Pepper v. Peck

• Decision Date: 17 May 1890
• Citation: 17 R.I. 55,20 A. 16
• Parties: PEPPER et al v. PECK.
• Court: Rhode Island Supreme Court

20 A. 16

17 R.I. 55

PEPPER et al

v. PECK.

Supreme Court of Rhode Island.

May 17, 1890.

J. Erastus Lester, for plaintiffs. Douglas & Douglas, for defendant.

STINESS, J. The petition shows that the plaintiff Pepper had done work for the defendant for several years before the formation of the present firm, taking his pay therefor in groceries from the defendant's store. Arnold became his partner, under the name of Pepper, Arnold & Co., and it was then mutually agreed that they should continue to do work for the defendant, to be paid for in the same way, and that the amount so paid should be charged to Pepper's account when the settlement was made. The charges for the work done were entered upon the plaintiff's books against the defendant, and an account was rendered to him July 1, 1883, for the amount then due, at which time his bill against Pepper was larger than the plaintiff's bill by thirty or forty dollars, which balance Pepper paid to him in cash. It did not appear whether at this time the firm was solvent or not. No credit, however, was entered on the books of the firm, and when they made an assignment, August 23, 1883, the charge against the defendant appeared as an open account. This action is brought by the assignee of the firm, who claims the right to a judgment against the defendant, notwithstanding the agreement and settlement, as stated, upon the ground that the defendant cannot apply the debt of an individual partner to the payment of a firm debt. Although the defendant's claim is referred to in the petition as a set-off, it is more properly a payment. It does not rest upon an executory agreement, but it is an executed settlement, if it is anything. If the parties had the right to settle, and did settle, their respective claims as stated, the omission of the firm to enter a credit upon its books neither alters the fact, nor affects the rights of the parties. The question, then, is whether a settlement so made bars the action on the account. We think it does. It is clear that partners have the control and disposition of their joint property, and they may insist that it shall not be applied to the payment of individual debts. But it follows from this right of control that they may assent to this; and so, when a firm claim is bona fide settled by payment of the individual debt of one of the partners, it operates as an accord and satisfaction of the claim of the firm. It is, in substance, the same as though the debtor paid his debt to the firm in money, which the individual partner, with...