Case Name: Work et al. v. Beach
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1889-05-24
Citations: 6 N.Y.S. 27
Docket Number: 
Parties: Work et al. v. Beach.
Judges: 
Reporter: West's New York Supplement
Volume: 6
Pages: 27–29

Head Matter:
Work et al. v. Beach.
(Supreme Court, General Term, First Department.
May 24, 1889.)
Account Stated—Contract.
An action by plaintiffs against defendant and his co-partner on a joint account was discontinued on defendant’s agreeing to assume individual liability on the joint account when it should be consolidated with his individual account with plaintiffs, and on his permitting plaintiffs to sell stock held as security on both accounts. Defendant agreed to examine the consolidated account, and, if he found it correct, to adopt it as the measure of his liability, and pay it, “ when he could do so. ” Held, that when defendant accepted the consolidated account, it became an account stated, but plaintiffs could not recover thereon without showing that defendant was able then to pay it.
Appeal from special term, New York county.
Action by Frank Work and others against Miles Beach, The substance of the complaint is that defendant had two accounts with the plaintiffs, who were stock-brokers,—one an individual account, and the other a joint account with one Marston; that plaintiffs, not having sufficient margin upon the joint account, began an action upon it against defendant and Marston, to recover a balance due thereon, and defendant and Marston appeared and contested their liability; that before any trial defendant requested plaintiffs to discontinue said action, and sell all of his margins held by them for both accounts, and, in consideration of such discontinuance, agreed that the proceeds of all the margins on both accounts should be credited in one account; that all advances on both accounts should be charged in the same account; that the two accounts should be consolidated into said one account; that he would individually assume liability for the balance due on the accounts after such consolidation, and, as sood as the accounts were adjusted, consolidated, and reduced to one account, he would examine it, and, if correct, would adopt it as a liability against himself, “and pay the amount due when he could do so;” that thereupon plaintiffs accepted and assented to said proposition, and in conformity thereto discontinued the action, sold the securities, consolidated the accounts, making the debts and credits as agreed, and on or about February 25,1885, rendered to the defendant the consolidated account, showing a balance of $14,570.68 against him, and that the defendant examined the account, retained it for.more than 10 days, and declared to the plaintiffs that it was correct. The complaint then avers that thereupon the said account became an account stated, and the fact that the balance has not been paid. A demurrer to the complaint, on the ground that it does not state facts sufficient to constitute a cause of action, was sustained, and plaintiffs appeal.
Argued before Van Brunt, P. J., and Bartlett, J.
Henry S. Bennett, for appellants. A. C. Brown, for respondent.

Opinion:
Van Brunt, P. J.
It may not be at all necessary to add anything to the opinion of the court below, which satisfactorily, and we think conclusively, disposes of the questions raised upon this appeal. It may, however, be necessary to consider one or two points made by the counsel for the plaintiff, in which it is claimed that the court below misapprehended the theory of the complaint, in that the complaint excludes the idea that there was a new agreement which changed the original cause of action or discharged the original debt. We think that, upon an examination of this complaint, it clearly appears that the original debt was discharged, and a new obligation created by the transactions therein recited. It appears from the complaint that the defendant had employed the plaintiffs to buy and sell for himself individually, and also for the joint account of himself and another, various stocks, bonds, and other securities dealt in on the stock exchange; that the plaintiffs advanced money for making these purchases, and the defendant agreed to leave with them said securities so purchased, or other valuable securities, sufficient to keep them at all times fully indemnified and secured; that for some time previous to J une, 1884, the joint account was in arrears, and the plaintiffs demanded further security and indemnification from the defendant and his copartner, and brought an action against them to recover the amount advanced, which had become due on the joint account; that the defendants duly appeared, and interposed a defense contesting their liability on said account. While such action was pending a settlement of that litigation was made, the plaintiffs agreeing to discontinue the action, and the defendant permitting them to sell the securities held by them both for his individual and joint accounts, and that the proceeds should be credited in one account, and that the advances on both accounts should be also charged in one account, and that such account should be a consolidation of both accounts, and that he would individually assume liability for the balance due on such account after such consolidation, and pay the amount due when he could do so. If this arrangement was not a discharge of the original debt, it is difficult to see how there could be an accord and satisfaction without actual payment. Claims were being made against the defendant and another, which were contested. The plaintiffs held securities which belonged to him individually, and which had been deposited as security for his individual account and the joint account. The contest as to the liability on the joint account is settled by this arrangement, and the defendant permits the securities to be sold. The wording of the complaint, that he requested them to be sold, has no particular significance. The defendant permits the plaintiffs to sell the securities, and in consideration of discontinuance of the action assumes the whole liability, and promises to pay the same when he is able. It is true that this transaction made this an account stated when the accounts were approved by the defendant, as they were, and that, in the absence of any promise to pay, the law would imply a promise. But° where an account is stated, and as part of the transaction an express promise is given to pay upon a condition, that excludes the implied promise, because an express contract to do a tiling excludes the idea of there being an implied contract. For example, when a man purchases goods, arid nothing is said about prices or time of payment, the law implies a contract to pay the value of the goods upon delivery. If, however, the purchaser makes an express promise to pay in 30 days after delivery, what, under such circumstances, becomes of the implied promise? It is clear that it does not arise. So, in the case at bar, if there has been a settlement of these accounts, and simply an account stated had between these parties, an implied promise to pay would naturally have arisen. Butin connection with the settlement is an express promise upon the part of the defendant to pay when he is able. That is the condition upon which lie consents to the accounts and to the sale of the securities, and upon which he withdraws his defense to the joint account. Flow, after the plaintiffs have accepted the withdrawal of the defense and the sale of the securities, and have accepted the assumption of liability by the defendant, it seems to be difficult to see how they can escape the condition upon which that liability was incurred. In other words, they propose to have the benefit arising from the settlement relieved from the burden which was specifically attached to it. The mere fact that the account was duly admitted correct by the defendant himself does not deprive him of the conditions with which that admission was coupled.
It is urged, however, that, assuming the appellants to have agreed to forbear, where is to he found the consideration sufficient to support so important an agreement? The consideration seems to be apparent, and the whom ques tian is begged when it is claimed that he had no defense to the account, for he investigated it, and admitted its justice; since the admission of the account was induced by the acceptance of his promise that he should not be called upon to pay it until lie was able. This is another instance in which the plaintiffs seem to claim every part of the bargain and settlement which tends in their favor, without taking into consideration anything given to the defendant because of the withdrawal of his contest. If the defendant had stated, "We will settle our differences; we will agree upon a certain sum which I am to pay in six months," could the plaintiffs—their claim being admitted—require the defendant to pay immediately? The falsity of this position seems to be established the moment it is stated. Great stress is laid upon the hardship of such a contract to the plaintiffs. It seems to us that it would be a gross hardship, after the defendant admitted this account upon the express undertaking that he was to pay when he was able, and presumably not before, that he should be called upon to pay without proof of this condition. We know nothing of the hardship of the agreement. The defense, which was withdrawn, to the joint account may have been perfectly good, or it may have been a defense in which the chances of success were reasonable, and the defendant, for the purpose of getting the time in which to pay the alleged claim, may have been willing to waive his chances of success. He having done so, there is certainly no hardship in calling upon the plaintiffs to adhere to the bargain which they made with the defendant, and which was the basis of the withdrawal of the defense to the action upon the joint account. The judgment must be affirmed, with costs.
Bartlett, J., concurs.