Court Opinion

ID: 5512655
Source: CourtListenerOpinion
Date Created: 2022-01-10 04:23:31.655622+00
Date Added: 2024-06-11T08:34:12.092556
License: Public Domain

Brady, J.
The defendant, upon a sale of the partnership effects of the" firm of Randall & Williams, agreed to discharge certain debts, including notes then held by Nathan Randall for moneys loaned, and which were subsequently, and before maturity, *185and for value transferred to the plaintiffs. The defendant, at the time of the sale and agreement mentioned, held a note of Nathan Randall for $500, which was past due, and which she set up as a counter-claim, and offered to prove. On the trial before the referee, it was disallowed and judgment given for the plaintiffs on the notes.
Two questions are presented on this appeal. ' First. Did the agreement inure to the benefit of the plaintiffs ? Second. Was the set-off improperly excluded F
The defendant received all the assets of the partnership, and in consideration thereof, undertook to pay its debts to a certain limit. The plaintiff’s cjebt was included in the obligations assumed. The partnership property is primarily liable for the joint debts. It is the fund created and provided for them. Wilder v. Keeler, 3 Paige, 167; Kirby v. Carpenter, 7 Barb. 373; Ganson v. Lathrop, 25 id. 455; Sage v. Chollar, 21 id. 596, although the creditors may not have any specific lien upon it. The receipt of it, therefore, constitutes a good consideration for a promise to pay the debts with which it is burdened. An action lies on a promise made by the defendant, on a valuable consideration, to a third party for the benefit of another, even where he is not privy to the consideration (Lawrence v. Fox, 20 N. Y. 268), and it is not essential that the promise should be made directly to the person to whom the money is to be paid if it is made for his benefit. Delaware & Hudson Canal Co. v. Westchester Co. Bank, 4 Denio, 97.
There is no difference in principle between the cases cited and this, except that (and it makes the plaintiff’s case stronger) there is privity between the defendant and the consideration, inasmuch as the property which formed the consideration was, as we have seen, primarily liable for the plaintiff’s debt.
The set-off was properly rejected, because the plaintiffs were holders of a negotiable note, and having taken it before maturity, and for value, it was not subject to existing equities in the absence of notice, actual or constructive. The'promise to pay the note held by the plaintiffs was to pay it as it existed at the time it matured. It could not be affected by any arrangement between the defendant and the makers. The defendant assumed their obligations, which was to pay the note, to a bona fide holder, for value without notice, notwithstanding they might, were it in the hands of the payee, have a subsisting set-off or equity against it. This must be the rule in *186a case like this more particularly where the equitable obligation to apply the joint property to joint debts is created by the law of the land.
There is, however, another objection to the set-off, and that is that it does not exist apparently in favor of the defendant in her own right. Merritt v. Seaman, 6 N. Y. 168; Dale v. Cooke, 4 Johns. Ch. 13; Duncan v. Lyon, 3 id. 359; Root v. Taylor, 20 Johns. 137. It is not alleged that the note was transferred to the defendant, and the presumption is that it was part of the effects which she acquired as executrix of Austin Myers, deceased. There is nothing in the cases of Kelly v. Roberts, 40 N. Y. 432; Ætna Nat. Bank v. Fourth Nat. Bank, 46 id. 82; Garnsey v. Rogers, 47 id. 233, in conflict with the rule established in Lawrence v. Fox and applied here.. The binding force of a promise duly made upon a valid consideration to one person for the benefit of another is recognized particularly in Kelly v. Roberts, supra. The consideration here was the transfer to the defendant of the partnership property already charged with its debts upon the promise that the debts would be paid.
The judgment should be affirmed.

Judgment affirmed.