Motley v. Wickoff

Montgomery, J. This case was determined by the circuit court upon an agreed state of facts. The defendant and one Gill, as copartners, became indebted to the plaintiff in the sum of about’ $140. In April, 1891, Wickoff retired from the firm of Gill & Wickoff, and Gill, in con *232 sideration of the partnership property all being turned over to him, assumed the payment of all the partnership debts. After the dissolution of the firm, and before this action was brought, the amount had been reduced from $140 to $116, by payments to plaintiff made by Gill. It further appears that Gill, shortly after the dissolution, stated to plaintiff that he had assumed, and agreed with Wickoff to pay, all the partnership indebtedness, and that to said statement plaintiff replied, “All right; pay as fast as you can;” that, some time after the dissolution, defendant saw the plaintiff, and stated to him that, according to the terms of the dissolution between himself and Gill, Gill was to pay the sum due and owing to the plaintiff, and asked plaintiff if he would release him (defendant) from the indebtedness, to which plaintiff replied that he would. Upon this state of facts, the case was 'submitted to the court, upon a stipulation that the plaintiff was entitled to recover if the court should find that the defendant had not been released from the indebtedness. The court found, as matter of law, that there was no consideration for the promise of the plaintiff to defendant to release him from his liability on the partnership indebtedness, and entered judgment for the amount claimed, with costs. Defendant suggests, rather than urges, that the case is one where the rule adverted to in Webber v. Alderman, 102 Mich. 638, namely, that where the surety is induced to forego or relinquish means of indemnity to which he might otherwise have resorted, by the promise of the creditor to exonerate the surety, this may work an equitable estoppel to deprive the promisor of the power to retract, is applicable. But there are no facts found in this case which make this rule at all pertinent. There is no finding that the responsibility of Gill has in any way been changed, or that defendant has changed his position in the matter because of any assurances given by plaintiff. The case must turn upon the question of whether there was a consideration to support the promise to look to Gill *233 alone. The authorities are not agreed upon the question of whether the agreement of one joint debtor or copartner to pay the debt upon which the two are liable is a sufficient consideration to support a release of his co-debtor. The modern English doctrine appears to be that such an undertaking is a sufficient consideration, on the ground that the sole liability of one of two debtors may, under many circumstances, be more beneficial and convenient than the joint liability of two, and that whether it was actually a benefit in each particular case will not be inquired into, but that the changed relation will be held to be a sufficient consideration. See Thompson v. Percival, 5 Barn. & Adol. 925, and Lyth v. Ault, 7 Welsb., H. & G. 669. This doctrine has also found support in this, country, to the extent stated in Collyer v. Moulton, 9 R. I. 90 (98 Am. Dec. 370), in which it was said: “If, by a mutual arrangement between the plaintiff Collyer and the two defendants, Moulton had been released from his liability for the work already done, and a new promise made by Bromley, the other defendant, to pay for it, this would have been a valid release for a valuable consideration; one debt would have been substituted for the other. ” See, also, Bantz v. Basnett, 12 W. Va. 772; Bowyer v. Knapp, 15 W. Va. 277; Waydell v. Luer, 3 Denio, 410. Contra, Early v. Burt, 68 Iowa, 716: Wild v. Dean, 3 Allen, 579. In the case of Johnson v. Emerick, 70 Mich. 215, Mr. Justice Champlin, speaking for the court, said: “Such discharge from liability is based upon the express or implied assent of the creditor, upon a sufficient consideration; and a creditor, knowing of such relation, who goes on and deals, with the other partners with reference to the debt, may well be held to have assented to the arrangement, and to have accepted the responsibility and promise of the partner assuming such debt. This consideration need not be a money consideration. It may be the obtaining of an additional- security, better terms of payment, negotiable securities which the creditor may use in his business, or any other benefit, or it may be a loss *234 of some right or disadvantage suffered by the surety through the act of the creditor.” In the present case it will be noted that the transfer of the firm property by defendant to Gill was not induced by any promise of plaintiff, but had occurred before any promise of release was made; nor does it appear, as before stated, that the defendant lost any rights; nor was-any security taken or accepted by the plaintiff; nor does it appear that the time for the payment of the debt was-extended. Plaintiff relies upon Walstrom v. Hopkins, 103 Pa. St. 118, and Eagle Manfg. Co. v. Jennings, 29 Kan. 657 (44 Am. Rep. 668). In the latter case it was claimed that the plaintiff had due notice of the dissolution of the firm, and the assumption of the liabilities by Whitney, and that it accepted him for the payment of the bill of exchange. The court said: “The dissolution of the partnership, the taking of all the partnership property, and the assumption of all partnership liabilities by Whitney, in no manner released defendant. The alleged promise of plaintiff was made after the dissolution, and not as an inducement to or consideration of it. The acceptance has never been paid. * * * No-additional security of any kind was furnished. The acceptance was not destroyed and new paper given. The plaintiff received absolutely no consideration, and, even if it did promise that it would look to Whitney, such promise was entirely without consideration, and in no manner discharged the defendant. ” In Walstrom v. Hopkins it was held that a promise by a creditor of a firm to release a partner who has retired from the firm, and to look to the continuing partner only for the payment of his debt, unless founded upon-a legal consideration, is nudum pactum, and cannot be enforced. The-weight of authority favors the contention that the promise of the continuing partner may be a sufficient consideration to support the release of the outgoing partner. But, in the absence of such concurring or binding promise, we think no well-considered case can be found* *235 holding that the mere agreement between the partners will of itself support the agreement of the creditor to release the outgoing partner. Such an agreement does not establish a privity between the continuing partner and the creditor, entitling him to sue such partner individually. It is only a private executory contract, intended to regulate the rights, duties, and obligations of the co-partners between themselves, consequent upon a dissolution of the firm. Wild v. Dean, 3 Allen, 579. In the present case there was not only no extension of time, no acceptance of the paper of the individual partner, but the stipulation does not show an express agreement made to plaintiff by Gill to pay the debt. The finding is that Gill stated to plaintiff that he had agreed with Wickoff to pay all partnership indebtedness, and that to this the plaintiff replied, “Allright; payas fast as you can.” It will be noted that this was not simultaneous with the release of Wickoff, nor did it in terms establish a privity between Gill and plaintiff as to the obligation of Gill to pay the debt individually. We think the judgment should be affirmed. The other Justices concurred.