Savage v. Edgar

The opinion of the court was delivered by Kalisch, J.

The interposition of the court of chancery between the appellant and the respondents in their controversy in the supreme court cannot be sustained upon the fácts before us. The agreement, in writing, entered into by thé appellant and the respondent Savage for a complete accord and satisfaction of the matters in dispute between them and which were the subject of an action at law then pending in the supreme court, is clear and explicit in its terms. The fact that Savage fully performed his part of the agreement was not controverted. The legal effect of the performance by Savage of his agreement was to extinguish the appellant’s claim that was made the basis of the action against Savage in the supreme .court. But as this settlement was made between the litigants privately and without judicial sanction, the settlement was, as a matter of course, not entitled to judicial recognition until brought properly before the court *209 in which the action was pending. The appellant, it appears, not only refused to perform that part of the agreement whereby he had obligated himself to discontinue the action, but attempted to repudiate the entire agreement and insisted upon proceeding to a trial of the cause. The action of the appellant in that respect could in no manner alter the legal effect of the settlement.

It would be an anomaly in the judicial procedure of this state to countenance the right of the respondents to oust their adversary from the forum in which he was properly seeking his remedy, because, peradventure, he might set up facts in reply to their defence of an executed compromise, matters which are only cognizable in a court of equity. For that is practically what the respondents are seeking to do.

Under the state of facts presented, the respondents’ regular course to pursue was to have applied to the court in which the action at law ^as pending for leave to file a supplementary answer setting up the executed accord. Before the adoption of the new Practice act, such a situation would have been met, under the common law, by an application for leave to file a plea puis darrein continuance. This plea was peculiarly adapted to the situation which the facts set out in the respondents’ bill and affidavit present. In discussing the office of this plea, Steph. Pl. (on p. 66) says: “It is to be observed that the effect of such a plea is not to impugn the right of action altogether, but only the right of further maintaining it; i. e., since the period when the matter of defence arose; and in this respect it differs from an ordinary plea in bar which is in the nature of an absolute and general exception to the plaintiffs’ right to maintain the action and tends to deny that it was properly brought. A plea of this kind is always pleaded by way of substitution for the former pleas on which no proceeding is ever had. It may be either in bar or abatement; and is followed like other pleas, by a replication and other pleadings, till issue is obtained upon it.”

If the plaintiff’s replication to the additional plea set up matter which did not raise an issue of fact, cognizable in a court, of law, the proper course was to demur, but now, under the new practice, such a situation may be met by a motion to strike out the reply to the supplemental answer.

*210 The accord set up and executed by the respondent Savage will afford a complete defence to the appellant’s action at law, unless it should appear that the appellant was induced to sign a release (for such was the legal effect of the written agreement- fully performed by the respondent Savage), by false and fraudulent representations as to the value of the stock. Of course, if the execution of the instrument was induced by fraud, that can be shown in an action at law.

While there is a resemblance in the circumstances of the present ease to those which appeared in Headley v. Leavitt, 68 N. J. Eq. 591, and Trenton Street Railway Co. v. Lawlor, 74 N. J. Eq. 828, in which cases this court held that the jurisdiction of the court of chancery was properly entertained, yet, upon an analysis of the cases cited, there will be found as much difference intrinsically from the case sub judice, as one might expect to find Between an original writing and its facsimile. The prominent distinguishing feature between the present case and the cases cited is that in neither of the latter AAras there a complete accord. In Headley v. Leavitt, supra, the defendant áttempted to set up in the action at law on certain promissory notes the accord and satisfaction as a defence; but the proof showed that he had not performed his part of -the compromise, and the defence, therefore, Avas overruled. Subsequently, he did perform and filed a bill to restrain the action at law on the ground that he had an equitable defence, and then the court directed that the action at laAv should be restrained unless and until the plaintiff consented that the complete accord and satisfaction might be set up as a defence. In that case this court, speaking through Mr. Chief-Justice Guarniere (on p. 595), said: “The subject of litigation which resulted in the judgment was one which was cognizable by a legal rather than an equitable tribunal. The contract which the appellant sought to set up as a defence to the action in the supreme court would, if it had been executed by him, have constituted a legal and not an equitable defence to that action. Subsequent performance of the ■contract on his part gives him no right to have the forum of the litigation changed to a court of equity and to deprive the re *211 spondeut of the determination of a jury upon the question of the existence or non-existence of the contract.”

In Trenton Street Railway Co. v. Lawlor, supra, the agreement for compromise was made while the action at law was pending. Lawlor’s attorney, with authority from Lawlor, agreed to take a certain sum in compromise, and this Lawlor refused to accept. The case, therefore, ivas one of unexecuted accord.

In the present case, it appeared that the accord had been fully executed by the respondent Savage, and of which the respondents could have availed themselves by a proper plea in the action at law, hence there was no ground for the interference of a court of equity. The appellant’s motion to strike out the bill for want of equity should have prevailed.

The decree will be reversed, with direction to the court of chancery that the bill be dismissed, with costs.

For affirmance• — None.

For reversal — The Chief-Justice, Garrison, Swayze, Trenchard, Bergen, Minturn, Kalisoh, Black, White, Terhune, Heppenheimer, Williams, Gardner — 13.