time essence conditions, it becomes at once apparent why the clause providing for payment of the increased rate of interest in case the stipulated payments were not punctually made was inserted. It subserves two purposes: (1) As a pressure to induce prompt payments on the part of the purchasers, and (2) to increase the vendor's compensation should it see fit to waive strict performance, or a forfeiture, should one have been incurred. Nor does it signify an intendment, notwithstanding the provisions for prompt performance, that they should not be strictly observed, but was inserted so that, in case the vendor should choose to waive such observance, he might be entitled to a greater percentage of interest for his indulgence. this view it is not inconsistent with the other provisions under discussion, as all can subserve their especial purposes without the least inharmony.

In

O'Connor v. Hughes, 35 Minn. 446, 29 N. W. 152, so implicitly relied upon by respondent, is not in conflict with this interpretation, for in that case the contract provided that, if there was any default in strict performance, the vendor should have the right at his election to declare it null and void; and it was held that, in the absence of a determination on the part of the vendor to require strict performance and of reasonable notice of such election on his part, the mere default of the vendee in making the specified payments would not operate to extinguish his equitable rights, and that a subsequent declaration of forfeiture by the vendor, without notice and reasonable opportunity to make payment, was also ineffectual. The difference between the two contracts is manifest and vital. By the one we are construing, a forfeiture is incurred upon default in payment at once, and by force of positive stipulations to that effect; but in that one the vendor was accorded the right, at his election, to declare the contract null and void on account of the default, and without such declaration properly and timely made there could be no forfeiture. It is true that in the course of construing the contract the clause respecting overdue payments drawing an increased rate of interest was considered among the rest as indicating as well an intendment that the default was not of itself to work a forfeiture. This, however, was natural, for the forfeiture was not made to depend merely upon the failure of payment strictly and punctually at the time specified, but upon the election also of the vendor to declare the contract null and void. If he should have permitted the contract to run on after default without declaring a forfeiture, then it was the intendment that he should be entitled to the increased rate of interest on defaulted payments. So it is here, if the vendor elects to waive the time of payment or a forfeiture that has been incurred by force of the very terms of the contract itself, as distinguished from electing to declare a forfeiture, as in

that contract contemplated, then it was the intendment that he should be entitled to the increased interest. The difference is, we state it again, that in the one case the vendor must elect to declare the forfeiture for a default of the purchaser, without which the contract runs on, remains operative, and in the other he might, if he so elects, waive the default and forfeiture that follow by force of the contract without any act of his; and in case of such election we say he is entitled to the increased rate of interest, and there is no incongruity with the idea of strict performance. If the contract does not mean this, the increased interest clause would, in effect, operate to nullify all the repeated, positive, and unequivocal stipulations inserted with the unmistakable purpose of making time of the essence of the contract by its own terms unconditional upon any act of the vendor. Burroughs v. Jones, 79 Miss. 214218, 30 South. 605, seems to give a like construction to a similar contract. By the adjudications, both at law and in equity, the effect of such time-essence stipulations, terminating the contract upon a failure to comply strictly and punctually with its conditions, is to entail a forfeiture by sheer force of the contract itself upon the mere default of the purchasers by their failure to make payments at the times designated as they obligated themselves to do. 2 Warvelle, Vendors (2d Ed.) § 813; Snider v. Lehnherr, 5 Or. 385; Cleary v. Folger, 84 Cal. 316-319, 24 Pac. 280, 18 Am. St. Rep. 187; Martin v. Morgan, 87 Cal. 203, 25 Pac. 350, 22 Am. St. Rep. 240; Foot v. Bush, 72 Iowa, 522, 69 N. W. 874; Wells v. Smith, 2 Edw. Ch. 78; Dauchy v. Pond, 9 Watts, 49; Benedict v. Lynch, 1 Johns. Ch. 370, 7 Am. Dec. 484; Cartwright v. Gardner, supra; Drown v. Ingels, 3 Wash. St. 424, 28 Pac. 759. There is some divergency of opinion as to when and under what conditions equity will relieve against a default in punctual payment, even though time may seem to be made of the essence of the contract, owing to the principle of equitable conversion and consequent vesting of the equitable title to realty in the vendee. 1 Pomeroy, Eq. § 454. But, however this may be, it is plain that the law affords no such relief. In that forum all payments to be made prior to the time in which it is agreed that title shall pass, where time is made material, are conditions precedent, and, unless made promptly, the payee is without right of relief. Haggerty v. Elyton Land Co., 89 Ala. 428, 7 South. 651, affords an apt illustration, showing the distinguishing characteristics as between the equitable and the legal right. The court says: "By the contract of sale an equitable interest vested in Haggerty, and in respect to the forfeiture of this equitable interest-that is, of the money consideration paid and the materials furnished and work done upon the improvements the condition may be regarȧed as subsequent. By the express terms of the

bond for title he did not, and could not, become entitled to a conveyance of the legal estate, except by performance of the condition. As to this it is precedent." But in that case the court refused to grant relief, although in equity, because time had been made of the essence of the contract. So that under the contract in question, forfeiture having been entailed by force of the stipulations of the parties to that effect, without more-that is, without any affirmative act on the part of the railroad company-it was at liberty to re-enter and retake possession of the lands at once upon the happening of default in payment upon the part of the purchasers, providing the contractual relations remained the same; but the railroad company could waive a default or consequent forfeiture, if it so desired, which, as we have seen, is a matter of its own choice or election. This it might do by express agreement to that purpose, or it might do it by unequivocal acts or demeanor affording reasonable and proper inducement for the purchasers in reliance thereon to alter their course as to strict and punctual compliance. 2 Warvelle, Vendors (2d Ed.) §§ 819, 820, 821; Neppach v. Oregon & California R. Co. (just decided) 80 Pac. 482; Baker v. Bishop Hill Colony, 45 Ill. 264; Watson v. White, 152 Ill. 364, 38 N. E. 902; Mouson v. Bragdon, 159 Ill. 61, 42 N. E. 383; Thayer v. Meeker, 86 Ill. 470; Wheeling Gas Co. v. Elder (W. Va.) 46 S. E. 357. But, if the waiver was once accomplished, the vendor could not again assume the original relations, and insist upon a forfeiture, unless upon a subsequent default, not within the purview of the waiver, without giving the purchasers proper notice of its intention so to do and a reasonable time in which to comply with the demand for payment. Watson v. White, supra; Mouson v. Bragdon, supra; Eaton v. Schneider, 185 Ill. 508, 57 N. E. 421; Thayer v. Meeker, supra; O'Connor v. Hughes, supra.

With this understanding of the contract and its effect as to the rights of the parties, we may determine whether, under the complaint, as tested by the demurrer, the plaintiff is entitled to recover. This waiver agreement, when acted upon, would be operative at least as a waiver of prompt payment as per the stipulations in the contract, if it was not in reality a modification or an ingrafting of new and different conditions upon the contract itself. The parties so treating with reference to the original contract knowing all the attending conditions, it might be conceded, as contended by defendant, we think, but without deciding, that it was tantamount to a ratification or affirmance of the contract at that time; but it does not follow that there might not thereafter be a rescission by the mutual agreement of the parties, express or implied. Owen v. Pomona Land Co., 131 Cal. 530, 63 Pac. 850, 64 Pac. 253. It should be noted in this connection that there was nothing for the purchasers to return to the

end that they might place the vendor in statu quo. They had received nothing at its hands, except, perhaps, they might have gone into possession of the property, which they had a right to do under the contract. Being prevented by their own undertaking from removing any timber from the lands, we must presume that they have not broken the contract in that respect. So that they have received nothing which they would be required to return to the company in order to place it in statu quo as a condition to a rescission on their part, nor has the company been put to any expense or inconvenience by sufferance of the purchasers. The complaint proceeds upon the theory that, while the contract was still operative, being so continued by virtue of the alleged waiver agreement, the defendant, without right, by the notice of March 27, 1900, repudiated and rescinded such contract; and the plaintiff, taking it at its word, assented thereto, and thus by mutual agreement rescinded, which entitled plaintiff to a return of the money paid on the faith of the contract. Taking it, therefore, for granted that the agreement for a waiver as to time of payments until patents issued to the defendant was made as alleged, the notice of March 27, 1900, was a palpable repudiation of all existing contractual relations between the parties, and in consequence tantamount to a rescission on the part of the company. The notice refers, it is true, to the "former contract" of December 31, 1889, but it forfeits and cancels said contract for failure to make payment of the purchase price as agreed upon, which, if of any force by virtue of the waiver agreement, was a virtual rescission in toto. The plaintiff had a right, under the attending conditions, notwithstanding any ratification or reaffirmance of the contract as first entered into, to say to the company: "Very well, since you refuse to be bound further by your engagements, I assent to your rescission." This the law says is, in effect, a mutual rescission. Treating the defendant's declaration that the contract is canceled, and no longer of any force or effect, as an abandonment, the plaintiff might himself abandon, and, the contract having thus come to an end, he might very well, as he has done, sue at law to recover what he has paid. Glock v. Howard & Wilson Colony Co., 123 Cal. 1, 10, 55 Pac. 713, 719, 43 L. R. A. 199, 69 Am. St. Rep. 17. Mr. Justice Henshaw, in further consideration of this case, says: "There have been many cases before this court involving the rights of parties to agreements for the sale and purchase of real estate, in which it has been held that, after the parties have rescinded the agreement or mutually agreed to abandon, the vendee may recover the money which he paid in part performance of his contract;" citing cases. This court, however, has settled the principle by the language of Mr. Chief Justice Moore in Graham v. Merchant, 43 Or. 294, 304, 72 Pac. 1088, 1090, as follows: "When a vendor

abandons his contract to convey, the vendee, in his choice of remedies, may elect to rescind the contract, and thereupon maintain an action at law to recover what he has paid thereon as money had and received." Thus it is that an abandonment by one party may be treated as a proposition to rescind by the other, and thereupon he may also abandon, and thus arrive at a mutual agreement to rescind, and the law so treats the correlative acts of the parties. 2 Warvelle, Vendors (2d Ed.) § 826; Cummings v. Rogers, 36 Minn. 317, 30 N. W. 892; Wheelden v. Fiske, 50 N. H. 125. The parties could as well rescind a ratified or reaffirmed contract by mutual agreement, there being nothing to return or do in order to reinstate statu quo conditions, as they could the original, and, having so mutually rescinded here, the plaintiff was entitled to maintain the action.

Another objection is urged to the complaint, namely, that the action is being prosecuted by Maffet in a representative capacity as trustee, when it is insisted that it should have been instituted by him individually, or rather in such latter capacity, having joined with him the survivors of McKinney, deceased, neither of which requisites to the maintenance of the action has been observed. The contention is based upon the premise that the term "trustees" was used in the contract as descrip tiones personarum. Prima facie, however, the term, without more, implies a trust in favor of an undisclosed beneficiary, and hence we cannot say, from the face of the contract itself, that plaintiff and McKinney were not in fact trustees, and the complaint is good against the objection. If trustees, the survivor must, it is admitted, sue in exclusion of the personal representatives of the dereased co-trustee. Perry, Trusts (5th Ed.) § 158; Sturtevant v. Jaques, 14 Allen, 523; Shaw v. Spencer, 100 Mass. 382, 97 Am. Dec. 107, 1 Am. Rep. 115. Under the construction we have given the contract, and considering also the effect of the alleged waiver agreement, the third ground of demurrer is without relevancy or force. The demurrer was therefore properly overruled.

This brings us to the question arising upon the motion for judgment on the pleadings. The argument of plaintiff in support of the motion is that the alleged agreement as to the waiver of the time-essence stipulations should be treated as if not asserted in the complaint, and when so treated he is entitled to judgment notwithstanding the answer of the defendant, which seems to controvert none of the allegations of the complaint material to this inquiry, except those relating to such agreement. It proceeds upon the theory that the contract, construed as a whole that is, considering the clause providing for the payment by the purchasers of an increased rate of interest in case they failed to make their payments punctually with those other provisions calculated in themselves to make time strictly of the essence of the contract

-signifies an ultimate intendment that the purchasers might make the payments at any time, and that they would not incur a forfeiture so long as the vendor did not itself elect to declare it, and that, so construed, there had been no default or forfeiture on the part of the purchasers when the defendant gave the notice of March 27, 1900, declaring the contract canceled, and no longer in force or effect. Such, however, is not, as we have shown, the reasonable and proper interpretation of the contract under the authorities. Barring the alleged agreement of July 25, 1892, a forfeiture took place by force of the terms and stipulations of the contract when the purchasers failed to pay the interest installments as they became due. By the acceptance of payments on the first and second installments after they became due and payable, it might be that the company waived these defaults; but otherwise it has done nothing that could be construed into a waiver of the third and subsequent installments. Thus it would appear that the contract had been forfeited long before the notice of cancellation was given. But, as the forfeiture did not depend upon the vendor's election to forfeit, but took place by the terms of the contract itself, the notice meant nothing more than an intendment to insist upon a right to which the company was entitled without it. It could hardly be considered that under such conditions the notice was in itself a waiver of the defaults and consequent forfeiture, and at the same time an election on the part of the railroad company to forfeit the contract, so that in this view, it was absolutely essential to the statement of a good cause of action that the complaint show, by apt allegations, a waiver in some manner by the railroad company of the default in payments and the forfeiture of the contract on the part of the purchasers consequent upon such default. This the plaintiff did, however, by setting up the agreement to postpone an insistence upon punctual payments until defendant was ready to convey its title to be acquired from the general government, which, being negatived by the answer, an issue was thus raised that should have been tried out.

There was error, therefore, in allowing the motion for judgment on the pleadings, for which the judgment of the circuit court will be reversed, and the cause remanded for such other proceedings as may seem proper.

(20 Colo. App. 508) BLYTHE et al. v. CORDINGLY et al. (Court of Appeals of Colorado. March 13, 1905.)

PARTNERSHIP-ACTION AGAINST-JUDGMENTEFFECT AS TO PARTNERS NOT SERVED-CONSIDERATION FOR NOTE-RELEASE OF JUDGMENT ASSIGNMENT OF JUDGMENT RIGHTS OF ASSIGNEE.

1. The only judgment that can be rendered against a copartnership on a firm obligation is

one against the copartnership jointly, and the partners summoned or appearing, whether the summons is served on all, or one or more.

[Ed. Note.-For cases in point, see vol. 38, Cent. Dig. Partnership, § 437.]

2. Mills' Ann. Code, §§ 235-240, providing a method of summoning those defendants not originally served in an action against persons jointly liable, is exclusive; and a judgment rendered on a firm debt, where service is had upon less than all of the partners, is a merger of the obligation, and a bar to a subsequent action against the partners not served.

3. The assignee of a judgment which has been released of record takes the judgment for what it is worth, and can have no greater rights than the assignor.

[Ed. Note. For cases in point, see vol. 30, Cent. Dig. Judgment, § 1548.]

4. A note given in consideration of a release of the judgment against the maker is founded on a good consideration.

Error to District Court, Arapahoe County. Action by James M. Blythe and another against Alfred Cordingly and another. Judgment in favor of defendants, and plaintiff's bring error. Reversed.

E. T. Wells and Jno. G. Taylor, for plaintiffs in error. Stuart D. Walling, for defendant in error Alfred Cordingly.

MAXWELL, J. The complaint named "Alfred Cordingly and Abraham Goodstein, late copartners under the firm name of Cordingly & Goodstein," as defendants. It alleged eight causes of action. The first seven were based upon promissory notes alleged to have been made by the defendants "under their firm name of Cordingly & Goodstein." The eighth cause of action alleged the execution by "the firm of Cordingly & Goodstein" of six promissory notes, identical in terms with those alleged in the first six causes of action; that such promissory notes were indorsed by their respective payees to Fannie Goodstein and Millie Goodstein, who, without consideration, transferred and delivered the said six promissory notes to one John T. Deweese, to hold as their trustee; that Deweese commenced an action in the district court of Jefferson county against the defendants under the firm name of Cordingly & Goodstein, and caused summons to be served upon Abraham Goodstein, and, although no process was ever served upon said Cordingly, nor any appearance of said Cordingly made or entered in said action, said district court on or about November 5, 1894, rendered judgment in said action in favor of said Deweese, and against said Alfred Cordingly and Abraham Goodstein, copartners as Cordingly & Goodstein, for the sum of $9,406.18 and costs; that January 29, 1895, said Deweese assigned said judgment to Millie and Fannie Goodstein, and on or about February 13, 1895, said Millie and Fannie Goodstein and said Deweese, "although no sum of money or other consideration whatsoever was ever paid on said judgment," caused satisfaction thereof to be entered in said dis

trict court; that November 1, 1898, said Millie and Fannie Goodstein, for divers good and sufficient considerations, assigned and set over to the plaintiffs the said judgment and the promissory notes of said Cordingly & Goodstein whereon the said judgment was founded. The prayer was that said satisfaction of judgment be vacated, and that plaintiff's have judgment against the defendants for the amounts of the several promissory notes, with interest, alleged in the first seven causes of action. Abraham Goodstein did not appear in the court below, and, so far as the record shows, no summons was served upon him. The separate answer of Alfred Cordingly denied the allegations of the complaint, and set up several distinct affirmative defenses; alleging therein fraud. want of consideration, accord and satisfaction, and release. Plaintiffs filed a replication. From the admissions in the replication and the uncontradicted averments of the answer it appears that the notes in the first six causes of action were identically the same as the notes described in the eighth cause of action, upon which the judgment of the district court of Jefferson county was rendered in favor of Deweese, and that all of such notes were included in said judgment; that the defendant Abraham Goodstein was served with summons, and entered his appearance and the appearance of said firm in said action; that judgment was entered therein on the 5th day of November, 1894, for the sum of $9,406.18; that on the 13th day of February, 1895, Deweese and Millie and Fannie Goodstein signed, sealed, acknowledged, and delivered to the defendants therein their release of said judgment, and therein and thereby acknowledged full payment and satisfaction of the same, and fully and forever discharged and released the same; that on the date of the release, to wit, February 13, 1895, the same was filed with the clerk of the district court of Jefferson county, and thereupon satisfaction of said judgment was duly entered upon the judgment docket of said court; that the amount of the promissory note alleged in the seventh cause of action included the promissory notes alleged in the first six causes of action, with interest, and was the amount for which judgment had been rendered by the district court of Jefferson county.

The case having been reached for trial, the defendant Alfred Cordingly moved the court for judgment on the pleadings, which motion was granted upon the grounds (1) that the six promissory notes alleged in the first six causes of action were identical with the six notes described in the eighth cause of action, and that such notes were merged in the judgment of the district court of Jefferson county, and could not be made the basis of another judgment against the defendants therein; (2) that the said judgment had been satisfied and discharged by the deed of release of said judgment executed by Deweese

and Millie and Fannie Goodstein, and the entry of satisfaction on the judgment docket of said district court, which release and satisfaction could not be impeached, avoided, or set aside for the alleged want of consideration; (3) that the amount of the alleged promissory note set forth in the seventh cause of action is identically the same as alleged in the promissory notes described in the first six and the eighth causes of action, and was without any good or valid consideration.

Plaintiffs in error, in their brief, say: "Two questions are therefore presented: First. Whether a judgment against one of two makers of a promissory note, in an action against both, merges the cause of action. Second. Whether a release of a judgment, and the entry of satisfaction on the record, is effectual, when given and made without consideration?"

We think the record presents but one question-whether a judgment on promissory notes executed by a copartnership, service being had on one partner only, merges the partnership notes in the judgment. The second question above presented by plaintiffs in error is not in the case, as they are estopped to raise the same, as will hereinafter appear.

It is the settled law of this state that the only judgment which can be rendered against a copartnership on a firm debt or obligation is one against the copartnership jointly, and the partners summoned or appearing, whether the summons is served upon all or one or more of the defendants. Craig v. Smith, 10 Colo. 220, 15 Pac. 337; Sawyer v. Armstrong, 23 Colo. 287, 47 Pac. 391; Ellsberry v. Block, 28 Colo. 477, 65 Pac. 629; Dessauer v. Koppin, 3 Colo. App. 115, 32 Pac. 182; Peabody v. Oleson, 15 Colo. App. 346, 62 Pac. 234. In Ellsberry v. Block, supra, in discussing the force and effect of sections 14, 43, 235-240, Mills' Ann. Code, the court said: "The purpose of these provisions was to provide a method of procedure whereby a partnership might be sued upon its obligations, its members brought into court, judgment rendered which would bind the firm and individuals served, and that those not served with summons might be subsequently brought in, and a judgment entered which would be personally binding upon them. These provisions do not alter any of the fundamental principles of the law as to the joint liability of partners, but are merely intended to change the common law in point of practice, for, according to the rules of the latter, in an action at law against several defendants jointly liable only, all must be served with process before judgment could be rendered."

Plaintiffs in error urge that Exchange Bank v. Ford, 7 Colo. 314, 3 Pac. 449, declares that a partnership note is not a joint contract, under our laws. We do not believe that this case announces such doctrine. It was there held that the judgment rendered 80 P.-32

against one of several signers of a promissory note given for a firm debt was a bar to a subsequent recovery against another partner upon the original indebtedness which formed the consideration of the note, because the joint liability of all was merged in the judgment against one. In the course of the opinion, doubt is expressed as to whether or not section 2528, Mills' Ann. St., was intended to have reference to strictly partnership contracts. The above section is identically the same as the Illinois statute. The court said: "It has, however, recently been held doubtful if this Illinois statute has any application to partnership contracts." Citing Coates v. Preston, 105 Ill. 473. Jansen v. Grimshaw, 125 Ill. 468, 17 N. E. 850, was an action of assumpsit by plaintiff against the defendants to recover the amount of a promissory note executed by the defendants under the firm name of F. W. Jansen & Son. One of the defendants pleaded a former recovery based upon a judgment against two members of the partnership. The court said: "This action was brought against the three defendants as partners-as joint promisors— and, where an action is brought upon a liability of that character, the law is well settled that a judgment against one or two of the joint promisors will be a bar to a future recovery against one or all of the remaining joint contractors." Citing authorities. In Sessions v. Johnson, 95 U. S. 347. 24 L. Ed. 596, it is said: "Even without satisfaction, a judgment against one of two joint contractors is a bar to an action against the other, within the maxim, "Transit in rem judicatam;' the cause of action being changed into matter of record, which has the effect to merge the inferior remedy in the higher. Judgment in such a case is a bar to a subsequent action against the other joint contractor, because, the contract being merely joint, there can be but one recovery; and consequently the plaintiff, if he proceeds against one only of two joint promisors, loses his security against the other; the rule being that by the recovery of the judgment the contract is merged, and a higher security substituted for the debt. But the rule is otherwise where the contract or obligation is joint and several, to the extent that the promisee or obligee may elect to sue the promisors or obligors jointly or severally; but even in that case the rule is subject to the limitation that, if the plaintiff obtains a joint judgment, he cannot afterwards sue them separately, for the reason that the contract or bond is merged in the judgment, nor can he maintain a joint action after he has recovered judgment against one of the parties in a separate action, as the prior judgment is a waiver of his right to pursue a joint remedy." In North v. Mudge, 13 Iowa, 496, 81 Am. Dec. 441, the suit was on a promissory note of a copartnership. The defense pleaded was former recovery. The court said: "The general doctrine is that,