Wadhams v. Page

• Decision Date: 03 December 1890
• Citation: 1 Wash. 420,25 P. 462
• Parties: WADHAMS ET AL. v. PAGE ET AL.
• Court: Washington Supreme Court

25 P. 462

1 Wash. 420

WADHAMS ET AL. v. PAGE ET AL.

Supreme Court of Washington

December 3, 1890

Appeal from superior court, King county; I. J. LICHTENBERG, Judge.

Thomas Burke, ( Andrew Woods, of counsel,) for appellants.

Lewis & Gilman, for appellees.

DUNBAR J.

This was an action by plaintiffs and appellants to recover a balance alleged to be due from defendants and appellees on account, amounting to $203.43, with interest thereon at the rate of 10 per cent. per annum from the 3d day of April, A. D. 1884. Service of summons was had only on defendant Joseph Green. The defendant Green, for an affirmative defense alleged that on the 23d day of February, A. D. 1884, he and one Alfred Page were doing business under the firm name of Page & Green; that on or about the 3d day of April, 1884 they dissolved partnership; that at said time there was due Wadhams & Elliott about the sum of $203; that the said Page continued to run and manage the said business of the said partnership; that the said Page was to pay the said Wadhams & Elliott the said amount due said firm; that Wadhams & Elliott were notified of said dissolution; that they accepted the said Alfred Page for the said indebtedness due them from said firm of Page & Green, and transferred the account of Page & Green to the said Alfred Page, and held the said Page only for the said amount of indebtedness, and did then and there release the defendant Green from any obligation or indebtedness due to plaintiffs by the said firm of Page & Green. The affirmative matter in defendant's answer was denied in plaintiffs' reply. Payment of the said indebtedness was also alleged in the answer, but no attempt was made to prove the payment on the trial, except as stated in the affirmative answer. The jury found a verdict in favor of defendants, judgment was rendered in accordance therewith, and from said judgment plaintiffs appeal to this court, also alleging certain errors in the instruction of the court.

While a "novation" was pleaded as an affirmative defense in this action, there was no proof tending to show that Wadhams & Elliott had ever, by express or implied contract, agreed to extinguish defendant Green's liability by substituting or accepting Page as the payor of the debt incurred by the partnership of Page & Green. It is true that the testimony of Green showed that it was agreed between Page and Green that Page should assume this debt, and that Green should be discharged, and that Wadhams & Elliott were notified of the dissolution and of the agreement between Page and Green. But the promise of one partner to pay the debt of another, for which he is already bound, is no consideration for an agreement to release the other partner. Early v Burt, 68 Iowa, 716, 28 N.W. 35; Wildes v. Fessenden, 4 Metc. (Mass.) 12. In order to give any weight to an agreement whereby liabilities are extinguished, it is essential that all parties in interest should be parties to the agreement. It would certainly be a loose and unjust law that would allow obligations to be thrown off or transferred at the will of the obligor. Such is not the law. If one partner transfers his liability to another, and the creditor does not assent to the transfer, his rights are not affected. As stated by Mr. Lindley, in his excellent work on Partnership, it cannot be too often repeated that, merely by retiring, a partner gets rid of no liabilities as to past transactions unless there is some statutory enactment applicable to his case; and the same observation applies to a total dissolution. To use the words of Mr. Justice HEATH: "When a partnership is dissolved, it is not dissolved with regard to things past, but only with regard to things future. With regard to things past the partnership continues." Indeed, so improbable was the idea that a creditor would release a part of his security, and rely on one debtor when he before had two, without taking any other security, that some of the early English courts held that where a partnership had been dissolved, one member retiring and the other continuing the business, and agreeing to pay the debts of the old firm, where the creditors knew of the arrangement, and consented to it, and transferred the debt to the new firm, and where there was strong testimony outside of this fact showing that the creditors had agreed to discharge the defendant, and look to the other partner, the retiring partner was liable; and the fact that no person had become liable to the defendant who was not so originally was relied upon by the court as showing that there was no consideration for the alleged discharge. The most noted cases holding this doctrine were Lodge v. Dicas, 3 Barn. & Ald. 611, and David v. Ellice, 5 Barn. & C. 196. But, while this doctrine has been modified by the later decisions and authorities, no court that we know of has gone so far as to hold that the simple agreement between the partners that one of them should be discharged, and notice to the creditors of said agreement, will affect the rights of the creditors, or...