Mount v. Chapman

Burnett, J., delivered the opinion of the Court—Terry, C. J., and Field, J., concurring. On the fourteenth day of "March, 1854, the defendant executed a note and mortgage for six hundred dollars, to Henry Murphy, due on the first day of December following, and drawing interest from date at the rate of two and one-half per cent, per month. On the tenth day of May, 1856, Murphy assigned the note and mortgage to plaintiff. This suit was brought to foreclose the mortgage. The defendant plead payment and set-off. The plaintiff had judgment, and the defendant appealed.

The first material point made by the defendant’s counsel is that the Court below erred in not allowing the defendant the benefit of a payment made to Murphy while he was the owner and holder of the note.

It appears that Chapman was the owner of a stable, and that [296]in the fall of 1855, it was agreed between him and Murphy that Chapman was to furnish the stable, hay, and grain, and board Murphy, and that Murphy was to attend to the stable—the profits to be equally divided between them, and the share of Chapman to be applied in discharge of the note. The stable was attended to by Murphy until March, 1856, during which time he received various sums upon joint account. It docs not certainly appear, from the testimony, whether the parties, by their agreement, contemplated any joint expenses to be paid out of the joint fund, or whether the profits to be divided were the net or gross proceeds.

But we think it unnecessary to decide whether they were or were not partners, as between themselves. Conceding that it was a partnership, we think the defendant had the right to a credit upon the note for the amount received by Murphy. There was a special agreement at the time the partnership was formed that the share of Chapman should be applied as a payment upon the note. This condition must have operated upon the minds of both the parties in making the partnership contract. It docs not appear that there were any losses incurred by the firm, and it was only necessary to ascertain the amount received by Murphy, as the share of Chapman. The defendant Chapman was made a witness by the plaintiff, and stated that when they looked over their books the last time, about the first day of May, 1856, it was agreed between him and Murphy that the sum of three hundred and ninety-six dollars had been received by Murphy as the property of Chapman, and that the same should be applied as a credit upon the note. That this amount, at the least, was received by Murphy, is clear, from his acknowledgments to other witnesses, to whom he stated that the note was paid except about two hundred dollars. It would seem clear that Murphy alluded to the principal sum of the note, not including the interest. His admission to Chapman, about the first of March, 1856, that he had received as Chapman’s portion of the profits between six and seven hundred dollars, was no doubt based upon an incorrect estimate made from memory, and without any reference to the books of the concern.