Edwards v. Warren Linoline & Gasoline Works

• Decision Date: 15 June 1897
• Citation: 47 N.E. 502,168 Mass. 564
• Parties: EDWARDS v. WARREN LINOLINE & GASOLINE WORKS, Limited.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

168 Mass. 564

47 N.E. 502

EDWARDS v. WARREN LINOLINE & GASOLINE WORKS, Limited.

Supreme Judicial Court of Massachusetts, Suffolk.

June 15, 1897

COUNSEL

Robert

B. Kendall, for appellant.

Lauriston L. Scaife and Bancroft G. Davis, for appellees.

OPINION

LATHROP J.

It is conceded by the plaintiff that as the jurisdiction of the court depends upon charging the Walworth Manufacturing Company as trustee, inasmuch as there was no service upon the principal defendant, the action was properly dismissed upon discharging the trustee. The question, then, is whether the trustee was properly discharged, and this depends upon whether the principal defendant, an association formed under the laws of the state of Pennsylvania, is a partnership or a corporation. The trustee's answers to interrogatories refer to Brightly's Purd.Dig. (12th Ed.) 1086-1088, and to the cases, of Eliot v. Himrod, 108 Pa.St. 569 and Sheble v. Strong, 128 Pa.St. 315, 18 A. 397, as containing the law relative to the statement in the answer that the principal defendant was a partnership, and not a corporation. From the Digest it appears that such an association is styled a "partnership association," and not a corporation. By the terms of the various acts which have been passed upon the subject, such an association may be formed by three or more persons. The capital is alone to be liable for the debts. There is no personal liability of the members, except to the extent of any unpaid subscription, if certain provisions of the act are complied with. "Interests in such partnership associations" are declared to be personal estate, and are transferable, under such rules and regulations as shall from time to time be prescribed; but, if there are no such rules and regulations the transferee of any interest in any such association is not entitled to any participation in the subsequent business of the association, unless elected to membership therein, by a vote of a majority of the members in number and value of their interests. The business is to be conducted by a board of managers. The duration of the association may be fixed by the articles of association, but is not to exceed 20 years. Power to adopt and use a common seal is given in case the association has occasion to execute a deed of conveyance or bonds and mortgages. Land sold to the association, or by it is required to be conveyed in the name of the association. It is further provided: "Said association shall sue and be sued in their association name; and, when suit is brought against any such association, service thereof shall be made upon the chairman, secretary, or treasurer thereof, which service shall be as complete and effective as if made upon each and every member of such association." In Eliot v. Himrod, 108 Pa.St. 569, 580, it is said by Mr. Justice Trunkey, in delivering the opinion of the court: "The formation of a limited partnership association is materially different from the creation of a corporation. Such association is treated in the statute as a partnership, which, upon the performance of certain acts, shall possess specified rights and immunities. In contemplation that the association may consist of many members, for convenience it is clothed with many of the features and powers of a corporation, such as the right to sue and be sued, grant and receive, in the association name. But no man can purchase the interest of a member, and participate in the subsequent business, unless by a vote of a majority of the members in number and value of their interests. No charter is granted to the persons who record their statement." Sheble v. Strong, 128 Pa.St. 318, 18 A. 397, is to the same effect.

If the question presented were an open one in this commonwealth, it might well be held that such an association could be considered to have so many of the characteristics of a corporation that it might be treated as one. At common law, a joint-stock company formed for business purposes is considered in this commonwealth merely as a partnership. Tappan v. Bailey, 4 Metc. 529 (Mass.); Tyrrell v. Washburn, 6 Allen, 466. The same rule has been applied to joint-stock associations formed under the laws of the state of New York, which do not differ, in any essential respect, from the laws of Pennsylvania. Taft v Ward, 106 Mass. 518, 111 Mass. 518; Bodwell v. Eastman, 106 Mass. 526; Gott v. Dinsmore, 111 Mass. 45, 51; Railroad v. Pearson, 128 Mass. 445. See, also, Frost v. Walker, 60 Me. 468; Dinsmore v. Railroad, 32 Leg.Int. 388, 11 Phila. 483, and Fed.Cas. No. 3,921. In Taft v. Ward, 106 Mass. 518, 524, speaking of the New York statutes, it was said by Chief Justice Chapman: "These statutes provide, in substance, that any association consisting of seven or more shareholders or associates may sue and be sued in the name of the president or treasurer; that in such suit a judgment may be rendered against the company; and until an execution is issued against the company and returned unsatisfied, no action shall be maintained against individuals. These statutes seem to apply to all co-partnerships consisting of seven or more members. The members of such companies are authorized to hold their interests in shares, which are assignable like shares of stock in a corporation, and the action against the members is regarded as supplementary to the action against the company. Waterbury v. Express Co., 50 Barb. 157; Robbins v. Wells, 1 Rob. (N.Y.) 666. So far as these statutes relate to the procedure in courts for the recovery of debts, they are limited to the state of New York; for each state adopts its own forms of remedy. Story, Confl.Laws, §§ 556-558. The plaintiff could not in this commonwealth bring an action against the president or secretary, and obtain a judgment against the company by its name; nor could he bring an action against the members, or any of them, as a supplement to such an action. In order to do so, we must hold that the statutes of New York prescribing forms of action are in force here. In this commonwealth, such a company is a mere co-partnership." There is nothing inconsistent with an association being a partnership that it has shares, or that the shares are transferable, or that the death of a member shall not work a dissolution of the partnership. Phillips v. Blatchford, 137 Mass. 510. See, also, Hoadley v. County Com'rs, 105 Mass. 519; Gleason v. McKay, 134 Mass. 419. The case mostly relied on by the plaintiff is Liverpool Ins. Co. v. Massachusetts, 10 Wall. 566, which was taken to the supreme court of the United States on a writ of error from ...