Simons v. Supreme Council American Legion of Honor

Defendant insists that it should have had judgment against plaintiff on the ground that plaintiff’s claim grows out of a-situation which was included in an accord and satisfaction; that there was a dispute between plaintiff’s assignors and defendant as to the amount due the former from the latter ■— an honest dispute — which resulted in the proposition by defendant to pay a given sum and no more in settlement of the matter, for which sum a draft was ‘accepted.

Now it is the settled law of this state that if a debt or claim be disputed or contingent at the timq 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. The test in such cases is, Was the dispute honest or fraudulent ? If honest, it affords the basis for an accord between the parties, which the law favors, the execution of which is the satisfaction.

The father of the assignors of plaintiff obtained a benefit certificate, or policy of insurance, issued by defendant whereby the latter agreed to pay to the beneficiaries, plaintiff’s assignors, §5,000 upon proof of the death of insured. Insured died October 2,1900. Had he died two days earlier this controversy could not have arisen as then according to. the policy and defendant’s by-laws the beneficiaries would have been entitled to §5,000 beyond dispute and a payment of a less sum would not have prevented the beneficiaries or their assignors from maintaining an action to recover the balance. But defendant had amended its by-laws months before so as to reduce the amount payable on all policies maturing after October 1, 1900, §5,000 policies being reduced to §2,000. Defendant’s by-laws ■—■ made a part of the policy — authorized amendment. So when insured died this policy represented but §2,000 according to the by-laws.

It is not pretended that defendant’s representative fraudulently represented to plaintiff’s assignors that the policy had been reduced to $2,000. It had been so reduced by the formal action of defendant and according to a decision in this state its action was legal. When, therefore, its representative insisted that the policy had been reduced to $2,000 he stated the contract as defendant understood it and believed it to be. And hence when lie said that after deducting 5 per cent—as to which there is no controversy — there would remain but $1,900 due the beneficiaries, he stated defendant’s belief accurately. The beneficiaries asked for the $5,000. They were disappointed at the reduction. Here then was the dispute. The beneficiaries could have refused to accept the $1,900, and brought suit for the entire amount. But the only decision of moment in this state upon the subject held that defendant’s action was authorized and legal. The only other course open was to settle.

The law wisely,favors settlement, and where the parties are in a position to deal with one another at arm’s length, as these jjarties were, the law will support their settlement. How is the settlement in this case evidenced ? By the acceptance of the draft for $4,900 by the beneficiaries after they had been told by defendant’s representatives that such sum would be paid only on condition that the beneficiaries sign the blank

The beneficiaries would have it now that one of them, protested. But there is no protest in the papers. The surrender, which was indorsed upon the certificate of insurance, was signed by both beneficiaries, and reads “undersigned beneficiary named in the within benefit certificate acknowledges having received the amount herein agreed to be paid, and this certificate is hereby surrendered to the Supreme Council American Legion of Honor for cancellation.” How above that indorsement one of the beneficiaries, Howard L. Keyser, wrote the following: “ Receipt below given for $1900 only. 2 — 27 — 01.” That statement represents the simple fact that they received under the certificate $1,900. And it does not affect the character and legal effect of the instrument any more than as if the certificate of surrender had stated that “ Undersigned beneficiary named in the. within benefit certificate hereby acknowledges having received $1,900, the amount herein agreed to be paid.” It simply adds to the surrender certificate—which says the beneficiaries have received the amount agreed to be paid — what that amount was.

There is very little evidence of protest in the testimony of the beneficiary Keyser. But if it were far stronger, it could have no legal effect as against the written evidence of this settlement, consisting of the signed surrender of the policy and the draft payable to the beneficiaries, and not received until after the signing of the "surrender and the delivering up of the policy, as testified to by the beneficiary Keyser. He said

That decision standing alone would, perhaps, require a reversal of this judgment. But it is not invoked for that purpose, as in my view an accord and satisfaction in law was established by plaintiff’s proofs. That case is cited in order primarily that attention may be called to a portion of the reasoning of the court. Judge Miller said—-all of. his associates concurring — that “There certainly could not be higher evidence of an intention to discharge and cancel a debt than by a destruction and surrender of the instrument which created it, to a party who is liable by virtue of the same.”

The surrender of the policy in this case, with the statement in writing that it was surrendered for cancellation, was evidence of- an intention to discharge and cancel the policy. It was not only evidence of it, but evidence of such a vigorous character that according to the opinion quoted there could be no higher evidence of such an intention.

This case, however, is stronger in favor of defendant than 'that. There, there was no evidence that plaintiff received anything. Here, plaintiff’s assignors received $1,900, which they admitted they were told they would not receive unless they did surrender the policy for cancellation. There is no evidence of any kind in contradiction of this evidence of intention, so that no opportunity is presented for a submission of such a question to the jury.

An attempt is made by counsel for plaintiff to persuade us that this case is so nearly analogous to Komp v. Raymond ( 175 N. Y. 102 ) as to prevent our disposition of the case by the application of well-established legal principles. As I understand the facts of that case the decision is not applicable to this one, but the general principles laid down in that case are in harmony with those asserted here. In Komi’s case the parties differed as to the amount due and as to the meaning of their contract. Plaintiff finally accepted the amount defendant conceded to be due, and receipted for the same: but he offered to prove that he did so with the distinct understanding that if he could bring proof to defendant that he was wrong, defendant would pay the balance, and at the same time he said : “ If you do not pay me that balance I will take the thing to court and we will leave it to a court and jury to settle.” This evidence was rejected, and this court holds he had a right to prove it. But in the case under consideration no such act was proved, nor was any attempt made to prove it, or to prove any other fact tending to cut down the legal force and effect of the surrender in writing of the policy in consideration of the draft.

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

Judgment reversed, etc.