Leafgreen v. Telford

Mr. Justice F. A. Smith delivered the opinion of the court. The principal ground upon which appellants ask a reversal of the judgment is based upon the rule of law that the payment of a part of a debt or liquidated damages is not a satisfaction of the whole demand. The application of the rule to the case at bar is made by the assertion that at the time the payment of $1,750 was made the claim amounted to $3,646.03. This amount was arrived at by taking the sum that was agreed upon, in the contract of arbitration as due from appellees to appellants, $4,007.03, and subtracting therefrom the sum of $361 found by the arbitrator to he due from appellants to appellees. It is urged that $3,646.03, with the interest accrued thereon, was a liquidated amount and that the payment of $1,750 by appellees was not an accord and satisfaction of the indebtedness but that appellees are only entitled to have that credited upon the liquidated amount due with interest, notwithstanding the settlement that was made and the receipt given which provided that the said $1,750 was'“in full of all claims and demands of every kind and nature down to the date hereof. ’ ’ It is further urged that a release of a liquidated indebtedness, executed by one of the partners after the dissolution' of a partnership, of the whole of the indebtedness upon a payment of a part, is not a valid release, and that therefore appellees are only entitled to a credit of $1,750 upon the liquidated indebtedness. On the other hand the contention of counsel for appellees is that there was an honest controversy between the parties at the time the settlement was made, and that a settlement of matters in dispute for a less sum than that which may be in fact actually due as a matter of law, and the payment and acceptance of the amount agreed upon in such settlement is a good accord and satisfaction. It is further contended that an accord and satisfaction with one of several joint creditors works a complete extinction of the claim, and is a good accord and satisfaction without showing that the one who made the settlement had authority from the other to make it. In our opinion there was a controversy between the parties, appellants and appellees, which was involved in a lawsuit, and there is no question but that while the lawsuit was pending appellees paid the $1,750 to one of the co-partners, plaintiffs in the action, and took from the co-partner with whom the settlement was made a receipt dated October 4,1906, as follows: “Received of Messrs. Telford & McWade through Edwy Logan Reeves and Chauncey W. Martyn, trustee, $1,-750.00, in full settlement of all claims and demands of every nature down to date. ’ ’ At the same time appellees took a stipulation from the plaintiffs in the action showing that the matters involved in the cause had been settled, and that the suit should be dismissed without costs. In 2nd Parsons on Contracts, page 618, the learned author says: “It has been said the payment of a part of a debt, or of liquidated damages is no satisfaction of the whole debt, even where the creditor agrees to receive a part for the whole and gives a receipt for the whole demand; and a plea of payment of a small sum in satisfaction of a larger is bad, even after verdict, but this rule must be so far qualified as not to include the common case of a payment of a debt by a fair and well understood compromise carried faithfully into effect, even though there were no release under seal.” In 1st Cyc. 329, it is said: “Where a claim is unliquidated or in dispute, payment and acceptance of a less sum than claimed, in satisfaction, operates as an accord and satisfaction, as the rule that the receiving of a part of the debt under an agreement that the same shall be in full satisfaction, is no bar to an action to recover the balance, does not apply while the plaintiff’s claim is disputed or unliquidated. * * *. The fact * * * that the amount accepted was much less than the creditor was entitled to receive and would have recovered, had he brought action, does not in any way affect the rule. ’ ’ The rule as to the parties between whom a good accord and satisfaction may be made with respect to joint creditors or plaintiffs, as stated in 1st Cyc. 318 is: ‘‘Accord and satisfaction with one of several plaintiffs or joint creditors is a complete extinction of the claim and is a good accord and satisfaction without showing that the one who made the settlement had authority from the others to do so.” This doctrine is supported by State v. Story, 57 Miss. 738, and cases there cited. In Austin v. Hall, 13 Johns. 286, in an action in trespass by tenants in common for being expelled from their land where there was a plea interposed to the effect that two of the plaintiffs in consideration of the sum of six cents had released all cause of action that they, or either of them, or any other person or persons had against the defendants on account of such trespass, it was held that the action is strictly a personal one and the plaintiffs were bound to join in it, and the release by two of the plaintiffs is a bar to the action and the defendant is entitled to judgment. Weston v. Weston, 35 Maine, 360, was a suit upon a promissory note which had become the property of two administrators by their charging themselves with it in their account as administrators. One of the administrators thereafter executed an instrument acknowledging payment and discharge by her intestate. It was held in a subsequent action on the note that by being so charged in the administrators’ account the note became the property of both administrators, and either of them could receive payment of it or discharge it. The same rule is announced in 2 Chitty on Contracts, 1132. In onr opinion the discharge on settlement made at the time of the payment of $1,750 by appellees was valid and binding upon both appellants, and the court did not err in its finding and judgment for appellees. The judgment is therefore affirmed. Affirmed.