Court Opinion

ID: 4892739
Source: CourtListenerOpinion
Date Created: 2021-09-02 23:52:32.112964+00
Date Added: 2024-06-11T08:09:47.057999
License: Public Domain

Ireland, Associate Justice.
In the amended answer of defendants, filed the 8th of October, 1872, they say that they settled and compromised the debt sued on, in the manner set out, “in consideration of the fact that the said note here sued on was an ante helium note.”
On the 6th day of January, 1873, defendants filed another, amended answer, in which they say “that said compromise, so made, was, in fact and in truth, a part of a general composition and compromise made and entered into with the general creditors of defendants, in the said city of Hew York, by their defendants.
“ That each of said creditors, by the terms of said compromise and composition, agreed and promised, at the time of making the same, to receive in full discharge and satisfaction of their several claims and demands against defendants fifty cents on the dollar, and on that basis these defendants paid all of said creditors, save the plaintiffs, who had heretofore refused to carry out the said terms of said compromise and composition.”
These extracts from the defendants’ pleadings present their defense in the strongest light in which it is shown by the record. Does the defense show a sufficient consideration to uphold the settlement made in 1866 ?
It is well settled, elementary in fact, that an agreement, not supported by a consideration, for a creditor to .receive a less sum than the whole, will not discharge the debt. (Bradshaw v. Davis, 12 Tex., 346.)
*386There is a class of cases apparently within this rule, hut which the law merchant, for reasons of public policy, places on a different basis.
This class is embraced in what is generally denominated a composition or an agreement, by a debtor in failing circumstances and a number of creditors to take a less sum in discharge of the whole. PTor does the rule stated above include compromises of disputed or doubtful claims. These are not only upheld, but are favored by the comía, and they do not, as in undisputed demands, require any other or distinct consideration to support them. In this case, defendants’ proof shows that the debt was undisputed.
Compositions are usually or frequently effected through trustees, and when an assignment is made, and it is understood at the time of the assent of each creditor that all the other creditors are to become parties to the arrangement— are all to receive a like per cent., in full discharge, these settlements are upheld. It would be understood, however, at the time the agreement is entered into, that all are to share alike. (Perkins v. Lockwood, 100 Mass., 249.)
Tested by these rules, it will be seen that the defense fails both as to pleas and proof.
• The pleas do not allege that it was understood and agreed at the time of the settlement in 1866, that plaintiffs undertook and agreed to take the offered settlement upon condition, or with the understanding that all the other creditors were to accept a like sum in discharge of their debts. This is not supplied by the allegations and proof that a like settlement was made with all the other creditors, and we are of opinion that the court erred in overruling plaintiffs’ demurrer to defendants’ answer.
We cannot assent to the proposition contended for by plaintiffs, that a composition entered into, which might be good under the rules here laid down, would still fail, unless the new notes were promptly paid at maturity.
If a composition should be effected by the execution of a *387binding agreement, whether in the shape of promissory notes or in some other shape; if it is in a condition to be enforced and the creditor can sue and recover upon it, it would he sufficient. (Bradshaw v. Davis, 12 Tex., 349.) It is true that parties capable of contracting might make time of the essence of the contract* and make its binding force depend upon payment at the day named; but this is never the case in commercial contracts or contracts relating to chattels, but may be made so by agreement of parties.
It was competent to make the proper parties to the suit by amendment, provided the amendment came in time and did not deprive the defendants of any rights of defense they otherwise had. (Hopkins v. Wright, 17 Tex., 35; Martel v. Somers, 26 Tex., 558.) In such case, however, it would be. proper for the court to charge the party making the amendment with all costs, or require their payment as a condition upon which the amendment should be made.
With reference to the question raised by the exclusion of a portion of the deposition of Lowery and Ford, it appears that the receipt given defendants at the time of the settlement, in 1866, is not only a receipt, but it embraces the terms of the settlement; and when this is the case such receipts can no more be altered or changed by parol than any other written agreement.
Lowery says in his deposition that the receipt expressed the terms of settlement, and such appears to be its import, and it was not error to exclude parol evidence to show that there were other stipulations in the agreement, in the absence of any allegations of fraud or omissions in drawing it.
There is an error in the judgment not assigned, nor could it be, by appellants, inasmuch as there was no effort to correct it. The cause went to trial as the association, under the laws of Congress, successors to the Bank of the Republic, yet the judgment is in favor of Lanes, Boyce & Co.
Whether the defendants can bring themselves within the rules announced in this opinion, will be for them to deter*388mine on another trial. The judgment is reversed and the cause remanded.
Eeversed and remanded.