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TRACY V. TUFFLY, 134 U. S. 206 (1890)

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U.S. Supreme Court

Tracy v. Tuffly, 134 U.S. 206 (1890)

Tracy v. Tuffly

No. 134

Argued November 22, 25, 1889

Decided March 3; 1890

134 U.S. 206


The third section of the Act of the Legislature of Texas entitled "An act in relation to assignments for the benefit of creditors, and to regulate the same and the proceedings thereunder," passed March 25, 1879, provides that

"Any debtor desiring so to do may make an assignment for the benefit of such of his creditors only as will consent to accept their proportional share of his estate and discharge him from their respective claims, and in such case the benefits of the assignment shall be limited and restricted to the creditors consenting thereto; the debtor shall thereupon be and stand discharged from all further liability to such consenting creditors on account of their respective claims, and when paid they shall execute and deliver to the assignee for the debtor a release therefrom."

That section was amended by an act passed April 7, 1883, so as to provide that

"Such debtor shall not be discharged from liabilities to a creditor who does not receive as much as one-third of the amount due, and allowed in his favor as a valid claim against the estate of such debtor."

Held that this legislation applied to limited partnerships formed under chapter 68 of the Revised Civil Statutes of Texas, adopted by an act passed March 17, 1879.

An assignment by a limited partnership consisting of one general partner chanroblesvirtualawlibrary

Page 134 U. S. 207

and one special partner, for the benefit of its creditors, may be executed by the general partner, and such assignment need not embrace the individual property of the special partner.

An assignment by a limited partnership for the benefit of its creditors is not void because the verified schedule attached to the assignment embraces a debt of the special partner, which cannot, under the statute, be paid ratably with the claims of other creditors.

The only effect of the failure of a limited partnership to state fully in the published notice the terms of the partnership is that the partnership shall be deemed general.

Circumstances stated under which creditors may be estopped to deny the existence of a partnership as a limited partnership.

While repeals of statutes by implication are not favored by the court, it is settled that, without express words of repeal, a previous statute will be held to be modified by a subsequent one if the latter was plainly intended to cover the whole subject embraced by both and to prescribe the only rules in respect to that subject which are to govern.

The case, as stated by the court, was as follows:

The principal questions in this case arise under the laws of Texas relating to limited partnerships and to assignments for the benefit of creditors. Before examining those laws, the facts out of which this litigation arises will be stated.

Prior to March 26, 1884, R. W. McLin and W. T. Tuffly were partners doing business at Houston, Texas, under the name of R. W. McLin & Co. On that day, McLin died, his widow and two minor children surviving him. No administration was had upon his estate. At the time of his death, the firm was largely indebted to various individuals and partnerships. Among the latter were Morrison, Herriman & Co., Dunham, Buckley & Co., and W. H. Lyon & Co., who are plaintiffs in error. After consultation with the agent of many of the creditors, the firms just named among the number, the surviving partner and the widow determined to form a limited partnership under the name of "W. T. Tuffly," which should assume the debts of R. W. McLin & Co., in consideration of the release, by creditors of the old firm, of the estate of R. W. McLin from liability for their debts. From a trial balance of the accounts of the old firm which Tuffly caused to be made, it appeared that after the payment of its debts the share belonging to R. W. McLin's estate was $6,419.36. Mrs. chanroblesvirtualawlibrary

Page 134 U. S. 208

McLin having sold and transferred to Tuffly all the goods and merchandise belonging to the old firm, they executed the following certificate of the formation of a special partnership:

"State of Texas, County of Harris:"

"We, W. T. Tuffly and Mrs. Christine E. McLin, hereby certify that we have formed a co-partnership, under the firm name of W. T. Tuffly, under which firm name the business of such co-partnership shall be conducted."

"The general nature of the business intended to be transacted is a general retail, and wholesale, if they see proper, fancy and staple drygoods and notion establishment, in the City of Houston, Texas. W. T. Tuffly is and will be the general partner of such partnership, resident of the City of Houston, Texas, and Mrs. Christine E. McLin is and will be the special partner of such partnership, whose residence is also in said City of Houston, Texas."

"The said Mrs. Christine E. McLin has contributed the sum of six thousand four hundred and nineteen and 36/100 dollars to the common stock. The said partnership is to commence on the 16th day of April, 1884, and to continue for the space of two years, to end on the 16th day of April, 1886."

"W. T. Tuffly."

"Christine E. McLin"

This certificate was duly acknowledged by Tuffly and Mrs. McLin on the day of its date, before a notary public of the county, who certified the fact under the seal of his office. And on the same day, as appears from the official certificate of that officer, W. T. Tuffly, as the general partner named in the certificate of partnership, certified under oath that Christine E. McLin, the special partner therein, "has contributed to the common stock of said partnership the sum specified in said certificate, and the said sum has in good faith actually been paid in cash." The record also contains the certificate of the county clerk, under the seal of his office, to the effect that the certificate of partnership, with the certificate of its authentication, was filed for registration in his office on the 25th day of chanroblesvirtualawlibrary

Page 134 U. S. 209

April, 1884, and was duly recorded on the 26th day of May of the same year.

In conformity with the direction of the clerk of the county court, the following notice was published in a designated newspaper for six successive weeks from April 26, 1884:

"The undersigned give notice that they have formed a co-partnership under the firm name of W. T. Tuffly, having the following terms, as will appear by their executed and recorded certificate: W. T. Tuffly is the general partner. Mrs. Christine E. McLin is the special partner, and has contributed to the common stock the sum of six thousand four hundred and nineteen 36/100 dollars. W. T. Tuffly. Christine E. McLin."

On the day of the formation of this partnership, April 24, 1884, numerous creditors of R. W. McLin & Co. -- among the number, Morrison, Herriman & Co., Dunham, Buckley & Co., W. H. Lyons & Co. -- executed a written release in these words:

"The undersigned creditors of the late firm of R. W. McLin & Company, in consideration of the assumption of all the indebtedness of said late firm by the firm of W. T. Tuffly, composed of W. T. Tuffly, general, and Christne E. McLin