Emmittsburg Railroad v. Donoghue ex rel. J. T. Motter & Co.

Bryan, J., delivered the opinion of the Court. To an action on a single hill the defendant pleaded six pleas. The third and sixth were held bad on demurrer. The third plea.avers in substance that it was agreed between the plaintiff and the defendant that if the plaintiff would relinquish all claim to the interest which had accrued on the principal sum due, the defendant would pay said principal in full satisfaction of the debt, and that in accordance with the agreement the defendant did pay said principal sum, and the plaintiff thereupon surrendered to him the writing obligatory. The interest was as much a part of the debt as the principal, and it was necessary that an agreement to waive it should be sustained by a valuable consideration. The agreement was simply a contract to pay a portion of the sum due in satisfaction of the whole. A debt cannot be discharged in this way. Jones vs. Ricketts, 7 Md., 116, and many other cases. The substance of the sixth plea was that the defendant owed the plaintiff the single bill in question, and also another debt, the amount of which was in dispute, and that in fulfillment of an agreement with the plaintiff he paid the amount of the single hill without interest (or, as stated in the words of the plea, the face of the hill), and also the amount of the other debt as claimed by the plaintiff, without further or other dispute in regard to the last mentioned debt, and without further delay as to the single bill, and that these payments were accepted by the plaintiff in full settlement of his claim. We do not see that the statements in the plea show any consideration for giving?up the interest due on the single hill. They show the payment of another debt; if the defendant paid no more than was due on this other debt, he gave nothing that would be a consideration in the view of the law. It [389] Is not alleged that more was paid than was justly due. It is undoubtedly true that the compromise of a doubtful •claim is a valuable consideration. The prevention of litigation is an object highly favored by the law. If there had been a controversy about this second claim, of which, the issue was considered by both parties doubtful, the payment of the claim in full would have been a valuable consideration. 1 Parsons on Contracts, 469. It is not averred in the plea that the amount due was doubtful, and that to prevent litigation respecting it, this settlement was made. Merely stating that the amount was in dispute is a very different thing. In Edwards vs. Baugh, 11 Meeson & Welsby, 641, Lord Abingee’s remarks are very apposite: “The declaration alleges that certain disputes and ■controversies were pending between the plaintiff and the defendant, whether the defendant was indebted to the plaintiff in a certain sum of money. There is nothing in the use of the word ‘ controversy ’ to render this a good •allegation of consideration. The controversy merely is, that the plaintiff^ claims the debt, and the other denies it.” In Addison on Contracts, 11, in a note we find these passages: “But if the rights of a claimant are doubtful, and are honestly contested, an agreement on the part of the debtor to pay something, and on claimant’s part to accept that in full, is valid, so far, at least, as the element of consideration is concerned.” “ Thus when a creditor and his debtor entertain doubts of the validity of the •debt, and make an honest compromise of it, a note given by the debtor for the compromise sum agreed on cannot be contested as lacking consideration.” And a large number of authorities are cited. On page 12 it is thus stated: “ But unless the debt is unliquidated, or some doubt exists as to the exact amount due, a promise by the creditor to discharge the residue on receiving payment of part is nudum pactum, and totally inoperative, because the debtor [390] is under a legal obligation to pay the whole demand.” In-our view of the case this plea is not a sufficient defence to-the action. (Decided 22nd June, 1887.) Judgment affirmed.