In re Farmers' Supply Co.

• Decision Date: 06 May 1909
• Docket Number: 4,044.
• Citation: In re Farmers' Supply Co., 170 F. 502 (S.D. Ohio 1909)
• Parties: In re FARMERS' SUPPLY CO.
• Court: U.S. District Court — Southern District of Ohio

170 F. 502

In re FARMERS' SUPPLY CO.

No. 4,044.

United States District Court, S.D. Ohio, Western Division.

May 6, 1909

John N Van Deman, Geo. R. Young, and D. B. Van Pelt, for trustees.

C. E Swadener, for Rasor Lumber Co. and Lenz and Stine.

Erie J Weaver, for Citizens' Banking Co.

SATERDistrict Judge.

The right of the individuals doing business as partners under the firm name of the 'Rasor Lumber Company' to commence or maintain an action in this court on the mechanic's lien asserted in their intervening petition is disputed on the ground that they have not complied with the requirement of the amendatory act of February 13, 1896(92 Ohio Laws, p. 25;sections 3170-1 to 3170-7, both inclusive, Rev. St. Ohio), which provides that every partnership, excepting certain commercial and banking partnerships, transacting business in Ohio under a fictitious name or designation not showing the names of the persons interested as partners in such business, must file with the clerk of the court of common pleas of the county in which its principal office or place of business is situated a certificate stating the full name and residence of each partner, and that, in case of failure so to do, the persons so doing business as partners 'shall not commence nor maintain an action on, or on account of, any contracts made or transactions had in their partnership name in any court of this state,' until they shall have first filed such certificate.

The purpose of the act is that a public record shall be had of the individual members of all partnerships, other than those especially excepted from its provisions, with such definiteness and particularity that those dealing with them may at all times know with whom they are dealing and to whom they are giving credit or becoming bound.Partnerships subject to the provisions of the act are not by its terms placed under any disability as regards the acquisition and ownership of property, or the making of contracts, or the transaction of business.The only penalty attached by the act to the failure to file the required certificate is the legal incapacity of the offending partnership to commence or maintain an action on, or on account of, any contracts made or transactions had in the partnership name, in any court of the state, until it shall have first filed the required certificate.The Ohio act is borrowed from that of California, and instructive cases supporting the foregoing announcements are: Meads, Seaman & Co. v. Lasar,92 Cal. 221, 28 P. 935;Cheney v. Newberry,67 Cal. 126, 7 P. 444, 445;Phillips v. Goldtree,74 Cal. 151, 13 P. 313, 15 P. 451;Wing Ho v. Baldwin,70 Cal. 194, 11 P. 565;Sweeney v. Stanford,67 Cal. 635, 8 P. 444;Quan Wye v. Chin Len Hee.123 Cal. 185, 55 P. 783;Hartzell & Co. v. Warren, 11 OhioCir.Ct.R. 269.

The jurisdiction and remedies conferred by the Constitution and statutes of the United States on the national courts are uniform throughout the different states of the Union, and cannot be impaired, restricted, or destroyed by state legislation, which prescribes a condition only by compliance with which a partnership having a fictitious name may commence and maintain litigation in its own courts.In Dunlop v. Mercer,156 F. 545, 551, 86 C.C.A. 435, 441, it is said:

'By section 8, article 1, of the Constitution, the Congress was empowered to establish 'uniform laws on the subject of bankruptcy throughout the United States,' and by the bankruptcy law of July 1, 1898(c. 541, 30 Stat. 544(U.S. Comp. St.1901, p. 3418)), jurisdiction was conferred on the District Courts of the United States to 'cause the estates of bankrupts to be collected, reduced to money and distributed, and determine controversies in relation thereto, except as herein otherwise provided.'

This jurisdiction was not granted by, and it cannot be revoked, annulled, or impaired by, the law or act of any state.'

The same principle is announced in: Barber Asphalt Pav. Co. v. Morris,132 F. 947, 948, 66 C.C.A. 55, 67 L.R.A. 761;Painter v. Napoleon Tp. (D.C.)156 F. 289;Butler Bros. Shoe Co. v. U. S. Rubber Co.,156 F. 1, 84 C.C.A. 167, and cases there cited.The action may be maintained.

Section 3185, Rev. St. Ohio, provides that, within 30 days after a principal contractor shall have filed an affidavit for a mechanic's lien on the owner's property, he shall notify the owner, his agent or attorney, that he claims such a lien, and, if he fail so to do, the lien secured shall be null and void.The Farmers' Supply Company, in the improvement of whose elevator the material furnished by the lumber company was used, having made an assignment in trust for the benefit of its creditors to its president, who had been active in securing the elevator repairs, one of the lien claiming petitioners gave him, while acting as president and assignee, oral notice of the lumber company's claim to a lien.The statute does not specify the kind of notice to be given, but, wherever written notice is required by the Ohio mechanic's lien law, such requirement is expressed in clear and unmistakable terms or by necessary implication.'Notice' means 'information by whatever means communicated; knowledge given or received. ' United States v. Foote,13 Blatchf. 418, Fed. Cas. No. 15,128;White v. Fleming,114 Ind. 573, 16 N.E. 487. Where a mechanic's lien statute requires notice to the owner without using any language to indicate that written notice is intended, an oral notice is sufficient. McLeod v. Capell, 7 Baxt.(Tenn.) 196;Vinton v. Builders' & Manufacturers' Association,109 Ind. 351, 9 N.E. 177;Boisott on Mechanics' Liens, Sec. 355;White v. Fleming, supra;21 Am. & Eng.Ency.Law, 583;Treadway & Marlatt's Ohio Mechanic's Lien Law, Sec. 180.

The Supply Company, through oversight, did not affix its corporate seal to the mortgage given by it to the Citizens' Banking Company.The use of private seals in Ohio has been abolished.Section 4, Rev. St. Ohio.Seals are no longer necessary on deeds and mortgages (sections 4106,4107), excepting in those instances in which some statute specifically provides otherwise.It is now well settled that, whenever a corporation has the power to make a contract and is not restricted in the manner of so doing, it stands as to such contract on the same footing as a natural person, and in relation thereto it may adopt the same modes immediately calculated to accomplish its purpose which an individual could adopt.The Supply Company had the power to execute the mortgage, and there being no statutory or charter provision directing the mode of procedure, and the mortgage to the bank having been executed in the same manner as that of an individual, it cannot be defeated for want of a corporate seal.Cook on Corp.(4th Ed.) Sec. 721;Thompson on Corp.Secs. 5047,5052;10 Cyc. 1006, 1007;Blunt v. Walker,11 Wis. 349, 78 Am.Dec. 709;Murray v. Beal,23 Utah, 548, 65 P. 726;Gottfried v. Miller,104 U.S. 521, 26 L.Ed. 851;Poyser & Son v. Standard Pav. BrickCo., 46 Wkly.Law Bul.(Ohio) 84;East End Building & Loan Co. v. Hughey, 16 OhioCir.Ct.R. 19;Fourth National Bank v. Camden Lumber Co. (C.C.)142 F. 257.

At a meeting of the board of directors of the Supply Company held in May, 1907, it was unanimously agreed that if Stine and Lenz would indorse two notes of the company for $1,000 and $1,500, respectively, to enable it to make needed repairs on its elevator, the company would secure them by mortgage on such property.No resolution to that effect was offered or adopted, and no record was made of the proceedings had at the meeting.Stine and Lenz, believing the company to be solvent, under the assurance that they would be protected by mortgage, indorsed the notes, each due 90 days after date, by guaranteeing their payment at maturity.The notes were discounted by the company at banks, and the proceeds were applied in payment of such repairs.On June 24th the board passed a resolution that Stine and Lenz be given a mortgage 'on elevator to secure note given for repair of same,' and on the day following the president and secretary of the company executed and delivered to them a mortgage conditioned as follows:

'Provided, nevertheless, that whereas, the said Farmers' Supply Company are indebted to the said Jacob Stine and Isaac Lenz and have executed their promissory note for the payment of $2,500, payable ninety days after date, with interest at six per cent.: Now, if the said Farmers' Supply Company shall pay said sum of money, with the interest, when due, then these presents shall be void.'

Stine and Lenz paid the notes at maturity; each advancing one-half of the money.As joint petitioners, they assert a mortgage lien on the premises for the $2,500 and accrued interest.This was permissible, Bates, Pl. &Pr. 2183, 2184.

Under objection, the mortgage and notes were admitted in evidence and witnesses were permitted to testify to the...