Beam v. Barnum

Ellsworth, J. In the argument of this case, a wider range was taken, by counsel, than we think it necessary to follow, in order to decide the chief question in dispute. That the debt is in the form of a judgment of a court of record, in this state, we deem unimportant, inasmuch as the [204] locality which attaches to it, for some purposes, can have nothing to do with the question, whether the debt is discharged, by a composition and release. Nor is the question of the legal effect of a receipt in full, executed in this state, important. Nor the peculiar phraseology of this receipt, as whether, if executed in Connecticut, it would be held, under our decisions, to be in truth a receipt in full. We had, however, supposed, that the effect of a receipt in full, was settled, in the cases of Fuller v. Crittenden, Tucker v. Baldwin, and Hurd v. Blackman, in our reports. In our courts, at least, a receipt in full is a good defence in bar, with perhaps some qualifications, as stated in the cases above-mentioned. These matters are here unimportant, because, the subject now in hand is a New-York transaction, exclusively, and must be governed by the law of that state. There, the original debt was contracted, and continued; there, the parties met and compromised, with special reference to that statute law of New-York, which alone can give to the settlement made the peculiar effect aimed at, by both parties. So the question discussed by counsel, whether, at common law, one member of the creditor firm can, after the company is dissolved, in the company name, compound and discharge a debt due the company before its dissolution, is unimportant; though of this too we should entertain no doubt, if the thing is done understandingly and honestly, inasmuch as the statute of New-York, in the first section, provides, “that any one or more of the individuals, who was or were embraced in such copartnership firm, may act alone in the compromise; and such compromise or composition shall be a full and effectual discharge to the debtor or debtors making the same.” We have then only to enquire, if the composition made in New-York is effectual, according to the provisions of the New-York law. The law is full and explicit in its terms; and it applies, beyond all question, to this very case. The provisions of the law have been complied with, by both parties, fairly and fully; and it was probably the best thing for the creditors that could be done at the time; at least, the creditor himself so believed; and he must be allowed to be the best judge in the matter. The debtor, on paying the amount agreed to, received from Mr. Beam, as the law re [205] quired, a note or memorandum in writing, exonerating him from all and every liability incurred by reason of such connexion with such partnership firm, which may be given in evidence, &c., in bar of such creditor’s right of recovery against him or them. We see no way of evading this settlement, consummated under and according to the provisions of the law of New-York. In the courts of that state, certainly this writing would be held to be a good bar to a recovery. And why not equally so in Connecticut? It is of the very essence of the composition, that Barnum is to be no longer liable for the debt. It was said, on the trial, that Fairchild, the partner of Barnum, was not discharged from the debt, but Barnum alone, and that Fairchild being dead, and Barnum the survivor, his condition is altered, and he is now liable as survivor, and as survivor is sued; so that if Barnum could not be held liable for the debt himself, as a partner, he can be as the representative of Fairchild. But if he is discharged “from all and every individual liability, by reason of the connexion with such partnership firm,” he is discharged from liability as survivor, (for this is but a part of the original liability,) and from every liability, without exception. If this is not so, and he can now be sued for the debt, because he happens to be the survivor, he has not been effectually discharged from the debt. The plaintiffs are not debarred from presenting the claim against the estate of Fairchild, now deceased; nor if Fairchild's estate is able to pay the debt, is the discharge of Barnum any obstruction to obtaining payment from the estate; and such would be the case, if Fairchild was living. His liability to pay the whole remains unaffected, by the composition with Barnum, as much so, as if that composition had never been made; and should Fairchild's estate pay the debt, then, if, on the settlement of the company’s affairs, this payment should make Barnum indebted to Fairchild's estate, he must pay it, notwithstanding the composition with the plaintiff; the discharge from the plaintiff would be no answer to Fairchilds executor or administrator. It has no reference whatever to the liability of the partners, as between themselves. What would be the remedy to be pursued, in New-York, or here, whether at law [206] or in equity, and what the precise form of redress against the partner who is not discharged, or against his estate, we have not had occasion to examine. Doubtless, both here and there, such local remedies would be allowed as are adapted to the situation of the parties, always securing to the creditor whatever is left to him against the partner not discharged, and to the partner who has been discharged, the immunity to which he is entitled. In this opinion the other Judges concurred. Judgment for defendant.