Court Opinion

ID: 9654136
Source: CourtListenerOpinion
Date Created: 2023-08-23 18:07:21.011755+00
Date Added: 2024-06-11T18:13:06.203772
License: Public Domain

George Rose Smith, J., dissenting. This case does not involve a disputed or unliquidated claim that was settled by a compromise agreement. Fullerton did not question the amount of his original indebtedness, which was •evidenced by a promissory note; he merely asked the •creditor to accept in satisfaction of the debt something-less than payment in full. Such an agreement by the creditor is initially without consideration, but if the agreement is fully performed by both parties it discharges the original obligation under the doctrine of accord and satisfaction. As I read the record, the agreement in this case was not fully performed by the creditor, and therefore the accord was not followed by a satisfaction. Wellons testified that Fullerton was to deliver the equipment to the appellant, but of course we must assume that the jury accepted Fullerton’s version of the transaction. In the course of his testimony Fullerton stated seven different times that by the agreement the appellant was to pick up the equipment at Warren. He also testified that he understood that the note would not be returned to him until the equipment had either been delivered by him or picked up by the appellant. Fullerton explained that after the agreement was reached the equipment was in fact placed in a safe place in his building at Warren, but he did not even intimate that the parties ever agreed upon the storage of the property as constituting full performance of the accord. To the contrary, he said again and again that the agreement required the appellant to come and get the property. His sole defense in the trial court was that the appellant failed to carry out its part of the contract. It is plain enough that this defense must fail. Willis-ton puts the exact case: “Suppose the debtor within the time agreed or, if no time was specified, within a reasonable time tenders performance of his promise, but the creditor in violation of his agreement refuses to accept the performance in satisfaction of his claim and brings suit on the original cause of action. Even here, the unexecuted accord is no defense. The creditor’s claim is not satisfied. Tender is not the same as performance. To assert the contrary is to say that the debtor after making his tender has satisfied the debt, though he is still the owner of the thing which was agreed upon as the satisfaction.” Williston on Contracts (Rev. Ed.), § 1843. To the same effect is the Restatement of Contracts, § 417 (d) :• “If the creditor breaks such a contract, the debtor’s original duty is not discharged. ’ ’ Our own decisions support the rule that the defense of accord and satisfaction depends upon a full performance of the agreement by both parties. As we said in North State Fire Ins. Co. v. Dillard, 88 Ark. 473, 115 S. W. 154: “But where the agreement is not executed, and is not evidenced by any writing, then it is not a bar to an action on the original debt; and, not being a bar, it is immaterial why the agreement is not executed. It may be through the fault of either party, or it may be through the fault of neither, as was the case here, or through the interposition of a third party. Still, the promise is to satisfy, and until that promise is fulfilled the agreement has not become binding.” (My italics). In Grimmett v. Ousley, 78 Ark. 304, 94 S. W. 694, we likewise held that “the accord must be fully executed.” Additional cases need not be cited. It is evident from the above that the case should be reversed for the trial court’s error in giving this instruction: “You are instructed that, should you find from a preponderance of the evidence that plaintiff and defendant entered into an agreement by which the defendant agreed to pay the interest on the indebtedness and did pay such interest and plaintiff agreed to take back the equipment in question at Fullerton’s place of business in "Warren, Arkansas, and in fact did take back a part of the equipment, then you will find for the defendant.” This is a binding instruction, not susceptible of being cured by other instructions, and is patently erroneous in telling the jury that if the agreement was only partly performed “then you will find for the defendant.” The judgment should be reversed, but I do not agree with the appellant’s earnest contention that it is entitled to have judgment entered here in its favor. . It is true that when the creditor breaches the contract of accord the debtor’s original duty is not discharged, but it is also true that the debtor may be entitled to damages for the creditor’s breach of his agreement. Rest., Contracts, § 417 (d); Williston, § 1844. For this reason the case should be remanded for a new trial.