Court Opinion

ID: 6136155
Source: CourtListenerOpinion
Date Created: 2022-02-04 21:42:33.614807+00
Date Added: 2024-06-11T08:54:31.056040
License: Public Domain

Bocees, J.
(dissenting).
The case is before the court on the record containing the pleadings, the findings of the referee and judgment thereon, with exceptions, but without any of the evidence given on the trial. The errors, therefore, if any there be, are to be sought for in the referee’s findings, or in his omissions to make findings-necessary to the support of the judgment.* * * *
There is no finding of actual intended fraud in the making of the assignments ; nor is it found that the notes were without consideration ; only this, that they were not valid demands in the hands of the payees against the makers of them, the assignors; and that consequently the preference of payment given them in the assignments rendered those instruments fraudulent and void in law as to the plaintiff and its judgment. But how were the notes invalid in the hands of the payees ? They were made oil good and sufficient consideration, and as property they were legal subjects of gift; and the gift of them was none the less valid because made by husbands to their wives and families, respectively, when in so far as is made to appear there were no then existing creditors of the donors to gainsay it. A husband is authorized to make a suitable provision for his wife and family, and if made without fraudulent-intent or purpose it- will be sustained. (Carr v. Breese 81 N Y., 584, and cases there cited; Whiton v. Snyder, 88 id., 299; Armitage v Mace, 96 id., 538.) But it is urged that the notes but represented claims or demands in favor of O. K. and V. A. Wood, respectively, against a partnership firm of which they were members, and, therefoie, not enforceable without an accounting between its members; and this even without its insolvency. The case of Cole v. Reynolds (18 N. Y., 74) holds to the contrary. In that case two *417firms, in each, of which A. was a partner, stated an account of their mutual dealings; and it was held that an action could be maintained by the creditor firm against the debtor firm for the balance found due the former from the latter on the accounting. The difficulty urged in that case, answered and overcome by the decision, was the technical one existing at common law that a man cannot sue himself. As there held this difficulty is not, under our present system of jurisprudence, law and equity being united, insuperable, but partnerships are to be treated as having distinct existences, each having its own distinct rights and interests. So the rule laid down by Story, there received approval, that the court, would treat different firms tor the purpose of substantial justice, exactly as if they were composed of strangers or even in fact corporate companies.
But the difficulty urged (but overcome by the decision,) in Cole v. Reynolds does not exist in this case at all. The facts here carry the case clear even of what was there sought to be made effective as a defense. Here, as in that case, there was a settlement between the firm of their own mutual dealings, and the two firms put themselves in the position of debtor and creditor. From this point the present case differs from Cole v. Reynolds and the difference is favorable to the legal integrity of the notes given by the debtor firm for the balance found due from it to the partners in the creditor firm. Notes fon this balance were, by consent of all the parties, all the members of both firms, given by the debtor firm to third parties. Now the technical difficulty in bringing suit, because at common law a man cannot sue himself is out of the way, and the promise of the debtor firm to the payees rested upon a good and sufficient consideration'. Thus the giving of the notes by the debtor firm to third parties by direction of the members of the creditor firm, operated as payment to the two members of the latter firm ; and so the referee correctly found. It seems, therefore, beyond peradventure, that the notes were legal, valid obligations in the hands of the payees against the debtor firm, hence might be legally and equitably preferred for payment in its assignment.
This conclusion necessitates a reversal of the judgment.
Judgment reversed; new trial granted; costs to abide the event, and referee discharged.
Judgment affirmed with costs.

 The findings of the referee which were here stated are given, in the statement of the case