Cumberland County Power & Light Co. v. Gordon

• Decision Date: 21 July 1939
• Citation: 7 A.2d 619
• Parties: CUMBERLAND COUNTY POWER & LIGHT CO. v. GORDON.
• Court: Maine Supreme Court

7 A.2d 619

CUMBERLAND COUNTY POWER & LIGHT CO.

v. GORDON.

Supreme Judicial Court of Maine.

July 21, 1939.

Exceptions from Superior Court, York County.

Action by Cumberland County Power & Light Company against Benjamin M. Gordon, to recover purchase price of certain restaurant equipment. On defendant's exceptions to the acceptance of referee's report for the plaintiff.

Exceptions sustained.

Argued before DUNN, C. J., and BARNES, THAXTER, HUDSON, and MANSER, JJ.

John S. S. Fessenden and Brooks Whitehouse, both of Portland, for plaintiff.

Berman & Berman, of Lewiston, for defendant.

HUDSON, Judge.

On defendant's exceptions to acceptance of Referee's report.

The plaintiff sues to recover compensation for "electric light and cooking service" and balance of purchase price for sale of certain restaurant equipment. As to both, the Referee reported for the plaintiff.

Late in 1934 or early in 1935, the defendant, together with Max Gordon and Samuel Gordon, then all of Lewiston, formed a copartnership "for the purpose of Delicatessen & Restaurant in the city * * * of Lewiston under the partnership name of Gordon's Delicatessen." On May 27, 1935 they made and caused to be filed in the city clerk's office in Lewiston certificate of association in accordance with Section 4 of Chapter 44, R.S. 1930.

They carried on the partnership business in Lewiston until April, 1936 when the defendant agreed in writing to retire and sold all his rights and interests in the partnership to his copartners. Upon his retirement, however, he did not file in the clerk's office a withdrawal certificate.

Following his withdrawal, Max and Samuel Gordon transacted business under the same name in Lewiston.

In April, 1937 Max and Samuel opened a "delicatessen and restaurant" in Portland and so conducted it. No new certificate was filed in the clerk's office in Portland.

Following the defendant's withdrawal, he had nothing whatever to do with the business either in Lewiston or in Portland.

The items sued were contracted at the Portland store. The restaurant equipment was purchased under a conditional sales contract which was signed:

"Gordon's Delicatessen

By Max Gordon

By Sam Gordon

608 Congress St.

Portland, Maine"

It is not contended that the defendant personally had anything to do with this purchase or with the furnishing of the electric service.

On December 7, 1937 Max and Samuel made a common law assignment of the assets to one Lessard for the benefit of creditors. The plaintiff, notified of the assignment, refused to assent to it, but afterwards did accept and collect a dividend check from the assignee, designated as "First & Final Dividend—9.6%," signed "Gordon's Delicatessen by: Alton A, Lessard Assignee," and bearing on its back the following notation: "In full satisfaction of all claims against Max Gordon, Sam Gordon & Alton A. Lessard, Common Law Assignee."

The plaintiff (as under the conditional sales contract it had the right to do) repossessed the property, sold it, and credited it on its indebtedness.

The plaintiff bases its rights to recover on said Section 4 which reads: "Whenever two or more persons become associated as partners or otherwise for the purpose of engaging in any mercantile enterprise, they shall, before commencing business, deposit in the office of the clerk of the city or town in which the same is to be carried on, a certificate signed and sworn to by them, setting forth their names and places of residence, the nature of the business in which they intend to engage, and giving the name under which they are to transact business. Whenever any member of such partnership or association withdraws therefrom, he may certify under oath to the fact of such withdrawal, which certificate shall be deposited in the clerk's office where the partnership certificate is recorded; and he shall conclusively be presumed to be a member of the firm or association to the time of his depositing such certificate."

Under this statute, because of the failure to file the withdrawal certificate, there could be no question as to the liability of this defendant had the remaining partners, after his withdrawal, contracted new indebtedness in its Lewiston store within the actual or apparent scope of the partnership business.

At common law the voluntary assignment of the interest of any member of a partnership at will worked a dissolution. As stated in Smith v. Virgin, 33 Me. 148, at page 156: "In a partnership at common law with no agreement to continue for any specified time, or to qualify in any manner the principles ordinarily applicable, a dissolution takes place on the assignment of the interest of any member."

Also see 20 R.C.L., Section 178, page 954, to the effect that every change in the personnel of a firm works a dissolution and a new partnership is formed whenever a partner retires or a new one is admitted. Also see Story on Partnership, Sections 269, 272, 302, and 307.

As to the common law effect of the dissolution of a partnership, Mr. Story says in Section 334: "* * * the dissolution of a partnership, whether it be by the voluntary act or will of the parties, or by the retirement of a partner, or by mere efflux of time, will not in any manner change the rights of third persons, as to any past contracts and transactions with, or on account of the firm; but their obligation and efficacy and validity will remain the same, and be binding upon the partnership in the same manner, as if no dissolution had taken place. In the next place such a dissolution will not absolve the partners from liabilities to third persons for the future transactions of any partners, acting for, or on...