Summary
In Bitter v. Rathman (61 N.Y. 512) it was held that a married woman, who in secret trust for her husband becomes a member of a co-partnership, is to be regarded as the owner of the interest she represents, and might maintain an action for the dissolution of the co-partnership and for an accounting.
Summary of this case from Noel et al. v. KinneyOpinion
Submitted September 23, 1874
Decided January term, 1875
John Ganson for the appellant. H.C. Day for the respondent.
The case on the part of the plaintiff, as I gather it from the evidence and the facts, as found upon the trial, is, in substance, this: A business firm in the city of Buffalo, of which the plaintiff's husband was a member, went into bankruptcy, in January, 1870. The husband was desirous that the business of the firm should be continued, with a view of his ultimately becoming again a partner in it; to that end an arrangement was made between him and the defendant, to which his wife, the plaintiff, assented, that the business should be carried on by the plaintiff and defendant, as partners; to be conducted on her part by her husband, as her agent; and that it was so carried on in the firm name of Rathman Co.; the capital on her part having been principally advanced by her father and credited to her on the books of the firm. A disagreement finally arose between them, when the defendant denied that she was a partner and claimed that he alone was interested in the business, and that it was entered upon and carried on for his individual benefit. This disagreement resulted in the bringing of this action by the plaintiff for a dissolution of the partnership and an accounting.
The court before whom the issues were tried found "that the plaintiff, in secret trust for her husband, was the partner of the defendant," and that "in respect to the public she was to be regarded the real partner," and ordered an accounting as to the partnership affairs. The defendant excepted to the conclusion that the plaintiff was a partner of the defendant; for that, being a married woman, she could not, in law, be his partner; and now the defendant further objects, that the act of 1860 authorizing a married woman "to carry on any trade or business and perform any labor or services for her sole and separate account," did not authorize her to enter into or carry on a partnership business in which she had no interest other than as trustee for another. All this may be conceded so far as it regards her husband and his creditors. As to the creditors of her husband, he, and not she, would, doubtless, be regarded the real partner. Yet she, having suffered herself to be regarded by the public as a partner, was liable, as such, to the creditors of the ostensible firm; and, having thus exposed herself to such liabilities, if any should be found to exist, she had to any such extent the right, as against either the defendant or her husband, to be protected out of the share which would belong to her in her capacity as trustee for her husband, at whose instance she undertook the trust. And now that the defendant has, steadily, since this controversy arose, and throughout the trial, insisted that he alone was interested in the business, and has not at any time or in any way insisted that the husband should be made a party plaintiff or defendant, it does not lay with him here, for the first time in the progress of the action, to raise an objection which might very properly have been raised by her husband or his creditors in an appropriate action or proceeding to reach her apparent interest in the partnership, to which the defendant has no right, and to which, as between him and her, she is the rightful owner.
It is also insisted, on the part of the defendant, that errors were committed by the referee in his statement of the account, and that the judgment founded upon it is erroneous. No exception appears to have been made to the report of the referee, or any specific objection made against the confirmation of the report. If, therefore, there was an error in the report or its confirmation, and the judgment which followed the order of confirmation, it cannot avail the defendant here.
The judgment appealed from should be affirmed.
All concur.
Judgment affirmed.