Olyphantv.St.Louis Ore k Steel ;00.; Id.729j Central 7hMt 00. v. Wa-bash;St.;L.ct P. Ry. 00., ld. 871. . claim compan;r is for personal inJunes; groWil1 g out of the neglIgence of the company's agents more than 'pi,iQr to the ,suit for forecJosure; Neither on principle. nor to be prior in right to the authority can we adjudge such a gage bondholders. . Whether or not there may be cases growing out of the; cirliumstances attendant' uportthecreating of the mortgage, such. as the notorious bonding oftlie property for sums largely in excess of its' cost value, in which the mortgagors operating the road ought in equity and good conscience to De held as the :mere agent of the 'nlortgage bondholders/it is' not necessary to decid-e'iii this case. t ' ".!
I
J. Ifaving'satwith on the hearing of case, I concur both in the reasoning and the conclusions of the foregOIng opinion.
ARNOLD
and others'/). DANziGER and another. l ': '
(Circuit Oourt, E. D. LouiBiana. January 18,1887.)
1.
INSOLVENCy-TITLE OF SVNDIe-LoillsiANA LAW.
In Louisiana all the property and rights of property of an insolvent who makes a cession to the ,syndic.
2. PARTNERSHIP-PROROGATION OF. , . Where the extension or prorogation of a partnership is made during the life of the partnership, it cannQt b,e considered as the creation of a new partnership. '. B. PARTNERSHIP-PARTNEitm COMMENhAM"':"LiABILITY. A partner in commendam contributed $40,000 to the partnership funds. Be'fore the expiration of ..the partnership the term was extended. At that time aU the capital of the firm bad been lost, except $7,000 of the money advanced , by the partner in comme7l4am. . Held, that under Rev. Civil Code La., art. 2842; which limits the liability ofa partner 'in commendam to the sam which he agrees to contribute, the Jilartner incom'f!le1lliam was not liable the deficiency of $83,000; the extensIOn not being the creation of a new paI1nership, and there being, therefore, no agreement to furnish a further sum, or to make good the loss on the sum originally contributed., , '
In Equity. On demurrer. :The bill of complainants.in this case alleges that on the sixteenth of September, 1882,-DavidDanziger"being then a dry goods merchant in New Orleans"entered into partnership with Leon Godchaux, by which Godchaux became a partner in commendam, and advanced to said Danziger on $he business in his the Sum of $40,OOOithe said the law of to do. That own name, as he agreement of partnership was made for the term oftwo years, but before the.expiration thereof, ,on the eighth of May, 1884, they agreed to con1 Reported
by JosephP. Hornor, Esq., of the New Orleans bar.
DANZIGItR.
899
tinue and exten'd tne partnership fOl'three additional years. The bill then alleges yhatat the time·of the expiration of the:original two years, Danziger was insolvent; that all of his capital had been lost, and all of the $40,000 of capital· advanced by Godchauxhadbeen lost except about $7,000; in other words, if the 'partnership had been liquidated and settled, and all the debts of the firm paid on the sixteenth of tember,1884, Godchaux would have had only $7,000 to his credit, and Danziger nothing, therefore'Godchaux owes the creditors of the extended and new firm which began September 16, 1884, $33,000; and that by his agreeing to continue,. renew, and extend the partnership from· the sixteenth of September, 1884, he gave the firm of Danziger & Co. additionaleredit, on the faith of which orators sold it goods and merchandise. Complainants go on to allege that, at various dates after the sixteenth of September, 1884, they sold goods and merchandise to the firm; that they have recovered judgmeht therefor against Danziger, and issued execution thereupon, which has been returned nuUabona after due demand; that on the fifteenth of October, 1885, Danziger availed himself of the insolvent laws of Louisiana, and surrendered all his property to his itors, and complainants now bring this suit in order to have it declared that the act of continuance of the partnership of the eighth of May, 1884, was in reality a new partnership, commencing on the sixteenth of September, 1884, and to declare that Godchaux was bound for whatever deficiency of capital existed between the actual capital of the firm at that date and $40,000; in other words, that the act of extension of the partnership was an act of renewal, and Godchaux was bound to advance another $40,000, or at least to have that much in the firm, at the date of the renewal, which hehad not. .B. R. Forman and E. Howard McOaleb, for complainants. T1uYrruLB J. Semmea and 10seph P. Hornor, for defendants. PARlJEE, J. TwO points are made by the demurrers in this case: (1) That the equitable asset sought to be reached in this case has passed , to the possession of the syndic of Danziger in the insolvency proceedings . instituted by him (Danziger) in the state ·courts of Louisiana. (2) That the extension of the partnership in commendam between Danziger and Godchaux, made during the existence of the original partnership before its term had expired, and relating only to the term of the partnership, was not the creation of a new partnership, and imposed no obligation on Godchaux to contribute another sum of $40,000, nor to make good, if impahed, his original contribution of $40,000. 1. In Louisiana all the property and rights of property of an insolvent who makes a cession pass to the syndic. Dwight v. Simon, 4 La. Ann. 490; Muse v. Yarborough. 11 La. 521; West v. His Creditors, 8 'Rob. (La.) 128; Bank v. Horn, 17 How. 157; Adams v. Preston. 22 How. 488. The obligation of a partner in commendam to contribute the agreed amount iSa debt in favor of the partnership and of creditors of the partnership. Rev. Civil Code, arts. 2842,2856; De liPLrdi v. Gossett, 1 La. Ann. 138; La Ohomette v. Tlunrta8, ld. 121. The distinction sought to
900
FEDERAL REPORTER.
be made between Danziger, managing partner, and Danziger. the partnership, is too shadowy to, cU,t much figure in the case, and at best only existed for Godchaux; .to the rest of the world Danziger individually and Danziger merchant or partnership were identical. ,2. "In no case, except 8.,8 . hereinafter expressly provided, shall the partn£)r who has no other interest in the concern than that of partner in commtr[tdam be liable to pay any sum beYond that which he has agreed to furnish by his contract." Rev. Civil Code, art. 284;2. The bill shows no liability of GOd,chauxbeyond on account of any state of faGtsprovided for in any of the st\bsequent articles of the Code. The then is whether. by the extension of the term of the partnership God,chauf( agreed to :make the original sum oL$40,QOO good, or agl;el¥1 toyontribute to the partnership any sum in addition to the original $40,0()Ocontributed. It is not plaimed that Godchaux made any such agreement expressly,but it is charged that he did impliedly,because it is claimed that the extension of the partnership under the law was substaptially :creating new partnership for a new term under the same and the original partnership; and as the terms of the original partnership ,req\1ired Godchaux to contribute $40,000, so he was required under the new partnership to contribute $40,000. "The prorogation which may be agreed upon between the parties shall,be made. and,.proved in the same mftnner as the contract of partnership itself." .Rev. Civil Code, /tri. 2878. This article relates to the manner and JorJ}l and method of proof for an extension of a partnership.. It cannot relMe to the terms and conditions, or otherwise there could be no extension except for ll.' period equal to the original term. There is nothing in the Code, unless in said article 2878, nor in the.nature of things, to hinder the partners,in extending their partnership,,:from inserting any new, or modify.ingany old, provision. The question in case of a modification might be whether the old partnership was extended or a new one,.created.. In the present case there is no suggestion that any mO,di· fication except. as to duration was made, and it is admitted that the original partnership was extended lawfully. When it was extended it would seem that it to. be and was the same partnership, and a new one, and, if .not a new one, then the partners by the extension save as to the duration of the term. assumed no new do not discuss the question as to The English· and American· whether a partnership extended is or not a new partnerehip. They seem to take it for grllnted that a naked agreement to extend the term of the partnership, whether made ,before the expiration or at the expiration, would be a mere continuance of the same partnership. for 'if the partnership, at the expiration ofthe term, is continued "in the absence of all acts and circumstances wha,tspever to control or vary the original terms of the agreement, the just legal conclusion seems to be that the partner-, ship is to be treated as a mere partnership during the joint will and pleas. ure ofllll the parties, al1q, therefore dissoluble at the will or anyone of them, but that in all other respects it is to be carried on .upon the origas to rights, duties, interests, liabilities, and shares of inal term..s
ARNOLD 'D. DANZIGER.
the profits and losses." Story, Partn. (5th Ed.) § 279; Colly. Partn. (Perkins' Ed.) § 214; Watson, Partn. 3810 Some of the French writers are clear that the continuation or prorogation of a partnership after its dissolution or expiration is really to contract a new partnership. Report by Boutteville. See Locre,'La Legislation Civile, vol. 14, p. 542; Bravard-Veyrieres, Droit Con1inerciale, vol. 1, p. 385; Par<lesslls, Cours de Droit CivileCommerciale,vol. 3, p. 273; Deleurie,.Droit Civile, vol. 5, p. 537. But M. Troplong (Droit Civile Explique, vol. 2, Commentaire ' Des Societes Civile etComrnerciale, § 915) says: "The partnership continued is not a new partnership as wrongly says M. Bouttevillein .his 'report to the tribunal. It is the same partnership subsisting without. interrUption between the same persons, with the same capital and the same m'eans.with the same end and the same object, and presenting no other modification than in the time of its duration changed by the will of the parties." And he adds: "Le mot de prorogation employe par notre article exc]ut toute idee d'intermittence dans l'existence de la Societe." ,. M. LaUJ:ent, ,vol. 26, Prineipes de ,Droit Civile, § 371, in discussing the matter, quotes Troplong, Pont, and Boutteville, and says: "We believe it is necessary todistinguish. When the parties prorogue the partnership before the expiration of the time, they modify solely the social pact, and to modify it is to maintain it; the partnership prorogued will always be the first partnership. But' when the term has expired, and such is the supposition of Boutteville, the partnership is dissolved of full right, it does not exist, then the prorogation is the constitution of a new partnership." The exterision or prorogation in this case was during the life of the partnership, and neitheton principle nor the best authority should it be considered 'as the creation of a new partnership; and if it was not the creation of a new partnership, then Godchaux made no agrMtnent, express or implied; to contribute another $40,000, or to make good at any time the origina1'$40,000 contributed by him; and if he made no such agreement, the law of Louisiana, (Rev. Civil Codl;1, art. 2842, supra,) relieves him of further liability. ' The bill makes rio case to hold him for any liability beyond; his liability as a partner i'n, commendam. under Louisiana law.' . I am oHhe opinion that the demurrers should be sustained.
FEDERAL .REl'OR'fER.
YONGl!:
v.
EQUITABLE LIFE,ASSUR. SOC.
and others.
(Olrc'f-ltt o.ourt, E, lJ. Tenne,,8ee. May 12,1887.) LIFE INSUl:{ANCE-WHEN POLICY
A policy of life iI).surance, upon due application. was issued under a con. tract with the local agent, whereb'yit was sUbstan'tially agreed that the agent' should pay first qqarter'& premium. and take the applicant's note for the same. The policy was ¢ailed frpID the home office, July 28. 1885, and ,reo ceived by the local agent, August· 5, 1885, but was ifever actually delivered into the possession of tlIeapplicant, who was taken iH'.A.ugust 6th, and died September 9. 18815, " Held that; .as between the applicant and the company, the ,policy became effective .and binding when placed in the mail, July 28,1885; an,d. If nat then, certainly when it reached the hands of the agent, August 5, :1885;
BINDIN(b-CONTRACT WITH AllENT.
In Equity. . Oreed F. Bates and Richmond &; Clark, for complainant· .De Witt &; Thornas,for respondentS. KEY,J.· On the fourteenth July, 1885, W. W. YQnge made application for insura.nce upon his life for'the benefit of bis wife, the complainant, to the defendant company. An examination of that date, by a nredical examiner of the 'company, was made, and thl;l risk was reported as a good one. The papers were forwarded from Chattanooga to Louisville, Kentucky, to of the company. These agents discoveredan error or omission in .the report of the medical examiner, and sent that paper baeI,- for coql:lction. This delayed matters for about a week, at the end of which time the papers were forwarded to the home office in New York. The action of the home office was favorable, and a policy to the general agents at Louisville, on tbe was duly executed and ·twenty-eighth day of July, 1885, and by them was mailed to the agent here, whom it reached upon the [OI;enoon ·of the fifth of August, 1885. He called at the office .of in the afternoon to deliver the policy, .but did not find him., ,Next day (6th) the agent learned that Yonge ,was not ,The day following (7th) the agent .calledat Yonge's office, and learned that he was at home sick; not seriously, as was supposed. On learning the agent's business, a friend of Yonge's.: and hisassociate in business, tendered the premium, and requested that the policy be delivered to him. The agent declined to accept the premium or surrender the policy, upon the ground that the policy did not go into effect until the first premium was paid in the life-time and good health of the applicant. Yonge's illness grew more serious, and he died upon the ninth of September,1885. This bill was filed to enforce a surrender of the policy, and to have it paid. In addition to the faets already the proof establishes the following: The agent of the company pers.istently urged Yonge to make this application, when Yonge gave as a reason for not doing so that he was afraid he would not have the money to pay the first premium; or, to put the matter in the agent's language: