Opinion
09-18-1811
Scott's Executor v. Osborne's Executor. [*]
Wickham, for the appellant. Hay, contra. Wickham, in reply.
[Syllabus Material] [Syllabus Material] [Syllabus Material] [Syllabus Material]
James Scott filed his bill, on the 2d of March, 1795, in the late high court of chancery against the executors of William Osborne, deceased; charging that, some time prior to the 16th day of February, 1785, the plaintiff being about to purchase a tract of land, in the county of Prince Edward, of a certain Robert Donald, for the sum of 9461. current money, whereof 4341. 10s. in part, was to be paid immediately, and the balance the Christmas following; William Osborne, of the county of Nottoway, in order to encourage him to make the purchase, and in consideration that he, the plaintiff, had married his daughter Elizabeth, and for her advancement, did advise and instruct the plaintiff to contract for the purchase of the said land, and to make the first payment himself; and, in consideration of his so doing, agreed that he, the said William Osborne, would pay the last payment for him, out of a debt due to him by bond from a certain Henry Anderson, (amounting to 3151. 15s. 3d. with lawful interest from the 1st of April, 1776,) when the same should be collected; that the plaintiff, depending on those promises, concluded the contract for the purchase, made the first payment to Robert Donald; and gave his bond for the balance of the purchase-money, amounting to 5121. 10s. payable the 25th day of December, 1785, in full hope and assurance that the same would be duly paid and taken up by the said Osborne; that his circumstances would not justify his making the said purchase; and that he would not have made it, if the promise aforesaid had not been made him; that, nevertheless, the said bond was not discharged by Osborne, who had not been able to collect the money from Anderson, and the plaintiff was himself compelled to pay it, with great difficulty and inconvenience, and a considerable sacrifice of property, which he finally accomplished, and took in the bond, about the year 1790; that Osborne, by his last will, made and published the 2d of October, 1786, bequeathed to his daughter Elizabeth, wife to the plaintiff, 51. current money, and soon after departed this life, without having, in any manner, paid or satisfied the plaintiff for the said sum of 5121. 10s. or any part thereof; that his executors had, since the year 1790, completed the collection of the debt due from Anderson; but the plaintiff is unable to prove, at law, when the same was collected, and to what amount; that the said executors had assets to satisfy the plaintiff's claim, and were accountable to him, as trustees, to an amount equal to his last bond to said Donald. The bill concluded with special and distinct interrogatories, requiring the defendants to answer the several allegations aforesaid, and prayed a decree for 5121. 10s. with interest from the 25th day of December, 1785; also for the legacy of 51. and for general relief.
The defendants, by their answer, contended, that, if the plaintiff's claim could be supported at all, it could in a court of law; that the promise of their testator (admitting that he made it) was not binding either in law or equity, because there was no consideration to support it, unless marriage shall be regarded as a continuing consideration; and because the time limited by law for the institution of actions for claims of this nature had long ago expired. They further answering said, that they were present when a conversation took place, between their testator and the plaintiff, about the purchase of Donald's land; and they understood that, if the money due on Anderson's bond could be collected, the plaintiff was to have the use of it, free from interest if returned in a short time; and that he was to give his bond for it: " they feel a conviction that such was the nature of the agreement, (if it can be called one,) not only because their memories tell them so, but because, if their testator really intended that the said complainant should have the absolute ownership of the said bond, no reason can be conceived why an immediate delivery, or assignment, did not take place."
The answer further stated that the complainant had given an incorrect, if not an uncandid, statement of the will of William Osborne; who, in fact, devised to his daughter Elizabeth, wife to the complainant, during her natural life, a negro woman, named Cutchina, and all her increase that she then had, or might thereafter have, and directed his executors to lay out the sum of 2801. in the purchase of Negroes, which Negroes he bequeathed to the said Elizabeth during her life, and, after her death, to her children by the complainant: he also devised to the said Elizabeth, (after the death of his wife,) during her life, with a limitation to her children as before, a negro woman named Poll, and her daughter Milly; " all which, it is conceived, were certainly meant by the testator to be in full of the provision which it was proper for him to make for the plaintiff's family; the defendants aver that the complainant was spoken to by the testator, and then expressed his approbation of the manner in which the legacies aforesaid were to be made to his wife; that the said sum of 2801. has been disposed of according to his wishes, and he has received every benefit which was intended for him, or any part of his family, by the will aforesaid; that the widow of the said testator hath since departed this life, and hath made considerable bequests, to the children of the complainant, out of the residue devised to her; which residue could not be ascertained until all accounts were settled, and the estate divided; and now the complainant finding, perhaps, that he has got all that he is likely to receive, is setting up a claim, about which he has thought proper to be silent for nearly ten years."
In this answer the respondents said nothing about the time of collection of, or sum received by, them upon Anderson's bond. But from certain exhibits in the cause, (whether filed by the plaintiff, or by the defendants, does not appear,) the sum of 1281. 14s. 6d. appears to have been made, by an execution issued May 13, 1790, and the balance, amounting to 5941. 9s. 4d. besides costs, to have been recovered, in an action of debt on the judgment, in September, 1793.
The last wills of William Osborne and Elizabeth Osborne, his widow, were also exhibits, and corresponded with the description of them given in the answer. Many depositions were taken on both sides; the general tendency of which was to prove the plaintiff's having been induced to make the purchase of Donald's land by William Osborne's promise to let him have the amount of Anderson's bond when collected.
The late chancellor dismissed the bill with costs; from which decree the plaintiff appealed to this court; and, the appellant and appellees having departed this life, the appeal was revived in favour of Scott's Executor against The Executor of Abner Osborne, who was surviving executor of William Osborne.
Wickham, for the appellant. 1. Scott came into equity upon two grounds; 1st. The trust relative to Anderson's bond; the amount of which, when collected, he was entitled to receive; and for that purpose had a right to demand an account; and, 2d. The uncertainty as to the time when the money was collected; which made a discovery necessary.
Chichester's Ex'x v. Vass's Adm'r, 1 Munf. 98.
2. The promise was supported by a sufficient consideration, the purchase of Donald's land having been made at the request of Osborne; and the plaintiff having thereby sustained a great inconvenience, against which he promised to indemnify him.
Carr v. Gooch, 1 Wash. (VA) 260--262; 3 Burr. 167; 1 Pow. on Cont. 343, 344; 1 Roll. Abr, 22, pl. 23.
3. The act of limitations did not bar the plaintiff's claim; which never accrued until the money due from Anderson was collected.
Hay, contra. According to Scott's own statement, the money when collected being his, an action for money had and received, or a special action for breach of contract, would have lain in his favour: adequate redress might then have been had at law; and, therefore, even if the consideration were sufficient, and the contract proved, there is no ground for coming into a court of equity.
But the consideration, in this case, was not sufficient: the promise, in fact, was merely voluntary. For the bill states that the plaintiff was about to purchase the land in Prince Edward, before his father-in-law said any thing to induce him to make the purchase. He must have applied to Osborne for help, and the promise must have been made in consequence of that application. His allegation, that the purchase was far above his ability, is no basis for a consideration; since (from his own showing) he was able, and actually did pay for the land.
The delay of bringing suit ought to bar the plaintiff; especially, since he waited till the death of Mr. and Mrs. Osborne, to get whatever might be bequeathed, by either of them, to himself, or his wife and children, and then set up this claim on account of Anderson's bond, for which, probably, the old gentleman supposed he had made him complete satisfaction by the ample provision made in his will. The bill being, in substance, for a specific performance, in which case the giving relief is discretionary with a court of equity, the court ought not to countenance the present plaintiff.
Wickham, in reply. An action for money had and received will lie against every trustee; yet the bill in equity lies. That action is, in many respects, of modern date; introduced to obtain relief at law in many cases where the remedy formerly was, exclusively, in equity. But this circumstance does not take away the old established jurisdiction of the court. Proving, then, that that action will lie, does not prove that a bill in equity will not lie. But the prayer for a discovery is abundantly sufficient to give the court jurisdiction.
As to the consideration of the promise; the plaintiff's saying he was about to buy the land, proves nothing; for this was not actually buying it. Another allegation in the bill is, that he would not have bought it, but for this promise. In all human probability, Anderson's bond was in suit at the time, and that circumstance alone prevented Osborne's assigning it to the plaintiff.
In Rowton v. Rowton, 1 Hen. & M. 92, there was no difference of opinion among the judges, on the point that the agreement, if proved, was upon sufficient consideration.
Mr. Hay's argument that Scott's claim is unconscientious, is not supported by the facts in the record. The devise in Osborne's will, to Scott's wife, is no satisfaction of the contract. Even a devise to himself could not have had that effect, without an express declaration in the will. Such a devise could not be presumed to have been intended as a satisfaction; especially in opposition to the testimony of witnesses, which ought always to be admitted to rebut an equity.
Hay. The suggestion of a want of discovery is merely colourable, to give jurisdiction. The time when Anderson paid the money might easily have been proved.
Wickham. The decision in Chichester's Ex'x v. Vass's Adm'r, is a complete answer to this objection. I contended, there, that the plaintiff having proved his case by evidence aliunde, a discovery was not necessary; bnt my argument was overruled.
OPINION
Wednesday, September 25th. The following opinion was pronounced as the opinion and decree of the court, consisting of Judges Fleming, Roane, Brooke and Cabell.
The chancellor, in this case, dismissed the appellant's bill, without assigning any reason for doing so; and the counsel for the appellee stated four points in support of the decree;
1st. That, if the appellant had a right, he had a complete remedy at law, and therefore a court of equity had no jurisdiction of the cause.
2d. His action was barred by the statute of limitations.
3d. The promise, or declaration of Osborne, as stated in the bill, was void for want of a consideration; and,
4th. If good, the legacies to his wife, of which he had the benefit during his life, ought to be regarded as a satisfaction, pro tanto, of his engagement.
But we are of opinion, 1st. That a bill in chancery was necessary to discover whether, and at what time, the money due on Anderson's bond was recovered and received by Osborne's executors; 2d. That the appellant was not barred by the statute of limitations, as he had no right to the money, under the said promise, until it should be recovered of Anderson, the time of which was uncertain, and which, it appears, did not happen until the year 1793; 3d. That a very good and sufficient consideration is charged in the bill, and proved by sundry witnesses; and, lastly, that the legacies to the appellant's wife, being for life only, are by no means a satisfaction, pro tanto, of the engagement of the testator Osborne; it being a promise of a specific debt, when recovered, to be applied to a particular purpose.
The decree, therefore, ought to be reversed, with costs.
" Decree reversed; and, this court proceeding, & c. it is decreed and ordered that the appellee, Conrad Webb, executor of Abner Osborne, the surviving executor of William Osborne, out of the estate of the said William Osborne, pay to the appellant the full amount of the debt, with the interest thereon, by him recovered and received, on the bond of Henry Anderson, in the proceedings mentioned, and also interest, at the rate of 5 per centum per annum, on the said aggregate sum, from the time the same was received by the said executor, until payment thereof shall be made by virtue of this decree. And it is ordered that the cause be remanded to the said court of chancery, for such further proceedings to be had therein, as shall be deemed necessary to carry this decree into full effect."
ACCORD AND SATISFACTION.
I. Definitions.
II. What Constitutes a Satisfaction.
1. Part Payment.
a. In General.
b. Payment by a Stranger.
c. Payment at an Earlier Date.
d. Where Demand Is Unliquidated.
2. Payment by Note.
3. Payment by Check.
III. Effect of Accord and Satisfaction.
IV. Pleading and Practice.
I. DEFINITIONS.
Accord and Satisfaction.--Accord and satisfaction is a method of discharge of a contract, or cause of action arising either in contract or tort, consisting in the substitution of an agreement between the parties in satisfaction of such contract or cause of action, and an execution of that agreement. 1 Am. & Eng. Enc. Law (2d Ed.) 408.
Accord.--Accord is a satisfaction agreed between the party injuring and the party injured, which, when performed, is a bar to all actions upon the same account. Rorer Iron Co. v. Trout, 83 Va. 397, 2 S.E. 713, 5 Am. St. Rep. 285.
II. WHAT CONSTITUTES A SATISFACTION.
1. PART PAYMENT.
a. In General.
The Common-Law Rule.--The general doctrine to be deduced from the authorities from Pinnel's Case, 5 Coke's R. 117a, down to the present time, seems to be, that an agreement to accept a smaller sum in lieu of a liquidated and ascertained debt, made between the debtor and creditor, is a mere nudum pactum, and not binding upon the creditor, and, therefore, he may accept the part and immediately sue for and recover the rest, notwithstanding his express, but unsealed, promise to release the debtor from the payment thereof. But this rule, being highly technical in its character, seemingly unjust, and often oppressive in its operation, has been gradually falling into disfavor; and the courts have therefore not only confined its operation strictly within its own narrow limits, but have seized upon every possible opportunity to evade its application. As a consequence, it has been generally, if not universally, held that where any new element entered into the agreement of compromise--as where an earlier day is fixed for the payment, or a different place selected therefor, or where the payment is made in some other thing than what was originally contracted for, e. g., a chattel, or personal services, it will amount to a satisfaction of the whole debt, if the parties so agree. Seymour v. Goodrich, 80 Va. 303; Smith v. Phillips, 77 Va. 548; Lee v. Harlow, 75 Va. 22; Smith v. Chilton, 84 Va. 840, 6 S.E. 142.
Statutory Rule.--It is now provided by statute in Virginia that " part performance of an obligation, promise, or understanding, either before or after a breach thereof, when expressly accepted by the creditor in satisfaction, and rendered in pursuance of an agreement for that purpose, though without any new consideration, shall extinguish such obligation, promise, or undertaking." Va. Code (1887), sec. 2858. See also, Smith v. Chilton, 84 Va. 840, 6 S.E. 142.
But under this statute, where a creditor agrees to accept less than the amount due from his debtor in satisfaction of his debt, and then assigns the entire debt, of which assignment the debtor has notice, the debtor is estopped from falling back upon the compromise and release after he permits a decree to be entered against him for the entire debt. Smith v. Chilton, 84 Va. 840, 6 S.E. 142.
b. Payment by a Stranger.
May Amount to a Satisfaction.--Where a stranger to the contract pays a sum which is accepted in full satisfaction of a larger sum, this amounts to a satisfaction of the larger debt. Thus where a father or other relative pays one-half of a joint note, on behalf of the promisor in consideration of the fact that the promisee will release such promisor from the payment of the other half, and the contract is executed, the money received, and the release indorsed on the note, such a transaction constitutes a valid contract of which the promisor can avail himself when sued for the remaining half of the note. Maslin v. Hiett, 37 W.Va. 15, 16 S.E. 437; Seymour v. Goodrich, 80 Va. 303.
So where a note is secured by a deed of trust, and the grantor in the trust deed conveys the property to a third party, who gives his note to the creditor for the debt with interest and executes a deed of trust to secure such new note, according to agreement, this is the payment of the old debt, and the first deed of trust is discharged. In such case, if in a release deed by the creditor in the first deed of trust he acknowledges payment of the debts so secured, this will not be an acknowledgment of the payment of the debt secured by the second deed of trust. Dryden v. Stephens, 19 W.Va. 1.
One-Half Payment by Stranger.--When a third person pays one-half of a joint note on behalf of one of the makers in consideration of the payee's release of such maker from payment of the other half, and the release is indorsed on the note, such transaction constitutes a complete satisfaction of the note; a release of one joint obligor being a release of all. Maslin v. Hiett, 37 W.Va. 15, 16 S.E. 437.
c. Payment at an Earlier Date. --Where a creditor agrees to remit part of the debt upon condition that a part of the residue be paid at an earlier date, the condition must be strictly performed; but he may, by his consent, enlarge the time, and such consent will bind him in equity. Robertson v. Campbell, 2 Call 421. See also, Higginbotham v. May, 90 Va. 233, 17 S.E. 941.
d. Where Demand Is Unliquidated. --If one owing an unascertained sum of money offers his creditor a sum, declaring that it is in full payment, the contract is discharged by the acceptance of such sum. American Manganese Co. v. Virginia Manganese Co., 91 Va. 272, 21 S.E. 466.
2. PAYMENT BY NOTE.
General Rule.--The general rule is that the debtor's own note does not operate as the payment of an antecedent note unless so intended by the parties. In the absence of such intention, express or implied, the note is treated as a conditional payment merely. Hopkins v. Detwiler, 25 W.Va. 734; Lazier v. Nevin, 3 W.Va. 622; Miller v. Miller, 8 W.Va. 542; Poole v. Rice, 9 W.Va. 73; Dunlap v. Shanklin, 10 W.Va. 662; Bantz v. Basnett, 12 W.Va. 772; Sayre v. King, 17 W.Va. 562; Bank v. Good, 21 W.Va. 455; Farmers Bank v. Mut., etc., Soc., 4 Leigh 69; Moses v. Trice, 21 Gratt. 556; Lewis v. Davisson, 29 Gratt. 216; First Nat. Bank of Parkersburg v. Handley, 48 W.Va. 690, 37 S.E. 536; Morriss v. Harveys, 75 Va. 726; Hess v. Dille, 23 W.Va. 90; Taylor v. Bank of Alexandria, 5 Leigh 471.
So where several small promissory notes are given for a large one, they will be no satisfaction of the larger one unless paid. M'Guire v. Gadsby, 3 Call 234.
Where Note Is Passed into Judgment.--The same rule applies where the note is passed into judgment; the new note is considered as a conditional satisfaction of the judgment only, and upon dishonor of the former, the latter revives and may be enforced at law or in equity. Morriss v. Harveys, 75 Va. 726; Feamster v. Withrow, 12 W.Va. 611.
Where There Is an Argument to Accept in Satisfaction.--But, of course, where there is an express agreement between the parties to accept the new note in satisfaction of the old one, this agreement will control. Merchants National Bank v. Good, 21 W.Va. 455; Hopkins v. Detwiler, 25 W.Va. 734; Morriss v. Harveys, 75 Va. 726; First Nat. Bank v. Handley, 48 W.Va. 690, 37 S.E. 536; Poole v. Rice, 9 W.Va. 73; Dunlap v. Shanklin, 10 W.Va. 662; Hess v. Dille, 23 W.Va. 90; Moses v. Trice, 21 Gratt. 556; Bantz v. Basnett, 12 W.Va. 772; Dages v. Lee, 20 W.Va. 584; Kimmins v. Oldham, 27 W.Va. 258.
Where it is agreed between the parties that the note of a third person shall be taken for the debt, the mere taking of it amounts to the payment of the debt. Dryden v. Stephens, 19 W.Va. 1.
Where the transaction amounts to a novation of the debt by a mere exchange of securities, and the new contract is accepted in satisfaction of the old one, it becomes an accord executed, and discharges the original cause of action, whether the new contract is ever performed or not. Morriss v. Harveys, 75 Va. 726.
No Necessity for Any Form of Words to Make New Note a Good Satisfaction.--Where a new note is accepted in satisfaction of an old one, it is not essential that any particular form of words be used, such as " full satisfaction" or " absolute payment," but any language will be sufficient which, with the surrounding circumstances, plainly indicates a satisfaction of the debt by the adoption and acceptance of a new and different security. Morriss v. Harveys, 75 Va. 726.
Where Agreement to Accept Is Procured by Fraud.--Whether a note is that of one previously bound, or of a stranger, it will not be regarded as an absolute payment or extinguishment of the pre-existing debt, even when so expressly received, if the agreement to so accept it was procured by fraudulent concealment and misrepresentations. Poole v. Rice, 9 W.Va. 73; Merchants National Bank v. Good, 21 W.Va. 455.
Usurious Note.--Where usurious notes are given for a valid pre-existing note they do not amount to a satisfaction, but in such case, the usurious notes being nugatory and void, the creditor is remitted to his original title and remedy. Parker v. Cousins, 2 Gratt. 372.
Impeachment of Settlement by Note.--Where parties have made a settlement in regard to a transaction, and struck a balance, which has been adjusted by cash or note, it is incumbent upon the party complaining of fraud or mistake, by suit in equity, to allege it specially in his bill, and to establish it by proof. Currey v. Lawler, 29 W.Va. 111, 11 S.E. 897.
3. PAYMENT BY CHECK. --The giving of a check by a debtor to a creditor is generally presumed to be only a provisional or conditional payment of the debt for which it is given. The check, however, may, by agreement between the parties, be given and received in full payment and absolute discharge and satisfaction of the debt; and whether it was so given and received is a question of fact for the jury. Blair v. Wilson, 28 Gratt. 165.
III. EFFECT OF ACCORD AND SATISFACTION.
An accord with and satisfaction from one of several persons guilty of a joint assault and battery is a bar to an action as to them all, notwithstanding the acknowledgment of satisfaction is expressed as applying only to the part which that one took in the trespass, and notwithstanding a proviso that it shall not operate in favor of the other trespassers. Ruble v. Turner, 2 Hen. & M. 38.
IV. PLEADING AND PRACTICE.
Mode of Pleading Accord and Satisfaction--At Common Law.--At common law the defendants might have relied upon an accord and satisfaction of the plaintiff's cause of action under their plea of nonassumpsit; but as accord and satisfaction admits the original cause of action and sets forth matters in discharge thereof, they had a right to file such a plea, even though the plea of nonassumpsit had also been filed. First National Bank v. Kimberland, 16 W.Va. 555; Merchants', etc., Bank v. Dorsey, 9 W.Va. 373; Richmond, etc., R. Co. v. Johnson, 90 Va. 775, 20 S.E. 148; Virginia, etc., Ins. Co. v. Buck, 88 Va. 517, 13 S.E. 973.
Mode of Pleading Accord and Satisfaction--Under Statutes.--It is provided by statute, both in Virginia and West Virginia, that " in a suit for any debt the defendant may at the trial prove, and have allowed against such debt, any payment or set-off which is so described in his plea, or in an account filed therewith, as to give the plaintiff notice of its nature, but not otherwise." Va. Code, sec. 3298; W. Va., Code, sec. 4. ch. 126. It follows that under these provisions the defendant, though he may rely upon the accord and satisfaction under the general issue, yet the satisfaction upon which he relies must be so plainly and particularly described in an account filed with his plea, as to give the plaintiff notice of its nature. Richmond, etc., R. Co. v. Johnson, 90 Va. 775, 20 S.E. 148; Virginia, etc., Ins. Co. v. Buck, 88 Va. 517, 13 S.E. 973; Smith v. Townsend, 21 W.Va. 486; Morgantown Bank v. Foster, 35 W.Va. 357, 13 S.E. 996. See also, monographic note on " Assumpsit" appended to Kennaird v. Jones, 9 Gratt. 183.
When Demurrer to Plea Will Be Sustained.--Where, in an action of debt on a judgment, the defendant pleads that by an agreement in writing between the parties the judgment was discharged and satisfied by a new contract for the payment of a sum in cash, which was then paid, and for the payment of the balance by deferred installments, whereby the said judgment was remitted and released, and accord and satisfaction thereof made, a demurrer to the plea will be sustained. Herrington v. Harkins, 1 Rob. 591.
[*]For monographic note on Accord and Satisfaction, see end of case.