#### Charles L. Weeks *et al.,*Respondents, *against*Henry C. Zimmerman, Appellant.

(Decided April 1st, 1889.)

One of the partners of an embarrassed firm gave a chattel mortgage to plaintiffs, creditors, on all the firm property, to secure their claim. On the same day another partner, without knowledge of the chattel mortgage, transferred to defendant, another creditor, likewise without knowledge of the mortgage, a part of the property embraced therein-, such property being taken in full satisfaction, and the debt cancelled on defendant’s books. The chattel mortgage was not recorded until the following day. *Held,*that the transaction with defendant was not a payment of an antecedent debt, but an accord and satisfaction, and that defendant’s title was good as against plaintiffs.

Appeal from a judgment of the District Court in the city of New York for the Third Judicial District.

. The facts are stated in the opinion.

*T. McMahon,*for appellant.

*Schenck & Punnett,*for respondent.

*227Per Curiam.

[Present, Van Hoesen and Bookstaver, JJ.]—This action was brought to recover damages for the alleged conversion of a horse, wagon, and harness. On the 10th of September, 1888, the firm of Miller & Pfeiffer, doing-business as bakers in the City of New York, were embarrassed, and among their creditors were the plaintiffs and the defendant. Between eleven and twelve o’clock in the forenoon of that day, Pfeiffer, in his firm name of Miller & Pfeiffer, executed and deliver to the plaintiffs a chattel mortgage on all of the firm property then used in their business, including the horse, wagon, and harness in controversy, to secure the indebtedness of his firm to the plaintiffs. On the same day, Miller, of the firm of Miller & Pfeiffer, on behalf of his firm and in ignorance of the fact that his partner had given the chattel mortgage to the plaintiffs, had an interview with the defendant, in which he stated his partner had taken away some of the goods, and that he was afraid they could not go on, but that if. the defendant would take the horse, wagon, and harness for his debt, they would be able to pay everybody else with the remainder of the property. After some negotiation defendant agreed to do so,, and sent his agent for them, and they were delivered to him between two and three o’clock in the afternoon of the same day. Defendant thereupon cancelled the debt on his books, and afterwards "sold the horse, wagon, and harness for less than his debt. Plaintiffs did not file the chattel mortgage in the register’s office until the following day. When they found the defendant in possession of the horse, wagon, and harness, they demanded them of him, and upon his refusal to deliver them they commenced this action for the conversion of this property, and after a trial, the court below rendered judgment in favor of the plaintiffs.

In this we think it erred, and it fell into this error by regarding the transaction between Miller and the defendant as a sale of the property in payment of an antecedent debt, which it was not. No sum was agreed on as the value of the property. There was no bargaining as to the price; no bill of sale was executed; and although a writing is not necessary to *228make a valid sale, yet we think it indicative of the intent of the parties. It was to be taken in satisfaction of the debt, no matter what was realized from the property, and this was consummated by defendant cancelling the debt on his books when the agreement was made. As the event turned out, the property realized less than the amount of the debt, hence it was of advantage to the contracting party. This makes the transaction an accord and satisfaction, which is a substitution of a new agreement in lieu of the former one, and is accepted in full performance of the first agreement. The new agreement,we think, would have been a bar to any action which the defendant might have brought against Miller & Pfeiffer upon the original debt; hence the defendant was a *bona fide*holder of the property" in question as against the plaintiffs, as the transaction was completed before they had filed their chattel mortgage *(Thompson*v. *Van Vechten,*27 N. Y. 568; *Parshall*v. *Eggert,*54 N. Y. 18; *Dutcher*v. Swartout, 15 Hun 33).

The judgment should therefore be reversed, with costs.

Judgment reversed, with costs.