Court Opinion

ID: 3627680
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:07:56.481164+00
Date Added: 2024-06-11T09:05:13.078788
License: Public Domain

[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 89 
[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 90 
[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 92 
[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 94 
[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 95 
The order of the General Term denying the motion for a new trial made under section 1001, Code of Civil Procedure, is reviewable by this court. (Walker v. Spencer, 86 N.Y. 162;Raynor v. Raynor, 94 id. 248.) But the General Term could not, on such a motion, review questions of fact, and only the questions of law presented by the exceptions can be considered in this court. (Raynor v. Raynor, 94 N.Y. 248, 252.)
In the absence of fraud or duress, a settlement of a disputed claim preferred in good faith by a promisee against a promisor, is a legal consideration for a promise; and the fact that the promisor had a legal defense to the claim settled is no defense to an action on the new promise. (Russell v. Cook, 3 Hill 504; Stewart v. Ahrenfeldt, 4 Denio 189; Crans v. Hunter,28 N.Y. 389; White v. Hoyt, 73 id. 505, 514, 515; Feeter v.Weber, 78 id. 334; Dunham v. Griswold, 100 id. 224;Callisher v. Bischoffsheim, L.R., 5 Q.B. 449; Ockford *Page 96 
v. Barelli, 25 Law Times 504, 20 Week. Rep. 116; Miles v.New Zealand etc., Co., 32 Ch. Div. 266.)
The cases of which Ryan v. Ward (48 N.Y. 204) is a type, holding that a payment by a debtor of a less sum than the amount which he admits to be justly due and owing by him does not extinguish the debt, though the creditor agrees to receive the less sum in satisfaction, are not in conflict with the rule above stated. There is a great difference between claims unliquidated and disputed, and those which are liquidated and undisputed. A compromise which is sufficient to bar an action on a claim within the first class often being quite insufficient to bar an action on a claim within the second class.
The law regards with favor and seeks to uphold settlements of pending or threatened litigations, but not with favor an attempt to discharge an admitted debt by payment of a part of it. There is no doubt about the rule above stated being firmly established in the law of this state; but the important question is, whether the settlement of March 8, 1880, is within the rule. The transaction was not an executed settlement of one or more disputed claims by which the claimant surrendered or released his demands in consideration of the payment of a sum agreed on or upon the promise of future payment of the sum agreed on. In the absence of duress, fraud or mistake, an account stated by partners between themselves will not be opened and investigated in an action for an accounting (Story on Part., § 206; Lind. on Part. [5th Eng. ed.] 512; Pilling v. Pilling, 3 De G., J. 
Sm. 162; Coventry v. Barclay, id. 320.) But the controversy settled March 8, 1880, did not relate to the accounts between all or any of the parties to this action, as partners; the question debated and settled was, had Theodore D. Barnum and the respondents been partners since June 24, 1879, and each entitled to a fifth of the profits? They finally agreed, in consideration of being credited with $3,000 each and of the future partnership, that no partnership had previously existed.
This contract is supported by a valid consideration. The partnership which the court found then existed, and *Page 97 
which, by agreement, was to continue for more than a year, rested only on an oral contract, and either partner had a right to terminate it at will.
A contract forming a partnership to be continued beyond one year, is within the section of the statute of frauds which provides that every agreement which by its terms is not to be performed in one year from the making thereof, is void unless it is in writing, and a partnership so formed is a partnership at will. (Morris v. Peckham, 51 Conn. 128; Williams v.Jones, 5 B.  C. 108; Jones v. McMichael, 12 Rich. Law, 176; Essex v. Essex, 20 Beav. 442; Burdon v. Barkus, 3 Giff. 412; 4 De G., F.  J. 42, 47 and 50; Reed's Stat. Fr. § 191; Lind. on Part. [5th Eng. ed.] 80, 81.)
We have not been referred to any case in this state wherein this proposition has arisen and has been decided. In Smith v.Tarlton (2 Barb. Ch. 336), the parties, by an oral contract, entered into and agreed to continue in partnership for three years. Before the expiration of the time limited two of the partners filed a bill against the third partner, alleging that the partnership property had been sold and the partnership dissolved by mutual consent, and that the defendant had misapplied the funds of the firm. An accounting and an injunctionpendente lite was prayed for. An injunction was granted on the bill which the defendant moved, on the bill, to vacate, but the motion was denied, the chancellor saying:
"This was not, as the counsel supposes, an agreement which was not to be performed within one year, so as to require it to be in writing, under the statute of frauds. But it was the formation of an immediate partnership between the parties, which partnership was to continue three years, unless sooner dissolved by the consent of such parties. In this state no written articles are necessary to constitute a copartnership which is to take effect immediately, although a written agreement might be necessary to bind the parties to enter into a future copartnership to commence after the expiration of a year." *Page 98 
In National Bank v. Van Derwerker (74 N.Y. 234, 239), it was said: "But as to partnerships, although to endure for a longer period than a year, it has been held that they are not within the statute of frauds." (Smith v. Tarlton, 2 Barb. Ch. 336.)"
In the first case the complainants alleged that the partnership property had been sold and the firm dissolved by mutual consent, which was not denied. The question whether a partnership to continue more than one year, formed by an oral contract, was determinable by the will of either party, was not in the case. The second case did not arise between partners, but was an action brought against the shareholders in a joint-stock association, which existed under an oral contract, to recover the amount due upon executions against the association, which had been returned unsatisfied. It was held that the fact that the association existed under an oral contract was not a defense in favor of the shareholders and against a creditor of the association. The remark quoted was made while discussing the liability of the shareholders and cannot be regarded as a determination of the question.
An oral contract, invalid by the statute of frauds, because by its terms it is not to be performed within one year from the making thereof, is not validated by part performance. (Billington v. Cahill, 51 Hun, 132) To hold that part performance is performance would be a nullification of the statute The agreement of March 8, 1880, cannot, under the facts found, be avoided for fraud or duress. It is not found that the position of Stephen O. and Theodore D. Barnum, that no legal partnership existed, was taken in bad faith. There is no finding that the Barnums made false representations or concealed any facts; on the other hand, it appears that all of the facts now known were then known to the respondents. Duress per minas
might be implied from the seventeenth and eighteenth findings of fact contained in the decision signed, but for the finding, made on the request of the appellants, "that the plaintiffs consulted counsel in the matter (the settlement *Page 99 
of March 8, 1880), and were not ignorant of their rights, if any, nor under duress." When findings of facts are so inconsistent that they cannot be reconciled, those which are the most favorable to the appellant are controlling on the appellate courts. (Redfield v. Redfield, 110 N.Y. 671; Bennett v.Bates, 94 id. 354; Bonnell v. Griswold, 89 id. 122;Schwinger v. Raymond, 83 id. 192.)
The facts found by the trial court are insufficient to support its decision that the oral compromise of March 8, 1880, "was without any good consideration, and was null and void."
The order and judgment should be reversed and a new trial granted, with costs to abide the event.