Case ID: pa_108/html/0278-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Chief Justice Merctjr", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Blair, administrator, versus Wood.
    1. By force of the Act of April 11th, 1848, section 4 (P. L. 536) the estate of a deceased partner becomes liable for the whole debt of the firm of which he was a member, whether the surviving partner be solvent or insolvent. For the purpose of action against the representative the debt is treated as if it were the individual debt of the decedent.
    2. So, likewise, in a suit by an administrator for a debt due his decedent, the defendant may set off a debt due him by the firm of which the decedent was a member; and if the set-off exceeds the demand, the jury will certify the balance in his favor.
    
      January 9tlr, 1885.
    Before Mercur, C. J., Gordon, Paxson, Trunkey, Sterrett and Green, JJ. Clark, J., absent.
    Error to the Court of Common Pleas, No. 1, of Philadelphia County: Of January Term, 1884, No. 253.
    This was an action of assumpsit, by D. Blair, administrator d. b. n. of Joseph M. Lupfer, deceased, against John S. Wood. The narr. was in the common counts and claimed to recover the sum of $10,000, due plaintiff’s intestate. Plea, payment, etc. and a special plea of sefroff that plaintiff’s intestate was indebted to defendant in a larger sum than that claimed in this suit, and defendant claimed a certificate in his favor for the balance due him. The claim of set-off was set forth substantially as follows: — The firm of J. M. Lupfer & Co., tanners, was composed of Joseph M. Lupfer, plaintiff’s intestate, and James W. Lupfer; the defendant as commission merchant, received from said firm certain leather on sale, and made to said firm certain advances: the firm was dissolved, by the death of Joseph M. Lupfer, on February 19th, 1875, on which date the balance due defendant by said firm, after deducting all credits for leather sold and on hand, amounted to $73,000. The said James W. Lupfer was at the time of the said dissolution of the firm insolvent, and since 1878 has not resided or been in this 'state. Replication denying the payment etc.; rejoinder, de injuria.
    
    When the case was called for trial, before Biddle, J., the plaintiff’s counsel stated that he could not proceed in the cause, because the claim of the plaintiff had been compromised and settled by defendant since suit brought, and submitted, therefore, that the cause could not be proceeded with.
    The court thereupon permitted counsel for defendant to open to the jury, claiming a sefroff under the plea as above. Defendant put in evidence the following paper :—
    Blair vs. Wood. C. P. No. 1, March 1880, No. 443.
    It is hereby agreed between the parties hereto that the said Blair, administrator, plaintiff, releases all claim which he has in this suit against John S. Wood, and in the subject matter of the suit, and agrees that he will not cause or allow the said suit, to be discontinued, nor will he suffer a nonsuit so as to prevent the said Wood from recovering upon the alleged set-off. This agreement is made in consideration of Wood’s agreeing to pay the sum of $250 to Blair upon the performance of these conditions and others contained in an agreement of even date herewith. This agreement not to affect in any way the No. 50 judgment, Janu’y T., 1878, Huntingdon County, Sam’l Lupfer, admin., etc., v. Israel Lupfer, et al., etc., no costs to be recovered against D. Blair, admin., in case judgment should be rendered against said Blair in above suit.
    D. Blaik,
    Admin, d. b. n. of J. M. Lupfer. Feb’y 16th, 1881.
    John S. Wood,
    Per J. H. Ebert. Feb’y 16th, 1881.
    A. Sydney Biddle, Witness of both parties.
    Defendant called J. H. Ebert, defendant’s bookkeeper, and offered to prove by him the amount due defendant by the firm of J. M. Lupfer & Co. Objected to; objection overruled; exception.
    The witness, after referring to tjie books of the defendant kept by him or under his direction, was asked — Q. Are you able to state, refreshing your memory from these entries, the balance now due to the defendant? Objected to; objection overruled; exception. Answer. The balance due January 1st, 1875, was $88,024.75 and the balance due January 1st, 1878, was $64,824. The last sum is the amount now due. Defendant closed.
    The court charged the jury that it was admitted that plaintiff’s debt was compromised, and that there was no defence to the defendant’s claim and that if the jury believed the defendant’s evidence, he was entitled to a verdict and certificate for the amount proved to be due him.
    Verdict for the defendant and the jury certify that the j>lain-tiff is indebted to the defendant in the sum of $60,000 and judgmeiit thereon. The plaintiff took this writ of error, and filed inter alia, the following assignments of error. ,
    1. The court erred in admitting as a sefroff a claim of defendant against the firm of James M. Lupfer & Co., of which firm plaintiff’s intestate was a member.
    2. The court erred in overruling plaintiff’s objection to the ■following offer made by defendant, to prove “the amount due defendant by the firm of J. M. Lupfer & Co., of which firm the plaintiff’s intestate was a member.”
    5. It appearing from the record that the plaintiff’s debt had been paid by defendant, since the suit was brought, the court erred in permitting the defendant to prove an alleged set-off and in not entering a compulsory nonsuit under the Act of 1886, the plaintiff not proceeding in the cause.
    
      Charles C. Lister, for the plaintiff in error. —
    The agreement signed by the administrator and the defendant did not in any manner alter the legal status of the parties. It simply prevented the plaintiff from suffering a nonsuit, but did not prevent the entry of a compulsory nonsuit under the Act of 1836, as in the case of an absent plaintiff, nor change the defenclant’s position in the least. Under tbe pleadings, bis claim arose as a set-off, and tbe settlement of plaintiff’s claim voluntarily extinguished bis right to recover under tbe plea of set-off so far as this action is concerned. If tbe defendant bad any right to proceed in tbe cause after tbe extinguishment of plaintiff’s claim, then manifestly it was, under the pleadings, for a certificate for amount in excess of plaintiff’s claim by way of set-off. It has long been tbe settled law of this state that in an action by A against B, tbe defendant cannot set off an account for goods sold to A and another as partners: McDowell v. Tyson, 14 S. & R., 300; Archer v. Dunn, 2 W. & S., 361; Jackson v. Clymer, 43 Pa. St., 79; Sherwood v. Yeomans, 98 Id., 453.
    Tbe doctrine has been carried to a greater extent, because, even though tbe matter arose out of tbe same transaction, in an action by a partner for his individual debt, an unsettled claim against tbe firm cannot be set off; Milliken v. Gardner, 37 Pa. St., 456. In Walker v. Eyth, 25 Id., 216, Eyth sued to recover bis individual debt, and an offer to set off against it a debt due by Walker, & Eytb as partners, was not allowed. In that case as here, Walker was a non-resident, bad subsequently died, and bis estate was insolvent, all of which was urged in support of tbe claim, but it was" held that tbe claim of Eytb was bis separate estate, and be bad a right to appropriate to bis separate creditors. To allow set-off in this case would permit defendant to defeat plaintiff’s claim by a claim against tbe partnership and thereby compel the other partners to pay the debt of tbe member of tbe firm out of tbe partnership funds to tbe prejudice of tbe others. Tbe administrator would also be concluded by the judgment on this verdict, and defendant permitted to participate in tbe distribution of the estate of plaintiff’s intestate as a separate creditor. Upon principle and authority tbe objection should have been sustained.
    
      A. Sydney Biddle, for tbe defendant in error. —
    A firm debt being a joint and several liability, Wood could have recovered judgment against Joseph M. Lupfer in bis lifetime for a debt due him by tbe firm of J. M. Lupfer & Co.: United States v. Lewis, 2 W. N. C., p. 35; Lewis v. United States, 2 Otto, 618. It follows that in an action by Joseph M. Lupfer, in bis lifetime, against Wood, tbe latter under tbe defalcation Act could have set off Ms claim against Lupfer’s firm. Although tbe decisions in Pennsylvania are not in harmony on this question, tbe latest case is directly to tbe point as just stated: Domestic Sewing Machine Co. v. Saylor, 5 Norris, 287. TMs case undoubtedly overrules tliree of the five cases cited by plaintiff in error, namely: McDowell v. Tyson, Archer v. Dunn aud Milliken v. Gardner. The' last of them was cited to the court in the Sewing Machine Case, and the other two seem to have been overlooked. Justice Paxson, after reviewing many of the cases, concludes : “ That such indebtedness may be set off is too plain for argument.” The only subject for regret is that this court did not explicitly overrule Milliken v. Gardner, and other similar cases, which remain (as is shown by the brief of the plaintiff in error) as pit-falls to entrap the unwary.
    Wood also could have recovered in equity, on his firm debt, against the administrator of Joseph M. Lupfer: Story on Partnership, §§ 361, 362 and authorities there cited. In Pennsylvania the same result would be reached in the equitable action of assumpsit. It follows that in this action of assumpsit, by Jos. M. Lupfer’s administrator against Wood, the latter may set off his claim against the firm of which Jos. M. Lupfer was a member.
    But whatever may have been the common law or equity doctrine, the question has .been definitely settled by the Act of April 11th, 1848, (P. L., 536) section 4 of which provides “ In any suit or suits which may hereafter be brought against the executors or administrators of a deceased co-partner for the debt of the firm, it shall not be necessary to aver on the record or prove on the trial that the surviving partner or partners is or are insolvent, to enable the plaintiff to recover.” And it has been decided that the effect of the Act is to render a deceased partner’s estate liable in the first instance, whether the survivor be solvent or insolvent — and with good reason; for though the surviving partner be solvent he may not be within reach of the creditor: Brewster’s adm’r v. Sterrett, 8 Cas., 118; Moore’s Appeal, 34 Pa. St., 411; Ferguson v. Wright, 61 Id., 258; Lewis v. Cuthbertson, 11 S. & R., 49. A plea- in abatement by Blair to Wood’s set-off, averring nonjoinder of the surviving partner would not have availed him (or Lupfer, if the action or set-off had been against him in his life time) under the provisions of section 5, of the above Act of April 11th, 1848. It will be observed that this verdict does not in any way establish the right of Wood to obtain the assets belonging to the estate of Joseph M. Lupfer. No execution can issue on the judgment to be entered upon this verdict against the administrator. Wood’s only remedy is in the Orphans’ Court of Huntingdon County where Lupfer was domiciled, and the only object of obtaining this judgment is to enable Mm to prove his claim satisfactorily before the Auditor in that county. The judgment does not affect the claims of other creditors of Lupfer if any, firm or separate.
   Chief Justice Merctjr

delivered the opinion of the court, January 26th, 1885.

Section 4 of the Act of April 11th, 1848, provides for the bringing of a suit against the executor or administrator of a deceased co-partner, for a debt of the firm, and for a recovery, without averring in the record or proving on the trial, the insolvency of the surviving partner. For the purpose of action against the representative, the debt is treated as if it was the individual debt of the decedent: Brewster’s Adm’r v. Sterrett, 8 Casey, 115. The estate of the decedent becomes liable for the whole debt of the firm of which he was a member : Moore’s Appeals, 10 Id., 411. In the class of cases to which this Act applies, its purpose is to make the indebtedness several, which was joint before: Miller v. Reed, 3 Id., 244. Being several, a debt against the estate of the decedent may be treated as such either to maintain an action therefor, or for the purpose of set-off. It follows there is no error in this record.

Judgment affirmed.