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| PARTNERSHIP LAWS.

THE STATUTES OF NEW YORK,

WITH THE DECISIONS THEREON,

RELATING TO

LIMITED PARTNERSHIPS,

TOGETHER WITH THE-STATUTES RELATING TO

COMPROMISES BY PARTNERS AND JOINT DEBTORS,
PARTNERSHIP NAMES AND SIGNS,

THE REQUISITE FORMS,

WITH ALL THE AMENDMENTS TO DATE.

NEW YORK:
BAKER, VOORHIS & CO., LAW PUBLISHERS,
66 NASSAU, STREET.
1880.

 

 

 

 

 
PARTNERSHIP LAWS.

THE STATUTES OF NEW YORK,

« WITH THE DECISIONS THEREON,

-

RELATING TO

LIMITED PARTNERSHIPS,

TOGETHER WITH THE STATUTES RELATING TO

COMPROMISES BY PARTNERS AND JOINT DEBTORS,

AND TO

PARTNERSHIP NAMES AND SIGNS;

AND

THE REQUISITE FORMS,

NEW YORK:
BAKER, VOORHIS & CO., PUBLISHERS,

66 NASSAU STREET,
1876.
  

A 4 4
Entered according to Act of Congress, in the year 1871, by

AUSTIN ABBOTT,
at the Office of the Librarian of Congress, at Washington.

 

Copyright 1876, by AUSTIN ABBOTT.

BAKER & GODWIN, Prinrzxs,
25 Park Row,N. Y.
PARTNERSHIP LAWS.

THIS collection of the Partnership Laws of New York is reprinted by

 

 

 

permission, from Assotr’s NEw Yor« Diersr ABBOTT’
_REMEMBRANCER, with the necessary additions to make it complete to
January 1, 1876, It contains—

I. ° Liurtep PartTNERsHIPs.
II. CompromisEs,
Il. Firm Names.

I. LIMITED PARTNERSHIPS.

1 Rev. Stat. 764, Part IT, Ch. IV, Title I.

Purposes of limited partnership. 1 2. S., 764, § 1 (am’d by
1 LZ. 1886, p. 110, ¢. 70), Limited partnerships for the transaction of
any mercantile, mechanical or manufacturing business, or of any other
lawful trade or business, within this State, may be formed by two or
more persons, upon the terms, with the rights and powers, and sub-
ject to the conditions and liabilities herein prescribed; but the pro-
visions of this Title shall not be construed to authorize any such part-
nerships for the purpose of banking or making insurance.

Members. 1 2. S. 764, § 2. Such partnerships may consist of
one or more persons, who shall be called general partners, and who
shall be jointly and severally responsible as general partners now are
by law; and of one or more persons who shall contribute, in actual
cash payments, a specific sum as capital, to the common stock, who
shall be called special partners, and who shall uot be liable for the
debts of the partnership, beyond the fund so contributed by him or
them to the capital.
4 PARTNERSHIP LAWS.

Where the statute is not complied with, the supposed special
partner cannot avoid being held as a general partner by showing that
he was induced to contribute special capital by fraud of the copart-
ners, and that he took no part in the business, and as soon as he discov-
ered the fraud (though not till after the debt ‘in question was contract-
ed) he withdrew. Supreme Ct. 1875, Tournade v. Hagedorn, 5 Supm.
Ct, (T. & 0.) 288, dew 2oviwn.

Payment of capital. In order to form a limited partnership,
such as will exempt the special partner from personal liability, it is
indispensable that the special partner’s capital should be in cash. Pay-
ment in goods will not suffice.* | Supreme Ct. 1860, Haviland v. Chace,
39 Barb. 283. 2+ we

Dormant partner. Where a person under a private agreement
with a special partner in a limited copartnership, furnishes a portion
of the capital which the special partner ostensibly puts into the busi-
ness of the firm in his. own name, and is to have a certain portion of
the income or profits which the special partner derives from the busi-
ness, with a privilege of examining, from time to time, into the busi-
ness matters of the firm, he and the special partner become thereby
general partners. All persons interested in the partnership, are, by
the statute, liable as general partners, if any false statement is made
in the certificate or affidavit by which the limited copartnership is
formed. WN. Y. Com. Pl. 1863, Bulkley v. Marks, 15 4b. Pr. 454;
s. c. sub nom. Buckley v. Lord, 24 How. Pr. 455. But the certificate
is not fatally defective, if it substantially complies with the require-
ment of the statute, and correctly gives all the information required.
Thus, if it gives the names of the respective places of residence of the
general and special partners, indicating that they reside there, it is not
a valid objection that the words “ residence,” “ resident in,” or “ resides
at,” are not used. Lachaise v, Marks, 4 H. D. Smith, 610.

Powers of members. 1 &. S. 764, § 3 (am’d by 1 L, 1857, p.
836, c. 414). The general partners only shall be authorized to trans-
act business for the partnership, except as provided in section seven-
teen, and no special partner shall be authorized to sign for the partner-
ship, or to bind the same.

 

* To the same effect, Richardson v. Hogg, 38 Penn, St 153. See also, Van Dike
v. Rosskam, 67 Jd,330. Nor is it enough to make payment in notes treated as cash.
Pierce v. Bryant, 5 Allen (fass.) 91. Nora mere order on a depositary having no
notice thereof, for delivery of securities, although after the recording of the certifi-
cate the firm realize the full amount thereon. Haggerty v. Foster, 103 Mass, 17.
PARTNERSHIP LAWS. 5

Effect of above amendment. Rights and liabilities of special
partners already fixed at the date of the passage of the act of 1857 (1 L.
1857, 887, c. 414, §§ 3, 4), were not affected by the passage of that
act. Ct. of App. 1859, White v. Hackett, 20 W. Y. 178; rev’g
8, ¢. 24 Barb. 290.

Certificate. 1 2. S.764,§ 4. The persons desirous of forming
such partnership, shall make and severally sign a certificate, which
shall contain,

1. The name or firm under which such partnership is to be con-
ducted :

2. The general nature of the business intended to be transacted :

3. The names of all the general and special partners interested
therein, distinguishing which are general and which are special part-
ners, and their respective places of residence :

4, The amount of capital which each special partner shall have con-
tributed to the common stock : :

5. The period at which the partnership is to commence, and the
period at which it will terminate.

Form of Certificate of Weematlon of Limited Partner-
ship.

The undersigned, desirous of forming a limited partnership, under
the statutes of the State of New York, hereby certify :

1, That the name or firm under which such partnership is to be
conducted is [here insert the firm name}.

2. That the general nature of the business intended to be transacted
by such partnership, is [here designate the general nature of the busi-
ness, as, the buying and selling [on commission] at wholesale and re-
tail, of hardware and house furnishing goods, and such other articles
as are usually bought and sold by dealers in such wares and goods].

3. That the names of all the general and special partners interested
in said partnership, are as follows:

A. B., who resides at , and C. D., who resides at
, are the general partners; and E. F., who resides at ‘
and G. H., who resides at , are the special partners.
4, That the said E. F. has contributed the sum of dollars,
and G. IT. the sum of dollars, as capital, to the common stock.
5. That the period at which the said partnership is to commence is
the day of , 187 [insert the date, which should

be after that on which the certificate is to be filed and recorded]; and
the period at which the said partnership is to terminate is the
day of 187 [insert the date.]
Dated this day of 187 .
[Signatures.]
6 PARTNERSHIP LAWS.

To be acknowledged. 1 2. S.'764,§5. The certificate shall
be acknowledged by the several persons signing the same, before the
chancellor, a justice of the supreme cvurt, a circuit judge, or a judge
of the county courts; and such acknowledgment shall be made and
certified in the same manner as the acknowledgment of conveyances
of land. *

Form of Acknowledgment.

City and county of , 8%: On this day of , 187,
personally came before me, the above [or within] named A. B.,C. D.,
E. F. and G. H., to me known to be the persons described in and
who executed the above certificate, and severally acknowledged to
me that they respectively signed said certificate.

[Signature of offcer.]

Proof by a subscribing witness was held sufficient, in Mattison v.
Demarest, 4 Robi, 161, 173.

What officers may take acknowledgment. JZ. 1837, p. 101,
ce. 129,§ 1. The certificate required by the fourth section of title first
of chapter four of part second of the Revised Statutes of the State of
New York [§ 4, above], may be acknowledged or proved, as to the
several persons signing the same, before the same persons before
whom a conveyance of lands may be now or hereafter acknowledged
or proved; and such acknowledgment or proof shall be made and
certified in the same manner as the acknowledgment or proof of the
conveyances of lands may be made or certified ; and the certificate
when so made, shall have the same effect as if it were acknowledged
in the manner heretofore required by the law hereby amended.

By the statutes now in force (Jan. 1, 1876), acknowledg-
ments may be before the following officers:

1. When taken within the State. Before a justice of
the supreme court, a county judge, surrogate, mayor or recorder of a
city, a judge of the New York Common Pleas, justice of the peace of
a town, &mmissioner of deeds for a city or county, or notary public.
(1 &. 8S. 756, § 4; Z. 1840, p. 187, c. 288; Z. 1851, p. 331, c. 175,
§1; Z. 1859, p.869, c. 360; L. 1863, p. 880, c. 508; 3 Daly, Appen.)
In general, these officers can only take acknowledgments within the
county, town or other district, for which they were appointed. And
this rule has been applied to notaries. (See 38 How. Pr, 312.) But
by Z. 1878, p. 1211, c. 807, notaries appointed for either Kings,
PARTNERSHIP LAWS. q

Queens, Richmond, Westchester or Rockland, or New York, may file
certificate in any of those counties, and act therein. Amended, by
making it retroactive in part, by Z. 1875, p. 94, c. 105. Further
amended by extending it in part to Putnam and Suffolk. (Z. 1875,
p. 527, ¢. 458.)

A justice of the supreme court may act anywhere within the
State.

2. When taken without the State, but within the
United States. Before a judge of the United States supreme,
circuit or district courts, or of the supreme, superior, or circuit court of
any State or Territory, or before a judge of the United States circuit
court in the District of Columbia [now supreme court of the Dis-
trict] ; but such acknowledgment must be taken at a place within the
jurisdiction of such officer ; or before the mayor of any city ; or be-
fore a New York commissioner ; but the certificate of a New York
commissioner must be accompanied by the certificate of ‘the secretary
of the State of New York, attesting the existence of the officer, and the
genuineness of his signature; and such commissioner can only act
within the city or county in which he resided at the time of his ap-
pointment. (1 R. S.'757, § 4, subd. 2; Z. 1845, p. 89,¢. 109; LZ.
1850, p. 582, c. 270, am’d by 2 L. 1857, p. '756, c. 788.)

When made by any person residing out of the State, and within
the United States, it may be made before any officer of the State or
Territory where made, authorized by its laws to take proof or acknowl-
edgment; but no such acknowledgment is valid, unless the officer
taking the same knows, or has satisfactory evidence, that the person
making it is the individual described in, and who executed the instru-
ment. J. 1848, p. 303, c. 195.

In the last class of cases there must be subjoined or attached to the
certificate of proof or acknowledgment, signed by such officer, a cer-
tificate, under the name and official seal of the clerk, register, recorder
or a prothonotary of the county in which such officer resides, or the
clerk of any court thereof, having a seal, specifying that such officer
was, at the time of taking such proof or acknowledgment, duly author-
ized to take the same, and that such clerk, register, recorder or pro-
thonotary is well acquainted with the handwriting of such officer, and
verily believes that the signature to said certificate of proof or
acknowledgment is genuine. (Z. 1848, p. 303, c. 195, § 2, as am’d by
2 L. 1867, p. 1515, c. 567, § 1.)
8 PARTNERSHIP LAWS.

When taken without the United States, Where the
party is in other parts of America, or in Europe,—before a minister
plenipotentiary, or minister extraordinary, or chargé d'affaires of the
United States, resident and accredited there,—or in any foreign port
or country, before any United States consul; vice consul, deputy consul,
consular agent, vice consular agent, commercial agent, or vice commercial
agent, resident in any foreign port or country ;—before a New York
commissioner appointed fur any city in any foreign State or coun-
try ;—in the Dominion of Canada, before the judge of any court of
record, or the mayor of any city ;—in the British Dominions, before the
lord mayor of London, or chief magistrate of Dublin, Edinburgh, or
Liverpool. (1 2. S.'757, § 6; Z. 1829, p. 348, c. 222; L. 1863, p.
449, c. 246, §§ 1, 2; LZ. 1865, p. 776, c. 421; 1 ZL. 1870, p. 503, ¢.
208 ; Z. 1875, p. 119, c. 186.) Acknowledgment may be made before
a person specially authorized by the supreme court of the State, by a
commission issued for the purpose. (1 R. S. 757, § 8.)

The governor of New York is also authorized to appoint commis-
sioners of deeds, not exceeding three in each, for the following cities:
London, Liverpool, and Glasgow, in Great Britain; Dublin, Belfast, .
Cork and Galway, in Ireland; Paris and Marseilles, in France; and
for any other foreign State or country. (Z. 1858, p. 498, c. 308, § 1;
. 1862, p. 478, c. 283.) And not exceeding five in each city in any
foreign State or country. (Z. 1875, p. 119, c. 136.)

The certificate of such commissioner must be under his official seal
and subscribed by him, and when authenticated by the secretary of
state, as hereinafter mentioned, has the same effect to authorize the
recording or reading in evidence of such instrument, as is given by
law to like certificates made by justices of the Supreme Court of this
State. (Z. 1862, p. 478, c. 288; L. 1875, p. 119 ¢. 136.)

Acknowledgments by persons in the volunteer service of the State and
United States, out of the State, before certain officers. (Z. 1862, p.
870, c. 471.) ‘

Authentication. There must be subjoined or affixed to a cer-
tificate of acknowledgment taken by New York commissioners abroad,
a certificate under the hand and official seal of the secretary of state of
this State, certifying tbat such commissioner was at the time of taking
such proof or acknowledgment, or of administering such oath or affir-
mation, duly authorized to take the same, and that the secretary is ac-
quainted with the handwriting of such commissioner, or has compared
PARTNERSHIP LAWS. 9

the signature to such certificate with the signature of such commissioner
deposited in his office, and has also compared the impression of the seal
affixed to such certificate with the impression of the seal of such com-
missioner deposited in his office, and that-he believes the signature
‘and the impression of the seal of the said certificate to be genuine. (LZ.
1858, p. 498, c. 808, § 2; Z. 1875, p. 119, ¢. 186, § 2.)

The act relating to consular officers provides that the acknowleds-
ment or proof before a vice or deputy consul, consular or vice consu-
lar agent, or commercial or vice commercial agent, when certified by
him, under his seal of office, or under the seal of the consulate or
agency to which he is attached, to have been made before him by the
party executing, or being a subscribing witness to the same, and that
the said party executing the same is known or proven to him to be
the same person who is described in and who executed the same, shall
be as valid and effectual as if taken before one of the justices of the
Supreme Court in this State. (Z. 1863, p. 449, c. 246, as am’d by L.
865, p. 776, c. 421.)

The acknowledgment or proof. before the judge of any court of
record, or the mayor of any city, within the Dominion of Canada, is
not valid, “unless the officer taking the same knows or has satisfactory
evidence that the person making it is the individual described in and
who executed the instrument. And there must be subdjoined or
attached to the certificate of proof or acknowledgment, if taken before
a judge of a court of record, a certificate under the name and official
seal of the clerk of the court, that there is such a court; that the judge
before whom the proof or acknowledgment is taken is a judge thereof;
that such court has a seal; that he is the clerk thereof; that he is well
acquainted with the handwriting of such judge, and verily believes his
signature genuine. Ifthe proof or acknowledgment be taken before
the mayor of any city, it shall be certified by him under his seal of
office.” (1 Z. 1870, p. 503, c. 208.)

Filing. 1 2. S.'765,§ 6. The certificate so acknowledged and -
certified, shall be filed in the office of the clerk of the county in which
the principal place of business of the partnership shall be situated ;
and shall also be recorded by him at large, in a book to be kept for
that purpose, open to public inspection. If the partnership shall have
places of business situated in different counties, a transcript of the
certificate, and of the acknowledgment thereof, duly certified by the
clerk in whose office it shall be filed, under his official seal, shall be
filed and recorded in like manner, in the office of the clerk of every
such county.
10 PARTNERSHIP LAWS.

Delay in filing. All that the law requires in the formation of
a limited partnership is a substantial compliance with its provisions.
The filing of the certificate and affidavit required, twenty-eight days
after they were executed, does not affect the validity of the partner-
nership, as to transactions had with it after the date of such filing.
WN. Y. Com. Pl. 1874, Levy v. Lock, 5 Daly, 46, ¥ 7 Aww) 395

Affidavit of Payment. 1 2. S.'765, § ‘7. At the time of filing
the original certificate, with the evidence of the acknowledgment
thereof, as before directed, an affidavit of one or more of the general
partners shall also be filed in the same office, 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. ;

Form of Affidavit to be filed with Certificate.

City and county of , ss: A.B., of , being duly sworn,
says:

That he is the general partner [or, one of the general partners]
named in the above [or, annexed] certificate, and that the sum [or,
several sums] specified in said certificate, to have been coutributed by
the special partner [or, by the special partners, respectively] in said
certificate named, to the common stock of said partnership, has [or,
have] been actually and in good faith paid in cash.

[Signature]

Sworn before me this
day of 187 .

[Signature of offcer.]

An affidavit to accompany a certificate of a limited partnership
need not follow the exact words of the statute, If it clearly estab-
lishes the facts required by the statute, it is sufficient. And where
the affidavit refers to the certificate, it may be explained by the state-
ments of the certificate. Supreme Ct. 1855, Johnson v. McDonald, 2
Abb. Pr, 290.

An afgdavit to accompany a certificate of special partnership,
which states that the special partner has “ actually paid in” the capi-
tal contributed by him, is equivalent to an affidavit that he has paid
it “in cash.” J.

Effect. The affidavit that capital has been paid in, is not evidence
of that fact, further than to throw the burden of proof on the creditor.
Supreme Ct, 1843, Madison County Bank v. Gould, 5 Hill, 309.
\

PARTNERSHIP LAWS. 11

Partnership deemed formed. 1 2. S. 765,§8. No such.part- <
nership shall be deemed to have been formed, until a certificate shall ¢
have been made, acknowledged, filed and recorded,* nor until an affi-
davit shall have been filed as above directed; and if any false state-
ment 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.

If a false statement is made in the affidavit filed.—e. g. stating J
payment in cash, when it was made in goods,—the special partner is ,
liable exactly as if no advertisement were published, or certificate
filed. His liability is not confined to the period for which the adver-
tisement states that the partnership is ee Ci. 1860,
Haviland v. Chace, 39 Barb, 288, Kx yee

Publication. 1 2. S.'765, § 9 (am’d by L. 1862, p. 880, c. 476),
The partners shall publish the terms of the partnership when regis-
tered,} for at least six weeks immediately after such registry in two
newspapers, to be designated by the clerk of the county in which such
registry shall be made, and to be published in the Senate district or
city, or town, in which their business shall be carried on; and if such
publication be rot made, the partnership shall be deemed general.

Errors in the advertisement. The terms of the partnership
must be published truly, and in two papers.

The amount of the capital to be paid in by the special partner, is
a material portion of the terms required to be published. Where, by
a misprint in one of the papers, the capital contributed was published
as $5,000 instead of $2,000, which was the fact,—Held, that the special
partner was liable asa general partner. Ct. of Hrrors, 1846, Argall
v. Smith, 3 Den, 485.

In the publication of the certificate of the terms of a limited part-
nership, a trifling mistake in the publication of the names of the part-
ners, as Araa.z for ARGALL, will not vitiate the publication. Supreme
Ct. 1840, Bowen v. Argall, 24 Wend. 496,

Where the papers all were sufficient in form, and the notice sufi-
ciently published; but the notice stated that the partnership was to
commence November 16th, instead of October 16th, as provided in the
articles; in an action to charge the special partner for a debt con-
tracted after November,—Held, that the error in date being uninten-

 

+ * As to effect of an unrecorded certificate, when used as proof of a gencral part-
nership, see Gray v. Gibson, 6 Mich. 300.
+ The word ‘‘requested” is a misprint in the official copy, for “registered.”
See 1 2. S. 3d ed. marg. p. 765.
12 PARTNERSHIP LAWS.

tional, it formed no objection to the notice, Supreme Ci, 1848,
Madison County Bank », Gould, 5 Hiv, 309.

Mode of publication, The terms of the partnership must be
truly published, in two papers, as reqyired by tho statute. Not to
publish at all would be clearly fatal, and it is equally so to publish in
but one paper. Tho duty of making such publication is by tho statute
devolved upon the partners; and it is one which they must see to at
their peril. Cz. of Errors, 1846, Argall v, Smith, 8 Den. 435.

Time. <A publication once in each of tho six weeks immediately
following the registry, is sufficient. The statute counts by weeks,
taking ono day, no matter which, if according to the common course
of weekly publication, in each week, One publication in each of six
consecutive weeks of seven days each, tho first publication being within
the first seven days after the registry, satisfies the statute. Supreme Ce.
1840, Bowen ». Argall, 24 Wend. 496. Seo § 24 of the statute, and
note (delow), and compare the cases on other similar statutes, in 4d),
N.Y. Dig. tit. Time,

Form of Advertisement of Terms of Partnership.

[The better practice is to publish a copy of the certificate, with sig-
natures. |

Proof of Publication. 1 2. S.'765, § 10, Affidavits of the
publication of such notice, by the oe. of the newspapers in which
the same shall be published, may be filed with the clerk directing the
same, and shall be evidence of the facts therein contained.

Form of Affidavit of Publication.

City and county of , 9: A. B,, of , being
duly sworn says, that he is printer of the newspaper known as the
[desig ate newspaper], published daily [or, weekly] at [designate place
of its publication], and that the advertisoment, a copy whereof is
hereto annexed, was published in said newspaper, for six weeks suc
ecssivelygthat is to say, in the issues of said newspapers, dated respect-

ively the day of , the day of , the
day of , the day of » tho day of ’
and the day of » year 187
[Signature,]

Sworn, before me this
day of , 187
[Signature of officer.]
PARTNERSHIP LAWS. 13

Renewals, &c., of partnership. § 1 2. S. 765,§ 11. Every
renewal or continuance of such partnership, beyond the time origin-
ally fixed for its duration, shall be certified, acknowledged and _
recorded, and an affidavit of a general partuer be made and filed, and
notice be given, in the manner herein required for its original forma-
tion; and every such partnership which shall be otherwise renewed
or continued, shall be deemed a general partnership.

What alterations work a dissolution. 1 2. S. 765, § 12
(am’d by L. 1858, p. 449, ¢. 289; and see 1 ZL, 1857, p.
837, c. 414, § 2). Every alteration which shall be made in the
names of the general partners, in the nature of the business,* or
in the capital or shares thereof con®fbuted, held or owned,
or to be contributed, held or owned, by any of the special
partners, and the death of any partner, whether general or
special, shall be deemed a dissolution of the partnership, unless ihe
articles of partnership shall specify that in such events the partner-
ship shall be continued by the survivors, in which case it may be so
continued with the assent of the heirs or legal representatives of the
deceased partner.t And every such partnership which shall be car-
ried on after such atteration shall have been made, or such death shall
have occurred, shall be deemed a general partnership in respect to all
business transacted: suc eration or death, except in the case of
a provision in the articles of partnership for the continuance of the
business by the survivors as aforesaid, in which case the heirs or legal
representatives of the deceased partner may succeed to the partner-
ship rights of such deceased partner, and continue the business the
same as if such partner had remained alive; provided, however, that
one or more special partner or partners may be added to the partner-
ship upon actually paying in an additional amount of capital, to be
agreed upon by the general and special partners, and the alteration of
the partnership by such additional special partners, shall not make
the partnership general, nor alter its name nor work a dissolution,
provided the general partners in the partnership name shall file an
additional certificate with the clerk, with whom the original certificate
may: have been filed, verified on oath by one of them, stating the
names and residences of such additional special partners, and the
amounts respectively contributed to the common stock by them. And
any special partner, or the heirs or legal representatives of any such
special partner, deceased, may sell his interest in the partnership with-
out working a dissolution thereof, or rendering the partnership gen-
eral, provided a notice of such sale be filed within ten days thereafter,
with the clerk with whom such original certificate of partnership may

 

* As to alterations of which the special partner was ignorant, see Singer v.
Kelly, 44 Penn. St. 145.

f The admission of a new general partner necessitates a reorganization de novo.
Andrews v. Schott, 10 Penn. St. 47.
14 PARTNERSHIP LAWS.

have been filed, and the purchaser, of such interest may thereupon be-
come a special partner, with the same rights as an original special
partner.

Removal. If the firm remove their place of business from the
county where it was first established, atid where the certificate required
by the statute had been duly filed, to another county, and the business
is continued there, without filing in the clerk’s office of that county any
new certificate, the special partners are rendered liable as general
partners. Ct. of App. 1870, Riper v. Poppenhausen, 43 WV. Y. 68,

Buying out the firm. A special partner, who buys out the en-
tire firm property, and continues the business in his own name, for
his own account, interferes with the firm business contrary to § 17,
and renders himself liable as a general partner. Supreme Ct. 1871,
First National Bank of Canandaigua v. Whitney, 4 Lans. 34.

Death of partner. Limited partnerships formed under the
statute are governed, and the mutual rights, duties, and liabilities of
the pdrtners are regulated, by the common law, in every respect not
taken out of the general rule by the statute. The death of the special
partner, within the period fixed for the duration of the agreement,
dissolves it. MW. Y. Surr. Ct. 1850, Ames v. Downing, 1 Bradf.
321; S. P. Jacquin v. Buisson, 11 How. Pr. 385, But see amend-
ment of 1858 (above).

Assent of heirs, &c. i seems that some positive act of assent
is necessary on the part of the heirs or legal representatives (the laf-
ter term including next of kin, or legatees, as the case may be), and
mere silent acquiescence would not be enough. Walkenshaw ». Per-
zel, 4 Robt, 426; s.c. 32 How. Pr. 233. Compare Richter v. Pop-
penhusen, 9 Add. Pr. NV. S. 263; 8. c. 42 WN. Y. 3738.

Effect of dissolution. ¢ seems that, upon dissolution by an act
specified in section 12, the general partnership which arises becomes
subject tqall the rules applicable to general partnerships ; and that
the same act which dissolves the former may also be a dissolution of
the latter. Mattison v. Demarest, 4 Robt. 161.

Names composing firm ; and signboard. 1 2. S.'765, § 18
(amd by 2 L. 1866, p. 1424, c. 661).* The business of the partner- |

 

7 Compare previous amendment, Z, 1862, p. 880, c. 476, §1; L, 1864, p. 71,
c. 48,
PARTNERSHIP LAWS. 15

ship shall be conducted under a firm in which the names of the gen-
eral partners only shall be inserted, except that where there are two
or more general partners the firm name may consist of either one or
more of such general partners, with or without the addition of the
words “and company,” or “ & C'o.”* and if the name of any special
partner shall be used in such firm with his privity, he shall be deemed
a general partner; but the said partnership shall put upon some con-
spicuous place on the outside and in front of the building in which
it has its chief place of business, some sign on which shall be pointed
in legible Euglish characters, all the names in full of all the members
of said partnership, and in default thereof no action shall be abated or
dismissed by reason of the proof of plaintiff of the partnership failing
to meet the allegations of his pleading as to the names and number of
the partnership; but the pleading may be amended on the trial to
conform to the proof in that respect without costs.

§ 2. (of Z. 1866, above cited). This act shall apply to existing
limited partnerships, but shall not discharge any special partner from
any liability now existing upon any debt or obligation heretofore con-
tracted.

Whether the provision of 1 R. S. 766, § 13,—relative to firm
name of limited partnership,—was merely directory,— Query ? Ward
vo. Newell, 42 Barb, 482; s. c. 28 How. Pr. 102.

Continued use of old name. 1 Z. 1868, p. 528, c. 256, § 1.
Any limited partnership which may hereafter be formed under the
laws of this State, may use the firm name of any former general or
limited partnership formed under said laws, where a majority of the
partners, general or special, in either of such last mentiored copart-
nerships, shall be members of the new limited copartnership; or,
where a majority of the members of such former copartnership shall
consent in writing to the use of such firm name by such new copart-
nership, upon complying with the provisions of the act entitled “An
act allowing the continued use of copartnership names in certain
cases,” passed April seventeenth, eighteen hundred and fifty-four, and
the acts amendatory thereof, so far as the same may be applicable.

See the act as to copartnership names stated below, on p. 27.
Suits. 1 2. S. 766, § 14. Suits in relation to the business of the

partnersihp, may be brought and conducted, by and against the gen-
eral partners, in the same manner as if there were no special partners.

 

* Tn a Pennsylvania case, where the statute prescribed that the business of the
partnership should be conducted under a firm iu which the names of the general
partners only should be inserted, without the addition of the word “Company,”
or any other general terms—a firm composed of two general partners and one
special partner carried on business under the name of one general partner & Co.,
Held, that the statute was violated. Andrews v, Schott, 10 Penn. St. 47.
16 PARTNERSHIP LAWS.

This provision does not apply to an action for an injunction and
a receiver, to close the business of a special partnership formed under
the statute, based on the ground of insolvency, but merely to claims
by or against them asa partnership. MW. Y. Superior Ct. Sp. T. 1866,
Walkenshaw ». Perzel, 4 Robi, 426 ;*s. c. 82 How. Pr. 238.

Judgment against partners. Under section 14, judgments in
suits thus brought must necessarily have the same effect, so far as re-
lates to partnership property, as if brought against all the partners;
and a levy under a judgment recovered in such an action against the
general partners, binds the whole partnership property. Cz. of App.
1862, Van Alstyne v. Cook, 25 W. Y. 489.

Execution. As the special partners cannot interfere with the
property or take the contro] from the general partners, it follows that
the sheriff, on an execution against such partner, has no such power.
He cannct, on such execution, do anything with the partnership
property that the special partner could not do. He, therefore, has
no authority to take from the general partners, the partnership prop-
erty, for the purpose of selling the interest of the special partner in
the property and assets of the firm; nor can he, as in the case of other
partnerships, sell the interest of one partner in the property of the firm,
and deliver the property in which such interest is sold to the pur-
chaser. Ct. of App. 1864, Harris ». Murray, 28 NW. Y. 574.

In general partnerships the sheriff may seize the partnership prop-
erty on an attachment or execution against one of the partners. Ct.
of App. 1870, Smith v. Orser, 42.N. Y. 132; afi’'g 48 Barb. 187.

Withdrawing capital. 1 2. S.'766,§ 15. No part of the sum
which any special partner shall have contributed to the capital stock,
shall be withdrawn by him, or paid or transferred to him, in the shape
of dividends, profits or otherwise, at any time during the continuance
of the partnership; but any partner may annually receive lawful in-
terest om the sum so contributed by him, if the payment of such inter-
est shall not reduce the original amount of such capital ; and if, after
the payment of such interest, any profits shall remain to be divided,

he may al ceive hieportion of such profits.

Merely giving notes, payable in future, by the general partners,
in the same name as that of the partnership, on making an agree-
ment of dissolution with a view to purchase the special partner’s
PARTNERSHIP LAWS. 17

interest, is not a withdrawal of capital, within section 15 of the statute.
NV. Y. Com. Pl. 1855, Lachaise v. Marks, 4 #. D. Smith, 610.

The receipt of dividends by a special partner will constitute him
a general partner, if they are drawn as a device to withdraw capital ;
but dividends may be’ paid to him in good faith, with the effect only
to require him to restore them, in case the capital shall thereby be yn-.
intentionally reduced. 0.

The withdrawal, by a special partner, of his capital, before the act-
ual dissolution of the firm, though after notice of dissolution, renders
him liable as a general partner. W. Y. Com. Pi. Bulkley v. Marks,
15 Abd. Pr. 454; 8. 0. sub nom. Buckley v. Lord, 24 How. Pr. 455.

Refunding interest. 1 R. S. 766, § 16. If it shall appear,
that by the payment of interest or profits to any special partner, the
original capital has been reduced, the partner receiving the same shall
be bound to restore the amount necessary to make good his share of
capital, with interest.

“Powers of special partner. 1 2. S. 766, § 17 (am’d by 1 L.
‘1857, p. 837, c. 414, § 3). A special partner may from time to time
exainine into the state and progress of the partnership concerns, and
may advise as to their management; he may also loan money to, and’
advance and pay money for the partnership, and may take and hold: .
the notes, drafts, acceptances and bonds of or belonging to the part-
nership, as security for the repayment of such moneys and interest,
and may use and lend his name and credit as security for the partner-
ship, in any business thereof, and shall have the same rights and
remedies in these respects as any other creditor might have. He
may also negotiate sales, purchases, and other business for the part-
nership, but no business so negotiated shall “be binding upon the
partnership, until approved by a general partner. Excepting as
herein mentioned, he shall not transact any business on account of the’
partnership, nor be employed for that purpose, as agent, attorney or
otherwise.* If he shall interfere coritrary to these provisions he shall
be deemed a general partner.t

Leases. 1 Z. 1872, p. 260, c. 114. It shall be lawful for a
special partner, in any limited partnership, to lease to the general,
partuer or partners, any lands, tenements or other property, for the

purposes of the partnership, at such rents and upon such terms as may
be agreed upon between them.

 

* Effect of stipulating that his son shall be employed by the firm, and have
control over payments. Richardson v, Hogg, 38 Penn. St, 153.

+ So also he may be held liable on the ground of having led him, the creditor,
to suppose that the firm was a general partnership, Barrows v. Downs,9 R, J. 446.

2
18 PARTNERSHIP LAWS.

Loans. A special partner may make a loan to the firm without
necessarily rendering himself liable as a general partner. Borrowing
money to enlarge the business is not a “change” of the terms of
partnership, within the meaning of the statute. MW. VY. Superior Ct.
Sp. T. 1866, Walkenshaw v. Perzel, 4 Robt. 426; 8, c. 32 How. Pr.
233.

Special partner of pledgee may buy. A special partner of a
firm with whom property is pledged is not incapacitated from pur-
chasing the pledge at a sale made by the firm. As he is prohibited
by 2 B. S. '766, § 17, from transacting any business on account of the
partnership, and cannot be employed as agent, attorney, or otherwise,
no duty devolves upon him in reference to the bailment. He cannot
aid or direct in the sale; and hehce is not within the rule that one
shall not be permitted to purchase who has a duty inconsistent with
the character of a purchaser. WV. Y. Com. Pl. Sp. T. 1857, Lewis ».
Graham, 4 Add. Pr. 106. But see the act of 1857 above stated, en-
larging the powers of the special partner. ‘4

Title to real estate should be taken in the name of the general
partners alone. To take it in the name of all, renders the special
partner a tenant in common, and so operates as a withdrawal of
capital to the extent of his undivided interest in the land. But if it
is not shown that the special partner knew and consented to the use
of his name in the conveyance, he does not by it become chargeable
as a general partner. Supreme Ct. 1848, Madison County Bank vw
Gould, 5 Hill, 309.

Accounting. 1 2. S.'766, § 18. The general partners shall be
liable to account to each other and to the special partners, for their
management of the concern, both in law and equity, as other partners
now are by law.

4

Bill for accounting and receiver, on dissolution, sustained, not-
withstanding the partnership was a limited one, and the complainant
was the gpecial partner. The limited partner has the same right that
a general partner has, to insist that the assets be applied to pay the
partnership dcbts; and the statute [1 R. S. 766, § 18] expressly
entitles him to an accounting. Supreme Ct. Sp. T. 1853, Hogg ».
Ellis, 8 How. Pr. 473.

Frauds. 1 2. S.'766,§ 19. Every partner who shall be guilty
of any fraud in the affairs of the partnership, shall be liable civilly to
PARTNERSHIP LAWS. : 19

the party injured, to the extent of his damage; and shall also be liable
to an indictment for a misdemeanor, punishable by fine or imprison-
ment, or both, in the discretion of the court by whith he shall be
tried.

Partnership transfers void. 1 2. S.'766,§ 20. Every sale,
assignment, or transfer of any of the property or effects of such
partnership, made by such partnership when insolvent, or in contem-
plation of insolvency, or after or in contemplation of the insolvency of
any partner, with the intent of giving a preference to any creditor of
such partnership or insolvent partner over other creditors of such part-
nership; and every judgment confessed, lien created, or security given,
by such partnership, under the like circumstances, and with the like
intent, shall be void, as against the creditors of such partnership.

As to what is insolvency or contemplation of insolvency, see
Walkenshaw ». Perzel, 4 Robt. 426; 8. 0. 32 How. Pr. 233, and Abd,
N.Y. Dig. tit. Deriirtons.

Certain transfers, &c., of their property, by general
partners, void. 1 2. S. '767,§ 21. Every such sale, assignment,
or transfer of any of the property or effects of a general or special
partner, made by such general or special partner, when insolvent, or
in contemplation of insolvency, or after or in contemplation of the
insolvency of the partnership, with the intent of giving to any creditor
of his own, or of the partnership, a preference over creditors of the
partnership; and every judgment confessed, lien created, or security
given, by any such partner, under the like circumstances, and with
the like intent, shall be void, as against the cretlitors of the part-
nership.

When special partner to become liable. 1 &. S. 767, § 22.
Every special partner who shall violate any provision of the two last
preceding sections, or who shall concur in, or assent to, any such
violation by the partnership, or by any individual partner, shall be
liable as a general partner.

Insolvency of limited partnership. Creditors of a limited
partnership prior to the period limited for it to terminate, are entitled
in equity to be paid out of its assets, in preference to even bona fide
holders of notes issued by the general partner, although in the name
of the firm, but after the dissolution. If the special partner has be-
come liable as general partner, by reason of the business being car-

 

* Creditors are not precluded from holding him liable, by the fact that they
had knowledge at the time of their dealings, that a limited partnership was
relied on. Andrews v, Schott, 10 Penn. St. 47.
20 PARTNERSHIP LAWS.

‘pied on after the expiration of the limited partnership, the remedy of
the note-holder is by suit at law against him individually. Chancery,
1843, Haggerty v. Taylor, 10 Paige, 261.

When the special partner, under a limited partnership, does not
pay in the amount of his capital specified in the certificate, and the
firm, having ‘become insolvent, assign the property thereof for the
benefit of creditors, the assignee may maintain an action against the
special partner to recover fur the estate the capital agreed to be put
in. WV. Y. Com. Pl. 1854, Robinson v. McIntosh, 3 #. D, Smith, 221.

The property of a limited partnership, after insolvency, is deemed
a trust fund for the benefit of all the creditors ; if the partners neglect
to place it in the hands of a proper trustee for distribution, any cred-
itor may proceed at once, in equity, for the appointment of a receiver
and a distribution. Jt.is not necessary he should first obtain judg-
ment at law. Chancery, 1889, Innes v. Lansing, 7 Paige, 583; Su-
preme Ct, 1848, Whitewright v. Stimpson, 2 Bard. 379; 1859, Jack-
son v. Sheldon, 9 Abd. Pr. 127.

But these cases are overruled, below, so far as they preclude one
creditor from obtaining priority.

General assignment. The rule that a partner can in no case
make a general assignment to a trustee for the benefit of creditors,
without the assent of his copartner, the latter being present, and
capable of acting, is applicable to a limited partnership, ¥. Y.
Superior Ct. 1849, Hayes v. Heyer, 8 Sandf. 284, 293.

Such a partnership being insolvent, one of the general partners,
with the consent of the special partner, made an assignment of all the
partnership effects for the payment of all the firm debts ratably. Held,
that the other general partner, who might have been, but was not
consulted in the matter, was entitled to have it set aside and a re-
ceiver appointed. b.; but compare Robinson v. McIntosh, 3 #. D.
Smith, 221; and Robinson v. Gregory, cited in 30 NV. Y. 350.

But if the assignment is executed, and acknowledged by the resi-
dent payjner in person, for himself, for the firm, and as the attorney
in fact of the non-resident partners, who ratify his acts, it is sufficiently
executed. The statute requiring acknowledgment of general assign-
ments (Z. 1860, c. 348) does not require it of non-residents. WV. Y.
Com, Pl. Sp. T. 1868, Darrow »v. Bruff, 36 How. Pr. 479.

Priority of diligent creditor. The assets of an insolvent lim-
ited partnership are not necessarily to be divided equally among its
PARTNERSHIP LAWS. 21

ereditors, <A creditor who, by superior diligence, acquires a judg-
ment against the firm prior to other creditors, is entitled to a satisfac-
tion of the same in full, though there is not enough to pay the others
also [disapproving 9 Abb. Pr. 127.] Supreme Ct. 1861, Artisans’
Bank v. Treadwell, 34 Barb. §53.*

A judgment creditor of a' insolvent limited partnership, formed
under the Revised Statutes, .sho have made an assignment for the
benefit of creditors contrary to the statute, may maintain an action in
his own behalf to set aside the assignment, and obtain payment of his
debt, at least in the absence of any such proceeding on the part of
other creditors. Supreme Ct. 1860, Greene v. Breck, 382 Barb. 73;
rev’g 8s. c. 10 Abb. Pr. 42.

Insolvency and preferences. Sections 20, 21, and 22, do not
prevent a creditor from obtaining, by superior diligence in hostile
proceedings, a lien in preference over other creditors. The members
of a limited partuership, before or after insolvency, are just as liable
to be sued for their debts as other natural persons. Their creditors
are entitled to recover judgments against them, with the view to
reach the individual property as well as the partnership property. It
is true the partnership property of a limited partnership is a trust fund
for the payment of the partnership debts ; but so is the partnership
property of all partnerships, general or epecial. The only difference
between the property of a general and a special partnership, in this
respect, is such as is made in sections 20 and 21 of 1 #. S. 766, for-
bidding the giving of any preférence among the creditors of a special
partnership as therein prescribed. A creditor of such partnership
may acquire a lien upon the partnership property by procedure in
invitum, just as much and as properly in one case as in the other.
[Overruling 7 Paige, 583; 2 Barb. 379; 3 Sandf. 299; 9 Abd. Pr.
127.] Ct. of App. 1862, Van Alstyne v. Cook, 25 W. Y. 489.

Special partner postponed as creditor. 1 2. S. 767, § 23
(am’d by 1 L. 1857, p. 887, c. 414, § 4.) In case of the insolvency
or bankruptey of the partnership, no special partner shall, except for
claims contracted pursuant to section seventeen, under any circum-

 

* The court, considering the point a difficult and important one, did not give
full effect to its decision. but directed that an action should be brought, to test
the question in the Court of Appeals, the property, meanwhile, to be kept by a re-
ceiver. See the decision of the latter court, in Van Alstyne v. Cook, 25 WN. Y.
489, above stated; overruling Jackson v, Sheldon, 9 465, Pr, 127,
22 PARTNERSHIP LAWS.

stances, be allowed to claim as a creditor, until the claims of all the:
other creditors of the partnership shall be satisfied.*

Before the amendment. The provision of 1 R. S. 767, § 23
(before the amendment of 1857, c. 414, forbidding special partners to
claim as creditors until the claims of all other creditors of the insoly-
ent limited partnership should be satisfied), only applied to claims
held by the special partner individually, and acquired by him before
the dissolution. Ct. of App. 1866, Ilayes v. Weyer, 35 NM. Y. 326,

Assignment which provides for demand due to special partner
ratably with other debts, void. Mills x Argall, 6 Paige, 577.

Where the special partner is a member of another general firm, to
which the special partnership is indebted when it becomes insolvent,
neither the debt of the general partnership, nor the special partner’s
interest in it, is within the provision that, “in case of the insolvency
or bankruptcy of a special partnership, no special: partner shall, under
any circumstances, be allowed to claim as a creditor, until the claims
of all other creditors of the partnership shall be satisfied.” This pro-
vision simply places the special partner, so far as he is a creditor, upon
the same footing as if he were a general partner. In both cases the
partner must wait until all the other creditors are paid. If the same
person be a partner in two firms, one of which becomes insolvent,
while the other is solvent and a creditor of the insolvent firm, then the
ereditor firm may recover from the insolvent firm, notwithstanding a
member of the insolvent firm is also a member of the solvent firm.
NV. Y. Superior Ct. 1850, Hayes v. Bement, 3 Sand. 394; 5.0.8
N.Y. Leg. Obs. 83.

A special partner in a limited partnership, under the statute of
New Jersey (which in this respect is like the provision of the New
York statute, 1 #. S. '767, § 28), cannot recover against the general
partners, on a note given by them to him for good consideration, if .
the partnership be insolvent. [20 W. Y. 178.] Supreme Ct. 1864,
Ward v. Newell, 42 Bard. 482; s. o. 28 How. Pr. 102.

Prior%o the amendment by 1 ZL. 1857, p. 837, c. 414, §§ 3, 4, a
special partner, upon the insolvency of the partnership, was not en-
titled to dividends in common with the other creditors of the partner-
shiip, for cash loaned by him to it during the prosecution of its busi-
ness and used in payment of its liabilities. Accordingly, where a

 

* See, on this point, Dunning’s Appoal, 44 Penn, St, 150; and Clapp v. Lacey,
35 Conn. 463.
PARTNERSHIP LAWS. 23

limited partnership was formed in 1854 and became insolvent in 1855,
being indebted to the special partner for cash so loaned and used,—
Held, that the act of 1857 did not apply, and that*the special partner
could not be allowed to claim as a creditor until the claims of all the
other creditors of the partnership should be satisfied. Ct. of App.
1859, White v. Hackett, 20 WV. ¥. 178; rev’g s. c. 24 Bard, 290.

Dissolution, how effected. 1 2. S.'767,§ 24. No dissolution .
of such partnership by the acts of the parties, shall take place pre-
vious to the time specified in the certificate of its formation, or in the
certificate of its renewal, until a notice of such dissolution shall have
been filed and recorded in the clerk’s office in which the original certifi-
cate was recorded, and published once in each week for four weeks,*
in a newspaper printed in each of the counties where the partnership
may have places of business, and in the State paper.

Dissolution by expiration of time. As the original term
during whicn a limited partnership is to continue is required to be
published at the commencement of the business [l BR. S. 764, § 4,
subd. 5; §§ 9, 11], every person dealing with the firm is presumed to
have notices of the termination of the copartnership ; so that no formal
notice of the dissolution of the firm is necessary to be given, to pre-
vent any of the general partners from charging the copartnership with
new debts, contracted after the termination of the copartnership.
Chancery, 1843, Haggerty v. Taylor, 10 Paige, 261.

By agreement and notice. Where a limited partnership is
dissolved by the agreement of the parties before the period fixed for
its termination by the original certificate, it continues, as to persons
crediting the firm without actual notice of such dissolution, until the
notice required by the statute has been filed, recorded, and published
for four weeks, as therein prescribed. Ct. of App. 1854, Beers v.
Reynolds, 11 4. Y. (1 Kern.) 97; aff’g 12 Barb, 288; Supreme
Ct. 1862 (Bradford, Referee,) Fanshawe v. Lane, 16 4b, Pr. 71.

If any alteration is made in the capital or shares, and the partner-
ship is in any manner thereafter carried on before the publication of
the notice is completed, the special partner becomes liable as a gen-
eral partner. Beers v. Reynolds (above cited).

Therefore, where parties to a-limited partnership agreed to dissolve
it, and caused notice of dissolution to be filed and recorded, and com-’

* This has been held to make an interval of one week between the successive
publications essential. Jn re King, 7 Bank. Reg. 279.

 
94 PARTNERSHIP LAWS.

menced publication of it, and the special partner at the same time
sold his interest in the copartnership effects to the general partner,
‘who secured the price by a mortgage on the effects and other prop-
erty, and by a judgment, and continued the same kind of business ;
and afterwards, and before the publication was completed, he pur-
chased goods of the plaintiff, who had no actual notice of the dissolu-
tion ;—Held, that the special partner was liable to the plaintiff as a
general partner, without reference to the intent with which the disso-
lution was made, and the mortgage and judgment taken. 6.

In 1846, D., B. & M. formed a limited partnership, M. being the
special partner in 1846, to continue until 1849. In 1847 they agreed
that D. should withdraw, and B. should carry on the business ; but
that D. should allow his name to be used as a partner in purchasing
goods and giving notes therefor, until certain notes should be paid,
and then the partnership should be publicly dissolved. Held, that the
three were partners as to third persons until the notes referred to
were paid ; and were liable on notes given on the intermediate pur-
chase of goods, under the new arrangement. Supreme Ct. 1851,
Bulkley v. Dingman, 11 Barb. 289.

Form of Notice of Dissolution of Partnership.

Notice is hereby given that the limited partnership of A. B. &
Co., composed of the undersigned A. & B. as general and C. D. as
special partners, is dissolved by mutual consent, on and after the
day of , 187.

[Signatures of partners.]
[Paie.]

Until the completion of such notice, the partnership continues
as to persons crediting the firm without actual notice of such dissolu-
tion. Beers v. Reynolds, 11 NW. Y. (1 Kern.) 97.

A limited partnership cannot be dissolved by the act of the par-
ties, untif four weeks after the publication of the notice of the intended
dissolution, WV. Y. Com. Pi, 1863, Bulkley v. Marks, 15 4s. Pr.
454; 8. c. sub nom. Buckley v. Lord, 24 How. Pr. 455. .

Delay in filing proofs of publication not material. Mattison
v. Demarest, 4 Robt. 161.
PARTNERSHIP LAWS.) ) 4) QB

IIl.—COMPROMISES.
Act of 1838.

Compromise may bé made by one or more partners.
LL. 1888, p. 243, ¢. 257, § 1. Whenever any copartnership firm shall
be dissolved by mutual consent or otherwise, it shall and may be
lawful for any one or more of the individuals who was or were em-
braced in such copartnership firm, to make a separate composition or
compromise with any one or all of the creditors of such copartnership
firm ; and such composition or compromise shall be a full and effect-
ual discharge to the debtor or debtors making the same, and to them
only, of and from all and every liability to the creditor or creditors
with whom the same is made or incurred by reason of his or their
connection with such copartnership firm. i

Discharge. § 2 (am’d L. 1845, p. 410, ¢. 348). Every such
debtor or debtors making such composition or compromise, shall take
from the creditor or creditors with whom he may make the same, a
note or memorandum in writing, exonerating him or them from all
and every individual liability incurred by reason of such connection
with such copartnership firm, which note or memorandum may be
given in evidence by such debtor or debtors under the general issue,
in bar of such creditor’s right of recovery against him or them; and
if such liability shall be by judgment in any court of record in this
State, then on a production to and filing with the clerk of such court,
the said note or memorandum in writing, duly acknowledged by the
party or parties making the same, in the same manner as satisfaction
of judgment is now required by law to be acknowledged, such clerk
shall discharge said judgment of record so far as the said compromis-
ing debtor or debtors shall be concerned. . :

Form of Release on Composition or Compromise by
one of Several Partners.

Whereas the late copartnership firm of Y. Z. & Co., of > are
indebted to me, the undersigned, A. B., , of the city of F
in the sum of dollars [and if the indebtedness is on a judgment
of a court of record of this State, add words to this effect, by virtue of
a judgment recovered in the Supreme Court of the State of in
an action wherein said A.B. was the plaintiff, and the said late firm
were defendants]: And whereas such firm has been dissolved: And
whereas I have agreed with Y. Z., a member of the said firm, to com-
pound or compromise my claim on him individually in respect to the
said indebtedness to me of the said firm, for the sum of dollars :
Now xnow vg, that in consideration of the sum of dollars to
26 '\| °. 'l paRTNWERSHIP LAWS.

me, the said A. B., paid by the said Y. Z., at or before the time of
my subscribing this release, J, the said A. B., do hereby, according to.
the statute in such case made, release, acquit and forever discharge
the said Y. Z. and his estate of and from all individual liability,
claim and demand whatsoever, for or iti respect of the said indebted-
ness to me of the said firm: Proven, however, that this release is
made pursuant to an act entitled “An act for the relief of partners
and joint debtors, passed April 18, 1888, aid shall have no greater’
or other effect than as by the said act and by this release is provided.
Witness my hand and seal, this day of , 187

Acknowledgment. If the indebtedness is on a judgment, the
release should be acknowledged and filed with the clerk of the court
in which the judgment was obtained. The acknowledgment may be
taken before the clerk, or some judge of the court in which the judg-:
ment was rendered, or before some judge of the county -courts or
commissioner of deeds, who shall certify that the party making the
same was known or was made known to such officer by competent
proof. 2 R. S. 362, § 23; ZL. 1834, p. 458, c. 262.

If the party resides out of the State, the acknowledgment may be
before either of the officers before whom conveyances of real estate
may be acknowledged, by persons residing or being out of this State,
enumerated on pages 6 to 8 of this pamphlet.

Copartners’ rights. Z. 1838, p. 243, c. 257, § 8. Such com-
promise or composition with an individual member of a firm, shall
not be so construed as to discharge the other copartners, nor shall it
impair the right of the creditor to proceed at law or in equity against
the members of such copartnership firm as have not been discharged :
And the member or members of such copartnership firm so proceeded
against shall be permitted to set off any demand against said creditor
or creditors which could have been set off had such suit been brought
against all the individuals composing such firm; nor shall such com-
promise or discharge of an individual of a firm, prevent the other
members of such firm from availing themselves of any defense at law
or equity, that would have been available had not this act been passed,
except that they shall not set up the discharge of one individual as a
discharge of the other copartners, unless it shall appear that all were
intended to be discharged.

Contribution. L. 1838, p. 243, c. 257, § 4. Such compromise
or composition of an individual of a firm with a creditor of such firm,
shall in no wise affect the right of the other copartners to eall on the
PARTNERSHIP LAWS. 27

individual making such compromise, for his ratable portion of such
copartnership dekt, the same as if this law had not been passed.

Joint debtors. § 5. The above provisions in reference to co-
partners of a firm, shall extend to joint debtors, who are hereby au-
thorized individually to compound or compromise for their joint in-
debtedness, with the like effect in reference to creditors and to joint
debtors of the individuals so compromising, as is above provided in
reference to copartners. pro

II.—FIRM NAMES.

Fictitious names. Z. 1833, p. 404, c. 281, §1. No person
shall hereafter transact business in the name of a partner not inter-
ested in his firm, and where the designation “and company,” or “ &

Co.,” is re it shall seprepent an actual partner or partners.

Penalty. JZ. 1838, p. 404, c. 281, § 2. Any person offending
against the provisions of this act, shall, upon conviction thereof, be
deemed guilty of a misdemeanor, and be punished by a fine not ex-
ceeding one thousand dollars. ,

Amedment of foregoing act. Z. 1849, p. 502, c. 347, § 1.
The act entilled ‘An act to prevent persons from transacting business
under fictitious names,” passed April 29, 1833, shall not apply to
commercial copartnerships located and transacting business in foreign
countries, but they may use their styles or firms of their houses in
this State.

Name, when to be continued. Z. 1854, p. 1084, ¢. 400, § 1.
When any copartnership shall have used or hereafter shall use any
copartnership name, and the business conducted by it shall be con-
tinued by some or any of the copartners, their assigns or appointees,
it shall be lawful to continue the use of such name, provided that on
every change of the persons continuing such use a certificate shall be
filed and notice published as is hereinafter expressed.

Certificate to be acknowledged and published. § 2. On
every change of the person or persons continuing the use of such
name, he or they shall sign and acknowledge, before any officer by
law authorized to take acknowledgment of deeds, a certificate declar-
ing the person or persons dealing under such name, with their place
or places of abode, and file the same with the clerk of the county in
which shall be his or their principal place of business, and shall cause
the same to be published in a newspaper printed in the town or city
8 PARTNERSHIP LAWS.

in which shall be such principal place of business, or if none be printed
in such town, then in a newspaper printed in the county town, and in
the newspaper printed by the printer to this State, for four successive

weeks.

Register of firms. § 3. The county clerk shall keep a register
of such firms and names, entering in alphabetical order the name of
every firm and of the copartner or copartners thereof, for which regis-
tering and filing he shall receive for each firm a fee of one dollar, and an
additional fee of ten cents for every name of a copartner beyond two;
and the copies of such certificate and registry certified by him, and the
affidavit of such publication, shall be evidence.

Act to whom to apply. § 4. The provisions of this act shall
apply only to such firms or copartnerships having business relations
with foreign countries, anything in this act in anywise contained to
the contrary notwithstanding. E

Repeal. § 5. All statutes to the contrary of this act are hereby ©

repealed, as to persons within the purview hereof.

Limited partnership. As to names, &c., of limited partner-
ships, formed under the Revised Statutes, see page 14 of this pamphlet.

Le, Addinba .
ADDENDA.

INCLUDING STATUTES AND DECISIONS TO JANUARY 1, 1880.

Page 4. First paragraph. Add: Nor is it enough to show that the
departure from the statute was by mistake or unintentional; Court of Ap-
peals, 1875, Van Ingen v. Whitman, 62 N. Y. 513; or that it was in good
faith and not prejudicial to any creditor. 1877, Durant v. Abendroth, 69
Id. 148, affi'g 41 Super. Ct. G. & 8.) 53.

Second paragraph, Add: Payment in a check dated after the filing of
the affidavit, &c., is not enough. Durant v. Abendroth (above). Payment
by turning over assets on the promise of a general partner to turn them
into cash, and pay the cash in, is not enough. Court of Appeals, 1875,
Van Ingen v. Whitman, 62 N.Y. 513. But it is enough if the special part-
ner pays in cash’ of which he is the real owner in his own right. N. Y.

Supey. Ct. 1877, Lawrence v. Merrifield, 42,8 . Ct. J. & 8) 3p. s—
OUK ones “a be ore
Page 11. See paragraph, Add: Tf a false statement, within‘ the
meaning of the statute, is made, the liability imposed by the statute fol-
lows, although the error was a careless and innocent mistake, and although

no injury resulted to any creditor. Durant v. Abendroth, Court of Appeals,
1877, 69 N. Y. 148, affi’g 41 Super. Ct. (J. & S.) 53,

I Page 27. Second paragraph. Insert: The statute is not to be extend-
ed beyond its terms. Court of Appeals, 1878, Wood v. Hrie Ry. Co. 72 N.
Y. 196, affi’'g 9 Hun, 648. It is not available to enable other persons con-
tracting in the ordinary course of basiness to repudiate their obligations.
1d.; Bull’s Head Bank v,. McFeeters, 41 Super. Ct. (J. & 8.) 215. It is
enough to take the case out of the statute that the person whose name is
continued in use is liable as a partner to third persons, although not a
partner as between himself and the members of the firm in fact. Supm.
Ct. 1874, Greenwood v. Brink, 1 Hun, 227; 8. c. 8 Supm. Ct. (T. & C.)
740; N.Y. Super. Ct. 1878, Hennequin v. Butterfield, 43 Super. Ct. (J..& 8.)
411. One who consents to the continued use of his name in a case where
it is not allowed by the statute, is liable for firm debts to dealers not
charged with notice of his retirement. N. Y. Super. Ct. 1878, Freeman v.
Falconer, 44 Super. Ct. (J. & 8.) 182. The statute does not entitle a re-
. tiring partner to enjoin the continuing partner and a new associate from
“continuing the use of the words “and Co.” Superior Ct. Special Term,
~ 1878, Luthrop v. Lathrop, 47 How. Pr. 582. :

Page 28, Add: L. 1863, p. 227, c. 144, am’d’g L. 1854, c. 400, above
stated. The fourth section of the act entitled “ An act allowing the con-
tinued use of copartnership names in certain cases,’”’ passed April seven-
teenth, eighteen hundred and fifty-four, is hereby amended so as to read
as follows: The provisions of this act shall apply to firms or copartner-
ships having business relations with foreign countries, and to all copart-
nerships in this State who have transacted business therein for a period of
five years, or upwards, and to any limited partnership formed under the
laws thereof, whose general partners or the majority of them shall have
‘been members of the prior copartnership and who shall elect to continue
their business under the name of such prior copartnership and comply
with the requirements of this act.
INDEX.

ACCOUNTING, 18.
ACKNOWLEDGMENT, what officers may take, 6.
when taken within the State, 6.
when taken without the State, 7.
when taken without the United States, 8.
of release, 26.
ADVERTISEMENT of formation, 12.
of dissolution, 23, 24.
AFFIDAVIT of payment, 10.
falsity of, 11.
ALTERATIONS, 13.
ASSENT of heirs, &c., to continue business, 14.
ASSIGNMENTS for benefit of creditors, 20.

CAPITAL, payment of, 4.
withdrawal of, 16.
CERTIFICATE of partnership, 5.
of name to be acknowleged and published, 27.
COMPOSITIONS, 25.
COMPROMISE may be made by one or more partners, 25.
CREDITORS not estopped, 19, noée.

DEATH of partner, 14.
30 INDEX.

DEBTS, liability for, after compromise, 26.
DELAY in filing papers, 10, 24.
DISCHARGE, 25.
DISSOLUTION, what alterations work a, 18.
effect of, 14.
by expiration of time, 23.
how effected, 23.
by agreement and notice, 23.
form of notice of dissolution, 24,
DORMANT partner, 4.
DOUBLE partnership, 22.

ERRORS in advertisement, 11.
EXECUTION against partner’s property, 16.

FALSE statement, liability for, 11.
FICTITIOUS names, 14, noize, 27.
FILING certificate, 9.
celay in filing, 10, 24.
FIRM names, 27.
FORM of acknowledgment of certificate, 6.
of certificate of formation of limited partnership, 5. ‘i eS
of affidavit to be filed with certificate, 10.
of advertisement of terms of partnership, 12.
“of notice of dissolution of partnership, 24.
of release on composition or compromise by one of several
partners, 25.
FRAUDS, 18.

in inducing formation, 4.
INDEX. 31

GENERAL assignment, 20.

INSOLVENCY of limited partnership, 19-21.
and preferences, 21.
INTEREST, refunding, 17.

JOINT debtors, compromises by, 27.
JUDGMENT against partners, 16.

LEASES by special partner, 17.
LIMITED partnership, purposes of, 3.
LOANS by special partner, 18.

MEMBERS of limited partnership, 3.
their powers, 4, 17.

s

NAME, when to be continued, 27.
NAMES composing limited partnership, 14.
NOTICE of dissolution, 24.

PARTNER, death of, 14.
taking in new, 13, note.

PARTNERS, judgment against, 16.
PENALTY for fictitious name, 27.
POWERS of members, 4, 17.
PRIORITY among creditors, 20-22.
PROOF of certificate, 6.
-PUBLICATION, 11, 23.

form of affidavit of, 12.

mode of, 12.

proof of, 12.
32 INDEX.

PUBLICATION, time of, 12, 23.

of notice of dissolution, 23, 24.

REAL estate, title to, 18.
RECORDING, 11.
REGISTER cf firms, 28.
RELEASE, acknowledgment of, 26.
on composition or compromise, 25.
REMOVAL, 14.
RENEWALS, &c., of partnership, 13.
REPEAL, 28.
RIGHTS of other copartners in case of release, 26.

SALE to special partner, 14.
SIGNBOARD of limited partnership, 14.
SPECIAL partner of pledgee may buy, 18.
powers of, 17.
when liable, 19.
postponed.as creditor, 21.

SUITS as to business of limited partnership, 15.

TITLE to real estate, 18.
TRANSFERS, certain, void, 19.
PARTNERSHIP LAWS.

THE STATUTES OF NEW YORK,

WITH THE DECISIONS THEREON,

RELATING TO

LIMITED PARTNERSHIPS,

TOGETHER WITH THE STATUTES RELATING TO

COMPROMISES BY PARTNERS AND JOINT DEBTORS,

AND TO

PARTNERSHIP NAMES AND SIGNS;
AND

THE REQUISITE FORMS.

NEW YORK:
BAKER, VOORHIS & CO., LAW PUBLISHERS,
66 NASSAU STREET.
1889.
Entered according to Act of Congress, in the year 1871, by Austin ABBOTT,
at the Office of the Librarian of Congress, at Washington.

 

Copyright, 1876, by Austin Assorr Copyright, 1883, by Austin ABBOTT.
Copyright, 1889, by Austin ABBOTT.
PARTNERSHIP LAWS.

Tuis collection of the Partnership Laws of New York is reprinted, by
permission, from ABBOTT’s NEW YORK DIGEST and ABBOTT’S LEGAL
REMEMBRANCER, with the necessary additions to make it complete to
July, 1889. It contains —

I. LIMITED PARTNERSHIPS.
II. COMPROMISES,
III. FrrmM NAMES.

I.
Limited Partnerships.
1 Rev. Stat. 764, Part Il, Ch. LV, Trtle I.

Purposes of limited partnership. 1 2. S. 764, am’d by x
L, 1866, p. 110, c. 70 (same stat. 3 Id. 7th ed., 48; 4 La., 8th ed.,
2491), § 1. Limited partnerships for the transaction of any mer-
cantile, mechanical, or manufacturing business, or of any other law-
ful trade or business within this State, may be formed by two or
more perfsons, upon the terms, with the rights and powers, and sub-
ject to the conditions and liabilities herein prescribed; but the pro-
visions of this Title shall not be construed to authorize any such
partnerships for the purpose of banking or making insurance.

Members. 1 2. S. 764 (same stat. 3 Id, 7th ed., 48; 4 Id.
8th ed., 2492), § 2. Such partnerships may consist of one or more
persons, who shall be called general partners, and who shall be
jointly and severally responsible as general partners now are by
law; and of one or more persons who shall contribute, in actual
cash payments, a specific sum as capital, to the common stock, who
4 PARTNERSHIP LAWS.

shall be called special partners, and who shall not be liable for the
debts of the partnership, beyond the fund so contributed by him or
them to the capital.

Where the statute is not complied with, the supposed
special partner cannot avoid being held as a general partner by
showing that he was induced to contribute special capital by fraud
of the copartners, and that he took no part in the business, and as
soon as he discovered the fraud (though not till after the debt in
question was contracted) he withdrew. Supreme Ct. 1875, Tour-
nade v. Hagedorn, 5 Supm. Ct. (7. & C.) 288; s. c. reported as
Tournade v. Methfessel, 3 Hum,144. Nor is it enough, in case of de-
parture from the statute, to show that the departure was by mistake,
or unintentional. Cy. of App. 1875, Van Ingen v. Whitman, 62 WV.
Y. 513; or that it was in good faith and not prejudicial to any
creditor. 1877, Durant v. Abendroth, 69 /d. 148; affi’g 41 Super.
Ct. (J. & S.) 53-

But a special partner who would be liable to third persons as a
general partner by reason of non-compliance with the statutory re-
quirements in forming the special partnership, is not so liable to
one of the general partners on a firm note given the latter on a
purchase of his interest. Suwpm. Ct. 1884, Corbit v. Corbit, 19
Weekly Dig. 77.

A violation of the statute does not make a limited partnership
general, for all purposes, but only so far as to enable a creditor to
hold the special partner liable as if a general partner. Ct. of App.
1884, Durant v. Abendroth, 97 4. Y. 132, 144; U. S. Supreme
Ct. Abendroth v. Van Dolsen, AZay, 1889.

Payment of Capital. If, in an attempt to form a limited
partnership, a special partner fails to put in the capital agreed up-
on, he is liable generally. Cz. of App. 1885, Sharp v. Hutchinson,
roo WV. Y. 583; Supm. Cr. 1886, Fulmer v. Abendroth, 2 WV. Y.
State Rep. 123. It is indispensable that the payment be in cash.
Cash in Sank to the credit of the special partner, transferred by
his drawing his check in favor of the firm, and by its deposit by
them to their account, even in the same bank, and by the actual
transferring of the credit to the firm, is a sufficient payment in cash
for the purpose. C7. of Afp., Metropolitan Nat’l B’k z. Sirrett, 15
Abb. N. C. 318; 8. Cc. 97 WV. Y. 320; rev’g 19 Weekly Dig. 143 (so
held even though the fund against which his check was drawn was
held by him in an official capacity). 7d. But the delivery of a
PARTNERSHIP LAWS. 5

check, although there are funds in bank to meet it, is not sufficient,
if the funds are not actually transferred at the time from the con-
trol of the special partner to the control of the firm. Where, dur-
ing delay to present the check, the bank failed, and a new check
was given, and was paid after the formation of the partnership,
held that the special partner was liable as a general partner. N.Y.
Com. Pl. 1886, Hennessey v. Farrelly, 13 Daly, 468; U.S. Circ. Ct,
S. D. N. Y., McGinnis 2. Farrelly, 3 How. Pr, NV. S. 386. Pay-
ment in a check dated after the filing of the affidavit is not enough.
Ct. of App. 1877, Durant v. Abendroth, 69 WV. Y. 148. And al-
though the check be subsequently paid the misstatement in the affi-
davit renders the special partner liable. C#. of App. 1884, Durant
v. Abendroth, 97 W. Y. 132. Nor is the statute complied with
where part of the special partner’s contribution is paid by his re-
turning a note of one of the general partners, and crediting him
with the amount thereof upon the books of the firm. . Y. Super.
C#. 1886, Benedict & Burnham Manuf. Co. v. Hutchinson, 53 Super.
Ct. (J. & S.) 486.

Payment in goods will not suffice.* Supm. Ct. 1860, Haviland
v. Chace, 39 Barb. 283. Payment by turning over assets on the.
promise of a general partner to turn them into cash, and pay the
cash in, is not enough. C# of App. 1875, Van Ingen v. Whitman,
62 WV. ¥. 513. But it is enough if the special partner pays in cash
of which he is the real owner in his own right, although the cash
was procured by a sale of the old assets. V. Y. Super. Ct. 1887,
Lawrence v. Merrifield, 42 Super. Ct. (J. & S.) 36; affi'd, it seems,
in 73 WV. Y. 590, without opinion.

Reorganization of former firm. A previous general part-
nership may be changed into a limited partnership by the new firm
taking the assets of the former, but the special partner cannot put
in his stock in the old concern upon a valuation as his capital, be-
cause the statute requires his capital to be paid in cash. The stat-
ute does not prohibit the limited partnership from purchasing in
good faith the stock of the former firm, nor from paying for it out
of capital contributed by the special partner, although it may hap-

 

* To the same effect, Richardson v. Hogg, 38 Penn. St.153. See, also, Van
Dike wv. Rosskam, 67 Jd. 330. Nor is it enough to make payment in notes treat-
ed as cash. Pierce v. Bryant, 5 Ad/en (Afass.), 91.. Nor a mere order on a de-
positary having no notice thereof, for delivery of securities, although after the

recording of the certificate the firm realize the full amount thereon, Haggerty
wu. Foster, 103 Mass. 17.
6 PARTNERSHIP LAWS.

pen that the latter is enabled to receive the greater part or the
whole of the purchase money, and is placed in substantially the
same position as if he originally had put in the stock as capital, in-
stead of money, for this transaction is not a withdrawing of the
capital of the special partner, but it is ‘the employment of that capi-
tal in the business of the limited partnership. Metropolitan Nat’l
Bk v. Sirrett (adove cited). But a payment of the special capital under
an arrangement by which it is to be immediately appropriated to
the benefit of the former firm in which the special partner was also
a special partner, and a reimbursement by such former firm to the
special partner of his contribution to its capital, is insufficient to
sustain the special partnership. Cv¢. of App. 1888, Manhattan Co.
v. Phillips, 109 WV. Y. 383. Hence it is not, as matter of law, a
fraud or void in law if, when a limited partnership is formed, the
cash in fact paid into the firm be directly laid out by the general
partner in the purchase of merchandise from the special partner.
Yet if this be done it will be a question to be presented as a ques-
tion of fact for the jury, to find whether a fraud was committed
against the public, either by the contribution of the property to the
property of the firm, disguised as cash, or as a sale from the special
to the general partners at dishonest valuations contrived to impose
upon the public. Buffalo Superior Ct. Sp. T. 1883, Hanover
Nat’l B’k v. Sirrett, 15 4d. WV. C. 334, note; to same effect, Supm.
Ct. Sp. T. 1886, Ropes v. Colgate, 17 43d. MV. C. 136; MW. V.
Super. Ct. 1886, Manhattan Co. v. Phillips, 53 Super. Ct. (J. & S.)
84. And when it is submitted to the jury to find whether the
transaction was a mere contrivance to evade the statute, and to en-
able the special partner to put in the goods instead of cash as capi-
tal, their finding for the special partner upon this issue cannot be
disturbed. C+. of App. 1884, Metropolitan Nat’l B’k of N.Y. v.
Sirrett, 15 40d. WV. C. 318; s.c., 97 WV. ¥. 320; rev’g 19 Weekly
Dig. 143.

Dorm4nt partner. Wherea person under a private agreement
with a special partner in a limited copartnership, furnishes a portion
of the capital which the special partner ostensibly puts into the busi-
ness of the firm in his own name, and such person is to have a
certain part of the income or profits which the special partner de-
rives from the business, with a privilege of examining, from time to
time, into the business matters of the firm, he and the special part-
ner become thereby liable as general partners. WV. Y. Com. Pi.
PARTNERSHIP LAWS. 7

1863, Bulkley v. Marks, 15 Add. Pr. 4543 S.C. reported as Buckley
v. Lord, 24 How. Pr. 455.

Powers of members. 1 &. S. 764, am'd by 1 L. 1887,

. 836, c. 414 (same stat. 3 R. S., 7th ed, 48; 4 Ld., 8th ed. 2492),

g 3. The general partners only shall be authorized to transact busi-

ness for the partnership, except as provided in section seventeen,

and no special partner shall be authorized to sign for the partner-
ship, or to bind the same.

Effect of above amendment. Rights and liabilities of
special partners already fixed at the date of the passage of the act
of 1857 (1 Z. 1857, p. 837, c. 414, §§ 3, 4), were not affected by the
passage of that act. Cv. of App. 1859, White v. Hackett, 20 WV. Y.
178; rev’g s.c. 24 Barb. 290.

Certificate. 1 2. S. 764 (same stat. 3 Id., 7th ed. 49; 4 Id.,
8th ed., 2492), § 4. The persons desirous of forming such part-
nership, shall make and severally sign a certificate, which shall con-
tain,

1. The name or firm under which such partpership is to be con-
ducted:

2. The general nature of the business intended to be trans-
acted:

3. The names of all the general and special partners interested
therein, distinguishing which are general and which are special
partners, and their respective places of residence:

4. The amount of capital which each special partner shall have
contributed to the common stock:

5. The period at which the partnership is to commence, and the
period at which it will terminate.

All persons interested in the partnership are, by the statute, lia-
ble as general partners, if any false statement is made in the certifi-
cate or affidavit by which the limited partnership is formed. JV. Y.
Com. Pl. 1863, Bulkley v. Marks, 15 4d. Pr. 454; S.c. reported as
Bulkley v. Lord, 24 How. Pr. 455. But the certificate is riot fatal-
ly defective if it substantially complies with the requirement of the
statute, and correctly gives all the information required. Thus, if
it gives the names of the respective places of residence of the gen-
eral and special partners, indicating that they reside there, it is not
a valid objection that the words “residence,” “resident in” or
“resides at” were not used. Lachaise v. Marks, 4 £. D. Smith,
610.

As to place of business, see § 6, on p. 12.

‘
8 PARTNERSHIP LAWS.

Form of Certificate of Formation of Limited Partnership.

The undersigned, desirous of forming a limited partnership,
under the statutes of the State of New York, hereby certify:

1. That the name or firm under which such partnership is to be
conducted is [here insert the firm name].

2. That the general nature of the business intended to be trans-
acted by such partnership is [kere designate the general nature of
the business, for instance, thus: the buying and selling [on commis-
sion], at wholesale and retail, of hardware and house-furnishing
goods, and such other articles as are usually bought and sold by
dealers in such wares and goods].

3- That the names and residences of all the general and special
partners interested in said partnership, are as follows:

A. B., who resides at , and C. D., who resides at ;
are the general partners; and E. F., who resides at , and
G. H., who resides at , are the special partners.

4. That the said E. F. has contributed the sum of dol-
lars, and G. H. the sum of dollars, as capital, to the common
stock.

5. That the period at which the said partnership is to com- .

mence is the day of »18 = [ensert the date, which should
be after that on which the certificate is to be filed and recorded |; and
the period at which the said partnership is to terminate is the
day of ,18 [énsert the date.
Dated this day of , 18
[Stgnatures.]

To be acknowledged. 12. S. 764 (same stat. 3 Id, 7th
ed. 49; 4 Ld., 8th ed., 2492), § 5. The certificate shall be acknowl-
edged by the several persons signing the same, before the chancel-
lor, a justice of the Supreme Court, a circuit judge, or a judge of
the county courts; and such acknowledgment shall be made and
certified in the same manner as the acknowledgment of convey-
ances of land.

Form of Acknowledgment.

City ang county of , 55: On this day of ,18
personally came before me, the above [or, within] named A. B.,
C. D., E. F. and G. H., to me known, and known to me to be the
persons described in and who executed the above certificate, and
ae acknowledged to me that they respectively executed said
certificate.

[Signature of offcer.|

Proof by a subscribing witness was held sufficient, in Mattison
v. Demarest, 4 Rodt. 161, 173.
PARTNERSHIP LAWS. 9

Time. The acknowledgment is not ineffectual because made
by the intending special partner in advance, and given by him, with
the certificate, to his agent, for delivery in due time. JV. Y. Super.
Ct. 1887, Fifth Avenue B’k v. Colgate, 54 Super. Ct. (J. & S.)
188.

What officers may take acknowledgment. JZ. 1837. p.
101, c. 129,§ 1. The certificate required by the fourth section of
title first of chapter four of part second of the Revised Statutes of
the State of New York [§ 4, adove], may be acknowledged or proved,
as to the several persons signing the same, before the same persons
before whom a conveyance of lands may be now or hereafter ac-
knowledged or proved; and such acknowledgment or proof shall
be made and certified in the same manner as the acknowledgment
or proof of the conveyances of lands may be made or certified; and
the certificate when so made, shall have the same effect as if it were
acknowledged in the manner heretofore required by the law hereby
amended.

By the statutes now in force (July 1, 1889), acknowledg-
ments may be before the following officers :

1. When taken within the State. Before a justice of the
Supreme Court, a county judge, surrogate, mayor or recorder of a
city, @ judge of a Superior City Court, which indicates the New
York Superior Court, the New York Common Pleas, the city court
of Brooklyn, and the Buffalo Superior Court ; @ justice of any Dis-

_, trict Court of New Vork city, justice of the peace of a town, commis-

—~wsioner of deeds for a city, or notary public. (1 R. S. 756, § 4; Lb.
97; ZL. 1848, c. 75; ZL. 1840, p. 187, c. 238; LZ. 1851, p. 331, C- 175;
§ 1; LZ. 1859, p. 869, c. 360; LZ. 1863, p. 880, c. 508; 3 Daly, Appen.;
L. 1882, c. 410, § 1391.) In general, these officers can only take
acknowledgments within the county, town or other district, for
which they were appointed; but notaries have some special power
to act out of the county. See 1 466. Mew Pr. & F. 4.

A justice of the Supreme Court may act anywhere within the
State.

2. When taken without the State, but within the United
States. Before a judge of the United States Supreme or District
Courts, or of the Supreme, Superior, or Circuit Court of any State
or Territory; but such acknowledgment must be taken at a place
within the jurisdiction of such officer; or before the mayor of any
10 PARTNERSHIP LAWS.

city; or before a Wew York commissioner ; but the certificate of a
New York commissioner must be accompanied by the certificate of
the secretary of the State of New York, attesting the existence of
the officer, and.the genuineness of his, signature; and such gom-
missioner can only act within the city or county in which he resided
at the time of his appointment. (1 &. S. 757, § 4, subd. 2; Z.
1845, p. 89,c. 109; LZ. 1850, p. 582, c. 270, amd by 2 L. 1887, p.
756, c. 788; LZ. 1876, c. 58; and ZL. 1880, c. 115.)

When made by any person residing out of the State, and within
the United States, it may be made defore any officer of the State or
Lerritory where made, authorized by its laws to take proof or ac-
knowledgment ; but no such acknowledgment is valid, unless the
officer taking the same knows, or has satisfactory evidence, that the
person making it is the individual described in, and who executed
the instrument. (Z. 1848, p. 303, c. 195.)

In the last class of cases there must be subjoined or attached to
the certificate of proof or acknowledgment, signed by such officer,
a certificate, under the name and official seal of the clerk, register,
recorder or a prothonotary of the county in which such officer re-
sides, or the clerk of any court thereof, having a seal, specifying
that such officer was, at the time of taking sueh proof or acknowl-
edgment, duly authorized to take the same, and that such clerk,
register, recorder or prothonotary is well acquainted with the hand-
writing of such officer, and verily believes that the signature to said
certificate of proof or acknowledgment is genuine. (Z. 1848, p.
303, c- 195, § 2, as am’d by 2 L. 1867, p. 1515, ¢. 567, § 1.)

3. When taken without the United States. Where the
party is in other parts of America, or in Europe,—before a minister
plenipotentiary, or minister extraordinary, or chargé d'affaires of the
United States, resident and accredited there,—or in any foreign
port or country, before any United States consul, vice-consul, deputy
consul, consular agent, vice consular agent, commercial agent or vice-
commancdat agent, resident therein;—before a Mew York commis-
stoner. appointed for any city in any foreign State or country;—in
the Dominion of Canada, before the judge of any court of record,
or the mayor of any city;—in the British Dominions, before the
mayor, provost or chief magistrate of any city or town. (1 &.S.
575,86; L. 1829, p. 348, c. 222; L. 1863, p. 449, c. 246, 88 1, 23
L. 1865, p. 776, c. 421; 1 L. 1870, p. 503, c. 208; L. 1875, p. 119,
C. 136; 1883, p. 67, c. 80.) Acknowledgment may be made before a

hil
PARTNERSHIP LAWS. 11

person specially authorized by the Supreme Court of the State, dy
a commission issued for the purpose, (1 R. S. 757, § 8.)

The governor of New York is also authorized to appoint com-
missioners of deeds, not exceeding three in each, for the following
cities: London, Liverpool, and Glasgow, in Great Britain; Dublin,
Belfast, Cork and Galway, in Ireland; Paris and Marseilles, in
France; and for any other foreign State or country. (Z. 1858, p.
498, c. 308, § 1; Z. 1862, p. 478, c. 283.) And not exceeding five
in each city in any foreign State or country. (Z. 1875, p. 119, c.
136.)

The certificate of such commissioner must be under his official
seal and subscribed by him, and when authenticated by the secre-
tary of state, as hereinafter mentioned, has the same effect to au-
thorize the recording or reading in evidence of such instrument, as
is given by law to like certificates made by justices of the Supreme
Court of this State. (Z. 1862, p. 478, c. 283; Z. 1875, p. 119, ¢.
136.)

Acknowledgments by persons in the volunteer service of the State
and United States, out of the State, before certain officers. (LZ.
1862, p. 870, c. 471.)

4. Authentication. There must be subjoined or affixed to a
certificate of acknowledgment taken by New York commissioners
abroad, a certificate under the hand and official seal of the secre-
tary of state of this State, certifying that such commissioner was at
the time of taking such proof or acknowledgment, or of administer-
ing such oath or affirmation, duly authorized to take the same, and
that the secretary is acquainted with the handwriting of such com-
missioner, or has compared the signature to such certificate with
the signature of such commissioner deposited in his office, and has
also compared the impression of the seal affixed to such certificate
with the impression of the seal of such commissioner deposited in
his office, and that he believes the signature and the impression of
the seal of the said certificate to be genuine. (Z. 1858, p. 498, c.
308, § 2; LZ. 1875, p. 119, c. 136, § 2.) :

The act relating to consular officers provides that the acknowl-
edgment or proof before a vice or deputy consul, consular or vice
consular agent, or commercial or vice commercial agent, when cer-
tified by him, under his seal of office, or under the seal of the con-
sulate or agency to which he is attached, to have been made before
him by the party executing, or being a subscribing witness to the
12 PARTNERSHIP LAWS.

same, and that the said party executing the same is known or
‘proven to him to be the same person who is described in and who
executed the same, shall be as valid and effectual as if taken be-
fore one of the justices of the Supreme Court in this State. (Z.
1863, p. 449, c. 246, as am’d by L. 1865, p. 776, C. 421-)

The acknowledgment or proof before the judge of any court of
record, or the mayor of any city, within the Dominion of Canada,
is not valid, “ unless the officer taking the same knows or has satis-
factory evidence that the person making it is the individual de-
scribed in and who executed the instrument. And there must be
subjoined or attached to the certificate of proof or acknowledg-
ment, if taken before a judge of a court of record, a certificate
under the name and official seal of the clerk of the court, that there
is such a court; that the judge before whom the proof or acknowl-
edgment is taken is a judge thereof; that such court has a seal;
that he is the clerk thereof; that he is well acquainted with the
handwriting of such judge, and verily believes his signature genuine.
If the proof or acknqwledgment be taken before the mayor of any
city, it shall be certified by him under his seal of office.” (x Z.
1870, Pp. 503, C. 208.)

Filing. 1 2. S. 765 (same stat.3 Id. 7th ed.,50; 4 1d., 8th ed.
2492), § 6. The certificate so acknowledged and certitied, shall be
filed in the office of the clerk of the county in which the principal
place of business of the partnership shall be situated; and shall
also be recorded by him at large, in a book to be kept for that pur-
pose, open to public inspection. If the partnership shall have
places of business situated in different counties, a transcript of the
certificate, and of the acknowledgment thereof, duly certified by
the clerk in whose office it shall be filed, under his official seal, shall
be filed and recorded in like manner, in the office of the clerk of
every such county.

Place of business. Where the assumed limited partnership
carried on the business of commission merchants in the city and
county of New York, and such was stated to be its business in the
certificate there filed, and it was also engaged in the business of
tanning leather in another county, no copy of the above certificate
being filed in the latter county,—Held, that no limited partnership
was formed, and the parties were liable as general partners. JV. Y.
Super. Ct. 1885, Loomis v. Hoyt, 52 Super. Ct. (J. & S.) 287.

Delay in filing. All that the law requires in the formation of
a limited partnership is a substantial compliance with its provis-
PARTNERSHIP LAWS. 13

ions. The filing of the certificate and affidavit required, twenty-
eight days after they were executed, does not affect the validity of
the partnership, as to transactions had with it after the date of such
filing. JV. Y. Com. Pi. 1874, Levy v. Lock, 5 Daly, 46.

Affidavit of Payment. 1 2. S. 765 (same stat. 3 Td., 7th
ed., 50; 4 Id., 8th ed., 2492), §7. At the time of filing the original
certificate, with the evidence of the acknowledgment thereof, as
before directed, an affidavit of one or more of the general partners
shall also be filed in the same office, 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.

Form of Affidavit to be filed with Certificate.

City and county of , 95.5 AL B., of , being duly sworn,
says:

That he is the general partner [or, one of the general partners]
named in ‘the above [or, annexed] certificate, and that the sum [or,
several sums] specified in said certificate, to have been contributed
by the special partner [or, by the special partners, respectively] in
said certificate named, to the common stock of said partnership,
has [or, have] been actually and in good faith paid in cash.

/ [ Signature. ]
Sworn before me this
day of 218.
[ Signature of officer]

An affidavit to accompany a certificate of a limited partnership
need not follow the exact words of the statute. If it clearly estab-
lishes the facts required by the statute, it is sufficient. And where
the affidavit refers to the certificate, it may be explained by the
statements of the certificate. Supreme Ct. 1855, Johnson v. Mc-
Donald, 2 Abd. Pr. 290.

An affidavit to accompany a certificate of special partnership,
which states that the special partner has “actually paid in” the
capital contributed by him, is equivalent to an affidavit that he has
paid it “in cash.” 70.

Effect. The affidavit that capital has been paid in, is not
evidence of that fact, further than to throw the burden of proof on
the creditor. Supreme Ct. 1843, Madison County Bank v. Gould, 5
Til’, 309.
14 PARTNERSHIP LAWS.

Partnership deemed formed. 1 &. S. 765 (same stat. 3
Id., 7th ed., 50; 4 Id, 8th ed., 2493), § 8 No such partnership
shall be deemed to have been formed, until a certificate shall have
been made, acknowledged, filed and recorded,* nor until an affida-
vit shall have been filed as above directed; and if any false state-
ment be made in such certificate or affidavit, all the persons inter-
ested in such partnership shall be liable for all the engagements
thereof, as general partners.

Formation completed. If, at the moment a limited part-
nership is formed by the act of filing the certificate all the state-
ments in the certificate are true there is both a substantial and
literal compliance with the statute, and the special partner does not
incur the liability of a general partner. Supm. Ct. Sp. T., 1886,
Ropes v. Colgate, 17 44d. WV. C. 136.

It is immaterial that at the date of the certificate, and at the
time when it was signed and acknowleged by one partner, and
left with his agent for delivery in due time, the special capital had
not been paid in as therein stated, since the paper does not become
the certificate referred to in section 8, imposing general partnership
liability for false statements therein, until it is a completed in-
strument, and delivered so as to create the partnership. Jd. s.P.,
N.Y. Com. Pi. 1886, Manhattan Co. v. Colgate,1 JV. Y. State
Rep. 615.

Actual payment of contribution by the special partner, although
preceded two days by the signing and acknowledging of the cer-
tificate, is a sufficient compliance. MV. Y. Super. Ct. 1887, Fifth
Avenue Bk. v. Colgate, 54 Super. Ct. (J. & S.) 188.

Effect of omission to record. The omission of the county
clerk to actually record the certificate of the formation of the
limited partnership, when such certificate has been properly filed
with him for record, does not render a special partner liable as a
general partner. Ct. of App. 1888, Manhattan Co. v. Laimbeer,
21 Abb. NgC. 27; 5c. 108 WV. Y. 578; rev’g 17 Abd. N.C. 123;
S.C. 53 Super. Ct. (J. & S.) 23.

The limited partnership act of 1822 having expressly cast upon
the partners the duty to see that the registry of a certificate of

 

* As to effect of an unrecorded certificate, when used as proof of a general
partnership, see Gray v. Gibson, 6 Mich. 300. :

+ Payment subsequent to statement but before completion, held, a substantial
compliance in Selden (Mo. 1886), 4 Western Rep. 782.
PARTNERSHIP LAWS. ‘ 15

limited partnership is made, the omission of such provision in the
enactment of the Revised Statutes left upon the partners only the
duty of filing and leaving the certificate in the proper office for
record. J.

The duty of performing the physical act of transcribing a cer-
tificate of limited partnership into the proper book of records
being imposed by law upon the county clerk, his failure to so
transcribe a certificate properly left for record will not impose upon
the parties the penalties prescribed by the statute for failure to
record the certificate. 0.

If a false statement is made in the affidavit filed,—e. g.
stating payment in cash, when it was made in goods,—the special
partner is liable exactly as if no advertisement were published, nor
certificate filed. His liability is not confined to the period for
which the advertisement states that the partnership is formed.
Supreme Ct. 1860, Haviland v. Chace, 39 Bard. 283. If a false
statement, within the meaning of the statute, is made, the liability
imposed by the statute follows, although the error was a careless
and innocent mistake, and although no injury resulted to any
creditor. Ct. of App. 1877, Durant v. Abendroth, 69 WV. Y. 148;
aff’g 41 Super. Ct. (J-& S.) 53:

Publication. 1 2. S.765,§ 9, am’d by L. 1862, p. 880, c. 476
(same stat. 3 R. S., 7th ed., 50; 4 Ld. 8th ed., 2493). ‘The partners
shall publish the terms of the partnership, when registered,* for at
least six weeks immediately after such registry in two newspapers,
to be designated by the clerk of the county in which such registry
shall be made, and to be published in the senate district or city, or
town, in which their business shall be carried on; and if such pub-
lication be not made, the partnership shall be deemed general.

Errors in the advertisement. The terms of the partner-
ship must be published truly, and in wo papers.

There is not a variance sufficient to hold a special partner
where the certificate of formation described the business to be con-
ducted as “a general commission business, buying and selling
grain, flour and produce on commission,” and the notices published
stated the partnership was formed “for the purpose of conducting

 

* The word “requested” is a misprint in the official copy, for “ registered,”
See 1 &. S. 3d ed. marg. p. 765.
¥

16 CO; ‘PARTNERSHIP LAWS.

a general commission business.” Cz of App. 1888, Manhattan
Co. v. Phillips, 109 V. Y. 383; rev’g 53 Super. Ct. (J. & S.) 84,
on the point that the good faith in the payment of the special
partner’s contribution should have been left to the jury.

The section is satisfied by a publication of the terms of the
certificate; and an omission to state in the published notice all the
details of the partnership agreement, is not a failure to comply with
the provision as to publication, so long as the publication contains
all the facts required by section 4. Cz. of App. 1884, Metropoli-
tan Nat'l B’k »v. Sirrett, 15 Add. NV. C. 318; s.c. 97 WV. Y. 320;
rev’g 19 Weekly Dig. 143.

The amount of the capital to be paid in by the special partner,
is a material portion of the terms required to be published. Where,
by a misprint in one of the papers, the capital contributed was pub-
lished as $5,000 instead of $2,000, which was the fact.—/e/d, that
the special partner was liable as a general partner. Ct. of Errors,
1846, Argall v. Smith, 3 Dex. 435.

In the publication of the certificate of the terms of a limited
partnership, a trifling mistake in the publication of the names of
the partners, as ARGALE for ARGALL, will not vitiate the publica-
tion. Supreme Ct. 1840, Bowen v. Argall, 24 Wend. 496.

Where the papers all were sufficient in form, and the notice
sufficiently published; but the notice stated that.the partnership
was to commence Vovember 16th, instead of October 16th, as pro-
vided in the articles; in an action to charge the special partner for
a debt contracted after November,—/Ze/d, that the error in date
being unintentional, it formed no objection tothenotice. Supreme
Ct, 1843, Madison County Bank v. Gould,’5 7/7, 309.

Mode of Publication. The terms of the partnership must be
truly published, in ¢wo papers, as required by the statute. Not to
publish at all would be clearly fatal, and it is equally so to publish
in but one paper. The duty of making such publication is by the
statute devolved upon the partners; and it is one which they must
see to at their peril. Cv¥. of Errors, 1846, Argall v. Smith, 3 Den.
435-

A change in the name of “The Buffalo Daily Dispatch and
Evening Post,” one of the newspapers in which the notice was di-
rected to be published, to that of “ The Buffalo Evening Post,”
made after the publication was commenced,—Held, not to affect
PARTNERSHIP LAWS. 17

the validity of the publication. Cy? of App. 1884, Metropolitan
Nat’l B’k v. Sirrett, 15 Add. MW. C. 318; s. C.97 WV. Y. 320; rev’g
19 Weekly Dig. 143.

Time. A publication once in each of the six weeks immedi-
ately following the registry, is sufficient. The statute counts by
weeks, taking one day, no matter which, if according to the com-
mon course of weekly publication, in each week. One publication
in each of six consecutive weeks of seven days each, the first pub-
lication being within the first seven days after the registry, satisfies
the statute. Supreme Ct. 1840, Bowen v. Argall, 24 Wend. 496.
Where the articles of partnership, the certificate, and the order of
publication bore date October first, and the certificate was recorded
on that day; and the first publication in one of the two designated
newspapers was October sixth, and in the other, October tenth,—
Held, that the publication was in substantial compliance with the
statute requiring it to be commenced “immediately.” Cz of App.
1888, Manhattan Co. v. Phillips, 109 JV. Y. 383; rev’g 53 Super. Cz.
(J. & S.) 84,0n the point that the good faith in the payment of the
special partner’s contribution should have been left to the jury.
See § 24, of the statute, and note (Je/ow), and compare the cases on
other similar statutes, in 1 44d. New Prac. & F. 368, &c.

Form of Advertisement of Terms of Partnership.

[The better practice is to publish a copy of the certificate, with
the signatures, |

Proof of Publication. 1 &. S.765 (same stat. 3 Id, 7th ed.,
50; 4 Jd., 8th ed., 2493), § 10. Affidavits of the publication of such
notice, by the printers of the newspapers in which the same shall be

published, may be filed with the clerk directing the same, and shall
be evidence of the facts therein contained.

Forms of Affidavit of Publication.

-City and county of 3 ss. A. B., of » being
duly sworn says, that he is printer of the newspaper known as the
[designate newspaper], published daily [or, weekly] at [designate
place of its publication], and that the advertisement, a copy whereof
is hereto annexed, was published in said newspaper, for six weeks
successively, that is to say, in the issues of said newspapers, dated

2
18 PARTNERSHIP LAWS.

respectively the day of , the day of ’
the day of , the day of , the day of
, and the day of » year 18
[ Signature. ]
Sworn, before me, this )
day of ,18 .
[Signature of officer.|

Renewals, &c., of partnership. 1 2. S. 765 (same stat. 3
Id., 7th ed., 30; 4 Id., 8th ed. 2493), § 11. Every renewal or con-
tinuance of such partnership, beyond the time originally fixed for
its duration, shall be certified, acknowledged and recorded,_and an
affidavit of a general partner be made and filed, and notice be given
in the manner herein required for its original:formation; and every
such partnership, which shall be otherwise renewed or continued,
shall be deemed a general partnership.

Form and truth of renewal papers. To effect a renewal
it is not necessary that the special partner contribute afresh in cash;
but the certificate and affidavit must be adapted in the same man-
ner to secure the conditions of renewal as prescribed by the earlier
sections of the statute in reference to original formation. The
capital remaining belonging to the special partner and carried over
to the new firm must be stated truly; and the time during which
the business is to be continued under the renewal should be stated.
False statements leave the special partner without the protection
of the statute, and render him liable to creditors. MW. VY. Super.
Ct. 1887, Fifth Avenue B’k v. Colgate, 54 Super. Ct. (J. & S.) 188;
to the contrary was Super. Cz. Sp. T. 1886, Ropes v. Colgate, 17
Abb. N. C. 136. So held, where the renewal certificate and affi-
davit stated that the capital which the special partner had contrib-
uted to the original partnership “ remains wholly unimpaired; and
the same amount, namely, one hundred thousand dollars, has been
contributed by the said special partner to the common stock of the
renewed and continued partnership ;’’ but in fact the firm was at
the time of the renewal insolvent, and the special capital had been
lost. Jd.

What alterations work a dissolution. 1 2. S. 76s, § 12,
amd by L. 1858, p- 449, c. 289 (same stat. 1 R. S., 7th ed, 50; 4
Ld., 8th ed., 2493; and see 1 L. 1857, p. 837, c. 414,§ 2). Every
alteration which shall be made in the names of the general part.
ners, in the nature of the business,* or in the capital or shares

 

* As to alterations of which the special partner was ignorant, see Singer v,
Kelly, 44 Penn. St. 145.
() ‘
PARTNERSHIP LAWS. ae eh Te 19

thereof contributed, held or owned, or to be contributed, held or
owned, by any of the special partners, and the death of any partner,
whether general or special, shall be deemed a dissolution of the
partnership, unless the articles of partnership shall specify that in
such events the partnership shall be continued by the survivors, in
which case it may be so continued with the assent of the heirs or
legal representatives of the deceased partner.* And every such
partnership which shall be carried on after such alteration shall
have been made, or such death shall have occurred, shall be deemed
a general partnership in’ respect to all business transacted after
such alteration or death, except in the case of a provision in the
articles of partnership for the continuance of the business by the
survivors as aforesaid, in which case the heirs or legal representa-
tives of the deceased partner may succeed to the partnership rights
of such deceased partner, and continue the business the same as if’
such partner had remained alive; provided, however, that one or
more special partner or partners may be added to the partnership
upon actually paying in an additional amount of capital, to be agreed
upon by the general and special partners, and the alteration of the
partnership by such additional special partners, shall not make the
partnership general, nor alter its name nor work a dissolution, pro-
vided the general partner in the partnership name shall file an
additional certificate with the clerk with whom the driginal certif-
icate may have been filed, verified on oath by one of them, stating
the names and residences of such additional special partners, and
the amounts respectively contributed to the common stock by them.
And any special partner, or the heirs or legal representatives of any
such special partner, deceased, may sell his interest in the partner-
ship without working a dissolution thereof, or rendering the part-
nership general, provided a notice of such sale be filed within ten
days thereafter, with the clerk with whom such original certificate
of parinership may have been filed, and the purchaser of such in-
terest may thereupon become a special partner, with the same rights
as an original special parfner.

Removal. If the firm remove their place of business from the
county where it was first established, and where the certificate re-
quired by the statute had been duly filed, to another county, and the
business is continued there, without filing in the clerk’s office of
that county any new certificate, the special partners are rendered
liable as general partners. Cv. of App. 1870, Riper v. Poppenhau-
sen, 43 lV. Y. 68.

Buying out the firm. A special partner, who buys out the
entire firm property, and continues the business in his own name,

 

* The admission of a new general partner necessitates a reorganization de
novo, Andrews v. Schott, 10 Penn. St, 47.
\ {4
20 Jal PARTNERSHIP LAWS.

for*his own account, interferes with the firm business contrary to
£17, and renders himself liable as a general partner. Supreme
Ct. 1871, First National Bank of Canandaigua v. Whitney, 4 Lams.

34: ‘

Death of partner. Limited partnerships formed under the
statute are governed, and the mutual rights, duties, and liabilities
of the partners are regulated, by the common law, in every respect
not taken out of the general rule by the statute. The death of the
special partner, within the period fixed for the duration of the
agreement, dissolves it. MV. Y. Surr. Ct. 1850, Ames 2. Downing,
1 Bradf. 321; s. P. Jacquin v. Bussion, 11 How. Pr. 385. But see
amendment of 1858 (adove).

Assent of heirs, &c. /¢ seems that some positive act of as-
sent is necessary on the part of the heirs or legal representatives
(the latter term including next of kin, or legatees, as the case may
be), and mere silent acquiescence would not be enough. Walken-
shaw v. Perzel, 4 Robt. 426; s.c. 32 How. Pr. 233. Compare
Richter v. Poppenhusen, 9 44d. Pr. V. S. 263; s.c. 42 MV. Y. 373.

Effect of dissolution. J¢ seems that, upon dissolution by
an act specified in section 12, the general partnership which arises
becomes subject to all the rules applicable to general partnerships;
and that the same act which dissolves the former may also be a
dissolution of the latter. Mattison v. Demarest, 4 Robt. 161.

Names composing firm; and signboard, 1 2. S. 765,
§ 13, am’d by 2 L. 1866, p. 1424, c. 661 (same stat.3 R. S, 7th ed.,
50; 4 Jd., 8th ed., 2494).* The business of the partnership shall
be conducted under a firm in which the names of the general part-
ners only shall be inserted, except that where there are two or more
general partners the firm name may consist of either one or more
of such general partners, with or without the addition of the words
“and company,” or “& Co.,” + and if the name of any special
partner shal® be used in such firm with his privity, he shall be

 

* Compare previous amendments, L, 1862, p. 880, c. 476,§ 1; Z. 1864, p. 71,
c. 43.

+ In a Pennsylvania case, where the statute prescribed that the business of
the partnership should be conducted under a firm in which the names of the
general partners only should be inserted, without the addition of the word
“Company.” or any other general terms,—a firm composed of two general part-
ners and one special partner carried on business under the name of one general
partner & Co., /Ye/d, that the statute was violated. Andrews v. Schott, 10 Penn.
St. 47.
PARTNERSHIP LAWS. 91

deemed a general partner ; but the said partnership shall put upon
some conspicuous place on the outside and in front of the building
in which it has its chief place of business, some sign on which shall
be painted in legible English characters, all the names in full of all
the members of said partnership, and in default thereof no action
shall be abated or dismissed by reason of the proof of plaintiff of
the partnership failing to meet the allegations of his pleading as to
the names and number of the partnership; but the pleading may be
amended on the trial to conform to the proof in that respect with-
out costs.

§ 2 (of Z. 1866, above cited), This act shall apply to existing
limited partnerships, but shall not discharge any special partner
from any liability now existing upon any debt or obligation hereto-
fore contracted.

Whether the provisions of 1 &. S. 766, § 13,—relative to firm
name of limited partnership,—was merely directory,—gwery ? Ward
v. Newell, 42 Bard. 482; s. c. 28 How. Pr. 102.

Continued use of old name. 1 Z. 1868, p. 528, c. 256, § 1
(same stat. 4 R. S., 8th ed, 2497). Any limited partnership which
may hereafter be formed under the laws of this State, may use the
firm name of any former general or limited partnership formed
under said laws, where a majority of the partners, general or special,
in either of such last mentioned copartnerships, shall be members
of the new limited copartnership; or, where a majority of the
members of such former copartnership shall consent in writing to
the use of such firm name by such new copartnership, upon com-
plying with the provisions of the act entitled ‘‘ An act allowing the
continued use of copartnership names in certain cases,” passed
April seventeenth, eighteen hundred and fifty-four, and the acts
amendatory thereof, so far as the same may be applicable.

See that act as to copartnership names stated below, on p. 37.

Suits. 1 2. S. 766 (same stat. 3 Id. 7th ed., 513; 4 Id., 8th ed.,
2494), § 14. Suits in relation to the business of the partnership,
may be brought and conducted, by and against the general part-
ners, in the same manner as if there were no special partners.

This provision does not apply to an action for an injunction
and a receiver, to close the business of a special partnership formed
under the statute, based on the ground of insolvency, but merely
to claims by or against them asa partnership. JV. Y. Superior Ct.
Sp. T. 1866, Walkenshaw v. Perzel, 4 Robt. 426; s.c. 32 How. Pr.

233.
22 PARTNERSHIP LAWS.

The cases of Durant v. Abendroth, 97 WV. Y. 132; Sharp v.
Hutchinson, 100 WV. Y, 533, and Durant v. Abendroth, 69 . Y.
148, as to the proper form of action for enforcing the liability of a
special partner imposed by the statute of New York, were ap-
proved in Abendroth v. Van Dolsen, U. S. Supm. Ct. May, 18809.

Judgment against partners. Under section 14, judg-
ments in suits thus brought must necessarily have the same effect,
so far as relates to partnership property, as if brought against all
the partners; and a levy under a judgment recovered in such an
action against the general partners, binds the whole partnership
property. Cv¥. of App. 1862, Van Alstyne v. Cook, 25 WV. Y. 489.

Execution. As the special partners cannot interfere with the
property or take the control from the general partners, it follows
that the sheriff, on an execution against such partner, has no such
power. He cannot, on such execution, do anything with the part-
nership property that the special partner could not do. He, there-
fore, has no authority to take from the general partners, the part-
nership property, for the purpose of selling the interest of the special
partner in the property and assets of the firm; nor can he, as in the
case of other partnerships, sell the interest of one partner in the
property of the firm, and deliver the property in which such interest -
is sold to the purchaser. Cv. of App. 1864, Harris v. Murray, 28
MV. Y. 574.

In general partnerships the sheriff may seize the parinership
property on an attachment or execution against one of the partners.
Ct. of App. 1870, Smith v. Orser, 42 WV. Y.132; affi'g 43 Bard. 187.
See later decisions in Abd. Ann. N.Y. Dig. for 1887, p. 148.

Withdrawing capital. 1 2..S. 766 (same stat. 3 Id, 7th ed.,
51),§ 15. No part of the sum which any special partner shall
have contributed to the capital stock, shall be withdrawn by him,
or paid, or transferred to him, in the shape of dividends, profits or
otherwise, at#any time during the continuance of the partnership;
but any partner may annually receive lawful interest on the sum so
contributed by him, if the payment of such interest shall not reduce
the original amount of such capital; and if, after the payment of
such interest, any profits shall remain to be divided, he may also
receive his portion of such profits.

Merely giving notes, payable in future, by the general partners,
in the same name as that of the partnership, on making an agree-
ment of dissolution with a view to purchase the special partner’s
PARTNERSHIP LAWS. 23

interest, is not a withdrawal of capital, within section 15 of the
statute. WV. Y. Com. Pl. 1855, Lachaise v. Marks, 4 &. D. Smith,
610.

The receipt of dividends by a special partner will constitute him
a general partner, if they are drawn as a device to withdraw capi-
tal; but dividends may be paid to him in good faith, with the effect
only to require him to restore them, in case the capital shall there-
by be unintentionally reduced. Jd.

The withdrawal by a special partner, of his capital, before the
actual dissolution of the firm, though after notice of dissolution,
renders him liable as a general partner. WV.Y. Com. P/., Bulkley v.
Marks, 15 Add. Pr. 454; SC. sub nom. Buckley v.. Lord, 34 How.
Pr. 455.

A provision in the articles of limited partnership, permitting
the special partner to draw the interest on his capital monthly, is
not a violation of section 15. Cv? of App. 1884, Metropolitan
Nat'l B’k v. Sirrett, 15 Add. WV. C. 318; s.c. 97 WV. VY. 320; rev’g
19 Weekly Dig. 143.

A special partner who is entitled to interest on his capital is
not deemed deprived of his right to the same by reason of an in-
debtedness as customer upon drafts neither drawn nor charged to
his capital. Supm. Ct. 1886, Tillinghast v. Walton, 4 WV. Y. State

Rep. 35:

Refunding interest. 1 7. S. 766 (seme stat. 3 Id. 7th ed,
51; 4 [d., 8th ed., 2494), § 16. If it shall appear, that by the pay-
ment of interest or profits to any special partner, the original capi-
tal has been reduced, the partner receiving the same shall be bound
to restore the amount necessary to make good his share of capital,
with interest.

Powers of special partner. 1 2. S. 766 § 17, am’d by 1 L.
1857, p- 837, C- 414, § 3 (same stat. 3 R. S., 7th ed.,513; 4 Id., 8th ed,
2495). A special partner may, from time to time, examine into the
state and progress of the partnership concerns, and may advise as to
their management; he may also loan money to, and advance and
pay money for, the partnership, and may take and hold the notes,
drafts, acceptances and bonds of or belonging to the partnership,
as security for the repayment of such moneys and interest, and may
use and lend his name and credit as security for the partnership, in
any business thereof, and shall have the same rights and remedies
in these respects as any other creditor might have. He may also
negotiate sales, purchases, and other business for the partnership,
but no business so negotiated shall be binding upon the partner-
24 PARTNERSHIP. LAWS.

'

ship, until approved by a general partner. Excepting as herein
mentioned, he shall not transact any business on account of the
partnership, nor be employed for that purpose, as agent, attorney
or otherwise.* If he shall interfere contrary to these provisions he
shall be deemed a general partner.t

Leases. 1 Z. 1872, p. 260, c. 114 (same stat. 4 R. S., 8th ed.,
2496). It shall be lawful for a special partner, in any limited part-
nership, to lease to the general partner or partners, any lands,

_tenements or other property for the purposes of the partnership, at
such rents and upon such terms as may be agreed upon between
them.

Loans. A special partner may make a loan to the firm with-
out necessarily rendering himself liable as a general partner. Bor-
rowing money to enlarge the business is not a “change” of the
terms of partnership, within the meaning of the statute. M. Y.
Super. Ct. Sp. T. 1866, Walkenshaw v. Perzel, 4 Fobt. 426; S.C.
32 How. Pr. 233.

Special partner of pledgee may buy. A special partner
of a firm with whom property is pledged is not incapacitated from
purchasing the pledge at a sale made by the firm. As he is pro-
hibited by 2 2. S. 766, § 17, from transacting any business on ac-
count of the partnership, and cannot be employed as agent, attor-
ney, or otherwise, no duty devolves upon him in reference to’ the
bailment. He cannot aid or direct in the sale; and hence is not
within the rule that one shall not be permitted to purchase who has
a duty inconsistent with the character of a purchaser. JV. Y. Com.
Pi. Sp. T. 1857, Lewis v. Graham, 4 Abd. Pr. 106, But see the
act of 1857 above stated (p. 23), enlarging the powers of the special
partner.

Title to real estate should be taken in the name of the gen-
eral partners alone. To take it in the name of all, renders the
special partner a tenant in common, and so operates as a with-
drawal of capital to the extent of his undivided interest in the
land. But if it is not shown that the special partner knew and
consented to the use of his name in the conveyance, he does not

 

* Effect of stipulating that his son shall be employed by the firm, and have
control over payments. Richardson v. Hogg, 38 Penn. St. 153.

+ So also he may be held liable on the ground of having led him, the creditor,
to pees that the firm was a general partnership. Barrows v. Downs, 9 &. Z.
440.
PARTNERSHIP LAWS. 25

by it become chargeable as a general partner. Supreme Ct. 1843,
Madison County Bank v. Gould, 5 A7l/, 309.

Accounting. 1 2. S. 766 (same stat. 3 [d., 7th ed, 51; 4 12.,
8th ed., 2496), § 18. The general partners shall be liable to account
to each other and to the special partners, for their management of
the concern, both in law and equity, as other partners now are by
law.

Bill for accounting and receiver, on dissolution, sustained, not-
withstanding the partnership was a limited one, and the complainant
was the special partner. The limited partner has the same right
that a general partner has, to insist that the assets be applied to pay
the partnership debts; and the statute [1 R. S. 766, § 18] expressly
entitles him to an accountirig. Supreme Ct. Sp. T. 1853, Hogg v.
Ellis, 8 How. Pr. 473-

Frauds. 1 2. S. 766 (same stat. 3 [d., 7th ed. 51; 4 [d., 8th
ed., 2495), § t9- Every partner who shall be guilty of any fraud
in the affairs of the partnership, shall be liable civilly to the party
injured, to the extent of his damage; and shall also be liable to an
indictment for a misdemeanor, punishable by fine or imprisonment,
or both, in the discretion of the court by which he shall be tried.

Penal Code, § 375. A member of a limited partnership, who is
guilty of any fraud in the affairs of the partnership, is guilty of a
misdemeanor.

Partnership transfers void. 1 2. S. 766 (same stat. 3 Id,
7th ed., 51; 4 Id., 8th ed., 2495), § 20. Every sale, assignrnent, or
transfer of any of the property or effects of such partnership, made
by such partnership when insolvent, or in contemplation of insolv-
ency, or after or in contemplation of the insolvency of any partner,
with the intent of giving a preference to any creditor of such part-
nership or insolvent partner over other creditors of such partner-
ship; and every judgment confessed, lien created, or security given,
by such partnership, under the like circumstances, and with the like
intent, shall be void, as against the creditors of such /partnership.

As to what is insolvency or contemplation of insolvency, see
Walkenshaw v. Perzel, 4 Robt. 426; s.c. 34 How. Pr. 233, and
Abb. N. Y. Dig. tit. DEFINITIONS.

Certain transfers, &c., of their property, by general
partners, void. 1 2. S. 767 (same stat. 3 Id., 7th ed.,51; 4 1d., 8th
ed., 2495), § 21. Every such sale, assignment, or transfer of any of
the property or effects of a general or special partner, made by such
general or special partner, when insolvent, or in contemplation of
26 PARTNERSHIP LAWS.

insolvency, or after or in contemplation of the insolvency of the
partnership, with the intent of giving to any creditor of his own, or
of the partnership, a preference over creditors of the partnership ;
and every judgment confessed. lien created, or security given, by any
such partner, under the like circumstances, and with the like intent,
shall be void, as against the creditors of the partnership.

An assignment for benefit of creditors by a special partnership,
containing preferences, is void, and, therefore, does not preclude
the parties from making subsequently a valid assignment without
preferences. Ct. of App. 1886, Schwartz v. Soutter, 103 /V. Y. 683;
s.c. 5 Central Rep. 620. As to fraudulent preferences, see note
in 22 Abb. N. C- 327.

Whether an assignment, transfer or mortgage by a special part-
ner of his individual property to secure his individual debts made
at a time when neither he nor the firm is insolvent is prohibited by
this § 21, and made void as against firm creditors, Query? Ct.
of App. 1884, George v. Grant, 97 iV. Y. 262.

The section does not avoid a mortgage upon his individual
property given by a special partner of an insolvent firm borrowing
from a third person a sum of money for the purpose of paying his in-
dividual debts, and among others a debt of the firm of which the
lender was a member, such lender having, when he advanced the
money, no knowledge or notice of the insolvency either of the firm or
of the mortgagor, but being informed of the purpose for which the
money was to be applied. In such case the preference of the debts
paid out of the proceeds, is not effected through the instrument
itself, but results from the application of the money after it is ad-
vanced. J6.

When special partner to become liable. 1 2. S. 767
(same stat. 3 Id. 7th ed. 51; 4 [d., Sth ed. 2495), § 22. Every
special partner who shall violate any provision of the two last pre-
ceding sections, or who shall concur in, or assent to, any such vio-

lation by ,he partnership, or by any individual partner, shall be
liable as a general partner.*

Insolvency of limited partnership. Creditors of a limited
partnership prior to the period prescribed for its termination, are
entitled in equity to be paid out of its assets, in preference to even

 

* Creditors are not precluded from holding him liable, by the fact that they
had knowledge at the time of their dealings, that a limited partnership was relied
on. Andrews v Schott, 10 Penn. St. 47.
PARTNERSHIP LAWS. 27

bona fide holders of notes issued by the general partner, although
in the name of the firm, but after the dissolution. If the special
partner has become liable as general partner, by reason of the busi-
ness being carried on after the expiration of the limited partner-
ship, the remedy of the note-holder is by suit at law against him
individually. Chancery, 1843, Haggerty v. Taylor, 10 Page, 261.

When the special partner, under a limited partnership, does not
pay in the amount of his capital specified in the certificate, and the
firm, having become insolvent, assign the property thereof for the
benefit of creditors, the assignee may maintain an action against the
special partner to recover for the estate the capital agreed to be
put in. V.Y. Com. Pl. 1854, Robinson v. McIntosh, 3 4. D. Smith,
221.

The property of a limited partnership, after insolvency, is deemed
a trust fund for the benefit of all the creditors; if the partners neg-
lect to place it in the hands of a proper trustee for distribution,
any creditor may proceed at once, in equity, for the appointment of
a receiver and a distribution. It is not necessary he should first
obtain judgment at law. Chancery, 1839, Innes v. Lansing, 7 Paige,
583; Supreme Ct. 1848, Whitewright v. Stimpson, 2 Bard. 379;
1859, Jackson v. Sheldon, 9 44d. Pr. 127,

But these cases are overruled, below, so far as they preclude
one creditor from obtaining priority.

General assignment. The rule that a partner can in no
case make a general assignment to a trustee for the benefit of cred-
itors, without the assent of his copartner, the latter being present,
and capable of acting, is applicable to a limited partnership.
NV. Y. Superior Ct. 1849, Hayes v. Heyer, 3 Sandf. 284, 293.

Such a partnership being insolvent, one of the general partners,
with the consent of the special partner, made an assignment of all
the partnership effects for the payment of all the firm debts ratably.
ffeld, that the other general partner, who might have been, but was
not, consulted in the matter, was entitled to have it set aside and
a receiver appointed. J/é.; but compare Robinson v. McIntosh,
3 &. D. Smith, 221; and Robinson v. Gregory, cited in 30 WV. Y.
35° ;

But if the assignment was executed and acknowledged by the
resident partner in person, for himself, for the firm, and as the
attorney in fact of the non-resident partners, who ratify his acts, it
was sufficiently executed under the general assignment act of 1860,
£8 PARTNERSHIP LAWS.

c. 348, which did not require acknowledgment by non-residents.
N.Y. Com. Pl. Sp. T. 1868, Darrow v. Bruff, 36 How. Pr. 479.

Priority of diligent creditor. The assets of an insolvent
limited partnership are not necessarily to be divided equally among
its creditors A creditor who, by superior diligence, acquires a
judgment against the firm prior to other creditors, is entitled to a
satisfaction of the same in full, though there is not enough to pay
the others also [disapproving 9 Abb. Pr. 127]. Supreme Ct. 1861,
Artisans’ Bank v. Treadwell, 34 Bard. 553.*

A judgment-creditor of an insolvent limited partnership, formed
under the Revised Statutes, who have made an assignment for the
benefit of creditors contrary to the statute, may maintain an action
in his own behalf to set aside the assignment, and obtain payment
of his debt, at least in the absence of any such proceeding on the
part of other creditors. Supreme Ct. 1860, Greene v. Breck, 32
Barb. 73; rev'g s.c. 10 Abb. Pr. 42.

Insolvency and preferences. Sections 20, 21 and 22 do
not prevent a creditor from obtaining, by superior diligence in hos-
tile proceedings, a lien in preference over other creditors. The
members of a limited partnership, before or after insolvency, are
just as liable to be sued for their debts as other natural persons.
Their creditors are entitled to recover judgments against them, with
the view to reach the individual property as well as the partnership
property. It is true the partnership property of a limited partner-
ship is a trust fund for the payment of the partnership debts; but
so is the partnership property of all partnerships, general or special.
The only difference between the property of a general and a
special partnership, in this respect, is such as is made in sections
20 and 21 of 1 &. S. 766, forbidding the giving of any preference
among the creditors of a special partnership as therein prescribed.
A creditor of such partnership may acquire a lien upon the part-
nership praperty by procedure zz cnvitum, just as much and as
properly in one case as in the other. [Overruling 7 Paige, 583;
2 Barb. 379; 3 Sandf. 299; 9 Abb. Pr. 127.] Ct. of App. 1862,
Van Alstyne v. Cook, 25 WV. Y. 489.

 

* The court, considering the point a difficult and important one, did not give
full effect to its decision, but directed that an action should be brought to test the
question in the Court of Appeals, the property meanwhile to be kept by a receiv-
er. See the decision of the latter court, in Van Alstyne v. Cook, 25 WV. Y. 489,
stated in the text; overruling Jackson v, Sheldon, 9 4d, Pr. 127.

 
PARTNERSHIP LAWS. - 99

Special partner postponed as creditor. 1 #. S. 767,
§ 23, am’d by 1 L. 1857, p. 837, c. 414, § 4 (same stat. 3 R.S., 7th
ed., 52; 4 [d., 8th ed., 2495). In case of the insolvency or bank-
ruptcy of the partnership, no special partner shall, except for claims
contracted pursuant to section seventeen, under any circumstances
be allowed to claim as a creditor, until the claims of all the other
creditors of the partnership shall be satisfied.*

Before the amendment. The provision of 1 &. S. 767,
§ 23 (before the amendment of 1857, c. 414, forbidding special
partners to claim as creditors until the claims of all other creditors
of the insolvent limited partnership should be satisfied), only ap-
plied to claims held by the special partner individually, and ac-
quired by him before the dissolution. Cyt. of App. 1866, Hayes v.
Heyer, 35 J. Y. 326.

Assignment which provides for demand due to special partner
ratably with other debts, void. Mills v. Argall, 6 Pazge, 577.

Where the special partner is a member of another general firm,
to which the special partnership is indebted when it becomes in-
solvent, neither the debt of the general partnership, nor the special
partner’s interest in it; is within the provision that, “in case of the
insolvency or bankruptcy of a special partnership, no special part-
ner shall, under any circumstances, be allowed to claim as a credit-
or until the claims of all other creditors of the partnership shall be
satisfied.” This provision simply places the special partner, so far
as he is a creditor, upon the same footing as if he were a general
partner. In both cases the partner must wait until all the other
creditors are paid. If the same person be a partner in two firms,
one of which becomes insolvent, while the other is solvent and a
creditor of the insolvent firm, then the creditor firm may recover
from the insolvent firm, notwithstanding a member of the insolvent

 

* See, on this point, Dunning’s Appeal, 44 Penn. St. 150; and Clapp v
Lacey, 35 Conn. 463.

In Jaffe v. Krum (Mo., 1886), 4 Western Rep. 624, the court, in holding the
section of a statute of Missouri, which enacts, “if the partnership becomes in-
solvent, no special partner shall be paid as a creditor of the firm or receive the
benefit of any lien in his favor as such until the other creditors of the firm are
Satisfied,” to mean that in case of insolvency of the partnership, it postpones
the special partner as a creditor on any claim for advances made by him to the
partnership, and that the whole scope of the act is to the effect that he subjects
such advances to the hazard of the enterprise,—say, that other courts have
reached the same conclusion upon statutes in substance the same as the one
under consideration, citing White v. Hackett, 20 V. Y. 179; Mills v Argall, 6
Paige, 577; Ward v. Newell, 42 Barb. 482; Dunning’s App., 44 Pa, St. 150.
30 PARTNERSHIP LAWS.

firm is also a member of the solvent firm. M&M. Y. Superiur Ct.
1850, Hayes v. Bement, 3 Sandf. 394; 8.c. 8 WV. Y. Leg. Obs. 83.

A special partner in a limited partnership, under the statute of
New Jersey (which in this respect is like the provision of the New
York statute, 1 &. S. 767, § 23), cannot recover against the
general partners, on a note given by them to him for good con-
sideration, if the partnership be insolvent. [zo N. Y. 178.] Su-
preme Ct. 1864, Ward v. Newell, 42 Bard. 482; s.c. 28 How. Pr.
102.

Prior to the amendment by 1 Z. 1857, p. 837, c. 414, §§ 3, 4, a
special partner, upon the insolvency of the partnership, was not en-
titled to dividends in common with the other creditors of the part-
nership, for cash loaned by him to it during the prosecution of its
business and used in payment of its liabilities. Accordingly,
where a limited partnership was formed in 1854, and became in-
solvent in 1855, being indebted to the special partner for cash so
loaned and used,—/He/d, that the act of 1857 did not apply, and
that the special partner could not be allowed to claim as a creditor
until the claims of all the other creditors of the partnership should
be satisfied. Cv. of App. 1859, White v. Hackett, 20 WV. Y. 178;
rev'g s.C. 24 Bard. 290.

Dissolution, how effected. 1 2. S. 767 (same stat. 3 Id,
7th ed, 52; 4 [d., 8th ed., 2496), § 24. No dissolution of such
partnership by the acts of the parties shall take place previous to
the time specified in the certificate of its formation, or in the cer-
tificate of its renewal, until a notice of such dissolution shall have
been filed and recorded in the clerk’s office in which the orig-
inal certificate was recorded, and published once in each week
for four weeks,* in a newspaper printed in each of the counties
where the partnership ‘may have places of business, and in the
State paper.

Dissolution by expiration of time. As the original term
during which a limited parnership is to continue is required to
be published at the commencement of the business [1 R. S. 764,
§ 4, subd. 4, §§ 9, 11], every person dealing with the firm is pre-
sumed to have notice of the termination of the copartnership; so
that no formal notice of the dissolution of the firm is necessary to

 

* This has been held to make an interval of one week between the successive
publications essential. Jw ve King, 7 Bank Reg. 279. But see 11 Abd. N.C.
104.
PARTNERSHIP LAWS. 81

be given, to prevent any of the general partners from charging the
copartnership with new debts, contracted after the termination of
the copartnership. Chancery, 1843, Haggerty v. Taylor, 10 Paige,
261.

By agreement and notice. Where a limited partnership is
dissolved by the agreement of the parties before the period fixed
for its termination by the original certificate, it continues, as to
persons crediting the firm without actual notice of such dissolu-
tion, until the notice required by the statute has been filed, re-
corded, and published for, four wecks, as therein prescribed. Cv.
of App. 1854, Beers v. Reynolds, 11 WV. Y. (z Kern.) 97 ; aff’g 12
Barb. 288; Supreme Ct. 1862 (Bradford, Referee), Fanshawe v.
Lane, 16 Abb. Pr. 71.

If any alteration is made in the capital or shares, and the part-
nership is in any manner thereafter carried on before the publica-
tion of the notice is completed, the special partner becomes liable
as a general partner. Beers v. Reynolds (aéove cited).

Therefore, where parties to a limited partnership agreed to dis-
solve it, and caused notice of dissolution to be filed and recorded,
and commenced publication of it, and the special partner at the
same time sold his interest in the copartnership effects to the gen-
eral partner, who secured the price by a mortgage on the effects
and other property, and by a judgment, and continued the same
kind of business; and afterwards, and before the publication was
completed, he purchased goods of the plaintiff, who had no actual
notice of the dissolution:—Ae/d, that the spectal partner was liable.
to the plaintiff as a general partner, without reference to the intent
with which the dissolution was made, and the mortgage and judg:
ment taken. Jd,

In 1846, D., B. & M. formed a limited partnership, M. being the
special partner, the partnership to continue till 1849. In 1847
they agreed that D. should withdraw, and B. should carry on the
business; but that D. should allow his name to be used as a partner
in purchasing goods and giving notes therefor, until certain notes
should be paid, and then the partnership should be publicly dis-
solved. Ye/d, that the three were general partners as to third per-
sons until such notes were paid; and were liable on notes given on
the intermediate purchase of goods, under the new arrangement.
Supreme Ct. 1851, Bulkley v. Digman, 11 Bard, 289.
32 PARTNERSHIP LAWS.

Form of Notice of Dissolution of Partnership.

Notice is hereby given that the limited partnership of A., B. &
Co., composed of the undersigned A. and B. as general and C. and
D. as special partners, is dissolved by mutual consent, on and after
the day of ,18

[Signatures of partners.]

[Date.]

Until the completion of such notice, the partnership con-
tinues as to persons crediting the firm without actual notice of such
dissolution. Beers v. Reynolds, 11 W. Y. (1 Kerz.) 97.

A limited partnership cannot be dissolved by the act of the par-
ties, until four weeks after the publication of the notice of the in-
tended dissolution. MV. Y. Com. Fl. 1863, Bulkley v. Marks, 15
Abb. Pr. 4543 S.C. sub nom. Buckley v. Lord, 24 How. Pr. 455.

Delay in filing proofs of publication not material. Mattison
v. Demarest, 4 Rodz. 161.

II.

 Compromises.

Act of 1838.

[Repealed by Z. 1880, c. 245, which took effect Sept. 1, 1880. For
the act regulating such compromises thereafter made, see Code
Civ. Pro. § 1942, etc., given below.]

*

Compromise may be made by one or more partners.
L. 1838, p. 243, Cc. 257, § 1. Whenever any copartnership firm
shall be dissolved by mutual consent or otherwise, it shall and may
be lawful for any one or more of the individuals who was or were
embraced in such copartnership firm, to make a separate composi-
tion or compromise with any one or all of the creditors of such
copartnership firm; and such composition or compromise shall be
a full and effectual discharge to the debtor or debtors making the
same, and to them only, of and from all and every liability to the
PARTNERSHIP LAWS. 38

creditor or creditors with whom the same is made or incurred by
reason of his or their connection with such copartnership firm.

Discharge. § 2 (am'd L. 1845, p. 410, c. 348). Every such
debtor or debtors making such composition or compromise, shall
take from the creditor or creditors with whom he may make the
same, a note or memorandum in writing, exonerating him or them
from all and every individual liability incurred by reason of such
connection with such copartnership firm, which note or memoran-
dum may be given in evidence by such debtor or debtors under the
general issue, in bar of such creditor’s right of recovery against
him or them; and if such liability shall be by judgment in any
court of record in this State, then on a production to and filing
with the clerk of such court, the said note or memorandum in
writing, duly acknowledged by the party or parties making the
same, In the same manner as satisfaction of judgment is now re-
quired by law to be acknowledged, such clerk shall discharge said
judgment of record, so far as the said compromising debtor or
debtors shall be concerned.

Copartners’ rights. JZ. 1838, p. 243, c. 257, § 3. Such
compromise or composition with an individual member of a firm,
shall not be so construed as to discharge the other copartners, nor
shall it impair the right of the creditor to proceed at law or in equity
against the members of such copartnership firm as have not been
discharged: And the member or members of such copartnership
firm so proceeded against, shall be permitted to set off any demand
against said creditor or creditors which could have been set off
had such suit been brought against all the individuals composing
such firm; nor shall such compromise or discharge of an individual
of a firm, prevent the other members of such firm from availing
themselves of any defense at law or equity, that would have been
available had not this act been passed, except that they shall not
set up the discharge of one individual as a discharge of the other
copartners, unless it shall appear that all were intended to be dis-
charged.

Contribution. Z. 1838, p. 243, c. 257, § 4. Such compromise
or composition of an individual of a firm with a creditor of such
firm, shall in no wise affect the right of the other copartners to call
on the individual making such compromise, for his ratable portion
of such copartnership debt, the same as if this law had not been
passed.

Joint debtors. §5. The above provisions in reference to
copartners of a firm, shall extend to joint debtors, who are hereby
authorized individually to compound or compromise for their joint
indebtedness, with the like effect in reference to creditors and to

3
.

34 PARTNERSHIP LAWS.

joint debtors of the individuals so compromising, as is above pro-
vided in reference to copartners.

Provisions of the Code of Civil Procedure; superseding
the above Act of 1838.

Joint debtors may compound separately. Mode and
effect. Code Civ. Pro. § 1942. A joint debtor may make a separate
composition with his creditor, as prescribed in this section. Such
a composition discharges the debtor making it; and him only, The
creditor must execute to the compounding debtor a release of the
indebtedness, or other instrument exonerating him therefrom. A
member of a partnership cannot thus compound for a partnership
debt until the partnership has been dissolved, by consent or other-
wise. In that case the instrument must release or exonerate him
from all liability incurred by reason of his connection with the part-
nership. An instrument, specified in this section, does not impair
the creditor’s right of action against any other joint debtor, or his
right to take any proceedings against the latter; unless an intent
release or exonerate him appears affirmatively upon the face

ereof.

Satisfying judgment. Code Civ. Pro. § 1943. An instru-
ment, specified in the last section, is deemed a satisfaction -piece,
for the purpose of discharging, as prescribed in section 1260 of
this act, the docket of a judgment, recovered upon an indebtedness
released or discharged thereby, as far as the judgment affects the
compounding debtor Where the docket of a judgment is dis-
charged thereupon, a special entry must be made upon the docket,
to the effect that the judgment is satisfied as to the compounding
debtor only.

Release of a judgment recovered against one of two joint
and several debtors without service of the other:—/e/d, necessarily
to release the other, although it would have been otherwise of a
release of the liability of the one served. Susm. Ct 1885, Coon-
ley v. Woog, 36 Hun, 559.

Rights of the debtors not released. Code. Civ. Pro.§ 1944.
Where a joint debtor has thus compounded, a joint debtor who
has not compounded may make any defense or counter-claim, or
have any other relief as against the creditor, to which he would
have been entitled if the composition had not been made. He
may require the compounding debtor to contribute his ratable pro-
portion of the joint debt, or of the partnership debts, as the case
may be, as if the latter had not been discharged.
PARTNERSHIP LAWS. 85

What obligations are within the statute. A judgment
against several, for damages for negligence, is a joint obligation,
within the act of 1838, as to releases to one of several joint debtors.
N.Y. Super. Ct. 1873, Irvine v. Milbank, 14 Ads. Pr. WV. S. 408 ;
S.C. 36 Super. Ct. (J. & S.) 2643 aff'd, in 15 Abd. Pr. N.S. 378,
on other grounds.

So is the statutory joint and several liability of stockholders.
Supm. Ct. 1880, Herries v. Platt, 21 Hun, 132.

An agreement not under seal, releasing one judgment-debtor in
an action in tort but preserving the remedy against the others :—
Held, an instrument to be enforced according to the intent of the
parties, which did not discharge the others. Cz. of App. 1874,
Irvine v. Milbank, 56 4. Y. 635; s.c.15 Add. Pr. WN. S. 378;
affi’g 14 Abd. Pr. N.S. 4083 s. C. 36 Super. Ct. (J. & S.) 264
{but compare Mitchell v. Allen, 25 Hus, 543).

Seal. A release of one joint debtor which will release all must
be under seal. [7 Johns. 207.] Irvine v. Milbank (adove).
To the same effect, 1881, Honegger v. Wettstein, 47 Super. Ct.

(J. & S.) 125.

A release by parol to one joint debtor will not operate as a
discharge to other debtors jointly liable, and can only be pleaded
by the debtor to whom itis given. [2 Johns. 448; 7 Id. 209; 9
Wend. 335.] Cz. of App. 1877, Morgan v. Smith, 79 WV. Y. 537;
affi’g, in part, 7 Hun, 244.

Compromise without the State. Compromise with one of
several joint debtors deemed valid, under the act of 1838, though
made in another State. Supm. Ct. Sp. T. 1875, Saxton v. Hodge,
46 How. Pr. 467.

Form of Release on Composition or Compromise by one
of Several Partners. Under Code Civ. Pro. (above).

Whereas, the late copartnership firm of Y. Z. & Co., of ;
are indebted to me, the undersigned, A. B., , of the city of
,in the sum of dollars [and if the indebtedness is ona
judgment of a court of record of this State, add words to this effect,
by virtue of a judgment recovered in the Supreme Court of the
State of , in an action wherein said A. B. was the plaintiff,
and the said late firm were defendants]: And whereas, such firm
36 PARTNERSHIP LAWS.

has been dissolved: And whereas, I have agreed with Y. Z., a member
of the said firm, to compound or compromise my claim on him in-
dividually in respect to the said indebtedness to me of the said firm,
for the sum of dollars: Now KNow YE, that in consideration
of the sum of dollars to me, the said A. B., paid by the said
Y. Z., at or before the time of my subscribing this release, I, the
said A. B., do hereby, according to the statute in such case made,
release, acquit and forever discharge the said Y. Z. and his estate
of and from all individual liability, claim and demand whatsoever,
for or in respect of his connection with the said partnership; PRo-
VIDED, however, that this release is made pursuant to sections 1942,
1943 and 1944 of the Code of Civil Procedure of the State of New
York, and shall have no greater or other effect than as by the said
act and by this release is provided.

Witness my hand and seal, this day of ,18 .
[SEAL.]

Acknowledgment. If the indebtedness is on a judgment,
the release should be acknowledged before some officer mentioned
on pp. 7, &c., of this pamphlet, or before the clerk or his deputy
(Code Civ. Pro., $8 1943, 1260, last clause); and presented to the
clerk of the court in whose office the judgment-roll was filed.

Petitioning in Insolvency.

Power. JZ. 1849, c. 176, amdy. Z.1838. § 1. Any creditor or
creditors of any copartnership firm or of any joint debtors, may
unite with any one or more of the members of any such copartner-
ship firm, or with any one or more of any such joint debtors, in a
petition for the discharge of such partner or partners, joint debtor
or debtors from his or their debts under and in accordance with
the provisions of article third, of title one, of chapter five, of part
two of the Revised Statutes, and the discharge of any partner or
partners, joint debtor or debtors, in consequence of any such peti-
tion, shall have the same force and effect as the note or memoran-
dum in writing mentioned in the act hereby amended, and shall
not discharge any copartner or joint debtor, except such co-
partner and joint debtors as may be designated by the petitioning
creditor.

Code of Civil Procedure, § 2156. A creditor’s consent does
not affect his remedy against any person or persons indebted
jointly with the petitioner; and the petitioner's discharge has the
effect, as between the creditor and the other joint debtors, of a
composition between the petitioner and the creditor, made as pre-
scribed in article third of title fifth of chapter fifteenth of this act
(Sections relating to compromises by one of several joint debtors.)
PARTNERSHIP LAWS. 37

ITI.

Sicm Names.

Fictitious names. JZ. 1833, p. 404, c. 281, § 1. No person
shall hereafter transact business in the name of a partner not inter-
ested in his firm, and where the designation “and company,” or
“®& Co.,” is used, it shall represent an actual partner or partners.

[Superseded by Penal Code, below, p. 40.]

This statute is highly penal, and not to be extended by im-
plication. Its violation is no defense to an action against carriers
for loss of goods purchased and shipped by the plaintiff, in the
name of a firm which had been dissolved. C?#. of App. 1878, Wood
v. Erie Ry. Co. 72 WV. Y. 196: s. c. 28 Am. R. 125; affi’g 9g Mun,
648. Approved but distinguished in Lunt v. Lunt, 8 446. MW. C.
76, 81, 82.

It is not available, to enable other persons, contracting in the
ordinary course of business, with one violating the statute, to repu-
diate their obligations to him. /Zd.; Bull’s Head Bank v. McFeet-
ers, 41 Super. Ct. (J. & S.) 215. Compare to the contrary (1874),
O’Toole v. Garvin, 1 Hun, 92; s.c. 3 Supm. Ct. (7. & C.) 118,
where it was held that a violation of the statute as to false part-
nership names is a defense to an action for the price of goods sold
by plaintiff under such name.

The object of the statute was to protect persons giving credit
to such firm on the faith of the fictitious designation, and it was
not intended to protect those who obtain credit from the firm. It
affords no defense, therefore, to an action on a fidelity bond given
to such firm by an employee, in which the names of the actual
partners are stated as well as the fictitious designation. Ct.of App.
1884, Gay v. Seibold, 97 WV. Y. 472.

The statute is not violated where the words ‘‘& Co.” are used
to represent a person under a disability—e. g., the wife of the per-
son whose name appears as the head of the firm—if there was no
intention to impose upon the public by obtaining undue credit.
Ct. of App. 1880, Zimmerman v. Erhard, 83 WV. Y. 74; s. c. 38 Am.
A. 396; affi’g 8 Daly, 311.

Participation in the profits of a firm renders a person a partner
within the meaning of the statute, unless itis specially agreed that
38 PARTNERSHIP LAWS.

he receives a share in the profits as a compensation for his services
and has no interest in the business. One who is liable to third per-
sons as a partner, is a partner within the meaning of the statute.
1874, Greenwood v. Brink, 1 Hun, 227; s.c. 3 Supm. Ct. (T.& C.)
740; Ryan v. Hardy (1882), .36 Hun, 76.

A bona fide holder of a note indorsed with an apparent firm
name, by an individual payee who transacts business under such
name in violation of the statute [L. 1833, c. 281], may recover
thereon against both maker and indorser. [Distinguishing 1 Hun,
g2.] 1876, Bull’s Head Bank v. McFeeters, 41 Super. Ct. (J. & S.)
215.

Where the firm of Hegeman & Co. made a general assignment
for the benefit of creditors, under which certain persons became
the owners of the “ good will,” by purchase from the assignee, and
afterwards sold the same to a corporation whose corporate name
was “ Hegeman & Co.,”—Hedd, that the corporation were prohibited
by L. 1833, c. 281,—against doing business in fictitious names,—
from representing that the firm of Hegeman & Co. had resumed
business at their old place, and conducting its business as if it were
not a corporation but a continuation of the old firm; that it
acquired the right only to do business as the successor of Hegeman
& Co., and that, so long as it represented itself as the original firm,
it was committing a fraud on the public, and a court of equity
would not enforce its rights to the good-will and trade-mark of the
old firm of Hegeman & Co. against infringers thereof. [Citing
10 Jurist (N. S.), 55; 5 Am. L. Rep. (N.S.)588.] 2. V. Com. Pl.
Sp. T. 1880, Hegeman & Co. v. Hegeman, 8 Daly, 1. Compare
NV. Y. Super. Ct. Sp. T. 1879, Fenner v. Bennett, 1 Month. L. Bul.
46.

A contract by a resident of another State for the sale of a branch
of his business established in this State, is not invalid for the pur-
pose of defeating his action against the purchaser, because the busi-
ness was carried on by him in a fictitious firm name, such as is for-
bidden by“our statute. 1. The statute is penal, and has no extra
territorial force. [Citing Western Trans., &c. Co. v. Kilderhouse,
87 NV. Y. 430.] 2. The contract should be sustained as capable of
innocent construction [citing Lorillard v. Clyde, 86 W. Y. 384;
Ormes v. Dauchy, 82 Jd. 443], because the property, even if it be
acquired in violation of law, could be sold for the purpose of ending
the violation. [Citing Wood v. Erie R. R.Co., 72 W. ¥.196, 200.]
PARTNERSHIP LAWS. 39

3. The statute excepts firms transacting business in foreign coun-
tries. Supm. Ct. 1884, Ross v. Wigg, 34 Hun, 192.

Plaintiff, residing and doing business as a publisher in another
State, made a contract there with defendant, to canvass this and
other States,— He/d, that the fact that plaintiff was doing business
under an apparent partnership name, was no defense to an action
here for violation of the contract. Supm. Ct. (1881 ?), Stoddart v.
Key, 62 How. Pr. 137.

Illegality in the use of a firm name is a ground of defense, and
must be affirmatively set up in the answer. 1874, O’Toole v. Gar-
vin, 1 Hun, 92; s. c.3 Supm. Ct. (ZT. & C.) 118. Followed, in
Stoddart v. Key, 62 How. Pr.137; 1878, Hennequin v. Butterfield,
43 Super. Ct. (J. & S.) 411; aff'd, it seems, in 76 WV. Y. 598, with-
out opinion.

The defense is not meritorious, and the court may, in its dis-
cretion, refuse to allow an amendment of the answer to insert it.
1874, O’Toole v. Garvin, 1 Hun, 313; 8. Cc. 3 Supm. Ct. (7. & C.)
756.

One who consents to the continued use of his name in a case
where it is not allowed by the statute, is liable for firm debts to
dealers not charged with notice of his retirement JV. Y. Suger.
Ct. 1878, Freeman v. Falconer, 44 Super. Ct. (J. & S.) 132.

The statute does not entitle a retiring partner to enjoin the con-
tinuing partner and a new association from continuing the use of
the words ‘‘and Co.” WV. Y. Super. Ct. Sp. T. 1873, Lathrop v.
Lathrop, 47 How. Pr. 532.

Continuing the name of a deceased partner in the firm name is
a violation of the statute, and the firm cannot recover for goods
sold, although the use of such name is without wrongful intent, the
executors having carried on the business in conjunction with the
_ surviving partners in obedience to the requirements of the will.

[Citing Wood v. Erie Ry. Co., 72 WM. Y. 196, 198.] WW. VY. Com.
i. 1882, Lane v. Arnold, 13 4dd. WV. C. 73; rev’g 63 How. Pr.
40. ;

Amendment of foregoing act. Z. 1849, p. 502, c. 347, § 1.
The act entitled ‘“‘ An act to prevent persons from transacting busi-
ness under fictitious names,” passed April 29, 1833, shall not apply
to commercial copartnerships located and transacting business in
foreign countries, but they may use their styles or firms of their
houses in this State. [The act of 1833, after being revised and
40 " PARTNERSHIP LAWS.

superseded by the provision of the Penal Code now in force (see
below), was formally repealed by Z. 1886, c. 593.]

Same subject. Penal Code, § 363. A person who transacts
business, using the name, as partner, of one not interested with him
as partner, or using the designation “and company,” or “ & Co.,”
when no actual partner or partners are represented thereby, is
guilty of a misdemeanor. But this section does not apply to any
case where it is specially prescribed by statute that partnership
name may be continued in use by a successor, survivor, or other
person.

Name, when to be continued. Z. 1854, p. 1084, c. 400, § 1.
When any copartnership shall have used or hereafter shall use any
copartnership name, and the business conducted by it shall be con-
tinued by some or any of the copartners, their assigns or appointees,
it shall be lawful to continue the use of such name, provided that
on every change of the persons continuing such use a certificate
shall be filed and notice published as is hereinafter expressed.

[See amendment of § 4, delow.]

Since the provisions of L. 1854, c. 400; L. 1880. c. 561, author-
izing the continued use of individual and copartnership names for
business purposes, in certain cases, allow the name of a person who
has, during his lifetime, carried on business in his own name, to be
continued after his death, with the addition of the words, “and
company,” upon the filing of the proper certificate ; such continued
use is not in violation of L. 1833, c. 281. [Citing Wood z. Erie
Ry. Co., 72 WV. Y. 196; distinguishing Lunt v. Lunt, 8 44d. WV. C.
76; Lane v. Arnold, 13 /@ 73.] MW. VY. City Ct. Tr. T. 1884,
Arnsteadt v. Blumenfeld, Vv. Y. Daily Reg., June 17, 1884.

The statute is only intended to remove the objection of illegal-
ity and does not give those continuing the business a right to the
name as against oneretiring. Supm. Ct. Sp. 7., Caswell v. Hazard,
NV. Y. Daily Reg., March 14, 1887.

Compliance with the statute will enable persons entitled to its
benefits to deal with others under the old name; but it enlarges no
right of property, nor can it invest them even with intangible rights
of property to which a retiring member of the firm had a title. All
that depends upon contract, and cannot be affected by their ex
parte act. Ct. of App. 1883, Hazard v. Caswell, 93 WV. Y. 2593
rev’g 46 Super. Ct. (J. & S.) 559.

But a sale by a retiring partner to his copartner of all “his
aforesaid right, title and interest in and to the business, stock, fix-
' { ) ‘
‘ fe
PARTNERSHIP LAWS. ae Ii 41

tures . . . and good-will and other property and assets what-
soever of, and belonging to the said firm,’—WHe/d, fairly to imply
the right to continue the use of the name of such retiring partner
in the business of the successor firm. Supm. Ct., 1880, Caswell v.
Hazard, 50 Hun, 230.

Concurrence of a continuing partner of the same name as the
one retiring, in filing a certificate of the continued use of the part-
nership name, his subsequent sale, upon his own retirement, of
molds and labels bearing that name, and his omission for many
years thereafter, to object to the use of the same firm name by his
successors, will disentitle him to an injunction to restrain the con-
tinued use of the original firm name, although no person of his
own name continues as a member. Jd.

Certificate to be acknowledged and published. J.
1854, p- 1084, c. 400, § 2. On every change of the person or per-
sons continuing the use of such name, he or they shall sign and
acknowledge, before any officer by law authorized to take acknowl-
edgment of deeds, a certificate declaring the person or persons
dealing under such name, with their place or places of abode, and
file the same with the clerk of the county in which shall be his or
their principal place of business, and shall cause the same to be
published in a newspaper printed in the town or city in which shall
be such principal place of business, or if none be printed in such
town, then in a newspaper printed in the county town, and in the
newspaper printed by the printer of this State, for four successive
weeks.

As to the paper for publication, see 1 444. V. Y. Dig. new ed.,
481; 7 [d., 19.

Register of firms. § 3. The county clerk shall keep a reg-
ister of such firms and names, entering in alphabetical order the
name of every firm and of the copartners thereof, for which regis-
tering and filing he shall receive for each firm a fee of one dollar,
and an additional fee of ten cents for every name of a copartner
beyond two; and the copies of such certificate and registry cer-
tified by him, and the affidavit of such publication, shall be evi-
dence.

Act, to whom to apply. JZ. 1863, p. 227, c. 144 (am’d’g L.
1854, c. 400, § 4). The provisions of this act shall apply to firms
or copartnerships having business relations with foreign countries,
and to all copartnerships in this State who have transacted business
therein for a period of five years, or upwards, and to any limited
partnership formed under the laws thereof, whose general partners
ho
sa

42 see pode 2 PARTNERSHIP LAWS.

or the majority of them shall have been members of the prior co-
partnership, and who shall elect to continue their business under
the name of such prior copartnership and comply with the require-
ments of this act.

L. 1854, c. 400, § 4, further amended by extending the provisions
of the act to firms which have transacted business for /Arce instead
of jive years. JZ. 1888, p. 197, Cc. 142.

Filing certificate. Under the statutes allowing a continuing
partner to carry on business in the copartnership name (Z. 1854,
c. 400; LZ. 1863, c. 144), it is not enough that the partnership had
business relations with foreign countries, or had, for a period of
five years or upwards, carried on business in this State, under the
name which is continued; but the requirement of the statute in
respect to filing and publishing a certificate, &c., must also be com-
plied with. Brooklyn City Ct. 1880, Lunt v. Lunt (No. 1), 8 Add.
NV. C. 76.

Repeal. L. 1854, p. 1084,c. 400, § 5. All statutes to the con-
trary of this act are hereby repealed, as to persons within the pur-

view hereof. tee a

caf

Continued use of name of limited partnership. Z.1881,
p- 585, c. 425, § 1 (am'a’g t L. 1868, p. 528,c. 256). Any limited part-
nership which may hereafter be formed under the laws of this State
may use the firm name of any former general or limited partnership
formed under said laws, where a majority of the partners, general
or special, in either of such last-mentioned copartnerships, or of the
survivors thereof, shall be members of the new limited copartner-
ships; or where a majority of the members of such former copart-
nership, or of the surviving members thereof, shall consent in writ-
ing to the use of such firm name by such new copartnership, upon
complying with the provisions of the act entitled “ An act allowing
the continued use of copartnership names in certain cases,” passed
April seventeenth, eighteen hundred and fifty-four, and the act
amendatory thereof, so far as the same may be applicable.

Limitéd partnership. As to names, &c., of limited partner-
ships, formed under the Revised Statutes, see, also, page 20 of this
pamphlet.

Practice. For some provisions concerning litigation in part-
nership cases, see Code Cru. Pro. 8§ 1945-1947, and § 693.
PARTNERSHIP LAWS. 43

USE OF NAME AFTER DEATH.

L. 1880, Chap. 561. An act to allow the continued use
of a business name or designation in certain cases.

Right to continue use an asset of the estate. L. 1880,
c. 561, § 1, as am'd by L. 1881, c. 389. In case any resident of this
State shall die, who, at the time of his death, and for a period of
five years or more immediately prior thereto, was conducting and
carrying on, in his sole name, any business in this State, or who at
the time of his death, was so conducting and carrying on any busi-
ness having relation with other States or foreign countries, the right
to use the name of said deceased, for the purpose of continuing and
carrying on such business, shall survive. and in all cases where the
right hereby given is exercised, such right to the use of such name
shall form a part of the personal estate of such deceased, and shall
pass or. be disposed of and accounted for as such, and the right
hereby given may be exercised under the provisions of this act in
the case of all such persons who have died within five years last
past.

Under Z. 1880, c. 561, providing “ that in case any resident of
this State shall die, who at the time of his death and for a period
of five years or more immediately prior thereto, was conducting or
carrying on, in his sole name, any business in this State, the right to
use the name of said deceased, for the purpose of continuing and car-
rying on said business, shall survive,” &c., the successors of such
deceased person may, with the permission of his legal representa-
tives, use his name with the addition of “ & Co.,” as their copart-
nership name in continuing his business. [Citing Zimmerman ».
Ehrhard, 83 4. Y. 74; and distinguishing Lunt v. Lunt, 3 45. 1.
C. 76; Arnold v. Lane, 13 4b. NV. C. 73] N.Y. Com. Pl. 188s,
Arnsteadt v, Blumenfield, 13 Daly, 354.

Certificate to be filed and published. Z. 1880, c. 561, § 2.
In case any business shall be continued in the name of any such
deceased person, as in this act provided, the person or persons con-
tinuing such business shall execute and duly acknowledge a certif-
icate setting forth the person or persons dealing or intending to
deal under such name, with their respective places of residence, and
file the same in the county where it is intended the principal place
of business shall be, and shall cause a copy of such certificate to
be published in a newspaper printed in the town or city in which
shall be such principal place of business, or if none be printed in
such town, then in a newspaper printed in the county town, and in
44 PARTNERSHIP LAWS.

the newspaper printed by the printer to this State, for four succes-
sive weeks.

Record of certificates. Z. 1880, c. 561, § 3. The county
clerk where any such certificate is. filed as above provided, shall
keep a book in which all such certificates shall be recorded at full
length with their date of record, and also a register in which shall
be recorded in alphabetical order, every name which it shall be cer-
tified is to be used as herein provided, and in which shall also be
recorded in alphabetical order the names of all persons filing cer-
tificates as herein provided, with the date of such filing, and copies
of such certificates and an affidavit of advertisements, made as
hereinbefore provided, shall be full evidence of the same.

Clerk’s fee. JZ. 7880, c. 561,§ 4. Theclerk shall be entitled
to a fee of one dollar for recording every such certificate and for
entering the name to be used and the name of the person filing such
certificate as herein provided; and to a further fee of fifty cents.
for making and properly certifying a copy of such certificate.

Service of papers, &c. JZ. 1880, c. 561, § 5, Incase any
action or proceeding shall be brought, founded in whole or in part
upon any transaction growing out of a business conducted as hereby
provided, and the name of such deceased is stated as a defendant,
the process and papers in such action may be served on any person
or persons using such name with like effect as though such person
or persons had been named as defendant by his or their own respec-
tive names, and with the same effect as though all such persons
were served with process, and the process and all papers may be
amended by substituting the name or names of the person or per-
sons using the name of such deceased, and no action shall fail, abate
or be in any manner hindered by the name of such deceased being
so used.
INDEX.

ACCOUNTING by general partners to special partners, 25.
ACKNOWLEDGMENT, to certificate of limited partnership, 8.
proof by subscribing witness sufficient, 8.
time of, 9.
what officers may take, 9.
‘ACTIONS by and against limited partnership, in what name con-
ducted, 21.
ADVERTISEMENT of terms of limited partnership, effect of
errors in, 15.
AFFIDAVIT of payment of capital to be filed, 13.
ASSIGNMENT transfers of property by general partner, invalid-
ity of, 25.
ASSIGNMENT FOR BENEFIT OF CREDITORS by limited
partnership, void, 26, 27.
preference of diligent creditor, 28.
AUTHENTICATION of certificate of acknowledgment, 11.

BANKING by limited partnership not sanctioned, 3.

CAPITAL, payment of, 4.
of limited partnership, withdrawal of, 22.
CASH, what is, 4.
CERTIFICATE of limited partnership, 7.
to be filed, 12.
filing to be at place of business, 12.
effect of delay in filing, 12.
COMPROMISE may be made by one or more partners, 32.
rights of copartners after compromise, 33.
contribution, how affected after compromise, 33.
by joint debtors, 33.
joint debtors may compound separately, 34.
CONTRIBUTION by copartners, how affected after compromise,
33:
DEATH of special partner, effect of, 20.
continuance of firm name after, 43, 44.
DELAY in filing certificate of limited partnership, effect of, 12.
DISCHARGE of member of partnership after compromise, 33.
46 INDEX.

DISSOLUTION of limited partnership, 18, 20.
what alterations work a dissolution, 18.
how effected, 30.
by expiration of time, 30.
by agreement and notice, 31°
necessity of notice of, 32. mi

EXECUTION against property of limited partnership, 22.

FALSE STATEMENT in affidavit of payment of capital, 15.
FIRM NAMES, fictitious names, liability for use of, 37-40.
business not to be transacted in name of “ & Co.” 37-40.
continuance of firm name after death, 43, 44.
continuance of, 40-42.
FORMATION of limited partnership, when completed, 14.
FORMS of acknowledgment, 8.
of advertisement of terms of limited partnership, 17.
of affidavit of payment of capital of limited partnership,
13.
of affidavit of publication of limited partnership, 17.
certificate of limited partnership, 8.
of notice of dissolution of limited partnership, 32.
of release on compromise by one of several partners, 35.
FRAUD, liability of member of limited partnership for, 25.
by member of limited partnership, a misdemeanor, 25.

HEIRS, necessity of assent of, to continuance, 20.

INSOLVENCY, transfers of limited partnership property in con-
templation of, invalidity of, 25.
of limited partnership, 26.
assets of, 27, 28.
special partner postponed as creditor, 29.
INSURANCE BUSINESS, by limited partnership, not sanc-
tioned, 3.
IN TERE? on capital invested in limited partnership, 23.

JOINT DEBTORS may compromise, 33.
may compound separately, 34.
effect of release by one, 34.
necessity of seal upon release of one, to release all, 35.

JUDGMENT against limited partnership property, to what ex-
tent bound, 22.

LEASES by special partner to general partnership, 24.
INDEX. AT

LIMITED PARTNERSHIP, certificate of, 7.
certificate to be filed, 12.
filing of certificate to be at place of business, 12.
effect of delay in filing certificate, 12.
continuing use of name, 42.
dissolution of, what alterations work, 18.
dissolution, how effected, 30.
dissolution by expiration of time, 30.
dissolution by agreement and notice, 31.
effect of county clerk’s omission to record certificate, 14.
frauds of, liability of member, 25.
insolvency of, special partner postponed as a creditor, 29.
members of, 3.
names composing firm, 20.
old name, continued use of, 21.
powers of members, 7.
publication of terms of, 15.
purchase of entire firm property by special partner, 19.
purposes of, 3.
real estate of, title to be in whose name, 24.
renewals of, 18.
renewal papers, form and truth of, 18.
when to be deemed formed, 14.
LOANS, special partner may make to general partnership, 24.
MEMBERS of limited partnership, 3.
of limited partnership, powers of, 7.
MISDEMEANOR, member of limited partnership guilty of fraud,
25.
transacting business in name of “ & Co.,” when not rep-
resenting actual partner, 40.
NAMES composing limited partnership, #0.
sign-board of limited partnership, 20.
continued use of old name, 21.
use of fictitious firm names, liability for, 37-40.
continuance of copartnership name, 4o.

certificate of continuance to be acknowledged and pub-
lished, 41.

county clerk to keep register of firms continuing name, 41.

continuance of firm name after death, 43, 44.

continuing use of name of limited partnership, 42.
NEXT OF KIN, necessity of assent of, to continuance, 20.

OFFICERS who may take acknowledgments, 9.

,
48 INDEX.

PARTNER, special partner’s liability for non-compliance with.
statute, 4. .

liability of special partner where capital is furnished by
dormant partner, 6.

special, buying out firm, effect of, 19.
effect of death of special partner, 20.
powers of special partner, 23.
special partner may lease to general partnership, 24.
may loan, 24.
power of special partner to purchase property pledged
with firm, 24.
PARTNERSHIP, members of, may make compromise, 32.
discharge of member after compromise, 33.
rights of copartners after compromise, 33.
contribution, how affected by compromise, 33.
creditor may unite with member in petitioning for dis-
charge, 36. '
PAYMENT of capital, 4. :
PLEDGE, power of special partner to purchase property pledged
with firm, 24.
PUBLICATION, errors in advertisement of terms of limited part-
nership, effect of, 15.
of terms of limited partnership, 15.
mode of, 16.
time of, 17.
of certificate of continuance of firm name, 41.

REAL PROPERTY of limited partnership, title in whose name, 24.

RECORDING certificate of formation of limited partnership, effect
of county clerk’s omission, 14.

RELEASE by one joint debtor, effect of, 34.

necessity of seal to release all joint debtors upon release
of one, 35. *

of one joint debtor by parol, 35.
REMOVAL of place of business, 19.
RENEWALS of limited partnership, 18.

form and truth of renewal papers, 18.
REORGANIZATION of former firm, 5.

SEAL, necessity of, to release all joint debtors upon release of
one, 35.

TIME of publication of terms of limited partnership, 17.
TITLE to real estate of limited partnership, 24.
TRANSFERS of partnership property, invalidity of, 25.