The leading facts of this case are briefly as follows : On the first of January, 1848, E. D. Taylor and Churchill Coifing, with one Isaac D. Harmon, entered into a mercantile business copartnership, at Peru, in this State, to be carried on under the name of Harmon & Co. On the 30th September, 1850, Harmon retired from the concern, and that partnership was dissolved, and Taylor and Ooffing agreed to continue the business under the name of Taylor and Ooffing; the capital stock which TayW and Ooffing contributed being transferred to the new books, and to represent the interest each had in the firm of Taylor and Ooffing, viz: E. D. Taylor, five thousand dollars; Churchill Ooffing, ten thousand dollars.
It is expressly declared by the articles of this copartnership, dated March 7,1850, that “ the business is to be continued for the purpose of paying off the debts of I. D. Harmon & Co., and reimbursing the capital aforesaid, as long as they shall mutually think best, and the profits and losses of the business shared mutually.”
After being in business some fourteen months, on the 17th May, 1851, it was found that, instead of reimbursing the capital stock, or there being any prospect of it, Ooffing was in debt to the firm, in the sum of eighteen thousand three hundred and fifty dollars, a sum largely over the capital stock of both the partners. The debts of I. D. Harmon & Oo. not having been provided for.
To save this debt to the firm, it being largely indebted, Ooffing executed an absolute deed of conveyance to Taylor and Ooffing, of certain warehouses and stores in Peru. On the same day, Taylor and Ooffing executed a deed of that date, in the nature of a defeasance to this absolute deed, which provides, after the recital of Coffing’s indebtedness, that, “ If the said Churchill Ooffing shall well and truly pay, or cause to be paid, the said sum of $18,340 to the said Taylor and Ooffing, or their representatives or assigns, within three years from the date of said deed of conveyance, and of these presents, or if the said Ooffing shall pay any part of said indebtedness within the said term, then all the above described property, if all of the said indebtedness shall be paid, shall be reconveyed to the said Churchill Ooffing, or so much of it shall be released and reconveyed proportioned to the amount of payment made by him of the indebtedness aforesaid ; and further, if the said Ooffing can, at any time within the three years aforesaid, raise, by mortgaging the said premises, or by selling the same, or otherwise, sufficient money to pay said indebtedness, then the said Taylor and Ooffing shall redeed to the said Churchill Ooffing the premises above described, for the purpose of enabling the said Ooffing to pay the said indebtedness ; and the said deed of conveyance to Taylor and Ooffing, shall not prevent the said Ooffing from selling or mortgaging the said premises, or any portion of them, for the purpose of paying said indebtedness.”
The parties continued in business, after the date of this deed, until the 27th April, 1852, not quite one year, when the partnership was dissolved by an agreement of that date, as follows:
“ Whereas, Col. E. D. Taylor, of Michigan City, in the State of Indiana, one of the partners of the firm of Taylor & Coffing, of Peru, La Salle county, and State of Illinois, has agreed to indorse upon an indenture given by Churchill Coffing, of Peru, aforesaid, to Taylor & Coffing, for eighteen thousand three hundred and forty dollars, the sum of five thousand dollars, as so much paid upon said indenture by said Coffing; and whereas, the said E. D. Taylor has also agreed to assume and pay all debts, liabilities, notes, or drafts outstanding against the firm of Taylor & Coffing, and release the said Coffing entirely therefrom ; and whereas, the said E. D. Taylor, one of the proprietors of the Illinois River Bank of Taylor & Coffing, has agreed to pay to the said C. Coffing,for the said bank and for the Salisbury Plank Road Company, the sum of five hundred dollars per annum, to be paid to the said C. Coffing quarterly, for the space of years,’for his services as President of said Bank and of the Salisbury Plank Road Company:
“Now, therefore, know all men by these [presents'], that I, Churchill Coffing, of Peru, La Salle county, and State of Illinois, for and in consideration of the sum of five thousand dollars, indorsed upon said indenture as above recited, and also in consideration of the said Taylor’s assuming and paying the debts and liabilities of the said Taylor & Coffing, and releasing the said Coffing from all liability or responsibility therefor; and also, in consideration of the payment of five hundred dollars to the said Coffing, for his services as President of the Salisbury Plank Road Company and the Illinois River Bank of Taylor & Coffing as aforesaid, has [have] sold, transferred, assigned and set over, and by these presents do sell, transfer, assign and set over to the said E. D. Taylor, his heirs and assigns, all my right, title, and interest in and to all property, debts, accounts, notes, books, and papers belonging to the firm of Taylor & Coffing, (excepting the indenture given by the said Coffing to Taylor Sf Coffing aforesaid, which is to stand and remain as it is, unaffected by this deed of sale,) and also, all my right, title and interest of every kind and nature in or to the charter of the Illinois River Bank of Taylor & Coffing, and in or to the charter of the Salisbury Plank Road Company, and all my interest in the stock, notes, bills, papers, books, moneys, and all other property belonging or appertaining to said bank, or to said C. Coffing & Co., or to the said Salisbury Plank Road Company. And I, the said Coffing, do hereby promise and agree to use all honorable means to advance the interests of said institutions, and faithfully and truly perform such duties as shall devolve upon me by virtue of the office of President, etc., so long as I shall be required to act in that capacity, for the term aforesaid.
“ In witness whereof, I have hereunto set my hand and seal this 27th day of April, 1852.
CHURCHILL COFFING. [l. s.]
“ Know all men by these presents, that I, E. D. Taylor, of Michigan City, Indiana, in consideration of the sale this day made by the said Churchill Coffing contained in the foregoing indenture, do hereby covenant and agree with the said Coffing, his heirs and assigns, to have indorsed upon 0. Coffing’s indenture for eighteen thousand three hundred and forty dollars now in the possession of Taylor & Coffing, the sum of five thousand dollars as so much paid upon said indenture by the said Coffing, and also, that I will assume and pay all debts, liabilities, notes, or drafts outstanding against the said firm of Taylor & Coffing, and release the said Coffing entirely therefrom, and further, as one of the proprietors of the Illinois River Bank of Taylor & Coffing, and of the Salisbury Plank Road Company. The sum of five hundred dollars per annum shall be paid to the said Coffing quarterly, for the space of years, for his services as President of said Bank and Plank Road Company.
“ In witness whereof, I have this 27th day of April, 1852, hereunto set my hand and seal.
E. D. TAYLOR, [l. s.]
Filed October 15th, 1852, at H o’clock, P. M.”
The debts of the concern were very large; this item being about one-half of what the firm owed. The assets, including this item, are not shown to have been sufficient to pay the debts.
It is not pretended that Taylor has not paid all the debts and liabilities of the firm, as well as the five hundred dollars per annum to Coffing, for his services as president of these companies.
These being the stipulations and contracts of the parties, the account should be stated thus :
0. Cowing, in account with Taylor & Cowing, Dr.
To his debt secured by deed of May 17, 1851, payable in three years, $18,340 Or. By this amount indorsed on said deed by Taylor, ----- 5,000
$13,340
showing a balance at this time of thirteen thousand three hundred and forty dollars,, due by Coffing, to Taylor and Coffing, to be paid in three years without interest; and if paid by Coffing in that time, the real estate to be re-conveyed to him.
“ The purpose ” for which these parties continued business, after the dissolution of the firm of Harmon & Co., that of reimbursing the capital, would seem to have been far from being accomplished, and therefore, a dissolution was determined on.
The terms of that dissolution are clearly set forth in the above agreement, and by it, Taylor, incontestably, became the absolute owner of all “ the property, debts, accounts, notes, books and papers belonging to the firm of Taylor & Coffing,” which terms, as is admitted in the opinion of my brother Walker, included the capital stock of Coffing. Taylor became the absolute and sole owner of all these, with the exception stated in the italicised paragraph, and this it is, which has occasioned the litigation in this case, but which, as I view it, should have occasioned none.
This absolute deed, “ indenture,” was “ to stand and remain as it is, unaffected by this deed of sale.” How did the indenture stand at that date ? It stood controlled by a deed of defeasance, making it a mortgage, and it was so to remain, being unaffected by the deed of sale, Coffing having three years within which to pay the debt secured by it. All the rest of the assets of the concern passed immediately to Taylor by this deed. This, and the principal assets, so far as the privileges conceded to Coffing by the deed of dissolution, and they were important, were concerned, was not to be affected by the deed of sale. But was it never to be affected by it ? Was Coffing never to pay this debt ? If that was the understanding, it was quite easy to have inserted it in plain terms in the deed of dissolution. After the expiration of three years, the debt remaining unpaid, could not Taylor foreclose and sell ? Suppose the indenture had been assigned by Taylor & Coffing to a stranger, could he not foreclose and sell, and in what respect does Taylor’s condition differ, he being the assignee ? Are his rights less ?
Brother Walker and myself perfectly agree that Coffing’s capital stock passed to Taylor under the terms of this deed of dissolution, and asp in my opinion, that capital stock existed only in the shape of this debt due by Coffing, secured by this • indenture, that necessarily passed to Taylor, the only right remaining to Coffing being the right to pay the debt, or use the property for that purpose, as stipulated in the deed. Or it went to him as a debt due the firm of Taylor & Coffing. In either view, Taylor’s right seems unquestionable.
Coffing certainly owed the debt—it was assets of the firm, and all the stipulations in the deed bind him to its payment. The most and only effect I can give this exception in the deed of dissolution of April 27, 1852, is as I have stated; all the other assets of the concern, except this indenture, passed immediately to Taylor—that stood and remained as it was, unaffected by the deed of sale. In other words, the indenture was an ab solute deed from Coffing; but there was a defeasance behind it and lest it might be supposed that the deed would become absolute on the dissolution, and Coffing deprived of the privileges secured by the defeasance, and the property pass to Taylor un conditionally, it was to be understood that it was still to remain as a mortgage, to be affected as a mortgage, in no degree by the agreement, and this, ,1 think, would be the understanding of all mercantile business men. The stipulation in the deed of dissolution is not that Coffing shall never be required to pay the debt represented by the property described in the indenture, but that the indenture was to remain, as it was made to be, by the defeasance—a security merely, and as such, unaffected by the agreement. Why should not Coffing pay this debt ? What exonerates him? Taylor has paid all the liabilities, and they were heavy. There is no stipulation in any of the agreements releasing him. This debt was important to aid in discharging the liabilities. The debt due was one thing, that passed to Taylor; the indenture was a different thing, as there was a defeasance connected with it, and it was extremely proper that it should not be affected by the agreement. It was to remain a mortgage, and the debt secured by it to be paid without interest, in three years. This seems to me the only reasonable interpretation of the exception in the agreement. Any other would do Taylor great injustice.
The argument is, that as this indenture was given to Taylor & Coffing as a firm, Coffing, being one of the firm, must be entitled to one-half of this debt. But this cannot be, if the capital stock of Coffing passed to Taylor, and this debt represented it. The facts show that Coffing has been credited by Taylor on this indenture five thousand dollars, one-half the amount he put in, and by my brother Walker’s argument, Taylor has become entitled to the capital stock represented by this debt. Now, if Coffing is allowed to come in and share equally with Taylor in this balance of $13,340, due by himself to Taylor & Coffing, how can it be said that the whole capital stock went to Taylor, as it is admitted it did, and this debt which it represents did not ? I cannot understand this. On no principle, I recognize, can Taylor be deprived of this debt. Coffing owed it, and as the debts due the firm went to Taylor, this went with it. Though due to Taylor & Coffing, in the first instance on the assignment, it became Taylor’s, and would have passed to him instantly were it not for the exception in the deed of dissolution, which postponed it until after the expiration of three years. There can be no other construction put upon it by mercantile men, I think. Did not Coffing owe the debt ? Does not that debt represent his capital stock ? Is there anything of this stock remaining, but this debt ? Did not the capital stock and all the debts due the firm pass to Taylor by the assignment ? All this, or enough for my purposes, is admitted in the opinion of iny brother Walker, and all the right, therefore, legal or equitable, reserved to Coffing, was, in my opinion, the privilege of paying this debt in three years, without interest.
Against this balance of $13,340, justly due from Coffing to Taylor, Taylor has received four thousand dollars in rents of the property, for which Coffing is fairly entitled to a credit, no proceedings having been instituted by Taylor to foreclose the mortgage, or to establish the first deed, by reason of Coffing’s default as an absolute deed.
A decree should pass for Taylor here for nine thousand three hundred and forty dollars, with interest thereon from the 17th of May, 1854, until this time; but as my brother Walker will not concur with me in this opinion, nor the Chief Justice with either, I must yield my opinion, in order to get a final decision of the case, to the better judgment of my brother Walker, and accordingly consent that a decree vacating and reversing the first decree be entered, and a decree entered here in favor of Taylor, of three thousand five hundred and seventy-six dollars, and costs.