Jaffray v. Davis

• Decision Date: 14 January 1891
• Citation: 124 N.Y. 164,26 N.E. 351
• Parties: JAFFRAY et al. v. DAVIS et al.
• Court: New York Court of Appeals Court of Appeals

124 N.Y. 164

26 N.E. 351

JAFFRAY et al.

v.DAVIS et al.

Court of Appeals of New York, Second Division.

Jan. 14, 1891.

Appeal from supreme court, general term, first department.

John W. Little and O. F. Wisner, for appellants.

Isaac L. Miller, for respondents.

POTTER, J.

The facts found by the trial court in this case were agreed upon. They are simple, and present a familiar question of law. The facts are that defendants were owing plaintiffs, on the 8th day of December, 1886, for goods sold between that date and the May previous, at an agreed price, the sum of $7,714.37, and that, on the 27th of the same December, the defendants delivered to the plaintiffs their three promissory notes, amounting, in the aggregate, to $3,462.24, secured by a chattel mortgage on the stock, fixtures, and other property of defendants, located in East Saginaw, Mich., which said notes and chattel mortgage were received by plaintiffs, under an agreement to accept same, in full satisfaction and discharge of said indebtedness; that said notes have all been paid, and said mortgage discharged of record. The question of law arising from these facts, and presented to this court for its determination, is whether such agreement, with full performance, constitutes a bar to this action, which was brought after such performance to recover the balance of such indebtedness over the sum so secured and paid.

One of the elements embraced in the question presented upon this appeal is, viz., whether the payment of a sum less than the amount of a liquidated debt, under an agreement to accept the same in satisfaction of such debt, forms a bar to the recovery of the balance of the debt. This single question was presented to the English court in 1602, when it was resolved, if not decided, in Pinnel's Case, 5 Coke, 117, ‘that payment of a lesser sum on the day in satistaction of a greater cannot be any satisfaction for the whole,’ and that this is so, although it was agreed that such payment should satisfy the whole. This simple question has since arisen in the English courts, and in the courts of this country, in almost numberless instances, and has received the same solution, notwithstanding the courts, while so ruling, have rarely failed upon any recurrence of the question to criticise and condemn its reasonableness, justice, fairness, or honesty. No respectable authority that I have been able to find has, after such unanimous disapproval by all the courts, held otherwise than was held in Pinnel Case, supra, and Cumber v. Wane, 1 Strange, 426; Foakes v. Beer, L. R. 9 App. Cas. 605; Goddard v. O'Brien, (Q. B. Div.) 21 Amer. Law Reg. 637, and notes. The steadfast adhesion to this doctrine by the courts, in spite of the current of condemnation by the individual judges of the court, and in the face of the demands and conveniences of a much greater business, and more extensive mercantile dealings and operations, demonstrate the force of the doctrine of stare decisis. But the doctrine of stare decisis is further illustrated by the course of judicial decisions upon this subject; for, while the courts still hold to the doctrine of the Pinnel and Cumber-Wane Cases, supra, they have seemed to seize with avidity upon any consideration to support the agreement to accept the lesser sum in satisfaction of the larger, or, in other words, to extract, if possible, from the circumstances of each case, a consideration for the new agreement, and to substitute the new agreement in place of the old, and thus to form a defense to the action brought upon the old agreement. It will serve the purpose of illustrating the adhesion of the court to settled law, and at the same time enable us, perhaps more satisfactorily, to decide whether there was a good consideration to support the agreement in this case, to refer to (the consideration in) a few of the numerous cases which the courts have held to be sufficient to support the new agreement. Lord BLACKBURN said, in his opinion in Foakes v. Beer, supra, and while maintaining the doctrine, ‘that a lesser sum cannot be a satisfaction of a greater sum,’ ‘but the gift of a horse, hawk, or robe, etc., in satisfaction, is good,’ quite regardless of the amount of the debt; and it was further said by him, in the same opinion, ‘that payment and acceptance of a parcel before the day of payment of a larger sum would be a good satisfaction in regard to the circumstance of time;’ ‘and so, if I am bound in twenty pounds to pay you ten pounds at Westminster, and you request me to pay you five pounds at the day, at York, and you will accept it in full satisfaction for the whole ten pounds, is it a good satisfaction?’ It was held in Goddard v. O'Brien, 9 Q. B. Div. 37: ‘A., being indebted to B. in 125 pounds 7s. and 9d. for goods sold and delivered, gave B. a check (negotiable, I suppose) for 100 pounds, payable on demand, which B. accepted in satisfaction,-was a good satisfaction.’ HUDDLESTON, B., in Goddard v. O'Brien, supra, approved the language of the opinion in Sibree v. Tripp, 15 Mees. & W. 26: ‘That a negotiable security may operate, if so given and taken, in satisfaction of a debt of a greater amount; the circumstance of negotiability making it in fact a different thing, and more advantageous, than the original debt, which was not negotiable.’ It was held in Bull v. Bull, 43 Conn. 455: ‘And, although the claim is a money demand, liquidated, and not doubtful, and it cannot be satisfied with a smaller sum of money, yet, if any other personal property is received in satisfaction, it will be good, no matter what the value.’ And it was held, in Cumber v. Wane, supra, that a creditor can never bind himself by simple agreement to accept a smaller sum in lieu of an ascertained debt of a larger amount, such agreement being nudum pactum, but, 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. It was held in Le Page v. McCrea, 1 Wend. 164, and in Boyd v. Hitchcock, 20 Johns. 76, that ‘giving further security for part of a debt, or other security, though for a less sum than the debt, and acceptance of it in full of all demands, make a valid accord and satisfaction;’ that, ‘if a debtor gives his creditor a note indorsed by a third party for a less sum than the debt, (no matter how much less,) but in full satisfaction of the debt, and it is received as such, the transaction constitutes a good accord and satisfaction.’ Varney v. Conery, (Me.) 1 Atl. Rep. 683. And so it has been held ‘where, by mode or time of part payment, different than that provided for in the contract, a new benefit is or may be conferred, or a burden imposed, a new consideration arises out of the transaction, and gives validity to the agreement of the creditor.’ Rose v. Hall, 26 Conn. 392. And so ‘payment of less than the whole debt, if made before it is due, or at a different place from that stipulated, if received in full, is a good satisfaction.’ Jones v. Bullitt, 2 Litt. (Ky.) 49;Ricketts v. Hall, 2 Bush, 249;Smith v. Brown, 3 Hawks. 580;Jones v. Perkins, 29 Miss. 139; Sch weider v. Lang, 29 Minn. 254, 12 N. W. Rep. 33. In Watson v. Elliott, 57 N. H. 511-513, it was held: ‘It is enough that something substantial which one party is not bound by law to do is done by him, or something which he has a right to do he abstains from doing, at the request of the other party, is held a good satisfaction.’

It has been held in a number of cases that, if a note be surrendered by the payee to the maker, the whole claim is discharged and no action can afterwards be maintained on such instrument for the unpaid balance. Ellsworth v. Fogg, 35 Vt. 355; Kent v. Reynolds, 8 Hun, 559. It has been held that a partial payment made to another, though at the creditor's instance and request, is a good discharge of the whole debt. Harper v. Graham, 20 Ohio, 106. ‘The reason of the rule is that the debtor in such case has done something more than he was originally bound to do, or, at least, something different. It may be more, or it may be less, as a matter of fact.’ It was held by the supreme court of Pennsylvania in Bank v. Huston, 11 Wkly. Notes Cas. 389, (February 13, 1882:) The decided advantage which a creditor acquires by the receipt of a negotiable note for a part of his debt, as by the increased facilities of recovering upon it, the presumption of a consideration for it, the ease of disposing of it in market, etc., was held to furnish ample reason why it should be a valid discharge of a larger account or open claim unnegotiable. It has been held that a payment in advance of the time, if agreed to, is a full satisfaction for a larger claim not yet due. Brooks v. White, 2 Metc. (Mass.) 283; Bowker v. Childs, 3 Allen, 434. In some states, notably Maine and Georgia, the legislature, in order to avoid the harshness of the rule under consideration, have, by statute, changed the law upon that subject, by providing: ‘No action can be maintained upon a demand which has been canceled by the receipt of any sum of money less than the amount legally due thereon, or for any good and valuable consideration, however small.’ Citing Weymouth v. Babcock, 42 Me. 42. And so in Gray v. Barton, 55 N. Y. 68, where a debt of $820 upon book-account was satisfied by the payment of...