Philips v. Lockhart

ORMOND, J. — The bill of exceptions in this case, though not very lucid, presents two questions: First. The effect of a verbal promise to pay the debt of another. Second. The liability of one partner to another for the partnership debts paid by one, after the dissolution of the partnership. On the first point the proof set out in the record is, that the defendant purchased the interest of Huntington and another, in a firm, composed of these two persons and the plaintiff, with his consent, and became his partner. The defendant agreeing verbally, to pay the proportion of the two partners whose interest he purchased, of the outstanding debts of the old firm. If this promise is to be understood as made to the creditors of the firm, it is clearly void under the statute of frauds, being a promise to pay the debt of another, and not in writing. If Huntington and his partner, to whom it appears to have been made, had been compelled by the creditors of the firm, to pay the debts thus assumed by the defendant, they might probably have maintained an action against him, on his promise. But this promise cannot be held to enure to the plaintiff, nor can he maintain any action on it. It is as to him, within the statute of frauds. Nor is the question affected by the fact, that the promise was to pay a debt for which he is also responsible, and which if he has paid, he may have recourse against his former partners. The plaintiff cannot proceed against the defendant on his promise to indemnify them, which is the only legal effect that can be ascribed to his contract. [524] • It is equally clear, that the plaintiff cannot maintainan action at. law, for money paid by him, on account of the partnership between himself and the defendant, although the partnership has been dissolved, and the money was paid since its dissolution. It is ví ell settled, that one partner cannot maintain an action at law against his former partner, even after a dissolution of the partnership, uness there be a settlement of accounts, a balance struck, and according to some authorities, an express promise to pay it. (Foster v. Alanson, 2d Term, 479; Halstead v. Schmelgell, 17 Johns. Rep. 80; Holt’s N. P. C. 368.) In Lyon v. Malone, (4th Porter 501,) this court held that one partner, who after a dissolution of the firm, paid a firm debt, and took the note of his co partner for the amount, could maintain an action at law on the note. The broad distinction between that case and this, is, that there the note was evidence of an express promise to pay after the dissolution of the partnership; whilst in this case, there was no evidence of either a final settlement of accounts and balance struck, or promise to pay. There is no error in the judgment of the court, and it is therefore affirmed.