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Vol. IV.]

COMMONWEALTH v. WHITMAN.

(No. 10.

ceipt which the boont wrote the recention of hands; analy legitimate uition

in this case, is a confirmation of the testimony of the boy. If the jury, independently of the receipt, discredit the boy as to identity, then the receipt has no office in the case, and should be set out of consideration by the jury in the balance of the proofs.” The judge gave this instruction, with this addition, by way of explanation : “ The only legitimate use of the watch receipt is for the comparison of hands ; and if the jury believe that the same person wrote the receipt and the name attached to the receipt which the boy took, it is evidence tending to show that the man who was in the office, of whom the boy testified, was the defendant."

Drew testified that about ten minutes to two o'clock he left his office to go down cellar ; that he left no person there ; that he was gone some three or four minutes ; that on his return he found nobody there, but found a small package of cigars lying on the table, which were not there when he went out; that just before he went down cellar, the defendant, whom he said he knew, came up-stairs, looked into his door, caught his eye and went away out of his sight, but did not go up-stairs or down-stairs. The defendant asked the judge to instruct the jury, “ that Drew's testimony as to seeing the defendant in the entry was not in law confirmative of the boy or of Howard, especially when he fixes his time as earlier than ten minutes of two o'clock.” The judge gave this instruction, with this addition : “ The only effect of Drew's testimony on this point is to show that Whitman was in the entry about the time when, from Drew's testimony, the money must have been left in his office; and that this fact was only a circumstance, the weight of which it was for the jury to determine.”

It appeared that the District Telegraph Company was organized under the general law of New York for the incorporation of telegraph companies. The government offered in evidence a printed book, purporting to contain the statutes of the State of New York, and proposed to put it in the case. This book contained the general law above referred to, tit. 19, § 1, and purported to be published under the authority of the secretary of state of New York.

The defendant objected to the admission of the evidence; but the judge admitted it. The government then offered a copy of the articles of association under which the telegraph company was organized. The copy was an attested copy from the office of the secretary of state of New York, in which office the law required that the original should be deposited. There was no evidence by the witness who witnessed it. The defendant objected to the admission of this as evidence, but the judge admitted it. No other evidence was offered in reference to the corporation, or its authority to act in this state; but it appeared that it had undertaken to do business in the city of Boston under its New York organization by delivering messages from place to place ; and that this boy was one of their messengers. The defendant asked the judge to instruct the jury as follows: " If the jury find that the District Telegraph Company was chartered in New York, it would have no power and no authority to carry on business in this state, and in the city of Boston, until it had recorded a copy of the certificate in this state ; and, not having authority here to do the business, it could not in law make the telegraph boy the agent of the District Telegraph Company, and this money would not be the prop

the ometary organized articles

Vol. IV.]

HOLLAND v. DRAKE.

[No. 10.

erty of that company, nor would it be in its possession while in the boy's hands."

The judge declined to give this instruction; but did instruct the jury, “that the court was not bound to say whether the company had or had not authority to do business under its New York charter, in the city of Boston ; but that, if the jury found that it was incorporated, under the law of New York, as the District Telegraph Company, and attempted to do business here under its organization, and received this money and undertook to deliver it through this boy, as its agent, then it might be considered as having special ownership in this property, which would be sufficient under this indictment.” At the end of the government's case, the defendant moved the judge to order a verdict for the defendant, on the count which alleged the ownership of the property to be in the District Telegraph Company, on the ground that there was no evidence of its capacity to own the property named, or its ownership thereof The judge declined so to order. The defendant made a like motion as to the other count, on the ground that there was no evidence to show ownership or custody of the property in Drew, but the judge overruled the motion.

The jury returned a verdict of guiity; and the defendant alleged exceptions.

G. W. Searle, for the defendant.
C. R. Train, Attorney General, for the Commonwealth.
THE COURT

Overruled the exceptions.

SUPREME COURT OF OHIO.

(To appear in 29 Ohio St.)

ASSIGNMENT BY ONE MEMBER OF FORMER FIRM. — RATIFICATION. —

ATTACHMENT, ETC.

HOLLAND v. DRAKE.

1. One of the members of an insolvent firm cannot, either before or after dissolution of

the partnership, make a valid assignment of all its effects for the benefit of creditors, against the will of a copartner, or without his assent when he is present or accessible. 2. Where an assignment is so made against the will of the non-executing partner, or

when he is present and not assenting, and he subsequently ratifies the assignment, the ratification will relate back to the time of executing the assignment, and give it effect from that date ; but not so as to defeat the rights of third persons, acquired in good

faith in the mean time. 3. Where in such a case an attachment had been levied upon the property, between the

date of the assignment and its ratification, and by agreement between the attaching creditor, the assignee, and the partners, the property was delivered by the sheriff to the assignee, to be by him sold in place of the sheriff, and the proceeds to stand in place of the property, and be applied to the attaching creditor's judgment when obtained, if the court should hold the attachment good; in an action by the attaching creditor against the assignee and the partners, to have the proceeds of the property so applied : Held, that the defendants were estopped from setting up as a defence that the lien of the attachment was lost by delivery of the property to the assignee under

said agreement. 4. In such action it was not necessary to make the partnership creditors parties de

fendant.

Vol. IV.]

HOLLAND v. DRAKE.

(No. 10.

TRACY and McKay were partners in the "grain and feed business," in the city of Cleveland, Tracy being the active and managing member. On the 13th of December, 1867, the firm then being insolvent, McKay caused a notice of the dissolution of the partnership to be published in the city papers; and afterward, on the 20th of the same month, he executed to J. M. Drake, and filed in the probate court, a general assignment of the property and effects of the company, for the benefit of all its creditors. On the last named day, but subsequently to the execution and filing of the assignment, Holland and Pettitt caused part of the property so assigned to be seized upon an attachment issued in an action which they had lately brought against the firm, and in which they afterward recovered judgment. Prior to the execution of the assignment Drake had consented to act as such assignee, but the assignment was not in fact delivered to him, or he made aware of its existence, until some days after the levy of the attachment; but, when notified thereof, he accepted the same, and qualified as such trustee. At the time McKay executed the assignment, his copartner, Tracy, was in the city, but was not consulted, and when informed by McKay of its execution, refused to assent, and he did not assent until some time after the levy of the attachment. By mutual agreement between the parties interested, Holland and Pettitt, Drake and McKay, the attached property was then delivered by the sheriff to Drake, as assignee, “ to be sold by him instead of the sheriff," and the proceeds to “stand in place of the property and be applied in payment of Pettitt and Holland's judgment, in case the court should hold the attachment a good lien."

The assignee sold the property in pursuance of this agreement, and brought the money into the probate court, and Holland and Pettitt filed their petition therein against Drake, McKay, and Tracy, asking to have the money adjudged and paid to them, in preference of the other creditors. On hearing of this petition it was dismissed, the probate court holding that the assignment had precedence of the attachment, and that the fund should be distributed pro rata among all the creditors. On proceedings in error this judgment was affirmed in the common pleas, and Holland and Pettitt having filed a petition in error in the district court to reverse the judgment of affirmance, the case was reserved for decision here.

Estep & Burke, for plaintiff in error. The important question in this case is whether one partner, against the refusal of his copartner to join therein, can make a valid assignment of the partnership assets, to a trustee of his own selection ?

We maintain he cannot, and refer to the following authorities : Burrill on Assignments, 43–65, inclusive; Harrison v. Sterry, 5 Cranch, 289; Pearpont v. Graham, 4 Wash. C. C. 232; Deckert v. Gilbert, 4 Watts & Serg. 454; Kirby v. Ingersoll, 1 Harrington, 172; Hughes v. Ellison, 5 Mo. 463; Drake v. Rogers, 6 Mo. 317; Dana v. Lull, 17 Vt. 390; Deming v. Colt, 3 Sandf. 284; 2 Ib. 292; Hayes v. Heyer, 2 Ib. 284, 293; Kemp v. Darnley, Duer, 1; Fisher v. Murray, 1 E. D. Smith, 341.

Elwell f Marvin, for Drake. The only objection that can be raised to said assignment is that it is a fraud on the rights of the partners, inasmuch as it destroys the partnership. If this is a wrong, it certainly

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Vol. IV.)

HOLLAND V. DRAKE.

[No. 11.

does not injure the creditors, and neither of the partners make any complaint. The partner who was not consulted is the only person who has a right to complain. No one else can, for be alone was injured.

The court will sustain an assignment made by one partner for the benefit of all the creditors. Burrill on Assignments, 42-44, 51.

No one but an absent partner can question the validity of an assignment executed by his copartner. It is not void “ per se," but only voidable at the election of the absent partner. 4 Washington C. C. 232; Sheldon v. Smith, 28 Barb. 593 ; 4 Ñ. Y. Digest, 191, 311. As to a subsequent ratification, see 5 Hill, 107; Story on Assign. secs. 239-244.

Admitting that one partner cannot, in law, make such an assignment, yet he might, in view of the fact that the firm was insolvent, file his bill in equity, asking that the firm property might be sold for the benefit of all the creditors. And if he has done what a court of equity would have done, then the court will sustain the act.

Prentiss, Baldwin f Ford, for defendants in error: 1. This case, so far as the power of one partner, McKay, is concerned, to make a general assignment of all the personal property of a firm consisting of two partners, does not raise the abstract question of such a power in Ohio, under our law forbidding preferences, and making a ratable and equal distribution; but if it did, there is very much to be said in favor of such a power. But this case stands upon the following circumstances, differing it from the mere abstract question:

1. The firm was insolvent.

2. An attachment had been got out, of course, for fraud, and that of Tracy, the partner who, it is claimed, did not join in the assignment.

3. Tracy was applied to to join, and assented, but then expressed a wish to see his counsel about it, and after doing so declined, and subsequently deliberately assented again. He never objected to it, and his subsequent express ratification of it made it good from the beginning.

II. Was it a lien or incumbrance plaintiffs in error had after the sheriff gave up the property? The attachment was gone; if plaintiffs had anything, it was an equity, so that a court of chancery could have enforced their remedy, and that court only; and the probate court could not, — the expression lien or incumbrance referring to some plain legal right.

It seems plaintiffs are willing to recognize the assignee, as such, under this assignment, and place the attached property in his hands, giving up the attachment; but they say they have an agreement from him that he will not do his duty, and administer the assignment as the law requires him to do, but do so for their exclusive benefit. No court of equity would admit this as a good title for relief. Again, when the motion to dissolve the second attachment was declared for plaintiffs, they had no subsisting attachment, for it was already dissolved by their own act of giving up the property, and the refusal of the court to dissolve it, on the ground that Tracy was guilty of no fraud, would not give vitality to it. And now plaintiffs call on the probate court to require the assignee to violate his duty as such, — go on and sell the attached property after the sheriff has surrendered it, and account to them for the whole of it, because he has promised to do so. Why did not they have the sheriff hold on to it VOL. IV.

31

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(No. 11.

Vol. IV.]

HOLLAND v. DRAKE.

ct to lid the po vdecisions to is deemed

if they had a good title? Why did they seek to entrap the assignee into an agreement contrary to his duty, and use him as their mere instrument? The contract and promise were void against public policy, and against the spirit of the statute, and against the rights of the rest of the creditors. And there was no lien or incumbrance, and no remedy, unless to go into a court of equity and move there. Hyde v. Olds, 12 Ohio, 591 ; Story on Part. 322, 327, 328; Hitchcock v. St. John, 1 Hoffm. 511; 1 Hardy, 87; Burrill on Assign. 51, 306, 340; Sheldon v. Smith, 28 Barb. 593; Robinson v. Gregory, 29 Barb. 560.

WELCH, C. J. The important question in the case is, whether one member of an insolvent firm, either before or after dissolution of the partnership, can make a valid assignment of all its effects for the benefit of creditors against the will of a copartner, or without procuring his assent when present or accessible. Until this question is decided in the negative, it is unnecessary to consider the questions whether this firm was dissolved by the published notice, and if so, whether such dissolution had the effect to lessen or take away the power to assign. The important question is, did the power ever exist ?

The authorities and decisions on this subject are quite numerous, and are far from being uniform. It is deemed unnecessary here to attempt a review of them, or to enter into or repeat the reasoning pro and con on which they assume to stand. The leading cases will be found enumerated and referred to in Parsons on Partnership, 165 (notes l, m, n, o), and Story on Partnership, sec. 101, note 2. We have examined these cases with much care and consideration, and think the weight of authority, as well as the better reasoning, is with those who deny the validity of such an assignment. The power to make it is not within the contemplation of an ordinary partnership contract. It is not a power to act as agent of the company in carrying on its business and paying its debts, but a power to appoint an agent and to clothe him with all the powers of the partners. If the power exists where there are only two partners, as in the present case, it must also be conceded where there are many. It is easy to see that in many such cases it might be exercised to the great injury and annoyance of the non-consenting members of the firm. It is often the case, especially in times of financial depression, that a firm, if forced into liquidation, and their effects sold under the hammer, would prove insolvent, whereas if suffered to struggle on they would become solvent and successful. In such cases a single member, without the concurrence of the creditors, could, by the exercise of the power in question, bring it to an end, and place all its interests in the hands of a trustee of his own selecting; or, by threatening to exercise the power, he could compel his copartners to submit to unjust terms of forbearance. True, he might, in the absence of such a power, where the terms of the partnership did not forbid it, by a proceeding in equity dissolve the firm and place its assets in the hands of a receiver. But in that case the receiver would be chosen and appointed by the court, and not by the partner, and the other members of the firm would be consulted and heard. We think the safer and juster rule is to require the assent of all the partners, either actually given or to be fairly implied from the situation of the parties, or from the manner of conducting the business of the firm.

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