Reff, Gerald

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Right of Partnership to Sue or Be Sued in its Own Name

St. John's University School of Law

St. John's Law Review Volume 20 Number 2 Volume 20, April 1946, Number 2 Article 15 July 2013 Right of Partnership to Sue or Be Sued in its Own Name Gerald Reff Follow this and additional works at: https://scholarship.law.stjohns.edu/lawreview Recommended Citation Reff, Gerald (1946) "Right of Partnership to Sue or Be Sued in its Own Name," St. John's Law Review: Vol. 20 : No. 2 , Article 15. Available at: https://scholarship.law.stjohns.edu/lawreview/vol20/iss2/15 This Recent Development in New York Law is brought to you for free and open access by the Journals at St. John's Law Scholarship Repository. It has been accepted for inclusion in St. John's Law Review by an authorized editor of St. John's Law Scholarship Repository. For more information, please contact selbyc@stjohns.edu. CURRENT LEGISLATIONCivil Practice Act and the codification of the practice relating to theissuance of a certificate of finality by the County Clerk in order toeliminate differences in practice as to types of interlocutory decreesrendered in the various departments of the state and thus make suchprocedure uniform throughout New York State.4  Thus, the auto-matic type of interlocutory judgment which now prevails in mostcounties becomes the only type authorized by statute after September1, 1946.Thus the possibility of marriages, entered into by one of theparties more than three months after granting of the interlocutorydecree, being declared bigamous and void is now obviated.5 TheCounty Clerk will now attach the original certificate of finality to theinterlocutory judgment and indicate the issuance of a certificate offinality in his minutes of the action thus obviating the necessity ofsearching the file and the clerk's minute book more than once fororders affecting the validity of the judgment."Section 7-a of the Domestic Relations Law is similarly amended,effective September 1, 1946, in order to keep all divorce, annulmentor dissolution of marriage actions in conformity.7JUDSON F. ScHIEBEL.RIGHT OF PARTNERSHIP TO SUE OR BE SUED IN ITS OwN NAME.-At common law a partnership could not sue or be sued in its ownname but only in the name of all its individual members.' This fol-lowed naturally from the doctrine that a partnership was not a dis-tinct legal entity but merely an aggregate of individuals. In suits inwhich the partnership was the defendant, this became particularlyundesirable because of the- many instances when it was quite difficultto ascertain who all the members of the partnership were.2Although the non-entity theory has been well recognized, fromtime to time, either by judicial interpretation or by legislative enact-ment, partnerships have been clothed with entity characteristics forcertain purposes. Thus in equity this has been common practice asfar as "the keeping of accounts" is concerned or in "marshaling the4 12 Judicial Council Reports, 1946, p. 239.5 Pettit v. Pettit, 105 App. Div. 312, 93 N. Y. Supp. 1001 (3d Dep't 1905).6 N. Y. Laws 1946, c. 203, § 1, effective September 1, 1946.7 N. Y. Laws 1946, c. 203, § 2, effective September 1, 1946.1 J. V. Baldwin and Son v. Caflish, 182 App. Div. 477, 170 N. Y. Supp.354 (4th Dep't 1918); Union Wine Co. v. Green, 62 Misc. 551, 115 N. Y.Supp. 921 (Sup. Ct. 1909); Calumet and Hecla Mining Co. v. Equitable TrustCo., 186 App. Div. 328, 174 N. Y. Supp. 317 (lit Dep't 1919).2 By statute it has been made a misdemeanor to fail to file a certificategiving the true names of the partners where the firm name does not bear thesurnames of the partners; however, this statute has no civil effect. See N. Y.PENAL LAw § 440b.1946 ]ST. JOHN'S LAW REVIEWassets of an insolvent or liquidating firm." 3 By statute a partnershipmay acquire property in its own name 4 and may sue or be sued inthe firm appellation if the business is being carried on in the name ofa deceased person.5The legislature, in enacting Civil Practice Act, Section 222a,6has taken another step in limiting the common law aggregate theorywithout entirely changing partnerships to legal entities, for the statutemerely affects procedure and not substance. 7 The law provides:"Two or more persons carrying on business as partners may sue orbe sued in their partnership name whether or not such name com-prises the names of the persons" and it is further provided where thepartnership is the defendant that the service of summons may be madeon any one of the partners with the same effect as though all the part-ners had been named as defendants by their own names.The new law also states that the clerk with whom the judgmentroll is filed must write upon the docket opposite the name of eachmember of the partnership upon whom the summons was served theword "summoned". This is more desirable than the old method ofplacing the words "not summoned" upon the docket, for usually suitsin the partnership name will be brought for the reason that the partysuing does not know the names of all the partners. Since this is so,it is more logical to put "summoned" next to the name of the personserved, for the plaintiff surely knows that name, whereas to determinewhom he did not serve would place upon him the burden of discover-ing the appellations of all the partnership members. This procedureof placing the word "summoned" after the name of the party beingserved has also been applied to the case of joint debtors so as to makethe practice uniform.8Resort to Civil Practice Act, Section 222a, is permissive, notmandatory, and will generally be necessitated only when the plaintiffis unable to determine all the members of a partnership.It is believed that judgments under the new law will be givencomplete recognition by sister states under the "Full Faith andCredit" 9 clause as were judgments when rendered in the name ofthe individual members of a partnership. "The name in which a suit3 Jones v. Blun, 145 N. Y. 333, 39 N. E. 954 (1895).4 N. Y. PARTNERSHIP LAW § 12 (3). At common law, on the doctrinethat a partnership was an aggregate of individuals and not an entity, real prop-erty could not be held in the partnership name, for real property had to vestin some person whether natural or artificial.5 N. Y. Civ. PRAc. AcT § 223.6 N. Y. Laws 1945, c. 842, effective September 1, 1945.7 In states where like statutes have been enacted, the courts have so held.E. I. Dupont v. Jones, 200 Fed. 638 (S. D. Ohio 1912) ; Byers v. Schlupe, 51Ohio St. 300, 38 N. E. 117 (1894).8 N. Y. CIV. PRAc. AcT § 1199, amended by the Laws of 1945, c. 842, effec-tive September 1, 1945.9 U. S. CONST. Art. IV, § 1.[ VOL. 20CURRENT LEGISLATIONis brought and presented, when the same persons are involved, can-not reasonably be said to have an effect on the extra-territorial valid-ity of such judgments, since, in the final analysis the sine qua non isjurisdiction over the person or persons sued while the 'names' of suchpersons pertain rather to form than to substance." 10The legislature, in addition to enacting Civil Practice Act, Sec-tion 222a, repealed Civil Practice Act, Section 229a,'1 and amendedCivil Practice Act, Section 1197,12 by placing certain provisions ofthe old Civil Practice Act, Section 229a, into Civil Practice Act, Sec-tion 1197. Former Section 229a was essentially duplicative of Sec-tion 1197 in that it permitted service on fewer than all the partnerswhile allowing the taking of judgment against all, and was repetitiveof Section 1199 in its permission for enforceability of the judgmentagainst the partnership property and the individual property of thepartner served. Civil Practice Act, Section 229a, applied only to part-nerships "doing business" in this state or holding property here, whileCivil Practice Act, Section 1197, had no such restriction. However,Section 229a was extremely broad in that it was applicable to "anysuit legal or equitable" while Section 1197 applied to actions only forthe recovery of a sum of money in whole or in part from two or morepersons jointly indebted in contract or jointly liable in tort. There-fore the legislature repealed Civil Practice Act, Section 229a, in itsentirety and amended Section 1197 13 so as to incorporate into it thebroad provisions of Civil Practice Act, Section 229a, i.e., any actionlegal or equitable.The failure of the legislature to include the provisions for "doingbusiness" or holding property in this state may raise some questionas to whether sister states will recognize judgments rendered againstpartnerships which do not meet these requirements and in which juris-diction was obtained by serving one of the partners while temporarilyin New York State. However, the presence of one of the partnerswithin the state should be sufficient to obtain jurisdiction over thepartnership property' as jurisdiction over any partner will give thecourt power to compel that individual to apply not only his own prop-erty but the partnership assets as well to the payment of partnershipdebts. 14 As a partnership is not considered a distinct legal entity, thedoctrine that a foreign corporation not "doing business" within thestate is not subject to personal service merely because one of its offi-10 11 Rep. N. Y. Judicial Council (1945) 226; East Denver Municipal Irri-gation District v. Doherty, 293 Fed. 804 (S. D. N. Y. 1923)."1N. Y. Laws 1945, c. 842, effective September 1, 1945.12 Ibid.13 Ibid.124 Equitable Trust Co. of New York v. Halim, 133 Misc. 678, 234 N. Y.Supp. 37 (1929); Yerkes v. McFadden, 66 Hun 631, 22 N. Y. Supp. 1119(1894).1946 ]ST. JOHN'S LAW REVIEWcers or directors was served while temporarily in New York Statedoes not seem to apply. 5There should be no problem of constitutional law or conflict oflaw in making Section 1197 apply to any "action legal or equitable,"for conflicts of law and constitutional law are concerned only withjurisdiction and not with type of action. Once the requirements ofin rein or personal jurisdiction are met, a court has power to grantjudgments whatever the type of action.' 8Nor will this new section conflict with Civil Practice Act, Section1200, of the Joint Debtor Law which provides that where one ormore persons have not been joined as defendants and judgment istaken against those named as defendants, a subsequent action may bebrought against those not joined, because according to Civil PracticeAct, Section 222a, the partners need not be named individually, andtherefore the possibility of not joining one of the partners is non-existent.The advantages of the new law are obvious. Uniformity of pro-cedure is always desirable. Suits against partnerships have now beenmade to conform with the laws regulating joint debtors. Moreover,with permission to sue a firm in its partnership name, a plaintiff isrelieved of the burden of determining who all the members of a part-nership may be.GERALD REFF.15 Rosenberg Bros. and Co., Inc. v. Curtis Brown Co., 260 U. S. 516, 67Sup. Ct. 372 (1923) ; Zoller v. Smith, Levin and Harris, Inc., 30 F. Supp. 435(S. D. N. Y. 1939).16 11 Rep. N. Y. Judicial Council (1945) 232.[ VOL. 20

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Right of Partnership to Sue or Be Sued in its Own Name

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