text:
    Deming v. Colt and others. J. N. Hayes v. Heyer and others.
    One partner cannot make a general assignment of the partnership property to a trustee, for the benefit of creditors, against the consent or without the acquiescence of his co-partner; the latter being present or capable of acting in the matter,

    (So ruled in the first cause, by Oakley, Ch. J., and Vanberpoel and Sandforb, J. J., Oct. 7; Oct. 20, 1849 ; and in the second cause, by Duer, Mason, and Campbell, J. J.,
    Nov. 5, &c., 1849;
    Jan. 26, 1850.)
    The cause first above mentioned, came before the court on an appeal from an order at chambers, denying a motion to dissolve an injunction. The facts appearing by the pleadings and affidavits, are as follows:—In February, 1848, the plaintiff, Deming, and C. S. Butts, entered into partnership, for the purpose of manufacturing bone-black, a substance used in refining sugar. Butts made a purchase, in his own name, of some lots of ground in a remote part of the city, upon which the business was to be conducted, and which were to become the partnership property, on certain terms of payment being complied with by D. out of the profits. • The concern was continued * by Butts and Deming, with a reasonable degree of prosperity, until December, 1848, when Butts sold his interest in the partnership and in the lands, to the defendant, Colt. As to the lands, an agreement was executed between' Butts and Colt, by which C. was to pay $2,250 as the price, (subject to $2500 of mortgages,) by paying $1000 a year, in quarterly payments, until the $2.250, with interest, was discharged; and in case of ultimate failure to pay, these quarterly instalments were to be deemed as having been paid for rent.
    As between Deming and Colt, the latter agreed to bring in $1,500 of capital; no part of which was ever furnished, unless the fund raised on notes through Lamson and Lathrop, next mentioned, be so'considered. In the spring of 1849, in order to raise funds for the business, Colt made notes for $1,700, which were indorsed by Deming; and Lamson and Lathrop having guaranteed them, they were used in Boston for the purchase of goods, which were sent here and sold by L. & L., and the net proceeds, several hundred dollars less than the notes, were received by the concern of Deming and Colt.
    The business continued until June, 1849. In the meantime difficulties and disputes arose between the partners, and on the 4th of June, 1849, Colt, in the name of the firm, and in the exercise of his supposed rights, but without the consent or assent of Deming, and without consulting him, although he was at the time actively engaged in the business, executed a general assignment of all the partnership property and effects to Alexander Wilson, in trust for the benefit of the creditors of the firm, without any preferences. At this time the concern was in full operation, and there was no immediate necessity for its ceasing. It was alleged by Colt that the firm was insolvent, which was denied by Deming; but it probably was insolvent, if the notes guaranteed by Lamson & Lathrop were taken into the estimate, and the property brought summarily to a sale for the payment of the debts.
    At the same time, Colt sold and assigned to Lamson & Lathrop, his contract or lease from Butts for the lands on which the manufactory was situated, for a nominal consideration, subject to, and they assuming the terms, for which he was liable to Butts. The assignee, Wilson, immediately took, or attempted to take, possession of the partnership effects, and Lamson & Lathrop of the real estate; and Deming was thus, without his consent, thrown out of the concern, and the partnership was in that mode dissolved.
    Deming thereupon commenced a suit against Colt, Wilson, and Lamson & Lathrop, alleging that Colt’s assignments to the other parties were void; and he obtained, ex parte, an injunction, restraining them from selling or disposing of the property. After their answers were put in, they moved to dissolve the injunction, which motion was denied; and they appealed from the decision.

      H. L. Clinton, for the appellants.
    I. The injunction should be dissolved as to defendants Lamson and Lathrop.
    The plaintiff never had any interest in the lands in question, either legal or equitable; they were not partnership property, but mere individual property, first of Butts, and then of Colt. After the execution of the agreement between Butts and Colt, no partnership funds were applied towards purchasing the premises.
    The court have never gone further, than to hold that real estate purchased by a partnership, with partnership funds, and for partnership purposes, in the individual names of the partners, will be adjudged in chancery partnership property, only that it may be taken into consideration in the accounting of partners between themselves. The authorities are conflicting in regard to holding it partnership property even for this purpose. (Sigourney v. Mann, 7 Conn. R. 11; Smith v. Smith, 5 Vesey, 189; Ripley v. Waterworth, 7 Vesey, 425; Gow on Partner. 51, 52; Bell v. Phyn, 7 Vesey 453; Balmain v. Shore, 9 Vesey 500.)
    Even if the contract for the sale of the premises were partnership property, the assignment or sale of the contract to them would be equally binding upon the plaintiff. One partner certainly has the power to sell any part of the partnership property, and thereby bind the firm, at all events with respect to third persons.
    It is within the general scope of a partnership, for one partner to sell and dispose of all the partnership goods, including the whole stock in trade. (Coll. on Part. § 394, Perkins’s ed. and the authorities there cited; McCullough v. Lammerville, 8 Leigh 415; 10 Mass. 475; 12 Mass. 54.)

      A lease to a partnership is regarded as a part of the movables of the partnership. (Coll, on Part. § 137, Perkins’s Ed.)
    A purchaser of such, or any other portion of the partnership effects would be protected, even though the partner acted fraudulently with reference to his copartner. (Coll, on Part. 445.)
    H. The injunction should be dissolved with reference to the defendants Colt and Wilson.
    The assignment by one partner, of all the partnership effects, for the general benefit of creditors, without giving preferences, is valid in law. The point was expressly adjudicated in Deckerd's case, 5 Watts 22, and Harrison v. Sterry, 5 Cranch 300. Collyer lays down the doctrine, that a valid assignment may be made by one partner of all the partnership effects for the benefit of one creditor, of several, or of all the joint creditors, where all are admitted to an equal participation. (Collyer on Part. § 395, Perkins’s Ed., and the authorities there cited.)
    In many cases it has been held, that an assignment giving preferences is valid, while in other cases the contrary doctrine has prevailed.
    In the following cases the power of one partner to dispose of the whole of the partnership effects by assignment and otherwise, is discussed; viz. Mills v. Barbour, 4 Day 428; Anderson v. Tompkins, 1 Brock. 456; Robinson v. Crowdor, 4 McCord 519; Hodges v. Harris, 6 Pick. 360; Kirby v. Ingersoll, 1 Douglass (Mich.) 477; Pierpoint v. Graham, 3 Wash. C. C. R. 282; Tapley v. Butterfield, 1 Metc. R. 515; Havenv. Hussey, 5 Paige 30; Hitchcock v. St. John, 1 Hoff. Ch. R. 511.
    At the time the assignment to Wilson was made, the firm of Deming and Colt was insolvent, and therefore, a pressing necessity existed for such an assignment being made. The partnership effects were not sufficient to pay over fifty cents on the dollar. Every consideration that can be addressed to the discretion of the court, shows that this assignment should be upheld for the protection of the creditors.

      S. P. Nash, for the plaintiff.
    I. The assignment to Wilson, as trustee for creditors, though by its terms giving no preferences, being made without the knowledge or consent of the plaintiff, was void. It is settled law in this state, that one partner cannot, without the consent of his co-partner, make an assignment to a trustee for creditors, with preferences. (Havens v. Hussey, 5 Paige 30; Hitchcock v. St. John, 1 Hoffm. Ch. Rep. 511; and see Dana v. Lull, 17 Verm. Rep. 390; Kirby v. Ingersoll, 1 Dough (Mich.) 112; 3 Kent 44, note (b); Story on Partn. § 101 and note 3; Holcombe’s Leading Cases, 13.)
    As the decisions in other states holding a contrary doctrine are repudiated here, so the arguments and dicta on which those decisions are based, which, if followed, would of course authorize assignments without preferences, cannot be sufficient with us to uphold them.
    The case of an assignment by one partner, which does not giro prefermces, has not been adjudicated. An assignment giving preferences is held void, but not for giving preferences. If both partners join in such assignment, the preferences do not invalidate it. So if, without the intervention of a trust, one partner, without his co-partner’s consent, appropriates partnership property to the payment of favored creditors, his act is confessedly valid. But an assignment to a trustee, for the benefit of creditors, ipso facto, works a dissolution, destroys the business, and puts the non-consulted partner out of all his rights. Except by the grace of the assignee, he can neither advise, negotiate, nor aid in settling the partnership affairs, though personally liable for all the debts ; his hands are tied from discharging them, and the whole authority for winding up the estate, is vested in the chosen agent of the assigning partner. An assignment to a trustee is not an exercise, but a delegation, of partnership authority ; and if one partner cannot delegate the winding up of the partnership business by an assignment which gives preferences, there is no principle upon which he can do it at all.
    H. H an assignment by one partner without his co-partner’s consent will be sustained at all, it can only be for the protection of creditors, in a case of clear insolvency, of pressing necessity, and when the party not joining, cannot be consulted, or, being consulted, refuses his assent.
    If such be the rule, and without some such limits, the power, if it exists, is a most dangerous one. The party claiming under such an assignment must establish affirmatively the existence of the circumstances which justify it. Rone of them exist in this ease, sufficient to justify Colt, without the concurrence of his partner, in exercising this unusual power, which, to say the least, is on the extreme verge of partnership authority.
    III. Lamson & Lathrop have acquired no rights which are not subject to those of Deming, and of the partnership creditors.
    By the terms of the arrangement with Butts, the plaintiff acquired rights, in the enjoyment of which a court of equity would have protected him. The premises were purchased by Butts for the business of the concern, the title being taken in his name, for his protection, as he advanced the portion of the purchase-money which was paid down, and he was to be paid interest on that as capital. Surplus profits were to be appropriated to the purchase and improvement of the premises.
    Colt, under the article of sale, took Butts’s place in the partnership. After this, some of the purchase-money was paid out of the business; and additional structures were made upon the premises, partly out of the earnings of the business, and partly upon the credit of the firm.
    Real estate purchased with partnership funds, for the use of the firm, although the legal title is in the member of the firm in whose name the conveyance is taken, is in equity considered as the property of the firm, for the payment of its debts, and for the purpose of adjusting the equitable claims of the partners as between themselves. (Smith v. Tarleton, 2 Barb. Ch. R. 336; Buchan v. Sumner, Ibid. 165.)
    Whether the purchase money of the real estate has been all paid by the firm, or only a part, cannot affect this doctrine. The real estate is charged with the partnership equities to the extent that partnership funds have contributed to the acquisition or improvement of such estate.

      A purchaser of the legal title, takes subject to these equities, unless he is a bona fide purchaser without notice. He stands in the partner’s place who conveyed to him. (Buchan v. Sumner, ubi supra.)

    Among plaintiff’s rights and equities, were the right to become a purchaser of the premises ; the right to have the expenditures for improvements taken into account as between himself and Butts, and himself and Colt; the right to have the moneys paid to Butts taken into the account as between himself and Colt j and above all the right to the good will of the business, to which Colt had never contributed, and which is inseparably connected with the premises. Plaintiff clearly had a right as against Colt, and he has the same right against Lamson and Lathrop, to have the premises sold with this good will, so that its value should not be lost to himself or the creditors; at which sale he could become a purchaser. (Collyer on Partn., §§ 321, 322, 161-2, Ed. of 1848.)

         In the first cause, it was also decided, that real estate, bought by one of two partners for the purpose of providing a manufactory for the firm, in his own name, with an agreement that upon certain terms of payment being made by the other partner out of the profits, the land was to become partnership property, on which some money of the firm was subsequently laid out in improvements, was to be deemed in equity as partnership effects, which the first named partner could not dispose of as his own.

   By the Court. Oakley, Ch. J.

This case involves a question of great practical importance, which, so far as we can learn, has never been decided by the courts of this state, viz. whether it is competent for one member of a partnership, without the assent or concurrence of his copartner, who is present or capable of acting, to make a general assignment of the property and effects of the firm, to a trastee for the payment of the partnership debts, ratably and in equal proportion.

The state of the law as settled in this state, appears to be this: It has been held by the Court of Chancery that one partner may, from time to time, without the assent of his copartner, assign and deliver specific portions of partnership property to a creditor of the firm in payment of a debt. That inasmuch as it is in the power of one member of a firm to pay off a debt, he may pay it in a specific chattel, actually delivered to the creditor, as well as in money.

It has also been adjudged, that a general assignment by one partner to a trustee for the benefit of creditors, giving preferences, executed without the assent and against the wishes of his copartner, cannot be sustained. This, was on the ground that such an act was not incident to the rights or the power of any one partner. It appears to us that the decision referred to rests, not on the principle that preferences may not in any case "be given by one partner; because that may be done by a specific payment, or application of property, in the mode already stated; but on the principle that one partner cannot, of his own exclusive authority, make a trustee to dispose of the partnership effects in behalf of all the copartners. That it is not incident to the right of one partner thus to select an agent, and clothe him with all the authority of the firm for the disposal and application of its property.

It is obvious to every one who will consider the matter, that no such right can exist, when the concern is solvent, and the business of the firm is going on in its usual course. It is contrary to the very nature of the contract of partnership.

Hor do we perceive that the circumstance of insolvency can make any difference. In that case each partner has a great and powerful interest to see that a proper person is selected to wind up the affairs of the concern; as a judicious administration of the estate will beneficially affect the extent of the liability of each partner for the debts finally remaining undischarged, as well as the prospect of an ultimate surplus.

On the principle which forbids such assignments, giving preferences, we hold that one partner cannot execute a general assignment to a trustee for creditors, (although it prefers no one,) without the concurrence of his associates. Such assignments may be, and indeed have been upheld in some of the other states, but we believe always on some peculiar circumstance, such as the residence or absence of the other partners abroad, or the like.

The chancellor, in the case of Egberts v. Wood, 3 Paige 517, reviewed the authorities then published, and showed that they did not sustain the doctrine contended' for here. He did not, however, express an opinion on the point. In Havens v. Hussey, 5 Paige 30, he decided that one partner could not, against the wishes of his copartner, assign the partnership effects to a trustee, for the benefit of creditors, making preferences between them; on the principle that it was no part of the ordinary business of a copartnership to appoint a trustee of all the partnership effects, for the purpose of selling and distributing the proceeds among the creditors in unequal proportions.

The question was more or less discussed Harrison v. Sterry, 5 Cranch 300; Anderson v. Tompkins, 1 Brockenbrough’s C. C. R. 456; Robinson v. Crowder, 4 M’Cord’s Law R. 519; Deckerd’s case, 5 Watts 222; Hitchcock v. St. John, 1 Hoff. Ch. R. 511; and Kirby v. Ingersoll, 1 Dougl. R. (Michigan,) 172, 177.

In the latter case, an assignment like the one before us was held to be invalid in a well reasoned opinion; and although a different doctrine may prevail in other states, we have no hesitation in holding that a partner can in no case make a general assignment to a trustee for the benefit of creditors, against the consent or without the acquiescence of his copartner—the latter being present or capable of acting in the matter. The insolvency of the firm, which is urged as warranting Colt in making this assignment, might be a good reason for such an act where there is a necessity for prompt action, in order to avoid preferences and to prevent a sacrifice of property; the other partner being abroad or absent so that he cannot be consulted, and the affair being conducted in entire good faith. There is no circumstance of the kind here; and indeed for what we can see, the firm might have continued its business till this time. The assignment to Wilson is therefore void.

As to the transfer of the real estate to Lamson & Lathrop— although the purchase was made in the name of Butts, still, taking all the facts into view, we "consider that the land was assets of the firm. The price was to be paid out of the profits of the concern, and to some extent payments were made from the partnership, in improving the property. It was bought for the purposes of the firm, to enable the partners to carry on their business; and it is to be deemed in equity as partnership effects, which could not be thus disposed of by the act of one partner, without the sanction of the other.

The judge was right in refusing to dissolve the injunction, and the appeal must be dismissed.

1st the second cause, Hayes v. Heyer and others, the facts appear in the judgment of the court. The suit was commenced in the late court of chancery, and came to this court from the supreme court. The cause was argued by

H F. Gla/rk, for the plaintiff, and

H Hetehwn and T. Fessenden, for the defendants'.

Campbell, J., delivered the opinion of the com!:—

The bill in this cause was filed for the purpose of setting aside an assignment, made by the' defendant Heyer, with the assent of the defendant Ketchum, to the defendant Bement. The complainant and Heyer were the general partners, and Ketchum was the special partner, in a limited partnership, transacting a wholesale grocery business in the city of New York, under the firm name of Hayes & Heyer.

On the 11th of December, 1846, Heyer, in the name of the firm, executed a general assignment of all the partnership effects to Bement, providing for payment of all the creditors ratably according to their respective claims. At the time of its execution, the complainant was in the city, and at the place of business of the firm, but did not leam that an assignment had been made until some days after, and has never given a direct or implied assent. The special partner consented to its execution. The complainant files this bill to set aside the assignment, alleging among other things, that under the circumstances of this case, the defendant Heyer had no power to make it. We shall proceed to consider this point, without adverting to the others raised by the complainant, because if it is determined in his favor, the case is disposed of.

The title of the revised statutes relative to limited partnerships, (1 E. S. 164,) appears to have constituted the effects of the firm a special fund for the benefit of all the creditors; which fund, in case of insolvency, is to be distributed among such creditors ratably, in proportion to the amount of their respective debts. If the insolvent partners neglect to place the partnership effects in the hands of a proper and responsible trustee, to be distributed without delay among all the creditors of the firm other than the special partner, ratably in proportion to the amount of their several debts either due or to become due, any creditor may file a bill in this court in behalf of himself and the other creditors of the firm, and may have a receiver appointed. (Innes v. Lansing, 7 Paige 583.) If this firm was then insolvent, Heyer did no more than was his duty or that of the firm, in placing the funds in the hands of a proper party for distribution, provided he had the requisite power. When any partnership becomes insolvent, in equity the property constitutes a fund which, in case of disagreement of the partners, the court would place in the hands of a receiver for equal distribution.' In relation to general or limited co-partnerships, we apprehend the rule is the same when distribution is made by the court; but when directed by the partners themselves, in ordinary co-partnerships, they may give preferences to one creditor or class of creditors over others, while in limited co-partnerships, the statute restricts that power and prescribes the mode of distribution. But in both cases, the question of the power of a single partner applies. In both cases, all the partners—at least all the general partners in a limited, as well as in an ordinary co-partnership, have an equal interest in seeing that the best disposition be made of the assets, that the trustees who may be appointed shall enjoy the confidence of all, and shall render the proceeds of the partnership most effectual in the discharge of the partnership liabilities. In this case, if the firm of Hayes and Heyer was insolvent, then Ketchum, Rogers & Bement, who were large creditors, might, according to the decision in Innes v. Lansing, have at once filed their bill, and compelled an assignment of the effects of the special partnership to a receiver. It was not necessary to proceed to judgment. They would thus have obtained the object sought under the assignment, and would have deprived the complainant of all control. If, on the other hand, the firm of Hayes and Heyer was not insolvent, as contended by the defendants, then the assignment was clearly void, and would have been, if made by all the partners, because it would manifestly operate to hinder and delay creditors. Certainly, no individual or firm being solvent, and having sufficient assets to pay his or their debts, can be allowed to make an assignment for the purpose of thus preventing a sacrifice, and securing to the assignors a larger surplus than would remain, if the property was forced to an immediate sale.

It is evident, from the testimony in this case, that this firm was insolvent at the time of the assignment, though from the representations made by the general partners, it may well have been supposed by the special partner and the assignee that such was not the fact. We shall therefore proceed upon the ground that the firm was insolvent. Could, then, Heyer and the special partner make the assignment, the complainant, who was the other general partner, being present at the place of business'of the firm on the very day it was made, and who at the time did not know it was contemplated, and who remained for some time after in ignorance of its existence? It is true, that on the following day the complainant consented to a dissolution, and authorized Heyer to collect the debts and to discharge the liabilities of the firm. But this assent to a dissolution, given on the following day, in ignorance of the assignment, cannot be considered as a ratification. That assent to a dissolution conveyed no authority to Heyer to appoint other trustees or assignees to wind up the estate, even if it had been made on the previous instead of the subsequent day. The assignment must stand or fall, according to the determination of the question, whether on the 11th of December, the day of its execution, Heyer had the power to make it. In mercantile co-partnerships, especially in the purchase and sale of goods, in the acceptance, drawing and indorsing of bills of exchange and promissory notes, the single partner acts within the scope of powers necessary generally to the very existence of the co-partnership, and without which it would oftentimes possess neither vigor nor vitality. In the general management of the business of the firm, <c so intimate is the confidence, and so universal the community of interest and operation between partners,” that it would be difficult to mark out the precise line which limits the power of the partner over the partnership effects, and indeed indirectly over the separate fortunes of the other members of the association. But the power which is necessary to direct, manage, and control, to buy and to sell, to create and to discharge liabilities, and which, unless limited by express agreement, vests necessarily in each co-partner, is dependent upon the life, upon the actual existence of the co-partnership. While the partnership lives, this power is required, as well for the convenience of the partners themselves, as for the protection of those who deal with them. When the partnership ceases, when it is dissolved by the death of any of its members, by bankruptcy or assignment, then the power exercised by individual partners is limited, for the necessity for its exercise no longer exists. One partner cannot by will, introduce his executor or representative, or any other person into the co-partnership, nor can he by assignment of this interest bring his assignee into the firm, nor in case of individual bankruptcy, does the representative of the estate of the bankrupt partner, become a member of the partnership. In short, when by the accidents of death, or by the misfortunes of trade, the partnership becomes dissolved, the representatives of the deceased or failing partner possess only the power of compelling an account and settlement of the partnership business. We cannot therefore see upon what principle, a single member of a failing firm possesses the power of appointing a trustee, and without consent or knowledge of the other partners, transferring to such trustee the entire partnership effects, and empowering him to compromise the debts due, and collect and distribute the assets. Such a power is not necessary, and ought not to be implied. We entirely concur in the views expressed in the case of Deming v. Golt, decided by our brethren, and the decision in that case may therefore be considered as expressing the unanimous opinion of all the justices of this court, “ that a partner can in no case make a general assignment to a trustee for the benefit of creditors, against the consent or without the concurrence of his co-partner, the latter being present, and capable of acting in the matter.”

We have looked into the cases cited by the defendants, and find nothing which induces us to change the views herein expressed. The case of Harrison v. Sterry, 5 Cranch, does not present circumstances like the present. There was in that case only a partial assignment. It did not extend to all the effects of the partnership. It was made by the managing partner residing in the United States, the other co-partners residing in England. It appears also that the managing partner, who made the partial assignment, held powers of attorney from his co-partners, though not deemed sufficient to empower him in terms to execute a deed in their name. The confidence and general trust reposed in him were however manifest.

In the case of Anderson v. Tompkins and others, 1 Brockenburgh 456, Chief Justice Marshall certainly considers at length the question of the power of one partner to make a general assignment, and he comes to the conclusion that under the circumstances of that case, the partner had the power to make it. There the firm were transacting business in Virginia; one partner had left for Europe, and the firm having failed in business, the partner remaining made the assignment. In that case, however, he observes, “ this power would certainly not be exercised in the presence of a partner without consulting him, and if it were so, slight circumstances would render the transaction suspicious, and perhaps fix on it the imputation of fraud.” Also he says, “ this reasoning applies with increased "force, when we consider the situation of these partners. The one was on a voyage to Europe, the other in possession of all the partnership effects for sale—the absent partner could have no agency in the sale of them—he could not be consulted—he could not give an opinion—in leaving the country he must have intended to confide all its business to the partner who remained for the purpose of transacting itand in another part of his opinion, he adds, “ in extraordinary cases, an extraordinary use of power must be made.” The circumstances which marked that case do not exist in this. Here the partner was present, and could have been, and ought to have been consulted. But in that case, with all due respect to the opinions of that learned and almost unequalled judge, we cannot but think that his reasoning shows the necessity and existence of the great power of a partner, in the general management of its business during the lifetime of the co-partnership, rather than in appointing trustees, and in giving exclusively the direction to the settlement of its affairs when it shall have ceased to exist. In the one case, the existence of the power is necessary for the protection of those who deal with the firm; in the other, by its non-existence the partners may be protected against each other.

Another able judge of the supreme court of the United States, Justice Washington, in Pierpoint v. Graham, 4th Wash. C. C. R. 232, a case where there was an assignment made by one partner, the other being absent, observes, “ that though each partner is possessed of the whole effects, and may dispose of the whole to third persons who deal with the partnership, and though such power becomes of necessity incorporated into the nature and being of the association, yet “ it may admit of serious doubt whether one partner can, without the consent of his associates, assign the whole of its partnership effects, (otherwise than in the course of trade in which the firm is engaged,) in such a manner as to terminate the partnership. An assignment of all the effects to trustees for the benefit of the creditors of the concern, would seem emphatically to be of this character. Such is its obvious design, and such must be its necessary consequence.”

We entertain no doubt that in this case Heyer did not possess the power to make the assignment, and therefore it must be set aside, and a receiver must be appointed of all the effects of the partnership. The assignee may be allowed for such payments of dividends as have been made to creditors pursuant to the statute, paying over the balance on hand to the receiver, but the assignee is not to be allowed commissions.

An account must be taken between the partners, and of ¿the partnership effects, and for this purpose, and for the appointment of a receiver, an order of reference must be entered referring it to Hon. A. Yanderpoel. The question of costs is reserved until the coming in of the report of the referee.

       See preceding case, Deming v. Colt.


source: Caselaw Access Project

author: By the Court. Mason, J.

license: Public Domain

text:
    Huff v. Knapp, Chamberlain of the City of New York.
    The marine court of the city of New York is not a court of record, in the strict legal sense of that term. It may be called a statutory court of record, having certain powers of such a court expressly given it by the statute, and none others. But it has none of the incidental powers of a court of record.
    It has no power to appoint any officers, except such as are expressly named in and authorized by the act creating the court, or subsequent acts.
    Accordingly held, that a person appointed crier of the marine court, by the justices thereof, there being no law therefor, could not maintain an action against the chamberlain of the city, to recover compensation for his services in that capacity.
    (Before Dueb, Mason, and Campbell, J.J.)
    Sept. 18;
    Oct. 20, 1849.
    This was an action brought against the chamberlain of the city of Hew York, to recover for services as crier of the marine court, from the 8th day of March, 1841, to the 17th of January, 1845. The amount claimed was $1 50 per day.
    The complaint alleged that the marine court is a court of record; the appointment of the plaintiff to the office of crier, by the justices of that court; that by virtue of his appointment he had exercised the functions of the office for the period mentioned; and that payment for the services thus rendered, had been demanded of the defendant, accompanied by evidence of the plaintiff’s appointment, and of the performance of the services for which compensation was claimed.
    The defendant demurred to the complaint, on various grounds, which, by reason of the view taken of the case by the court, it is unnecessary to recapitulate. The main question raised upon the argument, and passed upon in the opinion of the court, was as to whether the marine court was such a court of record, as to have the power of appointing a crier. This point was not directly raised by the demurrer, but it was stipulated on the argument that the court should pass upon the question.

      A. Nash, for the plaintiff.

      N. E. Ernies, for the defendant.
   By the Court. Mason, J.

This is an action by the plaintiff, claiming to be crier of the marine court of the city of Hew York, for his services as such crier, from the 8th of March, 1841, till the 17th January, 1845.

The plaintiff founds his claim upon the tenth section of the act, entitled “ an act concerning costs and fees in courts of law, and for other purposes,” passed May 14,1840, and the first section of the act, entitled “ an act in relation to the compensation of criers and sergeants-at-arms,” passed April 11,1842.

The tenth section of the act of 1840, after prescribing the compensation of the criers of the supreme court, contains as follows:—“Criers of other courts shall receive during their attendance upon the court, the same compensation as constables are by law allowed, to be audited and paid as county charges.” The first section of the act of April 11,1842, also prescribes the compensation of the criers of the supreme court and of the sergeant-at-arms of the court of chancery, and then contains the following clause:—“ Criers of other courts shall receive one dollar and fifty cents for each day during their attendance upon the court, to be certified by the clerk of the court, and to be paid by the treasurer of the county, or chamberlain of the city in which such court shall be held, on the production of the certificate of the clerk specifying the number of days such crier shall have attended.”

The second section of this act repeals the tenth section of the act of 1840.

It is very clear that the plaintiff cannot recover in this suit against the chamberlain of the city, for services performed prior to the passage of the act of 1842 ; since the compensation for such services was, by the act of 1840, to be audited by the-board of supervisors and paid as county charges. There is this further objection, that, by the thirty-ninth section of the act of 1840, it was declared, that the act should not apply to the marine court. The counsel for the plaintiff endeavored to distinguish between the court and its officers, and contended, that the restriction of the thirty-ninth section must be confined to the proceedings in the court, and to the fees of the justices themselves, and not of the officers of the court. But we think, that the manifest meaning of the section is, that the act is to have no relation to the court, its proceedings, or officers. The act of 1842, however, has no such restriction; and, although it was urged by the counsel for the defendant, that it was only to be considered as a substitute for the tenth section of the act of 1840, and that the thirty-ninth section of the last mentioned act controls it, yet, as the act of 1842 is in terms applicable to all courts having criers, or entitled by law to have them, we shall consider it as extending to the marine court, if that court is by law authorized to appoint a crier.

This was the principal question discussed on the argument. It is not perhaps directly raised by the demurrer to the complaint. Yet as the parties have stipulated, that the court may, upon the demurrer, decide whether the marine court possessed the power to appoint a crier, and whether the act of 1842 gives his compensation, we proceed to consider it.

The counsel for the plaintiff admits that there is no express provision of the statute conferring this power, but contends that the court possesses it as an incident to its character as a court of record. He insists that all courts of record have the power to create bailiffs, or serjeants, or criers, from the simple fact of their being courts of record; and perhaps the English authorities cited on the argument bear him out in this position, so far as common law courts of record are concerned. The question then presents itself, is the marine court in all respects a court of record, and does it possess all the power incident to a common law court of record %

The act constituting this court, originally named the Justice’s Court in and for the city and county of Hew York, is to be found in 2 Eev. Laws, p. 381 to 398, and forms part of the act entitled, “ An act to reduce several laws relating particularly to the city of Hew York into one act,” passed April 9,1813. The 106th sec. declares, that for the purposes of hearing, trying, and determining all such actions as were made cognizable before the same court, such court was thereby vested with all such powers and authority as is vested in other courts of record in this state, and was thereby made and constituted a court of record. It -will be perceived that the powers of a court of record are conferred in this section, only for the purpose of hearing, &c., actions of which it has cognizance ; and there is no general grant of such powers. A similar provision is contained in the 86th section of the same act with regard to assistant justices’ courts. (2 E. L. 370. See also 1 E. 387, § 1.)

The 107th section, however, declares explicitly, that the said court shall be and is hereby declared to be a court of record, and shall have a seal and a clerk. This section was principally relied on by the counsel for the plaintiff, and was deemed by him to be conclusive. In determining this point, however, we are not to confine our view to a single section, but to look at the whole act, and by doing so we shall find that the marine court is a court of special and peculiar jurisdiction—that its powers and all its modes of procedure are particularly prescribed by the act, and are similar to those in the ordinary justice’s courts—that the compensation to the justices was originally derived in the same way, from fees paid by the parties; that its process is executed, not by the sheriff, but by marshals and constables; that in all these and numerous other particulars, it differs from all the other courts of common law jurisdiction in this state, except courts of justices of the peace.

The late supreme court has on several occasions been called upon to give a construction to this part of the statute. Thus in the case of The People v. the Justices of the Marine Court, (12 Wend. 220,) it was decided that the marine court had no power to set aside judgments and grant new trials. The court say, “ we have looked into the statute instituting this court and investing it with judicial powers, and we are satisfied no authority can there be found authorizing the marine court to set aside judgments and grant new trialsand again, “ the restrictions and limitations upon the remedy by certiorari, would seem to repel the idea of an unlimited power in these courts, at discretion, to arrest a judgment or grant a new trial. The power, unless expressly given, is too delicate and important to be executed by tribunals deriving their existence by statute.” The court evidently proceeded on the idea that not only was the court created by statute, but that it possessed no powers except such as were expressly granted by statute.

In the case of Lester v. Redmond, (6 Hill 590,) the marine court had decided that the limitation of six years to actions upon judgments rendered in any court not being a court of record, (2 R. S. 296,) did not apply to that court, because it was a court of record. The superior court had reversed the judgment, on the ground that the marine court was not a court of record, and the supreme court affirmed the judgment of this court.

The justices’ court of the city of Albany, is in many respects like the marine court. It is composed of three justices, has a clerk and a seal, and is declared to be a court of record. In the case of Wheaton v. Fellows, (23 Wend. 375,) the question was presented, whether nil débet was a good plea to an action on á judgment rendered in that court, or whether it should have been mil Uél record; and the court after premising that if the judgment was to be regarded in the same light as a judgment rendered by a justice of the peace, nil débet was the proper plea; but if it should be treated like a judgment of the supreme or a county court, the plea should have been mil Uél record; entered into a minute examination of the powers and mode of proceeding in that court, and came to the conclusion that, while it possessed, like other justices’ courts, many of the powers of a court of record, yet it was not in a strict legal sense entitled to that character, that its judgments were not enrolled, and a writ of error would not lie upon them, both of which particulars are incident to a court of record, and that therefore nil debet was the proper plea. The marine court resembles the justices’ court of Albany in the particulars relied on by the supreme court for this decision. (See § 110, 142.) -

There are various legislative enactments, which show that the legislature coincided with the court, in their views on this subject. For instance, the 1st chapter of part 3d of the revised statutes, treats of courts of general or limited jurisdiction, embracing the courts of errors, of chancery, supreme court, &c. The second chapter relates to courts of peculiar and special jurisdiction, among which we find the marine court, (2 R. S. 323, 3d ed.;) and also several provisions relative to justices’ courts, are made applicable to the marine court. (2 lb. p. 372, 3d ed. § 314.) The third chapter of the third part is divided into two titles; the first contains general provisions concerning the courts of justice specified in the two preceding chapters ; and the second, general provisions respecting courts of record; and the first section of the second title, declares that the several courts treated of in the first chapter are courts of record, thus excluding from this description, the court, treated of in the second chapter. (2 lb. 315, 3d ed.)

Again, in 2 R. S. 454, 3d ed., it is enacted that all judgments thereafter rendered m envy court of record, shall bind and be a charge on real estate. But it never was pretended that judgments in the marine court bound real estate. It was not until the code went into operation, that transcripts of judgments from that court, could be docketed in the county court, so as to become liens, although the judgments in the assistant justices’ court have been so docketed for several years.

But it is unnecessary to pursue this subject further. It is manifest, both from judicial decisions and legislative enactments, that the marine court is not a com’t of record, in the strict legal sense of the term. It may be called a statutory court of record, having certain powers of such a court expressly given it by the statute, and none others ; and of course it has none of the incidental powers of a court of record, and can appoint no officers except such as are named in and authorized by the act creating it, or subsequent acts.

The court, then, having no authority to appoint a crier, the plaintiff is not entitled to claim compensation under the act of 1842, for any services which may have been performed by him in that capacity.

This view of the case renders it unnecessary to notice the other points raised on the argument.

Judgment for defendant.


author: By the Court. Oakley, Ch. J.

text:
    Carpenter v. Dennis.
    Words imputing insolvency, when spoken of one “ engaged in the wooden ware business,” are actionable.
    The principle is, that words spoken of a merchant, trader, or person engaged in business, in which credit is usual, making imputations against his credit, are actionable, and it is not confined to merchants and traders exclusively.
    An allegation in a complaint, that the plaintiff is “ engaged in the wooden ware business,” is equivalent to an averment that he is a buyer and seller of wooden ware. (Before Oakley, Ch. J., and Vandeefoel and Sandford, J.J.)
    Oct. 13 ;
    Oct. 20, 1849.
    Motion in arrest of judgment, in an action of slander. The complaint stated that the plaintiff was “ engaged in the wooden ware business, in the city of Hew York,” and that the defendant had published concerning him, the following slanderous words : “You are a cheat: you always was a d—n cheat: you came some of your d—n cheating tricks the other day about that check, when you bought some brooms of us, and then kept out of the way. I have got you just where I want you; but there is no bottom to you. I would put you through, but you won’t stand. You will burst or fail, before I have a chance.” The complaint also contained other allegations of a similar character, in which the defendant was charged with having cautioned persons against trusting the plaintiff, and that he would soon break.
    The defendant did not answer the complaint. The cause came on before the chief justice and a jury, on the 27th June, 1849. The jury found a verdict for the plaintiff, of $75. After the verdict, the defendant’s counsel moved in arrest of judgment, which motion was denied, and the defendant appealed to the general term.

      N. B. Blunt, for the plaintiff.

      E. Sandford, for the defendant,
    referred to Rathbun v. Emigh,
      6 Wend. 407; Ostrom v. Calkins, 5 Ibid. 263; Southam v. Allen, T. Raym. 237; also 3 Wils. 177, 183, 186; 4 Wend. 537; 1 Denio 250; 1 Ad. & Ell. 2; 1 John. Cas. 129.
   By the Court. Oakley, Ch. J.

The slander, as alleged in the complaint, undoubtedly consisted in a charge of insolvency against the plaintiff, who is engaged in the business of vending wooden ware in the city of Hew York, and a distinct intimation that he was unworthy of credit. It is well settled, that such allegations spoken of a merchant engaged in business, constitute an abundant cause of action. But it is contended, that the rule is not applicable to dealers like the plaintiff. We think, however, upon examination, that the principle is not so narrow as was insisted by the defendant’s counsel. Starkie, in his Treatise on Slander, at pages 117 and 118, lays down what we conceive to be the true rule, that imputations upon the credit of merchants and traders, which, if believed, must necessarily operate to their serious prejudice, are actionable; and he cites instances in which the rale has been applied to a great variety of trades and employments, in which credit is usual, and to some which were much less like the business of merchants, than the occupation of the plaintiff. The description in the complaint, of the plaintiff’s employment, in its ordinary meaning, does not, as was said by the defendant’s counsel, imply of itself merely that he was a turner of wooden bowls. It means a buyer and seller of wooden ware, and as such, he is within the established principle by which such words are held to be actionable without proof of special damage.

Judgment affirmed.


text:
    Ferguson v. Ferguson.
    In suits for a divorce on the ground of adultery, it is not necessary to prove the direct fact of adultery.
    It suffices if the circumstances are such as to lead to the fact, by fair inference as a necessary conclusion, when considered with the guarded discretion of a reasonable man.
    When the facts relied upon are equally capable of two interpretations, one of which is consistent with the defendant’s innocence, they will not warrant a verdict against him.
    Thus, where the plaintiff sought to establish the adultery, by evidence that the defendant, eighteen months after marriage, had the venereal disease, and the circumstance relied upon to prove the disease, was consistent with the existence of other diseases not syphilitic ; it was held to be insufficient to prove he had the disease imputed to him.

      Held, also, that if the existence of the venereal had been proved, it would not have been sufficient, because it could not safely be inferred that it was not existing before the marriage, and had broken out afresh.
    After the trial of an issue as to the adultery charged in a suit for a divorce, the court, on a motion to set aside the verdict, will deal with it as they do in ordinary actions at law.
    Such a trial is not of the nature of feigned issues from chancery, sent to courts of law, for the information of the court of equity, where the latter court is governed or not by the verdict, according to its own views of the evidence.
    (Before Doer, Mason, and Campbell, J.J.)
    Oct. 19, 20 ;
    Nov. 17, 1849.
    The bill in this cause was filed for a divorce a vinculo, on the ground of adultery. A feigned issue had been ordered, which had been tried, and a verdict found against the defendant. That verdict had been set aside by the vice chancellor, and his decision affirmed on appeal by the chancellor. The case is reported in 1 Barbour Gh. R. 604. On the second trial, a verdict was again found against the defendant. The judge who presided, certified that he was satisfied with the verdict. The defendant moved for another trial. It is deemed unnecessary to state the facts, as the opinion so far as it related to the details of the case, is omitted. The cause was transferred from the supreme court after the second trial.

      J. L. White, for the' defendant.

      J. R. Whiting, for the plaintiff.
   By the Court. Mason, J.

On the argument before us, the counsel discussed at large, the principles which ought to govern the court in granting or refusing new trials in cases of this sort.

It was contended on behalf of the defendant, that feigned issues are ordered by courts of equity for the purpose of satisfying the conscience of the court, and that if for any material reason the court is not satisfied with the verdict, a new trial will be ordered ; that it will nicely weigh the evidence, and will set aside a verdict as against the weight of evidence, in cases where a court of law would refuse to do so.

There is a manifest distinction, however, between feigned issues sent out of chancery for the purpose of aiding the court in deciding upon facts, and those which are framed in order to try the fact of adultery. The first are for the information of the court; the power and the duty of. determining the facts belong to it and not to the jury, and therefore if the court is not satisfied entirely with the finding of the jury, it may either direct a new trial, or decide the cause even contrary to the verdict. Such a course was taken by the master of the rolls, in Armstrong v. Armstrong, (3 Myl. and K. 45,) and his decree was affirmed on appeal by the lord chancellor. But our statute in relation to divorces, has taken from the court the power of deciding upon the fact of adultery, where it is denied by the party charged, and conferred it upon the jury; and although the court is authorized by the statute to grant a new trial, as often as justice shall seem to require, yet it would seem to be proper that this court in the exercise of this power, should follow the rules adopted by courts of law in granting new trials; and that where there is conflicting evidence, a verdict should not be set aside simply because the court might think it to be against the weight of evidence, or would have decided differently from the jury.

The case before us, however, is not one in which there is conflicting evidence, upon which it might be the peculiar province of the jury to pass. The plaintiff’s case rests mainly upon one fact, which is clearly established. The contest between the parties is as to the inference to be drawn from that fact. Lord Stowell, in loveden v. Loveden, (2 Hagg. Consistor. Rep. 1,) thus states the principles of evidence in divorce cases. “ It is a, fundamental rule, that it is not necesary to prove the direct fact of adultery; because if it were otherwise, there is not one case in a hundred in which that proof would be attainable. It is very rarely indeed that the parties are surprised in the direct fact of adultery. In every case almost, the fact is inferred from the circumstances that lead to it, by fail’ inference as a necessa/ry conclusion, and unless this were the case, and unless this were so held, no protection whatever could be given to marital rights. What are the circumstances which lead to such a conclusion, eannot be laid down universally; though many of them, of a more obvious nature and of more frequent occurrence, are to be found in the ancient books. * * * * * * The only general rule that can be laid down upon the "subject is, that the circumstances must be such as would lead the guarded discretion of a reasonable and just man to the conclusion : for it is not to lead a harsh and intemperate judgment, moving upon appearances that are equally capable of two interpretations q neither is it to be a matter of artificial reasoning, judging upon such things differently from what would strike the careful and cautious consideration of a discreet man.”

This rule, so simply and lucidly stated, commends itself to the approbation of every mind, and its application to the present case will lead us to a correct decision. .

(The judge then examined the evidence, and came to the conclusion that it was equally capable of two interpretations, and therefore did not prove that the defendant had the venereal disease, which was the fact sought to be proved.)

But even admitting the correctness of the inference, from such a state of facts, that the defendant had the venereal disease, still that alone does not prove adultery. The plaintiff, therefore, calls upon us to draw this further inference, that the disease was contracted by means of illicit intercourse after marriage. It was an essential part of the plaintiff’s case, to show that the discharge could not have existed except from recent infection, and could not have been the result of immoralities before marriage. It is remarkable, however, that on this point, so essential to their success, the plaintiff’s counsel did not ask a single question. All the evidence on this part of the case, was elicited by the defendant’s counsel, and it is entirely at variance with the inference sought by the plaintiff. Dr. Wood states that the disease may break out after marriage, without any improper intercourse —that cold and other causes may reproduce an old stricture; and Dr. Parker says that the disease may give no trouble for years, and then break out again. Here, then, on the supposition that the appearances indicated the existence of the disease charged by the plaintiff, we find those appearances equally capable of two interpretations, so far as the time of its contraction is concerned—one entirely consistent with the innocence of the defendant, and the other involving a violation of the most solemn obligations. It is impossible for any man to say, that the circumstance of the disease being found within eighteen months after marriage, leads, “ by fair inference, to the necessary conclusion,” that it was contracted since, and not prior to the marriage.

But unless from the single fact proved, (the details are omitted,) we first infer that it indicates necessarily the existence of the venereal disease, and then build upon that inference the further one that the disease was contracted after marriage, the plaintiff must fail. There is nothing on which her case can rest. Both inferences are necessary. We cannot adopt either. It would be dangerous in the extreme, to found a decree of divorce on such grounds. It is not a case of conflicting evidence, but of an entire absence of evidence, direct, presumptive, or circumstantial. Had this been an ordinary trial at law, it would have been the duty of the judge to have withdrawn the cause from the jury for want of evidence, and to have nonsuited the plaintiff; and it is equally our duty, for the same reason, to set aside the verdict. And we would feel ourselves obliged to do the same thing, as often as the case might come before us for review upon the same state of facts, with no other grounds for a verdict against the defendant than were presented on the last trial.

Hew trial granted.


author: By the Court. Campbell, J.

text:
    Hooper v. Tuckerman.
    An assignment wMeh transfers to a trustee in trust for creditors, a larger amount of property than the assignee is empowered to distribute among the creditors, is void upon its face, the legal effect being to create a resulting trust to the assignor, after the trust for creditors is satisfied.
    An assignment of a debtor's property, executed by the proper officer to a trastee, under the insolvent laws of Massachusetts, on the debtor’s voluntary application, effects a legal transfer of the personal property of the insolvent in this state. Such an assignment is in effect a voluntary assignment for the benefit of creditors, operating as if made directly by the insolvent.
    Whether the assignment be deemed voluntary or not, it being a proper legal assignment under the laws of another state, the assignees may come into the courts of this state, for the purpose of enforcing any rights which they may equitably have as such assignees or trustees.
    (Before Dver, Mason, and Campbell, J.J.)
    Oct 18 ;
    Nov. 17, 1849.
    The bill in this cause was filed in the supreme court, in May, 1848, for the purpose of setting aside two assignments made by the defendant, Gray, to the defendant, Tuckerman, and to compel the latter to account for, and pay over to the plaintiffs, the property so assigned.
    The bill stated that under a statute of the state of Massachusetts, entitled “ An act for the relief of insolvent debtors, and for the more equal distribution of their effects,” the defendants, Horace Gray and one Nathaniel Frances, merchants in Boston, under the firm of Horace Gray & Go., on the 24th day of November, 1847, presented their petition to William Minot, a master in chancery in Boston, stating their inability to pay their debts, that they were desirous of surrendering all their property for the benefit of their creditors, and praying that a warrant might issue appointing some suitable person to take possession of their estate. Under this petition, and in conformity with the act, on the 7th day of December, 1847, the master executed an assignment of all of the property of the petitioners to the plaintiffs in this suit, as assignees and trustees for the benefit of the creditors of the petitioners; and they thereby became vested as such assignees, with all the estate and effects of the petitioners. The bill further stated that, by the provisions of the same statute as amended in 1841, every certificate of discharge granted to a debtor in pursuance of such proceedings, should be of no effect, if the debtor should, in contemplation of insolvency, within six months before filing his petition, malee a payment, or any assignment, or transfer of any part of his estate, 'with a view to give preferences, and that the full value of all property so transferred, might be recovered by the assignees appointed under the act from the creditor so preferred, provided the creditor, when he accepted such transfer, had reasonable cause to believe the debtor was insolvent.
    The bill further stated that the defendant, Gray, on the 23d of November, 1847, in contemplation of his becoming insolvent, and obtaining a discharge under the act, and being insolvent, with a view to give preferences to certain creditors, made and executed to the defendant, Tuckerman, residing in .New York, two deeds or instruments of conveyance or assignment, bearing date on that day, and conveying certain property situated in New York and New Jersey belonging to the defendant, Gray, in trust, for the benefit of his individual creditors. That no creditor had executed, or assented to these assignments, and that only a portion of the property so assigned, was thereby made liable to the trusts of the assignment. The assignments, were set forth at length in the bill, and are sufficiently stated in the opinion of the court.
    The bill charged that the assignments to Tuckerman were invalid and void, by the laws of Massachusetts, and that the plaintiffs were entitled to recover the property conveyed by them. It prayed for a discovery, the appointment of a receiver, and that the assignments to Tuckerman might be declared void and set aside.
    The bill was taken as confessed by the defendant, Gray.
    The defendant, Tuckerman, demurred to the bill, on the ground that the assignment to the plaintiffs was made by an officer appointed for that purpose in the state of Massachusetts, under the provisions of the act referred to, and that the assignments to the defendant were voluntary assignments of property in the states of Hew York and Hew Jersey, which belonged to the defendant, Gray, individually, and which was not within the jurisdiction of the state of Massachusetts. And that those assignments were made for the purpose of a ratable division among the creditors of Gray, individually, and the surplus, if any, among the creditors of Horace Gray & Co.
    W. M. Evarts, for the complainant.
    I. The plaintiffs, in their representative character, may sue in the courts of this state, and their title derived under the Massachusetts statutes, and the proceedings thereunder, will be here recognised and supported. (Story Confl. Laws, § 420; Alison v. Furnival, 1 Comp. Mees. & Rosc. 296, and cases infra.)

    1. The law of domicil governs the disposition of personal property. (Story Confl. Laws, § 384, 398, & 403, &c.; Holmes v. Remsen, 4 J. Ch. R. 485; S. C. in Error, 20 J. R. 262; Plestoro v. Abraham, 1 Paige 236; S. C. in Error, 3 Wend. 538; Goodwin v. Jones, 3 Mass. 517.)
    2. Ho rights acquired by the law or legal process of this state, compete or conflict with the plaintiff’s claims. And no creditors having become parties to the assignments to Tuckerman, or either of them, they were revocable, and his application in insolvency is a revocation of them. (Acton v. Woodgate, 2 Mylne & Keen, 492; Wallwyn v. Coutts, 3 Merivale 707; Scott v. Porcher, 3 Mer. 662; Maber v. Hobbs, 2 Young & Coll. 317, 327; 2 Story Eq. § 1036, a & b, 1045, 1046.)
    II. The two assignments to the defendant, Tuckerman, are clearly void against the policy and terms of the Massachusetts statutes. They are also fraudulent and void under the laws of this State. (2 R. S. 137.)
    1. The conveyance is larger than the trust for creditors; the debtor’s property is thus removed from the reach of the legal remedies of his creditors, and a portion of it only, devoted to the satisfaction of their claims; this is to hinder, delay, and defraud creditors, and renders the assignments void m toto. (Wakeman v. Grover, 4 Paige 23; S. C. in Error, 11 Wend. 187.)
    2. The legal effect of such assignments is to create in the assignee a resulting trust for the benefit of the assignor for the residue of the assigned property, after the trust for creditors is satisfied; this is equivalent to an express reservation of such benefit, and renders the assignments void in toto. (2 Story Eq. § 1196 a, and cases.)
    3. The provision contained in the assignments for carrying on the business by the assignee, (especially the provision in the Port Henry assignment,) tends to delay, hinder, and' defraud creditors, and renders the assignments void. (Hart v. Crane, 7 Paige 37.)

      G. W. Morris, for the defendant.
    I. An assignment under the insolvent laws of Massachusetts, does not operate a legal transfer of the personal property of the insolvent in this state. (Abraham v. Plestoro, 3 Wend. R. 538.)
    H. Such foreign assignees cannot maintain an action in the courts of this state, to withdraw such personal property from their jurisdiction to place it under the control of the courts of Massachusetts. (Raymond v. Johnson, 11 John. R. 488; 2 Kent’s Com. 407, 3d ed.; Ogden v. Saunders, 12 Wheat. 358; Abraham v. Plestoro, 3 Wend. 538; Johnson v. Hunt, 23 Wend. 87.)
    HI. The assignment to Joseph Tuckerman, a citizen of the state of Hew York, of property in this state and in Hew Jersey, being for the benefit of creditors and meritorious, cannot be questioned in our courts by foreign assignees, as being fraudulent under the law of a sister state. (Same cases as cited to last point.)
   By the Court. Campbell, J.

On the 24th day of Hovember, 1847, Horace Gray and Hathaniel Frances, of Boston, composing the mercantile firm of Horace Gray and Company, made application in that city for the benefit of the insolvent laws of Massachusetts, and such proceedings were had, that on the 7th day of December following, an assignment of the property was duly executed by the master in chancery, before whom the application was pending, to the plaintiffs in this suit. ■ On the 23d of November, the day previous to that on which the application was made, Horace Gray, one of the partners, executed two individual assignments to the defendant Joseph Tuckerman, by one of which he assigned a large amount of property in the state of New York, and by the other a large amount of property in New Jersey, upon trust to pay, first, certain workmen, and then the individual creditors of Gray, and to distribute the surplus among the creditors of Horace Gray & Co. The bill was filed in this cause to set aside those assignments, and the defendants have demurred. It is alleged in the bill that the assignments are void upon their face, and that they are also void, being in fraud of the laws of Massachusetts. These assignments are charged in the bill to have been executed by Gray on the 23d of November, the day of their date, in the city of Boston, and that they were in fraud of the insolvent laws of that state, for the benefit of which he applied on the following day.

The first assignment recites that Horace Gray himself, and the firm of Horace Gray & Co., had refused payments, and that he (Gray) was desirous of giving his property to his creditors, a large portion of which was at Port Henry, near Lake Champlain in the State of New York, and it was for the interest of his creditors that the works in Port Henry should be kept in operation for at least six months. Then follows the grant and assignment to Tuckerman, of all the pig iron, fuel, ore, and other personal property at Port Henry, or any on the way to or from the iron works, together with the wood on the shores of Lake Champlain, and his share in the tow boat Ethan Allen, to have and to hold the same, to Tuckerman, his executors, administrators, and assigns, to and for the uses, intents, and purposes thereinafter mentioned, that is to say, first, to continue the works in full operation for the term of six months from the date of the instrument, of which works Gray was lessee, and to sell the pig iron made from the same as fast as received either for cash or credit, &c.; and then provision is made for disposing of the proceeds of the pig iron, by payment of workmen and the individual creditors of the assignor, and to divide the residue of such proceeds among the creditors of Horace Gray & Co. No provision was made for the disposal of the residue of the assigned property.

The assignment of the Hew Jersey property, executed at Boston, on the same day, transferred all the pig iron, coal, ore, and the iron, &c., at the Hew Jersey works, and all the promissory notes or bills receivable, or other personal property, &c., there, in trust to continue the manufacture of the materials on hand until the same are turned into manufactured iron, and then to sell the iron for cash or credit, and out of the proceeds to pay expenses, wages, &c., and the individual creditors of Horace Gray, and divide the residue among the.- creditors of the' firm. Hothing was provided as to the disposal of the other assigned effects.

Both of these assignments are manifestly void upon their face. They cover in direct terms a much larger amount of property than the assignee is empowered to distribute among the creditors. The effect must be a resulting trust to the assignor. The property is thus placed beyond the reach of creditors for the benefit of the debtor. We must therefore deem these assignments as made to hinder delay and defraud creditors ; at least such are the necessary legal consequences, even though the failure to make provision for the entire distribution of the assigned property among the creditors, was the result of haste or inadvertence.

The assignments being void, can the assignees or trustees of the estate of the assignors appointed under the insolvent law of Massachusetts, prosecute this suit, in their own names, in our courts %

It was urged on the argument, that an assignment under the insolvent laws of Massachusetts, does not operate a legal transfer of the personal property of the insolvent in this state. It may be true, that in cases of statutory assignments under bankrupt acts, such as those of England, where the proceedings are in inmii/um, a legal transfer of the personal property situated in other countries, is not effected, especially as against subsequent lona purchasers, or against attaching creditors of the country where the property is situated, though the attachment may have issued after the assignment. In this case we are inclined to the opinion that the assignment was in law a voluntary one, and must have the same effect as if made directly by Horace Gray and Company to the plaintiff in this suit.

The petition of the 24th of November sets forth their insolvency, that they are unable to pay their debts in full, and that “ they wish to surrender all their property for the benefit of their creditors, and to obtain their discharge from said debts, according to the statutes in this behalf provided.”

“ Wherefore they pray, that a warrant may be issued for taking possession of their estate, and that such further proceedings may be had in the premises, as the law in such cases prescribes.” This petition was signed by the insolvents Gray and Frances; and such proceedings were had, that, on the 7th day of December following, the officer to whom the petition was addressed, executed, according to the laws of Massachusetts, an assignment to the plaintiffs in this suit, of all the property, real or personal, of the insolvent debtors, or which they or either of them had on the 24th of November, when the petition was presented. The whole proceedings were voluntary. The debtors wished to surrender their property, and they prayed for a warrant to issue for taking possession of it. The warrant is issued, possession taken, and, on a subsequent day, a formal assignment made by the officer.

We can see no difference between this assignment, and one made directly by the debtors themselves. A voluntary assignment, it is conceded, transfers the property wherever situated.

But whether this assignment to the plaintiff be voluntary or not, it being a proper legal assignment, and valid by the laws of Massachusetts, we can see no reason why the assignees or trustees may not come into this state, and in their own name institute proceedings in a court of chancery, for the purpose of enforcing any rights which they may equitably have as such assignees or trustees. Mr. Justice Marcy remarked in the case of Abraham v. Plestero, that “ I do not discover that this comity has been, any where so far withheld, as to refuse to foreign assignees a resort to our courts in their character as assignees or representatives of the bankrupt, to secure the rights they have acquired by the assignment; on the contrary, suits in their own names have, in repeated instances, been sustained, and their rights to sustain them established by express adjudication.” See authorities cited in Abrahams v. Plestero, 3 Wend. 551; especially Bird v. Pierpont, 1 John. 118; Bird v. Caritat, 2 John. 342.

We entertain no doubt in this case, that the rights of the assignees to appear in, and prosecute this suit, ought to be admitted and sustained.

The demurrer must be overruled with costs.


text:
    Weisser v. Maitland.
    In a charter party for a voyage from New York to Liverpool, it was agreed that the charterer should be allowed for the loading and discharging of the vessel, “ lay days as follows: to load, twenty days from the 12th inst., the owner guaranteeing to have the vessel ready by that timeand by a subsequent stipulation, the charter party was to commence when the vessel was ready to receive cargo, and notice thereof should be given to the charterer: Held, that the readiness of the vessel by the day named was a condition precedent to the charterer’s liability to accept and employ her.

      Held, also, that the charter party was to commence, whenever notice was given that the vessel was ready to receive cargo, provided she were ready on or before the day stipulated.
    Time is often the essence of the contract, in commercial transactions; and where the time fixed in a charter party for the vessel to be ready, appears to be essential, and the words are plain, it must be construed a condition precedent.
    (Before Oaklet, Ch. J., and Vandemoel and Samdford, J.J.)
    Nov. 16 ;
    Nov. 24, 1849.
    Demurrer to pleas. The declaration was upon a charter party, between the plaintiff, as the agent for the owners of the brig Linnea, and the defendant, (who executed the same under seal, in the name of Maitland, Phelps & Oo., of which film he was a member,) dated April 7th, 1847, by which, among other things, the plaintiff chartered the vessel to the defendant for a voyage from Hew York to Liverpool, and engaged that she should be provided with every requisite, and should, with some trifling exceptions, be at the sole use and disposal of the defendant during the voyage. The vessel was to take a cargo of corn in bulk. The defendant engaged to furnish to the vessel a full cargo, and to pay at certain rates specified in the charter party, for the freight. It was further agreed, that the defendant should be allowed for the loading and discharging of the vessel at the respective ports, as follows, that is to say: “ lay days, to load, twenty days from. Monday, the 12th inst.,” the plaintiff “ guaranteeing to have the vessel ready by that time, and to discharge with dispatchand in case of detention, the defendant was to pay demurrage at thirty dollars a day. It was subsequently provided, that the charter party should commence, when the vessel was ready to receive her cargo at the place of loading, and notice thereof given to the defendant, or his agent.
    The declaration averred, that the vessel was ready to receive cargo at the port of Mew York, her place of loading, by the 12th day of April, in the charter party mentioned. And that on the 13th of April, notice to that effect was given to the defendant, and he was requested to furnish the vessel with the cargo of corn in bulk, and to commence the voyage and charter party. That the cargo was not furnished, nor would the defendant employ or load the vessel, or dispatch her upon the voyage so agreed upon, by reason whereof the vessel was detained on demurrage, for the space of thirty-one days, and was prevented from earning the freight agreed upon, and the plaintiff had been subjected to various heavy expenses, for all of which he claimed damages to four thousand dollars.
    The defendant interposed three pleas. The first averred, that the vessel was not ready to receive the cargo mentioned in the charter party, by the 12th day of-April, as provided therein, and that thereupon the defendant forthwith gave notice to the plaintiff of his abandonment of the voyage. The second plea contained the same averment, and, in addition thereto, an averment that no notice of any such readiness was given to the defendant by the 12th day of April, in consequence of which the defendant abandoned the loading of the vessel, and the employment thereof, and gave notice thereof to the plaintiff. The .third plea averred, that on the 12th of April, the firm of Maitland, Phelps & Co., in the charter party mentioned, had a cargo of corn in bulk, ready for shipment, and to receive which, the charter party had been made by the defendant, and which defendant was ready and willing to ship and load on board the vessel, and would have done so, if the vessel had been in readiness, of which the plaintiff then had notice, but that the vessel was not, by the 12th day of April, ready to receive the same on board for the voyage. ■ Wherefore the defendant abandoned, &c., as before.
    The plaintiff demurred to the pleas, and assigned various causes; among them, that the pleas amounted to the general issue.

      F. B. Cuttmg, for the plaintiff.
    I. The pleas are bad in substance, because—1. The fact alleged that the vessel was not ready to receive cargo by Monday, the 12th April, is not an answer to the right of action. There is nothing in the charter party which makes the hiring dependent upon the condition, that the vessel should be ready to receive cargo by the 12th day of April. The time when the vessel was to be ready, was a distinct and independent covenant. If it were a condition, it relates only to the time when lay days were to commence. (Abbott on Shipp. 326, 342 [250, 266]; 10 East. 555; 1 M. & M. 297; Constable v. Clobare, Palm. 397; Bornman v. Duke, 1 Camp. 377; Hall v. Cazenove, 4 East. 477; Ritchie v. Atkinson, 10 Ibid. 295; Storer v. Gardner, 3 M. & Sel. 308; Galloway v. Jackson, 3 Scott’s N. R. 768; S. C. 3 M. & G. 960. 2. The pleas are also bad in point of form, because they amount to the general issue. The allegation, that the vessel was not ready to receive cargo by the 12th of April, merely puts in issue a similar averment in the declaration, and ought, (if the issue was material,) to have concluded to the country, or with a traverse. (1 Chitty Pl. 557; 19 John. 309.)

      D, Lord, for the defendant.
    I. The plaintiff specially warranted the time when the loading should commence, and it was the basis of the arrangement; and no remedy in damages would be adequate. There is no other provision which prescribes the commencement of the charter. It was to commence as soon as notice was given that the vessel was in readiness, and at all events by the 12th of April.
    II. The breach of the warranty of the plaintiff was sufficient to entitle the defendant to leave the vessel to the plaintiff; and the pleas show such right properly exercised by the defendant. (Glaholm v. Hays, 2 Mann. & Gr. 257; Abbott on Shipp. [249,] 325; Olive v. Booker, 1 Exch. R. 416.)
   By the Court. Oakley, Ch. J.

There is no doubt that these pleas are bad in form, under the old system of pleading, as being equivalent to the general issue. But under section 17 6 of the code, a defect of this character is no longer to be regarded; and it would be proper, under the provisions of that section, to amend the pleas by striking out the conclusion with a verification, and inserting one to the country.

The allegation contained in the second plea, of want of notice to the defendants that the vessel was ready by .the twelfth of April, is entirely immaterial. If the time of the readiness of the vessel to receive her cargo is to be regarded as a condition precedent, it is a sufficient defence, if she were not ready by that date.

The main question which the parties wish us to decide, is whether this provision is a collateral covenant, or a condition precedent.

The principle applicable to cases of this character, as the same is gathered from the authorities, seems to be, that every charter party is to be construed according to the clear intent of the parties, if that can be collected from the face of the instrument.

The stipulation in the charter party in question, in reference to time, seems to be introduced as a parenthesis in the agreement by which the defendant was to have twenty lay days from the twelfth of April, the plaintiff guaranteeing that the vessel-should be in readiness at that time. It is quite apparent, that if these words stood alone, they would be considered, without doubt, as equivalent to a warranty, and a positive stipulation, that the vessel should be ready at the time specified. It is contended, however, that the words relate only to the lay days, and that those were to commence on the 12th of April. But such cannot be the true construction of the instrument, because it is apparent, on that view, that the lay days might be defeated altogether. If the lay days were to commence on the 12th of April, and the agreement is to be construed that the vessel was to be ready in a reasonable time, that time might not elapse until the whole twenty days had expired. This is clearly the consequence.

The plaintiff refers to the other clause of the charter party, by which it was provided that the charter should commence when the vessel was ready to receive cargo at the place of loading, and notice thereof was given to the defendant; and he argues that the meaning of the whole instrument is, that the vessel was to be prepared for the voyage in a reasonable time, and then she should load and the lay days commence. This last clause is in the printed part of the charter party in the usual form; the former, guaranteeing the time, is written in the agreement, and in accordance with a familiar rule, must govern the construction of the instrument.

Aside from this, the liability was to commence when notice should be given, and if notice were given before or by the 12th of April, the party was bound to proceed. Time was of the essence of the.contract-, and is often so in commercial transactions. The success of the enterprise often depends upon dispatch. It was plainly the intent of these parties to be ready by the twelfth of April, at all events. Hie cases show that the great principle to be considered is the intent of the parties, and where the time is essential, and the words of the charter party are plain, as is the case here, we cannot doubt that the agreement, in reference to the day when the vessel was to be ready, is to be regarded as a condition precedent.

Judgment for the defendant on the demurrers, with leave to the plaintiffs to reply on payment of costs.