Case ID: ny-super-ct_35/html/0029-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Monell, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SIGISMUND H. HORSTMAN and others, Plaintiffs, v. JOHN MILLER and others, Defendants.
    Composition Deed.
    I, Covenants by creditors in severalty, effect of.
    
    1. A covenant whereby the creditors “ severally and each for himself agree ” to release and discharge, etc., does not render the deed void.
    " Before Monell, Curtis, and Sedgwick, JJ.
    
      Decided June 29, 1872.
    Exceptions ordered to be heard at General Term.
    The action was upon a promissory note made by the defendants, payable to the plaintiffs, dated September 10, 1868.
    The defendants gave in evidence a composition deed as follows:
    “ Know all men by these presents, that we, the subscribers, creditors of the firm of Miller & Company (composed of John Miller and Albert F. Miller, copartners), do hereby severally and each, for himself agree with the said firm of Miller & Company, that whereas they are unable to pay and satisfy in full our respective just debts, demands, and claims, we will take twenty cents for every dollar of our respective just debts, demands, and claims, and on receiving the said twenty per cent, we will thereupon and in consideration thereof, fully release and discharge the said firm, and each of the partners thereof from the same, in like manner as if the whole amount should be paid; provided, however, that unless the said twenty per cent, shall be paid on or before the first day of March, one thousand eight hundred and sixty-nine (1869), then this agreement shall be of no effect, and we shall be entitled to claim as if it had never been made.”
    The deed was under seal, and signed by the creditors of the defendants, including the plaintiffs.
    The defendants proved a tender to the plaintiffs of twenty per cent, of the plaintiffs’ claim prior to the time limited in the deed, which was refused.
    The tender was renewed at the trial, and again refused. i
    There was no evidence of any payment having been made upon the composition deed to any of the creditors, and no evidence of any tender having been to any creditor other than the plaintiffs, and the amount due plaintiffs had not been paid into court.
    The judge directed a verdict for the plaintiff for the amount claimed.
    The defendants excepted, and the court sent the exceptions to the General Term.
    Mr. H. Tompkins, attorney, and James Clark, of counsel for plaintiffs,
    urged: I. The language of the composition agreement, “ We, the subscribers, creditors “ of the firm of Miller & Co., do hereby severally and ‘1 each for himself agree with the said firm of Miller “ & Co.,” etc., excludes the idea of any agreement between the subscribing creditors for the relinquishment, by each, of a portion of his claim, in consideration of a like relinquishment by the others. The effect of the agreement, as to each creditor, is the same as if it had been signed by him alone.
    1. If the composition agreement be construed as the separate contract of plaintiffs with defendants, even acceptance by the former of the 20 per cent, stipulated for would constitute no defence. Acceptance of a less sum in lieu of a greater, admitted to be due, does not amount to a valid accord and satisfaction (Cumber v. Wane, 1 Strange, 426; Harrison v. Close, 2 Johns. 
      448; Seymour v. Minturn, 17 Id. 169; Dederick v. Leman, 9 Id. 333 ; Mechanics’ Bank v. Hazard, 13 Id. 353; Bunge v. Koop, 5 Bob. 1; 1 Smith’s Lead. Cases, 550).
    2. But there was no acceptance of the smaller sum agreed to lye paid. The most that can "be claimed is an accord with tender of satisfaction, which is no defence (3 Black. Comm. 15 ; Heathcote v. Crookshank, 2 T. R. 24; Com. Dig. Accord, b; Russell v. Lytle, 6 Wend. 391; Brooklyn Bank v. Degrauw, 23 Id. 342 ; Tilton Alcott, 16 Barb. 598; Day v. Roth, 18 N. Y. 448; Fellows v. Stevens, 24 Wend. 294).
    3. The objection is not avoided by the fact that the agreement is under seal. The composition deed, so far from merging the original debt, expressly excludes the idea of such merger- by the stipulation, in futuro, to release the original indebtedness when the condition of the agreement shall have been performed (Hicks v. Clark, 41 Vermont, 183, 186; U. S. Lyman, 1 Mason, 482, 505; Van Vliet v. Jones, Spencer, 341; Yates v. Aston, 4 Q. B. 182, 196; Bell v. Banks, 3 M. & Gr. 258, 265; Wallace v. Fairman, 4 Walts, 378; Charles v. Scott, 1 Serg. & Rawle, 294; Bank of Columbia v. Patterson’s Admr. 7 Cranch, 299 ; Montgomery v. St. Stephen’s Church, 4 Watts & Sergeant, 542, 546).
    4. In Heathcote v. Crookshank, 2 T. B. 24, where all the creditors were made parties to a general composition, and the composition money was actually tendered to the plaintiff, the defence was held incomplete because it was not expressly pleaded that the plaintiff’s agreement was in consideration of all the creditors coming in. In the case at bar, not only is no such consideration pleaded, but its existence is negatived by the language of the agreement.
    
      a. The creditors agree “ severally and each for himself.”
    
      b. The expressed and only consideration of each creditor’s agreement is the 20 per cent, stipulated to be paid on his claim.
    5. A contract to do an act, in futuro, in satisfaction of a past breach of contract, is revocable and inoperative until performance (Lynn r. Bruce, 2 H. Bl. 317; Graham r. Gibson, 4 Exch. 768).
    II. If it be implied, notwithstanding its express terms, that the agreement is between the creditors as well as with the debtors, still the defence must fail.
    1. Although it is averred in the answer that ‘ ‘ defendants have paid the several other creditors who “executed said deed the various amounts contracted “to be paid thereby,” no evidence of such payment, or tender of it, was offered. That such evidence was necessary becomes manifest when we reflect that, in composition agreements, the consideration for each creditor’s relinquishment of part of his demand, is a similar relinquishment by the others. But the failure to pay any one creditor, by operation of law (see authorities cited below), and, in this case, by the terms of the agreement, remits such creditor, and, as a necessary consequence, each of the others, to his original rights. The creditors, not paid, it is plain, are let in to claim the entire amount of their respective demands. In other words, they are absolved from their agreement to relinquish part of what was due them; but it was that very agreement which constituted the consideration of the agreement to relinquish by the others. In the present case, if it be claimed that the plaintiffs have relinquished a portion of their demand in consideration of a similar relinquishment by the other creditors, I answer, that unless the contract has been so performed, either by payment or tender, as to render the relinquishment by the others effectual, the consideration of plaintiffs’ agreement has failed (3 Chitty on Plead. 931; 36 Eng. Law & Eq. 193 ; Penniman v. Elliott, 27 Barb. 315; Reay v. Richardson, 2 C. M. & R. 422).
    
      
      2. It rested on defendants to show complete performance of the composition agreement (Cranley v. Hillary, Maule & Sel. 120 ; Oughton v. Trotter, 2 Nev. & Man. 71; Fellows v. Stephens, 24 Wend. 302).
    3. The tender pleaded is ineffectual.
    
      a. The money was not paid into court, and notice given to the plaintiffs (Simpson v. French, 25 How. Pr. R. 464.
    
      b. It was not shown that the money produced and tendered on the trial, was the same previously tendered [fols. 40, 41] (Roosevelt v. Bull’s Head Bank, 45 Barb. 579; Brooklyn Bank v. De Grauw, 23 Wend. 345).
    III. Defendants’ exceptions should be overruled, and judgment entered for plaintiffs on the verdict with costs.
    
      Messrs. Goodrich & Wheeler, attorneys, and Mr. Thomas M. Wheeler, of counsel for defendants, urged : First. The instrument, being under seal, imports a consideration.
    
      Second. The consideration in this deed is the payment of the twenty per cent., and a tender being equivalent to payment, the defendants were released from the debt.
    
      Third. Other creditors besides the plaintiffs having signed the deed, the relinquishment of a part of their demands, and the surrender of their right to enforce them in full, is a sufficient consideration to uphold it (Hull v. Merrill, 5 Bosw., 266; Renard v. Tuller, 4 Bosw. 107).
    
      Fourth. The insertion of the words “ severally and each for himself,” does not render the deed invalid. The law infers that the creditors agree “severally and each for himself,” and the insertion of what the law infers would not invalidate it. The law infers a separate agreement between each creditor and the debtors, and also an agreement between each of the creditors (see Hall v. Merrill, 5 Bosw. 273 ; Brick v. Cole, 4 Sand. 83).
    
      
      Fifth. The verdict should be set aside, and judgment given for the defendants.
   By the Court.—Monell, J.

It is understood that the learned justice at the trial held, that the composition deed being a several, and not a joint, agreement, it did not operate as a release of the original debt, for want of a sufficient consideration to uphold it.

The ground on which these composition deeds are sustained is, that the relinquishment to the debtor by others who sign of a part of their claims, or the concession of some modification of the right to enforce them, constitutes a sufficient consideration. The agreement must be mutual, and mutually binding upon all who sign it.

I am unable to distinguish this case from Hall v. Merrill, 5 Bosw. 266. In that case, the agreement was joint. In this case, it was several. Whatever may be the nature of the obligation in terms, it must, necessarily, in all cases be several. Bach creditor must agree for himself with the debtor, and his several agreement is joint, or his joint agreement is several, only so far as it is mutual with the others signing.

It is not necessary that the agreement should express the mutuaEty of all the signers. It is sufficiently implied by the nature of the agreement.

This cannot, therefore, be regarded as the mere separate contract of the defendants, and as such having the effect only of an accord. But it must be regarded as a mutual agreement, among all who signed it, to relinquish a part of their respective debts to the debtor, and binding upon all.

I think the exceptions should be sustained, the vérdict set aside, and a new trial ordered, with costs to the defendants to abide the event.