Farnsworth v. Whitney

74 Me. 370, 1883 Me. LEXIS 25

• Court: Supreme Judicial Court of Maine
• Decided: February 8, 1883
• Status: Published

Opinion

Walton,. J.

The presiding justice of the superior court ruled that upon the facts found and reported by him, the action could not be maintained. We think the ruling was correct.

When the two members of which a firm is composed, settle their partnership affairs and dissolve, and one of them takes an ■ assignment of the other’s interest in the partnership property, paying therefor a sum agreed upon by them, and assumes the ■payment of the partnership debts, the effect of the arrangement is to extinguish the assignor’s indebtedness to the firm. Such .an arrangement implies that the assignor is to retain whatever he has already received from the firm, in addition to the consideration mentioned in the assignment. It is in effect an agreement that the sum paid is a balance due him after deducting what he has already received. No other rational interpretation can bo put upon such an arrangement. It is impossible to.believe that the one would pay or the other receive the sum agreed upon, unless all existing claims between them were to be thereby ■adjusted and settled. So held in Lesure v. Norris, 11 Cush. 328.

In the case cited the partner’s indebtedness had been charged upon the boohs of the firm. In this it had not. But we think this can make no difference in the result. A settlement operates as an accord and satisfaction of all indebtedness intended to be included in it, whether such indebtedness is evidenced by charges upon the books bf the parties or not. The charges are only evidence of indebtedness. The indebtedness may exist without the charges. And when the evidence is satisfactory that the parties intended a full and complete settlement of all their affairs, it will operate as an accord and satisfaction of indebtedness which is not charged as well as that which is. If one of the parties is defrauded in the settlement (of which the want of proper entries upon the books may be strong evidence), the law furnishes him with two remedies; he may rescind the settlement, or bring an action on the case for the deceit. If he elects to rescind, he must do so promptly, upon discovery of the fraud, and restore whatever he has received under the settlement. If this is done, the parties are restored to their former rights, and made subject to their former liabilities. If, in consequence of the lapse of time, or a chango of circumstances, a rescisión has become impossible or undesirable, the injured party may still obtain ample redress by resort to an action on the case for the deceit. But the law does not allow him to adhere to the settlement and resort to an action of assumpsit to recover the whole or any portion of that indebtedness which it was the purpose of the settlement to adjust and extinguish. Bisbee v. Ham, 47 Maine, 543; Potter v. Ins. Co. 63 Maine, 440.

Upon the facts found and reported by the judge of the superior court, we think the ruling that the action could not be maintained, was correct.

Exceptions overruled.

Judgment for defendant.

AupletoN, C. J., DaNFORTii, YiegiN and Peters, JJ., concurred.