Scott v. Frink , 1868 N.Y. App. Div. LEXIS 169 ( 1868 )

Morgan, J.

The debt not being due at the time, the plaintiff was under no obligation to take payment in advance, and discharge the bond and mortgage, although he might oblige himself to do so by a valid agreement with the defendant.

It appears by the case, that the defendant did agree with the plaintiff that, if he would satisfy the bond and mortgage, he would pay him $500 then, instead of paying the amount in yearly payments as the same should become due and payable by the condition of the bond and mortgage. It also appears that he was anxious to anticipate the payments and get the mortgage off from his farm. The plaintiff preferred’ to keep his money invested as it was, but on the defendant’s offering to pay him $500 to get rid of the mortgage, the latter concluded to accept it and satisfy the mortgage.

If the matter had rested here, perhaps neither party would have been bound by the agreement, for it would have been rather a proposition on one side not definitely acted upon by the other, so as to make it a binding contract. But the parties did not stop here. The proposition of the defendant was not only accepted by the plaintiff, but acted upon. The defendant in fact induced the plaintiff' to accept a .payment of $250 at the time, and $30 more in a day or two after. When these payments were made, they were made and accepted under the new agreement, and in part performance thereof. If the defendant had signified his intention of having them applied as payments upon the bond and mortgage, (where they must be applied if this judgment is sustained,) the plaintiff would doubtless have refused to accept them; and it is very clear that the plaintiff did not accept them, except as part performance of the new agreement.

In my opinion, this new agreement, after it had been thus far acted upon, became binding and obligatory upon both parties. There is no difficulty in finding a consideration to- support it. The authorities are clear that a creditor may accept a less sum than what is stipulated for in the contract, and discharge it, when the debt is payable at a future day; and it seems to be equally clear that the debtor may oblige hims'elf to pay more than is stipulated for in the contract, to induce his creditor to discharge an obligation not yet due. (1 Smith, L. C. 441, 444. Chitty on Cont. 640.)

The question here is not strictly one of accord and satisfaction. That question' would perhaps come up if the defendant-had tendered payment of the $500 under the new agreement, and it had been declined by the plaintiff. "When the plaintiff afterwards attempted to foreclose his mortgage, the new agreement and a tender of performance under it would have raised the question—a question, however, rather of form than of substance, as I shall presently show.

I think no good lawyer will question the proposition, that if the defendant had paid the $500 under the new agreement, and the plaintiff had accepted it, the new agreement thus executed would be a good accord and satisfaction, and could be interposed as' such to a suit afterwards brought by the plaintiff upon these sealed obligations.

How when it is conceded that the new contract is founded upon a valid consideration, it must also be conceded that the parties may enforce performance of it.; and although the authorities may doubt whether the new agreement can be pleaded as an accord and satisfaction, while its stipulations are unperformed, there is no difficulty in interposing such a defense, when it has been voluntarily performed by the parties, or when its performance has been enforced by the courts.

If the new agreement has been obtained by fraud, or is the result of a mutual mistake, the party injured may doubtless avoid it. upon these grounds. But when it is otherwise valid, and none of these grounds are alleged or proved to avoid it, it may be enforced like any other contract. This action is brought to enforce such an agreement, and the only question before the court is, 'whether it is a valid agreement. That depends upon two questions : 1.' Whether there is a valid consideration to sustain it. 2. If there is a valid consideration to sustain it, whether it can be avoided for fraud or mistake.

I have already said enough as to the consideration. Unless it can be avoided for- fraud or mistake, it must be enforced; and after it is enforced, there will remain no more technical difficulties growing out of the numerous ■ authorities cited upon the question of dissolving sealed instruments by contracts of an inferior nature.

It would doubtless be inequitable to require the plaintiff to apply the $280 received by him under the new agreement, upon the bond and mortgage. If there was fraud or mistake which would authorize the defendant to avoid the agreement, he should have put the plaintiff in statu quo, by offering to rescind it. This he could not do without offering to cancel the agreement and take his money back. But, in fact, no fraud was pretended; and I am clearly of opinion that it is not a case where the court would afford relief on the ground of mutual mistake. Both parties had the means at hand to ascertain the amount unpaid upon the bond and mortgage. The defendant supposed he had got the advantage of the plaintiff. In this he was doutless mistaken, but it was one of those mistakes for which the other party was in no way responsible, and which the commonest prudence on the part of the defendant would have corrected. . To entitle a party to relief in such cases, the mistake must not only be material, but must be such that he could not with reasonable diligence have obtained knowledge of the fact. (Willard’s Eq. 70.)

To my mind this is a very plain case. The agreement is not to be set aside because the consideration is inadequate. Suppose the defendant had given his note to pay the balance over the $280, upon the payment of which the plaintiff had agreed, on his part, to satisfy the bond and mortgage. Until the note was paid, let it be conceded that there would be no accord, and no defense to an action on the bond; but when paid, the defense would be complete. Eow the defendant, in order to succeed in this case, must maintain the proposition that he would not be bound to pay the note; or, if he desired to pay it, the plaintiff would not be bound to accept payment. It is said, in some of the cases, that the plaintiff might refuse to accept performance of the substituted agreement, and thus avoid a plea of accord and satisfaction. As a technical rule of pleading this may be so in a legal action, but under the Code of Procedure a tender of performance would entitle the defendant to be released from the obligations of the contract; and the court sitting as a- court of equity as well as of law, would have no difficulty in decreeing a satisfaction of the mortgage. Thus the defendant" would have a perfect defense to a suit upon the bond and mortgage; not, indeed, by way of accord and satisfaction, but by way of counter-claim. The authorities .which deny the right of a defendant to set up a valid executory agreement to avoid a suit upon the original obligation, are based upon technical rules of pleadings in legal actions, and have no "application to pleadings under the Code.

Assuming that the contract is valid, either party may enforce its performance, and when performed by the defendant, either voluntarily or after recovery against him in the action, he will be at liberty to enforce a satisfaction of the mortgage.

The judgment. should be reversed, and a new trial granted, costs to abide the event.

Postee, J., concurred.