Court Opinion

ID: 6430042
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:07:23.154977+00
Date Added: 2024-06-11T15:52:09.208743
License: Public Domain

Morton, J.
The plaintiff and the defendant Arthur T. Parker, whom we shall speak of as the defendant, were formerly copartners engaged in the brokerage and insurance business. In June, 1893, the firm was dissolved by an agreement in writing under seal. The business was taken over by Parker and one of *3the provisions of the agreement of dissolution was that he should “ take up, pay and discharge all the debts and liabilities of the said copartnership as the same shall fall due.” The bond in suit was given to ensure the performance of this and other covenants contained in the agreement. One of the recitals in the bond is, “ whereas the said A. T. Parker also agrees to assume and pay all the debts and liabilities of the said copartnership, as the same shall fall due ”; and this is followed by the condition, amongst others, that “ if the said A. T. Parker . . . shall . . . also assume and pay all the debts and liabilities of said A. T. Parker & Co. then this obligation shall be void, otherwise it shall be and remain in full force and virtue.” After the dissolution of the firm one Whiting brought an action against the former co-partners to recover damages caused by alleged false representations made to him in the sale by the firm of certain securities. Whiting recovered judgment, and the plaintiff, in order to prevent his property from being levied on, paid the amount due on the execution. This is an action to recover the amount so paid.
The defendant contends that the amount paid by the plaintiff did not constitute a debt or liability within the meaning of those words as used in the bond and agreement of dissolution. It is not necessary to consider whether Whiting’s claim constituted a debt before it was reduced to judgment, or whether after it was reduced to judgment it came within the scope of the obligations assumed by the defendant as a debt. It is clear, we think, that it was at all events a liability and as such came within the terms of the bond and agreement. The words “ liable ” and “ liability ” are terms of large significance and in the absence of anything limiting their scope include obligations arising out of torts as well as out of contracts. In the present case the parties were contracting, the one with reference to the purchase of the business and the assumption of the debts and liabilities, and the other in reference to a sale of the business and a release from the debts and liabilities, and we see no reason why the word “liabilities” should be given a restricted meaning. There is no enumeration of the debts and liabilities to be assumed by the defendant, and the natural inference would be that he was to assume all of them. The words “as the same shall *4fall due ” do not indicate that the “ liabilities ” were those arising ex contractu, but rather that the parties intended to guard against indefinite delay in the settlement by the defendant of the debts and liabilities of the firm.
The defendant further contends that the agreement is illegal. But we see nothing illegal in an agreement by the continuing partner to indemnify the retiring partner against liabilities which do or may include an action for alleged false representations against the firm. Such an agreement is not an attempt by one wrongdoer to enforce contribution against another. Nor is it a case where two parties have conspired to commit an actionable wrong in consideration of the agreement by one of them to indemnify and hold harmless the other against the consequences thereof. The case before us relates to a tort for which the firm was liable and not to a crime which had been committed. As already observed we see nothing illegal in the agreement.

.Exceptions overruled.