Court Opinion

ID: 9481373
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:17:09.278512+00
Date Added: 2024-06-11T17:48:16.572002
License: Public Domain

VAN GRAAFEILAND, Circuit Judge,
concurring on separate grounds:
I concur in my colleagues’ holding that the judgment of the district court should be affirmed. However, I base my concurrence upon the failure of the three named defendants, Eagle Associates and its two general partners Howard R. Schuster and Robert R. Bolding, to comply with the district judge’s orders to attend pretrial conferences. I respectfully disagree with my colleagues’ holding that one of two general partners, sued with the partnership on a contract indebtedness, cannot represent the defendant partnership as well as himself in court.
Many years ago, in an opinion written by the eminent Learned Hand, we said that “our law has never adopted the civil law theory of the firm as a juristic entity; the Uniform Partnership Law as little as any other.” Rossmoore v. Commissioner, 76 F.2d 520, 521 (2d Cir.1935). That was the law of New York when Rossmoore was written. See Caplan v. Caplan, 268 N.Y. 445, 447, 198 N.E. 23 (1935); Matter of Peck, 206 N.Y. 55, 60, 99 N.E. 258 (1912). Except for a few especially prescribed statutory exceptions such as C.P.L.R. § 1025, it is still the law of New York. See Golia v. Health Ins. Plan of Greater New York, 6 A.D.2d 884, 885, 177 N.Y.S.2d 550 (1958), aff'd, 7 N.Y.2d 931, 197 N.Y.S.2d 735, 165 N.E.2d 578 (1960) (mem.); Chemical Bank of Rochester v. Ashenburg, 94 Misc.2d 64, 67, 405 N.Y.S.2d 175 (1978). In short, partnerships and corporations were, and continue to be, “distinctly different organizational forms.” See People v. Zinke, 76 N.Y.2d 8, 14, 556 N.Y.S.2d 11, 555 N.E.2d 263 (1990). We have recognized this to be so in numerous cases involving diversity of citizenship. See, e.g., Lewis v. Odell, 503 F.2d 445 (2d Cir.1974).
This conclusion, I suggest, follows from the very nature of a partnership. “When a partnership is established, the liability of the individual partners is an incident of the partnership, merely, not a separate and independent liability.” Hartigan v. Casualty Co. of Am., 227 N.Y. 175, 178, 124 N.E. 789 (1919). Unlike corporate shareholders or association members, partners are jointly liable with respect to their contractual obligations; i.e., “each partner is liable for the whole amount of every debt of the partnership, not merely for a propor*1311tionate part.” Midwood Dev. Corp. v. K 12th Assocs., 146 A.D.2d 754, 755, 537 N.Y. S.2d 237 (1989) (mem.); Greidinger v. Hoffberg, 49 A.D.2d 549, 551, 370 N.Y.S.2d 934 (1975) (mem.) Because a loan to a partnership is made to all and each of the partners, creditors “may select any partner and collect their claims wholly from the property of that partner.” People v. Knapp, 206 N.Y. 373, 382, 99 N.E. 841 (1912).
Where, as here, the liabilities of the partnership and one of its codefendant members are coterminous, the individual partners, whose personal liability is at stake, should be permitted to represent their identical interests in court. See N.Y.Civ.Prac. L. & R. § 321 and Fed.R.Civ.P. 17(b).