Case ID: mass_62/html/0382-01.html
Source: Caselaw Access Project
Author: {"author": "Shaw, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Cyrus Lothrop vs. Nathan King.
    A debtoi promised one of his creditors in writing to pay his debt, in consideration of his signing, with other creditors, a composition deed, agreeing to discharge the debtor from all his liabilities, and to take a dividend of his assets; and the creditor accordingly signed the composition deed. It was held, that he could not afterwards maintain an action against the debtor for the debt.
    This was assumpsit on a promissory note for $200, made by the defendant to the plaintiff, and dated June 24th, 1841. The defendant specified in defence a discharge by a release, dated the 24th of November, 1842.
    At the trial in the court of common pleas, before Mellen, J., the plaintiff, to maintain the case on his part, read the note declared on, and a paper signed by the defendant, of which the following is a copy: “ January 25, 1843; In consideration of Cyrus Lothrop’s having this day signed an instrument with Peter H. Pierce, Arad Thompson, and others, agreeing to discharge me from my liabilities and to take the dividend of my assets, (said instrument bears date November 24th, 1842), I do agree and promise to pay the said Cyrus Lothrop the full amount of the note which I now owe said Lothrop and all costs thereon, (said note is dated June 24th, 1841, for two hundred dollars, with interest on demand,) said Lothrop is to receive and apply his share in part payment of said note and costs thereon, and I promise to pay and make up to said Lothrop the deficiency, if any there be after deducting said dividend.” The plaintiff here rested his case.
    The defendant gave in evidence an assignment, dated the 24th of November, 1842, made by him to A'ad Thompson and others for the benefit of his creditors, and containing ar agreement on the part of the creditors executing it, to release the defendant from all his liabilities, and to take a dividend of his assets; which assignment was duly executed by the de fendant, and by the plaintiff and other creditors, and deliverer to the assignees named therein.
    The presiding judge thereupon ruled, that if there was m fraud in the defendant in making this assignment, and it was duly carried into execution, and if the paper signed by the defendant was made at the same time with, and in consideration of, the plaintiff’s signing the assignment, the assignment discharged the defendant from his liability on the note.
    A verdict was taken for the defendant, and the plaintiff alleged exceptions to the ruling of the judge.
    
      T. G. Coffin, for the plaintiff.
    
      E. Robinson, for the defendant.
   Shaw, C. J.

This case is decided by that of Case v. Gernsh, 15 Pick. 49. Any private and separate agreement, made by one of several creditors who are parties to a composition deed is a fraud on other parties, as well as an unwarrantable means of coercion, practised on the debtor, and is void. But this action is obnoxious to a further objection. The declaration is on the note; the note is released by the releasing clause in the assignment, and is so regarded by the terms of the separate paper, executed simultaneously with the plaintiff’s execution of the assignment. The plaintiff’s remedy, if he had any, was upon that paper; but for the reason already given, that promise to pay the amount which would remain due, after receiving a dividend under the assignment, was fraudulent and void. Ramsdell v. Edgarton, 8 Met. 227.

No objection was made to the trust assignment for creditors, made November 24th, 1842, that it was void by force of the statute of 1836, respecting assignments. Perhaps all the creditors were parties to it; but if otherwise, the plaintiff was a party to it; and if the effect of the statute was only to make such assignment void, as against creditors who might be injured by it, then in strict law, it was voidable only and not absolutely void, and the parties to it might be held to have waived that exception. But there is a more decisive answer, which is, that if the assignment and the releasing clause were void by the statute, the paper signed by the defendant simultaneously with it and as part of the same transaction fell with it, and then there is no acknowledgment to take the cause of action, arising on the note, out of the operation of the statute of limitations. Exceptions overruled.