Fourth Street National Bank v. Whitaker

Citations

• 170 Pa. 297
• 33 A. 100
• 1895 Pa. LEXIS 1401

Syllabus

<p>Partnership — Limited partnership under act of March 21,1836 — Liability of special partner — Misstatement of capital.</p> <p>Under the limited partnership act of March 21, 1836, P. L. 143, if a special partnership is continued or renewed, it must be in the same position, so far as the special capital in concerned, as when it was originally formed. Such capital must be unimpaired; it must be in such condition as to be available for creditors, and it is the duty of the general partner to furnish this information in his affidavit. If the capital has in fact been impaired, and the affidavit for renewal falsely states it to be unimpaired, the special partner becomes liable to the creditors as a general partner, and it is immaterial that he was in fact ignorant that the capital was impaired. It was his legal duty to know the truth or falsity of the statements placed on the public record, and, although ignorance of the falsity of the statement may exempt him from the imputation of moral turpitude, the statute does not exempt him from legal responsibility.</p> <p>Distinctions drawn between impaired and unimpaired capital of business partnerships are without weight in the interpretation of the act of March 21, 1836, as the object of the act is to give information to the creditor, of the financial standing of the partnership when it invites business.</p> <p>Where a renewal certificate falsely states that the special capital is unimpaired, the fact that the partnership had on hand at the time of the filing of the certificate, merchandise of a value in excess of the special capital is insufficient to relieve the special partner of general liability, if it appears that the debts of the firm were at the time in excess of its assets.</p> <p>In an action to hold a special partner liable as a general partner on partnership notes, the fact that the notes in suit were given after a false renewal certificate was filed, to take up notes given prior to the filing of the certificate,