199 A.D. 437 | N.Y. App. Div. | 1921
In December, 1918, a real dispute existed between the husband and wife as to the amount of her securities and money which he had used. She claimed he had borrowed from her, to be returned in kind, $18,000 of Finch, Pruyn & Co., Inc., bonds, another bond of $1,000 and $750 in money, together
No objection was taken to the statement of the court that we will assume it was the settlement of an honest dispute, and I think it is unnecessary to further consider that question. An agreement to pay less than the conceded amount due is not valid unless supported by some other consideration, but where there is an honest dispute between the parties as to the amount due, a settlement by fixing an intermediate amount is binding upon both parties, as it is the settlement of a disputed claim and the law favors such settlements. A novation may be the substitution of other parties, or it may be the substitution of other obligations or contracts. ¡ We must not get confused by the law applicable to accord and satisfaction. A simple accord without a satisfaction is unavailing, but if the agreement contemplates that it takes the place of the former agreement, that is effectual either as an accord and satisfaction or novation, the consideration of which is the settlement of the disputed claim. (Moers v. Moers, 229 N. Y. 294; Bandman v. Finn, 185 id. 508; Wehrum v. Kuhn, 61 id. 623; Sears v. Grand Lodge A. O. U. W., 163 id. 374.)
Reilly v. Barrett (220 N. Y. 170) was the construction of
Here we have an important element in addition to the settlement of the disputed claim. At least $17,000 of the plaintiff’s alleged claim was not to be paid in money. That obligation was evidenced by a writing which certified that she had loaned to him seventeen Finch, Pruyn & Co., Inc., bonds with the understanding that they shall be replaced from the bonds now held by the Albany Trust Company as collateral to his loan. Those were also Finch, Pruyn & Co., Inc., bonds. The obligation, therefore, was solely to return like bonds and not mo.ney, and by the settlement the defendant undertook to pay money and not bonds, and the settlement agreement was made sometime in December but the first monthly payment of $100 interest was to be made January first, following, thus being in some part a payment in advance of interest, and the agreement has been performed for several years.
To show that there was an honest dispute a brief reference may be made to the facts. Soon after their marriage in 1913 the defendant began the erection of a house at Saratoga Springs. They expected it would cost from $50,000 to $75,000. The work was fairly in progress when it was discovered that the cost would not be less than $100,000. The defendant was unwilling to go on with the house on account of such cost. Both were anxious to have the house built and, as she testified, she offered to let him have her money. “ I said, I will let you take my money, or you can use my money.” He says he understood she contemplated a gift but he was unwilling
H. T. Kellogg and Van Kirk, JJ., concur; Woodward and Cochrane, JJ., dissent.
Judgment and order affirmed, with costs.