Story v. Barrell

2 Conn. 665 | Conn. | 1818

Lead Opinion

Swift, Ch. J.

In this case, it appears, that Barrell and Gilbert, the defendants, had a note against Story, the plaintiff, to be paid out of the avails of a certain vessel, when sold, on which the plaintiff claimed, that he had paid 375 dollars to Barrell. Gilbert, on the sale of the vessel, had in his hands sufficient money to pay the whole note $ and after the dissolution of his partnership with Barrell, agreed with the plaintiff to retain the amount of the note, and promised in writ-ingto reruml to Iiim such sum as it should be found he had paid to Harrell, on a trial of the note then in suit. The suit, was withdrawn, so that the plaintiff bad no opportunity to prove what he bad paid on the note to Barrell. The money received by Gilbert was for the use of himself and Barrell.

When a man pays money on an obligation, his only remedy is to prove and apply such pay ment on the obligation : and no action will lie to recover it back. No action will lie to recover back money paid, with a full knowledge of all the facts. After the dissolution of a partnership, one, partner cannot do any act, by which he can subject the other to a new liability. On these principles, no action could be sustained for the money paid to Barrell; for it was a proper payment on the note, and Gilbert could not, after the dissolution of the partnership, subject him to an action for it. The withdrawing of the suit on the note was a rightful act, on the, part of Burrell : and it could not subject him to an action for a violation of the agreement with Gilbert. But it now appears from the verdict of the jury, that the sum of 375 dollars was paid to Barrell on the note, which was never applied : it also appears, that Gilbert retained the same sum ; that by reason of the withdrawing of the suit on the note, the plaintiff had no opportunity to prove the payment to Barrell, so as to give him a right to recover the money from Gilbert; and yet Barrell and Gilbert have received both these sums on account of the same debt. Here, the condition on which the money was paid, has not been fulfilled ; the con sideration for which it was paid, lias failed ; and though. .Barrell lias done no improper act, yet as he and Gilbert have jointly received the money under these circumstances, it is against good conscience that they should retain it; and they ought, on principles of justice, to refund it.

It is also contended, that the declaration is insufficient, because the promise is alleged to have been made after the date of the writ.

Where the day is material, as in written contracts, and must be proved precisely as laid, such an objection would be fatal \ but where the, day is not material, there this objection cannot be valid. Here, the plaintiff was not hound to prove the day alleged : he might have proved any other day, and it would have been sufficient. The averring of the promise, then, on a day after the date of the declaration, does not vitiate it.

Tuumbui.t,, Edmosd, Smith, Braisarh, Peters and Chapman, Js. were of the same opinion,

---

Concurrence Opinion

Hosmrr, J.

I concur with the Court, in the opinion that the motion in arrest is insufficient,

I am equally clear, that the objection to the testimony founded on the limitation clause in the statute of Frauds, is of no validity.

I cannot, however, admit, that an action for money had and received is sustainable against the defendants.

It is indisputable, that the plaintiff, in the count for money had and received, cannot recover of the defendants, the 375 dollars paid to Barrett, on tine 2d of July 1812, on his note due to the copartnership. This was in satisfaction of an existing debt, and is not distinguishable from any other payment.

On the 20th of December 1816, Gilbert, having refused to allow the above sum in part satisfaction of the note on which it had actually been paid, received of the plaintiff a sum equal to that note $ that is, he received 375 dollars beyond the amount due to the defendants. Whether this surplus can he recovered of the defendants on the count for money had and received, is the remaining question.

Before I enter on this enquiry, I will recur to certain facts, which have been misconceived, or were out of sight, during the investigation of this subject. The money demanded beyond the sum actually due, was paid to Gilbert after the dissolution of the copartnership, aqd without the knowledge or approbation of Barrett. No part of it has ever come to his hands, been applied to his benefit, or received to his use. It has ever been solely, and exclusively, in Gilberts possession j and on no legal principle could Barfell, if it were his desire, recover a farthing of it from Gilbert. Acting under this impression, when the plaintiff advanced the 375 dollars, Gilbert, in his individual name and character, executed a writing to Story, promising to repay him such sum as the court, before whom an action on the note was then depending, should determine had been paid.

In my judgment, there exist several objections to the plaintiff’s recovery on the count for money had and received.

In the first place, the money, without mistake or coercion, was voluntarily advanced, wilh full knowledge that Gilbert received S75 dollars. which before bad been paid on the note, and which payment lie refused to allow. Money paid under these circumstances cannot he recovered. Brown v. M'Kinally, 1 Esp. 279. Cartwright v. Rowley, 2 Esp. 723. Marriott v. Hampton, 7 Term Rep. 269. Gutes & al. v. Winslow. 1 Mass. Rep. 65. Bilbie v. Lamley & al. 2 East, 469. Bulkley v. Stewart, 1 Day 130. In the case last cited, it was said by the court, “ this action ({indebitatus assumpsit) does not lie to recover back money voluntarily paid, on a claim which the party disputes, though he pay it expressly reserving his right to litigate ids claim.” On a principle of general justice and legal policy, the piaintilFis not per* mitted to sustain his suit in such case, lie should have paid the sum, which he knew to be due from him, and stood on ids defence against the residue demanded.

The express engagement of Gilbert furnishes a second objection against the plaintiff’s demand, in my opinion, utterly irresistible. Expressum faeit cessare taciturn. No action for money had and received can be sustained, even against Gilbert. The law will never imply a contract, when the parties, with perfect fairness, have entered into an express agreement. In reply to this, it has been said, that the defendants, by withdrawing their action on the note, have prevented the happening of an event, i. e., the determinátion of the court in relation to the payment, without which no suit can be maintained on Gilbert’s contract. I do not admit the correctness, or supposed force, of this position, Harrell violated no obligation in withdrawing the suit. Undoubtedly, Gilbert did 5 and his contract furnishes a remedy against him. Be this, however, as it may : the express agreement remains open and in force ; and whether there is, or is not, any other remedy, the law will not raise an implied contract.

There remains another objection against the plaintiff’s recovery, to which no satisfactory answer has been given. The partnership connexion between Darrell and Gilbert had terminated, before the sum demanded of the plaintiff was advanced. Tiie money, I repeat, was not delivered to Gilbert with the knowledge or approbation of Burrell, and no part of it has come to Ids possession or use. “ The moment the partnership ceases, (said Lord Kenyon in Abel & al. v. Suttton, 3 Esp. 108.) the parties become distinct persons; t!j»v arc tenants in common of the partnership property undis-posed of, from that period ; arnl if they send any securities* which did belong to the partnership, into the world, after such dissolution, all must join in doing so. It never could be allowed, that one might make another his debtor against his will. "When a man takes a partner, he takes him for better for worse ; he reposes confidence enough, and places himself sufficiently in the power of the partner, during the partnership. To contend, that this liability to be bound by the acts of his partner, extends to a time subsequent to tbe dissolution, is, in my mind, a monstrous proposition. A man in that case could never know when he was to be at peace, and retired from all the concerns of the partnership, if one partner wa*. to have the power of binding another long after the dissolution of the partnership.”^(a) In Hockley Sf al. v. Patrick, 3 Johns. Rep. 528., it was adjudged, that if one partner, authorized to settle the debts due from the copartnership, after its dissolution, adjusts an account, and acknowledges a balance to be due from the co-partnership, this acknowledgment will not bind his co-partner. The reason assigned is, because « after the dissolution of a copartnership, the power of one party to bind the other wholly ceases.” It,then, is unquestionably clear, that no act or contract of a partner, after the connexion is dissolved, is obligatory on his copartner, except as to the authority impliedly existing for the collection of joint debts, or the obtaining of joint property. Gilbert and Barrett were as strangers, and each had no right to oblige the other. It was said, however, in the argument, that Gilbert had authority as agent to the late partnership, to receive payment on any terms he might think proper, and on this subject to bind his partner to any engagement he should make. The assertion, in my judgment, is gratuitous, and entirely destitute of foundation. He possessed, by implication, every power requisite to the performance of his duty, and nothing more. He could institute suits, execute receipts, collect debts, in the copartnership name ■, but he could not receive money to which the partnership had no claim, and, by his contract, oblige his partner, on a contingency, to the repayment of it. The reason is plain ; authority to this extent is both unnecessary and dangerous, and therefore, is not by law implied. Under the pretext of collecting debts, a partner might receive money on demands which had been satisfied, and by this act of his, if the company were implicated, one-rate his copartner in sums of ruinous magnitude.

After all, if the authority of Gilbert to do what has been contended for, were admitted, it could have no bearing on this case. He assumed on himself a personal obligations which the plaintiff accepted j and in consideration of which, he paid him 375 dollars. This contract is a law to the parties, of their own making, repelling every legal implication, and exclusively binding them to its own provisions.

I am satisfied, that the charge of the court was incorrect % and that a new trial ought to be granted.

Goitid, J.

The only objection, raised under the motion in arrest of judgment, is, that the promise is alleged to have been made after the date of the writ. But this objection confounds a well established distinction in pleading, vi». That any repugnancy, or mistake, in a material point, is incurable ; but that an immaterial one is aided by verdict. The present case falls within the latter branch of the distinction : for though, in the action of assumpsit, the promise is, upon the face of the declaration, always taken to be an express one ; yet the day, on which it is alleged to have been made, is never material. For the time of making a promise forms no part of the description of the contract, though the time of payment always does. In pleading records, and written Instruments, the rule is different; because the date enters into the description of the record, or instrument, itself. And in any case, the day laid in the declaration, though not originally material, may be made so, by the subsequent pleadings. But here, there are no pleadings, that can have that effect. The question arises, solely, upon the declaration ; and in such cases, the rule is, that if no day, an impossible day, or a future day, is laid, it is aided by verdict. 3 Keb. 354. Carth. 389. The principle of the rule is, that after verdict, every fact, or circumstance, which, in evidence, could have been necessary to warrant the finding, must be presumed to have been proved to the jury ; and of course, to have been proved by legal evidence. In this ease, therefore, the promise being found, we must pre~ sumo, tliat a promise before .the date of the writ was proved , f‘1!' evidence of a subsequent promise would not have been legally admissible.

The question remains, whether there are sufficient grounds shown for a new trial ? I think not. I am wholly unable to perceive any relevancy in the objection, that the admission of the evidence of Pitcher and others was inconsistent with the limiting clause in our statute of Frauds, That clause, which is, essentially, a statute of limitations, provides, that *f no suit shall be brought, or maintained,” upon any unwritten agreement but within three years,” &c. The parol evidence admitted w as, that in July 1812, the plaintiff paid to Harrell, 375 dollars, which Barrett then promised to indorse on the plaintiff’s note to JV*. Gilbert and Co. But the action is not founded upon Barrett's promise to indorse the 375 dollars, nor, indeed, upon any special promise; but upon the implied one, arising from the eventual over-payment of the note. But this implied promise did not, and could not, arise, at any rate, till the last payment made to Gilbert, in December 1816 j nor, as I conceive, till the suit on the note was withdrawn. The receipt of the 375 dollars, by Barrett, and his promise to indorse it, are only a part of the res gesta, from which, when completed, by the subsequent transactions, the plaintiff claims, that the law raises a promise, on the part of the defendants, to refund the excess, ultimately received by them. Whether such a promise results, or not, is a distinct question j but the present objection, at all events, has no application to the case.

It is then objected, that, as the payment, which is claimed to have exceeded the amount due upon the note, was voluntary ; Ike plaintiff is, for that reason, precluded from recovering back the excess. To this, I answer, that the writing, executed by Gilbert, in December 1816, implies a plain waiver of ail exception upon this ground. And it is not denied, S believe, by the counsel for the defendants, that an agreement by Gilbert, might have amounted, in law, to such a waiver, if the partnership between himself and Barrett had subsisted, at the time of the agreement. But it is insisted, that, as the partnership was, Usen, at an end f Barrett rannni, and of course, the late company cannot, be affected by it. It post be borne in mind, .-however, that .the w riting given by Gilbert is not an original contract, intended to bind the company | but an agreement, respecting the payment, w hirli he was then receiving/or the company, upon a note, airead] due to them. And, as to the note, he and Harrell were still, in effect, partners, the dissolution of their general partnership notwithstanding; and would have been such, if no general partnership had ever existed between them. Joint, creditors are, in relation to the joint debt, due to them, always in the nature of partners. And in this case, the, defendants, being, at the time of. Gilbert’s agreement, joint promisees, and having, of course, a joint interest in the debt; each of them then had, quoad the note, the same power to act for both, as if their original partnership had still subsisted. For that purpose, either of them had a right to act, as agent for both.

In this view of the subject, let us consider what the nature of this latter transaction, between the plaintiff and Gilbert. was.

The plaintiff, being indebted, by note, to the defendant, as late partners in business, and Gilbert, one of the defendants, being in possession of the plaintiff’s funds, it was proposed between the two latter, that Gilbert should retain out of those funds, the amount due upon the note. But, as the plaintiff claimed, that he had already paid 375 dollars, to apply upon the note; and as that payment was contested ; it was agreed, in writing, that Gilbert should retain, out of the plaintiff’s money, the amount of the original contents of the note, with the interest — leaving the question of over-payment to be judicially settled, in the suit, then pending upon the note : Gilbert, at the same time, engaging, for himself, and in his own name, to refund, if the question should be decided in favour of the present plaintiff, and to indemnify him, &c. And as it was a principal object of the parties, to have the question, as to the former payment, decided by the court, in w hich the action was pending ; it was stipulated, by the present plaintiff, that this agreement should not be given in evidence in that case. What effect Gilbert’s conditional undertaking to repay and indemnify the plaintiff, may have upon the question, I will, by and by, consider. For the, present, I observe, that the payment to Gilbert, as well as the former one to Harrell, was for the use of the late company ; that, it was, in effect., a payment to them ; and that they have had the benefit of both. These facts appear upon the motion. Gilbert’s agreement, then, was not intended to ere-ate (what it certainly could not create») any original duty upon Barrell. it was only an arrangement, which Gilbert, acting, and lawfully acting, as agent for his late partner, as well as for himself, made in relation to an existing joint claim of theirs — a claim, in which they were still, virtually, partners. And as Gilbert clearly had a right to represent the late company, in relation to this joint claim; as he had a right to receive payment — to discharge the note- — to compromise the demand — or to do, in general, any other act, respecting it, which he and his late partner, together, could do ; he must have had a right to receive payment, upon terms, or upon an understanding, or agreement, that the payment should not prejudice the plaintiff, in relation to any ultimate claim, arising out of the transaction, against the company. And he would have had the s \me right, as being a joint creditor with Barrell, whether any partnership in business had ever existed between them, or not. The power of each, to act for both, to this extent, is incident to the right of each to settle, or discharge, the demand. Now, it is certain, from the nature and scope of the agreement, that the payment to Gilbert was made, with the understanding, and virtually upon the condition, that it should not prejudice the plaintiff’s rights, in the event of its proving to be an over-payment. And if there were nothing more, in the case, — the payment having been made for, and in effect to, both the defendants, and they both having taken benefit of it — this condition must have bound them both. This appears to me quite as clear, as if the over-payment had been made by a mutual mistake, and had gone to the use of both the defendants. And if so, the plaintiff’s claim cannot, in my judgment, be repelled, either by the circumstance of the payment’s having been voluntary, or by the objection, that one of the members of a dissolved partnership cannot, by his own sole act, create a new obligation upon the other. For the only obligation, which, upon any supposition, Barrell incurs in consequence of the last payment, is the implied one, that he shall refund a part of what he himself has received, if it shall appear, that he has received too much.

But it is finally urged, that Gilbert’s written agreement, being a security, substituted for the obligation of the late company to refund, precludes the plaintiff from asserting his present claim. This objection, (however it might have .'¿¡Fettl'd the case, if the question, as to the first payment, had been judicially decided, as contemplated in that agreement,) cannot now avail the defendants. Gilbert's undertaking, so far as regards the present point, was only, to refund “ such sum, as the court should find" to have been before paid upon the note, But the court found nothing ; and was prevented from finding any thing, by the act of the defendants, in withdrawing the action, then depending. 1 say, “ the act of the defendants for though it does not appear, by whose personal direction, that suit was withdrawn j it must be taken to have been by the act of both the present defendants. And by this act, the plaintiff lost ¿ill remedy, in any event, upon Gilbert's written agreement : a judicial finding of the amount over-paid, being indispensable to a right of recovery upon that agreement. For though, where performance of a condition precedent, strictly so called, is prevented by a defendant, the plaintiff may recover, as if lie had actually performed : yet the rule is totally inapplicable to the present case. Here, the amount, to befound by the court, was the only thing, that could, under any circumstances, he recovered under the agreement: and the defendants, by preventing such a finding, have rendered performance of the agreement, on the part of Gilbert himself, absolutely impossible.

The state of the case, then, as it now stands, is, that the object of the plaintiff, in paying the full contents of the note, to Gilbert, has been defeated, and all remedy upon Gilbert's agreement destroyed, by this act of the defendants; and they still retain the whole amount of both payments, in violation of the understanding, and the virtual condition, upon which the last payment was made and received. Under these circumstances, the defendants, if they have received too much, in the whole, cannot, in conscience, retain it. $ nor is it competent for them to object, either that the last payment was voluntary, or that the plaintiff holds a substituted security for what may be due to him.

Motion in arrest insufficient$ and Mow trial, not to fee granted.

(a) Vide Kilgour v. Finlyson & al. 1 H. Black. 155. Lansing v. Gains & Ten Eyck, 2 Johns. Rep. 300.