Court Opinion

ID: 5458003
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:26:19.109805+00
Date Added: 2024-06-11T08:32:32.638574
License: Public Domain

By the Court, Parker, J.
I shall consider this case upon the facts as found by the referee, though I am not certain the evidence warranted the conclusion that it was a part of the original agreement for compromise that the §100 note should not be taken in satisfaction, unless it was paid at maturity. The evidence shows nothing of any such condition, previous to the plaintiffs’ letter acknowledging the receipt of the note. By the facts found it appears that on the 17th of May, 1845, the defendant owed the plaintiffs §371,57, for goods sold and delivered. A compromise was agreed upon on that day, by which the plaintiffs were-to have paid and secured to them 50 cents on a" dollar, in satisfaction of such indebtedness. In pursuance of this agreement the defendant paid at that time §85,69, and *375afterwards sent to the plaintiffs, in a letter which was received on the 8th of July, 1845, the promissory note of F. Holden for $100, payable on the 17th of November then next, with interest from the 17th of May of the same year. It was agreed by the parties that in case said note was paid at maturity, and not otherwise, it should be in full of all demands the plaintiffs had against the defendant. The note was not paid at maturity; but in February, 1846(’Holden paid the plaintiffs, on the note, $63. In April, 1846, the plaintiffs wrote to the defendant asking immediate payment of the note, and in May, 1846, Holden paid the balance and took up the note. This suit was brought to recover on the original demand.
The law is well established that the acceptance, by a creditor, of the note of a third person, in full satisfaction of an existing debt, is an extinguishment of the original indebtedness, though the note so taken is for a less sum than the whole debt. (20 John. 76. 1 Wend. 172. 14 Id. 116. 21 Id. 450. 22 Id. 341. 5 T. R. 516.) The law is otherwise where the note of the debtor himself is taken. (8 Cowen. 79. 3 Wend. 68.)
In this case the agreement was, that the note of Holden should be taken in full satisfaction of the defendant’s indebtedness, if paid at maturity, and not otherwise. It is claimed that the note not being paid at maturity, the plaintiffs may recover for the whole original indebtedness. There is no doubt the plaintiffs had a right to avail themselves of this condition. The note not having been paid at maturity, the plaintiffs might have insisted that the contract was broken, and might have claimed the whole. But had they a right to retain the note against Holden, to urge payment upon it, and after receiving the full amount of it to proceed then for the balance of the original demand against the defendant ? I think they had not. The note against Holden was not left with the plaintiffs as collateral security. It was designed to be in satisfaction; and I think it was evidently the object of the parties, in making the condition, to protect the plaintiffs against the possibility of the note not being good. It could never have been intended that the delay of Holden for a few days, or longer, in paying the *376note, should authorize the plaintiffs to receive not only the money due on the note, but also to collect the balance of the debt compromised.
By the agreement, non-payment at maturity would operate as a forfeiture. They had also the right to waive it; and X think their receiving a payment on the note after it was due, and subsequently asking and receiving payment of the balance due on the note, was a waiver of all claim of forfeiture on the score of time of payment. The cases are abundant to show that a forfeiture for non-payment at an appointed day, is waived by subsequent payment in full, whether it be on a lease, chattel mortgage, or other contract. (5 Cowen, 270. 1 Denio, 516. 3 Id. 33. 1 Barb. Sup. C. Rep. 114. 2 Id. 341. 5 Id. 339. 2 Peters, 96. 2 Watts & Serg. 88. 2 Call, 553. 5 T. R. 553.) So a condition precedent is waived by proceeding to fulfill the contract. (14 Wend. 219. 1 Verm. 44. 1 Leigh’s Nisi Prius, 632. 1 Conn. Rep. 79.)
I think the principle recognized in these cases is applicable here, and that the judgment of the Albany mayor’s court should be reversed with costs, and a new trial awarded.
Judgment reversed.