Sage v. Valentine

• Decision Date: 29 June 1876
• Citation: 23 Minn. 102
• Court: Minnesota Supreme Court
• Parties: WILLIAM N. SAGE and others <I>vs.</I> L. W. VALENTINE.

23 Minn. 102

WILLIAM N. SAGE and others vs. L. W. VALENTINE.

Supreme Court of Minnesota.

June 29, 1876.

Appeal by defendant from an order of the district court for Hennepin county, Vanderburgh, J., presiding, refusing a new trial after verdict for the plaintiffs, who sue as partners, doing business in the name of Pancost, Sage & Morse.

A. N. Merrick, for appellant.

Atwater & Babcock, for respondents.

BERRY, J.

This action is brought to recover $284, claimed to be an unpaid balance due upon a bill of goods sold by plaintiffs to defendant, amounting to $568.20. The defence is that defendant, being unable to pay his debts in full, made an arrangement for a composition with his creditors, by which they agreed to accept 50 cents on the dollar in full payment of their claims; that plaintiffs entered into, and became parties to, the agreement, and accordingly made their draft for the sum of $568.20, directed to defendant, payable at sight to the order of the East-Side Bank of Minneapolis, with instructions to the bank to accept from defendant 50 cents on the face of the draft, in full payment of the claim of $568.20; that defendant accordingly paid $284.10, in full payment of said claim, and that the bank delivered the draft to him, and accepted the sum of $284.10 in full settlement and satisfaction thereof. The facts set up in the defence as to the draft, the instructions accompanying it, the payment by defendant, the acceptance of the payment in full satisfaction, and the delivery of the draft to defendant, are undisputed.

The general rule is that payment of part of a liquidated and ascertained debt is no satisfaction of the whole. 2 Chit. Cont. 1101. This is upon the ground that, as respects the part not paid, the agreement to receive the partial payment in satisfaction of the whole debt is without consideration. There is, however, an exception to this rule when the partial payment is made in compliance with an agreement between the debtor and any number of his creditors for a composition. In that case the engagement of the other creditors to accept a composition on their debts is the consideration for the giving up, by each, of his claim for the residue. Norman v. Thompson, 4 Exch. 756; 2 Chit. Cont. 1157-8; Perkins v. Lockwood, 100 Mass. 249; Pierson v. McCahill, 21 Cal. 122; Devou v. Ham, 17 Ind. 472; Addison on Contracts, 998.

Mutuality between the creditors, as respects the consideration, is, therefore, essential to the validity of an...