In Jackson v. Volkening (81 App. Div. 36, 43; affd., 178 N.Y. 562) we find the following language used: "The rule of law is well established, undoubtedly, that where a liquidated sum is due, the payment of part only, although accepted in satisfaction, is not, for want of consideration, a discharge of the entire indebtedness, but this rule is not looked upon with favor and is confined strictly to cases falling within it.Summary of this case from Schnell v. Perlmon
March Term, 1903.
Carlisle Norwood, for the appellant.
Frederick Hulse, for the respondent.
We think the defendant made out a prima facie case of accord and satisfaction, and, upon the undisputed facts in the record, in the absence of evidence that his claim to a rebate was made in bad faith, a verdict should have been directed for him instead of for the plaintiff. The rule of law is well established, undoubtedly, that where a liquidated sum is due, the payment of part only, although accepted in satisfaction, is not, for want of consideration, a discharge of the entire indebtedness, but this rule is not looked upon with favor and is confined strictly to cases falling within it. ( Ryan v. Ward, 48 N.Y. 204, 208; Jaffray v. Davis, 124 id. 164; Kellogg v. Richards, 14 Wend. 116; Chicago, Milwaukee, etc., Ry. Co. v. Clark, 178 U.S. 353.) In Kellogg v. Richards ( supra), where the acceptance of a promissory note of a third party in payment of a larger liquidated claim was held to be a complete discharge, NELSON, J., said: "It is true there does not seem to be much, if any, ground for distinction between such a case and one where a less sum of money is paid and agreed to be accepted in full, which would not be a good plea. * * * The rule that the payment of a less sum of money, though agreed by the plaintiff to be received in full satisfaction of a debt exceeding that amount, shall not be so considered in contemplation of law, is technical and not very well supported by reason. Courts, therefore, have departed from it upon slight distinctions."
The compromise of a doubtful claim, however, is a good consideration for the payment of money, and, in the absence of fraud or mistake, the settlement cannot be subsequently questioned on the ground that the claim could not have been enforced. ( Stewart v. Ahrenfeldt, 4 Den. 189; Andrews v. Brewster, 124 N.Y. 433, 439.) In the Jaffray Case ( supra) the rule was stated and approved that "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. * * * All that is necessary to produce satisfaction of the former agreement is a sufficient consideration to support the substituted agreement. The doctrine is fully sustained in the opinion of Judge ANDREWS in Allison v. Abendroth ( 108 N.Y. 470), from which I quote: `But it is held that where there is an independent consideration, or the creditor receives any benefit or is put in a better position, or one from which there may be legal possibility of benefit to which he was not entitled except for the agreement, then the agreement is not nudum pactum, and the doctrine of the common law, to which we have adverted, has no application.' Upon this distinction the cases rest, which hold that the acceptance by the creditor in discharge of the debt of a different thing from that contracted to be paid, although of much less pecuniary value or amount, is a good satisfaction, as, for example, a negotiable instrument binding the debtor and a third person for a smaller sum." In the case at bar it is unnecessary to determine whether the defendant's claim for a rebate was valid and enforcible. The court will not inquire into the merits; it is sufficient if there was any plausible ground for a bona fide claim, and it was made in good faith, and it is immaterial whether the dispute arose over a question of fact or of law. ( General Electric Co. v. Nassau Electric Co., 36 App. Div. 510; affd., 161 N.Y. 656; Hills v. Sommer, 53 Hun, 392; Kine v. Farrell, 71 App. Div. 219; Andrews v. Brewster, supra; Goodrich v. Sanderson, 35 App. Div. 546, 551; Vorhis v. Elias, 54 id. 412; Whitaker v. Eilenberg, 70 id. 489; Zoebisch v. Von Minden, 120 N.Y. 406; Fire Insurance Assn. v. Wickham, 141 U.S. 564.) The defendant clearly released his claim to the rebate and canceled others for which he made no deductions. The settlement thereof would be binding upon him as well as upon the plaintiff; and the law will presume a benefit to the plaintiff and a loss to the defendant by the release of these claims. ( Andrews v. Brewster, supra, 439.) One block of marble did not answer the requirements of the contract at all, and might have been rejected. The weakness of defendant's claim lay in the fact that with some knowledge of the quality of the marble he paid for it; but the circumstances under which payment was made, it is contended, debarred the plaintiff from claiming an acceptance or that the payment was voluntary. If the claim was asserted in good faith, as the evidence shows, even though it was invalid on account of a misunderstanding of the facts or of the law, it affords a sufficient consideration for the new agreement evidenced by the accord and satisfaction. ( Hills v. Sommer, supra.) It was not denied that the defendant had not paid the balance of the account on which the claim is based; but he claimed an offset on account of rebates concerning other marble for which the accounts between the parties showed that he had paid and thus the balance of the account or the extent of the defendant's liability was disputed. In Nassoiy v. Tomlinson ( 148 N.Y. 326) the plaintiff claimed a commission of five per cent for selling the defendant's farm. The defendant did not dispute the employment or the rendition of the services; but controverted the rate of commissions, he conceding his liability for one per cent. The defendant inclosed a check for $300 to the plaintiff, that being the amount of the commissions figured at the rate of one per centum, with a blank receipt reciting that it was in full, which he requested the plaintiff to sign and return. The plaintiff used the check and did not sign or return the receipt. The court held that this was an unliquidated demand within the rule, and that it did not become a liquidated demand even as to the amount for which the defendant conceded his liability; and, although the defendant received no benefit, having paid only the amount which he did not dispute, yet it was held that this constituted an accord and satisfaction. I see no difference in principle between that case and this; and that there is no difference, in the application of this rule concerning an accord and satisfaction, between a dispute directly involving the claim upon which an action is founded and an offset claimed against the same, is established by high authority. ( Ostrander v. Scott, 161 Ill. 339; Tanner v. Merrill, 108 Mich. 58; Chicago, Milwaukee, etc., Ry. Co. v. Clark, supra.)
The case is this: The plaintiff had a claim against the defendant for a balance of account. The defendant, in good faith, asserted something more than a colorable claim as an offset thereto. Thus the defendant's liability became unliquidated, and he tendered the plaintiff a check in full settlement and imposed as a condition that its acceptance and use should constitute full satisfaction of the plaintiff's demand against him. This, I think, constitutes an accord and satisfaction within all the authorities. Moreover, it is by no means clear that the plaintiff's claim, standing alone, was liquidated. The contract furnished the basis of liability, but the amount depended upon the measurement of the marble and the lighterage to be agreed upon.
It follows, therefore, that the judgment should be reversed and a new trial granted, with costs to appellant to abide the event.
VAN BRUNT, P.J., INGRAHAM, McLAUGHLIN and HATCH, JJ., concurred.
Judgment reversed, new trial ordered, costs to appellant to abide event.