Mellen v. Goldsmith

OktoN, ,1. There was testimony tending to- show that the appellants-verbally agreed with the respondent and his other creditors that they would compromise their claims against him, and sign a deed of composition for sixty cents on the dollar, in consideration and upon the condition that the other creditors would do so; and that the other creditors did so compromise and sign such deed, and the appellants refused to so do, and refused to accept such per cent, in satisfaction of their claim tendered for such purpose by the respondent. The jury probably and very properly might have found their verdict upon this evidence, and this court ought not to disturb the verdict upon the mere weight or preponderance of the evidence. The evidence relating to the proceedings of the creditors’ meeting, and their action upon the proposition of the respondent, is not material, when it was shown — and it is not disputed— that immediately thereafter all of the creditors except the appellants signed the composition according to the agreement which the jury must be presumed to have found was so made by the parties and the other creditors. The exceptions taken to the rulings of the court in admitting or rejecting testimony, and in giving or refusing to give instructions to the jury relating to such meeting or its proceedings, are therefore immaterial, and will not be further considered. The instructions given clearly express the law upon the legal effect of such an agreement, and submit to the jury the question of fact; and, although there may be some clauses and abstract propositions of law not strictly correct, the charge taken together and fairly construed did not, we think, mislead the jury upon the material question in the case. The really important and only material question here is, Was [579] this agreement valid and binding upon the appellants, so that its performance by the other creditors and the respondent, in respect to their claims, and the offer of performance by the respondent in respect to the claims of the appellants, constitute a valid defense to this action, brought to recover the full amount? The validity of such an agreement does not depend upon the technical and strict rules which govern accord and satisfaction, release and discharge, but upon principles of equity, which treat the violation of or failure to execute such an' agreement as a fraud, not only upon the debtor, but more especially upon the other creditors, who have been lured in by the agreement to relinquish their further demands, upon the supposition that the debtor would thereby be discharged of the remainder of his debts. In Anstey v. Marden, 1 Bos. & Pull., 124, the plaintiff at one time orally agreed with the' other creditors to accept a composition of ten shillings on the pound, and to assign his claim to Weston, who was to advance the money; but when the agreement was drawn up he refused to sign it, although the other creditors had signed it and received their money. Rooxe, J., said: “Anstey is not the only person here concerned. If he were suffered to recover, he would be guilty of a gross fraud on the other creditors.” In Norman v. Thompson, 4 Exch., 755, the plaintiff verbally agreed with the debtor defendant and a part of his other creditors, that he would accept ten shillings on the pound for his claim, if they would do the same, and afterwards refused to carry out the agreement. Upon demurrer to the replication of the plaintiff, averring that he did not so agree, modo et forma, Pollocx, C. B., said: “ I do not think there is any ground for doubting that such an agreement is binding. It is a good consideration for one to give up part of his claim, that another should do the same.” In Bradley v. Gregory, 2 Campb., 383, the plaintiff verbally agreed with the debtor and the other creditors to execute [580] a composition deed, containing a clause of release, for and by the payment of ten shillings on the pound of his claim, if the other creditors would do so, and then, upon the execution of the deed by the other creditors, he refused to sign it. Lord Ellenboeougii said: “I think the agreement in the present case operates as a satisfaction. Rut it is said the agreement is executory, and therefore can be no bar. I think it is executed. Everything on the defendant’s part was performed. As far as depended upon him, there has been satisfaction as well as accord. It is the plaintiff’s own fault that he has not enjoyed the full benefit of all that he stipulated for. It would be unjust if the defendant could be sued in this action; and I am of opinion that, in point of law, the action is not maintainable.” In Wood v. Roberts, 2 Starkie R., 417, in which the facts are similar to those here, Abbott, L. C. J., said: “ If the plaintiff had, by his undertaking to discharge the defendant, induced any other creditor to accept a composition and discharge the defendant from further liability, he could not afterwards enforce his claim, since it would be a fraud upon that creditor.” In Butler v. Rhodes, 1 Esp., 236, the plaintiff and the other creditors had agreed with the defendant to sign a deed of composition for ten shillings on the pound; and after the other creditors had signed, the plaintiff refused to do so. Lord Ejenyon said that “it therefore never should be allowed to the plaintiff to recede from what he had undertaken, and to evade the effect of the composition by a refusal to execute the deed which had been prepared with his consent,” and directed the jury to find for the defendant. Anything I could say in elaboration of this doctrine so authoritatively established and so tersely expressed by these great masters of the law, might weaken its force, and it is sufficient further to - say that this equitable doctrine has been followed almost uniformly by the courts. Fellows v. Stevens, [581] 24 Wend., 294; Browne & Co. v. Stackpole, 9 N. H., 478; Paddleford v. Thacher, 48 Vt., 574; Gardner v. Lewis, 7 Gill, 377; Farrington v. Hogdon, 119 Mass., 453; Murray v. Snow, 37 Iowa, 410. By the Court. — The judgment of the county court is affirmed, with costs.