Osborne v. Barge

• Decision Date: 01 January 1887
• Citation: 29 F. 725
• Parties: OSBORNE and others v. BARGE and others.
• Court: U.S. District Court — Northern District of Iowa

29 F. 725

OSBORNE and others v. BARGE and others.

United States Circuit Court, N.D. Iowa, Central Division.

January Term, 1887

Martin & Wamback and Wright & Farrell, for complainants.

Kamrar & Borye and W. J. Covil, for defendants.

SHIRAS J.

The bill filed in this cause sets forth that on the eighth day of November, 1886, the firm of Barge & King, being indebted to complainants in the sum of $2,529.31 for goods sold, executed their certain promissory note, payable on or before November 9, 1886, for the sum named; and to secure the payment thereof also executed a chattel mortgage upon the property of the firm, the same being signed 'BARGE & KING, by W. T. KING. ' To the bill filed herein, for the purpose of foreclosing this mortgage, Barge &amp King, B. F. Barge, W. T. King, and Robert Fullerton are made parties defendant; and B. F. Barge and Robert Fullerton answer the bill, setting forth that on the sixth day of November, 1886, the firm of Barge & King, composed of B. F Barge and W. T. King, being wholly insolvent, the partners mutually agreed that a general assignment, for the benefit of their creditors, should be made by the firm to Robert Fullerton, as assignee; that the partners went to the office of an attorney, and directed him to prepare the necessary papers to complete such assignment; that the said W. T. King prepared and signed the schedule of assets and liabilities intended to be attached to the deed of assignment when prepared; and that about 8 o'clock A.M. of November 8th the said assignment was completed, the firm name being signed to the deed by B. F. Barge. It is also averred that the mortgage to complainants was not executed until about 10 o'clock A.M. of November 8th, at which time the firm of Barge & King had ceased to exist; that said King had no authority to execute the mortgage in the firm name, the same being done without the knowledge or assent of said Barge; and that the mortgage is consequently invalid. Fullerton, the assignee in the deed of general assignment, sets forth the execution and delivery of the deed, his acceptance of the trust thereby created, and avers that, as against such assignment, the mortgage is of no effect. It appears, therefore, that, the firm being insolvent, one partner executed a deed of general assignment, and the other a chattel mortgage to the complainants; and the exceptions to the answer present the question whether either one, and, if so, which, of these instruments, is valid, under the state of facts set forth in the answer.

As a general rule, it is held that each member of an ordinary partnership has authority, as the agent of the firm, to do such acts as are necessary or usual in the transaction of the business in the ordinary way; but that, as to acts not in the furtherance of the business of the partnership in the ordinary way, but which may put an end to the same, or the firm business and property from the partners, it is necessary, to sustain the validity of such acts, that it appear that the same were done with the assent of all the partners. As the effect of a general assignment for the benefit of creditors under the Iowa statutes is to convey all the property of the assignors, not exempt from execution, to the assignee, and to terminate the control of the assignors over such property, it follows that such an assignment, when lawfully made by a firm, practically terminates...