Lancaster v. Choate
Lancaster v. Choate
Opinion of the Court
The special jurisdiction of this court as a court of chancery, in cases arising under the insolvency laws, is described in St. 1838, c. 163, § 18; St. 1851, c. 327, § 16, applying it to insolvent corporations; and Gen. Sts. c. 118, § 16, which change the phraseology, but do not change the substance of the former provisions. It is not to be regarded as an appellate jurisdiction ; for such a construction, of the law would be contrary to the manifest intent of the legislature, and the existence of such a jurisdiction would create needless delays and embarrassments in the operation of the system. Where a right of appeal is given, as in the case of a creditor whose claim is disallowed, it is given in unequivocal terms, and the appeal is to the superior court. St. 1838, c. 163, § 4. Yet in describing the jurisdiction of this court, and also the process by which parties may apply to the court, and its course of proceeding thereon, the statute employs very comprehensive terms. It is “ a general superintendence and jurisdiction, as a court of chancery, of all cases arising under this act,” and “ in all cases which are not
The reason for making this provision so extensive is to be found in the character of the insolvent laws. They invest courts of inferior jurisdiction, and for a time invested masters in chancery, with an extensive power over the person as well as the ■whole estate and business of an individual alleged to be insolvent, and interfere with the rights of' his creditors, and of persons who have contracted with him. One important object which is expressed by the statute in respect to the jurisdiction of this court is, to establish and maintain a regular and uniform course of proceedings in all the different courts. Another principle, which is so important that the legislature cannot be supposed to have overlooked it, is the right of trial by jury. There was not and could not well be a jury trial established in the courts if insolvency. The delays, perplexities and expense incident to it would have destroyed the value of the system. The jurisdiction conferred on this court was manifestly intended to meet every exigency, whether foreseen or unforeseen. If the inferior tribunal should err as to the law or the facts, any party aggrieved was authorized to apply to this court, by a process adapted to the nature of his case, and might obtain an appropriate redress. His application does not bring the whole case before this court, but merely the point in respect to which he is aggrieved; and when that matter is corrected, everything else remains unchanged in that court. His right to have a decision of that court revised here is not given as a matter of course; but he must first satisfy the court that he has been aggrieved. His right to a trial by jury is not a matter of course; but when a suitable case is presented, this court may frame issues to be tried by a j ury, as in other cases in chancery. And if the party has
The court has had frequent occasion to consider the extent of its jurisdiction. In Partridge v. Hannum, 2 Met. 569, in speaking of the clause in St. 1838, c. 163, § 5, which makes the assignment conclusive evidence of the authority of an assignee to bring suits, Dewey, J. remarks that in a proper case, with proper parties, this court would have full power to arrest the proceedings, if there were an illegal and unauthorized appointment of one as assignee, and to order an injunction as to any suits at law or other proceedings by such assignee. In Kimball v. Morris, Ib. 573, the right of the judge of probate to issue a warrant to a messenger to take possession of all the debtor’s property without notice to him is discussed; and in such case it is admitted that he has a remedy in this court,'if aggrieved. A mandamus was issued to the judge in that case, requiring him to issue a warrant for the examination of the debtor. In Claflin v. Beach, 4 Met. 392, an injunction against further proceedings was granted on the petition of several attaching creditors, on the ground that the debtor had left the Commonwealth before the proceedings were commenced. This decision involved a question of fact. If the decision of the judge of probate that the debtor did reside in his county had been held conclusive as to that fact, there would have been no remedy here, however erroneous his decision might have been. In Davis v. Newton, 6 Met. 537, on the petition of certain creditors of an insolvent debtor, the assignee was directed to make claim to certain promissory notes which were claimed by the wife of the debtor; but her equitable right to a separate provision out of the proceeds was admitted and provided for. Such a case must require an extensive investigation of facts, as well as of the legal rights of various parties. In Stearns v. Kellogg, 1 Cush. 449, on a petition of attaching creditors, the proceedings of the court of insolvency were stayed, and
In all these cases, the views expressed by the court are in conformity with the result to which the court have arrived in this case, namely, that it has jurisdiction to revise and correct the proceedings in respect to the matters set forth in the petition, including the decisions of the judge as to matters of fact. And in this revision we are not limited to the evidence which was before him, but may allow the parties to introduce other evidence. It is a power to be exercised with great caution; not in cases where there has been laches in the court of insolvency, but only where the party complaining can show that he has been aggrieved and has pursued his remedy diligently. In the present case there has been no want of diligence, and the questions presented to the court are of great importance to all the parties interested.
The court are also of opinion that where a limited partnership is formed under Rev. Sts. c. 34 or Gen. Sts. c. 55, if there is a neglect to comply with the provisions of the statute so as to make the special partners liable to creditors as general partners, they are by the terms of the statute made general partners Limited partnerships are not known to the common law. Coope v. Eyre, 1. H. Bl. 37. In this commonwealth, they exist merely by virtue of the statute. The Rev. Sts. c. 34, are very precise in pointing out the duties of the special partner, in order to avail himself of the protection of the statute, and in stating his liability if he fails to comply with its provisions. Section 5 ’irects the publication of the certificate, and closes with the alternative provision, “ and in case said publication be not so made, the partnership shall be deemed general.” The 6th and 7th sections, as to the renewal or continuation of the partnership, and the duty of the special partner to abstain from the management of the business, close with a similar alternative
On looking into the evidence which has been taken in this case, and which is very voluminous, the court are satisfied that it is true, and was made to appear before the court of insolvency,, so that the judge should have found that Whittier was a member of the firm. He commenced as a special partner, but never fully complied with the provisions of the statute. He now avers that he ceased to be a partner when the term expired. But he consented to the publication of an advertisement to which his own name was signed, stating that he continued to be special partner. He allowed cards, which bore his name as a special partner, to be circulated among those with whom the firm was in the habit of dealing. He wrote a letter to the other members of the firm, in which he stated the same fact. His letter to E. Russell & Co. asserted it, with the design that the assertion should be made known to the mercantile community. Documentary evidence is less liable to mistake than verbal
A decree is to be entered vacating the proceedings upon the petition of Woodman, and making the injunction perpetual, and commanding the said Choate to proceed upon the petition of Lancaster against Woodman, Lancaster and Whittier as insolvent debtors.
Reference
- Full Case Name
- George T. Lancaster & others v. George F. Choate & others
- Status
- Published