Wetter v. Schlieper

Hilton, J. When a copartnership has become insolvent, no ■doubt can exist as to the power of a court of equity, upon the .application of either partner by a proper complaint, to appoint a receiver to take charge of the partnership assets, and close ■up its affairs. (Adams' Doctr. of Eq., 241, 243; Story's Eq. [125] Jur., §§ 672, 673 ; Law v. Ford, 2 Paige, 310; Egbert v. Wood, 5 Ib., 517, 525 ; Story on Partn., 228, 229 ; Hitchcock v. St. John, 1 Hoffm., 511 ; Martin v. Van Schaick, 4 Paige, 471.) The motion, therefore, presents the question: Whether the execution and delivery of the assignment so made by the defendants Schlieper and Haarhaus, purporting to convey and transfer all the partnership assets to the defendant Bohnstedt, in trust for the creditors of the firm, can be considered an impediment to the exercise of this power of the court, and prevent its granting the plaintiff the relief he asks ? During the existence of a partnership, each partner is clothed with and possesses an equal and general power and authority in behalf of the firm to sell, loan, pledge, or dispose of its effects and property in any manner within the objects of the partnership, or necessary or proper in the ordinary prosecution of its business. By the act of copartnership, each partner has these powers communicated to him; but they are personal to himself, and cannot be delegated to another without the assent or concurrence of his copartners. (3 Kent’s Com., 40 ; Story on Partn., §§ 101, 102 ; Collyer on Partn., § 384; Egbert v. Wood, 3 Paige, 517, 525 ; Havens v. Hussey, 5 Ib., 30 ; Fisher v. Murray, 1 E. D. Smith, C. P. R., 341; Mabbett v. White, 2 Kern., 442.) Ho other powers should be implied except, such as are sanctioned by the usages of the trade or business in which they may be engaged. (Hayes v. Heyer, 3 Sandf., 297; Hitchcock v. St. John, 1 Hoffm., 511; Fisher v. Murray, 1 E. D. Smith, C. P. R., 341, 344.) Upon these views of the powers of. each partner, it has been frequently decided that an assignment made to a trustee, of all the partnership assets for the benefit of the creditors of the firm, but giving preferences to certain creditors over others, is void; unless made with the assent or concurrence of all the copartners ; on the ground that authority to make such an instrument is not implied by the act of copartnership or the copartnership relation, and consequently cannot be inferred or presumed. (Anderson v. Tompkins, 1 Brook., 456; Harrison v. Strong, 5 Cranch, 289 ; Havens v. Hussey, 5 Paige, 30; Demiming v. Cobb, 3 Sandf, 284; Fisher v. Murray, 1 E.D. Smith, [126] C. P. R., 341; Kemp v. Carnley, 3 Duer, 1; Haggerty v. Granger, 15 How. Pr. R., 243; Everson v. Gehrman, 1 Abbotts' Pr. R., 167, S. C., 10 How. Pr. R., 301; Dana v. Lull, 37 Verm., 390.) How, if the power does not exist in any number of partners less than the whole to make such an assignment, giving preferences, by what process of reasoning can it be determined that any one partner can vest the entire partnership assets in a trustee by an assignment, as in this case, without preferences ? By either assignment, if valid, the whole property of the firm is wrested from the non-concurring partners against their will, placed in the possession and under the sole control of a trustee in whose selection they have had no voice, the business of the firm wholly suspended, and the copartnership itself virtually dissolved. A careful examination of the elementary works treating of the law of partnership, and of the decisions cited, fails to show that this power exists in either case. Courts should not imply authority of this extraordinary character, unless the parties intended to grant it; and it never should be presumed unless the evidence of such intention be express and positive. For the reasons thus briefly stated, I have arrived at the conclusion that the assignment by Schlieper and Haarhaus, without the consent or concurrence of the plaintiff, is absolutely void, asid no obstacle in the way of granting the plaintiff the relief sought by him in this action. It therefore follows that a receiver must be appointed of all the property of the partnership of Wetter, Schlieper & Haarhaus, and the injunction now existing continued until final judgment. A reference to appoint such receiver will be taken to Hamilton W. Robinson, Esq., as referee. Ordered accordingly.