Fred v. Fred

• Decision Date: 09 December 1901
• Citation: 50 A. 776
• Parties: FRED v. FRED et al.
• Court: New Jersey Court of Chancery

50 A. 776

FRED

v. FRED et al.

Court of Chancery of New Jersey.

Dec. 9, 1901.

Suit for specific performance by Sarah R. Fred against Abraham Fred and others. Conditional decree for complainant.

John Whitehead, for complainant.

Samuel Kalisch, for defendants.

EMERY, V. C. The substantial object of the amended bill, which is filed by the wife as a judgment creditor, is to compel the specific performance of an agreement made with her by her husband, as a judgment debtor, for the compromise of the judgment debt, by the delivery of notes for a less amount than the debt, secured by the indorsement of a third person. Complainant, who is the wife of the defendant Abraham Fred, recovered a judgment against her husband in a court of North Dakota, on December 7, 1896, for $5,000 for alimony and support of their child and for her costs and disbursements in the suit, together with the sum of $500 as attorney's fees as part of the taxed costs. On or about June 13, 1898, an agreement for the compromise and settlement of this judgment was made at Newark, where the husband then resided. The agreement for compromise was verbal, and the statements of the bill and answer disagree as to some of the terms of the agreement. They agree, however, that in carrying out the compromise three notes of her husband, aggregating $1,000, indorsed by the defendant Lewis, were to be delivered to the defendant Rev. Joseph Leucht, and that he was to deliver them to complainant upon the presentation of a written consent, signed by the defendants Jacob L. Newman and Leonard Kalisch. These two defendants were the respective attorneys of the wife and husband. A receipt for the notes to be so delivered was signed by Mr. Leucht, but by no other person; nor did this receipt purport to contain any statement of the agreement made between the complainant and the parties to the notes as to their consideration or the conditions upon which the written consent to delivery was to be given by the attorneys for the parties. The three notes were dated on June 13, 1898, one for $250, payable three months after date; one for $250, payable four months after date; and one for $500, payable fourteen months after date, with interest.

The amended bill alleges that complainant agreed to accept $1,000 in full payment and satisfaction of the sum of $5,000 ordered to be paid to her by the decree, to be secured by three notes, and that the notes were to be deposited with Mr. Leucht until Mr. Kalisch, for the defendant Fred, could ascertain from Dakota the proper method of satisfying the decree for $5,000, and when he learned this the notes should be delivered up to complainant. The bill then alleges that Mr. Kalisch has never advised complainant what was necessary to secure a cancellation of the decree. Complainant tenders herself ready to execute all documents or writings necessary under the laws of North Dakota to satisfy the decree for $5,000. The defendants answer jointly, and as to the terms of compromise and the conditions upon which the notes were delivered to Mr. Leucht defendant Fred says that he made an agreement with complainant to pay her $1,000 in full payment and satisfaction of the decree, the complainant agreeing to satisfy the decree of record if he would agree to pay her the $1,000 by the three notes, except that the first note of $250 was to be paid whether the decree was satisfied or not, but that the $750 remaining was not to be paid until the decree was first satisfied and canceled of record; that Fred's attorney, Mr. Leonard Kalisch, upon receiving a copy of the decree which complainant was to furnish, was to advise as to the method of obtaining cancellation of the decree, and that in the meantime the notes were to be deposited with defendant Leucht, not to be delivered to complainant until the copy of the decree was first produced, to ascertain complainant's right to cancel, and not until complainant caused the decree to be legally satisfied and canceled of record. The execution of the notes is then, by Fred's answer, stated to have been on the distinct understanding that, with the exception of the first note, they were not to be delivered to complainant until the decree was satisfied and canceled of record. The terms of a deposit in escrow may be in writing or in parol, or partly in writing and partly in parol; and the rule that a contract made in writing inter partes must be deemed to contain the entire agreement, does not apply. Stanton v. Miller (1874) 58 N. Y. 192, 203. Upon the evidence in this case (taking the admissions of the answer as evidence against defendants) I conclude that the terms upon which the notes in question were to be delivered to complainant by the depositary, Leucht, were that the decree in the Dakota court was to be satisfied and canceled of record before the delivery of the notes. The receipt signed by Leucht, the depositary, by which he declared that he was to deliver the notes to complainant upon the written consent of Kalisch and Newman, was not intended to express the entire contract between the parties as to the terms and conditions upon which complainant was entitled to the notes, but was intended to relieve the depositary from the responsibility of deciding whether the terms and conditions had been performed. So far as he was concerned, the decision upon this point was to be the joint decision of the two attorneys. These attorneys were both bound, upon the conditions being performed, to give the written consent. The agreement for satisfaction of the judgment by the payment of a smaller sum than the amount due, for which smaller sum the debtor was to give notes with the security of a third person, was a contract made on a valid consideration, and when made was binding both upon the judgment creditor and debtor. Had the agreement for settlement been executed by the actual delivery of the notes to the complainant herself, it would have been an accord executed, and a bar to an action upon the foreign judgment, even if the same had not been canceled. As to debts other than those evidenced by judgments, this effect of an accord executed is undoubted. Day v. Gardner (Van Fleet, V. C, 1886) 42 N. J. Eq. 199, 202, 7 Atl. 305. And according to the great weight of authority, especially of the later cases, accord and satisfaction is a good defense to an action on a judgment 2 Black, Judgm. par. 976, and cases cited; Bofinger v. Tuyes, 120 U. S. 198, 205, 7 Sup. Ct 529, 30 L. Ed. 649; Witherby v. Mann, 11 Johns. *518. The decision in Riley v. Riley (1843) 20 N. J. Law, 114, where a plea of this kind was stricken out, is referred to as establishing a different rule in this state; but, as it seems to me, it does not bear such construction. The only point there involved was the regularity of the plea of accord and satisfaction, and at that time payment was the only special plea authorized by statute to an action on a judgment. "Obligations," Gen. St p. 2336, § 4. Under similar statutes in other states authorizing pleas of payment, satisfaction of the judgment by accord or payment otherwise than in money may be shown under a plea of payment Howe v. Mackay, (1827) 5 Pick. 44, 46.

I conclude that upon authority and upon principle, if the notes in question had been actually delivered to the complainant herself, and received by her in satisfaction of the judgment, the judgment would have been barred. The question then arises as to the effect of the delivery in escrow, and whether such delivery is, or can become, a satisfaction of the judgment. The general rules applicable to such deposits are well settled. Upon the deposit in escrow a contract between the parties as to the delivery of the notes by the depositary is created, which neither party can alone rescind (11 Am. & Eng. Enc. Law [2d Ed.] 344), and the depositary, as the agent of both parties, is bound to deliver on the...