
    Oscar H. Clough, plaintiff and respondent, vs. Patrick Murray, defendant and appellant.
    1. So far as a release from the continuing obligation of a specialty, or its modification, and the satisfaction of a liability incurred under past breaches are concerned, a distinction is observed between the modes of so releasing, modifying and satisfying them. An instrument of equal solemnity, unless in case of performance, is necessary to discharge the first, or modify it, except as to time of performance, and then only by way of estoppel; so that an acceptance by parol, neither of an executory agreement nor a chose ^in action, in consideration of a .parol contract to modify or discharge it, Will operate as such modification or discharge, even although such new agreement be subsequently performed; whereas, a cause of action arising under a breach of covenant may be barred by the acceptance by parol of a new executory agreement in satisfaction thereof.
    2. All the cases on this subject lay great stress on the existence of some agreement to accept the new undertaking in place of the performance of the old, and the distinction between accepting the acts agreed -to be done, or the thing to be delivered, in satisfaction, and an acceptance of the mere agreement to do or deliver them in the same way, is preserved. There must be an accord.
    
    3. Hence it is necessary, in all cases, to allege and prove, either by the terms of the new contract, or evidence aliunde, the existence of an agreement to accept, in satisfaction of the prior contract such new contract itself, and not the mere performance of its terms.
    4. The plaintiff proposed in writing, in June, 1861, to do three things on certain terms therein specified, viz: 1st, To release the latter from all the obligations of a contract between the parties, made in October previous; 2d. To return to him four of certain promissory notes therein mentioned; 3d. To release him from all obligations in selling certain merchandize, (plumbago.) The defendant was required, among other things, to discharge a certain note of his, in which a certain sum (§540) was due; to pay a small sum ($21) for interest; and to deliver over certain notes of his own for certain amounts, as well as notes of S. & 0. It closed by the plaintiff agreeing to return such four notes when the defendant had paid the note for $540, and the $21, to the plaintiff, and have passed over to him such notes of S. G. and his own, or to have them ready for delivery on a certain day which should be prior to a specified day in Jidy; and that on those terms he would give the defendant a receipt in full for all demands, (except a certain specified note,) cancel the contract, and take also a receipt in full for ail demands. The referee found, as facts, not only the absence of any understanding between the parties that the making and acceptance of such proposition, and the defendant’s assumption, thereby, to perform what was therein required of him, should be a substitute for, or in extinguishment of, the original agreement, or of the defendant’s promises as maker of the five notes therein mentioned, but an actual understanding that only ~h\s performance of the terms of the proposition should determine and put an end to the original agreement, and his liability as maker of the notes.
    
      
      Held that this was a mere accord, "where performance, and only that, was to he satisfaction, or work an extinguishment of prior liabilities; and that the terns ■never having been complied with, the proposition was no bar to an action upon one of the defendant’s notes specified therein.
    (Before Robertson, Ch. J. and Monell and McCunn, JJ.)
    Heard November 15, 1864;
    decided December 31, 1864.
    This is an appeal by the defendant from a judgment of this court, on the report of a referee, in favor of the plaintiff against the defendant.
    The action was brought upon a promissory note, dated October 1st, 1860, for $1046.67, made by the defendant, payable nine months after date, to his own order, and by him indorsed ; and the note was one of five given by the defendant to Cyrus Butler, Richard Butler and the plaintiff, pursuant to the first article of an agreement, between the parties and others, dated October 1, 1860, a copy of which was annexed to the answer.
    The action was refered to Judge Bosworth, as referee, who found the following facts :
    
      First. The defendant made his promissory note in writing, dated the first October, A. d. 1860, whereby he promised to pay, nine months after the date thereof, to the order of himself, $1046.67, for value received, and indorsed and delivered the same ; and the same afterwards, and after the maturity thereof,' for a valuable consideration by the plaintiff paid, came into his hands by delivery before the commencement of this suit, and he is the owner and holder thereof, and the same has not been paid, nor has any part thereof, and the amount justly due and owing from the defendant to the plaintiff, upon the said note, at the date of the report, was $1261.78..
    
      Second. On or about the first day of October, a. d. 1860, Richard Butler and Cyrus Butler, together with the plaintiff, Oscar H. Clough, as the parties of the first part, and the defendant as the party of the second part, made and entered into certain articles of agreement under their hands and seals, bearing date on that day, a true copy whereof was annexed to the defendant’s amended answer.
    
      On or about the first day of October, a. d. 1860, pursuant to the said articles of agreement, and not otherwise, the defendant made and delivered to the said Richard Butler, Cyrus Butler and Oscar H. Clough, five promissory notes, dated October 1, 1860, payable to his own order, at five, seven, nine, eleven and twelve months from the date thereof, and by him indorsed, respectively, each for $1000, with interest from the first day of November, 1860, to the time of the maturity thereof, which interest, in the case of each note, was added to the said sum of $1000, and made a part of the aggregaté amount or principal sum for which each note was made. The note in the complaint (and in the first findings of fact above mentioned,) is that one of the said five notes which was payable at nine months from the date thereof.
    
      Third. The said Richard Butler, Cyrus Butler and Oscar H. Clough, on or about the first day of October, 1860, designated and appointed the said Cyrus Butler as their treasurer, pursuant to, and as provided in the fourth article of the said articles of agreement of October 1st, 1860. The said Richard Butler, Cyrus Butler, Oscar A. Clough and Patrick Murray, immediately after the making of said articles of agreement, proceeded to act under the same. The said Butlers and Clough, from time to time, prior to the 29th J une, 1861, sent to the defendant, at New York, plumbago, to be sold by-the defendant, and he made sales, from time to time, to different' persons, and on the 29th of June, 1861, there had been several sales of plumbago, on credit, appearing on the books kept by the defendant, and among others, a sale to one Jacob Seabury, which was then unpaid, and amounted, according to the books kept by the defendant, to $1697.07. The defendant, prior to June 29, 1861, had expended various sums for plumbago purchased by him, under and pursuant to said articles of agreement, and for storage, freight, cartage, packing and deliveries of plumbago from the mines, , and on the maturity of the first of the said five notes he was to be allowed, on account of the sums so expended, the sum of $498.50, in part payment of the said one of the said notes first maturing, and for the balance thereof he gave his own note for $537.01, payable June 5, 1861, Last said note, on the 29th day of June, 1861, was unpaid, was held by J. T. Sanger, and was estimated to amount, to the 29 th of June, 1861, to about' $450.
    
      Fourth. On the 29th of June, 1861, the said Cyrus Butler, as such treasurer, made a proposition in writing to the defendant, and made the same, as well on behalf of said Eichard Butler and Oscar H. Clough, as on his own behalf, and made the same by authority of .said Eichard Butler and Oscar H, Clough, and the same is in words and figures following, that is to say :
    “ New York, June 29, 1861.
    Hr. P. Murray, New York—
    Dear Sir : I propose to release you from all your obligations in the contract made between yourself, my brother, Oscar H. Clough and myself, to return you four of the promissory notes named in said contract, said notes being due, respectively, May 4th, July 4th, September 4th, and October 4th, 1861, and to release you from all obligations incurred in selling plumbago, except as hereinafter stated, on the following terms and conditions :
    You are to take up a certain note now in the hands of J. T. Sanger, which, with interest and expenses, now amounts to about................$540 00
    After which you will have paid out as follows i
    On account of note due March 4, 1861, .... 499 50
    “ “ as above mentioned,..... 540 00
    Storage, $9.82. Cartage, $12,50. Bill Eddy, $12.50, 34 82
    Add 67 kegs powder at $3.00,....... 201 00
    Making,............$1275 32
    You are to take in payment of above accounts on sales book
    of N. Y. B. L. as per mem. say,......$357 37
    55 bbl. Ground Plumbago,...... . . 510 00
    21 “ Crude “ 252 00
    19 “ Ground “ 125 40
    25 “ • Crude “ 300 00
    $1544 77
    
      For the account of Jacob Seabury, which stands on the books to the amount of $1697.07, one half of which was to be settled by note, I propose to take said note or notes without your endorsement. You agreeing to make the account as above good to me, and you are to take the merchandise half to your own account, giving us note or notes of A. Colburn of Philadelphia, to the amount of not more than $650, and for the bal. enough to make $800, (I agreeing to discount $47.04 from the mdze acct.) you are'to give me your own note at not longer than six months from July 1, ’61, I also agreeing to accept a conditional contract held by Seabury for 25, 50 or 75 tons. It is further agreed that in addition to the mem. basis of settlement herewith, you are to pay me on settlement of the papers, the sum of $21 for interest on unpaid notes. I agree to return the said four notes when you have paid the note of $540, (or about that sum,) and $21 to me, and have passed over to me said notes of Seabury, Colburn and yours, or to have them ready for delivery on a certain day, which shall be prior to July 10th ensuing. On these terms I will give you a receipt in full of all demands, except as relates to a note for bal, of the Sea-bury merchandise acct. cancel the contract, and take also a receipt from you in full of all demands,
    Very truly yours,
    Cyrus Butler, Treasurer.’’
    
      Fourth. Prior to the making and submission to the defendant of the said written proposition of June 29, b861, the defendant had ordered and forwarded to the said Butlers and Clough, the sixty-séven kegs of powder in the said written proposition mentioned. The defendant on the receipt of the said written proposition, and on or about the said date thereof, assented thereto, and so notified the said Butlers and Clough, and agreed to do and perform according to the tenor and effect thereof, the several matters and things therein named to be done and performed by him, It was not the understanding at the time of the said Butlers and Clough of the one part, and the said Murray on the other part, that the making of the said written proposition by the said Butlers and Clough of the one part and the assenting thereto, and acceptance thereof by the defendant, and his said agreement to do and perform, according to the tenor and effect of the said written proposition, the several matters and things therein named to be done and performed by the defendant, was, or was to be deemed to be, a substitute for the said articles of agreement of October 1st, I860,'and the several covenants therein .contained,'or of the promises of the defendant as the maker of the said five promissory notes in the second of these findings of fact mentioned, or was or was to be deemed to be a satisfaction or ex-tinguishment of the said articles of agreement and said five promissory notes, or of any or either of them, or of any part of either of them; on the contrary it was, at the time their understanding, and the understanding of each, of them, that performance by the defendant of the several matters and things in said written proposal mentioned to be done and performed by the defendant, and only the performance thereof according to the tenor and effeot of the said written proposition, would determine and put an end to the said articles of agreement, and the defendant’s liability as maker of the said five promissory notes or any or either of them.
    Fifth. The defendant was not able to procure the Seabury note or the Colburn note by July 10, 1861, and on the defendant’s representation to the said Butlers and Clough of the impracticability of obtaining the Seabury note, the said Butlers and Clough assented to so far modify the said written proposal as to accept- in lieu thereof the defendant’s note, for the amount of the Seabury" note, which the defendant was to procure and furnish. .
    And the said written proposition was further so far modified by the said Butlers and Clough that they waived performance by the defendant on or before July 10, 1861, and the several matters and things to be done by him as a condition to entitle him to the benefit of the said written proposition, on his actually doing and performing the several matters and things therein mentioned to he done and performed by him within such period as should be assented to and allowed by said Butlers and Clough for that purpose.
    
      Sixth. On the 20th of September, 1861, the defendant not having then done or performed any of the several matters and things in the said written proposition mentioned, and performed by him, except to deliver the sixty-seven kegs of powder as in the fourth of these findings of fact stated, and the said Butlers and Clough complaining of the delay of the defendant in the premises, the defendant on that day sent a note in writing to said Cyrus Butler, as representing said Butlers and Clough in the premises, which note in wilting is as follows, that is to say:
    “New York, Sept. 20th, 1861.
    Mr. Cyrus Butler, Dr Sir: I have not as yet arranged the money matter, and claim two weeks longer, or say the first of October to arrange our matters.
    If you wish, I will give you a note for the cash amount of our- settlement payable then, when I am certain to be in funds as well as Colburn’s note.
    Better than this I cannot do, and I beg of you to accede and you may rely on all our business ending well.
    Yours respectfully, P. Mubbay.”
    Cyrus Butler, on the same day by note in "writing acknowledging the receipt of the defendant’s last said letter, states that he is “ disposed to yield once more, but this time there must be no missfire.” He inclosed in it a note for $549.86, maturing October 4, 1861, being the amount to which the note for $537.01 would amount October 1, 1861, including interest to that day, and a notary's fee of seventy-five cents for protesting the said note of $537.01, to be signed and returned to him by the defendant. The matter referred to in the defendant’s said note of September 20, 1861, as “ the cash amount of our settlement,” was defendant’s said note of $537.01. The defendant signed the said note so enclosed to him, or drew one for the same amount, maturing October 4, 1861, and sent it the same day to said 0. Butler in lieu of and as a substitute for said note of $537.01, who received the same.
    
      Seventh. The defendant did not pay the said note of $549.86 at the maturity thereof, or subsequently, and on said fourth day of October, 1861, persuaded said Cyrus Butler to accept of an assignment of an account for goods sold by the defendant in the name of Winslow & Co. to Joseph Dixon & Co. on credit, to be paid for by the note of the latter, the said account amounting to about seven hundred and seven dollars ; the said assignment stating that the said note so to be given by Joseph Dixon & Co. was to be applied to the defendant’s “ note of $540 due 3d Oct. the difference, if any, to be applied on account of our settlement.” The note of $540 in said assignment of account mentioned, referred to the said note of $549.86, maturing October 4, 1861. The defendant on or before the 14th of October, 1861, obtained from Joseph Dixon & Co. their note for the said account so assigned by the defendant to Cyrus Butler, and on the 14th of October, 1861, in an interview between him and said Cyrus Butler, endeavored to agree upon some terms upon which said Butler would take the same at his own risk, but failing to do so, he thereupon refused to deliver it to the said Butler to be applied according to the terms and provisions of the new assignment of said account against Joseph Dixon & Go.; whereupon said Cyrus Butler then and there told the defendant that he had an absolute right to the delivery of the said note to himself, and insisted upon such delivery, which the defendant refused to make. The said Cyrus then notified the defendant that he should break up the contract of settlement, and would have nothing more to do with the defendant in reference thereto, and should hold him to the articles of agreement of October 1, 1860, and that the notes in the second of these findings of fact mentioned would be prosecuted.
    
      Eighth. On the 17th of October, 1861, the said Butlers and Clough, through the said Cyrus Butler, submitted to the de-' fendant a further proposition for a settlement, which last proposition the defendant declined to accept. Previously, and on or about the 16th of September, 1861, the defendant offered to the said Butlers and Clough to deliver to them the said note of Joseph Dixon & Co. and fulfill the -original proposition or contract of settlement in all particulars, so far as he was then able to do, and give his own- notes for the amounts for which by the contract of settlement they were to be given, and include in the amount thereof the amount of the note contemplated to be obtained from Colburn, if said Butler and Clough would not wait for the Colburn note until it could be procured. The said Butler and Clough, through the said Cyrus Butler, then distinctly notified the defendant that they would have nothing more to do with the defendant under the agreement for a settlement, or with any new notes to be given by him, and that he would be sued on the aforesaid notes which he had given. The said Butlers and Clough, subsequent to the refusal of the defendant on the 14th of October, 1861, to deliver to them the said note made by Joseph Dixon & Go. as heretofore stated, have not at any time agreed or consented to further extend the time for settling under the aforesaid written proposition of June 29, 1861, and the modifications thereof herein before stated, or that it should be deemed open and binding upon the parties thereto, or any or either of them.
    The referee’s conclusions of law upon the facts so as aforesaid found, were:
    1st. That the written proposition of June 29, 1861, and the acceptance thereof by the defendant, together constituted only an accord, and that actual performance according to the tenor and effect thereof, of the several matters and things therein mentioned to be done and performed by the defendant was essential, to put an end to and determine the obligatory force of the articles of agreement of October 1st, I860, and the liability of the defendant as maker of the five notes, in the second of the foregoing findings of fact mentioned.
    2d. That the plaintiff was entitled to a judgment in this action against the defendant -for the amount of the promissory note described in the complaint, together with interest thereon from its maturity, amounting together to the sum of one thousand two hundred and sixty-one dollars and seventy-eight cents, together with the plaintiff’s costs of this action.
    The referee further reported that he held proof of the counter claims set up in the second, third, fourth, fifth and sixth defenses pleaded in the defendant’s answer, inadmissible in this action, and excluded proof thereof.
    Judgment being entered in accordance with this report, the defendant appealed.
    
      J. Emott, for the defendant, appellant.
    
      G. W. Cotterell, for the plaintiff, respondent.
   By the Court, Robertson, Ch. J.

A distinction is recognized at law between the continuing obligation of a specialty and a liability under it for damages for a violation of stipulations contained in it. It requires an instrument of equal solemnity to dissolve the former, or even modify the terms of the instruments, unless as to time of performance of an act, (Clark v. Dales, 20 Barb. 42,) and then only on the principle of estoppel. (1 Roll. Abr. 453, pl. 5. Year Book, 2 Hen. VI. 37. Fleming v. Gilbert, 3 John. 528.) A contract agreed by parol to be accepted in discharge of. such obligation, or to modify the terms of such instrument under seal, even if performed ; or a chose -in action delivered and received in satisfaction, will not produce such effect. (Healy v. Spence, 8 Exch. 668. Smith v. Trowsdale, 5 El. and Bl. 685. Suydam v. Jones, 10 Wend. 80. Delacroix v. Bulkley, 13 id. 71. Allen v. Jaquish, 21 id. 628, overruling Dearborn v. Cross, 7 Cowen, 48. Eddy v. Graves, 23 id. 82. Mitchell v. Hawley, 4 Den. 414. The Mayor of Berwick, &c. v. Oswald, 1 El. & Bl. 295.) There is therefore nothing in the evidence before us .shewing a legal rescisión or modification of the original agreement of October, 1860, and á consequent failure of consideration of the note in suit.

Damages, however, for the breach of a covenant, may be satisfied by the delivery and acceptance of something else in satisfaction of them, or a new contract may he entered into and accepted as a substitute therefor. (Townsend v. Empire Stone-dressing Company, 6 Duer, 208. Delacroix v. Bulkley, ubi sup. Lattimore v. Harsen, 14 John. 330. Keeler v. Salisbury, 27 Barb. 485. 5 Coke, 117.) Even in a technical accord and satisfaction, its efficacy arises from the agreement contained in the former, and not from the performance thereof implied in the latter word. (1 Saund. Pl. and Ev. 23. Bac. Abr. Accord and S. 3 Steph. Con. 373. 1 Chit. Pl. 613. 2 id. 924, 1022, 1031, 1156.) And for that very reason, among others, the obligation of a specialty cannot be discharged by a parol executory accord, notwithstanding its terms are carried out. There can be no doubt, however, that the acceptance of a new agreement is satisfaction of a cause of action arising under a prior one, whether under seal or not, is a bar to any action therefor. Such new agreement may be either the assumption of new liabilities, a promise to pay a further sum, an undertaking of new duties or acts to be performed, an exchange of securities, or the surrender or apportionment of debts or property. (Addison on Contracts, 1099.) The reason assigned for which is that the party with whom the new contract is made has a remedy to enforce it by action. (Com. Dig. Accord, B. 4. Cartwright v. Coolie, 3 B. and Ad. 701. Evans v. Powis, 1 Welsb. H. and G. (1 Exch.) 607.) This is usually ranked as a species of accord and satisfaction, although, but for the fact that the original contract still remains obligatory, it would more nearly approach the novation of the civil law, (Instit. Lib. 3, Tit. 30, de Novatione, Cod. Lib. 8, Tit. 42, sect. 8, Dig. Lib. 46, Tit. 2, de Novationibus,) of which the substitution of a new debtor for an old, is the only branch recognized by our. law. The distinction between an accord and such a substituted agreement is pointed out in Tilton v. Alcott, (16 Barb. 598.) The liability of the party making an accord which he refuses to execute is recognized in Billings v. Vanderbeck, (23 Barb. 546.) In Potter v. Smith, (14 John. 444,) a delivery by the defendant to the plaintiff of certain property to be accepted by the latter in satisfaction of a certain part of the amount of a- judgment against the former, and half the costs included in it, and his agreement to release any errors in obtaining such judgment, in consideration of the relinquishment by the plaintiff of the other half of such costs, and a levy under two executions, was held to be good by way of accord and satisfaction. Mitchell v. Hawley, (4 Den. 414,) does not militate against this doctrine, because, in that case, the plaintiff merely agreed not to pursue one of the defendants if he would agree not to appeal from the judgment against them, where the remedy of such defendant (as on a covenant not to sue) would be on the agreement. The case of Keeler v. Salisbury, (27 Barb. 485,) which was subsequent, fully sustains the principle of the discharge of a cause of action by a new agreement The other before cited cases of Townsend v. Empire Stone Dressing Company, Delacroix v. Bulkley, and even Lattimore v. Harsen, (the point of which seems to be mistaken in Dearborn v. Cross, ubi sup.) are fully in point.

The same doctrine is more fully elaborated and distinctly stated in the English cases. In Gould v. Cheeseman, (2 B. and Ad. 328,) creditors who had accepted the covenants of their debtor, and his agreement to pay a trustee in satisfaction of debts due them, were precluded from maintaining an action against him for the original cause of action. An agreement by one party to an action to pay the costs of it, and- by. the other to pay a certain sum, and by both that all disputes should cease, it was held might be pleaded in bar of a further maintenance of the action. (James v. David, 5 T. R. 142. Crowther v. Farrer, 15 Q. B. 677. Cooper v. Parker, 14 C. B. 118.) An agreement between the parties to an action accepted by the plaintiff in full discharge of a prior agreement was, on demurrer to a plea setting up the same, held to be a substituted■ contract, and an answer to an action, or that for which it was substituted. (Taylor v. Hillary, 1 Cr. M. and R. 741.) The acceptance of an agreement to submit to arbitration certain matters in satisfaction of other claims was held to be a good bar to an action for the latter. (Williams v. The London Com. Exch. Co. 10 Exch. 569.) In an action on an award, a plea of a substituted agreement accepted in place of its performance,- was held good, (Smith v. Trowsdale, ubi sup.) as the action was not on the submission under seal.

But in all the cases just referred to, as well as others, great stress is laid on the existence of some agreement to accept the new undertaking in place of the performance of the old, and the distinction is preserved between accepting the acts agreed to be done, or the things to be delivered, in satisfaction, and accepting the mere agreement to do or deliver them in the same way. Thus, a plea of an agreement entered into by the parties to an action whereby the defendant promised to do a certain thing, and of the settlement, satisfaction, discharge and termination thereby of the cause of action in suit, was held bad for want of averring an acceptance by the plaintiff of such agreement, in satisfaction. (Hall v. Flocton, 20 L. J. 208.) In other words, there must be an accord.

It is necessary, therefore, in all cases to allege and prove, either by the terms of the new contract or evidence aliunde, the existence of an agreement to accept such new contract itself, and not the mere performance of its terms, in satisfaction of'the prior contract. The referee has found in this case, as facts, not only the absence of any understanding between the parties when making and accepting the written proposition of J une, 1861, that such making and acceptance, and the defendant’s assumption thereby to perform what was therein required of him, should be a substitute for, or in extinguishment of, the original articles of agreement and the covenants therein contained, or of the defendant’s promises as maker of the five notes therein mentioned, including that in suit; but also an actual understanding between the parties that only the defendant’s performance of the matters required to be done by him in such written proposal, should determine and put an end to such articles of agreement and the defendant’s liability as maker of such notes. The first of such facts was evidently founded on the entire absence of any extrinsic evidence to show that there was any understanding dehors the written proposition to render its making and acceptance a satisfaction per se, both of the prior agreement and the notes therein mentioned. The second was evidently founded on an interpretation of the terms of the proposition itself, and may, therefore, properly be said to be a question more of law than of fact.

Such proposition opens with a proposal to do three things, on certain terms therein specified : 1. To release the defendant from all obligations in the original contract of October, 1860. 2. To return him four of the notes mentioned therein, including that in suit! 3. To release him from all obligations in selling plumbago. Such terms, among other things, required the defendant to discharge a certain note of his, on which about $540 was due ; to pay a small sum for interest, ($21;) and deliver over certain notes of his own for certain amounts ; as well as the notes of two other persons, (Seabury and Col-burn.) It closed by stating : “ I agree to return the said four notes, whey, you have paid the note for $540 and $21 to me, and have passed over to me said notes of Seabury, Oolburn and yours, or to have them ready for delivery on a certain day, which shall be prior to July 10f/t ensuing. On these terms I will give you a receipt in full for all demands,” (except a certain specified note,) “ cancel the contract, and take also a receipt in full for all demands.” The fixing of the time for the relinquishment of the notes in question by the first part of such clause, was evidently separated from the release of the defendant from his obligations under the original contract, and such surrender was made to depend upon paying the sums specified, and delivering the note referred to by the time so fixed. By the second part of such clause only a promise was made to discharge the defendant entirely, upon the terms therein recited, including such payment and delivery. There can be no doubt that this was, as stated by the learned referee in his opinion, “ clearly a mere accord, where performance, and only that, was to be satisfaction, or work an extinguishment of prior liabilities.” This is still further evidenced by the requisition in such proposition that the defendant should pay the sum of $21 for interest on “the settlement of the papers,” and that he should transfer notes, not then in existence, of third persons.

Such terms, however, never were complied with, the Seabury and Colburn notes never having been delivered or tendered, or the $540 note paid; so that the agreement* as originally adopted, was never carried out. It is claimed* however, that the time of performance was not of the essence of the contract, and that the other parties have so conducted themselves in reference thereto as to make it immaterial, and that part performance has been accepted. The defense of an accord and satisfaction was entirely legal, and not equitable. There was no equity extending the time for performance beyond that fixed in such original agreement, until the new arrangement was afterwards made, to accept the defendant’s note in place of Seabury’s, which extended it to the time of such acceptance, and disposed of that act of part performance. The correspondence of the 20th of September, possibly extended the time of payment of cash required by the original terms of settlement to the maturity of the defendant's note then given. The acceptance of the assignment of the Dixon & Co. account would, if the note had been delivered, have been a compliance with that condition of the settlement. But the defendant's refusal to deliver such note, unconditionally, and the consequent notification to him by the other parties of the termination of such negotiation for a settlement took away all right to further delay. Even if it had not, and the time for obtaining the Col-burn note was prolonged until that time, that note never was offered, nor was the delay accounted for. The original arrangement was, therefore, never carried out, nor any modification, without which the defendant remained liable on his notes.

The powder whose delivery formed part of the arrangement was, at the very time of making it, on its way to the plaintiff and the Butlers, and was their property under the original agreement. For the price paid for it, the defendant was secured under the original agreement.

If there be any collision between the testimony of the defendant and Mr. Butler as to the occurrences and dealings between them, I think there is good ground for giving greater credence to the latter’s statements in consequence of the want of good faith in the former in withholding the Seabury note, and also the note of Dixon & Oo. after having assigned it. The second, third, fourth, fifth and sixth defenses in the answer, if counter-claims, are not admissible against the plaintiff, (Code, § 150,) and are not the subject of a legal set-off, (Cummings v. Morris, 3 Bosw. 560; S. C. 25 N. Y. Rep. 634,) and were properly excluded.

The judgment should be affirmed, with costs.  