Case ID: scl_31/html/0351-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Curia, per Richardson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

David Truesdell vs. Thomas E. Baker.
    
    Where articles of partnership, under seal, provide for a dissolution by mutual consent, such dissolution may be shewn by parol, and need not be evidenced by writing under seal, 
    
    
      Befoee O’Neall, J. at Charleston, Spring Term, 1845.
    This was an action of covenant, brought by the plaintiff on articles of partnership under seal, whereby the parties covenanted to carry on business for several years, as partners, unless dissolved by “mutual consent.” The defendant, alleging that the partnership had been dissolved by mutual consent, entered into a new business ; and the plaintiff brought this action for the recovery of damages.
    The defendant proposed, and was allowed to prove, that after the burning of the “ Exchange,” their place of business in Columbia, he and the plaintiff agreed to come to a settlement and dissolve. He proved that the plaintiff had again and again said they had by mutual consent dissolved their partnership. This testimony was objected to by the plaintiff, who insisted, that as the partnership was by deed, it could only be dissolved in the same way. This, his Honor thought, was generally true — but inasmuch as the deed of partnership here provided for the termination of the partnership by “ mutual consent,” he thought that this, like any other fact limiting the duration of the partnership, such as the expiration of the term, might be proved by any usually competent parol proof.
    The plaintiff submitted to a non-suit, with leave to move the Court of Appeals to set it aside, on the grounds—
    1st. Because a partnership formed by articles under seal, cannot be dissolved by any agreement not under seal.
    2d. Because, even where such articles provide, as in this case, for a dissolution by “ mutual consent,” such mutual consent must be under seal.
    3d. Because his Honor erred in suffering the defendant to give evidence of a dissolution by parol consent.
    McCrady, for the motion.
    The evidence might have been competent in mitigation of damages, but it was received and considered by the presiding Judge, as a bar to the whole action. This, under the operation of the maxim, unum quodque eodem modo quo colligatum est dissolvitur, (Noy Max. 11) he thought was wrong. 5 Rep. 26 ; 6 Rep. 44. It is true, that where the deed itself contains a condition, the performance of that condition may be shewn by parol ,• but this is not a condition ; and he submitted that a dissolution by mutual consent, could only be shewn by an instrument under seal. 1 Taunt. 428; 7 Price, 604.
    
      Hunt, contra.
    The question is whether this being an action for -damages, parol proof could be produced of a dissolution by mutual consent. The rule as to dissolving a contract by an instrument of as high a nature as the original, does not apply. 1st. Because the contract itself provides for its termination by mutual consent, which, like any other fact in pais, can be proved by parol. 2d. The rule of law itself is, that where the action is on the covenant, but to recover damages only, there parol evidence is sufficient. Blake’s case, 6 Rep. 44. The same rule was sustained in Burden vs. Skinner, 3 Day, 126. In an action on a covenant, under the general issue, parol proof of the consent of the covenantee to the non-performance of the covenant, may be given in evidence. If this is good law, it is conclusive, and it is in accordance with the rule laid down in Coke, as “ the action arises immediately out of the covenant, for damages only.” Bac. Abr. Tit. Accord and Satisfaction.
    
      
       For the maxim “ every contract ought to be dissolved by matter of as high a nature as that which first made it obligatory,” and the application thereof, vide Broom’s L. M. 407. R.
    
   Curia, per Richardson, J.

The question is, has not the covenant of partnership, which was executory and continuing, been executed under its express provisions %

The general rule of law, that covenants under seal can only be dissolved by written agreements also under seal, is well established. Noy. Max. 11; 5 Rep. 26 ; 6 Rep. 43. For instance ; a common money bond, being under seal, cannot be dissolved but by a written agreement, also under seal; and yet the condition of the bond may be proved to be fulfilled — as by payment, by accord and satisfaction, by lapse of twenty years, (fee, ; and any such fulfilment, though not under seal, dissolves the obligation of the bond. The meaning of the maxim, eodem modo dissolvitur &c. seems to be this, that where a subsequent contract is set off to dissolve, estop, or alter a prior contract, the former must be of as high a character as the latter. As if Trues-dell and Baker, while continuing in partnership, had changed the terms before stipulated, such alterations must be evidenced under seal — and the covenant would have still stood so modified. But when the contract itself sets forth the terms (in this instance “ mutual consent”) upon which it may be made to end, it is not unlike a bond which is dissolved by payment, though not proved by a sealed writing. Why ? Because the very end and terms of the bond are fulfilled by the fact of payment, no matter how proved. The executory contract has become executed, and ends. In like manner, may not the “ mutual consent” stipulated in this covenant, upon its actual occurrence, dissolve the partnership ipso facto ? — although, had there been no such stipulation expressed in the covenant, such consent must, like a mere alteration, have been proved by a sealed writing. In such a case, mutual consent would have been new, foreign, and additional to the covenant.

But in the case before the court, mutual consent” is covenanted to be the end and dissolution. Does it or not, mean the fact of mutual consent to operate as payment or satisfaction ? There may be assuredly room for either construction.

But the covenant admits of that practically adopted, in the first instance, by the parties themselves. They did dissolve by mutual consent, in point of fact. But take another view of the parol evidence admitted; the defendant was entitled to prove such consent in any way, at least to lessen the amount of damages, under any construction of the covenant. Under no view, therefore, can we perceive error in the circuit decision.

The motion is dismissed.

O’Neall, Evans, Butlee., Waedlaw and Feost, JJ» concurred.