Laflin & Rand Co. v. Steytler

146 Pa. 434 | Pennsylvania Court of Common Pleas, Alleghany County | 1892

Opinion,

Mr. Justice Mitchell:

The limited association act of June 2, 1874, P. L. 271, was a wide departure from the principles of the common law governing partnerships and the liability of the individual partners to the firm creditors. It was not the first, nor has it been the last of such changes. On the contrary, it is but one step in a line of concessions to the business views and habits of a commercial age and community, and it should be construed in the spirit of its enactment. A review of the course of legislation may help us towards the true intent of the statute.

The act of March 21, 1836, P. L. 143, was an elaborate scheme for the introduction of -a new kind of partnership, not previously known to the law. One or more general partners were required, and they alone were authorized to transact the business or sign the firm name, and their names alone, without . the word company or other general term, could appear in the firm title. The special partners must contribute actual cash as part of the capital, could not withdraw any part of it during the term, nor receive profits or even interest which lessened its amount; and any violation of these provisions, or any participation in the transaction of the business with the public, or the appearance of their names in the firm title, subjected them to be treated as general partners. A certificate of the facts had to be sworn to, acknowledged in the manner of acknowledgment of deeds, and recorded, before the partnership was legally constituted; and any change as to any fact set forth in the certificate must be again certified in like manner, on penalty of liability of all parties as general partners. The influence of common-law ideas of partnership is apparent throughout the act. It was manifestly regarded as an experiment, to be entered upon cautiously and hedged about with restrictions. But the act met the needs of the community, and in the language of the present hour, it had come to stay. After more than half a century it is_ still on our statute book as the basis of the system, and every change since has been a step forward in the same direction, and not backward. By joint resolution of April 16, 1838, P. L. 691, a partner, general or special, or his executor in case of his death, could, with the assent in writing of the others, sell and assign his interest without causing a dissolution, such alterations being certified, etc., as before. By the act of April 21, 1858, P. L. 383, the sale of a partner’s interest, or an increase of the capital, either by increased contributions from the original partners or by taking in new special partners, could be provided for in advance in the articles of partnership or in a separate instrument, such changes being required to be certified and recorded as before; but, most notable of all, the omission to record was not to work a dissolution as before, or subject the special partners to general liability. The spirit of progressive legislation had discovered that changes which left the business intact, or even increased in capital, did not demand the punishment of special partners by imposing general liability for neglect of mere formalities. The act of March 30, 1865, P. L. 46, made two important further changes: The firm title, where there were more than two general partners, may contain the words “ and company,” (previously forbidden,) the names in full of all the partners special as well as general being put upon a sign; and the special partners were allowed to contribute their share of the capital in goods, the value, however, being first appraised under oath by an appraiser appointed by the Court of Common Pleas. By the act of February 21,1868, P. L. 42, the firm name may consist of the name of any one general- partner, with the addition “ and company,” notwithstanding the name may be common to such general partner and any special partner, but the sign must be put up as required by the act of 1865.

This was the state of the law when the legislature passed the act of June 2,1874, P. L. 271, for the' fbrmation of partnership associations with .limited liabilities, under which the present -defendants were organized. By this act, no general partners are required, nor is any restriction -put upon the firm name or title, except that the word “ limited ” must be the concluding word. The persons desiring to form the association must sign and acknowledge a statement, setting forth inter alia “ the full names of such persons.” The act speaks only of “ subscribing and contributing capital,” total amount, “ and when and how to be paid,” etc. But, this being held to mean money capital only, a supplement' was passed May 1, 1876, P. L. 89, authorizing contribution “ in real or personal estate, mines, or other property, at a valuation to be approved by all the members.” The actlof 1874, it will be seen, was not a mere amendment or supplement to anything that went before, but, like the act of 1886, a new scheme, carefully and elaborately drawn, creating a new kind of artificial person, standing between a limited partnership as previously known and a corporation, and partaking of the attributes of each. It was, however, a step forward in the same line of legislative recognition of business demands uniformly pursued since the start, in 1836.

With this review, we may now turn to the two points specially involved in the present case. And first, we are to inquire what it meant by the full names of the members. This phrase first made its appearance in the act of 1865, in connection with the requirement that there should be “ put up in some conspicuous place on the outside and in front of the building,” a sign on which should be painted in legible English characters, “all the names in full of all the members of said, partnership, stating who are general and who are special partners.” Previously to this act, only the names of the general partners could appear in the firm title, and “ without the addition of the word company or any other general word.” This act required the use of the names of all the general partners except where there might be more than two, in which case the names of any two could be used with the addition of the words “and company,” and the sign, as already noted, “ stating who are general and who are special partners.” This last requirement is the key-note of the intent; it was to give information to the public as to the persons who composed the firm, and the capacity in which they stood connected with it, as generally or only specially responsible. The object aimed at was the identification of the person, and the requirement of his full name had nothing further in view. A man’s name is the designation by which he is distinctively known in the community. Custom gives him the family name of his father, and such prsenomina as his parents choose to put before it, and appropriate circumstances may require Sr. or Jr. as a further constituent part. But all this is only a general rule from which the individual may depart if he chooses. The legislature in 1852 ^* provided a mode of changing the name, but that act was in affirmance and aid of the common law, to make a definite point of time at which a change shall take effect. But without the aid of that act a man may change his name or names, first or last, and when his neighbors and the community have acquiesced and recognized him by his new designation, that becomes his name. Two noted examples are at hand for illustration. The blunder of the friendly congressman who nominated him to West Point transposed and altered the names by which General Grant has gone into history, and considerations of convenience or taste have induced President Cleveland to omit one of the names his parents bestowed upon him. A name, therefore, is the title used for the identification of an individual, and the intent of its requirement in full is certainty of such identification. The full name, therefore, is no more than the whole of such title, as it is used by himself and his neighbors for such purpose. To construe the statute to require the literal and absolute following of the entire list of names which the person may have had bestowed, upon him, would be giving it not only a veiy narrow and technical construction, which serves no purpose of the act, but even one which might tend to defeat its real intent. A statement signed “ Stephen Grover Cleveland ” would not create certainty, but doubt, as to its author.

The act of 1874, as already said, made no restrictions upon the firm title, except the compulsory termination “ limited,” and omitted the requirement of the sign, but in lieu thereof substituted the statement containing the “ full names ” of the persons composing the association. This phrase was borrowed from the act of 1865, and its intent was the same in both, to secure the identification of the individual by having his name plainly Set forth, in the full form by which the community would recognize him. The appellants gave evidence that the names as signed to the statement were in the form habitually used by them in business and by which they were generally known in the community. This, if proved, was a sufficient compliance with the statute.

The act of 1836 required the special partners to contribute actual cash, and for nearly thirty years this requirement was absolute and unyielding. The act of 1865 for the first time permitted goods to be put in as capital, but'required their value to be fixed by a sworn appraiser appointed by the court. The act of 1874, as amended in 1876, did away with all these restrictions, and allowed the capital to be contributed in “ real or personal estate, mines, or other property,” without any other check as to the valuation than the agreement of all the subscribers. The statement is to certify the kind of capital contributed, whether money or property, and in the latter case, a schedule with a description and valuation. By the plain terms of the act the valuation is in the discretion of the parties, and (assuming, of course, good faith) may be sanguine or cautious: Rehfuss v. Moore, 134 Pa. 462. The description, therefore, is plainly for the information of parties interested, so that they may if they desire, have the data for their own judgment of value. Accordingly it has been uniformly held by this court .that a vague, or general, or lumping description is not sufficient : Maloney v. Bruce, 94 Pa. 249; Vanhorn v. Corcoran, 127 Pa. 255. It is not intended, however, nor would it be practicable, in many cases where an existing business is the basis of the new firm, to require minute specification of details that may change from day to day. Certainty to a fair business intent is the safe, practical criterion, as was indicated in Rehfuss v. Moore, 184 Pa. 462, where a lumping valuation of six distinct patent rights, at a very high figure, was sustained on the ground that they were all expected to be used in the operation of a single device embodying the principle of all, and were considered valuable only in combination. The schedule in the present case described several tracts of land which it appears were acquired by different titles, but which had been merged together and formed into a coal-works called the Buffalo Mines. The schedule valued them as one tract. It also set out certain buildings, tenement-houses, engines, etc., in considerable but not minute detail, valuing each item separately, but as a part of one entire plant for the operation of coal mining. It is claimed that the various items of property are sufficiently specified and described for a creditor or the sheriff to go upon the land and identify or levy upon them. This was sufficient. The act expressly mentions “ mines ” as the subject of contribution as capital, and it cannot be intended that every pick and shovel, or mule and harness, should be specified and valued separately. A fair business description of the mine and its equipment is all that the statute requires.

Judgment reversed, and venire de novo awarded.

* Act of April 9, 1852, P. L. 301.