Palmer v. Yager , 20 Wis. 91 ( 1865 )

DixoN, C. J.

There are three appeals in this cause, and three entries upon the calendar: one by the plaintiffs, one by the defendants Rlizabeth Yager and Hiram Hiestand, and the other by the defendant Oheeves.

f The question upon the two first appeals is, whether the ¡agreement of June, 1853, between Williams and Yager, since i deceased, was an accord and satisfaction of the claim now set l up upon the bond and mortgage. The circuit court held that it was, and gave judgment for the plaintiffs for the balance found due upon the agreement, though a much larger sum was due according to the terms of the bond and mortgage.

It is a general rule, that an accord which has not been followed by satisfaction is no bar to an action. In other words, a subsequent promise, without execution, does not extinguish a pre-existing debt. But the rule has its exceptions ; and one is, where it is expressly agreed that the promise shall have that effect. When a debt is due by one contract, the parties may abolish it and substitute another in its place. In such case, if the substituted contract is founded upon any new or sufficient consideration, or if made upon the compromise of a doubtful or disputed claim, the original debt is extinguished, and no action can thereafter be maintained upon it. And this is so, whether the substituted contract be kept and performed or not. If not performed, the remedy is upon that contract for the breach. A new or sufficient consideration arises when the substituted contract is advantageous to the creditor, that is, when he derives a distinct benefit from it — something of value to which he would not have been entitled under the original contract. If he derives any such distinct benefit, and it is in addition expressly agreed that tlie substituted contract shall be received in satisfaction of the original, then the original contract is at an end. And any distinct benefit accruing to the creditor, however slight, will support such substituted contract. If the original contract be for the payment of a sum of money undisputed, and the substituted one be for the payment of a less suba, and not at a different time nor in a manner more advantageous to the creditor, it cannot be sustained as an accord and satisfaction though expressly so agreed. The creditor derives no distinct benefit from it. He neither receives nor is to receive anything to which he is not already entitled by virtue of the original contract. But if by the original contract the money is not yet due, and that which is substituted provides for an earlier payment, it is a good accord and satisfaction. The credit- or has his advantage in the earlier payment of the money. The same is also true, if the substituted contract, instead of the payment of a less sum in money, is for the delivery of property or the performance of labor in satisfaction, though of less actual value. So too of an original contract for the delivery of property or the performance of labor, for which satisfaction in money or other property or labor is agreed to be substituted. In such cases, in the absence of fraud, courts will not inquire into the value of the property to be received or delivered, or the labor to be performed, in satisfaction of the pre-ex-isting obligation, but leave the creditor to judge for himself, as in other transactions. It is presumed - that he found it for his advantage, else he would not have entered into the substituted contract. Mere inadequacy of consideration constitutes no ground of impeachment, more than in other cases of contract. It is enough if it appears that the creditor receives any distinct benefit from the substituted contract, which otherwise he would not have had.

In the case at bar, therefore, there was no want of considera- ’ tion to constitute a valid accord and satisfaction. The original debt was payable in wool and sheep. The substituted promise j was to pay in money. Tbe extent of Yager’s liability was in ¡ dispute, and tbe promise was likewise made by way of compromise. Upon either ground it was a binding and valid agreement, and would have extinguished the original debt if the parties had so agreed. If, for example, WiV '%ms had surrendered the bond and mortgage, or had executed a release, thus making the intention clear, there can be no doubt he could not afterwards have maintained an action to foreclose, but must have pursued his remedy upon the promise to pay in money. And this is the difficult point in the defense. Williams did not surrender, nor release, nor do any other act from which an intention to cancel the bond and mortgage can be inferred, until the promise was performed and the money actually paid. It never was performed by Yager. If it had been, and the money accepted by Williams, it would have become a promise executed, and, as such, a good accord and satisfaction. But before execution, and without any agreement that the promise of itself should operate as a discharge, the original debt remained in full force and unsatisfied. Such promises are to be interpreted in one of two ways: either as absolutely substituted for the original debt, or as collateral to it; and if collateral, the debt continues until the promise has been performed. When, therefore, in answer to an action for the debt, the defendant pleads the unexecuted promise, it becomes a question of intention, to be settled by the court or jury upon the facts of the particular case. Did the parties intend or the creditor agree to accept the thing to be performed, or merely the promise to perform, in satisfaction of the pre-existing obligation ? If the former, the promise is collateral, and the debtor’s liability unchanged ; but if the latter, the original debt is extinguished. And in deciding this question, reference must be had to facts. An intention to satisfy is not to be implied from the mere making of the promise. It must be established by some additional proof, the burden of which rests upon the debtor.

As already observed, the surrender of the original seeurities, or tbe delivery of a release or receipt, becomes very strong, perhaps conclusive evidence. But without these or some other equivalent facts, the intention cannot be inferred, and the plea jnust fail. Applying the same doctrine to the facts of this case, the plaintiff’s right to maintain the action and to recover the amount originally due, less the payments which have been made and the damages, if any, which were sustained by reason of the diseased condition of the sheep, seems very clear. The language of the answer is,' that after deducting the value of the wool which had previouly been delivered to Williams, he was “ to accept the balance, when ascertained upon the foregoing basis, in fall satisfaction of said bond and mortgage.” The principal witness testifies that Williams was to “ allow Yager for the wool already received on the contract at the market price at the time it was received by him, and that on the balance he would take the clip of that and the succeeding year, allowing therefor the market price at the time of delivery.” Upon either statement it is perfectly manifest that there was no agreement to accept the promise in satisfaction of the bond and mortgage.

We have spoken of the instruments sued on as a bond and mortgage. The instrument mentioned as a bond, however, is not such. It has no seal, and can take effect only as a parol or simple contract. It is obj ected that it ought not to have been received in evidence, and that when received it had no tendency to prove the cause of action set out in the complaint. The ground of this objection is, that it is described in the complaint as a bond. But this is a mistake. The words of the com-pfiaint are a “ certain bond or instrument in writing.” If not correctly described as a “bond,” it is as an “instrument in writing,” and as such was properly admitted in evidence.

The judgment below turned wholly on the question of accord and satisfaction. The defense that the sheep were diseased, and the defendants entitled to a deduction in damages on that account, was not considered. Some evidence was given upon it, but no decision was made. It will not therefore be considered by ns, but tbe judgment will be reversed, and tbe cause remanded for a new trial upon that issue. Tbe same judgment will be entered in both appeals, that of tbe plaintiffs and that of tbe defendants JElimbeth Yager and Hiram, Hiestand. But as tbe plaintiffs are tbe gainers, and those defendants tbe real losers in each, tbe costs of this court will be taxed only in favor of tbe plaintiffs upon their appeal. No judgment for costs will be given for tbe defendants.

Tbe mortgage is upon 160 acres of land. Tbe defendant Oheeves is tbe owner of one eighty by subsequent purchase from Yager and wife. He answered setting up this fact, and that tbe other eighty still belonged to tbe estate, and demanded that tbe other eighty should be first sold. Tbe court granted tbe relief which be asked, and directed tbe sale of tbe other eighty first. Why be should feel aggrieved by tbe decision, or prosecute this appeal, we are unable to see. He certainly has no ground of complaint. It seems to have been thought that be could come here upon tbe main question, of whether tbe mortgage bad been satisfied. But this is not so. No issue of tbe kind is made by bis answer. It arises only upon tbe answer of tbe principal defendants, dSlizabeth Yager and Hiram Heistand. As be has no cause of complaint, it would follow ordinarily that tbe judgment as to him would be affirmed. But as it has already been wholly reversed on tbe appeal of tbe plaintiffs, this cannot be. It must therefore be reversed on bis appeal also, but without costs to be taxed in bis favor.

An appearance has also been entered and an argument submitted in behalf of tbe defendants Waltermire and wife. This is clearly irregular. They answer separately, claiming distinct rights not involved in tbe issues presented by tbe other defendants. Tbe court decided against them, and they have not appealed. Consequently their rights are not before us for adjudication. Their answer, in brief, is that they are tbe owners, by paramount title and not subject to tbe mortgage, of tbe eighty acres claimed to belong to tbe estate of Yager. Tbe evidence discloses that whilst tbe defendants' Waltermire and wife have tbe legal title, and bad it at and before tbe execution of tbe mortgage, Yager bad or claimed to bave tbe entire equitable interest. It is this equitable interest wbicb tbe plaintiffs seek to subject to tbe mortgage. It is a general rule, if objection be taken, that questions of paramount legal title will not be examined in cases of this nature. Pelton v. Farmin, 18 Wis., 222. But where, in opposition to such legal title, tbe mortgagee alleges a superior equitable title in tbe mortgagor, and that it is covered by the mortgage, it would seem that such equitable title ought to be examined. But in order to do so a proper case should be made by tbe pleadings. Tbe facts should be stated in tbe complaint, and a demand for tbe requisite relief made, either that tbe bolder of tbe legal title convey, or that tbe title be adjudged to bave been in tbe mortgagor. In this case there is nothing of tbe kind. Tbe complaint is in tbe usual form, and tbe defendants Waltermire and loife are charged as having or claiming some lien upon or interest in tbe mortgaged premises subsequent and subject to tbe mortgage. If they bad appealed, therefore, it is not improbable that they would bave prevailed upon this ground. But as they bave not, we express no positive opinion upon tbe legal effect of tbe judgment against them, leaving it for counsel to avoid doubts, if they choose, by a future amendment of tbe complaint.

Downer, J.

As a matter of practice I think but one judgment of reversal should be entered, and that on tbe appeal of tbe plaintiff below.

By the Court. — Tbe judgment is reversed upon each of tbe appeals, and tbe cause remanded for further proceedings in ac cordance with this opinion.