Page images

Bank v. Bank, 136 U. S. 223, 10 Sup. Ct. | in its terms, and plainly requires that every 1013, 34 L. Ed. 341. But the statute under chattel mortgage to operate on behalf of a consideration clearly prescribes a different partnership shall be signed and acknowlrule as to chattel mortgages. Its effect is to edged by each partner. The statute, having restrict the agency of the individual partner taken away from a single partner all power in respect to such instruments, and to de- which he might otherwise have, had to create prive him of the power otherwise held to re- a valid lien by chattel mortgage upon partside in him by reason alone of his relation of nership property, an attempt on his part, actpartner to mortgage the personal property of ing alone, to do so, is analogous to the executhe partnership, either by signing the firin tion of a chattel mortgage upon property not name to the instrument, or the names of his belonging to the mortgagor; and it is not copartners by himself, or by merely signing conceivable, in the latter case, that the mere his own name. Thus the requirement of the fact that the mortgagee did not know that statute effectually withdraws the only sup- the property was owned by another would port of the rule elsewhere prevailing which give him a valid and enforceable lien upon permits one partner, under certain conditions, it against the true owner or his creditors. to execute a valid chattel mortgage upon It was not necessary, therefore, that the partnership property.

petition should allege that the mortgagee was It is not contended that the mortgage in without notice that the property mortgaged controversy was, in any event, a lien upon the was partnership property in order to quesinterest of Lellman, assuming the existence tion the validity of the mortgage under the of the partnership, nor would such a conten- statute above mentioned. If the circumtion, even if correct, be of any practical bene. stances were deemed to be such as would fit to the defendants, since the evidence clear- operate by way of estoppel to prevent the asly discloses that he had no remaining in- sertion of a right to the property as against terest after the payment of the partnership the mortgagee by the partner who did not debts. We need not, therefore, express any sign the mortgage, or by the creditors, that opinion as to whether a mortgage of part- would be defensive matter to be alleged and nership property not executed by all the part- proved by the mortgagee. No such defense ners as required by statute could be con- was alleged, nor would the evidence support strued as a mortgage of the interest of the it. On the contrary, we are of the opinion partner or partners executing it, without that the evidence is sufficient upon which it such an intention being mentioned in the might have been found that the mortgagee mortgage. In the case of Ridgely v. Bank, was chargeable with notice of the actual sitsupra, Judge Hallett held that the mortgage uation as to the ownership of the property, could not be so construed. A partner's inter- had that matter been important, and put in est in firm property is only his proportion in issue. That it was not deemed important or the surplus after the payment of partnership to be an issue in the case would appear from debts, and the settlement of the partnership the fact that the defendant mortgagee did accounts, and, until that occurs, it is impos- not testify as a witness, and no evidence sible to determine the extent of his interest; was adduced, nor any instruction requested and so it is held that a mortgage by one

in relation to notice or knowledge on her partner of his interest does not create any part. actual lien upon the partnership property it

It is contended that the court erred in perself, but is only a lien upon the interest of mitting an amendment to the petition after the partner as finally ascertained. Jones on judgment to conform to the proofs. It apChat. Mortgages, $ 45; 1 Cobbey on Chat. pears that the cause came on for trial April Mort. § 431.

18, 1904, and was concluded on the following There is some contention as to the absence day, when the verdict of the jury was receivof an allegation in the petition of notice on and judgment rendered; that on April 29, the part of the mortgagee of the alleged 1904, a motion for new trial was filed by fraud of the mortgagor in the execution of the defendants below, which was argul the mortgage, but the point seems to be di- December 1, and decided December 27, 1904. rected to the sufficiency of the petition in re- The order, overruling the motion, recites spect to the charge that the mortgage was that plaintiff, by his counsel, had filed an apmade for the purpose of hindering, delaying, plication to amend his amended petitio.l so and defrauding creditors, which charge, upon that it may conform to the proof made at the the evidence, is eliminated from the case trial of the cause, and that "the court, havas a substantive ground of recovery. It is ing considered said application, does permir, clear, we think, that want of notice on the authorize, and direct the amendment as praypart of a mortgagee named in a chattel mort- ed by the insertion or interlineation of the gage of partnership property that the prop- language, "That the assets in plaintiff's erty was partnership property will not, for hands were at the commencement of this acthat reason alone, render the mortgage valid. tion and are at the present time and have The statute is not confined to chattel mort- been during the period of his trust insufgages executed in favor of one who has actu- ficient to pay all creditors,' the same to be al notice or is chargeable with notice of the

inserted or interlined in the fourth paraownership of the property, but it is general graph of said petition, and to be resubscribed and restorn to, the court believing the same have been allowed to correspond with the to be in furtherance of justice to parties con- facts proven, which would not have changed cerned, to which order counsel for the de- the cause of action, the judgment would not tendant excepts.” And thereupon the motion' be disturbed because no formal amendment for new trial was overruled. The bill of was made. The defendants therefore having exceptions recites that in open court at the submitted in open court to a hearing of the time of the hearing of the motion for new motion to amend, without objecting to the trial the plaintiff made his motion for leave motion or hearing for want of notice cannot to amend his petition. But it appears also now be heard to object to the amendment on by the bill that the formal written motion that ground. The fact that the motion was, was not actually filed with the clerk until after hearing, put in formal shape and filed December 28th. The only proper inference does not, we think, alter the situation; since from the record in this respect is that when it does not appear that objection was made the motion for new trial was being heard, at the time that the motion was not in writand, when both counsel were in court, the ing. It may, indeed, have been presented in plaintiff asked leave to make the amendment; written form though not filed until the mothat such leave was subsequently granted tion was granted; and the order of Decemin open court, in the presence of counsel for ber 27th treated it and referred to it as filed. both parties, immediately before overruling This brings us to the merits of the amendthe motion for new trial; and that the moment. Was it error to allow it? It is clear tion was one which had already been acted that its allowance was based upon the proupon, to the end that the record might more visions of section 3588, Rev. St. 1899. That formally show the character of the applica- section reads as follows: “The court may, tion. Afterwards, and on January 3, 1905, before or after judgment, in furtherance of (lefendants moved to strike the motion filed justice, and on such terms as may be proper, December 28th from the files, and also the amend any pleading, process, or proceeding said amendment to the petition, on the by adding or striking out the name of any ground that no notice of the making or hear- party, or by correcting a mistake in the name ing of the motion to amend was given to de- of a party, or a mistake in any other respect, fendants or their counsel in writing or other- or by inserting other allegations material to wise. Other grounds of the motion to vacate the case, or, when the amendment does not went to the merits of the motion or applica-change substantially the claim or defense, by tion for leave to make the amendment. The conforming the pleading or proceeding to the motion to vacate was heard and overruled facts proved and when an action or proceedMarch 22, 1905, to which ruling the defend- ing fails to conform to the provisions of this unts reserved an exception.

division, the court may permit the same to be The first point urged in support of the made conformable thereto, by amendment. proposition that error was committed in al- The party applying to amend during the lowing the amendment is that no notice was trial shall be required to show that the given of the motion for leave to amend. It amendatory facts were unknown to him prior is sufficient answer to that to say that it to the application, unless, in its discretion, does not appear that the objection of want the court shall relieve him from so doing." of notice was interposed when the motion was The general rule under such a statute in that made and heard in open court in the presence amendments to conform to the proof should of counsel, and during the hearing upon the be liberally allowed, where justice will be motion for new trial. We must assume that, thereby promoted. The case of Henry v. at the time the motion was so made, it was Jeans, 48 Ohio St. 443, 28 N. E. 672, cited by heard by the court and taken under advise- counsel for plaintiffs in error, does not disment, without objection on the ground of credit that rule, but adheres to it, although want of notice. In a California case with it is said in that case that the power to reference to a similar objection the court make new parties after judgment "will be said: "But, conceding that previous notice sparingly exercised, and with a cautious disof the application should have been given, cretion.” It is well understood, however,

, still, we are unable to see that appellant was that an amendment after judgment to conin any way prejudiced by the failure. He form a pleading to the proof will not in all was present in court when the motion was cases be allowed. If allowed at all the made, and raised no such objection then. amendment should be in furtherance of jusOn the contrary, he proceeded to argue the tice, and the statute only permits such an question at length, and, when it was decided amendment when it will not change subagainst him, took a general exception to the stantially the claim or defense. It has been ruling. This was in effect a waiver of no- held improper to allow the amendment where tice, and appellant cannot now be heard to the case was not tried upon the theory sugcomplain of the action of the court on this gested by the amendment, or where it would ground.” Herman v. Santee, 103 Cal. 519, enable the plaintiff to recover upon an utterly 37 Pac. 509, 42 Am. St. Rep. 145. See, also, unconscionable demand, or where the admis14 Ency. Pl. & Pr. 127. In Kuhn v. McKay, sion of the evidence to which it is desired to 7 Wyo. 42, 49 Pac. 473, 51 Pac. 205, this conform the pleading was promptly objected court held that where an amendment might to when it was offered, upon the ground that it did not tend to support the allegations in cause of the absence of a plain allegation to the pleadings. 1 Ency. Pl. & Pr. 584–586. that effect in the petition. The trial court It has been held also that there is no war- very properly found that the amendment to rant for allowing such an amendment to a conform to the facts was in furtherance of pleading which, without it, does not state a justice, and we are satisfied that no error cause of action; and it is contended in the was committed in allowing it to be made. case at bar that the petition did not state On the trial of the cause the plaintiff below sufficient facts to constitute a cause of ac- testified that as trustee of the bankrupt estion, in the absence of the allegation per- tate he took charge of the property belongmitted by the amendment here questioned. ing to it including the property of the part

The amendment is not, in our opinion, sub- nership of Lellman & Hackman at Diamondject to either of the objections above men- ville, Wyo., consisting of the hotel property, tioned. The case was not tried upon a dif- furniture in the hotel, books, papers, etc., ferent theory. On the contrary, the plain- and that he received all such property from tiff's case was presented on the theory that the said Lellman. During the course of his the estate of the bankrupt, including the

examination as a witness, the plaintiff propartnership property was wholly inadequate

duced the hotel ledger, and was permitted to for the satisfaction of the demands of the

testify without objection as to certain encreditors, and the evidence, which was re- tries found in the book, whereby it appeared ceived without objection, clearly established

that on the inside of the book was written the insufficiency of the assets in the trustee's

"Ledger of Daly Hotel, Lellman & Hackman, hands, including the property covered by the

proprietors," and that it contained various mortgage, to pay the creditors. It is clear

entries of hotel accounts appearing by their also that the amendment did not change the

dates to have been written during the years cause of action. Before the amendment the

1901 and 1902, and the witness testified that petition alleged the existence of the partner

some of such entries were in the handwriting ship between Lellman and Hackman; that

of Mr. Lellman, and others in the handwritthe property administered upon by the plain

ing of Mr. Johnson who had acted as the tiff as trustee was the property of the part

hotel clerk during that period. By the tesnership; that Lellman and the partnership

timony of the witness, it appeared that the were insolvent when the mortgage was given;

accounts so found entered in the ledger were that the property therein described was part

for board bills, and bills usually incurred at nership property; and that Lellman unlaw

hotels. The witness also produced certain fully mortgaged it to the defendant Guild.

papers appearing to be statements of acIt was also alleged that the acts of the de

count dated during the year 1902, made out fendants in the making of the mortgage pre

in the handwriting of Lellman, and marked vented the plaintiff from equitably apportion

paid in full over his signature. Those stateing the property mortgaged towards the sat

ments appeared, by their recitals, to contain a isfaction of debts for which claims had been

statement of the account of the debtors namfiled in the bankruptcy proceedings. The

ed therein respectively with the "Daly Hotel, prayer of the petition was that the property,

Lellman & Hackman, Proprietors." In the covered by the mortgage, be declared part

same connection the witness further produced nership property, and the mortgage be ad

four drafts, two of them appearing to have judged null and void. If it be conceded that

been drawn by the same party, and the it was necessary to allege and prove the in

others by different parties, but all drawn sufficiency of the assets to pay the creditors,

upon Lellman & Hackman, Diamondville, there was not such an entire absence of al

Wyo., dated respectively January 19, March legation in that respect as would render the

11, July 10, and November 15, 1901, each of petition incapable of supporting a judgment,

which was marked paid; the drafts having as not stating I cause of action. The trouble

been found by the trustee among the books with the petition in that regard was not that

and papers kept at the hotel. The drafts it did not state a cause of action, but that

were admitted in evidence over the objec. the statement was defective, to cure which

tion of the defendant, and an exception was supposed defect the amendment was allowed

reserved to the ruling; and later a motion to conform to the facts established on tho

by defendants to strike them from the evitrial by evidence which had been admitted

dence was denied, to which an exception was without objection. If the assets in the plain

also reserved. It is contended that prejuditiff's hands had been sufficient to pay credit

cial error was committed in the admission of ors, then the mortgage might not have had the drafts. The drafts were objected to on the effect, as alleged, of preventing the equi

the ground that they did not tend to show the table distribution of the mortgaged property existence of the partnership at the date of the among the creditors, because, in that event, mortgage, that they did not show who paid the property might not have been required them, though counsel admitted that one of for such purpose. The fact that the assets them had been paid by Lellman; and the were insufficient having been shown without motion to strike was made on the ground objection, it is evident that it would have that they did not tend to establish the point been unreasonable to require a new trial be- in controversy, or the fact that the partnership existed, or that the parties were doing | plaintiff to show that the mortgage was givbusiness as such when the mortgage was giv- en upon property belonging to the partneren, and that the acts of third parties, so far ship of Lellman & Hackman. He was proas they appear on the face of the drafts, or ceeding to establish that alleged fact by proof by the indorsements thereon, cannot bind the of the conduct of the parties, and particularly members of the partnership, and further that the acts of Lellman in the conduct of the they were in the nature of hearsay evidence, business at Diamondville. Before the drafts and, therefore, inadmissible.

objected to were offered, the plaintiff had inAs the drafts do not, on their face, disclose troduced the written consent of Hackman, whether the debts thereby represented re- as a partner of Lellman, that the firm propspectively were contracted before or after the erty should be administered upon in the date of the alleged dissolution, and there was bankrupt proceeding, which consent appeared no evidence outside of the drafts themselves to have been signed October 6, 1902, and filed upon that subject, it is clear that their pay- with the referee in bankruptcy on the same ment would not be inconsistent with the date. The objections interposed to the drafts Claim that the firm had dissolved in January, disclose a clear understanding of the issue 1901, and that Lellman then assumed the in respect to the allegations of the partnerpayment of all the firm debts contracted in ship as then made up, for they were not made the business at Diamondville. It may, there- with express reference to the effect of the fore, be conceded that the drafts themselves,

drafts or their payment upon any supposed with the fact of their payment by Lellman,

or alleged dissolution. The objection was would not tend very strongly, if at all, to

that the drafts drawn upon the firm and antradict the evidence afterward introduced paid by Lellman, and found among his efon the part of tiie defendants to the effect

fects in the hotel, did not tend to prove the that the firm had been previously dissolved. existence of the partnership on Deceniber But there had been no evidence of a dissolu- 14th, following the date of the drafts, when tion when the drafts were admitted, nor was

the mortgage was executed. But they did any such claim then made by direct allega- tend to prove the fact of partnership on that tion of the pleadings. As disclosed by a re

date, and were clearly admissible for that mark of the trial judge in ruling upon the purpose. The drafts were offered in connecobjection to one of the drafts, they were

tion with other evidence of the conduct of admitied for the purpose of proving that at the business; all the drafts were dated in a date prior to the giving of the mortgage a

1901, and the latest one within a month of partnership existed. At the time the drafts the date of the mortgage. In proving a partwere offered and admitted, and the rulings nership between other parties on a certain in reference thereto were made, the answer date by their conduct the law does not conof the defendants consisted only of a general fine a party to proof of acts on the exact date denial of all allegations of the petition. The in question, but evidence tending to show a petition had not then been amended, but partnership at an earlier date, if not too reit alleged that, in the course of the admin- mote, is always admissible, since a partneristration of the bankrupt estate, one James ship shown to exist on a certain date will Hackman, a member of the firm of Lellman be presumed to have continued unless some& Hackman, a copartnership composed of thing to the contrary appears. 22 Ency. L. said Hackman and Lellman, the bankrupt,

19. “A partnership shown to exist is evifiled with the referee in bankruptcy consent dence of its existence at a later date under and authority for the trustee to include in the usual priina facie presumption of the the administration of the bankrupt estate

continuance of a juridical relation or conthe property of said partnership, which was stancy of a condition of affairs, more or less followed by allegations to the effect that the strong according to the length of intervening trustee was administering upon the property time." 2 Bates on Part. $ 1159. The drafts of that partnership, and that the property were, therefore, properly admitted.

The covered by the mortgage in question belonged same is true, and for the same reasons, reto that partnership when it was executed, and specting a bill rendered against the firm in that such mortgage was unlawfully executed July, 1901, by a Utah concern, which was by Lellman. The general denial put these marked paid, and was found among the othfacts in isue. The practical admission that er papers in Lellman's possession at the a partnership had once existed, by the amend- hotel. ed answer which alleged its dissolution in Some other objections urged against the January, 1901, was not in the case when rulings of the court in the admission or rethe drafts were admitted in evidence, nor jection of evidence will be briefly noticed. when the motion was made to strike them Error is charged in the admission of the writfrom the evidence. That was filed subse- ten consent of Hackman, the alleged copartquently, after the plaintiff had amended the ner of Lellman, that the trustee might inpetition by more specifically alleging the clude the partnership property in administer. existence of the partnership on the date of ing the bankrupt estate. The paper was adthe mortgage. Thus, upon the issues as they mitted chiefly, we take it, to show the trusstood at the time of the rulings in respect tee's authority over the alleged partnership to the drafts, it was incumbent upon the property, though, doubtless, it may have tended to discredit Hackman's testimony in sup- | No offers were made in connection with the port of the alleged dissolution in January, last two questions as to proof proposed, but 1901. The objection interposed to its admis- it is not perceived that an affirmative answer sion was the single one that it did not show to the one referring to Hackman's willingness when the partnership existed. That objec- that the firm property, if any, be subjected tion very clearly constituted no ground for to the claims of firm creditors would have its rejection. The paper recited that "James been so beneficial to the defendants as to Hackman, a partner of Fred Lellinan, the render its exclusion prejudicial error, even if above-named bankrupt,” consents that the erroneous, nor in what manner it would have property owned or belonging to the firm of discredited his written consent. And as to Lellman & Hackman, both real and personal, the last question, the defendants were clearly shall and may be administered in bankruptcy not prejudiced by the ruling upon it, since, in the proceedings wherein Fred Lellman is if the witness was unable to state what was bankrupt, and it was signed by said IIack- said, it would have proven nothing. The conman, and filed with the referee in bankruptcy. sent would not in itself amount to proof But we fail to see why the paper was not as against the defendants below, that the competent as against any objection for the property in question was partnership properpurpose of establishing the right of the trus- ty; its only effect, if any, upon that question tee to question the validity of the mortgage. was whatever force the jury or court might

It is also contended that the court erred in concede to it as contradictory of Hackman's sustaining an objection to certain questions testimony, hereafter to be referred to. propounded by counsel for defendants below It is claimed that error was committed in to the referee in bankruptcy while testifying excluding testimony offered by defendants as a witness for plaintiff with reference to through the witness, Charles Stone, as to statements made to him by Hackman when statements made to him by IIackman shorthe filed the written consent or subsequently. ly after January, 1901, to the effect that The referee had testified positively that Hack- the firm had dissolved. The sole question man came to him voluntarily, and offered to propounded to that witness which was obfile such consent. The first question of thatjected to was whether Mr. Lellman had not character inquired whether Hackman did made a statement to him as to who should not state to the witness that Lellman and pay the debts of the partnership incurred at himself had former y been partners, but had Diamondville. It appears that, although an dissolved their partnership, Lellman taking objection to the question was sustained, it the Diamondville property and he (Hack. had been answered before the objection was mar) taking the Evanston property. In con- made, and the answer is in the record, and nection with that question when objection must have gone to the jury. The answer was interposed, defendants' counsel stated was: “I think it quite possible.” The witthat the purpose was to prove that the con- ness, moreover, without objection, in response sent had been given involuntarily under the to other questions, testified quite fully as advice of the referee, and under the supposi- to statements made to him by Lel'man; and tion that he (Hackman) would be afforded we fail to find in the record any exclusion of some protection by filing the consent; and statements made to the witness by Hackman. that afterwards he informed the referee that The admission in evidence of a chattel he was not a partner of Lellman and had mortgage upon the property in controversy not been for some time, but that if there executed in 1899 by both Lellman and Hackwere any partnership assets he was willing | man to the Blyth & Fargo Company of that they be taken by the firm creditors. The Evanston is also assigned as error. proposed testiinony was excluded on the first offered and admitted before the amendground that subsequent statements of the co- ment to the petition specifically alleging the partner were not competent to contradict existence of the partnership at the date of the written consent filed by him. But no ex- the mortgage to the defendant Guild, and, ception seems to have been reserved to the as appears by the record, immediately folruling in relation to the above question, and lowing its admission counsel for the defendhence that particular ruling is not properly ants questioned whether the petition suffi

However, immediately following ciently alleged the partnership, and that rethe ruling upon that question, two other sulted in the amendment aforesaid, and, after questions were put to the witness, to both the amendment had been made, the mortof which objections were sustained, and ex- gage was again offered in evidence, and adceptions reserved. One of those questions mitted without objection. The instrument asked if Hackman did not, at the time, repre- was offered on each occasion as tending to sent to the witness that he was willing that show the firm ownership of the property, all the partnership assets of Lellman & Hack- and we think it was admissible for that purman, if any there were, might be subjected pose, but whether admissible or not, the to the claims of the firm creditors; and the defendants cannot complain since it was finalother was as follows: "You are unable to ly offered and received without objection. state, then, what Mr. Hackman did say at The plaintiffs in error complain of an inthat time when he signed this instrument in struction given to the jury to the effect that your office or subsequently to that date." as to creditors or other persons dealing with

87 P.-63

« PreviousContinue »