¶1The referee was correct in holding that the plaintiff could not maintain his action on account of the debt due to Southwick & Beed until he had been compelled to pay the same, or some part thereof.
¶2Mullin, Talcott and S. D. Smith, Justices.]
¶3By the agreement, the defendants purchased the interest of Coleman in the partnership of Coleman & Barnes, and took his place in that firm as of the first of January, 1868. They did not agree to pay at once all the debts of the firm of Coleman & Barnes. They only assumed the share of the liabilities of the firm which belonged to Coleman. The intent and meaning of such an assumption on the part of an incoming partner is merely to indemnify the outgoing .partner. If the outgoing-partner is obliged to pay any of the old debts, under such circumstances, then, and only then, he is entitled to maintain his action. (Pars, on Part. 434-437.)
¶4As to the balance of $200 due to Bussell at the time the defendants assumed the place of Coleman, it appears that the account was kept along with the new firm, and was one continuous account, and payment had been made to him more than sufficient to extinguish the balance which was due at the time of the change in the firm, without any specific appropriation by either party other than such as arose from the charges and credits in the continuous account, and the appropriation thereupon assumed by the rules of law. In such a case, where there is an outgoing partner and the account is continued as one continuous account, the rule is, that the payments are to be applied to the earliest items in the account, although the payments are made by the new firm, some of whom were not liable to the creditor for the debt extinguished by their application, and this is especially so where the incoming partner has assumed his share of the old liabilities. (Pars, on Part. 432, and cases cited.)
¶5■ It does not therefore appear that the referee has committed any error, and the judgment must be affirmed.