Court Opinion

ID: 8864680
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:00:35.157802+00
Date Added: 2024-06-11T17:05:57.361719
License: Public Domain

WALBAOE, Circuit Judge
(concurring). This is a writ of error brought by the defendant in the court below to review a judgment for the plaintiff ordered by the court upon the confirmation of the report of a referee before whom the action was tried by tlie stipula-iion of the parties. The report contains a full finding of the facts by the referee, and sets forth his legal conclusions thereon. Only (hose assignments of error can be considered which present the question whether, upon the facts found by the referee, the judgment is wrong. Roberts v. Benjamin, 124 U. S. 64, 8 Sup. Ct. 393; Shipman v. Mining Co., 158 U. S. 356, 15 Sup. Ct. 886.
Most of the assignments of error present the question whether the defense of accord and satisfaction set up in the defendant’s answer should not have been sustained and adjudged to preclude any recovery by ihe plaintiff. The material facts bearing on this question, which appear in the findings of the referee, may be summarized as follows: The plaintiff had contracted with the defendant to construct a certain railway, and, by the terms of the written contract between the parties, the defendant, among other things, undertook that, whenever its chief engineer should furnish it his certificate *984that the railway had been finished, and all the conditions of the contract been fully performed, and his final estimate of the amount due the plaintiff therefor, the defendant would pay the amount of the estimate, less such payments as should have been already made. The contract provided that the estimate of the engineer should be final and conclusive between the parties.
The parties had also entered into a supplemental contract, whereby the plaintiff agreed to complete his performance of the original contract on or before June i, 1887, and, in case of failure so to do, to allow the defendant, by way of forfeiture, the sum of $40,000.
The railroad was completed, and the chief engineer of the defendant furnished the certificate and final estimate, pursuant to the contract. The certificate was given March 3, 1888. It stated the sum earned, by the plaintiff under the contract, including deductions and additions for deviations, at $3,895,798.79. At that time the defendant had made payments to the plaintiff in money and materials amounting to $3,615,306.57, and, if certain nut-locks were included, amounting to $3,626,865.20.
During the performance of the contract, the defendant supplied the plaintiff with certain nut-locks, and desired him to use them in constructing the tracks. The plaintiff insisted that the contract did not require him to use them. Thereupon it was arranged that he should use them, and the question whether they were to be used at his expense, or that of the defendant, should remain open until the completion of the railway.
The plaintiff did not complete the contract by June 1, 1887, but his delay was wholly owing to his inability to do so, by reason of the failure of,the defendant to acquire certain rights of way which, by the contract, it had agreed to acquire. .
Upon a matter of account outside the contract, the defendant was indebted to the plaintiff for materials bought of him,.etc., in the sum of $34,598.90.
March 9, 1888, the defendant rendered to the plaintiff a statement of account, crediting the plaintiff with the sum of $3,895,-798.79, according to the engineer’s estimate, and with the further sum of $34,598.90, for materials, etc., and debiting him with payments amounting to $3,626,865.20, including $9,558.63 for the nut-locks, and also debiting him with the sum of $40,000 for failure to complete the contract by June 1, 1887. As thus rendered, the account stated as the balance due plaintiff the sum of $173,532.49. Atinexed to the statement was a receipt, which recited that the plaintiff had received $173,532.49 in full satisfaction of the amount due him upon the estimate, and of all claims and items of every kind, name, and nature arising from, or growing out of, the said contract, and of the construction of the said railroad. The plaintiff signed the receipt, and thereupon the defendant paid the plaintiff $173,532.49.
The referee found that the statement rendered by the defendant “contained an accurate, truthful,, and undisputed account of all dealings between the said parties,” except in respect to the $40,000 debited for time forfeiture, the $9,558.63 for nut-locks embraced *985in the $3,626,865.20, and another small item which accrued subsequently, to which reference is unnecessary.
The referee found, as conclusions of law: (1) That at the time of signing the receipt the plaintiff was not indebted to the defendant upon the item for nut-locks; (2) that the plaintiff was not liable for the item of $40,000 debited to him for failure to complete the railroad by June 1., 1887; (3) that when it rendered the statement of account the defendant was indebted to the plaintiff in the sum of $49,558.63 in addition to the sum of $173,532.49 paid by it upon receiving the receipt; (4) that the delivery of the receipt, and the acceptance of the payment, by the plaintiff, did not constitute a valid payment or accord and satisfaction of the said sums of $9,-558.63 and $40,000, or either of them, or any part of them; and that the plaintiff was entitled to recover the sum of $49,558.63, with interest from March 9, 3888.
The assignments of error thus raise the question whether the acceptance of $173,532.49 by the plaintiff, upon a promise to receive it in full of all Ms demands, was a settlement and satisfaction of his demands against the defendant, which amounted to $49,558.63 more than that sum. If there was no consideration for his promise, (he conclusion of the referee was correct; if there was a sufficient consideration for it, the assignments of error are good.
A promise by a creditor having a liquidated and undisputed demand against his debtor, which is wholly due and payable, to discharge the residue upon receiving payment of a part, is, according to all authorities, nudum pactum, and totally inoperative, because the debtor is under legal obligation to pay the whole demand. A demand is not a disputed demand, merely because the debtor refuses to pay or recognize it; for, if this were true, no case would ever arise for the application of the rule, it is disputed, within the meaning of the rule, only when it is so far disputable as to present a “proper case for litigation.” Tuttle v. Tuttle, 12 Metc. (Mass.) 551; Zoebisch v. Von Minden, 320 N. Y. 406, 24 N. E. 795; Honeyman v. Jarvis, 79 Ill. 318. A demand is a liquidated demand when it: is of such nature that its exact pecuniary amount is either ascertained or ascertainable by simple computation.
It is conceded that, as to the part of the plaintiff’s demand established by the certificate of the engineer, it was a “liquidated” and “undisputed” demand against the defendant, in the sense in which these terms are used in considering the validity of a promise to accept a part payment in satisfaction of the whole demand. The other part of the plaintiff's demand, that for the materials, etc., purchased of plaintiff by defendant, was, according to the referee’s finding, undisputed in fact between the parties; and, this being so, it is quite unnecessary to inquire whether it was originally one in respect to which there might have been a fair difference of opinion between the parties as to the amount due. The statenfent of account rendered by the defendant is evidence, as against the defendant, not only that it was an undisputed demand, but one the amount of which had been ascertained by the parties. If the amount had been ascertained, it was *986a liquidated demand. As no facts appear in the findings of the referee to the contrary, it is to be concluded that this part of the plaintiff’s demand was also liquidated, as well as undisputed by the defendant.
The case is not precisely one where the debtor refuses to pay the whole of an undisputed and liquidated demand, and exacts a promise from his creditor to receive part in satisfaction of the whole. Strictly, it is one where the creditor having two undisputed and liquidated demands against the debtor, and the latter, claiming to have cross demands or counter demands against the creditor, refuses to pay the creditor’s demands, unless the validity of the cross demands is acknowledged, and their amount allowed, to him by the creditor. By the statement of account and the receipt annexed to it, the defendant in fact took this position, and notified the plaintiff that, as a condition to paying the demands which it conceded to be due the plaintiff, the latter must allow and deduct the debited items for the nut-locks- and the forfeiture. Upon this state of facts, a promise to allow the whole amount of the cross demands has no consideration to sustain it, because, in contemplation of the law, no benefit could accrue to the promisor and no injury to the promisee. The promisor derives no benefit, because he allows the whole; the promisee is not injured, because he relinquishes nothing.
The authorities are not altogether in accord upon the question whether, in order that there may exist a valid consideration for a compromise, both parties must concur in supposing the demand to be doubtful in point of right or amount, or whether it suffices if the claimant only entertains this belief, and honestly supposes that he has a valid demand. If the claimant, knowing his demand to be groundless, coerces a compromise, the compromise is uniformly declared to be without consideration. On the other hand, it is well settled that there is a sufficient consideration when both parties regard the demand as possibly capable of enforcement. In Bank v. Geary, 6 Pet. 99, the court said: “It is enough that the bank considered it a doubtful question, and that they supposed they were getting some benefit by foreclosing all inquiry on the subject, and the complainant, by precluding herself from setting up the defense, waived what she supposed might have been of some material benefit to her.” See, also, Callisher v. Bischoffsheim, L. R. 5 Q. B. 549; Keefe v. Vogle, 36 Iowa, 87; Flannagan v. Kilcome, 58 N. H. 443; Clark v. Turnbull, 47 N. J. Law, 265; Lumber Co. v. Brown, 68 Vt. 239, 35 Atl. 56; Wahl v. Barnum, 116 N. Y. 87, 22 N. E. 280; McKinley v. Watkins, 13 Ill. 140. As in the present case no.concession was made by the defendant, and the allowance of its demands in full was exacted as a condition of paying the demands of the plaintiff, there was no compromise; and it is immaterial that the defendant may have asserted its demands in good faith, when it appears that they were in fact and in law without foundation. We conclude that the assignments of error which have been considered are not well taken.
By signing the receipt, and acquiescing for a considerable period in the correctness of the account rendered by the'defendant, the plaintiff was not precluded from recovery. An account stated is an ad*987mission that the account is correct, and, if the party to whom it is rendered omits to communicate objections to the other party within a reasonable time, an inference may be drawn that lie was satisfied with it. But there is no arbitrary rule of law which renders the* omission to object in a given time equivalent to an actual agreement or a consent to the correctness of the account. An account settled is stronger evidence, and requires more proof lo overcome it, than a mere account stated. But the parties are never concluded, except by the statutes of limitation, from proving the incorrectness of-the account, unless the case is brought within the principles of an estop-pel in pais or of an obligatory agreement between them. Lockwood v. Thorne, 18 N. Y. 285; Perkins v. Hart, 11 Wheat. 237.
Other assignments of error impugn the conclusions of the referee in disallowing the demands of the defendant for the nut-locks and for the forfeiture. There are no provisions in the contract which, expressly or by implication, required the plaintiff, in constructing the railroad, to use the nut-locks, unless found in that provision by which he undertakes to "finish, in every respect, in the most substantial and workmanlike manner, all the work hereinafter specified.” The referee» did not find flint this provision liad not been complied with. Nor is there any finding or any evidential facts in the report to authorize the conclusion that the parties, at the completion of the work, had come to an understanding by which the expense of these articles was to be borne by the plaintiff. It is too plain to require discussion that, if the failure of the plaintiff to complete performance of the contract on or before June 1, 1887, was caused wholly by the. default of the defendant in failing to acquire the lights of way necessary to be acquired before the work could be completed, the claim of the defendant for the $40,000 was without foundation.
The fifteenth and sixteenth assignments of error relate to that part of the recovery which proceeds upon the conversion by the defendant of certain bridge timber belonging to fhe plaintiff, — a cause of action which arose subsequently to the settlement between the parties of March 9, 1888. Neither of these assignments can be considered, — the first because it impugns a ruling of the referee made during the progress of the trial, and the second because the decision of a motion for a new trial is not reviewable.
We find no error in the record, and conclude that the judgment was correct.
It is therefore affirmed, with costs.