CHICK V. ROBINSON.
vation. " ! If these averments are must so treat them for the purposes of this case,-and if the defendant, was engaged iil doing the work of clearing in good raith, for the'purpose of preparing the land for cultivatioll , then, even though the settler was to receive in money the value of the timber SO cut, the act would be justifiable, under the law, and the person employed to do it would not be liable to the United States therefor. As has been frequently expressed in judicial utterances found in the cases above cited, the question is one of good faith on the part of the settler. The cutting, to be justifiable, must be fairly and reasonably an incident to real cultivation and improvement, as distinguished from a denuding of the land of its timber merely for the purpose' of selling the timber and securing the purchase price. The portion of the answer already considered was intended to state a complete defense or a bar to the cause of action, but there is another feature of the answer which sets forth, in QUI' opinion, a partial defense. That is the portion of the answer averring that CODway was to employ and did employ the timber cut,either directly or indii1 ctly, in erecting a dwelling house and necessary outbuildings for the settler. To the extent to which' the logs cut went into cobstruction of such dwelling house and outbuildings,' under the authorities already cited, or to t4e extent to which the money received for the logs )vas in good faith employed to construct a dwelling h9use and outbuildings, there could be no recovery in this case. The construction which we have placed upon the answer of Conway seems to be the same as that given it by the plaintiff in the case Its replication apparently concedes that the defendant had stated a valid defense, but by its general denial and affirmative averments it challenges the good faith of the alleged cultivation, and denies the alleged use of timber cut for outfitting the lands with requisite buildings for farming operations. We are also of the opinion that the amount of the plaintiffls damages was fairly put in issue by the pleadings. Defendant not only denied, in and by his general denial, the allegation that the logs cut were of the value of $1,681.15, but he specially denied that plaintiff had been damaged in the amount claimed by it. Under the authority of the cases of Stone v. Quaal, 36 Minn. 46, 29 N. W. 326, Nunnemacker v. Johnson, 38 Minn. 390, 38 N. W. 351, and Bank v. White, 38 Minn. 471, 38 N. W. 361, this pleading put the plaintiff upon its proof of damages. It results that the judgment must be reversed, and the cause remanded for a new trial, and it is so ordered.
CHICK et aI. v. ROBINSON et aI. (Circuit Court of Appeals, Sixth Circuit.
No. 645. 1.
EVIDJ;:NCE-PAUTNERSRIP BOOKS-ADMISSIBILITY AGAINST SPECIAL PARTNER.
June 6, 1899.)
Entries. in the books of a PllItnership in Michigan are admissible against a special partner who is ghen the right by statute to "examine into the state anpprogress of the partnership concerns" from time to time, and to advise as to their management.
95 FEDERAL REPORTER.
2. PARTNERSHIP-CASH CONTRIBUTED BY SPECIAL PARTNER-CHECKS. ", Under the limited partnership statute of'Michigan (How. Ann. St. § 2342 et seq.), which reqUire$, the,filing ,of an affidavit stating that the amount of a special partner's contribution to the capital stock 8.$ shown '\:>y the certificate of partnershIp has been actually and in good faith conL, -trlbuted, in money or property· at .cash- val:ue" a check given to the firm, Which was good when delivered, and paid ·on presentation, and which could be presented at any time, constitutes a 'contribution of "cash," and justifies an affidavit that such a, had been made in good faith, though the check was not presented for payment until afterwards.
, Thisls a: writ of error to a jUdgment in favor of the defendant A. W. Comstoc;k In a suIt by SwainT. Chick and William T. Chick, co-partners as ChIck Bros., citizens of Massachusetts, against Henry S. Robinson, Richard G. ElUott,and Andrew W. Comstock, co-partners as H. S. Robinson & Co., on a note of the firm for $2,166.70. A verdict and judgment were entered against Henry S. Robinson and Richard G. Elliott' without controversy. Andrew W. Comstock defended against the note on 'the ground that he was a special partner, under the statutes of Michigan, and was not liable on the note. The sectiolls of the statute of Michigan providing for limited partnersh'ps will be found in Howell's Annotated ,Statutes, as follows: "Sec. 2342. Limited partnerships mllY consist of one or more persons, who shall be called general partners, and who shall be jointly and, severally responsible as gelleral partners now are by law, and' of one or more' persons who shallcontribtite a specific amount of capital, in cash or other property, at cash value, to the common stock, who shall be called special partners, and who shaH not be liable for the debts of the partnership, beyond the amount of the fund so contl'ibuted by them respectively to th!o capital, except as hereinafter prOVided." , , . , , 'fSeC. 2344. The persons desirous of forming such partnership, shall make and severally sign a certificate, which shall contain: (1) The name or firm under which the partnership business is to be conducted. (2) The general nature of the business to be transacted. (3) The names of all the general and special partners interested therelIi, distinguishing which are general partners, and which are special partners, and their respective, places of residence. (4) The amount of capital stock which each special partner shall have contributed to the common stock. (5) The period at which the partnership is to commence, and the period when it will terminate. , "Sec. 2345. Such certificate shall be acknowledged by the several persons signing the same, before some officer authorized by law to take the acknowledgment of deeds, and such acknowledgment shall be made and certified in the manner provided by law for the acknowledgment of deeds for the conveyance of land. "Sec. 2346. The certificate so ac1}no:wledged and certified shall be filed in the office of the county clerk of the county in which the principal place of business of the partnership' shall be situated, and shall be recorded at length by the clerk in a book to be kept by him; and such book shall be SUbject, at all reasonable hours, to the inspection of all persons." "Sec. 2348. At the time of filing the original certificate and the aclmowledgment thereof, as before directed, an affidavit of one or more of the general partners shall also be filed in the same ,ofiice, stating that the amount in money, or other property at cash value, specified in the certificate to have been contributed by each of the special partners to' the common stock, has been actually, and in good faith, contributed and applied to the same. "Sec. 2349. No such partnership Slllin be deemed to have been formed, until such certificate, acknowledgment and affidavit shall have been filed as above directed; and .If any false statement be made in such certificate or affidavit, all the persons Interested in such' partnership shall be liable for. all the en,agements thereof, as generlll partners." , . 2354. The business of tfre"pal'tnership shall be carried on under a firm
''!nError to the Circuit Court-of the United States for'the Eastern District of Michigan.
in which the name of one or more of the general partners only shall be Inserted, with or without the addition of the words 'and company,' or any other general term; and if the name of any special partner shall be used in said firm with his consent or privity, or if he shall personally make any contract respecting the concerns of the partnership, with any person except the general partners, he shall be deemed and treated as a general partner. "Sec. 2355. During the continuance of the partnership under the provisions of this chapter, no part of the capital stock thereof shall be withdrawn, nor any division of interest or profits be made, so as to reduce said capital stock below the sum stated In the certificate above mentioned; and if, at any time during the continuance, or at the termination of the partnership, the property or assets shall not be sufficient to pay the partnership debts, then the special partners shall severally be held responsible for all sums by them received, withdrawn or divided, with interest th'ereon from the time when they were so withdrawn or divided respectively." "Sec. 2364. A special partner may from time to time examine into the state and progress of the partnership concerns, alld may advise as to their management; he may also loan money to, and advance and pay money for the partnership, and may take and hold the notes, drafts, acceptances, and bonds of or belonging to the partnership, as security for the re-payment of such moneys llnd interest, and may use and lend his name and credit as security for the partnership, in any business thereof, and shall have the same rights and remedies in these respects as any other creditor might have." It appears by the evidence that Henry S. Robinson and Hichard G. Elliott, as general partners, and Andrew W. Comstock, as special partner, entered Into a partnership agreement; that the certificate was duly signed and acknowledged, stating the facts required in section 2344, and, among them, that Andrew W. Comstock, as special partner, had contributed $50,000 to the common stock. Henry S. Hobinson, one of the general partners, in accordance with section 2348, made an affidavit on the 1st of May in which he stated "that the amount stated In said certificate to have been contributed to said limited partnership by said Andrew 'V. Comstock has been actually contributed by said Andrew W. Comstock in good faith to said limited partnership, in cash, and has been received by said limited partnership, and applied to the assets thereof." The certificate and affidavit were filed on the 2d of May. The plaintiffs contended that Comstock was liable as a general partner, for two reasons: (1) Because the statement in the affidavit was false, In that at the time of filing the certificate the amount in cash specified in the certificate to have been contributed b3' Comstock, the special partner, to the common stock, had not been actually and in good faith contributed and applied to the same. (2) Because Comstock, the special partner, had personally made contracts for the firm, and thus rendered himself generally liable as partner. under the statute. At the close of the evidence the court submitted both issues to the jury, but before a verdict was returned the trial judge withdrew the first issue from their consideration, instructing them that there was no evidence that the amount of $50,000 was not contributed in good faith in cash by Comstock as early as May 2d, as certified in the affidavit. Upon the second issue the jury found for the defendant.
Harrison Gier and F. W. "\\'lliting, for plaintiffs. Michael Brennan and Henry A. Haigh, for defendants. Before TAFT and LURTON, Circuit Judges, and THOMPSON, District Judge. TAFT, Circuit Judge. The main controversy in this court is whether there was any evidence which should have been submitted to the jury tending to show that Comstock did not, as certified in the affidavit of Robinson, actually in good faith contribute in cash the $50,000 to the stock of the company on the 2d day of May, 1893. The affidavit was dated the 1st of May, but it seems to be conceded
by the counsel for plaint-iff::inerrol" that, if the money was contributed before the affidavit, 'was;1Hed,. this is .asnfficient compliance with tbestatute.. The cODcessioh isjustifled by the decIsion of theqoul't of appeals of v. 134 N.Y.10l, .31.N. . E.276. See, also, Rope.s 'v:. Colgate, 17 Abb. N. C. 136.. The plamtIffs produced the books ofthepartnerli!hip, which show that on May 1st Co.mstock was stoclr with the.·payIDen.,t on May Uth witht'tie p,J,ljttt,e4t:of $IO,155;and on June 3d' wIth $9,$45, making a total o£$.qO,OOO; . On ,August 1st he is credite,d by interest with $657, and was paid that amount. The interest thus credited and paid to him is at the rafe"of 6 per: cent. oil $30,000 from May 3, 1893; '0:11 $Hl,155 from May 4,'tS93, and on $9,845 from June 3, 1893, all down .to August 1st. This. evidence taken from the books was objected to on behalf of defendant Comstock. He testified that he had never seen the entries in which th:ecredits for his special capital we're entered before comillg int() the court room, un,d thM he did not begin to l09k into the books UJ;ltil two years after the firm was organized. ,. BiY section 2364 a special partner is given the power "from time to time to examine into the state:ani:I progtessof. the partnership coneel'ns,'and may advise ;as to· their management." It seems to us that entries in the partnersllip books which are open to his inspection, andwit4re'spect to which M.way advise"areat lei).st pi'ipia facie evidenceagaitist him of transactions of the firm. Ithas:,beell so held under a similar statute in New York. .Bank v. HUber; 75 Hun, SO, 26 N. Y.Supp. 961; Kohlerv. Lindenmeyr, 129 N. 29 N. E. ' '. 957; ·Hotopl' v. Huber (Sup.)4l N. Y, Supp. 991. Elliott, one 01 the partners,testifted that Comstock contributed $50,000 in checks, $30,000 were deposited to the credit of the firm, and paid on the 2d May.: Two ()f the checks weI'e' not deposited orcoIleCfedonthe2d of :May.. A check for $10,155 collected on the 24th of May, and the check, for $9,845, was deposited and collected on the 3d of, June; . Elliott testified there was no agreement,so far as he kne""tliat these 'checks were tobe beld, but tbat they did'not deposit them they' did not need the money. Robinsoij testified that eve'rything was contributed, in what he COll'sidered cashitems, on the 1st day of May. He said there was no duebill of Comstock, but he had an indefinite impression that in the payments there was a note' of Farrand, Williams & Clark for $10,155. Elliott and' Robinson were called by the plaintiffs. It further appeared that a note of Farrand, Williams & Clark for '10,155, due to Comstock, was paid on 24th at the Commercial National Bank, where it had been deposited by Comstock for collection, and that the note had been sold by the Commercial Bank to the Alpena Banking Company, Comstock's bank, and that when the note fell due the assistant cashier of the Commercial National Bank paid Comstock by giving his check for that amount to H. S.Robinsoll' & Co. Comstock testified in his own behalf. His statement was that he gave $50,000 in checks, $30,000 of which were collected on the2dof May. He testified, thaLlie bad l;l, note of Farrand, WiIIiams& Clark for $10,155, . whkh he brought do.w.n with him from Alpena, where he lived, intendbis contribution, together> with a certified ing to put it in as part
checkOll the Alpena Banking Oompany, of president and part owner, for $9,845; that when he examined the affidavit, and found the statement therein that the contribution had been made in cash, he did not use: the note, but another check on the Alpena Banking Company for $10,155, and certified it as president of that bank· ing company. He testified that there was no agreement by which his certified checks aggregating $20,000 should be held, but that when he, found, on the 24th of May, that his check for $10,1($5 had not been deposited and collected, he concluded that it wouldsRve trouble to take up his check, and the money collected on the Farrand note for that purpose. This he did., He says he objected seriously to the failure to credit him with interest on $50,000 fromMay 1st, when he delivered all the checks,that he called the attention of Robinson to the injustice, and that the failure to rectify 'the error was due to the financial difficultiel:1 of the firm which s8 soon followed. It appears clearly, without contradiction, that the checks were good upon the day upon which they were delivered to H. S. Robinson, and would have been paid, had they been presented, on that day: The question is whether the circumstances that they were not presented until the 24th of May and the 3d of June, that the payment of the 24th of May was made at the time when the Farrand. Williams & Clark note was paid, and that interest was not charged 'in favor of Comstock on the books of the company on the $20,000 until the 24th of May and the 3d of fact contrary to the of June, do not tend to justify ari positive statement of Robinson, Elliott, and Comstock, that there was no agreement to hold the checks until the 24th and 3do! June. If there had, been such' an agreement to hold the checks, their use by Robinson would clearly not have been an actual contribution in good IiI the absence, of such agreement, Com· faith in ea'sh as stock was entitled TO interest on $50;000 from May 1st, because he could not be charged with the delay in collection, as between the partners. The question isa close one, but we think that in view 'of the positive statement of Robinson arid Elliott, called by the plaintiff, and of Comstock, called in his own interest,' that no such agreement existeq, in view of the uncontradicted explanation by Comstock as to the mode in which the entries happened to be made; in view of the uncontradicted statements by Elliott that the checks were deposited when they were needed, the inferences to be. drawn from the book of interest create only a scintilla of evidence entries and the supporting the view that there was any agreement between the part. ners as to· the withholdirig <>f the check. The evidence relied on by the plaintiffs amounts, when carefully and calmly considered;' to nothing more than a suspicion that there may have been' some between the partners. We do not think it was enough to require the court below to submit the issue raised on the pleadings on this point to the jury. It is objected that Comstock'S checks for $20,000 were not an actual contribution in cash to the assets of the firm, even if there was no agreement by the general partners to withhold presentation, and even if they were good when delivered to the general partners. The early decisions construing limited partnership statutes were very
95 FEDERAr,. REPORTER.
strict, and a literal compliance .with the, statute was enforced. In sq, me state,s,' notably iIi Mass,a<;"','Il'llsetts, thiS, construction of, such, a law is stilIl:paintained. HaggertY v. Foster, 103 Mass. 17. In oth"It" more reasonable view :pas, heen taken of late, lind all that is requii'edisa substantial compliance with the provisions of the statute, in good faith. Manhattan Co., v. Laimbeer, 108 N. Y. 581, 15 N, E. 712; );White v. Eiseman, 134 N. Y. 301, 31 N. This is the rule of construction adopted by the supreme court of Michigan in enfor:c4!g the statute. Hogan v. Hadzsits, 113 }fich. 282, 71 N. W. . 1092. . Oomstock,'s checks were certified, and it" is' expressly held by the court of appeals of New York that such instruments are equivalent to cash. White v. 134 N. Y. 301, 31 N. E. 276. But it is said tb,at as the certificate was by Comstock, the president of the Alpena Banking Company, of his own check, the check was not certified in ,such a way as to bind the company. We shall not enter u,pon adiscu$sion of this objection, because we are of opinion that a check, tboughuncertified, if good when delivered and paid when presented, isa CQntriblltio.n, in cash in good faith, although it may not be presented Qntll after the filing of the certificate. If the check is good the general partners may obtain ,the money upon it at any time. If the drawer is dishonest, and subsequently reduces his bank balance so that the check is dishonored, this is conclusive evidence that the delivery otthe check was not payment in cash in good faith, and the of the special partner accrues. The payment of checks as cash is in ,accordance with a well-known and reasonable usage of merchants, and we can see no reason why the statutes concerning limited partnerships should not be construed in the light of that usage. In,the case of In re Palliser, 136 U. S. 263, 10 Sup. Ct. 1035, Mr. Justice, Gray, spealdng for the supreme court, defines the word "cash," used in a criminal statute, as follows:
"The word in this statute, as in common speech, means ready money, i;o band, either in, current coin or other legal tender, or in bank bills, 'Oor checks paid and received' as money, and does not i,nclude promises to pay money in the future."
This, it ,seems to us, is a sufficient support for our conclusion. Doubtless the weight of authority in the construction of limited partnership statutes is to the contrary; but, as already said, the trend of modern caseli! is towards a more liberal and sensible view of such statutory requirements. Their purpose is to secure the actual payment of t;Q.e. money into the capital of the firm, and, failing that, to hold the special partner to a general liability. It seems to us that our construction of the statute secures this end, and it does not entrap the honest and unwary into unexpected liabilities, by enforcing a stricter rule as to what are cash payments than obtains in the commercial community. There is nothing in the decisions of the supreme courtof Michigan upon this statute which prevents our giving such a l;Qnstruction to it as we think its language and its policy reqllire. ·RothChild v. Hoge, 4:3 Fed. 97. The judgment of the circuit court is affirmed.
WILSON V. COOPER·.
WILSO:S v. COOPER et aL
(Circuit Court, D.
June .19, 1899.)
'Vhen a written contract Is entirely prepared by one of the parties, and accepted as thus prepared by the other, any doubt as to the meaning of provisions therein is to be resolved against the party preparing it.
SAME-CONTRACT FOR BUILDING OF ICE PLANT-WARRANTY OF CAPACITY.
Plaintiff contracted to bulld for defendant an Ice-making plant In Lincoln, Neb., the contract containing the following provision: "IVe guaranty the consumption of coal not to exceed [four and a half] tons of good Iteam coal, when the machine and plant are properly operated, to produce the eqUivalent of [thirty] tons of ice manufactured every twenty-four hours of continuous operation, prOVided that the steam boilers evaporate eight pounds of water for evelj' pound of coal burned." This warranty was on a printed form used by plaintiff generally, with blanks left for the portions In brackets, which were filled in writing. Held, that such blanks must be presumed to have been filled with reference to the plant templated by that particular contract and tbe kind of coal commonly used In Lincoln tor steam purposes, and there considered good stearn coal; and, as the contract required plaintiff to furnish the boilers. smokestack, and other appurtenances on which the amount of evaporation depended, the provision was a warranty that the plant, as constructed, with the coal 10 contemplated, would produce 30 tons of Ice In each 24 hours of continuous operation, with a consumption of only 4¥2 tons of coal. To give full effect to the concluding proviso of the warranty would enable the plaintifl' to render it nugatory in every case by so constructing the plant that the required evaporation could not be obtained.
This was an action on notes given in payment for the construction The defense was a breach of wananty as to the capacity of the plant. Lambertson & RaIl, for complainant. Charles O. Whedon, for defendants.
ef an ice plant.
SRmAS, District Judge. From the evidence tn thi!'l case, It appears: That the Arctic Machine Manufacturing Company, a corporation created under the laws of the state of Ohio, with its principal place of business at the city of Cleveland, was engaged, in the year 1896, in the manufacture and erection of an apparatus or plant for the making of ice, under certain letters patent owned by the company. That in the early part of that year it entered into negotiations with P. R. Cooper, the defendant, for the furnishing and erection at Lincoln, Neb., of one of its plants. That in the conduct of these negotiations the Arctic Company was represented by one William Hargreaver, and the present complainant, Frank Wilson, who was then the secretary of the company. That these negotiations were wholly conducted and concluded at Lincoln, Neb., at which place the company's representatives, Rargreaver and Wilson, had spent some time pending the negotiations, and had, by personal observation, familiarized themselves with the surroundings, so that tbey had full opportunity to know the circumstances under which the plant they were proposing to furnish would be operated. That under date of April 23, 1896, the Arctic Company submitted to the defendant P. H. Cooper a proposition headed as follows: ·"We hereby propos(l to furnish yon