REILLY v. BARRETT, N.Y., Judgment, Law, casemine.com

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Attorney(S)

Herman S. Hertwig for appellant. Henry M. Dater, Jay S. Jones and Edward J. Fanning for respondent.

Judges

ANDREWS, J.

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Smart Summary

Factual and Procedural Background

This action was brought by William F. Reilly to recover damages for personal injuries allegedly caused by the negligence of William M. Barrett, as President of the Adams Express Company. The defendant filed a supplemental answer asserting an affirmative defense that on August 16, 1912, he served a verified answer denying the plaintiff's claim, and on December 10, 1913, an agreement was made between the parties through their attorneys. Under this agreement, the defendant promised to pay the plaintiff two hundred dollars in full settlement of the claim, and the plaintiff agreed to accept that sum and discontinue the action without costs. The defendant tendered the sum, but the plaintiff refused to accept it. The defendant remained ready to pay. The sufficiency of this defense was challenged by a demurrer, and the issue before the court was whether the Special Term and Appellate Division correctly sustained the demurrer.

Legal Issues Presented

Whether an executory agreement to pay a sum in settlement, without actual satisfaction (payment or performance), constitutes a bar to the original claim.
Whether the defendant's affirmative defense alleging only an accord, without satisfaction, is sufficient to defeat the plaintiff's claim.

Arguments of the Parties

Defendant's Arguments

The defendant contended that an agreement (accord) was made to pay the plaintiff two hundred dollars in full settlement of the claim.
The defendant alleged tender of the two hundred dollars and readiness to pay, asserting this as a bar to the plaintiff's claim.

Plaintiff's Arguments

The plaintiff refused to accept the tendered sum, challenging the sufficiency of the defendant’s defense.
The plaintiff relied on the principle that until satisfaction (payment or performance) occurs, an accord alone does not bar the original claim.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Kromer v. Heim, 75 N.Y. 574	Establishes that an accord followed by satisfaction bars the original claim; an accord alone does not.	Confirmed that the defendant must plead and prove both accord and satisfaction to bar the claim.
Brooklyn Bank v. De Grauw, 23 Wend. 342	Supports the principle that an accord is an agreement to settle a claim, but satisfaction is necessary to bar the claim.	Reinforced the court’s view on the necessity of satisfaction following an accord.
Babcock v. Hawkins, 23 Vt. 561	Holds that the burden is on the defendant to plead and prove the bar by accord and satisfaction.	Applied to emphasize that the defendant must allege and prove satisfaction, not just accord.
Bandman v. Finn, 185 N.Y. 508	Involves surrender of an unmatured and contingent obligation as settlement.	Distinguished from the present case; did not weaken the precedent set by Kromer.
Mance v. Hossington, 205 N.Y. 33	Cited as recent authority affirming the principles in Kromer v. Heim.	Used to support the continuing validity of the accord and satisfaction rule.

Court's Reasoning and Analysis

The court analyzed the legal effect of an accord and satisfaction in settling claims. It explained that an accord is an agreement where one party agrees to give or perform, and the other agrees to accept in settlement of a claim something less than originally demanded. However, this accord alone does not bar the original claim until satisfaction—actual performance or payment—occurs. This principle applies whether the claim is contractual or tortious, liquidated or unliquidated. The defendant’s answer alleged only the existence of an executory agreement (an accord) and tender of payment, but did not allege that the promise itself was accepted in satisfaction or that actual payment was made. The court emphasized that the defendant bears the burden of pleading and proving both accord and satisfaction to establish a bar to the original claim. Because the defendant’s answer was defective for pleading only an accord without satisfaction, the demurrer was properly sustained.

Holding and Implications

The judgment of the lower court sustaining the demurrer is affirmed.

This decision means the defendant’s affirmative defense based solely on an executory agreement to pay (accord) without actual satisfaction is insufficient to bar the plaintiff’s claim. The case affirms the well-established legal principle that an accord must be followed by satisfaction to have a bar effect. No new precedent was created; rather, existing principles were applied to uphold the demurrer and allow the plaintiff’s claim to proceed.

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WILLIAM F. REILLY, Respondent, v. WILLIAM M. BARRETT, as President of the ADAMS EXPRESS COMPANY, Appellant.

ANDREWS, J.

This action was brought to recover damages for personal injuries caused by the alleged negligence of the defendant. As an affirmative defense a supplemental answer alleged "That on or about the 16th day of August, 1912, the defendant, in good faith, served his verified answer to the complaint herein denying generally the validity of the plaintiff's claim, and thereafter, and on or about the 10th day of December, 1913, an agreement was made between the plaintiff and the defendant, through their respective attorneys, by which the defendant agreed to pay to the plaintiff in full settlement of the cause of action set forth in the complaint the sum of two hundred dollars, and the plaintiff, in consideration thereof, agreed to accept the said sum in full settlement of the action, and upon the payment thereof to discontinue the action without costs." The answer then alleges tender of the sum of two hundred dollars to the plaintiff and his refusal to accept the same; and the continued readiness of the defendant to pay over such sum to the plaintiff.

The sufficiency of this defense was challenged by the demurrer, and the sole question in this court is whether the decision of the Special Term, affirmed by the Appellate Division, sustaining such demurrer is correct.

An agreement whereby one party undertakes to give or perform, and the other to accept in settlement of an existing or matured claim something other than what he believes himself entitled to, is an accord. The execution of such an agreement is a satisfaction.

An accord, when followed by satisfaction, is a bar to the assertion of the original claim. Until so followed it it has no effect.

The fact that the original claim is based on contract or in tort is immaterial. Either may be barred by accord and satisfaction. So it is whether the claim is liquidated or unliquidated, except that in the former case certain principles as to consideration are enforced which are not applicable to the latter.

These rules apply to every such transaction. It may be called a compromise. But whatever the name given the original claim is not barred until the satisfaction is completed. ( Kromer v. Heim, 75 N.Y. 574; Brooklyn Bank v. De Grauw, 23 Wend. 342.)

The satisfaction contemplated by the accord may involve the payment of money or the delivery of property. Or the creditor may agree to accept the debtor's promise itself in satisfaction rather than the performance of this promise. ( Kromer v. Heim, supra.)

In any event the defendant who seeks to set up this defense as a bar to the original action must allege and prove both the accord and the satisfaction. If his claim be that his promise was accepted in satisfaction, that he must plead. The burden is upon him to show the existence of a bar. ( Babcock v. Hawkins, 23 Vt. 561.)

The answer clearly shows an executory agreement by which the defendant agreed, within a reasonable time, to pay the plaintiff the sum of two hundred dollars, and by which the plaintiff agreed to accept that sum when tendered in settlement of the action, and thereupon to discontinue such action without costs. There is no allegation that the defendant's promise was to be received in satisfaction, and no facts pleaded from which such an inference can be drawn. The answer is, therefore, defective in that it pleads only an accord.

The plaintiff relies upon Bandman v. Finn ( 185 N.Y. 508). But, as is clearly pointed out, that was the case of a creditor holding an unmatured and contingent obligation agreeing with his debtor for the surrender of the obligation. The authority of Kromer v. Heim is not weakened and it has been cited as late as Mance v. Hossington ( 205 N.Y. 33).

The judgment appealed from should be affirmed, with costs.

HISCOCK, Ch. J., CHASE, COLLIN, POUND and McLAUGHLIN, JJ., concur; CARDOZO, J., absent.

Judgment affirmed.

REILLY v. BARRETT