Coffeyville State Bank v. Lembeck, 51013

• Citation: 610 P.2d 616,227 Kan. 857
• Decision Date: 10 May 1980
• Docket Number: No. 51013,51013
• Court: United States State Supreme Court of Kansas
• Parties: COFFEYVILLE STATE BANK, Appellant, v. Joseph W. LEMBECK and Carlene C. Lembeck, Appellees.

Page 616

610 P.2d 616

227 Kan. 857

COFFEYVILLE STATE BANK, Appellant, v. Joseph W. LEMBECK and Carlene C. Lembeck, Appellees.

No. 51013.

Supreme Court of Kansas.

May 10, 1980.

Syllabus by the Court

1. An executory accord is an agreement for the future discharge of an existing claim by substituted performance and it is the promised performance that is to discharge the existing claim, not the promise to render performance. Following Elliott v. Whitney, 215 Kan. 256, Syl. P 2, 524 P.2d 699 (1974).

2. An executory accord operates on a suspension of the original claim and, in the event of breach of an executory accord by the debtor, the prior obligation is again enforceable by the creditor. Where, however, the creditor sues on the accord and recovers a judgment, rather than suing on the original claim, the creditor is estopped from attempting to revive the original claim. In a civil action, the record is examined and it is held, the trial court did not err in granting the appellees summary judgment.

Thomas A. DeVore, of Hall, Levy, Lively & Viets, Coffeyville, argued the cause and was on the brief for appellant.

Aubrey Neale, of Neale & Neale, Coffeyville, argued the cause and Glen L. Tongier, Coffeyville, was with him on the brief for appellees.

HERD, Justice:

This is an appeal by Coffeyville State Bank from a summary judgment granted to Joseph W. Lembeck and Carlene C. Lembeck, husband and wife.

The facts are undisputed. On August 30, 1971, Joseph W. Lembeck gave Coffeyville State Bank a promissory note in the amount of $60,718.17 due in 90 days, with interest at 81/2% per annum until maturity and 10% per annum from the date of maturity until paid. The note was secured by personal property. Carlene C. Lembeck did not sign the note. The note was not paid according to its terms and on November 9, 1971, the bank commenced an action against the Lembecks in the district court of Neosho County for judgment on the note.

On May 4, 1972, the parties entered into the following agreement:

"THIS AGREEMENT made this 4th day of May, 1972, by and between Coffeyville State Bank, a Corporation of Coffeyville, Kansas, hereinafter called first party; and Joseph W. Lembeck and Carlene C. Lembeck, husband and wife, of Neosho County, Kansas, hereinafter called second parties.

"WHEREAS, the second parties are indebted to the first party on a certain promissory note dated August 30, 1971, in the principal sum of $60,718.17 with interest of 81/2 percent per annum from August 30, 1971, and WHEREAS, first party has filed suit in the District Court of Neosho County, Kansas, sitting at Erie, Kansas, against the defendant, Joseph W. Lembeck, in connection with said indebtedness; and the parties have reached an agreement in connection with said litigation.

"NOW, THEREFORE, it is agreed by and between the parties as follows:

"1. Second parties have turned over the personal property which secures the promissory note mentioned herein to first party, and the proceeds from the sale of this personal property shall be paid to Coffeyville State Bank.

"2. Second parties have deeded to first party under date of April 29, 1972, their equity in 80 acres of land in Nowata County, Oklahoma, subject to certain liens and encumbrances against said real property.

"3. Second parties have executed a certain promissory note in the amount of $8,000.00 in favor of first party, payable at the rate of $200.00 per month without interest, the first payment to be made on May 10, 1972, and a like payment of $200.00 each month thereafter until fully paid.

"4. First party, in consideration of the foregoing, covenants and agrees that the litigation pending in Neosho County, Kansas, will be dismissed without prejudice and that upon the second parties' payment of the note mentioned herein as agreed, all of second parties' obligations and liabilities to the Coffeyville State Bank which have been the subject of the litigation in Neosho County, Kansas, will be satisfied and canceled.

"5. Second parties are hereby given 30 days from this date to remove their personal effects from the property located in Nowata County, Oklahoma.

"IN WITNESS WHEREOF, parties to this Agreement have hereunto set their hands the day and year first above written.

COFFEYVILLE STATE BANK, A

Corporation, first party

By:/s/ F. C. Harlow

F. C. Harlow, President

/s/ Joseph W. Lembeck

Joseph W. Lembeck,

second party

/s/ Carlene C. Lembeck

Carlene C. Lembeck,

second party"

They made one variation from the terms of the agreement. A promissory note in the amount of $8900, instead of $8000, was executed by the Lembecks on April 24, 1972, in favor of the bank, payable without interest at the rate of $200 per month beginning June 10, 1972. Pursuant to the settlement agreement the Lembecks delivered to the bank their personal property and a deed to the 80 acres of land in Nowata County, Oklahoma, on April 24, 1972. Thereafter, the action on the note in Neosho County was dismissed without prejudice.

The defendants made payments on the settlement note until December, 1972, and thereafter were in default until June 24, 1975, when the settlement agreement was amended. The amendment reduced the monthly payment to $100 and stated the balance owed was $5787. The Lembecks failed to pay according to this amended settlement agreement and, on December 9, 1975, the bank filed an action in the district court of Montgomery County for judgment on the settlement note. Judgment was rendered on February 4, 1976, in the amount of $5687 in favor of the bank. The bank acknowledged payment of the judgment in full on October 25, 1978.

In the course of obtaining satisfaction of its judgment against the Lembecks', the bank learned that Joseph Lembeck's father had died in Nowata County, Oklahoma, on March 29, 1978, and that Lembeck would inherit one-half of an estate valued at approximately $250,000. The bank filed suit on the original $60,718.17 note on June 23, 1978, alleging the settlement agreement was an accord upon which judgment had been rendered. The Lembecks answered, alleging the petition failed to state a claim against the defendants upon which relief could be granted and affirmatively pled res judicata,...