Nathan v. Smith

This is an appeal from a judgment after a trial had before the justice at trial term without a jury. The action was brought to recover a balance alleged to be due for work, labor, and services, and materials furnished. The defense was accord and satisfaction.

It appears that the plaintiffs brought a former action to recover an alleged balance of $276, and that, while suit was pending and before issue joined, an understanding was arrived at between the parties and their attorneys that, if the defendant would pay to the plaintiffs’ attorneys $25 for their costs and expenses of the action, and give two notes, of $100 each, payable at a future day, the plaintiffs would accept this arrangement as a settlement of the matters in dispute, and would discontinue the action.. The $25 was paid, and the notes given and received, and the action was thereupon discontinued. One of the notes was paid at or about maturity, and the other note was not paid, and the plaintiffs thereupon claimed the right to rescind, and to stand upon the original contract, and in the complaint in the present action ask to recover the sum of $176, offering therein to return the unpaid note.

The question of accord and satisfaction has been one of frequent and almost exhaustive discussion in the courts of this and other jurisdictions in this country, and in the English courts, for a period of more than 200 years, and the application of the principle involved has been one of different judicial determination in the different tribunals. What may have been sufficient to sustain the rule in one state has in others been held to 'be inadequate, etc. As we have said, the authorities somewhat differ as to the interpretation of the rule and its exact application. Two elements necessarily enter into the question of accord and satisfaction, namely: The accord is the agreement for the reception of the thing in discharge of the debt; the satis

Our attention is called to the case of Jaffray v. Davis, 124 N. Y. 164 , 26 N. E. 351 , wherein it is said:

“The doctrine of stare decisis is further illustrated by the course of judicial decisions upon this subject, for, while the courts still hold to the doctrine of the Pinnell and Cumber-Wane Cases (cited in the opinion), they have seemed to seize with avidity upon any consideration to support the agreement to accept the lesser sum in satisfaction of the larger.”

In the Cumber-Wane Case, 1 Strange, 426, it was held that a creditor can never bind himself by a simple agreement to accept a smaller sum in lieu of an ascertained debt of a larger amount, such agreement being nudum pactum; but if there be any benefit, or even any legal possibility of benefit, to the creditor thrown in, that additional weight will turn the scale, and render the consideration sufficient to support the agreement.

In the case of Goddard v. O’Brien, 9 Q. B. Div. 37, where “A., being indebted to B. in £125. 7s. and 9d., for goods sold and delivered, gave B. a check negotiable for £100, payable on demand, which B. accepted in satisfaction,” this was held to be a good satisfaction; and this latter case is cited with approval in Jaffray v. Davis, supra, Baron Huddleston saying, in the Goddard Case, that the circumstances of negotiability made it, in fact, a different thing and more advantageous than the original debt. Humorous authorities are cited in the Jaffray Case, and of instances where the principle of accord and satisfaction has been held to apply, such as the giving of further security for a part of the debt or other security, though for less sum than the debt and acceptance of it in full of all demands, as in Le Page v. McCrea, 1 Wend. 164 , and in the case of Boyd v. Hitchcock, 20 Johns. 76 . Where a debt of $820 upon a book account was satisfied by the payment of $1 by calling the balance a gift, though the balance was not delivered except by fiction, and the receipt was in usual form, and was silent upon the subject of a gift, as in Gray v. Barton, 55 N. Y. 68 , and this later authority was approved in Ferry v. Stephens, 66 N. Y. 321 . In all these cases the new agreement was held sufficient, and the court of appeals, proceeding further, in the Jaffray Case said: “The state of the law upon this subject under the modification of later decisions, both in England and in this country, would seem to be as expressed in Goddard v. O’Brien, supra.” And we are content with this interpretation and application of the principle..

Judgment reversed and new trial ordered, with costs to the appellant to abide the event. All concur.