ADAMS, J.
It is a conceded fact in the case that the parties did enter into the contract which is set forth in the complaint, and the learned referee has found that its breach, so far as the defective character of the boiler is concerned, is fully established, to the plaintiff’s damage in the sum of $350. The evidence upon which this finding is based is quite conflicting, and not altogether convincing; there being much in the case to justify the inference that the failure of the boiler to operate satisfactorily was due in some measure, at least, to the unskillful, not to say negligent, manner in which it was used. But assuming, as we do, that the contract is one of warranty, and that the right to recover damages for its breach survives acceptance of the property contracted for (Canning Co. v. Metzger, 118 N. Y. 260, 23 N. E. 372), we are not prepared to hold that the evidence is insufficient to support such a finding. Upon the question of settlement, however, we are unable to concur in the conclusion reached by the learned referee, that the parties "did not in December, 1890, or at any other time, settle the plaintiff’s claim for damages growing out of the insufficient capacity of the boiler.” The undisputed evidence in the case shows that upon the 3d day of December, 1890, the plaintiff’s attorney addressed a letter to the defendants, containing a statement of the plaintiff’s claim in regard to the boiler, and demanding, among other things, that the defendants should furnish a new boiler, and compensate the plaintiff for expenses which she had necessarily incurred in consequence of its defective condition, and for repairs made to the engine. This letter was answered upon the following day by a letter written by the defendants’ attorney, in which the defendants declined to accede to the plaintiff’s claim, but, upon the contrary, insisted that they had fully complied with all the requirements of the contract, and demanded payment of a note of $500 which had been given as part consideration for the machinery, and which had fallen due the day before, and also of an open account which they had against the plaintiff amounting to $380.13. Shortly after this letter was written, the defendants, in pursuance of the right secured to them by their chattel mortgage, seized and took possession of the plaintiff’s boat; and upon the 9th day of December the plaintiff’s husband, who had in all these transactions acted as her agent, sought an interview with the defendants, which, it is conceded, resulted in at least a partial set-' tlement between the parties, and the payment by the plaintiff to the defendants of the amount then their due. The interview between the parties upon this occasion lasted for a considerable length of time, and was participated in by the plaintiff’s agent, and also by a friend of his, who accompanied him to the defendants’ place of business for the
*359purpose of assisting him in obtaining a settlement; and, while it is true that it does not appear that at this time it was expressly agreed that all matters in difference between the parties should be settled, it does appear that the defendants presented their claim, which included the amount due upon the note, with protest fees thereon, their open account against the plaintiff, and the expenses which they had incurred in taking possession of the boat. And to partly offset this claim the plaintiff’s husband insisted that $65 should be deducted from the amount claimed by the defendants, to cover certain expenses which had been incurred by reason of alleged defects in the machinery, and it appears that this sum was allowed by the defendants. It was then found that there was still due the defendants the sum of $871.43, and at the request of the plaintiff’s agent this balance was further reduced by the sum of $21.43, so as to leave the amount going to the defendants just $850, of which sum $700 was thereupon paid in cash, and a note signed by the plaintiff was given for the balance of $150, payable in three months after date. This note was subsequently paid, and thereafter the remaining notes and the chattel mortgage given to secure the same were, at the request of the plaintiff, assigned by the defendants to a third party. This settlement, conducted in the manner it was, occurring at the time it did, and consummated as it was by the giving of a note, fairly raises the presumption, we think, that all the demands existing in favor of either of the parties were then liquidated, and that the note was given for a balance found to be due from the maker. Lake v. Tysen, 6 N. Y. 461; Sheldon v. Sheldon, 133 N. Y. 1, 30 N. E. 730; Sherman v. McIntyre, 7 Hun, 592; Wright v. Wright, 74 Hun, 138, 26 N. Y. Supp. 238. This presumption, of course, was one which the plaintiff was at liberty to rebut, and it is contended that this was done; but the evidence does not satisfy us that this contention is well founded. After the defendants had given evidence of the settlement, the plaintiff’s husband was recalled to the stand, but gave no testimony in regard to it until after his cross-examination, when he was asked to state how he came to give this note. His explanation was to the effect that he had more than enough money . upon his person with which to pay the whole amount due the defend- ' ants, and was quite willing to pay the same, but that at the urgent solicitation of the defendants’ attorney, who was present during the negotiations, he was induced to give a note, instead of paying the balance in money,—which, to say the least, is not the manner in which such transactions are ordinarily conducted. Nor does this statement harmonize with that of the witness Diebolt, who testified that he conducted the negotiations for the plaintiff; that the plaintiff’s husband was not present until they had been concluded, but that he remained outside of the room by the express direction of the witness. The evidence of these two witnesses, in our opinion, so far from negativing the presumption of a settlement, tends, rather, when taken in connection with all the other facts and circumstances in the case, to strengthen it; and the impression produced upon my mind from a careful reading of the entire record is that the finding of the learned referee upon this branch of the case is so clearly against the weight of evidence as to require a reversal of the judgment.
*360Judgment reversed, and a new trial ordered before another referee upon payment by the appellants of the costs of the former trial, with the costs of this appeal to the appellants to abide the event. All concur, except FOLLETT and WARD, JJ., dissenting.