25 N.Y.S. 1086 | N.Y. Sup. Ct. | 1893
The plaintiff seeks to recover on two grounds: (1) That defendants’ testator withdrew his capital stock, in violation of 1 Eev. St. p. 706, § 15, which provides:
“No part of the sum which any special partner shall have contributed to the capital stock, shall be withdrawn by him, or paid or transferred to him, in the shape of dividends, profits or otherwise at any time during the continuance of the partnership.”
(2) That defendants’ testator was allowed to claim as a creditor, in violation of 1 Rev. St. p. 767, § 23, as amended by, chapter 414 of the Laws of 1857, which provides:
“In case of the insolvency or bankruptcy of the partnership, no special partner shall, except for claims contracted pursuant to section 17, under any circumstances, be allowed to claim as a creditor, until the claims of all the other creditors of the partnership shall be satisfied.”
Section 17, referred to in section 23, provides:
“He [a special partner] may also loan money to, and advance and pay money for the partnership, and may take and hold the notes, drafts, acceptances and bonds of or belonging to the partnership, as security for the repayment of such moneys and interest, and may use and lend his name and credit as security for the partnership in any business thereof, and shall have the same rights and remedies in these respects as any other creditoT might have.”
The referee found, on conflicting evidence, that the limited partnership was solvent on the 13th day of November, 1887, which finding we affirm.
The evidence shows that Charles H. George and Wilson H. George, the general partners of the limited partnership, undertook the duty of settling the affairs of the firm, and that they proceeded so far as to pay off all its debts, except the one owing to the plaintiff. It is asserted that in case a limited partnership expires, and the special partner withdraws, leaving all of his capital and all of the firm assets in the hands of the general partners, upon their agreement to pay to him the amount of his interest in the firm as settled and agreed upon, which they never do, it amounts to a “withdrawal of capital,” within the meaning of section 15, above quoted. This proposition cannot be sustained. Under the statute, the general partners are required to manage the affairs of the firm, and when the special partner, at the termination of the period for which the partnership is formed, leaves all of his capital and all the assets of the firm in the hands of his solvent general partners, and takes their joint promise to pay him his interest in the firm, which they never pay, that does not amount to a withdrawal of capital or of assets, within the meaning of the section. This precise question was decided in Lachaise v. Marks, 4 E. D. Smith, 610. In that case a limited partnership had existed under the name of Lord & Brown, but, before the expiration of the time limited for its duration, the special partner sold to the general partners all of his interest in the firm, and entered into an agreement dissolving it. Notice of the dissolution was filed, recorded, and published, as required by statute. The general partners assumed to pay all of the liabilities
“Twenty-Second. That the entire amount of the capital invested by Franklin E. James in the special partnership remains in the hands or under the control of Charles H. George and Wilson H. George, jointly, or of Charles H. George, solely, from November 13, 1887, to June 4, 1889.”
We assume that the date June 4, 1889, is a misprint for June 14, 1889,—the date of the death of Charles H. George. The judgment should be affirmed, with costs. All concur.