Lane v. Arnold — 13 Abb. N. Cas. 73

Majority

p. 73

LANE v. ARNOLD.

N. Y. Common Pleas, General Term,

November, 1882.

Headnote

Action fob Goods Sold.—Partnership.—Name op Firm.

Continuing the name of a deceased partner in the firm name is a violation of the statute (L. 1833, c. 281), and the firm cannot recover for goods sold, although the use of such name is without wrongful intent, the executors having carried on the business in conjunction with the surviving partners, in obedience to the requirements of the will.

Appeal from an order of the General Term of the Marine Court, affirming a judgment for the plaintiffs.

George Lane and Victor A. Harder brought this action for the value of goods sold in the name of May- or, Lane & Co. to the defendant, Thomas E. Arnold, after the death of Mayor, and while Ms executors were carrying on the business in conjunction with the plaintiffs, pursuant to the directions of the testator's will.

The act of 1833 (c. 281) provides that “no person shall hereafter transact business in the name of a partner not interested in his firm.” The question is whether the plaintiffs, by doing business in the name of a person not interested therein, have lost the right to recover the value of the goods which they sold to the defendants. We are first to inquire who are interested in the firm that did business under the name of Mayor, Lane & Company. It is conceded that the plaintiffs, Lane and Harder, were so interested. Pierre A. Mayor, in his lifetime, was also interested. Harder was the partner represented by the word “ Co.” When Mayor died he left a will, in which he authorized his executors “ to carry on and conduct the business that I am engaged in, in the city of New York, as one of the firm of Mayor, Lane & Company, in accordance with the terms and provisions of the articles of copartnership, dated January 1, 1875, made and

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entered into by and between George Lane, Victor A. Harder, and myself ; and I hereby authorize and direct my said executors to carry out the provisions of said agreement, or articles of copartnership, so far as my interest is concerned in said business, and for such further time as, in the judgment of my executors, will best promote the interests of my children.”

The executors, in obedience to the requirements of the will, carried on the business in conjunction with Lane and Harder. The name of the old firm of Mayor, Lane & Co. was continued in use, and the goods, to recover the price of which this action was brought, were sold by the plaintiffs in the name of Mayor, Lane & Co. It was not unlawful for Mayor, the testator, to direct his executors to continue the business. The executors might make themselves personally responsible if they accepted the trust, and carried on the business ; but it was not illegal for them to leave a part of the estate in the hands of the surviving partners, and at the risk of the business. They had a right, as executors, to a share of such profits as might be made. The estate, as well as themselves, might be liable to creditors for losses. It is evident, therefore, that some one besides Lane and Harder was interested in the business as a partner.

It is not strictly accurate to speak of an estate as a partner, for a partner must have a personal existence; but if Lane and Harder, as well as the executors, supposed that by the terms of the will the firm was to be continued under its old style, notwithstanding the devolution of the interest of Mayor upon his executors, the mistake they made was not in falsely pretending that Lane and Harder had a partner, but in permitting the executors to transact business in the name of their testator. As was said by Judge Miller, in Wood v. Erie Ry. Co. ( 72 N. Y. 196 , 198), the object of the act of 1833 is “to prevent persons from obtaining false

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credit on the strength of a name that has been withdrawn, or which they have no authority to use.’5

The act forbids the use of the name of a partner not interested in the firm. Of course, after Mayor’s death, he personally was no longer interested. There was at most a technical violation of a penal statute, resulting from a misunderstanding of the law. The will of Mayor, rather than the act of 1833, controlled the selection of the name under which the business was continued. But the statute was violated, and a wrongful intent must be inferred from the intentional doing of the illegal act.

The judgment should be reversed, and a new trial ordered, with costs to abide the event.

As I do not feel at liberty to place a construction upon the statute that would save persons, innocently violating the law, from the consequences of their lapse from strict conformity to its provisions, and as the court of last resort may apply the law in a more liberal spirit, I favor the granting of an application for leave to go to the court of appeals.

Vast Biíuítt and J. F. Daly, JJ., concurred.

Cases cited

Wood v. Erie Railway Co. 72 N. Y. 196 N.Y. 1878-01-22 at 198 p. 74