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Adequacy

faction.

Where a composition agreement is made between a debtor and his creditors whereby the debtor binds himself to pay a proportion of the debt of each creditor, and the creditors accept such composition agreement in satisfaction of their debts, those debts are thereby discharged; and the new agreement alone, without payment, affords a good answer to an action by a creditor upon the original liability (a).

The liability of a third party may be taken in satisfaction. of the debt of the original debtor, under a valid agreement between all the parties to that effect (b). So, the separate liability of one of several joint debtors may be accepted in satisfaction and discharge of the joint liability of all (c). So, where the plaintiff is himself indebted to a third party, the defendant, by agreement between all parties to that effect, may take upon himself the debt of the plaintiff in satisfaction of his own debt to the plaintiff (d).

In general, the intrinsic value of the matter or thing of the satis- given or done in satisfaction of the right of action is immaterial in law; it is settled by agreement of the parties as the equivalent or consideration for the discharge of the right of action (e). But in the case of a payment made in satisfaction of a money debt, the acceptance of a smaller sum is no satisfaction of a debt of larger amount, without some additional consideration for giving up the residue (ƒ).

Accord

tisfaction

The accord alone, being merely the agreement of the without sa- parties as to the matter to be given or done, and accepted, in is inopera- satisfaction of the right of action, while it remains unexecuted, does not affect the right of action (g). Notwithstanding an accord has been come to respecting a proposed mode of

tive.

(a) Good v. Cheesman, 2 B. & Ad. 328; Evans v. Powis, 1 Ex. 601; Boyd v. Hind, 1 H. & N. 938, 947; 26 L. J. Ex. 164, 166.

(b) Case v. Barber, T. Raym. 450; Henderson v. Stobart, 5 Ex. 99; and see Cuxon v. Chadley, 3 B. & C. 591; Hart v. Alexander, 2 M. & W. 484; Kemp v. Watt, 15 M. & W. 672.

(c) Thompson v. Percival, 5 B. & Ad. 925; Lyth v. Ault, 7 Ex. 669; 21 L. J. Ex. 217; overruling Lodge v. Dicas, 3 B. & Ald. 611.

(d) Cochrane v. Greene, 9 C. B. N. S. 448; 30 L. J. C. P. 97; and see post, Chap. VI, "Assignment of Contracts."

(e) See ante, p. 311; Pinnel's case, 5 Co. Rep. 117 a; Curlewis v. Clark, 3 Ex. 375; Cumber v. Wane, 1 Strange, 426; 1 Smith's L. C. 5th ed. 288; Lyth v. Ault, 7 Ex. 669; 21 L. J. Ex. 217. (f) Ib.; Down v. Hatcher, 10 A. & E. 121; and see post, p. 474.

(g) Allen v. Harris, 1 L. Raym. 122; Jones v. David, 5 T. R. 141.

satisfaction, and the defendant may be willing and offer to execute it, the plaintiff may, at any time before it has been executed, commence an action (a). Nor is a mere accord unexecuted binding on the debtor so as to give a right of action to the creditor for its non-performance (1). But an agreement made between the plaintiff and the defendant, that an action, previouly brought by the plaintiff against the defendant, should be settled, and all proceedings therein stayed, and that the defendant should pay the plaintiff a sum of money, was held to be a mutually binding agreement upon which an action might be brought in case of a breach on either side; although it might not, until performed by the defendant, constitute a defence to the previous action (c).

An agreement between a creditor and a debtor, that the creditor should take payment in goods to be delivered by the debtor, was held to be no answer to an action for the debt, unless the goods had been actually delivered and accepted in satisfaction of the debt (d). So, a plea that it was agreed that the plaintiff should take out his debt in beer, and that the defendant was always ready and willing to carry out the agreement on his part, was held a bad plea (e). So a plea, to an action for a breach of contract in not delivering timber, that the plaintiff agreed to accept other timber instead of that contracted for, and that the defendant tendered such other timber, which the plaintiff refused to accept, was held to be a bad plea, as showing an accord without satisfaction (f). In an action to recover a debt, the plea stated an agreement between the plaintiff and the defendant that in consideration that the defendant would secure the debt by executing a mortgage when called upon to do so, payable by annual instalments, the plaintiff promised that no proceedings should be taken in respect of the debt, unless default were made in payment of the instal

(a) Bayley v. Homan, 3 Bing. N. C. 915, 920.

(b) Lynn v. Bruce, 2 H. Bl. 317; Reeves v. Hearne, 1 M. & W. 323; see Reniger v. Fogossa, Plowd. 5, 6. (c) Crowther v. Farrer, 15 Q. B. 677.

(d) Wray v. Milestone, 5 M. & W. 21; Collingbourne v. Mantell, 5 M. &

W. 289.

(e) Collingbourne v. Mantell, 5 M. & W. 289.

(f) Gabriel v. Dresser, 15 C. B. 622; 24 L. J. C. P. 81.

By and with whom

ments, and that the defendant had always been ready to
execute the mortgage; it was held a bad plea as being
merely an accord without satisfaction (a). So, a plea stat-
ing an agreement to the effect that the defendant would
give the plaintiff authority to collect debts owing to the de-
fendant, and satisfy his cause of action from the proceeds,
and that the plaintiff might have collected the debts, but
neglected to do so, was held bad as showing an accord with-
out satisfaction (b).

Where an accord had been come to as to the mode of
satisfying a debt, but remained unexecuted, it was held that
as the right of action for the debt had not been affected by
the accord, the period of limitation continued to run against
it from the time it originally accrued (c).

Accord and satisfaction made with, and accepted by, one accord and of several joint creditors discharges the debtor as against satisfaction all (d). Accord and satisfaction made by one of several parties jointly liable, and accepted by the creditor, discharges all the parties (e).

may be made.

Accord and satisfaction made by a stranger on account of the debt may be adopted by the debtor in discharge of his liability (f).

(a) Allies v. Probyn, 2 C. M. & R. 408.

(b) Gifford v. Whittaker, 6 Q. B. 249; and see Baillie v. Moore, 8 Q. B. 489.

(c) Reeves v. Hearne, 1 M. & W. 323; see post, p. 526.

(d) Wallace v. Kelsall, 7 M. & W. 264; Smith v. Lovell, 10 C. B. 6, 23; Alexander v. Dowie, 1 H. & N. 152; 25 L. J. Ex. 281.

(e) Nicholson v. Revill, 4 A. & E. 675; and see Hillman v. Uncles, Skinner, 391; Thurman v. Wild, 11 A. & E. 452, 460; per Eyre, C.J., Cheetham v. Ward, 1 B. & P. 630, 633; and see by and to whom payment may be made, post, p. 486.

(f) See Jones v. Broadhurst, 9 C. B. 173, 193; Belshaw v. Bush, 11 C. B. 191, 207; Thurman v. Wild, 11 A. & E. 452; post, p. 487.

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ance of con

tract.

A CONTRACT to pay money is discharged by paying the Payment in money at the time and in the manner appointed by the Perform contract. If the creditor refuses to accept the payment so offered, the debtor may discharge himself from liability by a tender of payment. The payment or tender of payment is then made in performance of the contract, and no breach of contract occurs (a).

in satisfac.

If the debtor does not pay or tender the money at the Payment time and in the manner appointed, he commits a breach of tion of the contract. The right of the creditor under the contract breach. is thereby converted into a right of action to recover damages for the breach. The debtor can no longer, strictly speaking, discharge his liability by merely tendering the amount of the debt to his creditor; for the creditor is no longer bound to accept the tender, but may insist on his right of action for damages, and his consent to accept payment in satisfaction of his claim is necessary in order to discharge the liability of the debtor. The payment, if accepted, is then made not in performance of the contract, but in satisfaction of the right of action arising from the breach of it (b).

The right of action for a mere money debt has this peculiarity, that the amount of damages recoverable is liquidated or certain. The measure of the damages is the amount of

(a) See ante, p. 436.

(b) See ante, p. 467; per Parke, B., Kington v. Kington, 11 M. & W. 233,

234; per Williams, J., Chambers v.
Miller, 13 C. B. N. S. 125, 131; 32 L.
J. C. P. 30, 33.

the debt together with the amount of interest, if any interest is payable; but the debtor, by wrongfully detaining a mere money debt beyond the time when it is due, does not render himself liable for any pecuniary consequences which may happen to the creditor by reason of his special circumstances, which were not referred to or contemplated in the original contract (a). Hence the damages for the mere detention of the debt are, in general, what are called "nominal damages," which are described as meaning in fact "a sum of money that may be spoken of, but that has no existence in point of quantity." The existence of nominal damages in point of law is, however, important, because it entitles a creditor, in certain cases, to stand upon his strict right to bring an action, and to recover therein a verdict and his costs (b).

If the creditor, being entitled to claim his debt together with nominal damages for its detention, before action brought, accepts the amount of his debt, he cannot afterwards commence an action for the nominal damages alone (c). But where payment of the debt only has been made after an action has been commenced by the creditor to recover it, the latter is entitled to maintain his action for nominal damages and the costs of his suit; the payment made after action being taken into account as against the debt only, and not as necessarily covering the damages for the detention of the debt (d). Where payment is made and accepted, after action brought, in satisfaction of debt, damages, and costs, the creditor's claim is completely satisfied and discharged, and there is a complete defence to the action arising after the commencement of the suit (e).

Money demands differ in this respect from claims for the detention of goods which a person is bound to deliver; for

(a) See post, Chap. V. " Damages." (b) See per Maule, J., Beaumont v. Greathead, 2 C. B. 494, 499; Wilde v. Clarkson, 6 T. R. 303; Joule v. Taylor, 7 Ex. 58.

(c) Beaumont v. Greathead, 2 C. B. 494; and see Dixon v. Parkes, 1 Esp. 110.

(d) Nosotti v. Page, 10 C. B. 643; Cook v. Hopewell, 11 Ex. 555; 25 L.

J. Ex. 71; Goodwin v. Cremer, 18 Q. B. 757; 22 L. J. Q. B. 30; Kemp v. Balls, 10 Ex. 607; Lowe v. Steele, 15 M. & W. 380; Randall v. Moon, 12 C. B. 261.

(e) Thame v. Boast, 12 Q. B. 808; Gell v. Burgess, 7 C. B. 16; and see Henry v. Earl, 8 M. & W. 228; and Cook v. Hopewell, 11 Ex. 555; 25 L. J. Ex. 71.

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