Silverman v. Chase

Mr. Chief Justice Craig delivered the opinion of the Court: It is contended on behalf of appellee, that the new notes were without consideration, or that the consideration has failed for the reason appellant refused to surrender the old note, according to the agreement. It is true, under the arrangement at the time the new notes were given, it was agreed that the old note should be surrendered when Fox executed the new notes, but the evidence does not show that the new notes as executed were delivered on condition that the old note should be surrendered. These new notes were taken by appellant for the old one, and were to be in full satisfaction when Fox should execute them. As the firm of Clark & Hutchins never obtained the signature of Fox to the notes, they could not insist on the surrender of the old note, and we see no reason why appellant could not hold the new notes as additional security for his claim. Certainly his doing so was not inconsistent with the contract under which they were proven to have been received. We do not, therefore, think the consideration for these notes has failed; nor. do we regard the new notes given without consideration. If the firm was indebted to appellant, which we shall attempt to show hereafter, then either member of the firm could bind the firm for the payment of this debt by giving a promissory note. But, it is contended that even if there was a consideration for the new notes, Clark had no authority to execute notes in the firm name and bind Hutchins. This position is predicated upon the theory that the obligation of Clark & Hutchins was not joint, but several. A mere reference to the articles of co-partnership between Stephens & Emery will clearly show that that firm regarded the debt as a firm liability. The articles recite the indebtedness, and provide, “ Emery promises to pay and become jointly liable with Stephens for said indebtedness.” The firm note was given for the debt. Under these circumstances there can be no doubt, so far as the firm of Stephens & Emery was concerned, the debt became and was a liability of that firm. After Emery sold out to Clark, and the firm of Stephens & Clark was formed, that firm agreed to become bound by all the covenants and obligations contained and set forth in the articles of agreement between Stephens & Emery. Indeed, Clark merely stepped into the shoes of Emery; he became owner of Emery’s interest in the partnership property, and assumed the payment and settlement of all firm obligations. So far, then, as the firm of Stephens & Clark was concerned the debt continued to be a firm obligation. The next change in the firm arose by the sale of Stephens’ interest in the firm property to Hutchins. The articles of co-partnership entered into between Clark and Hutchins expressly provided that Hutchins should succeed to all the rights, property and liabilities of Henry Stephens as shown by the books of the late firm of Stephens & Clark. Upon an inspection of the books of the late firm of Stephens & Clark, in the , book containing a list of the bills payable will be found a memorandum of the $2,666.67 note due appellant. If, then, Hutchins succeeded to all the liabilities of Stephens, the conclusion is inevitable that, as a member of the firm of Clark & Hutchins, he became liable for the debt in question not only severally, but jointly with his partner Clark. The indebtedness upon the formation of the firm of Stephens & Emery became a firm obligation, and it remained a firm debt during the several changes of the firm, and so continued after the creation of the firm of Clark & Hutchins; and we are of opinion that Clark had authority to give binding firm notes for the indebtedness. It is next urged, that this claim can not be proved against the estate of Hutchins, until the partnership assets of the firm of Clark & Hutchins have been exhausted. We do not regard the position tenable. A partnership debt is joint and several, and the creditor has the right to elect whether he will proceed against the assets in the hands of the surviving partner, or against the estate of the deceased partner, as held by this court in Mason v. Tiffany, 45 Ill. 392. JSTor will the laches of the creditor* in following the assets of the firm, preclude a recovery. The creditor has the right to proceed against the estate at anytime before the Statute of Limitations has run, and a failure to pursue the partnership assets can not be relied upon as a defense when suit is brought against the estate. Under the evidence, the claim of appellant has never been paid or discharged, and no reason has been shown why it should not be allowed. The court erred in refusing to allow the claim against the estate, and for this reason the judgment will be reversed and the cause remanded. Judgment reversed.