Nathan v. Smith

Conlan, J. This is an appeal from a judgment after a trial had before the justice at Trial Term, without a jury.. ' The action was brought to recover a balance alleged to be due for work, labor and services, and materials furnished. The defense was accord and satisfaction. It appears that the plaintiffs brought a former action to recover an alleged balance of $276, and that while suit was pending and before issue joined,.an understanding was arrived at between the parties and their attorneys, that if the defendant would pay .to the plaintiffs’ attorneys $2.5 for their costs and expenses of the action, and give two notes of $100 each, payable at a future day, that the plaintiffs would accept this arrangement as a settlement, of the matters in dispute and would discontinue the action. The $25 was paid and the notes given and received, and the action was thereupon discontinued. One of the notes was paid at or about maturity, and the other note was not paid, and the plaintiffs thereupon claimed the right to rescind and to stand upon the original contract; and in the complaint in the present action ask to recover the sum of $176, offering therein to return the unpaid note. The question of accord and satisfaction has been one of frequent and almost exhaustive discussion in the courts of this and other jurisdictions in this country, and in the English courts, for a [375] period of more than 200 years, and the application of the principle involved has heen one of different judicial determination in the different tribunals; what may have been, sufficient to sustain the rule in one state has in others been held to be inadequate, etc. As we have said, the authorities somewhat differ as to the interpretation of the rule, and its exact application. Two elements necessarily enter into the question of accord and satisfaction, namely, the accord is the agreement for the reception of the thing in discharge of the debt; the satisfaction is the actual reception of the thing. The true underlying principle in all cases of complete accord and satisfaction may be said to be the payment of the amount or the delivery of the thing agreed to be received, accompanied by, in all cases, its full and complete acceptance. When these conditions are fulfilled, we think the rule is well applied. In the case at bar, the agreement was to receive certain notes and a certain sum of money, and these were delivered, and money paid and fully accepted, and the discontinuance of the first action followed. If there were, indeed, any doubt about the plaintiffs’ acceptance of the conditions, that doubt ceased to cast any shadow on the transaction when the money due upon the first note was; paid and accepted. Our attention is called to the case of Jaffray v. Davis, 124 N. Y. 164, wherein it is said: “ The doctrine of stare decisis is further illustrated by the course of judicial decisions upon this subject, for while the courts still hold to the doctrine of the Pinnel and Cumber and Wane cases (cited in the opinion) they have seemed to seize with avidity upon any consideration to support the agreement to accept the lesser sum in satisfaction of the larger.” In the Cumber-Wane cases it was held that a creditor' can never bind himself by a simple agreement to accept a smaller sum in. lieu of an ascertained debt, of a larger amount, such agreement being nudum pactum, but if there be any benefit, or even any legal possibility of benefit to the creditor thrown in, that additional weight will turn the scale and render the consideration sufficient to support the agreement. In the case of Goddard v. O’Brien, L. R., 9 Q. B.. Div. 37, where “A. being indebted to B. in £125 7s. and 9d. for goods [376] sold and delivered, gave B. a check negotiable for £100, payable on demand, which B. accepted in satisfaction,” this was held to be a good satisfaction, and this latter case is cited with approval in Jaffray v. Davis, supra, Baron Huddleston saying in the Goddard casé that the circumstances of negotiability made it, in fact, a different thing and more advantageous than the original debt. híumerous authorities are cited in the Jaffray case, and of instances where the principle of accord ánd satisfaction have been held to apply, such as the giving of furtlier security for a part of the debt or other security, though for a less sum than the debt, and acceptance of it in full of all demands, as in Le Page v. McCrea, 1 Wend. 164, and in the case of Boyd v. Hitchcock, 20 Johns. 76, where a debt of $820 upon a book account was .satisfied by the payment of $1, by calling the balance a gift, though the balance was-not delivered except by fiction, and the receipt was in usual form and was silent upon the subject of a gift, as in Gray v. Barton, 55 N. Y. 68, and this later authority.-was approved in Ferry v. Stephens, 66 N. Y. 321. In all these cases the new agreement was held -sufficient, and the Court of Appeals proceeding further in the Jaffray case said: “ The state of the law upon this subject under the modification of later decisions, both in England and in this country, would seem to-be as expressed in Goddard v. O’Brien, supra.” And we are content with this interpretation and application of the principle. • Entertaining these views, we are of the opinion that the plaintiffs’ action to rescind the agreement and to recover upon the old contract cannot be maintained, and there must be a reversal of the judgment. ■ • ¡ Olcott and Schuchman, JJ., concur. Judgment reversed and new trial ordered, with costs to the appellant to abide the event.