Tilge v. Brooks

16 A. 746, 124 Pa. 178, 1889 Pa. LEXIS 1018

• Court: Supreme Court of Pennsylvania
• Decided: February 11, 1889
• Status: Published

Opinion

Opinion,

Mu. Chief Justice Paxson:

The defendant below, Matthew Brooks, was sued as a co-partner with W. Howard Brooks and A. May Stevenson, for a debt admittedly due by the firm of W. Howard Brooks & Stevenson.' The grounds upon which this claim rested are these: Matthew Brooks had intended and attempted to form a partnership with William H. Brooks and A. May Stevenson in 1871, as a special partner. This special partnership was in fact a renewal of one made in 1866. The renewed partnership expired in 1876, when Matthew Brooks retired from the firm. The sales, for which it is sought to make him liable, were made in 1881, or about five years after dissolution of the firm of which he had been a member. When he retired no notice was given of the dissolution.

It was claimed, and I do not understand it to be disputed, that there were such irregularities in the formation of the special partnership, as to make the special partner liable to the penalties provided by the act of assembly in such cases. The eighth section of the act of March 21,1836, P. L, 143, in regard to limited partnerships, provides that “ If any false statement be made in such certificate or affidavit, all the persons interested in such partnership shall be liable for all the engagements thereof, as general partners.”

There can be no doubt that during the time the defendant Brooks was a member of this firm he was liable for its engagements, by reason of his non-compliance with the statute. The plaintiffs below claim that he was in point of fact a general partner and was liable, after he left the firm, to creditors, by reason of his failure to give notice of his withdrawal, and a number of authorities are cited in support of this proposition; amongst others, Andrews v. Schott, 10 Pa. 47, where it was said by this court: “ For unless the conditions of the act are substantially observed, all the defendants are general partners.” The language quoted from Andrews v. Schott would seem to be justified by the phraseology of the act of 1886, as, for instance, if the special partner transact any business on account of the partnership, or be employed for that purpose as agent, attorney, or otherwise, he shall be deemed a general partner. Like instances might be given from other sections of the act. But when the act declares^that under certain circumstances a special partner shall be deemed a general partner, it certainly does not mean that he is in fact a general partner; indeed, there is in the language an implication that he is not. Nor do I see how the legislature can make a man a member of a firm without his consent and the consent of the firm. It may, indeed, make him liable for the debts of a firm as though he were a general partner, and this is all the legislature probably intended to do. The confusion upon this subject may be occasioned by the inaccurate language sometimes employed in referring to it. A man who is not a member of a firm may yet make himself liable to its creditors by holding himself out to such creditors as a partner. Yet in fact he does not become a partner; he is merely liable as a partner.

There being no general partnership so far as Brooks was concerned, only a liability on his part for the debts of the limited partnership because of its irregularities, we see no reason why he should have given notice of the dissolution of a partnership which never existed. Haviland v. Chace, 89 Barb. 283, was decided upon the New York statute and is not consistent with our own act of 1836. Nor are authorities elsewhere of much service to us in construing it. Under our statute no general partnership was formed; it does not say that an omission to comply with its requirements shall have the effect of creating a partnership not intended by the parties.

Judgment affirmed.