
    Seth Caldwell vs. Abel Rice.
    A sued B., and summoned C. as trustee of B.: A., B. and C. afterwards made a tripartite agreement, in which it was stipulated that the respective demands of B. and C. should be submitted to referees, who should determine the amount due from C. to B. ; that C. should not make his disclosure in the trustee process, until after the referees should make their award; and that if the referees should determine that C. was indebted to B., C. should disclose, or become charged, as trustee of B., to the amount which the referees should determine to be due from him to B.; and that C. should be discharged from said process, if the referees should determine that he was not indebted to B.: The referees determined that C. was indebted to B. in a certain sum; but C. neglected to make his disclosure in the trustee process, until after B/s estate had been assigned under the insolvent law of 1838; and, on his subsequently making his disclosure, he was discharged, because the assignment of B.?s estate had dissolved the attachment, made of B.’s debt, by said process: A. afterwards sued C. for breach of the aforesaid agreement, in not making a seasonable disclosure in said process, and recovered judgment against him for the amount which the referees determined to be due from him to B. 5 and C. satisfied that judgment: The assignee of C., appointed under the insolvent law, afterwards brought an action against C. to recover the aforesaid amount. Held, that the action could not be maintained; B. himself having no right of action against C., when his estate was assigned.
    This was an action by the assignee, under the insolvent law of 1838, of Ephraim Sprague, an insolvent debtor, to recover money alleged to be due from the defendant to said Sprague.
    The parties submitted the case to the court on the following facts agreed: The assignment of Ephraim Sprague’s estate was duly made to the plaintiff, under St. 1838, c. 163, on the 17th of January 1840. On the 18th of March 1839, Harding P. Woods and Spencer Field, copartners, brought a suit against said Sprague, and summoned the present defendant, Rice, as his trustee. On the 25th of November 1839, an agreement was made by said Rice, of the first part, said Woods & Field, of the second part, and said Sprague of the third part, in these terms: “ Whereas there is an action now pending in the court of common pleas at Worcester, in which said Woods & Field are plaintiffs, and the said Sprague, principal, and said Rice, trustee; and whereas, at the time of the service of the said trustee process, there were mutual accounts and demands between said Rice and Sprague, of long standing, and unadjusted; therefore, to enable said Rice to disclose his indebtedness, if any, to said Sprague, at the time of the service of the said process, and that justice may take place between the parties to this agreement; the said Rice, in consideration of the agreement of said Sprague and of said Woods & Field, and the other parties, in consideration of the agreement of said Rice, &c., agree to submit their respective accounts and demands to refer ees ” [named] “ for inspection and determination of the amount of said Rice’s indebtedness at the time aforesaid; and said Rice agrees with said Woods & Field, that he shall not disclose, as trustee in said action, till after the referees have determined, &c.; and if the referees, after hearing, on notice, shall determine that said Rice was" indebted to said Sprague, said Rice agrees to disclose, or become charged as trustee, to the amount said referees shall determine was due: And said Woods & Field agree that said Rice shall be discharged, if the referees decide that said Rice was not indebted to said Sprague.”
    A hearing was had, on notice, before the referees, on the 9th of December 1839, during the sitting of the court of common pleas for the county of Worcester, at the December term, and they found the sum of $351-81, as a balance due to said Sprague from said Rice. Said Rice did not disclose as trustee, at said term, and charge himself, and said action was continued to the March term of said court, 1840, when said Rice did disclose, and was discharged; the said Sprague’s estate having been assigned under the insolvent law, as above mentioned, and the attachment of his effects and credits in the hands of said Rice, by said Woods & Field, being thereby dissolved. Said Woods & Field soon afterwards sued said Rice upon the above recited agreement of reference, and recovered judgment against him thereon, in this court, for the aforesaid sum of #351-81, found due by said referees; which judgment said Rice has satisfied. (See 4 Met. 481.)
    
      Washburn & W. A. Bryant, for the plaintiff.
    The recovery by Woods & Field against Rice, 4 Met. 481, is no bar to this action, as it did not discharge the debt due from Rice to Sprague. The attachment of that debt, by the trustee process, was dissolved by the assignment of Sprague’s estate under the insolvent law ; and Woods & Field recovered damages of Rice for a mere breach of agreement. And when Rice paid that judgment, he paid for his own default, and not the debt which he owed Sprague. That debt is still unpaid, and the plaintiff, as Sprague’s assignee, is entitled to recover it.. The defendant cannot escape from the plaintiff’s claim, unless the law shall be made to yield to an apparent equity in this particular case. But the equity is only a seeming one. If it be hard for the defendant to lose the amount in question, the hardship arises from his own neglect to make a seasonable disclosure in the trustee process.
    
      Brooks, for the defendant.
    The debt now sued for did not pass to the plaintiff, as Sprague’s assignee, as Sprague himself could not have recovered it of the defendant, after the agreement of November 25th 1839, and the award made in pursuance of that agreement. Prior to Sprague’s insolvency, he had, in effect, transferred the debt to Woods & Field, for a valuable consideration.
   Hubbabd, J.

The argument of the plaintiff proceeds upon the ground that the original promise, made by Rice to Woods & Field, was independent of Sprague, and consequently that the judgment recovered by them against Rice, the present defendant, was collateral, and founded upon a consideration which did not affect Sprague; so that the debt due from Rice to Sprague remains uncancelled, and in full force, and has passed, by virtue of the act under which Sprague was declared an insolvent debtor, to Caldwell, his assignee. If the premises upon which the argument rests are correct, the conclusion might follow, as contended for. But we are of opinion that the promise, made by Rice to Woods & Field, was not independent of Sprague. The agreement of November 25th 1839 was an agreement of three parts, Rice of the first part, Woods & Field of the second, and Sprague of the third part. This agreement, by necessary implication, admits that Sprague was indebted to Woods & Field, and it provides that Sprague and Rice may submit their respective demands to certain referees for their determination, and if they decide that Rice is indebted to Sprague, he is to disclose such sum, as the amount for which he is to be charged as trustee; and if they determine that he is not indebted to Sprague, then Woods & Field agree that he shall be discharged.

It is obvious that such an agreement could not be of binding force upon Woods & Field, unless they were parties to it; for their rights were not by law dependent upon an award of referees, between their debtor and his trustee, agreed to after the commencement of the suit; for they were entitled to have those accounts adjusted, to examine them for themselves, and to have the balance, if any, ascertained by the court before whom their suit was pending. Neither would Rice be protected in his disclosure, by any such award, without the agreement of Woods & Field; and no such reference could take place without Sprague’s being a party, and consenting that the award should be binding on him, as well as on the other parties.

We think, therefore, that the agreement was founded on mutual promises, and that it gave Woods & Field an equitable lien on the award that might be made, which could be enforced by them against Rice, either by a judgment against him on his disclosure as trustee, or by an action against him, founded upon his promise, in case he should neglect or refuse to disclose. The reported case of Woods & Field v. Rice, 4 Met. 481, shows that he refused to disclose, and in consequence he was charged, on his promise, with the amount of the debt due from him to Sprague. This took place after the insolvency of Sprague, and the assignment of his effects, which were facts appearing in. that trial.

We are of opinion that the judgment recovered by Woods & Field against Rice, and satisfied by him, is in law a payment of the debt due from Rice to Sprague, and that consequently no right of action exists in the assignee of Sprague to recovei it again. No greater rights passed by force of the assignment, than those which Sprague himself possessed in regard to this ciaim; and Sprague could not maintain a suit for this claim against Rice. He could not resort to his original cause of action; for that was merged in the award. He could not maintain an action on the award; because he had stipulated with Woods & Field and Rice, that if they would agree to the reference, they (Woods & Field) should be entitled to the fruits of the award.

The cause has been ingeniously argued by the counsel for the plaintiff; but we do not yield to the suggestion that the law is made to bend to the apparent equity of the case on the part of the defendant. On the other hand, if the disclosure had been made within a reasonable time, Woods & Field would have recovered the amount in their trustee suit, and the general creditors of Sprague would have had no benefit from his de mand against Rice; and they are not, therefore, placed in a worse situation by reason of the decision in the former action of Woods & Field v. Rice.

Plaintiff nonsuit.  