Steinhart v. Fyhrie
Steinhart v. Fyhrie
Opinion of the Court
This is an appeal by the plaintiffs from the judgment of the district court, sustaining a demurrer to the following complaint:
“ The plaintiffs complain against the defendants and allege: That on the 13th day of November, 1883, the said William Steinhart, Israel Steinhart, Charles Adler and
“Plaintiffs further allege that on the 9th day of November, 1883, the said Eeinhold Kleinschmidt and Carl Kleinschmidt and Louis Hillebrecht commenced an action
“And the plaintiffs allege further that on the 30th day of October, A. D. 1888, the said Henry Burfiend, Christopher Burfiend, and L. 0. Fyhrie, partners under the firm name and style of ‘L. C. Fyhrie & Co.,’ commenced an action in this .court against the said Davis & Shinnick, by filing a complaint against them, claiming that there was due to them from said Davis & Shinnick the sum of seven thousand six hundred and forty-one dollars, besides interest; and on the same day procured to be issued in said action an attachment against all of the property of said Davis & Shinnick, which attachment the
“And the plaintiffs further allege that, after the execution and delivery of the said assignment to the said L. 0. Fyhrie & Co., the said L. C. Fyhrie entered into and took possession of all the said personal property and real estate mentioned in the said assignment, and remained in possession thereof, and had the full control and possession thereof, until the 6th day of November, A. D. 1883, as assignee under the said assignment, on which last-mentioned day he, the said Louis C. Fyhrie, assignee as aforesaid, and one of the plaintiffs in' said suit of L. 0. Fyhrie & Co. v. said Davis & Shin-nick, and acting for them, and while he was so in possession of the said property, mentioned and described in the said assignment, placed the said attachment, which the
“And plaintiffs further allege that the said L. 0. Fyhrie & Co., defendants above named, have procured to be issued on the judgment obtained by them against the said Sewell Davis and Jeremiah Shinnick, an execution, and are about to cause the said personal property and real estate so assigned to them by said Sewell Davis, as aforesaid, in the firm name of Davis & Shinnick, to be sold under the said execution, and are threatening so to do, and to apply the proceeds of said sale to the payment of the judgment aforesaid. And the said plaintiffs allege that the said attachment so caused to be issued by the said L. C. Fyhrie & Co. was improperly and fraudulently, by the said L. C. Fyhrie & Co., levied and caused to be levied upon the said goods, chattels, wares and. merchandise, and real estate ; that the said Louis 0. Fyhrie had
“(1) That the said attachments of the said L. 0. Fyhrie et al., defendants above named, be set aside and dissolved.
“(2) Or that the lien of said attachments be declared to be subsequent to and subject to the attachments of the said plaintiffs William & I. Steinhart & Co. and the plaintiffs Kleinschmidt Bros. & Co., and they have priority over the said attachments and executions of the said L. C. Fyhrie, Henry Burfiend and Christopher Burfiend, and be first paid out of the proceeds of any sale or sales.
“(3) That the said L. C. Fyhrie & Co. maybe ordered, adjudged and decreed to pay over to said plaintiff's the full amount due to them, respectively, on the said judgment and executions, before making any application of such moneys or proceeds of the said goods, wares and merchandise, or real estate, upon the said indebtedness to them, the said L. 0. Fyhrie & Co.
(3£) That the defendant W. D. Cameron, sheriff'of said Meagher county, be ordered to pay over all moneys in his hands, or which may come into his hands, towards the payment and satisfaction of the respective executions of said plaintiffs before making any payment to the said L. C. Fyhrie & Co., and which he has received or may receive on any sale or sales of the property of said Davis & Shinnick, in his possession, custody or control as such sheriff.
“(4) That the said plaintiffs-herein may be declared to be entitled to satisfaction of their respective claims, notwithstanding the said assignment, and have priority over the said defendants L. C. Fyhrie & Co.
“ (5) Or that if said assignment should not be decreed to be void, waived, or otherwise declared invalid, that said L. 0. Fyhrie be declared to be trustee of said plaintiffs, and that he be ordered and decreed to pay to said plaintiffs out of moneys in hand received under said assignment, or which may come into his hands under the same at any time hereafter, the full amount of their respective demands against said Davis & Shinnick, or as much thereof as the said moneys and the proceeds of the property so assigned will amount to, before making any application of the same to the payment of the claims of said L. 0. Fyhrie & Co.
“ (6) That said defendants be adjudged to account for all the property received by the said L. 0. Fyhrie under the said assignment, and the said L. 0. Fyhrie & Co. and
“(7) That a receiver be appointed of all the property and effects of the said Davis & Shinnick.
“(8) That said defendant be required to deliver such money and other property to said receiver.
“ (9) That an order of this court be made that said W. D. Cameron retain in his or their possession, custody and control, all the said property and the proceeds thereof, until the further order of this court.
“(10) That the defendants in the mean time be enjoined from disposing of any of the moneys received or which may be received by them, or either of them, or of the said property, or any of the proceeds thereof.
“(11) And for such other and further relief as the nature of the case may demand, as shall be agreeable to equity.”
“Exhibit B.
“Townsend, Montana, Sept. 14, 1883.
“ Messrs. W. & I. Steinhart & Go., San Francisco — Gentlemen: We herewith send you a statement, at your request of the 27th ult. Having ordered goods of Sprague, Warner & Co., Chicago, we prepared this statement August 26th, thinking it might be required of us. It was not, however, and we received the goods as ordered, day before yesterday. You will doubtless think that we are carrying more on our books than is consistent, which fact we frankly admit; but until the entire system of business in this county undergoes a complete change, it cannot be avoided. Our allowance for bad accounts is liberal, as nearly all who are indebted to us are located here, and are perfectly responsible. Our valuation of property is just what it is worth to us in cash, 'and is not incumbered in any way, and is fully insured. As we did not invoice our stock, the estimated value of*472 it, as per statement, is way below its actual value. We wrote to L. C. Eyhrie for reference, but as I received a telegram last night stating that he is traveling, and will be here in a few days, do not think he has received our letter. If you consider yourselves safe in sending the goods, send them as soon as possible; if not, telegraph, if you please, to that effect, on receipt of this letter, and greatly oblige, Tours truly,
“Davis & Shinnick,
“Per Davis.”
“Exhibit C.
“Townsend, Montana, Sept. 12, 1883.
“To W. & I. Steinhart & Co., San Francisco, Cal.: Have you shipped goods to Davis & Shinnick, of this place; if not, you should, as they are good for amount ordered. L. C. Fyhrie.”
There being no allegations in the complaint that the foregoing'letter and dispatch were sent with a fraudulent intent, this complaint, as we understand it, is not founded upon fraudulent representations, and does not contain the allegations necessary in such pleading, but rests solely upon the defendants’ proceedings in attachment, and under the assignment procured by them, and their subsequent acts connected with them, by which they allege the attachment was merged in the assignment, and the defendants became the trustees of the partnership estate for the benefit of the plaintiffs.
'is the assignment, as it appears in the complaint, unsupported by any allegation setting forth the reason why it was executed by only one of the partners, a nullity? It is not alleged that he had any authority to do so from his copartner, or that his copartner was absent, or that he had intrusted to him the sole and exclusive control and management of the business, or that he was so situated that he must of necessity control it himself, or that it might be inferred from the course of their business, or
■The property was, therefore, subject to attachment, and the question of priority as to the writs is determined by the statute to be in the order of their levy. The filing of ■ the complaint and the levy by Fyhrie & Oo. were prior to those of the other parties to this suit; and they cannot be held as trustees having possession of the property for the benefit of the subsequent attaching creditors of Davis & Shinnick. The presumption does not arise, necessarily, that an assignment by one partner is regular and authorized, but the non-concurrence of the copartner should be explained or accounted for in the complaint, since only thus can that which is illegal and imperfect on its face become worthy of recognition and confidence. Nor is such an assignment made valid by the mere silence of the copartner; and it does not rest with him alone to repudiate it. Until it affirmatively appears that the assignment
A pleading is to be construed most strongly against the pleader, and in the absence of any allegation on the subject it is fair to presume that Shinnick did not authorize or consent to or ratify the assignment, or that there was any controlling circumstance which required and justified the action- of his partner in making it; but rather the contrary. A deed of assignment of the entire assets of a partnership for the benefit of creditors is an act of such importance and solemnity as that public policy would seem to require that it should be executed with full authority in advance, or made under such circumstances as that no question can arise as to, its validity. In this case the assigning partner undertook, not only to convey all the personal property, but the real estate, of the firm. This attempt at the conveyance of real estate could never be made valid b.y acquiescence, by ratification, by necessity, or by their course of business. Such a conveyance must be authorized in advance by power of attorney. Holding, then, as we do, that the assignment as it appears is void, no trust was created in the defendants Fyhrie & Co.; and the argument of the appellant that they cannot abandon their trust created by it falls to the ground. There was nothing to abandon. It was but six days from the date of the assignment until the levy of the attachment upon the property. In this interval Shinnick did nothing to ratify, or even in recognition of, the assignment. And there seems to be no shadow of validity in the supposed trust alleged in the complaint to have been created by the assignment. We
Judgment affirmed.
Concurring Opinion
concurring. In this action, Steinhart'& Co., plaintiffs and appellants, seek to set aside an attachment issued in favor of Fyhrie & Co., and levied upon the goods and property of Davis & Shinnick, and to charge said Fyhrie & Co. as trustees of said property for the benefit of the plaintiffs. It appears that Davis & Shinnick were merchants doing business at Townsend, in the county of Meagher, and were largely indebted to Fyhrie & Co. Wishing to replenish their stock of goods, they applied to Steinhart & Co. to purchase on credit, and in response to their application received a request for a statement of their financial condition, which was given in a letter of September 14th. Two days prior to the date of the letter, Louis 0. Fyhrie, one of the members of the firm of Fyhrie & Co., sent a telegram to Steinhart & Co., in which he represented that Davis & Shinnick were good for the amount of merchandise ordered. Eelying upon the statement of the letter and telegram, Steinhart & Co. sold to Davis & Shinnick a bill of goods amounting to $1,317.25, which were received by them at Townsend about the 1st of October. Subsequently, and on the 30th day of October, Fyhrie & Co. commenced an action; against Davis & Shinnick for the sum of $7,641, and caused an attachment to issue against all the property of Davis & Shinnick, but which attachment was not at that time served. On the next day, October 31st, Fyhrie & Co. procured Davis, one of the partners of the firm of Davis & Shinnick, to execute in the firm name an assignment of all their property to Louis C. Fyhrie, which assignment made Fyhrie & Co. preferred creditors, and under which Louis 0. Fyhrie, as assignee, entered into and took possession of all the property and effects of Davis & Shinnick, and held such possession until
Upon this state of facts, what are the rights of the parties? There is no attack upon the indebtedness of Davis & Shinnick to Fyhrie & Oo., and no question but what the attachment in their behalf to secure the same was regularly and properly issued. The plaintiffs ask to have this attachment set aside for the reason that after the same was issued, and before it had been served by levying upon any property, Davis, one of the partners of the firm of Davis & Shinnick, went through the extraordinary performance of making an assignment of the personal and real property of the firm for the benefit of Fyhrie & Oo., without the knowledge or consent, and, for all that appears, against the wifi, of his copartner, though the assignment may have been made in his presence. There does not seem to be much doubt that such an assignment is void. Steinhart & Co. were not injured by this void assignment. Notwithstanding the assignment they might have commenced their action and had the property attached. It is not alleged that they were in any manner prevented, hindered or delayed in making their attachment by reason of the assignment. If the assigned had taken possession of the property, the assignment being void, such possession would not have hindered or delayed the levy and execution of their attachment in a proper action, in which the assignée was made a party. What reason, then, is there for setting aside the attachment of Fyhrie & Co.?' It was first in time. It was issued upon a valid debt. It was issued before the assignment, and might have been levied then.
Did Fyhrie & Co., by virtue of the allegations of the complaint, become trustees of Steinhart & Co.? There is nothing in the complaint to show that Fyhrie & Co. attached any of the goods that Davis & Shinnick purchased of Steinhart & Co., but if their attachment covered and included all the goods so purchased, did Fyhrie & Co. or Louis 0. Fyhrie thereby become the trustees of Steinhart & Co.? It is alleged that, in the sale of these goods to Davis & Shinnick, the firm of Steinhart & Co. relied upon the statements of Davis & Shinnick contained in their letter, and the representations of Louis 0. Fyhrie contained in his telegram.. What of it? For all that appears in the complaint these statements and representations, at the time they were made, were absolutely and entirely true, and such as those parties might have honestly and conscientiously made. The complaint does not attack the good faith of these persons in making these statements and representations. There is nothing to show that they were untrue. It is not alleged that they were false, or that they were made with a fraudulent intent. But if they were wholly untrue, and made with intent to deceive, it is” not shown that the plaintiffs were in such a position as to have had the right to rely upon them. If they knew that the statements and representations were false, they relied upon them at
Reference
- Cited By
- 2 cases
- Status
- Published