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Date Created: 2024-08-24T03:29:51.129683

John Smith v. David Loring.
    One of two partners, without the knowledge and consent of his copartner, substitutes the partnership for his individual indorsement on an accommodation note. Ho is individually accountable to the copartner for any eon- ■ sequent loss.
    .Recognition of, and voluntary payment of such indorsement to the creditor, does not change liability between the partners.
    An agreement to abandon claim against copartner, upon account of such indorsement, though made for some consideration, may, under circumstances of unfairness and advantage, be relieved against in equity.
    This ease was reserved for decision here by the Supreme Court in Hamilton county. It was a bill in chancery, brought by one-partner against another, for an account and settlement of the partnership concern.
    
      The bill stated that the complainant and defendant entered into -partnership as merchants, in the year 1817, and continued to deal :as partners until December, 1821, when the partnership was dissolved by mutual consent. It alleged that the affairs of the company remained unsettled. But as the controversy related entirely to a single item of account between the parties, it is unnecessary to state more of the case than embraces that item.
    The bill charged that, among the unsettled business of the firm, ■was a claim set up by Loring to charge the complainant with one-half the amount of a partnership liability incurred by Loring for Jhis own account.
    It stated that one William Harlow, being in good credit, had obtained an accommodation loan, at the Bank of the United States, in Cincinnati, for sixty-three hundred dollars, *upon the indorsement of Whipple and Washburn, and Oliver Fairchild. That on May 4, 1819, David Loring substituted his individual name upon the note, for that of Fairchild, and the note so indorsed, was discounted, and on the 6th of July, and 7th of September following, notes for renewal were indorsed by David Loring with Whipple and Washburn, and discounted: that in the meantime, the credit of Harlow had very much declined, and on the 9th of November, Loring, without the consent or knowledge of Smith, indorsed the note with the name of Smith and Loring, instead of David Loring, and it was discounted, and the proceeds applied to take up the note indorsed by David Loring alone. And when this note became due, it was protested for non-payment.
    The bill further charged, that when the transaction came to the knowledge of Smith, he objected, but was assured by Loring that .a full indemnity had been obtained from Harlow, which induced the complainant to rest easy. It charged that the indemnity was altogether insufficient, and that in March, 1824, in settling the •concerns of the firm of Smith & Loring, the complainant was charged with, and actually paid one-half the sum of sixty-three hundred dollars, upon account of said indorsement. The bill prayed a general and final account, and that Loring should be charged with the amount paid by Smith, upon this indorsement. The answer admitted the indorsements of the note of Harlow, as-stated in the bill, and insisted that the name of Smith and Loring was substituted for that of David Loring, in good faith, and in conformity to the power of one partner to indorse the name of the firm. That Whipple and Washburn were indorsers for Smith and Loring, and that the indorsement was made for their common advantage to preserve the credit of all. It alleged that immediately after the indorsement, Smith was informed of it, and did not object.
    The answer further alleged that Smith had acquiesced and made no complaint until difficulty arose between them in respect to a transaction at New Orleans, in which an award had been made against Smith. It further insisted *that at the time of making the adjustment with the bank, Loring refused to go into any adjustment or settlement unless Smith'would agree to abandon all claim against him for this indorsement. That Smith did" make this agreement, and upon that being done, Loring-went into-the settlement, and it was completed to the mutual advantage and-satisfaction of the parties. Further, the answer charged that Smith was justly responsible to Loring for indorsing the name of; the firm upon a note of one P. A. Sprigman, without the consent-of Loring, all claim for which Loring abandoned at the settlement. It denied that Harlow’s circumstances became worse in,the summer of 1819, and denied all fraudulent design or intention.
    A voluminous mass of testimony was taken, and filed in the cause, from an analysis of which the following facts resulted:
    That the name of Smith & Loring was indorsed by Loring in-place of his own, without the knowledge of Smith, and that the fact was not known to Smith until after the note was discounted. That at the time the note was protested, or shortly after, an in- • demnity was given, which was then thought sufficient, and that Smith joined with Loring in a negotiation with the bank to take-this indemnity and discharge the indorsers. That in the settlement with the bank, the property of Smith & Loring, though divided between themselves, was given to the bank at a joint valuation, and each of them received a credit for half the value. At' the time of the division, Loring had agreed to give Smith two-hundred dollars for his choice, which was unpaid, and which .Smith was induced to relinquish at the settlement; that Loring had made most improvements, and that when the property was given to the bank, Loring’s part rented for one hundred and fifty dollars per annum more than Smith’s. That at present the rents were about equal, and the property esteemed of about equal value.
    That at the time of this settlement Smith manifested great .anxiety to effect it. That for the Sprigman indorsement there was A judgment against Smith, and an execution levied on his property, but no judgment against Loring. That Smith, through the negotiations of friends, agreed to *give up his claim for the Harlow indorsement, and that Loring agreed to give up his claim for the Sprigman indorsement, in respect to which it appeared that it had been originally made by Loi-ing, and not by Smith, but with his assent. That subsequently an agreement was made that Sprig-man should obtain other indorsers, but not being able to effect this, .Smith indorsed a note for renewal and to prevent a protest, and that Loring subsequently indorsed another note to be renewed, but it was not discounted, and the protest and suit were had upon the mote indorsed by Smith. That the circumstances of Harlow were bad in May, 1819, but it was not so well known as it was in the autumn of the same year.
    N. Wright, for complainant:
    1. There is a wide distinction between the liabilities of partners to third persons and their liabilities to each other. A partner may •often be bound to a third person by the act of his co-partner, where there is no liability as between themselves. The liability as relates to third persons rests upon general principles of mercantile policy; but as between themselves it rests upon a single and very simple principle.
    “A partnership is a contract between two or more persons for joining together their property, labor, or skill, upon an agreement that the gain or loss shall be divided proportionally between them.” The gain or loss is confined to the objects of the contract, and embraces the ordinary business contemplated by it. A gain or loss arising in a transaction by one partner, out of the ordinary .scope of the partnership business, is not a subject of division between the partners. To such gains the partnership contract creates no -community of right, and no community of burden as to such losses. Wats. Part 1.
    It is not the ordinary business of a mercantile co-partnership to indorse notes as security, or in any way become surety for others; of course the loss occasioned by such a transaction falls exclusively upon the partner who was the immediate agent in it. The first part of this proposition would seem plain from the very object of such an association. It is to make gain by merchandising, not to accommodate *friends or the world at large with sureties. The perils of the connection are great enough without •such an extension of authority, and the contract being to carry on merchandising, no stretch of construction can imply from it an obligation to participate in cases not arising out of that business.
    The case of Foot v. Sabin, 19 Johns. 154, arose directly upon this point, although being between partners and third persons, it is not so strong for complainant. It arose on the effect of the firm name given by one of the partners as security on a joint note. After alluding to the general principle that one of the firm can not give the partnership security for his individual debt, it is there said that “ the case is still stronger when one of the partners becomes security for another and attempts to bind his co-partners; it is a fraud on such of the partner’s as do not consent expressly to be bound, for the creditor is aware that it is a pledging of a pax’tnei’ship responsibility irx a matter in no wise connected with the partnership business. When, therefox-e, it was shown that the note was signed by H., as principal, and by W., with the name of W. & F. as sureties, nothing was shown to bind F.,” etc.
    It is px-oper here to remark, that as between the partners and third pel-sons, there is a difference between the decisions in New Yox’k and England, on the question of the liability of the firm in such cases, the former holding that it rests with the creditor to •show the express assent of the other partner, or he is not bound; and the latter, that “ the burden of avoiding such security rests with the firm, who must prove that the act was covinous in the partner who gave it, by showing it was done without the knowledge and against the consent of the other partners, and that the fact was known to the creditor when he took the paper of the firm. Dob v. Halsey, 16 Johns. 38; 13 East. 182; 7 East. 210.
    As between the partners, this difference is of no importance^ but it may be material with reference to their liability to third persons.
    2. If one partner pays his individual debts out of the partnership means, he is chargeable with the whole amount ^thereof' in the settlement of the accounts between the partners.
    I take it, that this proposition needs neither argument nor authority to support it; and I take it to be equally clear that the principle is not confined to debts, technically so called; but applies-equally to all claims or liabilities, on which money or other thing of value might be collected; and that there is no distinction between-a debt or liability of an individual partner, arising as surety or indorser for another, and a debt or liability originally and exclusively his own. They are all alike his individual concerns, and bave nothing to do with the partnership contract.
    The great mass of cases, in which it is so abundantly declared that one partner can not bind the firm by giving the joint name forLis individual debt, have very little to do with the present case. 2 Johns. 300; 4 Johns. 251; 11 Johns. 544; 1 East, 48; 10 East, 264; 13 East, 175.
    Those cases turn upon general questions of mercantile policy, Low far the world at large have a right to hold the parties as they appear upon negotiable paper without inquiry into circumstances; Low far it is better to charge individuals with debts not their own than to throw embarrassments upon the money or credit transactions of the mercantile community; and do not in any way involve-the question, whether the individual debt of one, paid or secured by him with the partnership means, shall be charged to him individually as between themselves.
    The English cases proceed' upon the ground, that it “may frequently be necessary that the private debt of one partner should be satisfied at the moment, for the ruin of one partner would spread to the others, who would,rather let him liberate himself by dealing with the firm;” and therefore the creditor taking such-security has aright to presume some such understanding, unless notice of the contrary is shown ; and on this ground they admit evidence of all circumstances and conduct of the partners, both at the time and subsequent to the transaction. But I conclude that in these cases, though the firm should all be holden for the individual debt of one, it by no means follows that the one is not chargeable with the whole debt as between themselves. 8 Ves. Jr. 542; Chitty on Bills, 43.
    
      *3. An agreement to release a debt, if without consideration, is nugatory and void.
    All contracts without consideration are void. 1 Fonb. Eq. 335; 4 Johns. 235; 2 Johns. 186; 9 Johns. 358.
    In Heathcote v. Crookshanks. 2 Dumfd. and East, 27, it was expressly decided, and treated as an old and settled principle of common law, that an agreement to take five pounds in satisfaction of a debt of twenty, is nudum pactum, and no defense to the action. The court say, “it is not binding in law.” See Co. Lit. 212,b.
    Fitch v. Sutton, 5 East. 231, was a case of express agreement to receive seventeen pounds ten shillings, in satisfaction of a debt of fifty pounds, and receipt in full given to that effect, but held to be no defense. “There must,” it is there said, “be some consideration for the relinquishment of the residue, or it is nudum pactum.”
    
    In Harrison v. Wilcox and Close, 2 Johns. 448, on a note for seventy dollars, plaintiff agreed, that if W. would pay him twenty-one dollars he would not call on him for the balance, on which the twenty-one dollars was paid, but the court said it was no defense, and a nudum pactum.
    
    A promise to give time on payment of part of the debt is void. 12 Johns. 426.
    Seymour v. Minturn, 17 Johns. 174, was a case of a written agreement, drawn up with much formality, to release the defendant from all demands, but not under seal; the court say, “The want of an adequate consideration is an insuperable objection to its operating as a release,” and they held it no defense.
    In the last case application was afterward made to chancery, but the same doctrine was there held by Chancellor Kent; and relief denied to Minturn. 4 Johns. Ch. 499.
    In these cases and other similar ones, it is repeatedly laid down as the settled law, that doing what a person is legally bound to do, as paying a part of the debt, etc., is no consideration.
    4. Any confirmation of a proceeding affecting the rights of a party, or relinquishment of claim, or acknowledgment of satisfaction, made under a mistake of the party’s rights, either in point of la.w, or fact, is not obligatory.
    *There is a marked distinction between a contract between persons by which rights are vested and divested, and a mere confirmation of an act done, a relinquishment of a claim, or acknowledgment of satisfaction. By the latter no new rights are created or vested, but merely evidence is furnished in the nature of admissions that facts are so and so. Thus a promissory note, being an original contract, can not be explained nor denied on the ground of a mistake of law, unless under some very extraordinary circumstances. But a receipt, being merely an admission and vesting no rights, can always be explained, and a mistake in law may as well be shown to contradict it as any other circumstance, as some of the cases last cited show. This distinction between agreements, if I may so use the term, in the nature of contracts, and those in the nature of admissions, must be kept distinctly in view, or the decisions on these questions will appear to be a mass of utter confusion.
    In the case of Pusey v. Desbouvrie; 3 P. Wm. 315, a daughter of a freeman, in London, accepted a sum of money as a legacy, in extinguishment of her orphanage part, and gave a release; and, although she was told she might elect which she pleased, yet, as she did not know of her legal right to inquire into the value of personal property to ascertain the amount of her orphanage part before her election, her release was, on that account, set aside in equity.
    In Perrot v. Perrot, 14 East, 438, an actual canceling of a deed of appoihtment by tearing off the seal, etc., was held nugatory and void, because the person did it under a mistake of the legal operation of another instrument. See 1 P. Wm. 345; 2 Vern. 742.
    In McLean v. Walker, 10 Johns. 485, which was trover for a note which had been delivered to defendant as a pledge, it is said by the court, “that the acknowledgment of the party, that the note was then absolute, can not affect his rights under the agreement ; it was merely his unadvised .opinion, which he had right to correct with better advice. ”
    Putnam v. Westcott, 19 Johns. 75, was a suit against a constable to recover back the purchase money of a lease *sold and conveyed by him under execution; and it was held, the constable having no legal authority to sell such property, that the money might bo recovered back, on the ground that it was paid under a mistake of the law.
    
    In Gray v. Murray, 3 Johns. Ch. 188, Chancellor Kent says: ‘‘It is,a well established, as well as a most reasonable principle, •.that to constitute a confirmation, the party confirming must be Jully apprised of his rights.” See 1 P. Wm. 732; 1 Ball. & B. 339.
    
      The case of Levy v. United States Bank, 1 Bin. 27, is strongly anal agous. Plaintiff received from a third person a check on the defendants which was presented and passed to his credit, but was afterward found to be a forgery. A clerk of the bank called on him to adjust the matter, and to get his own cheek for the amount. .A good deal of conversation passed, and plaintiff, among other things, expressly stated, “ on that point we are perfectly agreed. If the check is a forgery, which is all I wish to ascertain, it is no deposit.” The court decided that it was no defense. They say, “ being done by plaintiff under a mistake of Ms rigM, he is not bound by it.” They recite the remarks of Lord Hardiwicke, in Penn v. Lord Baltimore, that “ if Lord Baltimore made the agreement under a mistake of his right to another degree of latitude, he ought to be relieved.” Many of the cases of money paid under a mistake being recovered back, rest upon similar grounds, viz: mistakes of law.
    5. When an indorser or surety takes up the debt and prosecutes ihis principal, he is not bound to show absolutely his own liability to pay the debt. It is different on bonds of indemnity, given to secure one against claims. There the claims must be shown, to have been legal, but in the above cases of surety the rule is different; there, it is immaterial to whom the principal pays the debt, whether to the surety or the original debtor; he loses nothing by either course, and the surety is only bound to show what the law will imply to be a reguest, so as to avoid the mere technical objection of paying without request; and wherever one man’s name is used, or his means applied with the assent of another, for his benefit, the request is implied. Suppose *a man had forged my name to his bond as surety, and which I had taken up and paid, •could he prove the forgery to defeat my claim against him? In all ordinary cases to recover money paid as surety, the instrument and payment are sufficient proof. The actual liability is not inquired into. So on indorsed notes, the payment of the note by the indorser is sufficient proof, without inquiring into his liability. This is proved by the very common rule that an indorser actually discharged, or never liable for want of notice, may make himself liable by a subsequent promise to pay; and on this subsequent liability, which is the result of his own voluntary act, has not equal recourse against the principal.
    In Philips v. Thompson, 2 Johns. Ch. 420, the chancellor held that an indorser, discharged by want of notice, might not only take up the note, but hold on to the securities given for his indemnity.
    So, in the case now before the court, if it were shown (which certainly is not) that Smith was not liable to the bank, yet Loring, by whose act Smith’s name was on the paper as a surety, could not be heard to make that a defense. In addition to the above principle of law, it will be recollected that Loring insisted that Smith was liable to the bank, and on that ground induced him to-pay the debt; and surely he can not now be heard to deny that liability; to-day insisting he shall pay, for he is liable, and to-morrow denying his liability, and telling him he has paid in his own-wrong. Again, the result of such a position would be idle and useless. If Smith was clearly and absolutely not liable to the-bank, and had no right to pay the debt for Loring, having paid it under a mistake, he may recover it back, and leave the bank to. their further recourse upon Loring.
    Precisely the same state of fact which would defeat Smith’s-right to recover back the money, would establish his right to recover of Loring.
    6. It may, perhaps, be of consequence to refer also to the principle of law, that money obtained by extortion, imposition, oppression, or taking undue advantage of the parties’ situation, may be-recovered back. 2 Burr. 1012 ; Doug. 696.
    *And this principle extends to money paid on duress of goods, and generally when it becomes necessary to prevent a heavy-loss of property:
    As to obtain plate illegally detained. 2 Stra. 916.
    To release ships under detention. 9 Johns. 209, 375.
    To obtain deeds and court rolls. 2 Esp. 727.
    To prevent sale of land for taxes, etc. 2 Day, 369.
    Stores., for the defendant, contended:
    That the indorsement of the firm name, considering the principles on which the partnership was formed, was an act which the defendant was authorized to do. The copartnership was of a gen-' eral nature. No particular limitations or conditions were attached to it other than those imposed by the rules of law. The question* then, resolves itself into the point whether the act done by the. defendant was in the ordinary course of trade or dealing between. -merchants. In discussing this proposition, the situation of the -country, the business in which the parties were engaged, in fact -the whole scope of their commercial arrangments must be regarded. It is certain that Loring was the active partner; that he attended to all the banking business of the firm; that he was permitted to .•exercise a great degree of discretion in the management of the partnership concerns; that confidence was reposed by Smith in his capability, honesty, and intelligence. Under these cireum-stances the firm became the indorsers of Whipple & Washburn, who, in return, were the indorsers of the firm. Harlow’s credit had been sustained by the same indorsers, and a protest of his notes would have destroyed their credit, which must, of course, have materially injured if not wholly ruined Smith & Loring. Was .it, then, inconsistent with his duty to his copartner for Loring to pledge the name of the firm on Harlow’s note? But it is said that Loring had been the previous indorser, and the partnership security was not given until Harlow had become embarrassed. .The fact of such embarrassment is not admitted; but if it were, ¡there was the same obligation on the part of Smith to sustain the credit of Whipple & Washburn, as attached to Loring. Again, it is fairly inferable *from the manner in which the business of the firm was transacted, that either partner was at liberty to indorse the firm name without consulting his copartner, subject, however, to those limitations which good faith and common prudence always apply where the least discretion is exercised. 1 Salk. 292, Evan’s edition, and the note to the case; Watson on Partnership, 123; Livingston v. Roosevelt, 4 Johns. 267, opinion of Judge Vanness; Gallway v. Mathew, 10 East, 265.
    A distinction is taken by the complainant’s counsel, that can not be admitted to be sound law or sound reason. It is contended, that, however the act of one partner might bind the firm, as to third persons, the rule would be different as to their rights and liabilities interse. On what, it is asked, is the liability of the firm to third persons predicated? Is it not that the act done is performed in th e course •of business, and for the benefit of the concern ? If it is, does not the ;same rule obtain as to the private rights of the partners ? No case is cited to prove a contrary position, though the complainant’s counsel have quoted a multitude of cases to show on whom the burden of proof is thrown, when it is sought to create a partnership liability. In the opinion of Chief Justice Spencer, Foote v. Sabin, 19 Johns. 158, it is clear “that a state of case existed, where the' party taking the firm security was well aware it was not for mutual benefit.” The general proposition deduced from this authority,, by the complainant’s counsel, can not then be supported to the extent for which he contends.
    If Loring, however, was not strictly authorized to indorse the> firm name, still the' knowledge of Smith, of the fact, shortly after it transpired; his continued silence for years; his subsequent transactions in business with Loring; his negotiations to secure the' firm; and his attempts to compromise and settle the claim ; in fine, his whole conduct, shows the strongest possible case of subsequent, approbation of the course pursued by Loring.
    It was settled by Lord Eldon, in ex parte Bonbonus, 8 Ves. 542, “that previous authority, or subsequent assent, would be sufficient to bind the partnership for an act done by any member of the firm.”' The same doctrine is found in the *text to Pell on Mercantile Guarantees, 148; also see Duncan v. Lowndes, 3 Camp. 478; and the late case of Sandilands et al., executors of Howden, v. Marsh, unanimously decided by the King’s Bench, in 1819; 2 Barn. & Ald. 678; also, Eaton v. Taylor, et al., 10 Mass. 54.
    Again, at the time the arrangement was made between Smith and Loring and the bank, for the settlement of Harlow’s note, it was done by Smith, with a full knowledge of all the facts, as will appear from the testimony. Smith, by acceding, therefore, to this' arrangement, has paid his money voluntarily, and can not now recover it back, unless fraud, misrepresentation, or coercion be shown Livingston v. Roosevelt, 4 Johns. 251; Dob v. Halsey, 16 Johns. 34; Chitty on Bills, ed. 1817, p. 40-52, cum notis.
    
    What are voluntary payments within the meaning of the rule. 1 Wheat. Selw. N. P. 66; Brown v. McKinley, 1 Esp. N. P. C. 279; Cartwright v. Rowly, 2 Esp. 733; Gower v. Popkin, 2 Stark. 76; Marriot v. Hampton, 7 Term, 269; Bilbic v. Lumley, 2 East. 470;. Day’s ed. cum notis; Hall v. Schultz, 4 Johns. 243; Gates et al., v. Winslow, 1 Mass. 66; Homes et al., v. Aery, 12 Mass. 137.
    There was no mistake or ignorance of the facts, on the part of Smith, and it can not be contended that ignorance of the law, if there was any, can avail him. Lord Irnham v. Child, 1 Bro. C. C. 92; Lord Portmore v. Morris, 2 Bro. C. C. 219; Mildmay v. Hungerford, 2 Vern. 243; Worral v. Jacob, 3 Merrivale, 271.
    
      The complainant’s counsel, however, have quoted a number of eases, to support a principle not clearly understood by us.
    It would seem that a distinction is attempted to be drawn between ignorance of the law, and mistake of the laxo. Now, we conceive them to be convertible terms. It has been said, that ignorance is not always mistake; and it may be said, that the law does not regard willful ignorance, nor willful error. The case of Pusey v. Desbouvrie, 3 P. Wms. 320, proves nothing but an ignorance of the fact, and Lord King, in Onion v. Tyner, cited by complainant’s counsel, from 2 Yern. 471, decides the point in.controversy, on the ground of accident and mistake of the fact. Lord Ellenborough, in Perrot v. Perrot. 14 East, 439, took a ^similar ground. The case of Lansdown v. Lansdown, Mosely, 364, has always been regarded as deciding no more than that the schooi master’s mistake of the fact furnished a ground for relief.
    But the whole subject matter of the indorsement, and all the claims of the parties, arising out of it, were finally adjusted, in the settlement and arrangement made with the bank, as it fully appears from the testimony of several witnesses. It is answered, however, that there was no consideration to support such an agreement; that it was made, if it was ever understood to be made, by the parties themselves, while Smith was under a mistake as to his rights, and while Loring had such an advantage over him, that the parties were not placed on equal terms, when such settlement was made. Admit that it was necessary to prove some consideration to support the agreement, there certainly was a manifest difference in value between the property sold by Loring and that sold by Smith. The difference, whether it were equal or not to the pretended loss on the part of Smith, is an adequate consideration in point of law. Again, in the settlement of partnership accounts, where the parties are supposed to know best their own interests, where great confidence has been reposed, and mutual concessions required, it must always be the case that much will be arranged by compromise. Whenever an adjustment has once taken place, and the principles on which it was founded have been acted on by the parties subsequently, it can not be. either just or proper to open it up. In Cann v. Cann, 1 P. Wms. 726, Lord Macclesfield held: “ That an agreement entered into, upon the supposition of a right, or a doubtful right, though it afterward come out that the right was on the other side, should be binding, for the right must always be on the one side or the other; therefore, the compromise of a doubtful right was a sufficient consideration for an agreement.”
    Inadequacy of consideration will never avoid a contract, unless it is so gross that fraud will necessarily be inferred. 1 Maddox ed. of 1822.
    In Stephens v. Lord Bateman, 1 Brown’s C. C. 22, it is said, “ that if a deed is entered into by parties fully apprised *of their rights, in order to put an end to a suit, though upon inadequate consideration, it can not be set aside.” See also Sugden on Vendors, 170, 171.
    But it is again asserted, that the proof does not furnish any evidences of such consideration. The court are referred to the depositions, which convince the defendant’s counsel, at least, that there was a full, compensation paid.
    On the point of any inequality existing as to the situation of the partners, at the time of the settlement, the only fact gleaned from the evidence is, that judgments existed against Smith, for the partnership debts, which did not affect Loring’s property. To this fact is added a remark, that Loring is stated to have refused all overtures, on the part of Smith, to settle the matter, unless he would release his pretended claim to indemnity, for the Harlow indorsement. How far these circumstances amounted to coercion, or placed the parties on unequal grounds, it is impossible to conceive. There were judgments too against Loring, and there was a mortgage for a firm debt, which covered the whole property. No threats were used; but, on the contrary, much negotiation was carried on, and every attempt made by Smith to induce Loring to acquiesce in the offer of the bank, as to the purchase of the property.
    The abstract proposition that coercion, on the part of the party to be benefitted, destroys the contract, as against the party making it, is admitted; and the authorities quoted by the complainant’s counsel, are not denied, with the exception of Astley v. Reynolds, 2 Str. 916, which has been very properly overruled by Lord Kenyon in Knibbs v. Hall. 1 Esp. 84.
    The cases cited by complainant’s counsel, to show that an agreement to release a debt, made without consideration, is void, are not denied; but, it is rather singular, that every case quoted is confined to executory contracts only; not where the sum agreed to be paid for the release, or the act to be performed, has been paid -or perfected.
    On the whole, if there has been any fraud, coercion, of imposition, on the part of Loring, it is not discoverable from the history of the case. If he can not be protected from the *claim of the complainant, by the grounds assumed in his defense, it is difficult to perceive where liabilities can not be created.
    Benham, on the same side:
    This controversy has arisen out of a copartnership, which, it was •admitted, was general in its nature, as contradistinguished from, those which are special. It was unlimited in duration, and unde.fined in all other respects. Loring, it seems, was the most skillful .and experienced, and, therefore, the active partner, on whom devolved the weight of its concerns. He attended particularly to the correspondence and financial arrangements, by the judicious management of which, their credit, which was their capital, was •sustained. It is certainly competent and prudent, where persons form this fiducial and important connection, to stipulate among ■themselves, as matter of' private compact, that they are severally to be responsible only for their own losses and defaults; to define the manner in which the business of the firm shall be conducted, its duration, the proportion in which the profits and losses shall be distributed, and the mode of adjusting their accounts and diffi■culties. But as Smith and Loring did not think proper to do so, their respective powers and rights can alone be ascertained and settled by implication of law. The liabilities of partners are coequal with, their rights. Each reposes confidence in the skill and integrity of the other, and constitutes him his general agent, with plenary powers as to all matters which involve the interest of the firm: hence, as a general rule, it is always bound by the acts of each member in the course of the partnership business.
    1. The power of one partner to bind the firm by making, indorsing, and accepting promissory notes and bills of'exchange, was •settled as early as the reign of' YVilliam III., upon the custom of merchants, and has never since been doubted. 7 Term, 206; 4 Johns. 265; 1 Caine, 184; 4 Day, 430; 5 Day, 511.
    The firm is bound by the acceptance of a bill of exchange, drawn upon the firm, by a single partner, and whether it has funds or ■anticipated funds, or whether it be *for the honor of the drawee are immaterial. Holt. 67; 1 Salk. 126; 1 Ld. Raym. 175; 5 Day, 511.
    In 'like manner, the indorsement óf a bill or note by one partner,, in the name of the firm, prima facie binds the firm. 7 East. 213; 13 East. 175.- And these cases show that the partnership can only evade liability upon the ground of fraud or collusion between the holder of the paper and the partner who made the indorsement. For it seems to be well settled, that if a creditor of one partner collude with him to take payment of his. individual debt, out' of the partnership funds, knowing at the time that it is without the consent of the other partners, it is fraudulent and void. But if it be taken bona fide, without such knowledge at the time, the partnership can not disaffirm the act. One of two partners may give an authority to the clerk of a firm to accept bills, and sign and indorse notes in the name of the company. 1 Caine, 192; 3 Caine,. 368; 1 Dall. 269.
    It is, therefore, clear that Smith and Loring each had power to indorse, draw, and accept notes and bills of exchange in the name of the firm; and I contend the indorsement of Harlow’s note, under the peculiar circumstances, was but a fair and bona fide exercise of it. When they entered into partnership, they were bound to know the law applicable to the relation it formed; and we must presume, as this copartnery was unlimited, the partners, with an eye to their own interest and convenience, deemed it expedient to delegate to each other in mutual confidence this power, and wera willing to incur the hazard of its abuse. The power thus conferred was reciprocal, and the danger of its abuse was equal. Suppose, in the plentitude of their confidence, when this partnership’ was formed, they had conferred this power on each other by express compact, would equity listen to a complaint founded upon the injudicious exercise of it; and if not, with what propriety can Smith ask relief in this case? In this case, the power to indorse was conferred by implication-of law, drawn from the unlimited nature of the copartnership. It was an incidental power, and in the case put it would have been conferred by compact, but the responsibility must be the same in both cases.
    *2. Again. The power to indorse notes under the circumstances which Loring indorsed the Harlow note, may be deduced from the previous conduct of the firm. The deposition of Sprigman and others, show, that previous to the indorsement oí Harlow’s note, the name of Smith and Loring was indorsed on the note of Sprigman and Neply for the accommodation of the latter The complainant acquiesced in this transaction, and the firm was at length, after the note had been several times renewed upon discount in the Bank of the United States, compelled to pay it. This indorsement, which received the sanction of Smith, was in every respect similar to the indorsement of Harlow’s, except that Smith indorsed the Sprigman and Neply note the last time it was renewed by the bank. Accommodation indorsements, when made by one partner without the consent of the other, are analogous to guarantees given by one partner without the privity of the other to secure the debt of a third person; at least the analogy holds good as far as this, that in both cases, subsequent recognition-is tantamount to previous command, and the authority may be deduced in both eases by the previous course of dealing. Lord Eldon, in ex parte Garden, 15 Vesey, 286, has decided that one partner can bind the firm, by a guarantee in the name of the firm, for the responsibility of a third person; and Lord Mansfield holds the same opinion in the case of Hope v. Cust, cited in Sheireff v. Wilks, 1 East, 53. But Lord Ellenborough, in 13 East, 180, inclined to a different opinion, because he thought such a power was neither necessary nor usual in carrying on a joint concern, and, therefore, could not be claimed as incidental to the general power of a partner. They are indeed mere gratuities, which do not, like bills and notes, conduce to facilitate and protect trade. But Lord Ellenborough, in the case of Duncan v. Lowndes, 3 Camp. Ni. Pri. 478, says that to prove the authority of one partner to give a guarantee in the name of the firm, evidence of “ subsequent recognition is tantamount to previous assent or command,” and that proof of a previous course of dealing, in which similar guarantees were given, and to which both partners were privy, would bind the firm. I rely with emphasis upon the last case cited, for the proof is complete, not ;l;only that Smith subsequently recognized the Harlow indorsement as obligatory upon the firm, but acquiesced therein for a long time after the dissolution of the partnership, and united with Loring to obtain an indemnity from Harlow; it is also clear, that the previous conduct of the firm, in relation to the Sprigman note, was an invitation to Loring to act as he did, for here Smith himself was his exemplar.
    4. But the counsel for the complainant insist that Loring was not authorized to substitute the firm name for his individual lia•bility — that neither the previous course of dealing, nor the unlimited nature of the partnership, conferred upon him this authority I think I have shown that this proposition, under the circumstances of the case, is not tenable; but, if it be tenable, what «does it establish? Nothing more nor less than that Smith was not originally bound by the indorsement. And if not bound by the indorsement, how came he bound at all? I answer, by his subsequent recognition of the respondent’s right to bind the firm, which the law regards as equivalent to a previous command. When complainant was informed of the indorsement, he was free to affirm or disaffirm the act — he chose the former. Harlow was .then in good credit, and extensively engaged in business, and complainant could not charge the respondents with having acted mala fide in relation to the interest of the firm ; for he well knew their credit in the Rank of the United States was indirectly identified with Harlow’s, as Harlow’s principal indorsers were also their indorsers. As he then voluntarily, with a full knowledge of all the circumstances, made his election to ratify the indorsement, he .must abide by it, and share his moiety of the loss, which it seems Jhe was willing to do. Indeed, the payment of the one-half of the note, all duress and'fraudulent concealment apart, was per se, an .agreement to share the loss, if any should ultimately be sustained. It was a voluntary payment for the benefit of Harlow, to whom . alone he can look to be reimbursed. It can 'not be regarded either in law or equity, as a payment for the use of respondent, which ■ex equo et bono, he ought to pay back. The respondent, so far from being benefited, was an equal sufferer with the complainant. *It is clear, that Harlow is liable to complainant for the .amount paid, with interest; but it seems that the Terre Haute lands were an inadequate indemnity, and Harlow is an insolvent; '.therefore, the complainant ought to recover the amount paid from lioring. This logic is as sound as just. The complainant paid the one-half of his note voluntarily, knowing all the facts, and be can not recover it back, except from Harlow, for whose bene.fit it was paid. 4 Johns. 240; 1 Esp. Ni. Pri. C. 279; 2 Ib. 723; 2 East, 470.
    If one partner pay money for, and in the name of the firm, which the firm was not legally or equitably bound to pay, it is a payment in his own wrong, and he can not call upon his coparte ers for contribution. 8 Taunt. 443; 14 Johns. 318.
    So, if money be paid on a note, against which the party paying had a defense, it can not be recovered back, 9 Johns. 244, unless» it was paid under a mistake of the facts. 7 Johns. 442.
    We are gravely told by Mr. Wright, and the sages of the law are called to witness it, that a surety can recover back money paid” for his principal. We need no ghost to tell us this, for it is a principle of natural justice. But we deny that this is a case between principal and surety. It would be if Harlow were the respondent instead of Loring. But upon the record, it is manifestly a controversy between two unfortunate sureties, who have been-, compelled to pay money for an insolvent principal — a contest embittered by former friendship and confidence, where one surety after he has voluntarily paid his proportion, modestly asks a court of equity to coerce his co-surety to pay it back, and sustain the ■ whole loss himself.
    Again, counsel contend, with equal cogency,that the complainant'', ratified the indorsement, and paid the money from an ignorance of the law; and, therefore, the respondent, the Bank of the United-' States, or some person else, ought to refund it. But, in support. of this proposition, the sages of the law do not appear.
    This would, indeed, be a convenient doctrine in all desperate cases, but a very inconvenient general rule. It * would be a tax upon science to enhance the price of ignorance, a staple more abundant in our market. “ Alioqui erranti lucro esset ignorantia juris.” But notwithstanding the well known chivalry of the law, neither females nor infants can plead ignorance of it. “ Juris■error nec fceminis incompendiis prodest.” Prothier on Obligations, 413.
    But the depositions of Messrs. Avery, Washburn, Earl, and’ Hunter, abundantly prove that complainant had a full knowledge of both the law and the facts long before the settlement was amicably concluded with the bank. And it is well settled, that a court of equity will not relieve a party from his acts and deeds, fairly performed with the knowledge of the facts; although he might have been under a mistake as to the law, for he is bound to know the law at his peril. 2 Johns. Ch. 51, 60.
    5. It is admitted that the claim which is now sought to be enforced, has been amicably settled between the parties. But the» complainant insists that the settlement is not obligatory: 1. Because it was without consideration. 2. Because the consideration was inadequate. 3. Because the settlement was coerced or extorted by respondent, who took advantage of his situation.
    1. Astothefirst objection to the validity of this settlement founded upon the want of consideration, I admit, that to make a contract binding there must be a consideration of some sort. Fonb. Eq. .342, n. a. Otherwise neither a court of law nor equity will enforce it. This claim seems to have been originally asserted by way •of set-off to a claim made by respondent, for difference in the value •of their real property, which they had proposed to convey to the bank, in payment of all their responsibilities. And it is clear, that respondent’s real property was worth several hundred dollars more than complainant’s ; that he had given two hundred dollars more for it, at the time of the division, and had subsequently made valuable improvements. Now, this difference in value, together with his claim on accourit of the Sprigman indorsement, respondent agreed to relinquish, and complainant, expressly in consideration thereof, relinquished the claim for the Harlow indorsement. Whether this consideration were inadequate *or not is immaterial ; for no case can be found where inadequacy of price independent of other circumstances, has been held sufficient to set aside a contract. Fonb. Eq. 126, n. a.; Ch. Ca. 159; Ambler, 18; 1 Bro. Ch. 9, 22; 2 Bro. Ch. 17.
    There is a manifest difference between an executory and executed agreement. A court of equity always exercises a sound discretion in relation to the former when asked for a specific execution. But an agreement, executed in good faith, though the consideration be inadequate, forever concludes the parties to it. Fonb. Eq. 126, note? a. Nothing short of a fraud or palpable mistake will afford ground for relief.
    Mr. Wright has cited numerous authorities to show that money ■obtained by extortion, imposition, oppression, may be recovered back. The leading principle which governs all the cases brought for money had and received, is, that the defendant, as an honest man, ought to pay the money. Si apparet eum dare opportere. There can be no doubt that money paid by mistake may be re-demanded, if, in justice, it ought to be repaid. 1 Term, 286; Uowp. 565. But where both parties are under a common mistake the one can not recover of the other. 4 Bos. & Pul. 260. Nor can money paid, with full knowledge at the time of all the circumstances, be recovered back. 2 East, 4, 69; 2 Esp. 723; 1 Esp. 84; Ib. 279. Nor can money be redemanded if it be paid where the law would not compel payment, but where natural equity would dictate it. 1 Term, 286; 2 Sir Wm. Black. 824; Stra. 915. Where money has been paid on a void authority, it may be recovered. 1 Lord Ray. 742 ; 2 Ib. 1216. Where money has been paid under a judgment of a court of competent jurisdiction, it can not be recovered. And this was the principle decided by Lord Mansfield in the leading case of Moses v. Macfarlan, 2 Bur. 1005, upon which Mr. Wright relies as analogous to this. In that case the court of conscience, whose proceedings were reviewed, had determined that it was not competent to enter into a consideration of the agreement set up as a.defense against the indorsements.
    *The money, therefore, was not recovered by Macfarlan against Moses by the judgment of “ a court of competent jurisdiction,” else it would have been conclusive. But this case has not been acquiesced in by the profession. It was shaken, in principle, by Marriot v. Hampton, 7 Term, 269; and Brown v. McKinnally, 1 Esp. 279. The old cases are discordant. The cases of Moses and Macfarlan, although frequently cited, as in this case, to show that money obtained by extortion, etc., may be recovered back, is not an authority to sustain that principle. The case of Smith v. Bromly, Doug. 696, has been cited. That was an action for money had and received to plaintiff’s use. The plaintiff’s brother had committed an act of bankruptcy, and the defendant, his chief creditor, had taken out a commission against him; but afterward, finding there was like to be no dividend, refused to sign his certificate unless the bankrupt, or somebody for him, would advance forty pounds, and give a note for twenty pounds more. The plaintiff, who was the bankrupt’s sister, moved by his distress, had paid the demand for signing the certificate, and Lord Mansfield decided that the money might be recovered back. That the demand of the defendant was oppressive and wrong in itself, if not a fraud upon the other creditors. He had taken an unfair advantage by putting the compassion of his relations to the torture, and the demand was a violation of the statute, which prohibited such inducements being given. The case of Asley v. Reynolds, 2 Stra. 916, plate was pawned to raise twenty pounds; when the pawner came to redeem, he offered to pay the principal and four pounds interest* •which was more than legal; but the pawnee demanded ten.pounds, and refused to deliver the plate unless it were paid. The-plaintiff paid it, and brought his action to recover the surplus beyond the legal interest, and recovered upon the principle that a court of equity will compel a usurer to refund what he has received above the principal and legal interest; and that no one would transgress a law made for his own advantage unless compelled. But the principle of this case has been subsequently overruled by Lord Kenyon in Knibbs v. Hall, 1 Esp. 84. But why should I dwell upon this class of cases, as none of *th em-boar any analogy to this case ? It is urged that respondent refused to unite with complainant in the proposed settlement with the bank, unless he would consent to pay a moiety of Harlow’s note, and threatened to break off the negotiation, and leave the complainant in the breach to make the best arrangement he could with the bank, who had judgment liens upon his real estate. If all this be admitted it will not entitle the complainant to relief.. The respondent was under no moral or legal obligation to unite with complainant to transfer his real estate to the bank; and had be refused to do so, the complainant’s situation would have been no worse than it was before the subject was agitated. Had the respondent been the agent in augmenting the complainant’s embarrassments ; had he contrived to place him and his property at the-mercy of his creditors, and then had taken advantage of his distressed situation to compel him to pay the Harlow note, the case-would have been different. Suppose A have a judgment upon the lands of B, and threaten to proceed to sell them at a sacrifice unless B shall take such sum as he choose to offer, and B accepts bis offer and conveys, will any one contend B would not be bound,, or that he could be relieved from the sale because A took advantage of his situation ? The rule, volenti non fit injuria, must apply in such cases or there would be no end to litigation, nor sanctity in contracts and settlements. Hall v. Shultz, 4 Johns. 240.
    The effect of granting the relief prayed for, will be to enrich-one partner by the ruin of the other — against whom no imputation of having acted mala fide can, with propriety, be made.
    Hammond, for complainant in reply:
    The legal principles involved in this case have been very fully argued by Mr. Wright, and I shall not repeat what he has said., The positions taken by the defendant’s counsel require but a very brief notice.
    1. The power of Loring to make the indorsement so as to bind Smith to third parties is not drawn in question. All that is said on that head may be laid out of the case. Loring had power to' take the partnership funds and apply *them as his own. But this power could not excuse him from accounting for them to-Smith. It is in this light that we consider the substitution of this-partnership name for his own, at a time when loss was evident and actually ensued.
    2. Smith’s subsequent assent, that he was liable upon the note, would be a material fact to charge him in a controversy with the holder or indorsee. But it could not change the relative rights and obligations between the partner’s themselves. Had Loring given the note of the firm for a carriage and horses for his own use, Smith might have incurred a liability to the holder by a subsequent assent. Yet Loring would have been bound to account to Smith. The cases of subsequent assent, cited by the defendant’s counsel, are not between the partners themselves, but between the partners and third persons.
    3. The ease is considered as one in which payment has been made voluntarily, on an arrangement executed between the parties, and therefore not to be disturbed.
    Were this suit brought by Smith against the bank, to recover back the money paid, or to rescind the contract of sale, the arguments urged and authorities cited would apply. But they have no application, as we conceive, as the case stands.
    Smith had an undoubted claim against Loring, his partner, and he agrees to give up that claim for no consideration but an agreement, on the part of Loring, to unite in giving up his means to pay the just debts of the firm, upon arrangement advantageous to both. Would such an agreement bind him in a settlement with his partner?
    He is partly induced to make this agreement from the circumstance that Loring has the advantage of him, his property being under execution for a debt of the firm, and Loring’s free, and partly from an unfounded pretension that he was liable to Loring for an act charged upon him, but actually performed by Loring, would these circumstances furnish any aid to Loring in holding the agreement of Smith as obligatory upon him? Heathcote v. 
      Crookshanks, 2 Durn. and East. 27; Filch v. Sutton, 5 East. 231; Harries v. Wilcox, et al. 2 Johns. 448; Seymour v. Minturn, 17 Johns. 174. All cited by Mr. Wright are full to the *point that this agreement to give up the claim for the Harlow indorsement can not bar Smith, unless made upon a good consideration. The whole case, we conceive, turns upon that question, which the court must determine on the proof. m •
   By the Court :

There is no difficulty about the facts material to the decision of this cause. It is clear that Loring originally indorsed Harlow’s note with his own name, and upon his own account, and that he afterward substituted that of the partnership, without the knowledge, authority, or consent of Smith.

We entertain no doubt but, upon this state of facts, Loring was accountable to Smith for any loss sustained by the partnership, The making use of the partnership name to remove his own, was an application of the partnership credit to his separate use. And if pecuniaiy loss followed, its consequence was an application of the partnership funds to the individual benefit of one of the partners. The power of the partner to do this, by no means includes the right to do it, without being accountable. Wherever a partner binds the partnership for his own private advantage, he is liable to the partnership. Ho principle is better settled, and it is impossible to conceive how a court of justice could adjudge otherwise.

We can conceive of no course of reasoning, by which an individual indorsement can be distinguished from an individual note. Both create an individual liability for some legal consideration received by the party that incurs it, and the discharge of that liability must be for the benefit of the party Liable. The firm of ■Smith & Loring derived no benefit from their indorsement of Harlow’s note, more than they would from paying any other debt due by Loiing. The benefit resulted wholly to Loring, the prejudice to the firm.

It is attempted, in argument, to distinguish the two cases, by alleging that it was equally the interest of both partners to sustain Harlow’s credit, and that therefore the indorsement was for the benefit of both. But this argument *would more strongly ■apply to an individual debt of Loring’s. The firm would be deeply interested in preserving the credit of one of its members; and this might form a reasonable apology for a temporary application of partnership credit or funds to that purpose. But it could be no legal ground for exempting the partner, whose debt was paid, from accounting to the firm for the amount.

It is urged that if the indorsement was made without authority from Smith, it did not bind him, that the payment was, therefore, voluntary on his part, and he can not now recover it back.

As between Smith and the bank, upon the state of facts in this ease, there is no doubt this argument would be conclusive. It would be equally so, had the supposed liability been created by Doring, for money, which he actually received and applied to the purchase of a private estate. In that case, we presume, it would scarcely be resorted to. A partner borrows money, and gives for it the note of the firm. With this money he buys a farm, and takes the title to himself. The lender of the money was fully apprised of the fact that it was obtained for private investment, consequently this co-partner was not legally liable. Nevertheless, to .avoid controversy, he pays the debt, and takes up the note. Can it be for a moment supposed, that in a settlement between the partners, a court of justice would permit the maker of the note to exempt himself from accountability, by proving that, in point of law, the payment was voluntary, though made upon a liability of his own creating, and in payment of money that he had received and invested? As we view this case, the argument of voluntary payment is the same as it would be in the case supposed.

Upon the whole proof it is clear, that when the settlement was made with the -bank, Smith agreed to relinquish his claim against Loring, upon account of this indorsement. And this presents the real and only difficult point in the cause. If this agreement was made upon a good consideration, with a knowledge of his rights, and in circumstances that gave Loring no.unfair advantage, it must conclude Smith.

*At the time of the adjustment, when the separate property of the parties was made common stock, and sold to the bank for their mutual and equal advantage, it would seem that Loring’s part was of the greatest value. Though Smith gave some equivalent for this, in giving up his claim upon Loring for the original difference of exchange, still the difference in value, in favor of Loring, constituted some consideration. Under ordinary circumstances, the adequacy of the consideration is not tó be taken-into account. In the settlement of partnership affairs, where they settle upon equal terms, and mutually agree to share losses from, motives of friendship, and a disposition not. to scrutinize each-other’s conduct too closely, such settlements should not be disturbed, although the liabilities of one might greatly exceed those of the other. And for this reason, the inducement to settle of itself constitutes a good consideration.

But in this ease, and when this settlement was made, the parties were not upon equal terms. The property of Smith was under execution for a company debt, which it was equally the duty of Loring to pay. The property of Smith was bound, that of Loring was free. With this advantage in his favor, Loring refuses to make a settlement of the debts of the firm, which all the testimony concurs in describing as advantageous to both Smith and Loring,. unless Smith will relinquish this claim upon Loring’s own terms.. The conduct of'Loring, throughout all the negotiations, is that of a man who feels that he has an advantage, and is determined to. use it. Loring was, in any event, liable for Harlow’s debt, and there could be no justifiable reason for refusing to settle it, and the other debts of the firm, to the mutual benefit of both, without' an abandonment on the part of Smith of his claim for compensation. There was no necessary connection between the payment of debts due from the firm, and a settlement of account between the partners. The only conceivable reason for connecting the two-subjects would seem to be this: unless I can secure a certain residuum for myself, by a settlement, I will keep all, and let the-creditors do their +worst. It is, indeed, in proof that a threat,, something in this character, was thrown out.

In the course of these negotiations, Loring steadily refuses to. concede anything. He would not give up the award in his favor in the New Orleans affair. Smith was required to give up tha debt due from Loring for the difference of exchange, and the liability of Loring for the .Harlow indorsement. For these concessions by Smith, Loring would exonerate Smith from an alleged liability in the Sprigman case, which, upon investigation, turns, out to be totally groundless, and without color of justice. In the course of Loring, there was no equality or reciprocity of concession. The execution levied bn Smith’s property seems to have given Loring this advantage over him. It is evident, that in the-'negotiations, Smith did not contend upon equal terms. His great anxiety to effect the settlement is even alleged and insisted upon in the answer, as a ground why he should be concluded by it. .Smith pressed the settlement; Loring insisted to clog it with conditions.

Every case of this kind must be decided more or less, upon its own circumstances. Three judges only sit in this cause. • Two of us are of opinion that connecting the situation of Smith, the conduct of Loring, and the inadequacy of consideration together, they •present a proper ground for allowing the relief sought. Upon the first and second points, we all concur in opinion. It is only as to the effect of the settlement that we differ.

Judge Sherman dissented.

.Judge Burnet did not sit.