petual forbearance,' extinguishing an existing cause of action;& but the principle seems logically correct, and is now wellsettled law 9 So far indeed has the doctrine been carried that a contract unenforceable because of the Statute of Frauds has been held operative as a satisfaction of a prior enforceable contract. 10 § 1847. Presumption that accord is not intended as satisfaction. It is often extremely difficult to determine as matter of fact whether the parties agreed that the new promise should be itself the satisfaction of the original cause of action, or whether they contemplated the performance of the accord as the satisfaction. Unless there is clear evidence that the former was 7 See supra, § 338. 8 The reason given by Eyre, C. J., in Lynn v. Bruce, 2 H. Bl. 317, against the validity of unexecuted accords generally, that they are merely "substituting one cause of action in the room of another," is obviously as applicable to an agreement which is itself to be satisfaction of a cause of action as to an agreement where the performance is to be the satisfaction. ' Evans v. Powis, 1 Exch. 601; Buttigieg v. Booker, 9 C. B. 689; Edwards v. Hancher, 1 C. P. D. 111, 119; Frankfurt-Barnett Co. v. Wm. Prym Co., 237 Fed. 21, 27, 150 C. C. A. 223; Acker v. Bender, 33 Ala. 230; Smith v. Elrod, 122 Ala. 269, 24 So. 994; Mama v. Rout (Ark.), 215 S. W. 610; Heath v. Vaughn, 11 Col. App. 384, 53 Pac. 229; Warren v. Skinner, 20 Conn. 559; Goodrich v. Stanley, 24 Conn. 613; Brunswick, etc. Ry. Co. v. Clem, 80 Ga. 534, 7 S. E. 84; Byrd Printing Co. v. Whitaker Paper Co., 135 Ga. 865, 70 S. E. 798; Simmons v. Clark, 56 Ill. 96; Hall v. Smith, 10 Iowa, 45, 15 Iowa, 584; Sawyer v. Hawthorne, 167 Ia. 410, 149 N. W. 512; Bell v. Pitman, 143 Ky. 521, 136 S. W. 1026, 35 L. R. A. (N. S.) 820; Tuttle v. Metz Co., 229 Mass. 272, 118 N. E. 291; Whitney v. Cook, 53 Miss. 551; Yazoo, etc., R. Co. v. Fulton, 71 Miss. 385, 14 So. 271; Worden v. Houston, 92 Mo. App. 371; Gerhart Realty Co. v. Northern Assur. Co., 94 Mo. App. 356, 68 S. W. 86; Perdew v. Tillma, 62 Neb. 865, 88 N. W. 123; Lorentowicz v. Bowers (N. J. Eq.), 102 Atl. 630; Frick v. Joseph, 2 N. Mex. 138; Morehouse v. Second Nat. Bank, 98 N. Y. 503; Nassoiy v. Tomlinson, 148 N. Y. 326, 42 N. E. 715; Spier v. Hyde, 78 N. Y. App. Div. 151, 79 N. Y. S. 699; Goffe v. Jones, 132 N. Y. App. Div. 864, 866, 117 N. Y. S. 407; Gunn v. Fryberger (Okl.), 176 Pac. 248; Babcock v. Huntoon, 37 R. I. 526, 93 Atl. 911; Babcock v. Hawkins, 23 Vt. 561; Hard v. Burton, 62 Vt. 314, 20 Atl. 269. See also Hunt v. Brown, 146 Mass. 253, 15 N. E. 587; Bandman v. Finn, 185 N. Y. 508, 78 N. E. 175, 12 L. R. A. (N. S.) 1134; Schwartzfager v. Pittsburg, etc., R., 238 Pa. 158, 85 Atl. 1115, Ann. Cas. 1914 C. 149. Cf. Campbell v. Hurd, 74 Hun, 235, 26 N. Y. S. 458; Wentz v, Meyersohn, 59 N. Y. App. Div. 130. 68 N. Y. S. 1091; Hosler v. Hursh, 151 Pa. 415, 25 Atl. 52. 10 Morris v. Baron, [1918] A. C. 1. See supra, § 593. intended, the latter kind of agreement must be presumed, for it is not a probable inference that a creditor intends merely an exchange of his present cause of action for another. It is generally more reasonable to suppose that he bound himself to surrender his old rights only when the new contract of accord was performed. The earliest decision in which it was held that the accord itself might operate as an extinguishment of the creditor's claim was on an agreement of composition; 11 and it is in such instruments perhaps that it is most frequently and naturally inferred that the intention of the parties was to substitute at once the right to the agreed composition for the old claims. § 1848. Consequence of non-performance of accord. 11 If such is the construction of the agreement, it might seem that even though the accord is never performed the creditor's right to sue on the old claim is lost; and so it has been held.12 The conclusion seems, however, unwarranted. The debtor's breach of promise should justify rescission at the creditor's option instead of an action on the promise. 12 If money had been paid for the debtor's new promise, and the promise had been broken, the money could be reclaimed; 126 and where a discharge of a claim is given for the promise, the same principle can be and should be effectuated by cancelling or disregarding the discharge. Where it is the performance of the accord which is to be the satisfaction of the claim, there can be no doubt that the creditor may, on default in performance of the accord by the debtor, sue either on the original cause of action; 13 or, it would seem, if he prefers to do so, on the contract of accord. 11 Good v. Cheesman, 2 B. & Ad. 328. 12 See Beckwith v. Sheldon, 165 Cal. 319, 131 Pac. 1049; Byrd Printing Co. v. Whitaker Paper Co., 135 Ga. 865, 70 S. E. 798, Ann. Cas. 1912 A. 182; Sioux City Stock Yards Co. v. Sioux City Packing Co., 110 Ia. 396, 81 N. W. 712; Dean v. Skiff, 128 Mass. 174; Howard v. Scott, 98 Mo. App. 509, 72 S. W. 709; Spier v. Hyde, 78 N. Y. App. D. 151, 79 N. Y. S. 699; Babcock v. 124 See supra, § 1454. 13 Brown v. Spofford, 95 U. S. 474, 24 L. Ed. 508; Shubert v. Rosenberger, 204 Fed. 934, 123 C. C. A. 256, 45 L. R. A.(N. S.) 1062; Stanly v. Buser (Kans.), 185 Pac. 39; and this follows a fortiori from the decisions cited supra, §§ 1842, 1843. Similarly, if the creditor, contrary to his agreement, sues on the original claim without giving opportunity for the performance of the accord, the debtor need make no attempt to use the accord as a ground for injunction, even though the local law permits him to do so, but may suffer judgment to go against him and resort to a separate action on the accord.14 § 1849. Sealed contracts. A contract under seal presented some peculiar difficulties. The maxim "Nihil tam conveniens est naturali æquitate, ut unumquodque dissolvi eo ligamine quo ligatum est," seemed to forbid discharge by accord and satisfaction as completely as by mere parol agreement. Blake's case, 15 however, decided that a right of action for unliquidated damages for breach of covenant could be discharged in this way. The Court distinguished the case from that of a covenant to pay a sum of money. "For there is a difference, when a duty accrues by the deed in certainty, tempore confectionis scripti, as by covenant, bill, or bond to pay a sum of money, there this certain duty takes its essence and operation originally and solely by the writing, and therefore it ought to be avoided by a matter of as high a nature, although the duty 16 be merely in the personalty, but when no certain duty accrues by the deed, but a wrong or default subsequent, together with the deed, gives an action to recover damages which are only in the personalty, for such wrong or default, accord with satisfaction is a good plea." 17 Before breach of a covenant, not only was a parol agreement ineffectual to discharge it, but even though property were accepted in satisfaction the covenant was not discharged, whether the covenant was for the payment of money, 18 or for the performance of some duty, breach of which would sound 14 Hunt v. Brown, 146 Mass. 253, 15 N. E. 587. 156 Coke, 43b. 16 Neal v. Sheffield, 3 Croke, 254; Preston v. Christmas, 2 Wils. 86. Therefore, payment after the day was not a good plea to an action on a bond until made so by statute of 4 Anne Ch. 16. Sec. 12. At an earlier time pay ment even on the day of maturity was not sufficient to protect the obligor. See supra, § 1821. 17 See to the same effect, Webb v. Hewitt, 3 K. & J. 439, 443; Herzog v. Sawyer, 61 Md. 344, 352; Cabe v. Jameson, 10 Ired. L. 193, 51 Am. Dec. 386; Smith v. Brown, 3 Hawks, 580. 18 Spence v. Healey, 8 Ex. 668. in damages.19 Doubtless equity would, if necessary, enjoin the enforcement of any kind of bond 20 where satisfaction had been given either before or after maturity. The acceptance of property in satisfaction necessarily imports an agreement never to enforce the original obligation, and covenants to forbear perpetually were early given effect as a defence, even by courts of law. The reason sometimes given is that such a covenant amounts to a release.21 The more accurate reason, however, and that generally given in the books, is that circuity of action is thereby avoided. 22 This latter reason is as applicable to the case of a parol contract never to sue as to the case of a covenant not to sue, so that it would seem that even a court of law might well have held satisfaction before breach a defence. There can now be no doubt that wherever equitable defences are allowed at law, an executed accord would be a good defence to an action at law on the covenant, and probably few courts would hesitate to accept such a defence, even though no statute had authorized the general use of equitable pleas.23 If an executory accord were agreed upon as absolute satisfac4ion probably the same is true; 234 and even if an accord is not itself satisfaction an injunction should be granted on principles elsewhere stated. 236 19 Kaye v. Waghorne, 1 Taunt. 428; Berwick v. Oswald, 1 E. & B. 295; Harper v. Hampton, 1 H. & J. 622, 673; Smith v. Brown, 3 Hawks, 580. 20 Steeds v. Steeds, 22 Q. B. D. 537; Nash v. Armstrong, 10 C. B. (N. S.) 259; Hurlbut v. Phelps, 30 Conn. 42; McCreery v. Day, 119 N. Y. 1, 23 N. E. 198, 6 L. R. A. 503, 16 Am. St. Rep. 793. 21 Deux v. Jefferies, Cro. Eliz. 352. 22 Hodges v. Smith, Cro. Eliz. 623; Lacy v. Kynaston, 2 Salk. 575; S. C., 1 Ld. Ray. 688; 12 Mod. 548; Ford v. 23 Frankfurt-Barnett Co. V. Wm. Cal. 335; Worrell v. Forsyth, 141 Ill. 22, 30 N. E. 673. See also Starin v. Kraft, 174 Ill. 120, 50 N. E. 1059; Jones v. Chamberlain, 97 Ill. App. 328; Munroe v. Perkins, 9 Pick. 298, 20 Am. Dec. 475; Savage v. Blanchard, 148 Mass. 348, 19 N. E. 396; Siebert v. Leonard, 17 Minn. 433, 436; Armijo v. Abeytia, 5 N. Mex. 533, 545, 25 Pac. 777; Reichel v. Jeffrey, 9 Wash. 250, 37 Pac. 296. Cases where a parol agreement to rescind or discharge a sealed contract is held effectual, also a fortiori imply that accord and satisfaction would be good. 23 See, however, the authorities from California, Illinois and Oklahoma, cited supra, § 128, n. 38b, 39d, and § 1836, n. 80. 236 Supra, § 1845. § 1850. Debts of record. A debt of record presented a difficulty similar to that of a debt by specialty. Accordingly it could not be discharged at common law even by payment. By Statute of 4 Anne, c. 16, § 12, this was changed in England. The English statute may be regarded as part of the American common-law inheritance, but it did not cover the case of accord and satisfaction, and that has been held within comparatively recent times to constitute no defence to an action on the judgment.24 It may be doubted, however, whether these decisions would now be followed anywhere. The Supreme Court of the United States, even when holding itself obliged to preserve the distinctions between law and equity as they existed a century ago, has held the defence good, 25 and other decisions are to the same effect.26 § 1851. Requisites of satisfaction like those of consideration. Though the defence of accord and satisfaction was recognized long before the doctrine of consideration was developed, the requirements for a legally effective satisfaction became confused and regarded as identical with the requirements for the consideration of a promise. As an accord and satisfaction is an executed transaction, and as the validity of the satisfaction as a discharge of the previous cause of action cannot originally have rested on any view that the satisfaction was rather the consideration of a promise of perpetual forbearance than a technical extinction of the old cause of action, the essentials of consideration and of satisfaction might well have varied. But it was not unnatural that what had been regarded as inadequate to work a satisfaction of a cause of action should also have been regarded as insufficient consideration to support a promise, and later that whatever was insufficient consideration to sup 24 Riley v. Riley, 20 N. J. L. (Spencer) 114; Mitchell v. Hawley, 4 Denio, 414; Garvey v. Jarvis, 54 Barb. 179. 25 Boffinger v. Tuyes, 120 U. S. 198, 205, 7 S. Ct. 529, 30 L. Ed. 649. 26 Re Freeman, 117 Fed. 680, 684; Jones v. Ransom, 3 Ind. 327; McCullough v. Franklin Coal Co., 21 Md. 256; Savage v. Blanchard, 148 Mass. 348, 19 N. E. 396; Weston v. Clark, 37 Mo. 568, 572; Fowler v. Smith, 153 Pa. 639, 25 Atl. 744; Reid v. Hibbard, 6 Wis. 175. Accord and satisfaction was held a good plea to an action on a foreign judgment in Hardwick v. King, 1 Stew. (Ala.) 312. |