Zimmerman v. Erhard

Beach, J. The appeal is by the defendants from an affirmance by the general term of the Marine Court of a judgment rendered in a trial before a justice of that court, without a jury. The plaintiffs are husband and wife, and at the times of the business dealings between the parties were — 312 — copartners, under the firm style of John Zimmerman & Co. The defendants were also partners in trade. In 1877 the plaintiffs sold and delivered to the defendants merchandise at an agreed price, which this action was brought to recover. The purchase of the goods is clearly proven by one of the defendants, and there is no disag’reement in regard either to the price or delivery. It appears the defendants received accounts current, and addressed a letter to the plaintiffs apologizing for delay and promising payment. They contend, however, under a denial in their answer of the partnership of the plaintiffs, alleged in the complaint, that there could be no legal partnership between the plaintiffs, and that therefrom results a violation of the statute forbidding the use of the designation “ and company ” or “ & Co.,” unless representing an actual partner or partners. Judgment was rendered in favor of the plaintiffs, affirmed by the general term of the Marine Court, aiid the defendants bring this appeal. The controlling and important question presented is, whether or not there can be a valid copartnership between husband and wife. If that is decided affirmatively, it effectually disposes of the point made in behalf of the appellants, that the firm of “ John Zimmerman & Co.” was doing business in contravention of the statute of 1833 (L. 1833, ch. 281), enacting, “ where the designation ‘ and company ’ or 1 & Co. ’ is used, it "shall represent an actual partner or partners.” By the terms of the law, any person offending is guilty of a misdemeanor, punishable by fine. It is apparent that if the business relation between the plaintiffs was legal there was no violation of the statute, and none of the consequent results claimed by the appellants. It plainly appears from the record that an indebtedness exists, and the recovery had in the court below is, in my opinion, affected by no other important considerations than those resting upon the question suggested above. Under the statutes (L. 1860, ch. 90 ; L. 1862, ch. 172,) there have been numerous adjudications by the courts of this State, but I have failed to find any one directly — 313 — in point. It may be, however, considered settled law, that a married woman, doing business on her sole and separate account, may employ her husband as her agent in its control and management. (Knapp v. Smith, 27 N. Y. R. 277 ; Buckley v. Wells, 33 N. Y. R. 518 ; Gage v. Dauchy, 34 N. Y. R. 293 ; Merchant v. Burnell, 3 Keyes, 539 ; Kluender v. Lynch, 4 Keyes, 361 ; Whedon v. Champlin, 59 Barb. 61 ; Abbey v. Deyo, 44 N. Y. R. 343 ; Bogert v. Gulick, 45 How. Pr. R. 385.) In Adams v. Curtis (4 Lansing, 164), in deciding that she may maintain an action to recover compensation for services rendered to a firm of which her husband Avas a member, the court say: “ The effect and intent of the act (L. 1860, ch. 90) is to remove all the disabilities of coverture, so as to enable her to sue and to be sued as to contracts in all respects as though she was in fact unmarried.” It seems fairly deducible, from the above adjudications, that the Avife is competent to contract Avith her husband in her business, and if so, there would seem to be no reason Avhy she may not enter into a valid partnership agreement with him. It is a contract affecting directly her business interests, and confers upon him no powers more extensive than those which would be his Avhen acting as her general agent. He cannot affect a part of her personal estate uninvested in trade any further in the one case than in the other. Partnership is founded upon agency, and the members of a firm are, in their mutual relationship, both principals and agents. The words of the statute, “ On her sole and separate account,” refer to her marital status, and are not intended to restrict her business ventures to those in which she shall alone be interested. This view is greatly strengthened by the authorities affirming her poAver to join a partnership Avhere her husband is not a member (Hamilton et al. v. Douglas, 46 N. Y. R. 218 ; Plumer v. Lord, 5 Allen, 460). In the case of Cashman, Ex., &c., v. Henry et al., not yet reported, but found in the Daily Register of December 28th, 1878, the Court of Appeals say, in considering the effects of the statutes under review: “ She may engage in business, and. incur the most dangerous, and even ruinous liabilities in its — 314 — prosecution, and they will be enforced against her to the sainé extent as if she was unmarried.” It seems evident from the above adjudications that a married"woman is invested, by the logical effect of our legislation, in regard to her separate estate and business, with all the attributes and powers of a feme sole, and so being, any contract made by her relative thereto is valid, including a copartnership agreement with her husband. An examination of the decisions in other States adverse to the above conclusion has not changed my opinion. (Lord v. Parker, 3 Allen, 127 ; Plumer v. Lord, 5 Allen, 460 ; 7 Allen, 481 ; Knowles v. Hull, 99 Mass. 562.) The principle adjudged by them is the entire want of power in a feme covert to contract with her husband. This is not in accord with the cases in the courts of this State already cited, and while justly entitled to great respect, those above should not, in such circumstance, be followed without question. In Chamboret v. Cagney (35 Superior Court R. 434) the eminent judge writing the opinion of the court admits it not necessary to definitely decide the question at bar in that case. In expressing his judgment, adverse to the conclusion here, he says: “ In case a wife has separate property, although domestic circumstances may keep her home, or she may be kept there by the lawful exercise of a husband’s power over her in a proper contingency, he will not have power to dispose of that property. If they were business partners he might legally keep her home, and legally dispose of the partnership property at the place of business.” I have been led to differ from this reasoning, because the contingency suggested is equally likely to happen where her husband is general agent in the full control of her business, and also as to results when her personal estate is invested in a business wherein she is a partner with others. In re Kinkead (3 Bissell C. C. R. 405) is a decision confirming the views here expressed. In that case the firm, composed of husband and wife, was adjudicated bankrupt. An individual creditor of the husband, after proof of debt, claimed a dividend from the copartnership assets on the ground that — 315 — the wife could not so contract with the husband, and the assets were therefore his in law, and subject to the payment of his debts equally with those of the firm. The creditor's application for a dividend was denied, and the decision of the District Court affirmed on appeal. In Scott v. Conway (58 N. Y. 619) a married woman who apparently carried on a separate business was held to the truth of that appearance, and in an action against her by one who dealt Avith her in ignorance of the partnership, she was precluded from interposing the defense of her husband being a dormant partner. The case is not fully reported, and Avhile the decision may not necessarily involve the point at bar, it is cited as possibly beneficial to those, if any, who may further consider this question and be able to examine the opinions of the court. It is suggested that in the cases above cited, holding adversely, the coverture has been uniformly pleaded by the AArife for her oavu protection and advantage. There may be question as to its availability to the defendants here. It is also unnecessary to consider whether or not the case would he affected by the act of 1883, should it be admitted that the wife was not competent to form a copartnership with her husband, or whether the defendants, having purchased and received from them property, could object in an action by them for the purchase price. These questions present matter for very serious consideration, and upon them I express no judgment, deeming it advisable to rest the decision upon the main and far more important question involved. I am of opinion that the plaintiff’s copartnership was legal, and consequently the act of 1833 is not applicable to the case. The judgment of the court below should be affirmed. Van Brunt, J. In the disposition of this case, I do not think it necessary to pass upon the question as to Avh ether or not, in this State, if a married woman enters into a copartnership with her husband she can avail herself of the defense of coverture in an action by a creditor of the partnership to — 316 — reach her individual property, for the reason that such a defense is entirely personal to her, and she may avail herself of it or not, as she sees fit. The defendants in this action cannot set up that defense foe her; and as to them, the copartnership is perfectly valid, even though the wife could avail herself of her coverture as a defense to an action by a creditor seeking to reach her separate property. The judgment should he affirmed, with costs. Labbemobe, J., concurred in the result. Judgment affirmed, with costs.