Work v. Beach — 24 N.Y. St. Rep. 256

Majority

p. 256

Frank Work et al., App’lts, v. Miles Beach, Resp’t.

(Supreme Court, General Term, First Department,

Filed May 24, 1889.)

Headnote

1. Account stated—When express promise excludes implied promise.

Where an 'account is stated, and as a part of the transaction an express promise is given to pay upon a condition, that excludes the implied promise, because an express contract to do a thing excludes the idea of there being an implied contract.

2. Same—Accobd and satisfaction—Condition, when controlling.

The plaintiff and defendant had a settlement of certain accounts; in

p. 257

connection with the settlement, and as a condition upon which defendant consented to the accounts as stated,to the sale of certain securities held by plaintiff for his account, and upon which he withdrew his defense to an action on a joint account of himself and another, was an express promise on his part to pay when he was able. Held, that after plaintiffs accepted the withdrawal of the defense, and the sale of the securities, and accepted the assumption of liability by the defendant, they cannot escape the condition upon which that liability was incurred.

'3. Same—Proof of condition, when required.

Held, that the mere fact that the account was duly admitted correct by the defendant himself, does not deprive him of the conditions with which that admission was coupled, and that he could not be called upon to pay, without proof of the condition.

Appeal from interlocutory judgment sustaining demurrer to the complaint.

The substance of the complaint is, that prior to February 25, 1885, defendant had two accounts with the plaintiffs, who were stock brokers; one an individual account and the other a joint account with one Marston. That in June, 1884, the brokers, not having sufficient margin upon the joint account, began an action upon it against the defendant and Marston to recover a balance due thereon, and the defendant and Marston appeared and contested their liability. That in December, 1884, and before any trial, the defendant requested the plaintiffs to discontinue said action and sell all of his margins held by them for both accounts, and, in consideration of such discontinuance, agreed that the proceeds of all the margins on both accounts should be credited in one account; that all advances on both accounts should be charged in the same account; that the two accounts should be consolidated into said one account; that he would individually assume liability for the balance due on the accounts after such consolidation, and as soon as the accounts were adjusted, consolidated and reduced to one account, he would examine it, and, if correct, would adopt it as a liability against himself “ and pay the amount due when he could do so.” “ That thereupon plaintiffs accepted and assented to said proposition, and in conformity thereto ” discontinued the action, sold the securities, consolidated the accounts, making the debits and credits as agreed, and on or about February 25, 1885, rendered to the defendant the consolidated account, showing a balance of $14,570.68 against him, and that the defendant examined the account, retained it for more than ten days, and declared to the plaintiffs that it was correct.

The complaint then avers that thereupon the said account became an account stated, and the fact that the balance has not been paid.

The ground of demurrer is, that the complaint does not state facts sufficient to constitute a cause of .action,

Henry 8. Bennet, for app’lts; A. O. Brown, for resp’t.

It may not be at all necessary to add anything to the opinion of the court below which, satisfactorily, and, we think, conclusively, disposes of the questions r'aised upon this appeal.

It may, however, be necessary to consider one or two points made by the counsel for the plaintiff, in which it is claimed that the court below misapprehended the theory of the complaint, in that the complaint excludes the idea that there was a new agreement which changed the original cause of action, or discharged the original debt. We think that upon an examination of this complaint, it. clearly appears that the original debt was discharged, and a new obligation created by the transactions therein recited.

It appears from the complaint that the defendant had employed the plaintiffs to buy and sell for himself individually, and also for the-joint account of himself and another, various stocks, bonds and other securities dealt in on the stock exchange ; that the plaintiffs advanced money for making these purchases, and the defendants agreed to leave with them said securities so purchased, or other valuable securities, sufficient to keep them at all times fully indemnified and secured; that for sometime, previous to June, 1884, the joint account was in arrears, and the plaintiffs demanded further security and indemnification from the defendant and his copartrier, and brought an action against them to recover the amount advanced which had become due on the joint account; that the defendant duly appeared and interposed a defense, contesting their liability on said account. While such action was pending, a settlement of that litigation was made, the plaintiffs agreeing to discon,tinue the action, and the defendant permitting them to sell the securities held by them both for his individual and joint accounts, and that the proceeds should be credited in one account, and that the advance on both accounts should be also charged in one account, and that such account should be a consolidation of both accounts, and that he would individually assume liability for the balance due on such account after such consolidation, and pay the amount due when he could do so. If this arrangement was not a discharge of the original debt, it is difficult to see how there could be an accord and satisfaction without actual payment.

Claims were being made against the defendant and another, which were contested. The plaintiffs held securities which belonged to him individually, and which had been deposited as security for his individual account and the joint account. The contest as to the liability on the joint account is settled by this arrangement, and the defendant permits the securities to be sold. The wording of the complaint that he requested them to be sold, has no particular significance. The defendant permits the plaintiff to sell the securities,

p. 259

and on consideration of discontinuance of the action, assumes the whole liability, and promises to pay the same when he is able.

It is true that this transaction made this an account stated when the accounts were approved by the defendant as they were, and that in • the absence of any promise to pay, the law would imply a promise. But where an account is stated, and as part of the transaction, an express promise is given to pay upon a condition, that excludes the implied promise, because an express contract to do a thing excludes the idea of there being an implied contract. For example, when a man purchases goods, and nothing is said about prices or time of payment, the law implies a contract to pay the value of the goods upon delivery. If, however, the purchaser makes an express promise to pay in thirty days after delivery, what, under such circumstances, becomes of the implied promise? It is clear that it does not arise.

So in the case at bar, if there had been a settlement of these accounts, and simply an account stated had between these parties, an implied promise to pay would naturally have arisen. But in connection with the settlement is an express promise upon the part of the defendant to pay when he. is able. That is the condition upon which he consents to the accounts, and to the sale of the securities, and upon which he withdraws his defense to the joint account. Now, after the plaintiffs have accepted the withdrawal of the defense and the sale of the securities,’ and have accepted the assumption of liability by the defendant, it seems to be difficult to see how they can escape the condition upon which that liability was incurred. In other words they propose to have the benefit arising from the ■settlement relieved from the burden, which was specifically attached to it. The mere fact that the account was duly admitted correct by the defendant himself does not deprive him of the conditions with which that admission was coupled. '

It is urged, however, that, assuming the appellants to have agreed to forbear, where is to be found the considera - tian sufficient to support so important an agreement?

The consideration seems to be apparent, and the whole question is begged when it is claimed that he had no defense to the account, for he investigated it and admitted its justice, since the admission of the account was induced by the acceptance of his promise that he should not be called upon to pay it until he was able, another instance in which the plaintiffs seem to claim every part of the bargain and settlement which tend in their favor without taking into

p. 260

consideration anything given to the defendant because of the withdrawal of his contest.

If the defendant had stated, “We will settle our differences; we will agree upon a certain sum which I am to pay • in six months,” could the plaintiffs, their claim being admitted, require the defendant .to pay immediately ? The falsity of this, position seems to be established the moment it is stated.- Great stress is laid upon the hardship of such a contract to the plaintiffs. It seems to us that it would be a gross hardship after the defendant admitted this account upon the express undertaking that he was to pay when he was able, and presumably not before, that he should be called upon to pay, without proof of this condition. We know nothing in regard to the. hardship of the agreement. The defense which was withdrawn to the joint account may-have been perfectly good, or it may have been a defense in which the chances of success were reasonable, and the defendant, for the purpose of getting the time in which to pay the alleged claim, may have been willing to waive his chances of success. He having done so, there is certainly no hardship in calling upon the plaintiffs to adhere to the bargain which they made with the defendant, and which was the basis of the withdrawal of the defense to the action upon the joint account.

The judgment must be affirmed, with costs.

Bartlett, J., concurs.