Lieb v. Pierpont
| Decision Date | 07 June 1882 |
| Court | Iowa Supreme Court |
| Parties | LIEB v. PIERPONT & TUTTLE AND ANOTHER. |
OPINION TEXT STARTS HERE
Appeal from Hamilton district court.
This action at law was brought by plaintiff against Pierpont & Tuttle, and an attachment was issued thereon on the ground of the non-residence of defendants, which was levied upon certain land. Service was had by publication and judgment rendered for plaintiff. After judgment Chandler intervened by petition, showing that defendants had no interest in the land attached, which had been, before the attachment, conveyed to him. Upon this petition of intervention a trial was had upon the issues involving the intervenor's interest in and title to the land. No questions except such as pertain to these issues are in the case. The cause upon the intervenor's petition was tried to the court without a jury and a judgment rendered for the intervenor, discharging the attachment levied upon the land. Plaintiff appeals.W. J. Covil, for appellant.
Chase & Chase, for appellee.
1. The evidence shows that defendants, Pierpont & Tuttle, were partners, doing business in Illinois, and that prior to the attachment of the land in question Tuttle executed an assignment of all the property of the firm to intervenor, Chandler, for the benefit of its creditors, the proceeds of the property to be applied pro rata to all. The deed of assignment was executed in the name of the firm and also by Tuttle personally, but without Pierpont's knowledge or assent, and at the time he was in the town where the firm transacted business and where the deed was executed, and where both of the parties lived. It is also shown that Pierpont, as soon as he was informed of the assignment, objected thereto, in a written notice to Tuttle, claiming that the partnership had been dissolved for more than a month prior to the execution of the assignment. Pierpont also gave Chandler, before he had given bond as assignee, a written notice objecting and protesting against his acting under the deed. The land in controversy was the property of the firm, the legal title being held for convenience by Tuttle.
2. We are required to determine whether the deed of assignment executed under these circumstances is valid. The controlling question in the case is this: Has a partner power to execute a general assignment of all the property of the firm for the benefit of all its creditors without the assent, expressed or implied, of his copartner, when he may be consulted upon the subject, and is capable of expressing assent or dissent? It would appear, upon principle. that such power is not possessed by a partner. Under its exercise the business of the firm may be, and under almost all circumstances would be, destroyed, and the partnership itself practically dissolved as to future business. It is true that, theoretically, the assignment is for the purpose of effecting the payment of firm debts, and that the law allows one partner to use the property of the firm to discharge its indebtedness. But this rule of law is applicable to transactions occurring in the ordinary business of the firm, and does not authorize one partner, upon the exercise of his individual discretion, to terminate the business of the copartnership. In a matter of such great importance to each partner both ought to be consulted and be permitted to determine whether the condition of their affairs requires them to transfer all their property and abandon their business. We think the American cases are almost...
To continue reading
Request your trial