95 F. 619 | 6th Cir. | 1899
The main controversy in this court is whether there was any evidence which should have been submitted to the jury tending- to show that Comstock did not, as certified in the affidavit of Robinson, actually in good faith contribute in cash the $50,000 to the stock of the company on the 2d day of May, 1893. The affidavit was dated the 1st of May, but it seems to be conceded
Elliott, one of the partners, testified that Comstock contributed $50,-000 in checks, $30,000 of which were deposited to the credit of the firm, and paid on the 2d day of May. Two of the checks were not deposited or collected on the 2d of May. A cheek for $10,155 was collected on the 24th of May, and the remaining check, for $9,845, was deposited and collected on the 3d of June. Elliott testified there was no agreement, so far as he knew, that these checks were to be held, but that they did not deposit them because they did not need the money. Bobinson testified that everything was contributed, in what he considered cash items, on the 1st day of May. He said there was no due-bill of Comstock, but he had an indefinite impression that in the payments there was a note of Parrand, Williams & Clark for $10,155. Elliott and Bobinson were called by the plaintiffs. It further appeared that a note of Parrand, Williams & Clark for $10,155, due to-Comstock, was paid on May 24th at the Commercial National Bank, where it had been deposited by Comstock for collection, and that the note had been sold by the Commercial Bank to the Alpena Banking Company, Comstock’s bank, and that when the note fell due the assistant cashier of the Commercial National Bank paid Comstock by giving his check for that amount to H. S. Bobinson & Co. Comstock testified in his own behalf. His statement was that he gave $50,000 in checks, $30,000 of which were collected on the 2d of May. He testified that he had a note of Parrand, Williams & Clark for $10,155, which he brought down with him from Alpena, where he lived, intending to put it in as part of his contribution, together with a certified
It is objected that Comstock’s checks for $20,000 were not an actual contribution in cash to the assets of the firm, even if there was no agreement by the general partners to withhold presentation, and even if they were good when delivered to the general partners. The early decisions construing limited partnership statutes were very
Comstock’s checks were certified, and it is expressly held by the court of appeals of New York that such instruments are equivalent to cash. White v. Eiseman, 134 N. Y. 301, 31 N. E. 276. But it is said that as the certificate was by Comstock, the president of the Alpena Banking Company, of his own check, the check was not certified in such a way as to bind the company. We shall not enter upon a discussion of this objection, because we are of opinion that a check, though uncertified, if good when delivered and paid when presented, is a contribution, in cash in good faith, although it may not be presented until after the filing of the certificate. If the check is good the general partners may obtain the money upon it at any time. If the drawer is dishonest, and subsequently reduces his bank balance so that the check is dishonored, this is conclusive evidence that the delivery of the check was not payment in cash in good faith, and the penal liability of the special partner accrues. The payment of checks as cash is in accordance with a well-known and reasonable usage of merchants, and we can see no reason why the statutes concerning limited partnerships should not be construed in the light of that usage. In the case of In re Palliser, 136 U. S. 263, 10 Sup. Ct. 1035, Mr. Justice Gray, speaking for the supreme court, defines the word “cash,” used in a criminal statute, as follows:
“The word ‘cash,’ in this statute, as in common speech, means ready money, or money in hand, either in current coin or other legal tender, or in bank bills, or checks paid and received as money, and does not include promises to pay money in the future.”
This, it seems to us, is a sufficient support for our conclusion. Doubtless the weight of authority in the construction of limited partnership statutes is to the contrary; but, as already said, the trend of modern cases is towards a more liberal and sensible view of such statutory requirements. Their purpose is to secure the actual payment of the money into the capital of the firm, and, failing that, to hold the special partner to a general liability. It seems to us that our construction of the statute secures this end, and it does not entrap the honest and unwary into unexpected liabilities, by enforcing a stricter rule as to what are cash payments than obtains in the commercial community. There is nothing in the decisions of the supreme court of Michigan upon this statute which prevents our giving such a construction to it as we think its language and its policy require. Rothchild v. Hoge, 43 Fed. 97. The judgment of the circuit court is affirmed.