Cornell v. Taylor — 137 A.D. 496

Majority

p. 496

William T. Cornell, Appellant, v. Charles P. Taylor Respondent.

Third Department,

March 9, 1910.

Headnote

Accord and satisfaction — acceptance of part payment — honest dispute —moral obligation — question for jury — pleading — inconsistent . allegations.

The payment of part of an honestly disputed, debt when accepted, is an accord and satisfaction.

Where the legal obligation is acknowledged a dispute as to the moral obligation to pay cannot be made the-basis for an accord and satisfaction.

Where in an action for services rendered it appears that the agreed value of the . same was one hundred and forty dollars; that defendant after giving the plaintiff an order on an insurance company to secure the sum withdrew all the money owing to him by the company before the order was presented; that later he sent plaintiff a check for seventy-five dollars in full for the services, which plaintiff cashed after notifying defendant that he did not accept it as full payment, and it further appears that defendant while claiming to have ' been told the services were worth only seventy-five dollars, later admitted that he was-mistaken and promised to pay the balance, it is error for the. court, to nonsuit at the close of plaintiff’s case, for it is for the jury tó say whether there was an honest dispute as to the claim.

Allegations that the defendant fraudulently misrepresented that he had a policy ■ due from the insurance company and that he later withdrew the money therefor are inconsistent, but eliminating these, plaintiff could recover on an allegation of the fraudulent conversion by defendant of the funds held by the insurance company after he had assigned the same.

Houghton, J., dissented.

Appeal by the plaintiff, William T. Cornell, from a judgment of the Supreme Court in favor of the defendant, entered in the office

p. 497

of the clerk of the county of Broome on the 14th day of April, 1909, upon the dismissal of the complaint by direction of the court at the close of plaintiff’s case on a trial at the Broome Trial Term, and also from an order entered in said clerk’s office on the 6th day of May, 1909, denying the plaintiff’s motion for a new trial made upon the minutes.

In May, 1907, plaintiff furnished a casket to the defendant and performed services for him in connection with the death of his wife at the agreed sum of one hundred and forty dollars. To secure this sum defendant gave to the plaintiff an order upon the Prudential Life Insurance Company, in which company the life of his wife was insured for his benefit. Before ,the order reached the main office cf the company the defendant himself had drawn the full amount of the said life insurance. Thereafter the defendant sent to the plaintiff a money order for seventy-five dollars, together with a letter, which was interpreted by the plaintiff to state that the moneys were sent in full payment of the plaintiff’s claim. It was stated in the letter that the defendant had priced caskets in the city of Home and found that from sixty dollars to seventy-five dollars was a fair price for the casket furnished by the defendant and the work done. The plaintiff’s attorney wrote to the defendant that the order would not be accepted as payment in full, and that it would be in the hands of the plaintiff subject to his order. The order was, however, cashed by the plaintiff about the first of August. The learned trial judge has held as matter of law that this constituted an accord and satisfaction of the plaintiff’s claim.

O.liarles H. Stewart, for the appellant.

H. 0. Worden, for the respondent.

In Simons v. American Legion of Honor ( 178 N. Y. 265 ) the law seems to be declared bv the Court of Appeals as follows: “ Mow it is the settled law of this State that if a debt or claim be disputed or contingent at the time of payment, the payment when accepted of a part of the whole debt is a good satisfaction and it matters not that there was no solid foundation for the dispute.

p. 498

The test in such cases is, Was the dispute honest or fraudulent ? If honést, it affords the basis f 6r an accord, between the parties, which the law favors, the execution of which is the- satisfaction.” ■' Can it ' be held in this case that there was an honest dispute between the parties? "

It will be noticed that there Was no claim of fraudulent representation ; simply a claim that he liad agreed to give $140 for what in fact was worth, only $75. Without fraud or misrepresentation on the part of the defendant that would not constitute a dispute of the validity of the plaintiff’s . claim. A dispute as to the .moral' obligation to pay cannot be made a basis for an accord and satisfaction. But inore than that, thereafter the plaintiff went to Borne and was told by the defendant that he was-informed by a certain undertaker there that the claim was exorbitant. The plaintiff went with the defendant to the undertaker’s and there in the presence

■ of the plaintiff the undertaker denied that he had told the defendant anything of the kind. After this conversation the defendant admitted to the plaintiff that lie had made a mistake and promised to pay the balance of the bill before spring. These facts would seem to indicate that at least there was a question for the jury as td whether, there was an honest dispute which could be made the basis of an accord and satisfaction, for without such an honest dispute an agreement to take a lesser amount in payment of a liquidated claim is without consideration and void. (Fuller v. Kemp, 138 N. Y. 237 .)

But the defendant contends -that the action is brought for fraudulently misrepresenting that the defendant had the policy of insurance in the Prudential Life Insurance Company and that the plaintiff has failed, to prove any such cause of action.. It is difficult to-see why the plaintiff should have alleged such misrepresentation and thereafter have alleged that the defendant drew the moneys from the Prudential Life Insurance Company, which would seem to show ■ conclusively that there could not have been any fraudulent misrepresentation of the fact. Eliminating these inconsistent declarations, there remains an allegation of a fraudulent conversion of funds held by the Prudential Life Insurance Company for. the defendant- which he had assigned to the plaintiff, and such a cause of action would seem to be supported-by the proof. i

p. 499

The judgment and order should, therefore, be reversed and a new trial granted, with costs to appellant to abide the event.

All concurred, except Houghton, J., dissenting.

Judgment and order reversed and new trial granted, with costs to appellant to abide event;