Case Name: Isaac D. Hammond, plaintiff and respondent, vs. John H. Christie, impleaded, &c. defendant and appellant
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1867
Citations: 5 Rob. 160
Docket Number: 
Parties: Isaac D. Hammond, plaintiff and respondent, vs. John H. Christie, impleaded, &c. defendant and appellant.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 28
Pages: 160–169

Head Matter:
Isaac D. Hammond, plaintiff and respondent, vs. John H. Christie, impleaded, &c. defendant and appellant.
1. A plea of accord and satisfaction is not supported by proof of a tender made to the plaintiff’s attorney, who declined to accept it as satisfaction.
2. A payment, by a debtor, of a less sum than the amount of his indebtedness, in satisfaction of a debt due his creditor, although such less sum be expressly received by the creditor in full satisfaction, does not constitute an accord and satisfaction, and does not extinguish the creditor’s right to recover the balance of the indebtedness; unless, perhaps, the transaction is of such a character as to constitute a compromise of an honestly disputed claim. Per Jones, J.
3. To bring a case within that exception, the circumstances must be such, as to show that the creditor knew the precise objections raised by the debtor to the .claim, and by accepting the lesser sum recognized their validity, and also to show that the objections were made in good faith, and not as a mere cover to give color to a compromise, so as to evade the principles relating to accord and satisfaction. Per Jones, J.
4. Wallcer v. Millard, (29 N. T. Pep. 375,) and Keen v. Knap, (8 id. 402,) commented on and distinguished from the present case.
6. Where one employs another as his agent to collect a claim, the latter agreeing to pay the same to his principal when collected, in an action to recover a balance remaining in the agent’s hands from collections made by him on such/ claim, the doctrine applies, that an agent receiving money for his principal is bound to pay it over to him, and cannot be, converted into a trustee for a third person, by a mere notice of his claim; nor can he dispute the title of his principal.
6. In such an action the defendant is not entitled to he credited with any drafts drawn upon him hy his principal, unless he has either actually paid, or hound himself to pay, them.
(Before Monell, Garvin and Jones, JJ.)
Heard May 13, 1867;
decided-,-,
Appeal from a judgment entered upon the report of a referee. The plaintiff alleged, in his complaint, that on or about the 1st of May, 1862, at the city of New York, he employed the defendants, (then and still co-partners, under the firm of “ Christie & Stow,”) as claim agents and brokers, to collect from the United States government certain bills for the plaintiff) amounting to a certain sum, ($2146,) which he delivered to them, as such co-partners, and claim agents and brokers, and they undertook to collect the amount of said bills from said United States, and to pay the proceeds over to the plaintiff". That on or about the 18th day of July, 1862, the defendants did collect and receive from said United States government the amount of said bills, and received, as proceeds thereof, a certain sum, ($2146.) That the sum of $100 was a reasonable and fair compensation for the defendants’ services therein. That the plaintiff, at various times in the years 1862 and 1863, at said city, duly demanded from the said defendants payment of the said sum, the proceeds of the plaintiff’s said bill so received by the defendants, less their proper charges and commissions for the collection of said amount. That no part of said sum has been paid the plaintiff, except the sum of $800, and the defendants are now justly indebted to the plaintiff therefor in a certain sum, ($1246,) with interest tnereon from the date of its collection; for which he demanded a judgment against the defendants, with costs.
The defendants, by their answer, denied most of the allegations in the complaint. It alleged that in or about the month of January, 1862, one William S. Bliss called at the office of the defendants in the city of New York, and represented to them that he was an officer in the military service of the United States, and had a claim against the government of the United States to a large amount, for money expended by him, said Bliss, in recruiting a regiment called the Bliss cavalry; that he, said Bliss, subsequently left with the defendants certain papers purporting to be the expenditures, or an account thereof, in recruiting said regiment; that it also appeared that the plaintiff herein was one of the principal claimants for such expenditure; ■ that in accordance with the representations of the plaintiff and said Bliss, said claim was made out at the sum of $2152.20, and presented to the United States government by the defendants for payment; and the defendants had from time to time collected from the United States govern-. ment portions of said claim, amounting to about the sum last aforesaid; that it was duly agreed by and between said Bliss and the plaintiff and the defendants, that in consideration that the defendants would prosecute and collect said elaim, and would pay all the necessary disbursements therefor, they the defendants should receive and retain from the amount collected the sum of ($500) five hundred dollars over and above their ordinary commissions, and that thereupon said claim was prosecuted and collected by the defendants upon and in pursuance of the agreement aforesaid; that the defendants hadpaidtothe plaintiff, or to or upon his order, and by his directions, at different times, between the 18th day of February, 1862, and the 11th day of December, 1862, on account of the bills or claim in complaint mentioned, the sum of. $1521.39. That the sum so received and collected by the defendants from the United States government, as alleged above, and also the sum so paid to the plaintiff, were so received and paid for the benefit of the plaintiff, and all other persons interested in the recruiting of a certain regiment called the Bliss cavalry, and that the plaintiff furnished certain supplies to said regiment, and he had received from the defendants the whole amount of Ms claim for any supplies so furnished to said regiment; that he is only a nominal party in this action; and that the action (if any) should be prosecuted in the name of said William S. Bliss, as the real party in interest,-and not in that of the plaintiff. For a further defense the defendants alleged that on the' 8th day of August, 1863, the plaintiff, for the consideration of seventy- dollars ($70,) and the further- consideration to be performed, as expressed therein, executed under his' hand, and delivered to the defendants the agreement or release, of which the following is a copy:
“ I hereby consent to the discbntinuance of the suit in the case of Isaac D. Hammond against Christie & Stow, and the said suit is hereby discontinued, and the cause of action released, in consideration that Christie & Stow pay the costs of said suit, and pay a certain order or draft drawn by me on Christie & Stow for $70, now in the hands of James M. Sheehan.
New York, August 8, 1863.
(Signed) Isaac D. Hammond.”
That the said sum of $70, being .the amount of the order or draft mentioned in said agreement or release, was duly paid to James M. Sheehan, the person therein mentioned, on the 8th day of August, 1863; and at the time last aforesaid, these defendants offered to pay, and tendered to said James M. Sheehan, he being the plaintiff’s attorney in this action, the plaintiff’s costs of said action.
The referee found the following facts : That the defendants were co-partners in business, as brokers and claim agents, in the city of New York;.that on or about the time stated in the complaint, the plaintiff employed them in their capacity of brokers and claim agents to collect certain moneys due from the United States, arising out of certain claims against the said United States, amounting to the sum of $2146 and upwards, and that the defendants undertook such employment, and agreed to collect the said claims for the plaintiff; that after the collection by the defendants for the plaintiff of the said claims, so placed by him in the hands of the defendants, they recognised the plaintiff as the person to whom they were hound to account for the moneys received by them, by continuing, to transact business with him relative to such claims, and by payments to him on account therepf; that there has been no account and satisfaction between the plaintiff and the defendants in this action, whereby the claim of the plaintiff has been settled and discharged, or this suit discontinued; that the plaintiff in this action is the sole party in interest herein; that the defendants, after their employment by the plaintiff, and the agreement made by them to collect the said claims against the government' for him, collected, as his agents, the sum of $2250; that the defendants have paid to the plaintiff, for and on account of the moneys so collected by them, for him, the sum of $909.66, for which sum they are entitled to be credited in this action; that they are not entitled to be credited on the order on them given by the plaintiff, in favor of William S. Bliss, for the sum of $500, for a larger amount than the sum actually paid by them to Bliss thereon; which was to be $100, and that the retention of the order by the defendants from the said Bliss, in whose favor it was drawn, did not constitute a payment to the plaintiff of the amount of the draft; that there was no agreement between the plaintiff and the defendants, for any specific sum, as a compensation for their labor and services in collecting for him the said claims against the Hnited States; that there were no peculiar circumstances of trouble or complexity in making the collection, and that the defendants a,re not entitled to receive from the plaintiff a larger compensation under the circumstances than the usual brokerage in such cases, which was ten per cent on the actual amount by them collected for the plaintiff, and which compensation amounted to the sum of $225; that after deducting all payments made by the defendants to the plaintiff, or paid by virtue of his orders, and after deducting the amount of commissions on the said collections, to which the defendants are entitled, the plaintiff was entitled to' receive from the defendants the sum of $1115, with interest thereon from the 18th day of July, 1862, amounting to the further sum of $340.08.
The referee found on the foregoing facts, as conclusions of law: (1.) That the defendants, having undertaken to collect the amount of the claims placed in their hands, for the plaintiff", and in his name and as his agentsj were estopped from denying that he was the party in interest in this action, and from denying their liability to account to him therefor. (2.) That the plaintiff, independent of his interest in the subject matter, had by the payment and advances made by him on the claims collected by the defendants, and by the consent of the parties interested, that the collection should be made in his name, such an interest in this claim as to enable him to maintain this action in his own name, under section 113 of the Code of Procedure. (3.) That the order for $500 given by the plaintiff to William S. Bliss, on the defendants, did not operate as an assignment to that extent of the claim of' the plaintiff in this action, the payee, Bliss, never having consented to accept the responsibility of the defendants for the amount of the order, or to discharge the plaintiff from his liability for a larger sum than the actual amount received thereon. (4.) That from the facts proved the plaintiff was entitled to recover from the defendants the said sum of $1465.08, principal and interest.
He, therefore, reported in favor of the plaintiff, for that amount, and judgment was entered accordingly, with costs.
P. J. Pattison, for the appellant.
Jas. M. Sheehan, for the respondent.

Opinion:
By the Court, Jones, J.
The plea of accord and satisfaction is not supported by the proof. The only tender was made to the plaintiff's attorney, who declined to accept it as satisfaction. Consequently one of the essentials to the validity of a plea of accord and satisfaction, viz. an accept anee, is wanting. It is true, he agreed to and did accept payment of a draft held 'by him, upon the defendants; but he declined to, and did not accept it as a payment made under the agreement of August 8,' 1863, and he wholly declined to accept the costs of suit. (Tilton v. Alcott, 16 Barb. 598. Geary v. Page, 9 Bosw. 290.)
But conceding that the sums stipulated to be paid by that agreement have been paid to, and received by the plaintiffs, in full satisfaction of the whole claim, still neither, the agreement nor the' payment made thereunder would have constituted a defense to this action brought to recover the balance left unpaid.
A payment by a debtor, of a less sum than the amount of his indebtedness, in satisfaction of an indebtedness due his creditor, although such lesser sum be expressly received by the creditor, in full satisfaction, does not constitute an accord and satisfaction, and does not extinguish the creditor's right to recover the balance of the indebtedness, (cases above cited; also Dederick v. Leman et al 9 John. 333;) unless, perhaps, the transaction is of such a character as to constitute a compromise of an honestly disputed claim. (Palmerton v. Huxford, 4 Denio, 166. Pierce v. Pierce, 25 Barb. 243. Neary v. Bostwick, 2 Hilt. 514.) To bring a case within this exception, the circumstances must be such as to show that the creditor knew the precise objections raised by the debtor to the claim, and by accepting" the lesser sum recognized their validity; and also to show that the objections were made in good faith and not as a mere cover to give color to a compromise, so as to evade the principles relating to accord and satisfaction.
.The proof in this case does not bring it within the exception. It does not appear that at the timé of the agreement the plaintiff knew what objections .were raised to his claim. It cannot, therefore, be inferred that he recognized their validity.
The appellant's counsel has cited two cases which he deems sustains his defense of accord and satisfaction. They are Walker v. Millard, (29 N. Y. Rep. 375;) and Koon v. Knap, 8 id. 402.) A mere inspection of the first case is sufficient to show that it has no bearing on the principles under discussion. The second case is worthy of a little more attention, because it is possible that its bearing may be misapprehended. On a careful reading, it will be seen that this case decides but two principles: 1st. That a contract agreeing to take a certain sum in full compensation for damages arising out of personal injuries, can be pleaded in bar of an action brought to recover damages for such injuries. This holding does not infringe on .the principle relating to the plea of accord and satisfaction, for those principles apply only to damages arising out of a breach of those contracts, which are capable of being accurately measured according to definite legal rules. Thus the damages arising from not paying a promissory note are, immediately on the breach, adjusted by the law at the amount of the note and the interest thereon, from the date it became due; while in the case of personal injuries there can be no adjustment, except by a verdict, the amount of which, until rendered will, of course, be uncertain.
Now, in the one case the law says it cannot be allowed for you to take advantage of your creditor's necessity for ready money, and by paying him $50 to relieve yourself from paying $100 which you justly owe him and ought to pay; while in the other it says, as the law fixes no sum which shall be your compensation for a personal injury, and as you are fully as capable of determining what would be a proper compensation as a jury is, it is . perfectly proper that you should agree on the sum which you consider as sufficient compensation, and, after having so agreed, that you should not be permitted to speculate on the probability of a jury thinking your own estimate too low.
The other principle decided by the case of Koon v. Knap, (8 N. Y. Rep. 402,) is that a receipt, which is in its nature ¡a contract, cannot be varied or altered by parol; and that this doctrine applies as well to receipts which are contracts for the compromise of contract debts, as to other contracts. There is no question of the correctness of this decision. But it has nothing to do with the principle applicable to the case at bar. Although such a receipt cannot (except such portion as acknowledges the receipt of a consideration) be contradicted or varied by parol; yet that does not make the contract expressed in the receipt a binding or valid one. The question in the case at bar is whether the contract in question is valid and binding; and for the reasons just given we think it is not.
The appellant, however, further insists that the action is not brought by the real party in interest. The referee has found as a fact, that the plaintiff employed the defendants as his agents, to collect a certain claim, the defendants to pay the same to the plaintiff, when collected. This finding is sustained by the evidence. The suit is brought to recover a balance remaining in the defendants' hands from collections made by them on their claim. The doc|trine in the case of principal and agent applies, which is: ¡"If an agent receives money for his principal, he is bound to pay it over to him, and he cannot be converted into a trustee for a third person by a mere notice of his claim." (Story on Agency, 3d. ed. § 217.) Nor can he dispute the title of his principal. (Id.)
The only remaining matter urged by the appellant's counsel is that the defendants should be credited with the • sum of $500, by reason of a draft drawn on them by the plaintiff in favor of Col. Bliss, for $600. Upon this draft the defendants paid Bliss $100. There is evidence tending to show that the balance was paid by crediting it to Bliss' account for prior advances made to him. . But, on the other hand, there is evidence contradictory of this, and tending to show that no more than $100 has been paid on it. Upon this contradictory evidence, the referee has found as a fact, that no further.payment than $100 has been made on this draft. His finding on this point is conclusive. We have then a draft drawn by the plaintiff on the defendants, in favor of Bliss, for $600, not accepted in writing, and on which only $100 has been paid. For the balance, the defendants are not liable to Bliss. They are not liable as acceptors, because they have never accepted in writing; they are not liable to him as assignee of the plaintiff because the draft in question does not operate as an assignment. Even if the evidence is sufficient to establish a parol promise, made by the defendant to Bliss to pay him the whole amount of the draft, still1 23**6 Bliss could not recover on such promise. (Luff v. Pope, 5 Hill, 413. Winter v. Drury, 1 Seld. 525. Pike v. Irwin, 1 Sandf. 14.)
Thus nothing has changed the original liability of the the defendants to pay this balance to the plaintiff.
Judgment affirmed, with costs.