Farmer v. Medico-Legal Journal Ass'n — 26 N.Y. St. Rep. 940

Majority

p. 940

Aaron D. Farmer et al., Resp’ts, v. The Medico-Legal Journal Association and The Railway & General Printing Company, App’lts.

(City Court of New York, General Term,

Filed November 4, 1889.)

Headnote

Accord and satieaction — Hinds or parties must meet.

Plaintiffs agreed to accept 50 percent in settlement of their claim against an indorser on a note. The amount, with costs, was sent and consent returned to discontinue the action against the indorser, who declined to accept it unless it included the maker also. Plaintiffs declined to do so and returned the costs. Held, that as the minds of the parties did not meet, there was no valid executed accord and satisfaction.

Appeal from judgment directed by trial judge in favor of the plaintiffs.

Clarke Bell and Roger Foster, for app’lts; Thornton, Earl & Kiendl, for resp’ts.

The action is on a promissory note made by the Medico-Legal Journal Association to the order of the Bailway & General Printing Co., and by it endorsed and delivered to the plaintiff. It is dated November 5, 1887, and fell due March 8, 1888. Prior to the maturity of the note, to wit, in the early part of February, 1888, the Bailway & General Printing Company found itself embarrassed, and the plaintiffs agreed to accept from it fifty cents on the dollar, in settlement of their claim against the Bailway & Printing Co. The latter company was willing to settle on this basis, and after the present action was commenced sent an endorsed note according to the terms of the compromise. The plaintiff’s attorneys accepted, the note and $15 taxable costs, and returned a consent discontinuing the action against the Bailway & Printing Co. The latter declined to accept the discontinuance unless it embraced the Medico-Legal Journal Association, the maker of the note in suit, as well. This the plaintiffs declined to do,

p. 941

claiming that the proposed compromise was merely to release the Eailway & Printing Co. from its liability, but was not to discharge the Medico-Legal Journal Association. The costs were thereupon returned, and the action proceeded to trial, both defendants pleading the alleged compromise in defense as an accord and satisfaction. We hold that what occurred falls short of an executed accord and satisfaction. The Eailway & Printing Co. evidently intended to compromise its liability for fifty cents on the dollar, and to repossess itself of the note in suit at the same time.

The plaintiffs evidently intended to release the Eailway & Printing Company from liability as endorser for fifty cents on the dollar, reserving its right to collect the balance from the Medico-Legal Journal Association, the maker of the note. When it was ascertained that the parties had not - united in the same understanding, the compromise was abandoned, and the parties were restored to their former position.

A misunderstanding such as occurred here does not make a contract. Indeed, the elementary books lay it down as a legal axiom, that there is no contract unless the parties thereto assent to the same thing and in the same sense, and that a proposition becomes a contract only when it is met by an acceptance which corresponds with it entirely and adequately. An endorser on a note may lawfully effect .a discharge from liability by the consent of the creditor without at all impairing the remedies of the latter against the principal debtor, the maker, or he may arrange that the creditor shall enforce the obligation as against the maker for any sum due by the latter, returning the overplus after paying the creditor’s demand against the endorser, the creditor being in respect to the amount due to himself an owner and in respect to the overplus a trustee of an express trust for the benefit of the endorser, or the latter may agree with the creditor that the sum paid to the latter for the endorser’s discharge shall operate as a payment pro tanto, as none of these arrangements work any prejudice to the principal debtor, in respect to whom the endorser is a mere surety, and as between whom the surety is entitled to full payment of the obligation.

As it is evident the minds of the contracting parties did not meet, there was no valid executed accord and satisfaction of the note in suit, and the judgment directed by the trial judge must be affirmed, with costs.

McAdam, Ch. J., and Holme, J., concur.