Accord and satisfaction is agreement to accept in satisfaction for a debt something received, sec 996.

Acceptance of less amount is no satisfaction without release, sec 997.

Accord and satisfaction with one joint creditor or debtor releases all, sec 998.

Accord without satisfaction no bar, sec 999.

Unliquidated debt for larger amount may be discharged on receipt of smaller amount in cash, sec 1000.

Any additional weight turns the scale, sec 1001.

Anticipation of time or change of place may be sufficient, sec 1002.

An agreement to take a lesser amount secured is an accord and satisfaction when security is received, sec 1003.

Acceptance of third party as security amounts to novation, sec 1004.

When other creditors release, composition may be accord and satisfaction, sec 1005.

Goods or labor may be taken in satisfaction, sec 1006.

Part payment by judgment and execution may satisfy, sec 1007.

Payment by a stranger may be accord and satisfaction, sec 1008.

Sec 996

Accord and satisfaction is an agreement to accept in satisfaction of a debt something at the time received.1 The accord is the agreement for the reception of the thing in discharge of the debt; the satisfaction is the actual reception of the thing. Upon this satisfaction the creditor's right of action is extinguished; and written promises can be extinguished by this process as effectually as unwritten.2 A distinction at common law, however, exists between sealed and unsealed instruments. The tenor of the former can only be varied, at common law, so as to introduce a new mode of satisfaction, by a writing under seal;1 and hence it is held that "accord and satisfaction is no bar to an action for a debt covenanted to be paid."2 - On the other hand, accord and satisfaction has been held a good plea to an action for breach of a covenant to repair, the action not being to enforce the covenant, but to claim damages for its non-fulfilment by the covenantor.3 And the distinction between sealed and unsealed instruments does not obtain in equity, nor in those systems in which equity is absorbed in the common law.4 - Accord and satisfaction, being a matter of extrinsic settlement, may be proved by parol.5 - The settlement, to be operative, must be immediate; an agreement to settle at a future time cannot be an accord and satisfaction.6 - As to the thing received, an important distinction is to be observed. This thing may consist in money or labor or goods actually at the time delivered,7 or in a substantive security (e. g., negotiable paper, or other independent engage-

Accord and satisfaction is agreement to accept in satisfaction of a debt something at the time received.

1 Bac. Abr., Accord; Com. Dig., Ac. and Sat.; Kaye V. Waghorn, 1 Taunt. 428. See supra, sec 504.

2 Smith V. Trowsdale, 3 E. & B. 83; M'Kellar V. Wallace, 8 Moore P. C. 378;.

Drake V. Mitchell, 3 East, 251; Edwards V. Chapman, 1 M. & W. 231; Anderson V. Turnpike Co., 16 Johns.

86.

1 Blake's case, 6 Rep. 44. See as to sealed documents, supra, sec 680.

2 Massey V. Johnson, 1 Ex. 253, cited Leake, 2d ed. 877.

At common law, a liability on contracts under seal could not "be discharged by a mere license not under seal even for a valuable consideration, or even by accord and satisfaction before breach (Smith's L. C. 7th Am. ed. 603, citing Berwick V. Oswald, 1 E. & B. 295; Spence V. Healey, 8 Exch. 668); and after breach, those claims arising out of them which sounded in damages, and not debts accruing by the execution of the deed only, could be the subject of accord and satisfaction." Blake's case, 6 Rep. 44; Selw. N. P. "Covenant," vii. 1. The present practice is stated in other sections. Infra, sec 1032; supra, sec 684 et seq.

That there may be parol novation of sealed contracts, see supra, sec 852 et seq.

That debts secured by instruments under seal may be barred by accord and satisfaction, see Jones V. Ransom, ment) for indebtedness. The latter case is virtually one of novation, as it is the acceptance of a new contract in place of an old contract which is superseded.1 Hence, "an accord with mutual promises to perform is good, though the thing be not performed at the time of action; for the party has a remedy to compel the performance."2 In such case, however, the accord must have been accepted in satisfaction.3 But unless there be a new consideration, such substitution is not operative.4 "Upon the whole," says Mr. Chitty, "the true distinction would seem to be, between cases in which the plaintiff has agreed to accept the promise of the defendant in satisfaction, and those in which he has agreed to accept the performance of such promise in satisfaction; the rule being that in the latter case there shall be no satisfaction without performance; whilst in the former, if the promise be not performed, the plaintiff's only remedy is by action for the breach thereof, and he has no right to recur to the original demand."5

3 Ind. 327, and see 7 Smith's L. C. 7th Am. ed. 697. "A parol accord and satisfaction cannot discharge the instrument, but may discharge the money due upon it." Ibid., citing Strang V. Holmes, 7 Cow. 225. "Upon the same distinction it is that accord and satisfaction before breach, without release of deed, is no bar to an action of covenant; but after breach, it is of the damages." Ibid., citing note to 6 M. & Gr. 262; Harper V. Hampton, 1 Har. & J. 622; Smith V. Brown, 3 Hawks. 580; Cabe V. Jameson, 10 Ired. 193.

3 Blake's case, 6 Rep. 44.

4 Leake, 2d ed. 378; citing Binns V. Fisher, 43 L. J. C. 188. See Coit V. Houston, 3 Johns. Ca. 243; infra, sec 1032. As to distinction between sealed and unsealed contracts, see supra, sec 684.

5 Lavery V. Turley, 6 H. & N. 239; Massey V. Johnson, 1 Ex. 241; Wh. on EV. sec 77, 1017.

6 Infra, sec 999.

7 Infra, sec 1006.

1 See supra, sec 852 et seq. That it may be proved by parol, see Wh. on EV. sec 1017.

2 Com. Dig. Accord, B., adopted in Ch. on Con. 11th Am. ed. 1122, as cited by Peake, J., in Good V. Cheeseman, 2 B. & Ad. 335; and per car. Cartwright V. Cooke, 3 B. & Ad. 702. To the same effect are cited Woodward V. Miles, 24 N. H. 289; Babcock V. Hawkins, 23 Vt. 581; Billings V. Vanderbeck, 23 Barb. 546; Perkins V. Lockwood, 100 Mass. 249. - This distinction is adopted by Storrs, J., in Goodrich V. Stanley, 24 Conn. 613, who, after quoting the extract above given from Comyn, adds: "the meaning of which is, that an acceptance, in satisfaction of a debt, of an accord or agreement, with mutual promises to perform, on which the party has a legal remedy for its nonperformance, is a good satisfaction of such debt, although such promises are not performed..There must be a valid agreement, substituting a new cause of action in place of the old. It is not sufficient that there is a mere accord between the same parties, with mutual promises, but there must be a new agreement with a new consideration. Although this doctrine, well established in the English cases, appears to have been regarded with disfavor in some of the courts of this country, we do not perceive why, on principle, an acceptance of a new and valid promise, which can be enforced in substitution of an existing claim, should not be held to be as effectual a satisfaction and extinguishment of such claim as the acceptance of any other thing.".

3 Flockton V. Hall, 14 Q. B. 380; Hall V. Flockton, 16 Q. B. 1039.

4 Supra, sec 852 et seq. As to release, see infra, sec 1031 et seq.

5 Ch. on Cont. 11th Am. ed. 1124, citing Evans V. Powis, 1 Exch. 601; Sard V. Rhodes, 1 M. & W. 153; Good V. Cheeseman, 2 B. & Ad. 328. To the same effect is Babcock V. Hawkins, 23 Vt. 561; Ranlett V. Moore, 21 N. H. 336; Woodward V. Miles, 24 N. H. 289.