Court Opinion

ID: 4935184
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:14:04.785873+00
Date Added: 2024-06-11T08:14:38.940147
License: Public Domain

Peters, C. «J.
Tlie court is of the opinion that the ruling at the trial of this case was correct.
One partner sells his interest in the partnership property to his co-partner, the latter promising as a part of the transaction to pay the partnership debts. This promise constitutes a direct and personal obligation of the one to the other. If the retiring partner pay a debt which his late associate agreed to hold him harmless of, he immediately has a claim against the latter for money paid. He can at once bring suit upon the claim. We do not feel the force of the argument that the action must be special on the contract of indemnity, and not maintainable until all the partnership debts have been paid. There may or may not be other defaults, and if there are it may be difficult to anticipate whether they will occur or not, and long periods may lapse between defaults. Such a remedy might turn out to be a very inadequate indemnity. We think that as often as money is paid on distinct and independent debts by the retiring partner, on account of default of payment by the other partner, suits are maintainable therefor in the common form of action for money paid. Fay v. Guinon, 131 Mass. 31; Stevens v. Record, 56 Maine, 488.
It follows, we think, that such a claim may be presented against the private estate of the defaulting- partner, if his estate be in process of settlement in insolvency, provided that when the partners contracted between themselves, no conspiracy or wrongful intention existed in relation to such estate. A partner may contract in good faith with a co-partner as he may with any one else.
In the case before us, it appears that the partner, wdio purchased the property and business, sometime afterwards carried hoth the partnership estate and his own private estate into insolvency for settlement. The other partner, present claimant, having been required, sometime prior to the insolvency, to pay a debt against the firm, took an assignment of it to himself, and had it proved for his benefit, in the name of the assignor, against *343the partnership estate. This was an irregular proceeding. In law he could not take an assignment to himself of a claim against himself, although against himself and another. The act was payment of the debt, and the original creditor had no claim to be proved.
The claimant noiv asks that the proof of claim against the partnership estate be withdrawn, and he allow'ed to present his claim against the private estate of the debtor. Re, Golder, 2 Hask. p. 33. Judge Lowell, in the case of In re Edward Hubbard, Junior, 1 Low. 190, held that a creditor who has proved his debt in bankruptcy may be permitted to withdraw his proof, if it was made under a mistake of law or fact. Much more allowable should it be regarded when the first proof was improperly made. The case of Ex parte Lake, 2 Low. 543, substantially like the present, is favorable to the claimant’s contention. We think it w'ould be a matter of justice to allow' the claimant to withdraw' his claim in one form and present it in the other, as prayed for by him. The estate is in a condition not to suffer injury by the change, as no confusion of assets will be created thereby. Fraud is not suggested. The claimant paid the debt in good faith in August, 1887, and his partner did not go info insolvency until October afterwards.
The appellee cites Morton v. Richards, 13 Gray, 15, as inconsistent with the practice approved by Judge Lowell. It is to be noticed that that case was decided on the peculiar terms of the Massachusetts statute, not liberal enough to embrace a case like the present, though the court in the opinion intimate that it might have been better if the statute had not been limited as it was. Our statute is of much wider effect. By ch. 70, § 25, It. S., all debts due and payable from the debtor at the time of filing the petition for insolvency proceedings are provable. The Massachusetts case, therefore, fails of influence on the present question.

Exceptions overruled.

Libbiqt, Virgin, Emery, Haskell and White no use, JJ., concurred.