Corbett v. Cannon

The opinion of the court was delivered by Allen, J. : There is an elaborate discussion in the briefs of the question whether the firm of Corner & Farnum was a general or special partnership, and, if a special partnership, whether Corner and Farnum alone, as the general partners, had authority to execute an assignment of all the property of the firm for the benefit of their creditors. A further'question is presented, however, which we deem decisive of the case, and which renders a consideration of other questions unnecessary. The business of the firm was carried on at Wichita by Corner and Farnum only. Hanscome resided at Denver'. The firm became insolvent and gave a chattel mortgage on their property to the Wichita National Bank to secure their indebtedness to it,, amounting to about $24,000. Hanscome had no personal charge of the business. He was notified by telegraph of the assignment, and went to Wichita, [130] and was there on July 5.- He testified by deposition that he did not express to Corner and Farnum his affirmation of their making the assignment; that he did not know the extent of their liabilities; that he did not authorize them to execute the assignment, aiid would have opposed it if he had been consulted; that he told them that he thought that they had made a mistake. It was shown that an action was brought in the county court of Arapahoe county, Colorado, by Roth, Bruner & Feist against Hanscome to recover a large snm of money claimed to be due them from the firm of Corner & Farnum. Hanscome employed attorneys, who, after being fully informed by him of all of the facts in relation to the matter, on the 8th day of September, 1891, filed an answer in that action alleging that said firm of Corner & Farnum did, on the 3d day of July, 1891, make, execute and deliver their deed of voluntary assignment for the benefit of all their creditors; that such assignment was duly acknowledged and recorded in Sedgwick county, Kansas, and that everything necessary and proper to be done under the laws of the state of Kansas relative to assignments was done ; that a majority of the creditors of Corner & Farnum accepted said assignee, and that the matter of said assignment was still pending and undisposed of; that the plaintiffs in said suit were parties thereto, and had received or would receive a greater portion, if not all, of their claim out of the assets of the firm in the hands of the assignee. While Hanscome, in his testimony, says that he expressed disapproval of the action of Corner & Farnum in making the assignment, he at no time denied its validity, nor did he take any steps whatever to avoid it. The answer above mentioned was filed long before [131] this action was commenced by F. Cannon & Co. In it he expressly recognized the validity of the assignment. That an assignment executed by one or more partners without authority from another may be ratified and confirmed by the partner who does not execute it, is clear both upon reason and authority. In the case of Hodenpuhl et al. v. Hines et al., Appellants, 160 Pa. St. 466, it was held that a person who, with sufficient notice that his copartner, the manager of the business, has made a formal assignment for the benefit of creditors, fails to dissent therefrom within a reasonable time is deemed to have ratified it, and it will stand against subsequent executions against the firm. In Adee v. Cornell et al., 93 N. Y. 572, where an assignment was attacked by creditors on the ground that there were partners who did not join in it, it was held that the alleged partners, having acquiesced in the assignment, no one else could complain, and that an assignment could be ratified by members of the firm who did not join in it. To the same effect are Matthews v. Smelser, 26 S. W. Rep. (Tex.) 872; Farwell and others v. Webster, Garnishee, etc., 71 Wis. 485; Tischler v. Kurtz, 17 S. Rep. (Fla.) 661; Williams v. Frost, 27 Minn. 255; Rumery v. McCulloch, Garnishee, etc., 54 Wis. 565; Hooper et al. v. Baillie et al., 118 N. Y. 413. Probably the failure of Hanscome to take any action inconsistent with the assignment, or to express his dissent otherwise than by saying that he deemed it unwise and a mistake, ought to be held a tacit ratification ; but we need not rest on this alone, for in his answer to the suit against him in Colorado he expressly affirmed the validity of the assignment, and expressly avei’red the right of the assignee to the possession of the firm property for the purpose of [132] distributing it to the creditors. The district court erred in holding thfe assignment void, under the testimony in the case. The judgment is reversed, and the cause remanded for further proceedings in accordance with the views herein expressed. All the Justices concurring.