Noyes v. New Haven, New London & Stonington Railroad

| Conn. | Mar 15, 1861

Ellsworth, J.

We are all satisfied that the defendants are entitled to a new trial.

We can entertain no doubt with regard to the legal character and effect of the payment of the $17,595.93 by the defendants to Eddy, one of the partners, and one of the plaintiffs in this action. It must, in our judgment, put an end to the right of the plaintiffs to recover that sum again in this suit.

The superior court found, that this sum was paid to Eddy and received by him in satisfaction of the debt now in suit, though something less than the amount actually due; and the judge properly held that Eddy had a right to receive it for that purpose, and that the settlement was good and obligatory upon him, though upon what ground he could regard it as null and void as to Noyes it is not easy to perceive.

On these premises it would seem to be impossible that Eddy and Noyes can unite in suing for this sum already in the hands of the former ; and this attempt to force a second payment will be seen to be entirely absurd if we suppose that Eddy had been the survivor in the action instead of Noyes, while the same rule would of course prevail in either case.

The difficulty of maintaining a joint action upon the facts found below is so. apparent that the plaintiffs’ counsel are compelled to assert, and they do assert, that the payment of the $17,595.93, was not in fact a payment upon the partnership debt at all, but a transaction entirely foreign to that debt; as perhaps a loan to Eddy, or a delivery of so much money to him for some unknown purpose. Such a view of the transaction we can by no means concur in. It is a palpable denial of the finding of the judge, which is that Eddy received the money to apply, and in fact did apply it, in payment and satisfaction of the debt. Not to insist, as perhaps might properly be done, that the entire debt of $18,808.38 was released by the compromise, (for one partner could do this,) we may at least say that the two partners can recover no more than the difference between that sum and the sum paid, and for that it is agreed by the defendants that the verdict may stand if the rest is remitted on the record.

Now let us inquire on what ground it is that the plaintiffs claim that the money received by Eddy was not a payment and satisfaction of the partnership debt when it had been agreed that it should be. It is to be observed that the state of the company account between Noyes and Eddy no where appears upon the paper's. That fact seems to have been thought quite immaterial upon the trial of the cause, as indeed it would be in a suit by partners against a third person to recover an unpaid partnership debt. Hence we have no means of knowing that Eddy, by receiving the money, whether to apply on his own debt against the company, or to pay other creditors of the company, or to reimburse himself for his capital advanced, has done his partner any injustice whatever. Whatever may have been threatened, we do not see that any injustice has actually been perpetrated on Noyes, nor can we know it, until the account is settled between them, or the state of the account agreed upon.

But the counsel of Mr. Noyes claim it to be an important fact that their client notified the president of the railroad company to make no settlement unless both partners were present, and that the president agreed to this. The counsel are not entirely agreed whether this notice meant that the defendants should not settle with certain factorizing creditors without the contractors were present, or that one partner should not be paid unless the other was present and agreed to it. Be this as it may, it is not found that Eddy assented to the arrangement or in fact had notice of it, and he certainly had power as partner to settle with their debtor and receive payment. He was not affected by what Noyes had done, for, if so, then he could have stopped payment to Noyes, and the defendants could not then have paid their debt, or made a legal tender of it to either. This would be absurd. The defendants had nothing to do with the plaintiffs’ quarrels. A court of equity could, if necessary, in a bill with proper averments, have interposed ; but the request of Noyes had no legal effect. Without more than appears in this case the defendants could pay either of the partners, for they constituted but one person. The circumstance that the president promised not to pay Eddy separately, if that be the construction of the request, amounts to nothing against Eddy. If the president has broken a legal* promise to the injury of Noyes, the remedy is against him, but it is not enough to defeat the payment made to the partner Eddy.

It is urged further, that Eddy’s purpose in affecting a settlement was to get the money into his own hands and not account for it, and that the defendants were cognizant of this, and yet settled with him, partly because they could settle with him more favorably than with both, and partly to enable him to put the money into his own pocket. But Eddy is accountable for it at all events as a partner, and we do not know but that every dollar of it was justly due to him, or to the partnership creditors who perhaps are urging their claims against him or his estate. We can not see that a fraud has been accomplished to the injury of the partnership, or even of Mr. Noyes, although there has been a breach of the confidence which belongs properly to the partnership relation, and in ordinary cases is inseparable from it; and even if a fraud has been committed by the company on Noyes, it would not be a fraud on Eddy, or on the partnership as such, and no action could be maintained in the name of the partnership for it.

We have not thought it important to discuss the law of the cases cited on the argument. It seems to us to agree with the views which we have expressed as the result of our own reflections. We consider the rule to be this—that wherever one partner settles with a»debtor .of the company and receives payment of the debt, he can not retain the money and repudiate the settlement; nor can he, either alone or in union with his partner, recover the debt a second time.

It may be proper, in view of some of the cases cited, that we remark that there is a wide difference between joint plaintiffs and joint defendants in cases involving the acts of one partner, such as settlements, and payments by or to him in the partnership business. In the first each plaintiff must have a perfect cause of action, as much so as if he had sued alone; in the latter each will stand on his own personal merits or individual defense.

Nor have we gone into the question whether the authority of a partner to bind his co-partner within the scope of the partnership, may not be revoked or restricted as to executory contracts, with notice to the party dealing with him to that effect. We are inclined to think that it may, and that it was so held in the case of Leavitt v. Peck, 3 Conn., 124" court="Conn." date_filed="1819-06-24" href="https://app.midpage.ai/document/leavitt-v-peck-6573383?utm_source=webapp" opinion_id="6573383">3 Conn., 124. But the payment of an existing debt to one of the partners, notwithstanding the request of the other that it should not be so paid, is a very-different matter. Debtors have rights of their own, and they are not dependent upon the continuance of partnership authority for the discharge of their duties. Unless there has been an assignment with notice, or an injunction from chancery, they may treat each partner of the firm to which they are indebted as representing the whole company, however numerous.

We advise a new trial, unless the amount of the payment in question shall be remitted on the record.

In this opinion the other judges concurred.