Hinkle v. Basic Chemical Corp.
| Decision Date | 28 August 1967 |
| Docket Number | No. 21711,21711 |
| Citation | 431 P.2d 14,163 Colo. 408 |
| Parties | Daryl HINKLE and Thelma Hinkle, Plaintiffs in Error, v. BASIC CHEMICAL CORPORATION, a Colorado Corporation, Defendant in Error. |
| Court | Colorado Supreme Court |
Holley, Boatright & Villano, Wheat Ridge, for plaintiffs in error.
Mincer & Larson, Glenwood Springs, for defendant in error.
This is an action brought by Daryl and Thelma Hinkle against Basic Chemical Corporation seeking a judgment in the sum of $9,988.60. They alleged that this amount was due and owing as a result of certain trucking and hauling services rendered by them during the years 1956 to 1958. Basic Chemical's answer alleged that this debt had been paid by means of giving to the Hinkles a 'promissory note' in the amount of $9,988.60. This 'note' which was in evidence reads as follows:
and in payment of open account, the undersigned promises and agrees to pay to Daryl Hinkle as hereinafter provided, the sum of Nine Thousand Nine Hundred-Eighty-Eight and 60/100 ........, together with interest thereon at four per cent (4%) per annum from date.
'It is understood that this note is one of several of similar tenor, given to general creditors of the undersigned, and shall be paid from 50% Of the monthly net profits of the corporation, payments to begin within six months from the date hereof. Net profits shall be determined monthy, and fifty per cent thereof assigned for credit upon this, and similar notes, and divided among the holders thereof, pro rata. Such payments shall thereafter continue monthly, until all of said notes, with interest, shall have been paid.
'It is further understood and agreed that in case of foreclosure and sale by secured creditors, or in case of bankruptcy of the undersigned, the whole of said note may be declared, by the holder of this note, as immediately due.
'BASIC CHEMICAL CORPORATION
'By Jean Cole
President'
After trial the court found that the above stated amount had been owed by Basic Chemical to the plaintiffs; that they had accepted the 'note' in question as payment for the open account; and that, even though nothing had been paid on the 'note' in question, the Hinkles could not recover on the open account since it had been terminated by that instrument.
The Hinkles on writ of error urge the following as grounds for reversal:
(1) It was error to conclude that the 'note' in question constituted payment of the open account;
(2) It was error to find that plaintiff Hinkle had accepted the 'note' as payment of the open account; and,
(3) Even assuming that the 'note' was valid and was accepted, it had not been honored and plaintiffs, therefore, were entitled to bring an action on the original indebtedness.
We must determine whether the giving of the instrument in question operated to discharge the original claim, or whether it was an executory accord, or whether it was merely an affirmance of the debt. We note that the payment provision is highly illusory and we do not believe that as a matter of law--for reasons which hereafter appear--the 'note' discharged the original debt; nor do we believe that it can be held to be an affirmance of the debt because its terms of payment are quite different from those contemplated on an open account obligation. It seems though, in reading it in its entirety, that it was an executory accord.
An executory accord is defined in 6 Corbin, Contracts § 1268 as:
'* * * an agreement for the future discharge of an existing claim by a substituted performance. * * *.'
Corbin indicates that merely because an agreement is termed a compromise or composition with creditors, or that evidently if it is asserted to be so--as defendant is attempting to do here--does not take it out of the field of executory accords. Corbin, supra § 1268. The general rule is that the execution of an agreement which constitutes an executory accord does not serve to discharge the original debt unless there is specific wording to that effect in the contract. Corbin, supra § 1269. Such has long been the law in Colorado. For example, in Heath v. Vaughn, 11 Colo.App. 384, 53 P. 229 (1898) it was said:
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Caldwell v. Armstrong
...duty or debt is not discharged until there is satisfaction on the accord. That is, the accord is executory. Hinkle v. Basic Chemical Corp., 163 Colo. 408, 431 P.2d 14 (1967); Heath v. Vaughn, 11 Colo.App. 384, 53 P. 229 (1898); Restatement (Second) of Contracts § 281 (1979). However, an acc......
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Bd. of Cnty. Comm'rs of Adams Cnty. v. City & Cnty. of Denver
...to perform under the later contract. Caldwell v. Armstrong , 642 P.2d 47, 49 (Colo. App. 1981) ; see also Hinkle v. Basic Chem. Corp. , 163 Colo. 408, 412, 431 P.2d 14, 16 (1967) (to establish an accord and satisfaction, the evidence must show that the new agreement was expressly accepted a......
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Resolution Trust Corp. v. Teem Partnership, Civ. A. No. 88-B-1560.
...(8th Cir.1989). This is because an accord without its satisfaction does not void the underlying note. See Hinkle v. Basic Chemical Corp., 163 Colo. 408, 431 P.2d 14, 16 (1967); 15 S. Williston, A Treatise on the Law of Contracts § 1842 (3d ed.1972). Thus, there remains an "interest" in the ......
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W. F. Const. Co., Inc. v. Kalik, 13720
...Caldwell v. Armstrong, 642 P.2d 47, 49 (Colo.App.1982). See also Owens v. Hunter, 368 P.2d 753 (Ariz.1962); Hinkle v. Basic Chemical Corp., 163 Colo. 408, 431 P.2d 14 (1967); Goggins v. Bookout, 141 Mont. 449, 378 P.2d 212 (1963); Chopping v. First National Bank of Lander, 419 P.2d 710, (Wy......