45 How. Pr. 33 | New York Court of Common Pleas | 1872
Lead Opinion
The referee finds that the assets of the firm of Greiff & Semmler, upon the dissolution of the firm, were transferred to Semmler, subject to the payment of the debts of that firm; that a new firm was formed, consisting of the defendants Euell and Semmler; that the total assets of the old firm, making $10,541.98, was put into the new one by Semmler, subject to the payment of the debts of the old firm, and that the sum of $3,000 was put in by Euell; that Euell & Semmler, in consideration of receiving all the assets of the late firm, agreed and promised to each other, at the time of the formation of the new firm, to pay off all the debts of the old ones, and that the plaintiffs’ claim was one of these debts.
It was laid down in the early case of Leonard agt. Vredenburgh (12 John., 38) by chancellor Kent, as too clearly settled to be questioned, that if a promise to pay the debt of another be founded on a new and distinct consideration, independent of the debt, and one moving between the parties to the new promise, it is not a case within the statute, but is considered in the light of an original promise; and such is the nature of the promise in the present case. So far as
I can see no difference in principle between this case and that of Lawrence agt. Fox (20 N. Y., 268), There, a sum of money was loaned, upon the promise by the borrower to pay a debt due by the lender to another person \ and it was held that the person to whom the debt was due might maintain an action npon the promise as one made for his benefit; and here Euell received a joint interest in $10,000 worth of property upon a promise to be jointly responsible for the
In Skelton agt. Brewster (8 John., 376) the defendant, in consideration of receiving from a person all her household goods, promised to pay a debt for which that person had been arrested in execution; and it was held that this was not a collateral engagement, but an original undertaking, upon which an action might be maintained by the execution creditor for whose benefit the promise was regarded as being made. .
There is nothing in the recent case of Garnsey agt. Rogers (47 N. Y., 233) giving any different interpretation of the law from that laid down and acted upon in the cases above cited. That case simply declares that, to entitle a third party to maintain, an action upon a promise of this nature, the contract must have been made for his benefit; that he must be the party intended to be benefited, which, it holds, was the case in Lawrence agt. Fox, and was not the case in Garnsey agt. Rogers; for there, the promisor, in the language of judge Rafallo, £i engaged "to advance his own money for the purpose of protecting the property of the promisee; which advance, when made, would become a lien upon the property of the promisee.” Here, however, the contract made by Semmler with his partner, Euell, was for the benefit of the creditors of the old firm ; for the assets of that firm were left by Greiff with his partner, Sepimler, subject to the payment of the firm debts which Semmler agreed and assumed to pay; and when Semmler, therefore, made these assets a part of the capital of the new firm, upon the condition that that firm should assume and discharge the debts of the old one, it was an agreement on his part, as I have said, for the benefit of the creditors of the old firm, for whose benefit Semmler held the assets before that agreement was entered into. In other words, it was giving up property to that firm which would otherwise have gone to the payment of the debts of these creditors; and the new arrangement was as much an engage
Euell having acquired' a joint interest in these assets, there was a sufficient consideration for the promise on his part, and the mutual agreement entered into cannot be regarded in any other light than as intended for the benefit of the creditors of the old firm. This being the conclusion upon the facts, it was not an agreement within the meaning of the statute of frauds.
Concurrence Opinion
(concu/rri/ng).—The referee has found, upon conflicting evidence, the facts establishing plaintiffs’ right to recover; and, unless the exceptions taken by the defendant be sustained by authority, the judgment must be affirmed.
The first proposition is that the evidence at most shows but a parol promise to pay the debt of another, which is void by the statute of frauds
If this were the only conclusion that could be drawn from the testimony, the defendant was entitled to a nonsuit; for it is well settled that a parol agreement, made by a third person with the creditor to pay the debt of another, is void; and upon this point the cases cited "by appellants’ counsel are conclusive.
The seventh finding of fact (and there was evidence to support it) is as follows:
“ That the defendants Euell & Semmler, in consideration of receiving all the assets of the late firm of Greiff & Semmler, agreed and promised to each other, at the time of the formation of the new firm of Euell & Semmler, to discharge and pay off all the debts of the late firm of Greiff & Semmler, including the claim of the plaintiffs in this action.” ■
It’ would- thus appear that the promise upon which the plaintiffs rely, and which was- adjudged to have been proved, was not within the statute. It was made by Euell with the debtor, his copartner and co-defendant, to pay the debt owir.g by the latter to his creditors the plaintiffs.
I have examined all the other exceptions, and am of opinion that they are not well taken.
The judgment should be affirmed, with costs.
Dissenting Opinion
dissenting.—It seeins to me that the judgment in this action should be reversed. The agreement of the defendant, Euell, taking the statements of plaintiff’s witnesses as true, was a mere naked contract, -without consideration, to pay the debt of a third party and clearly within the statute. It was made at the time he entered into the copartnership with his co-defendant, Semmler, but the mere contribution to the firm by Semmler of his stock Avas not a delivery of property by him to Euell, out of which the latter Avas to satisfy the plaintiff’s debt so as to bring the case within the spirit of Lawrence agt. Fox (20 N. Y., 268) and similar cases ; but was property put into the copartnership agreement and for copartnership purposes. This property was liable to division with the other assets on dissolution, and a share of it to be returned to Semmler. It was not ah irrevocable conveyance to Euell for the purpose of paying the old creditors; and the promise of the latter, it seems to me, is not to be distinguished in principle from that discussed in Garnsey agt. Rogers (47 N. Y., 233).
There a person taking a mortgage on real property, as security for a loan, agreed by a stipulation in his mortgage to pay a prior mortgage given by his debtor to a third party. It was held that the promise was not made for the benefit of the prior mortgagee, but only for the benefit of the mortgagor,
There is no testimony whatever that Semmler asked Euell to pay the old debts for the sake of the old creditors, or that Semmler contributed the property to the firm or entered into the copartnership upon any agreement that the old creditors should be paid. The agreement of Euell seems to have been made for his own and Semmler’s convenience, “ for the sake of being relieved and of not getting pushed ” in their new business. Even if Semmler, during the copartnership, could have enforced this agreement against Euell (47 N. Y., 243), the creditors could not unless made for their benefit. The subsequent dissolution of the copartnership and the agreement between Semmler and Euell (Case, p. 68) whereby the defendant, Euell, takes all the assets, does not help the plaintiff’s case, there being no agreement in it to pay the old individual debts of Semmler, and it being made upon the consideration set forth in. it—“ one dollar and moneys paid to and for (Semmler) by said Euell, and other valuable considerations.”
The judgment should be reversed.
Judgment affirmed.
Note.—A motion was made at the succeeding general term for a reargument or leave to go to the court of appeals, and the same court refused to grant either application; all the judges this time agreeing that the former judgment of affirmance was correct.
