Pope v. Tunstall

Dickinson, Judge, delivered the opinion of the court: Not deeming it necessary to discuss the principles upon which pleas are stricken out by the court, we will consider the proceeding in the same light as if the pleadings had come up on demurrer. The defendant in error contends that in debt upon bond, it is ,no plea that the plaintiffs accepted a new bond in satisfaction of the old one, for that is no satisfaction, either actual or present; and refers to various authorities in support of his position. If he has reference only to cases where there is a simple exchange of bonds, or obligations, his argument cannot, in truth, be controverted, for the satisfaction must, in legal contemplation, be advantageous to the party agreeing to accept, for it would be inoperative if it could not possibly afford him some equivalent or consideration. Bacon Ab. accord, A.; Com. Dig. accord B. 1. There must be some change, or rather difference, between the former and the latter contract to show that the parties intended to alter it by substituting something more advantageous to the creditor than he before possessed, as by shortening the time, giving other security, or the like. Hobart, 68. And it is a rule that to a bond, accord and satisfaction can be pleaded by deed only, for an obligation under seal cannot be discharged but by an instrument of at high a nature as the obligation itself. 2 Wils. 86. In the case of Lynn, and another, vs. Bruce, 2 H. Black, 317, where the plaintiff, at defendant’s request, had consented and agreed to accept and receive from the defendant a composition of fourteen shillings in the pound and so in proportion for a lesser sum than a pound, upon a debt due from the defendant to the plaintiff on a bond for two hundred pounds in full satisfaction and discharge of the sum and all money due thereon, and the defendant promised to pay the compensation. A part thereof only was paid, and an action brought for the residue. The consideration of the promise was on an agreement to accept a composition, and judgment was signed for the balance. Lord Chief Justice Eyre, in delivering the opinion of the court said, “ that it was settled in the case of Allen vs. Harris, 1 L. Raym. 122, upon consideration of all the cases that upon an accord no remedy lies,” and that it was said that the books are so numerous that an accord ought to be executed, that it was impossible to overturn an the authority — the expression is u overthrow all the books.” This doctrine is well settled, and upon sound principles. Accord executed is satisfaction. Accord executory is only substituting one cause of action in the room of another, which might go to any extent. The cases in which the question has been raised whether an accord executory could be enforced, and in which it has been so often determined that it could not, have been cases in which it has been pleaded in bar of the original action; but the reason given in three of the cases Rol. Al. title, Accord, pi. 11, 12, 13, is because the plaintiff hath not any remedy for the whole; or, where part has been performed for that which is not performed, which goes directly to the gist of the action. An accord must be completely executed in all its parts before it can produce legal obligation or legal effect. In Peyton's case, 5 Co. 79, referred, to by the defendants in error, it was held that where part of the accord had been executed, fender of the residue would not be sufficient to make it a bar to the action; but that there must be an acceptance in satisfaction. See also the two cases in Cro. Eliz. 304, 305, to the same effect. A plea simply alleging acceptance of a smaller sum of money in satisfaction of a larger sum has been repeatedly decided to be bad. 5 Coke, R. 117, Pinnel's case; 9 Coke, 89; 5 John. R. 386, Watkinson vs. Inglesby; 5 T. R. 513, Kearslake vs. Morgan; 2 T. R. 28, Heathcock vs. Crookshanks; 1 Str. 425, Cumber vs. Ware; 17 John. 169, Seymour vs Minike; and numerous other authorities hold to the same principle. But it has always been held that a plea alleging the payment of a less sum before' the day of payment stipulated in the contract or at a different place; or the delivery of a specific article in satisfaction, and an acceptance in satisfaction by the plaintiff, was a good plea. 5 Co. 117. So a plea, alleging the payment of a less sum by a third person, and the acceptance of it by the plaintiff in satisfaction is a good bar, 11 East, 305, Steinman vs. Magnus; 1 New-Hamp. R. 279, Coburn vs Gould; 2 D. and E. 763, Cockshot vs. Bennett. The reason why the payment of a less sum by the debtor, in satisfaction of a larger sum, cannot be adjudged a satisfaction is, according to Lord Coke, because “ it appears to the Judges that by no possibility can a lesser sum be a satisfaction to the plaintiff for a greater sum.” But the gift of a chattel is good, because it may be intended to be more beneficial to the plaintiff, although of less value than money. 5 N. H. R. 136, Clarke vs. Dinsmore. It is laid down as a general principle that accord without satisfaction is no bar to an action of debt; that is, that accord being a promise to confer satisfaction must be fully and actually executed and accepted in order to confer satisfaction, and operate as a defence to such action. As for instance, if an agreement is made to do a thing in satisfaction at a future day, and it is done and accepted at that time, it is a legal satisfaction. The party cannot sue while it is only executory, but here is an accord with satisfaction, and the previous claim is extinguished. In support of these positions see Bacon’s Ab. Accord A., Com. Dig. Accord B. 4; Allen vs. Harris, 1 L. Ray. 122; Watkinson vs. Inglesby, 5 J. R. 386. In the case of Blenn vs. Chester, 5 Day, 359, it was said that if the agreement that satisfaction should be rendered by the defendant, or a third person, at a future day, be not founded on a new consideration, and afford a fresh right of action, it would be no bar to an action on the original demand before the time prescribed for rendering satisfaction. Many of the authorities referred to by the defendants were expressly decided upon the ground of accord without satisfaction. In the case of Cose vs. Barber, T. Raymond 450, one ground of decision there was, that the satisfaction was to be rendered in part by a third person who was party to the accord, but the plea did not show that the promise was in writing. In Com. Dig. Accord B. 4, it is expressly laid down that “ an accord with mutual promises to perform is good, though the thing be not performed at the time of action, for the party has a remedy at law to compel the performance, and this doctrine is sustained in the case of Gordon vs. Cheeseman, 1 B. & A. 325 and 702; also, in the observations of Grose in James vs. David, 5 T. R. 143. In the case of Boyd, and others, vs. Hitchcock, 20 J. R. 76, it was declared that if a debtor give his note, endorsed by a third person, as further security for a part of the debt, which is accepted by the creditor in full satisfaction, it is a valid discharge of the whole of the original debt, and it may be pleaded in bar as an accord and satisfaction. The additional security required by the creditor for a part of the debt is a good consideration for the relinquishment of the residue. Le Page vs. McCrea, 1 Wend. 172; Kearslake vs. Morgan, 5 T. R. 513. This doctrine is confirmed in vs. Wheeler, 8 Cowen, 79, and the distinction is there taken between the note of a third person, and that of the debtor himself for the original debt. So the acceptance in full satisfaction by a creditor of the note of a third person, endorsed by his debtor, for the whole amount of a previous note given by the debtor, may be pleaded as an accord and satisfaction to an action on the previous note. In Booth vs. Smith, 3 Wend. 68, it is said to go upon the principle that although the defendant still remains liable, the character of the responsibility is changed, and he cannot be charged on the original consideration. An express agreement by a creditor to take a bill or note for the full amount of his debt as an absolute payment or extinguishment thereof destroys the right of action for such debt, and leaves the creditor without remedy except upon the instrument. Brown vs. Kewley, 2 B. & P. 518; 10 Vesey, 201; Camidge vs. Allenby, 6 B. C. 381; Sheehy vs. Mandeville 6 Cranch, 253; Burdock vs. Green, 15 J. R. 247; Hughes vs. Wheeler, 8 Con. 77. In the case of Wilkinson vs. Inglesby and Stokes, 5 J. R. 385, where A. pleaded that he, together with B., being indebted to C., and several others, agreed to assign all the stock in trade and outstanding debts to C. and the other creditors, who agreed to accept the same in full satisfaction of their respective debts, and averred that he and B. did deliver all their stock in trade, and assign all the debts due to them, for the use and benefit of C. and the other creditors, which delivery, and assignment of debts, was received in full satisfaction by C. and the other creditors, &c. There was a demurrer to the plea that it was agreed to assign without averring that the plaintiff was a creditor, or that they assigned, and that it was not set forth to whom the assignment was made. Van Ness, J., in delivering the opinion, said “ that it was a plea of accord and satisfaction, and he thought it was a good plea,” &c.; that there was more nicety than good sense in some of the cases on this subject; that accords are favored in law, and therefore ought not to be too rigorously expounded. The court decided that the agreement was sufficient, and overruled the case of Preston vs. Christmas, 2 Wils. 86, where an assignment of an equity of redemption was declared not to be pleadable as accord and satisfaction ; and said that the plaintiff in the case before them agreed to receive such assignment, and that the accord was executed. It avers delivery and assignment, and that the assignment and delivery were received by the plaintiff in satisfaction of the debt. In the case of Cumber vs. Ware, 1 Sir. 426, Chief Justice Pratt said, “that it must appear to be a reasonable satisfaction; at least, the contrary must not appear as it did in that case.” The current of decisions is, and we believe correctly, that although accord executory is no bar, yet an accord executed is good: and all the authorities agree in this. Rol. Al. title, Accord, pl. 14; 2 Lord Raym. 122; 2 H. Bla. 317. The acceptance in satisfaction is the essence and gist of the plea, and Lord Coke, in Peyton’s case, 9 Coke, 86, recommends as the best way of pleading an accord to plead it by way of satisfaction only. In the case of Booth vs. Smith, 3 Wend. 66, it was decided that acceptance in full satisfaction by one creditor of the note of a third person for the whole amount, of a previous note given by his debt- or, is an extinguishment of the original consideration, and such acceptance may be pleaded in bar to a recovery on an original note. The obligation upon which this suit is brought is dated the 19th May, 1838, payable to Tunstall and Waring sixty days after date for 1,109 85, oyer of which was ordered and granted. The defendant below then sets out in his plea that after the execution of the said writing, to wit: on the 25th January, 1839, the plaintiff below took into partnership Robert S. Carter, as well in the matter of the note sued on, as in trade and merchandize, and that before the institution of the suit, he executed the subsequent writing obligatory, with A. V. Brookie and N. Peay, to said Tunstall, Waring, «fe Co., under the name of Tunstall, Waring, & Co., for ‡1,186 86, and avers that the same was accepted and received by the said Tunstall, Waring, and Carter, in full satisfaction and discharge of the said debt, founded upon the writing obligatory in the declaration mentioned, and of all damages and interest due, and owing, and accrued. The rule by which partners become liable under the contract of partnership has given rise to a general rule in the course of legal proceedings by which the act or admission of one partner, as likewise notice to one partner is held to be binding upon the others, and in all contracts by parol or otherwise, they only who were partners at the lime can join, and therefore a person who enters the partnership after the completion of the contract cannot be made a plaintiff, unless the debtor shall admit him as creditor, and it be agreed between the partners that the contract with the old firm be extinguished, and a contract with the new firm established, Wilford vs. Wood, 1 Esp. 182* Under the latter such partners may sue. Was there such new contract made? It is not only averred that the individuals comprising the new firm were joint owners of the writing sued on, but that all of the partners accepted and received the last writing obligatory in full satisfaction and payment of the first. And can it be denied that they had the power to do so. That the right to change the partnership, so far as related to themselves, extinguished the, old debt by making a new contract in the name of the new firm cannot be controverted. If then this position be conceded as correct, and we believe it to be so, an assignment from the old to the new firm, to enable them to form a second contract upon the basis of the former one, would, so far as their interests were involved, have been a nugatory or, at least, a hopeless act. Shortening the time of payment alone is not the only case as contended by the defendant in error in which a plea of this kind would be good. Any change or alteration which renders the creditor’s situation more advantageous, or the debt more secure will suffice. Here the parties not only have the same security as regards Pope, but the additional security of Brookie and Peay, upon as high an obligation as they possessed before. The plea avers that the parties did accept, and is so pleaded, as we conceive with sufficient certainty, and shows the satisfaction to be reasonable; at any rate, nothing to the contrary appears upon the face of the pleadings. Wherefore, we are of opinion that there was error in the proceedings of the court below in striking out the second plea. The judgment of the Circuit Court must therefore be reversed with costs, and this cause be remanded to the court from whence it came tor further proceed, ings to be had therein according to law, and not inconsistent with this opinion.