instead of the salary, and the business continued, afterwards, upon the basis of a partnership between Wadsworth and Mrs. Ambler. The -entire- capital was furnished by Mrs. Ambler. It appears that John C. Ambler was acting as manager of his mother’s affairs, and that she was, to some extent, dependent on him for support, although she had some small means which he invested and controlled for her benefit, and which he sought to keep distinct from his own funds. This arrangement with Wadsworth was made without her knowledge, and she knew nothing of it, until the occurrence of the events which led to this suit. In making the arrangement, John C. Ambler was merely acting under his power as general agent. In December, 1862, appellant commenced suit against Strong Wadsworth and James Wadsworth, on his old claim against them, and in March, 1863, recovered a judgment against Strong Wadsworth (James not having been served) for over nine thousand dollars. An execution was immediately issued, and levied upon the furniture and money found in the office of S. Wadsworth & Co. The money levied on, amounting to over six thousand dollars, was paid over by the sheriff to appellant, the plaintiff in the execution. Immediately after the levy, judgments were confessed by Strong Wadsworth and Mercy Ambler as follows: One in favor of Butter et al. for three thousand and three T7/„ dollars, one in favor of Tyler et al. for eighteen hundred and sixty-six dollars, and one in favor of Marshall et al. for sixteen hundred dollars, and after an ineffectual attempt to recover by writ of replevin' the property levied on, Butter et al. filed a bill in behalf of themselves and the other creditors of S. Wadsworth & Co., praying that the property levied on be decreed to be the partnership property of Strong Wadsworth and Mercy Ambler, and, as such, marshaled in payment of their creditors, to the exclusion of the individual creditors of Wadsworth. Appellants Wadsworth, Mercy Ambler and the sheriff were made defendants to this bill. Williams and the sheriff answered, denying the alleged partnership between Wadsworth and Mrs. Ambler, the oath to' their answer having been waived. Mrs. Ambler answered, admitting the alleged partnership, and she also filed a cross-bill setting "up the partnership, and praying that the partnership assets might be applied in payment of partnership debts. On the final hearing the court below so decreed, and Williams brings the record to this court. It should be further stated that Strong Wadsworth and Mrs. Ambler are admitted to be insolvent, and that the former had drawn all the profits due to him from the business. It is apparent, from this statement of the facts, that the decision of this case depends upon the effect to be given to the answer and cross-bill of Mrs. Ambler, by which she ratifies the act of her agent in making the partnership arrangement with Wadsworth. It is denied, however, in the first instance, by the counsel of appellant, that she has legally ratified, there being no proof of authority from her to her attorneys to file the answer or cross-bill, and no proof of her signature to these pleadings which are signed by her in her own proper name. It is sufficient to say in regard to this, that, in the absence of proof to the contrary, the authority of an attorney of this court to appear and plead for such parties as he claims to represent, is presumed. _ If the appellants desired to raise this question in the court below, or to impeach the genuineness of Mrs. Ambler’s own signature to the answer and cross-bill, they should have filed an affidavit and asked for the proper rule. Mot having done this, they cannot now deny the authority of Mrs. Ambler’s counsel to file such answer and cross-bill as they thought proper. The other question is more difficult, but we have arrived at the conclusion, that the ratification of Mrs. Ambler makes the arrangement between her son and Wadsworth good from the beginning. So far as appears, he had no authority to create a partnership between her and another person, but if an agent assumes to do an act of this sort, it may, like any other act of an agent not unlawful, be ratified by the principal* and-the ratification relates back to the performance of the'act. It is urged, however, that a ratification cannot relate back so as to cut off the intervening rights of third persons. That is doubtless true as a general rule, but if the doctrine of relation is applied merely for the protection of a clearly superior equity, such application would be consistent with recognized legal principles, even though it interferes with the claims of third persons resting upon an inferior equity. We consider the case before us one of that character. The debt of Williams accrued long before John C. Ambler undertook to create a partnership between his mother and Wadsworth.' The credit upon which it accrued did not spring from any control which the latter acquired over the property of Mrs. Ambler. So far as she and her property are concerned, the contracting of the debt had no connection with them. Williams, as a creditor of Wadsworth, was placed in no worse position in consequence of the acts of Mrs. Ambler’s agent in forming the partnership, whether such acts were authorized by the principal or not. But how was it with the complainants, the creditors of the firm % Their debts arose in consequence of money paid by them to S. Wadsworth & Co., for bills of exchange on Mew York, on the same day with the levy by the sheriff, and the identical money paid by them, was part of that seized under the levy. Mrs. Ambler, by giving to Wadsworth the control of her small capital, through her agent, had enabled him to start the business of S. Wadsworth & Co., and procure credit, by selling drafts to these complainants and the other creditors. Although Mrs. Ambler was under no legal obligation to ratify these proceedings of her agent when they came to her knowledge, yet she was under a certain moral obligation to protect, to the extent of her power, those innocent creditors who had become such, through means furnished by her, and through the acts of her general agent. She recognizes this duty, and by ratifying the act of her agent, has made herself personally liable, as a partner in the firm of S. Wadsworth & Co., for the debts of the firm, and is now liable to be sued therefor. Wright v. Boynton & Hayward, 37 N. H., 9. These are debts which would have had no existence, but for the acts of her agent in dealing with her property, and connecting her in a partnership arrangement with Wadsworth. If she is now willing to ratify this arrangement, and assume all the liabilities of the firm of S. Wadsworth & Co., ab initio, as she does by ratifying, is it not manifestly just that the other incidents of partnership should follow, and the partnership assets he first applied to the payment of the partnership debts ? Is it not plain, that the equity of the creditors of S. Wadsworth & Co., as against the assets of the business done under that name, and as against the capital furnished by Mrs. Ambler, is superior to that of individual creditors of Wadsworth whose debts were contracted long1 before this business was commenced? If Mrs. Ambler is willing to ratify the acts of her agent, are not their equities, as against Williams, precisely what they would have been if he had had full authority to do .what he did? We think so, and it follows that the lien of Williams’ execution must be treated, in a court of equity, as only attaching to whatever interest Wadsworth had in the assets of the firm, after the payment of the firm debts. The decree of the Superior Court must be affirmed. Decree affirmed. .