Court Opinion

ID: 9300387
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:06:50.991887+00
Date Added: 2024-06-11T17:13:39.727638
License: Public Domain

WASHINGTON, Circuit Justice.
The case upon which this action is founded, is stated in the bill of exceptions, and is as follows: Bradford & Inskeep, being indebted to the United States in a certain sum for duties, foiir several bonds, for the amount of the same, were executed by Samuel Bradford, one of the partners, in his individual and separate capacity, and by Moses Thomas, his surety; and being unable to pay all their debts, Bradford & Inskeep made an assignment of all their estate and effects to the defendants, for the benefit of their creditors; from which estate, the defendants received a sufficiency to satisfy the said bonds; but refused, upon demand made by the plaintiffs, to pay the same; and the only question for the consideration of this court is, whether the court below ought to have admitted these bonds to be given in evidence, to prove a debt due by Bradford & Inskeep, or by Samuel F. Bradford, to the United States? The objection made to the admission of this evidence is, that they are incompetent to prove a debt due by Bradford & Inskeep, because they were not executed by them; and consequently. the defendants cannot be charged as receivers of money belonging to that firm, to the use of the United States. If, in point of law, the premises be correct, the conclusion unquestionably is so. The question then is, whether these were the bonds of Bradford & Inskeep? The affirmative is contended for, by the counsel for the United States, upon the following grounds: 1st. That one partner has a general authority to bind his co-partner by deed; and if not so, then, 2d. Samuel F. Bradford was authorized to bind his co-partner, by virtue of the power of attorney mentioned in the bill of exceptions.
The first ground cannot for a moment be maintained; and even the counsel, who stated it, did not appear to have much confidence in it. There is not, it is confidently believed, a solitary case to be found, which supports the doctrine, that one partner can, by deed, impose a charge upon his co-partner; and the authorities to the contrary are numerous and positive: Harrison v. Jackson, 7 Term R. 207; Green v. Beals, 2 Caines, 254; 4 Bac. Abr. 608, tit. “Merchant.” It is true, that one partner may release a partnership debt, so as to bind his co-partner; but this proceeds upon a general and well established principle of law, that a release by one joint creditor bars the other; — the release is a satisfaction in law, and is equivalent to a satisfaction in deed. Ruddock’s Case, 6 Coke, 25, 2 Rolle, Abr. 411.
2. That one partner may, by a power of attorney, authorize the other to execute a deed in liis name, or in the name of the co-partnership, is not to be doubted. Indeed, *877■without such a power, one partner may bind the co-partnership by a deed executed in his own name, and in that oí his partner, if it be done in his presence, or by his authority. Ball v. Dunsterville, 4 Term R. 313, cited in 3 Ves. 578.
In this case, it must be admitted, that Bradford was fully authorized, by the power of attorney, to bind his partner, by placing his signature and seal to the bonds in question; and if he had done so, the ease would have admitted of no doubt. But he has not thought proper to execute the bonds, either in the name of the co-partnership, or in the separate names of his partner and himself; and the bonds are therefore the separate bonds of Samuel F. Bradford; as much so as if the power to bind his partner had not been given. It was'insisted, indeed, though somewhat indirectly, that the power of attorney contained an agreement, by each partner, to be bound by any bond which the other might execute in his own name. This is by no means the fair construction of the instrument. It authorizes each partner to execute customhouse bonds, not in his own name, which would have been useless and absurd, but in their several and respective names; that is. in the names of Samuel F. Bradford and .lohn Inskeep. and not in the .name of either. The agreement to be pound by bonds so executed, was certainly an unnecessary stipulation; but, nevertheless, the insertion of it cannot control the plain construction of the words which grant the authority. Neither are we prepared to admit, that an agreement between Bradford and Inskeep, that each would be bound to pay bonds executed by the other, alone, would make such bonds the deeds of the party who did not execute the bonds. This, however, is a point not necessary to be decided in this case.
But it is contended, that, notwithstanding these bonds, Bradford and Inskeep were bound, as importers of the goods upon which the duties arose, to pay the same to the United States; and that the bonds ought to have been suffered to go to the jury, as evidence of the amount of the debt for which they were so liable. To this argument, there is this conclusive answer, — that the bonds, being given by one partner for a partnership debt, extinguished the simple contract debt, due by the co-partners, as importers, and made it the debt of Bradford alone, who executed them. We entirely -concur in the opinion of the supreme court of New-York, in the ease of Tom v. Goodrich, 2 Johns. 213. The rea: son upon which the doctrine is founded, is obvious. The bond is clearly obligatory upon the partner who executed it; and is therefore an extinguishment of the simple contract debt as to him. A joint action, therefore, to recover on the original debt, could not be supported against both partners. Neither could an action be maintained against the partner who did not execute the bond, because he has a right to insist that his partner should be joined with him in the action; of which right the creditor and the other partner cannot, without his consent, deprive him. It is precisely like the case of a release, which, if given to one joint debtor, discharges both. A bond, given for a simple contract debt, operates as a release of that debt, and creates another of a superior dignity, which can be enforced only against the person who executed the bond. The case of U. S. v. Lyman [Case No. 15,647,] does not contradict this doctrine, even as applied to custom-house bonds; and we subscribe entirely to the decision made in that case. There, the bond for the duties was given by a purchaser from the importer, after the importation was complete, and had fixed the importer with the debt. The bond, therefore, was given by a stranger to the original contract; and it is a clear principle of law, that a simple contract debt is not extinguished by a higher security, afterwards given by a third person; unless where it is done in pursuance of an agreement made at the time when the original debt was created.
It is true, that the learned judge intimates an opinion, that a bond given by the importer himself, would not extinguish the original debt; but he gives no positive opinion upon the point; and, noticing the case of Tom v. Goodrich, he observes merely, that the doctrine it establishes may admit of some doubt; but that in that case, it was unnecessary to consider it, as the case he had to decide was not that of a partnership. And he concludes, by considering the bond given by Lovejoy, only as the security of a third person, for the proper debt of the importer, which would not, per se, extinguish it; and most unquestionably it was no more than a collateral security.
Again, it is contended on the part of the United States, that, although this bond might not be proper evidence of a debt due by Bradford & Inskeep to the United States, it clearly constituted a debt of Samuel F. Bradford; out of whose separate estate, in the hands of the defendants, his trustees, the United States were entitled to be paid the amount of these bonds, in preference of Bradford’s other creditors. To this argument there are two objections. The first is, that the bonds, as the bonds of Bradford alone, were merged in the judgment, stated in the bill of exceptions to have been obtained against him; and therefore, they had no legal existence for any purpose whatever. And secondly, the evidence so offered, did not correspond with the case stated by the plaintiffs as constituting the foundation of their action; the former being the evidence of a debt due by Bradford alone; and the latter, that of a claim of a partnership debt due by Bradford & Inskeep; and the defendants being sued as receivers of the joint funds of the co-partners, debtors of the United States, it was necessary for the United States to prove, not only that they were such receivers, but also, that the debt *878■chargeable upon those funds, in the hands of the defendants, was due from the co-partners.
Upon the whole, we are of opinion, that the judgment of the district court ought to be affirmed.