Pierce v. Bryant

Bigelow, C. J. If we adopt the most liberal rule of interpretation, in construing the statute regulating the formation of special partnerships, Gen. Sts. c. 55, we cannot, without violating its plain and explicit language, hold that the defendant Goulding is exempt from liability as a general partner for the debts of the firm. There was no substantial compliance by him with one of the essential requisitions of the statute. At the time the copartnership was formed, and for a long time thereafter, he did not contribute to the common stock the specified sums, which he stipulated to furnish, in actual cash payment as capital. In this particular, the certificate which be signed and acknowledged and caused to be recorded in the registry of deeds contained a false statement. It certainly requires no argument to prove that the promissory notes of the supposed special partner, payable on time to the general partner, and which, when negotiated, constituted a debt for which both members of the firm were liable, was in no legitimate sense a contribution of money to the common stock. Such a procedure was a clear violation [93] of the letter and spirit of the statute. It created no fund or capital to which persons dealing with the firm might look for the payment of their debts, but substituted in its place a debt for which each copartner was severally liable. Nor can the note of a third person, not indorsed by the payee, and of which Goulding and the copartnership were only equitable owners, be regarded as equivalent to money. A note is an agreement to pay money. It cannot be treated as cash. It is quite immaterial that it does not appear that credit was given to the firm by the plaintiffs, or by other creditors, in consequence of the supposed payment by the alleged special partner of his proportion of the capital, and that it is not shown that loss or injury has been sustained by any one in consequence of the failure to comply with the requisitions of law. Such evidence, from the very nature of the case, it would be very difficult to obtain. -It was not intended by the provisions of the law that any such burden of proof should be thrown upon creditors. In the place of an inquiry into any such doubtful and speculative questions, the statute substitutes the plain, unequivocal and explicit provision, that if a false statement is made in the certificate, all the persons interested in the copartnership shall be liable as general partners. For the same reason, it is unnecessary to show any malafides in making the certificate. Parties are bound to know the truth, and they cannot be permitted to say that they acted in good faith, in certifying to that which was in fact false. It is a mistake to suppose that, in adopting from the civil law the principle of a special or limited copartnership, the legislature intended also to ingraft on the stock of the common law all the rules of construction which are applied to such a contract in those countries where it forms a part of the regular system of public laws. To have done so would have been to make a great inroad on the well settled doctrines of the common law applicable to partnerships, especially on that fundamental rule, that he who enters into a contract by which he is to contribute capital and share in the profits of a firm shall be liable in solido for its debts. The intent of the statute is to relax this rule only on certain conditions, and within fixed and prescribed limitations, [94] If these are not fulfilled, or are disregarded, then the statute applies rigorously the rule of the common law, by subjecting all the members of the firm indiscriminately to the liabilities of general partners. It was suggested by the counsel for the defendants, that the statute does not require that the money contributed by the special partner should be paid in at the time of making and acknowledging the certificate for registry, and that it is a sufficient compliance with the requirements of the law, if it is paid in after the expiration of the time fixed for publication of the certificate in the newspaper. Whether this be so or not is quite immaterial to the decision of the present case, inasmuch as the capital which the special partner was to furnish was not paid in until long after that period of time had elapsed. But we are satisfied that the terms of the statute do not support the suggestion. The parties are required to certify to that which has been done; not to that which is executory. The payment of the capital in cash by the special partner must precede the publication, otherwise it would be impossible to make a true certificate. And this payment must be followed by the required publication; otherwise the special partnership will not be formed, but the parties will become general partners. This construction can work no hardship, because it is easy for the special partner to see that all the statutory provisions are complied with. Judgment for the plaintiff.