MILLERD against THORN

MILLERD against THORN. Court of Appeals, 1874. Trial.—Right to Open and Close.—Exception.— Issues.—Partnership.—Release of Retiring Partner. The right of the party holding the affirmative of the issue, to open and close at the trial, is a legal right, and if refused by the judge, an exception lies. In an ordinary action by several plaintifis, to recover money due on contract made with them, an allegation in the complaint that they were copartners, becomes immaterial, so far as the. issue, is concerned, if the answer admits the contract; and a denial in the same answer, of the allegation of a partnership, does not entitle plaintiffs to open and close. Creditors of a partnership, knowing that one partner had retired, and that the others had agreed to assume and pay the firm debts, took the negotiable note of the latter in payment of a firm debt. Held, that he thereby discharged the other partner. Kelson Millerd, .Theron J. Paine and Robert C. Brown, sued William B. Thorn and Albert B. Smith, in the supreme court, for goods sold. The complaint alleged that plaintiffs were copartners at the time of the sale, and the time of suing,\and it alleged the sale in the usual form. The answer of Thorn denied the allegation of plaintiffs’ copartnership ; and also expressly admitted that defendants had been copartners, and that while such partners, they bought the goods of the plaintiffs, but alleged that afterward they dissolved on an agreement that Smith should take the assets and pay all the debts ; and that plaintiff, with knowledge of this agreement, accepted Smith’s individual note for the balance due, which note he had not sued on, nor returned. At the trial, both parties claimed the right to open and close; and the judge ruled that it was plaintiffs’ right. . The effect of the evidence, as to the affirmative defense, is fully stated in the opinions. Defendant asked a verdict to be directed in his favor, and also asked that the complaint be dismissed, which were refused ; and a verdict was found for plaintiff. The supreme^ court affirmed the judgment, the following opinion being rendered. The question arising upon the pleadings in this case was, whether the plaintiffs had accepted the individual note of the defendant Smith, in discharge, or in payment of the defendants who, as former copartners, were their joint debtors. The question was submitted to the jury on testimony, which was to some extent conflicting, and the result was adverse to the defendant Thorn. Whether the acceptance of the note was an ex-tinguishment of the debt of the firm, depended entirely upon whether it was so agreed at the time it was given and received. The rule is well established that no presumption to such effect arises, upon the delivery and acceptance of the note of a third person, in reference to a preexisting indebtedness, and that the burden of proving its acceptance in discharge of the debt rests upon the person seeking to set it up as payment (Noel v. Murray, 13 N. Y., 167). The same rule applies to cases of this character. The acceptance of the individual note of one partner after dissolution of his firm, in settlement of a partnership indebtedness, that is, in payment of the debt by agreement thereto, is an extinguishment of the joint obligation (Grandolfo v. Appleton, 40 N. Y., 533); but'whether such an agreement was made or not, is a question of fact to be ascertained and determined by proof. The defendant Thorn had the advantage of" these rules, but failed to satisfy the jury that Smith’s note was accepted, as alleged. The result is, therefore, that he cannot succeed on this appeal unless some error was committed, and an exception thereto was duly taken. We have examined the exceptions and they are unavailable. The questions asked the defendant were legitimately within the scope of a cross-examination, controlled and regulated by the discretion of the presiding judge. If they related to collateral matters, the answers were conclusive. This is a familiar rule, and it needs no citation of' authorities to prove it. The inquiries were, however, not of that character, but either cognate to the examination in chief, or calculated to show the interest of the witness in the subject matter, or his peculiar relations to the defendant Thorn, which might influence his statement. Re was one of the defendants, and a generous latitude may be allowed when the party takes the stand either in his own favor or that of his co-defendant. The exception to the question asked the witness Nelson Millerd, “Did you ever make any agreement with either of them (the defendants) in regard to taking Mr. Smith’s note?” cannot avail the defendant. Whether such an agreement was made or not, was, it is true, a question of fact to be determined, as already suggested on the proofs, and is also, it may be said, a mixed question of law and fact. The inquiries related to the fact, the answer gave the circumstances bearing upon the subject, and the subsequent examination of the witness developed his knowledge of what would necessarily enter into the elements of such an agreement. It is evident, therefore, that though the inquiry to some extent involved a legal conclusion, the answer given, and the subsequent statements- made were of the facts and circumstances attending and surrounding the alleged compact about receiving the note. The exception is therefore of no value. The proposition that the defendant Smith became the principal, and Thorn the surety, under the circumstances disclosed, and that if the plaintiffs, with knowledge of them, took the - defendant Smith’s note for the indebtedness mentioned, without the knowledge or assent of the defendant Thorn, they thereby extended the time of payment, and released Thorn, cannot be maintained. The relation of .the principal and surety existed between the partners, inter sese, after the dissolution of the firm, and the assumption of the debts of the copartnership by Smith ; and the defendant Thorn would be protected in the application of the joint property to such relation (Crafts v. Mott, 4 N. Y. 604; Williams v. Bush, 1 Hill, 623). The mere acceptance of a note, however, by one partner who has assumed the obligations of his firm, or indulgence shown him by the creditor in reference to the payment of the debt, does not deprive .the creditor of the right to recover the original claim, on delivering up the note to be canceled (Smith v. Rogers, 17 Johns., 340). The partners continue to be principal debtors unless the creditor, by agreement with them, or one of them, changes the legal status of one or more towards himself. He could not, after knowledge of a dissolution, and of the assumption of the obligation of the firm by one member of it, contract personally with the latter upon the firm assets as a basis, and have them applied to the payment of such individual obligations. They are applicable to the joint debts (Williams v. Bush, supra,), but beyond that he is not affected by any arrangement between the "partners, unless, with full notice of their relations to each other, he acts to the prejudice of the other in reference to the joint property. This case developes no fact or circumstance of that character. The finding of the jury established the absence of any personal dealing with the defendant Smith, which deprived the plaintiffs of their right to pursue the defendant Thorn. The judgment should, for these reasons, be affirmed. Defendant appealed. Joseph A. Shoudy, for defendant, appellant: Besides the authorities elsewhere mentioned, cited, to the point, that the defendant was entitled to open and close : Hoxie v. Green, 37 How. Pr., 97; Huntington v. Conkey, 33 Bard., 218. That the facts were a defense: Evans v. Drummond, 4 Esp. 89, 91; Chitty on Cont., 267; Place v. McIlvain, 38 N. Y., 96 ; Bank of Albion v. Burns, 46 Id., 170; Marsh v. Pike, 10 Paige, 597). F. A. Paddock, for plaintiffs, respondents. See also Opdyke v. Weed, 18 Abb. Pr., 223, note ; Hecker v. Hopkins, 16 Id., 301, note ; Gildersleeve v. Mahony, 5 Duer, 383 ; Slauson v. Englehart, 34 Barb., 198. For exceptions to this rule, see Fry v. Bennett, 28 N. Y., 324, affirming 3 Bosw., 200. Compare Cary v. White, 52 N. Y., 138, reversing 7 Lans., 1. [MAJORITY — Grover, J.] Grover, J. The party holding the affirmative upon an issue of fact, has the right, upon the trial, to open and close the proofs, and to reply, in summing up the case, to the jury. This is a .legal right, not resting in the discretion of the court, and when denied, the denial may be excepted to, and the ruling reviewed upon appeal from the judgment (Lindsley v. European Petroleum Co., 10 Abb. Pr. N. S., 107; S. C., 3 Lans., 176; Elwell v. Chamberlin, 31 N. Y., 614). The defendant in this case held the affirmative of the issue. The admission in the answer that the defendant purchased the goods of the plaintiffs as alleged in the complaint, and became thereby indebted to them ‘therefor, as thus alleged, rendered the'question whether the plaintiffs were, at the time of such sale, copartners, wholly immaterial. The only facts to be tried were those alleged by the affirmative defense contained in the answer of the defendant Thorn. Upon a failure by Thorn to give such evidence to sustain this defense as would make a case proper for the consideration of the jury, the plaintiffs were entitled to judgment upon the pleadings for the amount claimed. The co-partnership of the plaintiffs was the only fact denied by the answer. The plaintiffs were entitled to judgment upon the failure of the defendant to prove his affirmative defense, whether they were copartners or not. There was no occasion to prove this ; and testimony upon the point should have been rejected as immaterial. The judge, therefore,' erred in denying the defendant the right of opening and closing the proof, for which error the judgment must be reversed, unless it appears from the case that the defendant was not prejudiced by the error. This would so appear if there was no question in the case that should have been submitted to and determined by the jury, and if it was the duty of the judge to direct a verdict for the plaintiffs for the amount claimed by them. The defense set up by the defendant Thorn was, that after the purchase of the goods from the plaintiffs by the defendants, the defendants dissolved the partnership existing between them ;—that it was agreed between Thorn and his copartner Smith, upon such dissolution, that the latter should assume and pay all the debts of the firm, including that to the plaintiffs for the goods in question ; that these facts were communicated to the plaintiffs, after which they received from Smith his note on time in payment of the demand. The defendant Thorn gave evidence, tending to prove these facts, such as made (the court held, and rightly, I think) a case that must be determined by the jury. When a creditor of a partnership, after dissolution, knowing that one or several of the partners have agreed with the others to assume and pay the debts of the firm, takes the negotiable notes of those who should pay, in payment of the debt of the firm, he thereby cancels the claim against the firm and discharges the other partners (Story on Partnership, 276-8, §§ 155, 156, and notes ; Collier on Partnership, book 3, § 3, cases cited ; Arnold v. Camp, 12 Johns., 409 ; Waydell v. Luer, 3 Den., 410). ' I think the defendant was entitled to have the jury instructed substantially as requested by him ;—that if the plaintiffs extended the time of payment of the debt to Smith until ■ the note given by him therefor matured, Thorn was thereby discharged. By the agreement of Smith, upon the dissolution of. the partnership between the defendants, to assume and pay the debt due the plaintiffs, he became, as between him and Thorn, principal debtor, and the latter his surety for payment. If the plaintiffs, with knowledge of these facts, made a valid agreement with Smith to extend the time of payment, they thereby discharged Thorn (Colgrove v. Tallman, 2 Lans., 97; Oakley v. Pashaller, 10 Bligh's Parl. Cas., 548, 589). The judgment appealed from must be reversed, and a new trial ordered, costs to abide event. All the judges concurred. Judgment accordingly.