Case ID: johns_2/html/0212-01.html
Source: Caselaw Access Project
Author: {"author": "Tompxons, J. Kent, Ch. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Tom against O. Goodrich, who is impleaded with Oliver Barber, surviving co-partners of O. Barber, G. W. Barber, A. Hosford, A. Hosford, jun. and O. Goodrich.
    This was an action of assumpsit. The declaration contained three counts ; 1st. For money paid, laid out and expended by the plaintiff for the use of O. Barber, O. Goodrich, A. Hosford. A. Hosford, jun. and G. W. Bar-
      
      her, in the life-time of the deceased partners. 2d. For money had and received by the same persons to the use of the plaintiff. 3d. For money lent and advanced. The defendant pleaded the general issue, and gave notice that he should offer in evidence that, being a citizen of Connecticut¡ and residing in that state, he was discharged by the general assembly of that state in October, 1799, from all the debts owing by him individually, and as one of the said copartnership.
    
      
      One of five partners executed bonds to the United States for duties on goods imported on account of the copartnership, and as their property, and T. became a surety in the bonds. The copartner who signed the bond died, and afterwards, the surety paid part of the bonds ; and after another of the partners died, the surety paid the residue of the bonds. T. brought his action against one of the surviving partners, who had resided in the state of Connecticut, and had been previously discharged from his debts by an insolvent act of that state, for money paid, laid out and expended, for the use of the copartners, &c. in the life-time of the deceased partners. In the declaration the implied promise was laid as made by all the partners, in the life-time of the deceased partners. It was held, that proof of the payment of money for the surviving partners, after the death of a copartner, would not support a declaration on an implied promise by all tbe partners ; that the claim of the United States against the copartnership became extinguished by the bond of the individual partner, who was alone responsible ; and that the surety, who had paid the money, had a right of action against the partner only who had signed the bond!
    
      The cause was tried at the New-York sittings, the' 19th June, 1806, before Mr. Justice Thompson.
    
    From the evidence produced at the trial, it appeared, that the above-mentioned partners carried on business iri New-York, as merchants, under the firm of George W¿ Barber and Co. from June, 1796, till some lime in the year 1799. During that period, Oliver Barber and George TV. Barber were the active partners, and conducted all the business in the city of New-York, where they resided-The other partners resided in Connecticut.
    
    On the 8th July, the 2d August, and the 22d October,’ 1796, the said copartnership imported goods, the property of the copartnership, into the city of New-Yorlc, oit which duties were payable to the United Stales, and which were regularly entered by George W. Barber, in the name of the copartnership, at the custom-house in Nevj-York.-Qn the 8th July, the 2d August, and the 22d October, 1798, George TV. Barber, as principal, and the plaintiff as his surety, executed four several bonds to the United States for the payment of the duties on the goods so imported for George TV. Barber and Co- George W. Barber died in January, 1799, and A- Hosford, the 7th April, 1804. The plaintiff, as surety, paid to the United States, in February, 1800, five hundred and one dollars and seventy cents, and in August, 1804, three thousand three hundred and thirty dollars and seventy-one cents, on ae-“count of the said bonds.
    On the evidence of the facts, the defendant’s.counsel moved for a nonsuit, which was overruled by the judge* and the jury found a verdict for the plaintiff.'
    A motion was made on behalf of the defendants to set aside the verdict, and far a new trial.
    Two questions-were raised for the consideration of the eourt. I. Whether the assumpsit in the the declaration ought not to have been laid as made by those partners only who were living at the time the plaintiff paid the money. 2. Whether the defendants are at all liable to
    tl t plaintiff in this action ?
    
      Hoffman, for the defendant.
    The promise must be proved as laid in the declaration. The plaintiff’ having declared on a promise by all the partners, he must prove it, Here the promise is stated to have been made by five persons, two of whom were dead at the time. The proof does not support the declaration.
    
    There could be no assumjjsit in law, or implied promise, until the plaintiff had actually paid the money.| The payment of money for the use of the surviving partners would not raise an implied promise in the deceased partner.
    Again,.one partner cannot bind his copartner by deed and for the same, or a stronger reason, he cannot, by requesting another person to become surety in a bond, bind his copartner by such bond, so as to make him liable for the consequences.
    If money be lent to one partner, expressly for the use of the copartnership, and the lender takes a bond from, such partner for the amount, no recourse can afterwards be had against the copartnership, on the implied promise. The law of the United States prescribes a bond of a particular form, and agents and consignees are considered as principals. Nothing is said as to rights against co-partners. But in case df the insolvency of the principal, the same preference is given to the surety who pays the money, as before belonged to the United States.
    
    
      Radcliff and Harison, contra.
    In general counts,. like those contained in the plaintiff’s declaration, the ■precise time and place are not material. At the time'the bond was excuted, there was an implied promise of the principal to indemnify the surety, and though the money was paid afterwards, yet the assunvpsit must.be considered as having relation back to the time of the giving of the bond. If so, the objection as to the death of two of the partners afterwards, but before the money was paid by the plaintiff, fails. Surviving partners may be charged generally in indebitatus assumpsit, without taking notice of the previous copartnership, or of the death of a co-partner. All the survivors are named in the declaration» which is in the usual form in the case of surviving partners. It is -true, that the situation of the parties .might have been more accurately described; but the objection is merely formal.' Where substantial justice may he done, why should the court send the parties to another trial, on a mere formal objection .that might have been obviated by an amendment? The end of new trials is the attainment of justice. New trials have been granted o.n allowing the defendant to amend his plea, when the ■court are satisfied that justice has not. been .done. In the present case the merits of the cause have been fairly ' , , tried, and the rights of the parties would .not .be varied by a new trial.
    The acts of congress make no provision for the binding of a copartnership in a bond, by the copartnership name or firm. A bond with sureties is required by the laws of the United States, far.securing the payment of the duties, and the acting partner must, of course, execute the bond as principal. If he pay the money, he will have his remedy in equity against his copartners for their proportions, though not inthc courts of common law. The bond is, virtually, a payment of the duties on the goods of the copartnership, who are thus benefited. Why may not a stranger who thus pays money for the use and benefit of a copartnership,, have his action at law against such copartnership? In the case of Taylor v. Mills & Magncll,
      
       a party in interest was held liable, though he did not sign the bond. The act of congress does not take away the common law rights of sureties, but has super-added privileges not before possessed, by giving to them all the preference and priority which the government would have against the principals, if bankrupts or insolvents. This was intended to encourage merchants to become sureties for each other. The surety is not obliged to look beyond the principal named in the bond ; but it will greatly embarrass merchants if they cannot, when necessary for their indemnity, have recourse, to the co-partners for whose benefit the bond was given. A consignee who executes a bond to secure the duties on goods consigned to him, would have a right of action against the consignor for the money paid to his use, though the goods should be afterwards destroyed by fire.
    P. Edwards, in reply.
    
    The declaration is on a promise or contract between the parties named, and it must be proved as it is laid. A promise, either express or implied, by three persons, is different from a promise by five. The cases already cited show that this is a fatal variance. It is said that all the copartners were liable to the plaintiff at the time the bond was executed, and that the implied promise must have relation back to that time. But a promise to indemnify, or save another harmless, is different from a promise to pay money.# When the principal fails to pay, a cause of action accrues to the surety, on account of his liability, and is founded on the implied promise to keep him harmless, But where the surety pays the money, his right of action accrues only on payment of the money; he is not damnified until the money is paid, The plaintiff cannot maintain an action against all the copartners for money paid to their use, unless it was actually paid for them, or his person has been taken in execution for their debt, Two of the partners Were dead before the money was paid, so that it is impossible 
      to imply a promise to pay by five persons. But in truth, no promise by the copartnership to indemnify the plaintiff in this case can be raised by implication of law. Not a case can be found of such an implied promise to indemnify a surety, except by persons who have executed the bond. It has never been extended beyond the parties to the instrument. All prior contracts, promises, or liabilities, in regard to the duties, were merged in the bond by which George W. NarSer became the debtor of the United States. . By that bond all claims of the United States against the copartnership, were extinguished. ■Suppose Barber, and the plaintiff as his surety, had given their bonds for all the debts due by the copartnership of George W. Barber and Co. those debts would be' thereby extinguished; but Barber only would have aright of action against the copartnership. The plaintiff, who became surety for him at his request, would have no right against the copartnership for having paid their debts. The argument on the other side goes to maintain the doctrine, that, when a surety pays the debt of the principal, he has a' right of action against all persons who may, consequentially, be benefited by such payment. Such a payment may be a good consideration for an express promise by a person not a party to the instrument, but who is benefited by it; but if creates no implied promise. A third person cannot be thus made a debtor, nolens vo-t lens, without his knowledge or consent. Suppose Barber had given a counter-bond to indemnify the plaintiff, would not all implied promises have been merged’in such bond? The act of congress gives the surety who pays a bond a tight to bring a suit on the bond in his own name, against the principal, and transfers to such surety all the rights, preferences and priorities belonging to the United States, The surety is thus secured by bond, and is in a better situation than if he took an indemnity from the principal at the time. Now, shall a person thus situated, resort for an indemnity to third* persons, not named, nor parties, on the ground of an implied contract ?
    In the case of Taylor v. Mills fy Magnell, there was an affidavit of Magnell, who admitted that he was liable, and that he would have executed the bond, had he been in the country at the time. That case does not support the proposition contended for by the other side; but is an express authority to show that the plaintiff could have no cause of action until he had paid the money.
    
      
      1 East, 52 Sheriff v. Wilks. Opinion of Lawrence, J.
      
    
    
      
       6 Term 363 Spalding v. Mure. Holmes 4-Drake v. De Camp, vol. 1, p. 34.
    
    
      
      
         Comber-479] smitkvBarrow.
      
    
    
      
       -ji Burrow, 292- Camper. 62,63.&Term, so. S3.
    
    
      
      
        Laws ofU.S.
      
    
    
      
      
        Cowper, m,
      
    
    
      
      3 Bxilslrode, 833. 5 Co. 24. 3 Wilson, 14. S62. 346.
    
    
      
      
        Cowper,SS7. Taylor v. Mills h Mag-mil,
      
    
    
      
      
        z Term, to0, j^artinnant.
      
    
   Tompxons, J.

In this case two questions arise for our determination. 1. Whether the promise in the declaration ought to have been stated to have been made by those partners only who were living at the time the plaintiff paid the custom-house bond ? 2d. Whether the defendants are at all liable to the plaintiff in this action ?

There can be little doubt that no right of action for money paid, laid out, and expended, arises in favour of a surety, against the principal, until the former has actually paid the debt, or his body has been taken in execution upon a judgment therefor. (Chilton v. Whiffin and Cromwell, 3 Wilson, 13.)

Before the plaintiff paid the first custom-house bond, (at which time, if ever, his right of action against the partnership accrued) George W. Barber died; and previous to the second payment, as surety for the said George W. Barber, Aaron Hosford also died. The declaration is upon the assumpsit of all the partners living at the time the bonds were executed. In the case of Spalding and another v. Muse and others, (8 Term Rep. 363.) it was decided that in an action for money had and received, to the use of the plaintiffs, by three defendants, the former could not give evidence of money had and received to their use, by the three defendants and another person who had since died. This doctrine proceeded upon the undeniable principle, that to entitle himself to recover upon a promise, either express or implied, by the parties who are alleged in the declaration to have made it. Tire same doctrine has been recognized in this court, in the case of Holmes & Drake v. De Camp, (1 Johnson, 36.) There can be no substantial, reason for applying a different principle in the action, for money paid, laid out, and expended, or in a case where the promise proved is by three persons only, when the promise laid in the declaration is by those three persons and others whom they have survived. A plea in abatement is not necessary where the contract is stated to have been jointly made by more persons than are proved, upon the trial, to have assumed ; but the plaintiff, in such case must fail upon the general issue of non assumpsit simul cum.

As the objection to the plaintiff’s right to retain the verdict upon the ground of a variance between the contract proved and the one stated in the declaration, might be obviated by an amendment, it becomes necessary to decide, whether the defendants are at all liable to the plaintiff, for the money paid by him as security for George W. Barber, one of the partners. In my opinion they are not. The law does not imply a promise by all the persons who may be benefited in consequence of payment by a surety, but only by the person whose debt is thereby discharged. In this case upon the acceptance, by the custom-house officer, of the bond of the plaintiff and Barber, the claim of the United States, for the duties secured thereby, became confined to that bond, and the debt, if any previously existed in favour of the United States against all the parties for those duties, was extinguished. The previous debt to' the United States then became the debt of Barber only; and when the plaintiff became Ais surety, the promise of indemnity, and the promise upon the payment of the money, were implied against Barber only.

I am, therefore, of opinion, that the motion for a new trial ought to be granted; but that liberty be given to the plaintiff to amend his declaration, upon payment of she costs subsequent to the declaration.

Thompson, J. was of the same opinion.

Kent, Ch. J.

I am of the same opinion, and would only add, on the merits of the case, that as George Barber gave the bond to the United States, and became thereby responsible, to the exclusion of his partners, the United States could look only to him. The plaintiff executed the bond as his surety,, and cannot charge any other person as principal. There is no privity between the parties but what arises from the bond. It would be refining upon the doctrine of implied assumpsits, and going beyond every case, to consider the surety in a bond, as having by that act, a remedy at law against other persons, for whom the principal in the bond may have acted as trustee» George Barber, the principal here, was, as it is stated, a surety for the debt of his firm, and that debt might perhaps have arisen by their being sureties for other persons still behind them. We can only look to the principal and surety in the bond to the United States, and to fhe obligations resulting from that relation, because the money was paid by the plaintiff in discharge of that bond, and in exoneration of the personal representatives of George Barber, who, alone, were legally responsible for that debt. It may be, that George Barber had received a full indemnity from his partner when he gave the bond. We cannot, in this action, unravel the accounts between George Barber and his partners; and to push the implied assumpsit beyond the party to the bond, may iead to great difficulties, and produce injustice.

New trial granted. 
      
       Where one of two partners executes.a bond for duties oft goods imported, with a surety, and the surety advances his co-obligor money, with which he pays the bond, he may maintain an action against both of the partners, for money lent, this being a partnership transaction} although had the surety himself taken up'the bond, he could only have had an action against the partner who executed it. Walden v. Sherburne, 15 John. 409.
     
      
      
        3 Wilson 13, M, Shitton v. Whiffinet al. and 3- Wilson, 262. 346.
     
      
       7 Term, 207. Harrison v. Rushfarth.