170 F. 502 | S.D. Ohio | 1909
The right of the individuals doing business as partners under the firm name of the “Rasor Dumber Company’’' to commence or maintain an action in this court on the mechanic’s lien asserted in their intervening petition is disputed on the ground that they have not complied with the requirement of the amendatory act of February 13, 1896 (92 Ohio Daws, p. 25; sections 3170-1 to 3170-7, both inclusive, Rev. St. Ohio), which provides that everj1--partnership, excepting certain commercial and banking partnerships, transacting business in Ohio under a fictitious name or designation not showing the names of the persons interested as partners in such business, must file with the clerk of the court of common pleas of the county in which its principal office or place of business is situated a certificate stating the full name and residence of each partner, and . that, in case of failure so to do, the persons so doing business as partners “shall not commence nor maintain an action on, or on account of, any contracts made or transactions had in their partnership name in any court of this state,” until they shall have first filed such certificate.
The purpose of the act is that a public record shall be had of the individual members of all partnerships, other than those especially excepted from its provisions, with such definiteness and particularity' that those dealing with them may at all times know with whom they aré dealing and to whom they are giving credit or becoming bound. Partnerships subject to the provisions of the act are not by its terms placed under any disability as regards the acquisition and ownership of property, or the making of contracts, or the transaction of business. The only penalty attached by the act to the failure to file the required certificate is the legal incapacity of the offending partnership to commence or maintain an action on, or on account of, any contracts made or transactions had in the partnership name, in any court of the state, until it shall have first filed the- required certificate. The Ohio act is borrowed from that of California, and instructive cases supporting the foregoing announcements are: Meads, Seaman & Co. v. Lasar, 92 Cal. 221, 28 Pac. 935; Cheney v. Newberry, 67 Cal. 126, 7 Pac. 444, 445; Phillips v. Goldtree, 74 Cal. 151, 13 Pac. 313, 15 Pac. 451; Wing Ho v. Baldwin, 70 Cal. 194, 11 Pac. 565: Sweeney v. Stanford, 67 Cal. 635, 8 Pac. 444; Quan Wye v. Chin Len Hee, 123 Cal. 185, 55 Pac. 783; Hartzell & Co. v. Warren, 11 Ohio Cir. Ct. R. 269.
The jurisdiction and remedies conferred by the Constitution and statutes of the United States on the national courts are uniform throughout the different states of the Union, and cannot be impaired, restricted, or destroyed by state legislation, which prescribes a condition only by compliance with which a partnership having a fictitious name may commence and maintain litigation in its own courts. In Dunlop v. Mercer, 156 Fed. 545, 551, 86 C. C. A. 435, 441, it is said:
“By section 8, article 1, of the Constitution, the Congress was empowered to establish ‘uniform laws on the subject of bankruptcy throughout the United States,’ and by the bankruptcy law of July 1, 1898 (e. 541, 30 Stat. 544 [U. S. Comp. St. 1901, p. 3418]), jurisdiction was conferred on the District Courts of the United States to ‘cause the estates of bankrupts to be collected, reduced to money and distributed, and determine controversies in relation thereto, ex-*505 cent as heroin otherwise provided’ This jurisdiction was not granted by, and it cannot l>o revoked, ¡nuíulled, or impaired by, tlie law or act of ¡my state.”
The same principle is announced in: Barber Asphalt Pav. Co. v. Morris, 132 Fed. 947, 948, 66 C. C. A. 55, 67 L. R. A. 161; Painter v. Napoleon Tp. (D. C.) 156 Fed. 289; Butler Bros. Shoe Co. v. U. S. Rubber Co., 156 Fed. 1, 84 C. C. A. 167, and cases there cited. The action may be maintained.
Section 3185, Rev. St. Ohio, provides that, within 30 days after a principal contractor shall have filed an affidavit for a mechanic’s lien on the owner’s property, he shall notify the owner, his agent or attorney, that he claims such a lien, and, if he fail so to do, the lieu secured shall be null and void. The Farmers’ Supply Company, in the improvement of whose elevator the material furnished by the lumber company was ttsed, having made an assignment in trust for the benefit of its creditors to its president, who had been active in securing the elevator repairs, one of the lien claiming petitioners gave him, while acting as president and assignee, oral notice of the lumber company’s claim to a lien. The statute does not specify the kind of notice to be given, but, wherever written notice is required by the Ohio mechanic’s lieu law, such requirement is expressed in clear and unmistakable terms or by necessary implication. “Notice” means “information by whatever means communicated; knowledge given or received.” United States v. Foote, 13 Blatchf. 418, Fed. Cas. No. 15,128; White v. Fleming, 114 Ind. 573, 16 N. E. 487. Where a mechanic’s lien statute requires notice to the owner without using any language to indicate that written notice is intended, an oral notice is sufficient. McLeod v. Capell, 7 Baxt. (Tenn.) 196; Vinton v. Builders’ & Manufacturers’ Association, 109 Ind. 351, 9 N. E. 177; Boisott on Mechanics’ Lieus, § 355; White v. Fleming, supra; 21 Am. & Eng. Ency. Raw, 583; Treadway & Marlatt’s Ohio Mechanic’s Lien Raw, § 180.
The Supply Company, through oversight, did not affix its corporate seal to the mortgage given by it to the Citizens’ Banking Company. The use of private seals in Ohio has been abolished. Section 4, Rev. St. Ohio. Seals are no longer necessary on deeds and mortgages (sections 4106, 1107), excepting in those instances in which some statute specifically provides otherwise. It is now well settled that, whenever a corporation has the power to make a contract and is not restricted in the manner of so doing, it stands as to such contract on the same footing as a natural person, and in relation thereto it may adopt, the same modes immediately calculated to accomplish its purpose which an individual could adopt. The Supply Company had the power to execute the mortgage, and there being no statutory or charter provision directing the mode of procedure, and the mortgage to the hank having been executed in the same manner as that of an individual, it cannot he defeated for want of a corporate seal. Cook on Corp. (4th Ed.) § 721; Thompson on Corp. §§ 5047, 5052; 10 Cyc. 1006, 1007; Blunt v. Walker, 11 WE. 319, 78 Am. Dec. 709; Murray v. Beal, 23 Utah, 548, 65 Pac. 726; Gottfried v. Miller, 104 U. S. 521, 26 L. Ed. 851; Poyser & Sou v. Standard Pav. Brick Co., 46 Wkly.
At a meeting of the board of directors of the Supply Company held in May, 1907, it was unanimously agreed that if Stine and Lenz would indorse two notes of the company for $1,000 and $1,500, respectively, to enable it to make needed repairs on its elevator, the company would secure them by mortgage on such property. No resolution to that effect was offered or adopted, and no record was made of the proceedings had at the meeting. Stine and Lenz, believing the company to be solvent, under the assurance that they would be protected by mortgage, indorsed the notes, each due 90 days after date, by guaranteeingtheir payment at maturity. The notes were discounted by the company at banks, and the proceeds were applied in payment of such repairs. On June 24th the board passed a resolution that Stine and Lenz be given a mortgage “on elevator to secure note given for repair of same/' and on the day following the president and secretary of the company executed and delivered to them a mortgage conditioned as follows:
“Provided, nevertheless, that whereas, the said -Farmers’ Supply Company are indebted to the said Jacob Stine and Isaac Lenz and have executed their promissory note for the payment of $2,500, payable ninety days after date, with interest at six per cent.: Now, if the said Farmers’ Supply Company shall pay said sum of money, with the interest, when due, then these presents shall be void.”
Stine and Lenz paid the notes at maturity; each advancing one-half of the money. As joint petitioners, they assert a mortgage lien on the premises for the $2,500 and accrued interest. This was permissible, Bates, PI. & Pr. 2183, 2184.
Under objection, the mortgage and notes were admitted in evidence,, and witnesses were permitted to testify to the agreement reached at the May meeting by the directory, and that the intention in giving the mortgage was to secure Stine and Lenz as indorsers of the two notes. The conditioning clause does not correctly describe the consideration of the mortgage, nor does it or the resolution of the board give any information as to the date of the note, nor, except by implication, to whom the note mentioned in it was delivered. It cannot, however, be successfully claimed that the instrument as between the parties is not a mortgage. Neither the corporation nor its creditors are injured by the fact that the mortgage describes one $2,500 note, instead of two notes aggregating that amount, or by the fact that the mortgage Suggests, if it does not actually describe, an indebtedness to the mortgagees, instead of reciting that its purpose is to indemnify them against loss for having guaranteed the company’s notes. It is a familiar rule that a mortgage, duly executed, delivered, and recorded is not invalid as to third parties from want of certainty in describing the debt to be secured, when, upon the ordinary principle of allowing extrinsic evidence to apply to a written contract and its proper subject-matter, the debt intended to be secured may be shown as between the parties themselves. Hurd v. Robinson, 11 Ohio St. 232; Jones on Mortgages, § 352; Gill v. Pinney, Adm’r, 12 Ohio St. 38; Greiss v. Wilkop, 12 Ohio Cir. Ct. R. 481; Lattimer v. Mosaic Glass Co., 13 Ohio Cir. Ct. R. 163, 169.
It is claimed that the addition of the proceeds of the two notes to the assets of the corporation was not made by Stine and Renz, the guarantors of the notes, but by the banks that discounted them; that there was no present consideration for the mortgage; and that consequently it is not protected by the saving provision of section 67d of the bankrupt act. Manifestly Hie money realized on the notes would not have reached the coffers of the corporation but for the indorsement of Stine and Renz. They became its creditors contingently at the time of indorsement. Remington on Bank. §§ 644-, 1310, an'd cases cited. If an obligation be assumed upon a valid agreement that the bankrupt will execute a mortgage upon certain specific property to secure the assumed liability, a mortgage executed and delivered in pursuance of such agreement, within a reasonable time thereáfter, is valid, and the liability assumed will be deemed a present consideration for the conveyance. Douglass v. Vogelcr (D. C.) 6 Eed. 53; Gattman v. Honea, 10 Fed. Cas. 89, No. 5,271; In re Jackson Iron Mfg. Co., 13 Fed. Cas. 260, No. 7,153; Sabin v. Camp (C. C.) 98 Fed. 974; Loveland on Bank. (3d Ed.) 585; Wilder v. Watts (D. C.) 138 Fed. 426; In re Grandy & Son (D. C.) 116 Fed. 318; Remington on Btmk. § 1372. The reason for this is found in the general law that where a party by express agreement sufficiently indicates an intention to make specific property a security for a debt or other obligation, and promises to transfer such property as security, equity, regarding that as done which ought to he done, creates an equitable lien upon the property designated., Wilder v. Watts, supra.
Whether the mortgage was executed and delivered in pursuance of a valid, prior, enforceable contract, having its inception at the May meeting of the directory, legally obligating the company to make the conveyance, and whether the adoption of the resolution at the June meeting, and the subsequent execution and delivery of the mortgage, was such a ratification as related back to the beginning of the transaction so as to defeat the intervening rights of third parties, strangers to the transaction, and other creditors of the company (Murray v. Beal, supra; In re Kansas City Stone, etc., Co., 14 Fed. Cas. 128, No. 7,610; Holland v. Drake, 29 Ohio St. 441; Coleman v. Darling, 66 Wis. 155, 28 N. W. 367, 57 Am. Rep. 253), need not be considered, unless the circumstances were such that the giving and acceptance of the mortgage constituted a preference under sections 60a and 60b of
The referee is affirmed, and an order may be drawn accordingly.