Sherman v. Jenkins — 53 N.Y. St. Rep. 780

Majority

p. 780

Darwin W. Sherman, Resp’t, v. Lyman Jenkins, App’lt.

(Supreme Court, General Term, Third Department,

Filed July 8, 1893.)

Headnote

1. Assignment for creditors—Burden of proof.

Where an assignment of a partnership for the benefit of creditors is valid:

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upon its face, and shows that the person signing it was authorized to do so, the burden of showing its invalidity, for reasons outside the record, is upon the person assailing it.

% Same—Partnership property—Estoppel.

Where the property in question was used by the partnership in the transaction of its business, the assignee of one of the partners cannot he permitted to assert an alleged individual ownership thereof by his assignor, and that it was not copartnership property, as against its creditors.

3. Pleading—Admission by demurrer.

Where certain defenses in the answer are demurred to and the demurrer overruled, and plaintiff fails to avail himself of a permission to reply, the judgment on the demurrer remaining on the record is an admission of the facts set forth in such defenses.

4. Replevin—Detention.

The defenses so demurred to alleged that after the assignment and before the commencement of this action plaintiff’s assignor and another brought action against defendant for the recovery of said chattels, which action is still pending, and that in such action an injunction was procured restraining defendant from disposing of, or interfering with, said property, and that such injunction was in force when the demand was made by plaintiff. Held, that there was no wrongful detention, and as there was no unlawful taking originally, an action of replevin could not be maintained.

Appeal from judgment in favor of plaintiff, entered upon the report of a referee.

Action to recover the possession of four horses and two pairs of sleighs.

In April 1887, a co-partnership was formed in Glens Falls, N. Y., under the name and style of the New York & Oriental Tea Company. This company was composed of William H. Bobinson and Godfrey B. Martine. The place of business was Glens Falls, N. Y., whence teams were sent with goods through the adjoining country. The property in litigation in this action is property that was used in this business. During all of the time the property was cared for at the company’s expense, and when at home was kept on the company’s premises. The defendant claims that this property, on the 29th day of January, 1890, was the property of the company; the plaintiff .claims that it was the property of one Godfrey B. Martine, from whom he purchased it a few days before the suit was brought, and was only put in the business of the company at work by Martine.

On the 29th day of January, 1890, the company made. an assignment for the benefit of their creditors to this defendant, who duly qualified and took possession of all the company’s property, including this in litigation, and entered upon the discharge of his duties. On the 19th day of February, 1890, the defendant, pursuant to advertisement, was going to sell at public auction all the property of the company, including this in litigation. The same day an action was commenced in the supreme court by Homer J. Martine and Godfrey B. Martine, against William H. Bobinson and Lyman Jenkins, as assignee in trust for the benefit of creditors of the New York & Oriental Tea Company and William H. Bobinson, individually. In this action the plaintiffs alleged that they and defendant, Bobinson, were the co-partners ■composing said company; alleged that this property in litigation.

p. 782

was the individual property of Godfrey E. Martine; asked for an injunction restraining this defendant from doing anything whatever with the property of the company, including this in litigation, and further asked that this property be adjudged to belong to Godfrey R. Martine and he be awarded the possession of the same. At the same time the plaintiffs procured an injunction restraining the defendant from doing anything or in any manner interfering with this property. While this action was pending and while this injunction was in force the alleged sale to the plaintiff in this action was made as well as the demand for the property from this defendant, and within an hour thereafter this suit was commenced.

The plaintiff demurred to the third and fourth defenses, in the answer in this action, on the ground that they were insufficient-in law upon their face. The demurrers were overruled, with leave to the plaintiff to withdraw them at any time within twenty days from the entry of the order overruling them, on payment to the defendant’s attorneys of $35 costs. The condition of the order was not complied with, and the demurrers remained on the record of this case at the time of the trial.

Cameron & McArthur (T. W. McArthur, of counsel), for app’lt; A. Armstrong, Jr., for resp’t.

The assignment to the defendant on its face was a valid assignment; the burden, therefore, was on the plaintiff to prove that it was invalid for reasons outside of the record. Hooper v. Baillie et al., 118 N. Y., 413 ; 29 St. Rep., 52 .

I have been unable to find anything in the evidence in the case proving, or tending to prove, that the member of the co-partnership, who signed the instrument of assignment was not authorized to do so by his co-partner, as set forth in the acknowledgment. The defendant would, therefore, lawfully become possessed of all the co-partnership property.

The plaintiff’s assignor was a member of said co-partnership.

' The property in question was in the possession of and used by said co-partnership in the transaction of its business; it must have been so with the knowledge and consent of plaintiff’s assignor; and as against the creditors of the co-partnership the plaintiff ought not to be permitted to assert the alleged individual ownership of his assignor therein, and that it was not co-partnership property.

The defendant represents the interests of the creditors of said copartnership.

I think the referee erred in the v,iew taken by him of the assignment He seems by his qualifications of the defendant’s request to (find that the co-partnership executed an assignment for the benefit of creditors to the defendant, to have held that it was necessary for the defendant to prove that plaintiff’s assignor exe-' cuted such assignment, or authorized or consented to his co-partner doing it for him.

This, as we have already seen, was not incumbent upon the defendant to show, the assignment being valid upon its face, and

p. 783

showing that the person signing it was authorized to sign it; if in fact there was no such consent and authority given, it was for the plaintiff to prove that fact, which he has failed to do.

The referee also erred in his holding in regard to the third and fourth counts in defendant’s answer.

They had been demurred to by the plaintiff, and the demurrers overruled, and the plaintiff had failed to avail himself of the permission granted to him of replying to such counts in the answer, the judgment upon the demurrers was of record, and so remaining on the record was an admission of the facts set forth in such counts. Cutler v. Wright, 22 N. Y., 472 .

The third count of said answer alleges that the plaintiff’s assignor and another commenced an action against this defendant and another, after said assignment, in which they alleged that plaintiff’s assignor was the owner of the same property which is in question in this action, and demanded, among other things, that he be so adjudged the owner of said property, and that the defendant therein be directed to deliver the same to plaintiff’s assignor, and that such action was still pending against this defendant at the time of the commencement of this action, and so commenced before the plaintiff claims to have acquired his title to the property in question; that plaintiff procured his alleged title to said property during the pendency of such action, and with full knowledge that it was pending.

The fourth count in said answer alleges that in the action set up in the third count an injunction was granted enjoining and restraining the defendant from disposing of, or interfering with said property, and that the demand made upon defendant by the plaintiff for the property in question herein was made while said injunction or order was in force, and with the knowledge by the plaintiff of the pendency of said action, and of said order.

These things so alleged being admitted by the demurrer, as before stated, there was no wrongful detention of the property by the defendant, even admitting that he had no lawful title to it under the assignment, and as there was no unlawful taking of the property by the defendant originally, there is nothing, it seems to me, upon which an action of replevin can be sustained.

The decision of the special term upon the demurrer being unreversed, was binding upon the referee, and as to him it was a final decision in the case as to the question decided by it, and the referee erred in considering it an open question to be passed upon by him. For these errors judgment should be reversed, the referee discharged, and a new trial granted, costs to abide the event.

Mayham, P. J., and Putnam, J., concur.