Kaufman v. Carter
| Decision Date | 14 August 1903 |
| Citation | 45 S.E. 211,67 S.C. 312 |
| Parties | KAUFMAN v. CARTER et al. |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court of Oconee County; Watts Judge.
Action by Otto Kaufman against John Carter and W. J. Neville. From order sustaining demurrer, plaintiff appeals. Affirmed.
J. R Earle and H. J. Haynsworth, for appellant. Stribling & Herndon, for respondents.
The complaint in this action alleges that the defendants, John Carter and W. J. Neville, conducted a mercantile business at Walhalla as copartners under the firm name of Carter & Co. from January 1, 1899, to January 1, 1901, "without posting up and keeping posted up a proper or conspicuous signboard or plate containing the name and style of the firm at the business stand of the firm, and without posting up and keeping posted up in any conspicuous place at the business stand and stands of the firm the given and surname of each member of the firm, in violation of section 1326 of the General Statutes of 1882." The plaintiff claims by reason of this default he is entitled to recover as a penalty from each of the members of the firm individually $50 per month for 24 months, and demands judgment for $1,200 against Carter and for the same sum against Neville. The defendants demurred on the ground that the complaint does not state facts sufficient to constitute a cause of action, in that it fails to charge the partnership alleged in the complaint was a limited partnership. The circuit judge sustained the demurrer, and the appeal involves the correctness of this ruling.
The section under which the action is brought is as follows Gen. St. 1882, § 1326. Rev. St. 1893, § 1432. The sole question is whether this section applies to all partnerships or to limited partnerships only. If this provision of law had been enacted as a separate statute, there would be no place for discussion, for its language is broad enough to embrace all partnerships, general and limited. The connection in which the section stands, and the history of the particular statute of which it forms a part, make the question one of much gravity and interest, and seem to justify a somewhat tedious statement. The original statute was enacted in 1837 (6 Stat. at Large, p. 578). It was entitled "An act to authorize the formation of limited partnerships," and consisted of 27 sections; every section except the twenty-fourth, which is the section now under consideration, and the last, which only limits the period in which the act was to be enforced, clearly and unmistakably relating to the formation and conduct of limited partnerships. The precautions necessary for the protection of the special partners from general liability and of the public from being misled as to the extent of their liability, are laid down in great detail. The General Assembly has never seen fit to enact any general law on the subject of partnerships, being content, no doubt, with the common law on the subject as interpreted by the courts of the state. The title and the general purpose and scope of this act, even upon casual perusal, would lead any intelligent mind to pause in uncertainty as to whether the drastic provisions of this section were meant to apply to every mercantile partnership in the broadest sense of the term, or to every mercantile partnership embraced within the scope of the act. If the Legislature had contemplated the regulation of all partnerships of every kind, it seems reasonable to suppose it would have carried out its purpose by a separate statute framed with that end in view, and would not have attempted to deal with the larger subject by the insertion of a single section in a statute relating in its title and all other sections to a minor branch of the same subject. The possibility of disaster and ruin resulting to innocent persons from considering the provision applicable to limited partnerships alone would hardly have been absent from the legislative mind. The analysis of the act seems to strengthen the view that the twenty-fourth section, like all the others, relates to limited partnerships only. The first section provides: "Limited partnerships, for the transaction of any mercantile, mechanical or manufacturing business, or for the transportation of passengers, products of the soil, or merchandise, within this state, may be formed by two or more persons, upon the terms, with the rights and powers, and subject to the conditions and liabilities, herein prescribed; but these provisions shall not be construed to authorize any such partnership for the purpose of banking or making insurance." The twenty-fourth section, providing for the penalty here sued for, is limited in its operation to mercantile partnerships as distinguished from those formed for the transaction of "manufacturing business or for the transportation of passengers," etc. The plaintiff, however, contends that, though the act relates in its title and scope to limited partnerships, yet from the context we are forced to the conclusion that the words in the twenty-fourth section, ""every mercantile partnership in this state," includes all partnerships except limited partnerships. The argument is, there is every provision in the preceding sections for notice sufficient to protect the public as to the names of the partners, general and limited, and their respective liability, by recording and newspaper publication, and for that reason the further requirements of posting the names of the partners does not apply to limited partnerships, but only to general partnerships. The unsoundness of this argument seems to be apparent from its statement. The first section of the act provides for the formation of limited partnerships "upon the terms, with the rights and powers, and subject to the conditions and liabilities, herein prescribed." One of the liabilities "herein prescribed" is the liability to the penalty mentioned in the twenty-fourth section. It seems manifest that the court could not, in the face of this express provision, exempt special partnerships from this liability, by holding it inapplicable to them. We venture to think the more natural and reasonable view leads to the inference that the Legislature intended the requirement as to posting the partnership names to apply particularly to a special partnership. Preceding sections of the act had required not only recording of the certificate, but publication of the terms of partnership. The publication could be required for only a limited time, and it seems not unreasonable to provide, after such publication had ceased, perhaps for years, the public should be kept on notice of those whose liability was not unlimited, without recourse to the records, which might not be thought of in that connection. The proviso at the end of section 24, "that...
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