liquidated

$735. Payment of an amount less than that of a Accord of liquidated' debt then payable, is not a satisfaction debt. thereof, though accepted as such.3

'Palmerton v. Huxford, 4 Denio, 166; Neary v. Bost-
wick, 2 Hilt., 514; see Evans v. Powis, 1 Exch.,

601; Wilkinson v. Byers, 1 Ad. & El., 106.
Brooks v. White, 3 Metc., 286; Goodnow v. Smith, 18
Pick., 414; Smith v. Brown, 3 Hawks, 580.

'Von Gerhard v. Lighte, 13 Abb. Pr., 101; Harrison v.
Wilcox, 2 Johns., 448; Dederick v. Leman, 9 id., 333;
Scott v. Hunt, 2 How. Pr., 58; Down v. Hatcher,
10 Ad. & El., 121; Thomas v. Heathorn, 2 B. &
C., 477; Fitch v. Sutton, 5 East, 230; Cumber v.
Wane, 1 Str., 426. This rule of the common law is
not founded upon natural justice, nor can it be sup-
ported upon any other than technical grounds. An
agreement to accept a barrel of flour in satisfaction
of a debt of $1,000 is valid, and if the flour is de-
livered the debt is satisfied. So a release under
seal, without any consideration, extinguishes the debt.
But an agreement to accept $999 in satisfaction of
the debt is unavailing, and the obligation to pay the
other dollar is unimpaired. In Pennsylvania, the
rule has been disavowed for over thirty years past
(Milliken v. Brown, 1 Rawle, 391). It has been abol-
ished in Maine, by statute (Laws 1851, ch. 213). The
commissioners recommend the omission of this sec
tion, and the insertion of the following substitute':

735. Part performance of an obligation, either
before or after a breach thereof, when expressly
accepted by the creditor in satisfaction and rendered
in pursuance of an agreement for that purpose, though
without any new consideration, extinguishes the obli-
gation.

CHAPTER V.

NOVATION.

SECTION 736. Novation, what.

737. Modes of novation.

738. Novation a contract.

739. Effect of acceptance of new obligation.

740. Recission of novation.

§ 736. Novation is the substitution of a new obli. Novation,

gation for an existing one.

what.

Modes of novation

Novation, a

contract.

Effect of acceptance of new

obligation.

$737. Novation is made:

1. By the substitution of a new and higher obligation between the same parties, with intent to extinguish the old obligation;1

2. By the substitution of a new debtor in place of the old one, with intent to release the latter; or

3. By the substitution of a new creditor in place of the old one, with intent to transfer the rights of the latter to the former.3

1 The acceptance of a debtor's own note does not dis

charge the debt (see § 739).
of a contract under seal for
extinguishes the latter.

But the substitution one not under seal,

Conkling v. King, 10 N. Y., 440; Graves v. Friend, 5 Sandf., 568; St. John v. Purdy, 1 id., 9; N. Y. State Bank v. Fletcher, 5 Wend., 85; Sard v. Rhodes, 1 M. & W., 153. But if there is no agreement to accept the new obligation in satisfaction, it is not a satisfaction (Noel v. Murray, 13 N. Y., 167; Vail v. Foster, 4 id., 312; Monroe v. Hoff, 5 Den., 380). The intent is the material question (Jobbitt v. Goundry, 29 Barb., 509).

Code La., 2185; Code Napoleon, 1271.

S738. Novation is made by contract, and is subject to all the rules concerning contracts in general.

S739. The acceptance, by a creditor, of a new obligation of the debtor for the payment of money only, in satisfaction of another obligation of as high degree, for the payment of a specific sum of money only, then payable, does not extinguish the latter obligation' [unless accepted as a satisfaction under section 735], but extends the time of payment until the new obligation becomes payable.3

1 Spencer v. Ballou, 18 N. Y., 331; Hill v. Beebe, 13 id., 562; Cole v. Sackett, 1 Hill, 516.

2 The clause in brackets depends upon the adoption of

the substitute suggested for $735.

'Myers v. Welles, 5 Hill, 463; Hart v. Hudson, 6 Duer, 294; Walton v. Mascall, 13 M. & W., 452; Kearslake v. Morgan, 5 T. R., 513; Okie v. Spencer, 2 Whart., 253.

of novation

$740. When the obligation of a third person, or Rescission an order upon such person, is accepted in satisfaction, the creditor may rescind such acceptance, if the debtor prevents such person from complying with the order, or from fulfilling the obligation, or if, before the creditor can with reasonable diligence reach such person, he becomes insolvent.2

'Franklin v. Vanderpool, 1 Hall, 78; Coyle v. Smith, 1

E. D. Smith, 400; Purchase v. Mattison, 6 Duer,
587; Jacks v. Darrin, 3 E. D. Smith, 557.
Lovett v. Cornwell, 6 Wend., 369; aff'g S. C., 1 Hall,

56; Timmins v. Gibbins, 18 Q. B., 722; Ontario
Bank v. Lightbody, 13 Wend., 107; see Heubach v.
Mollman, 2 Duer, 227; Benedict v. Field, 16 N. Y.,
505; but see Des Arts v. Leggett, id., 582, 589.

CHAPTER VI.

RELEASE.

SECTION 741. Obligation extinguished by release.

742. Certain claims not affected by general release.
743. Release of several joint debtors.

extinguish

S741. An obligation is extinguished by a release Obligation therefrom given to the debtor by the creditor, upon a ed by renew consideration, or under seal.

A release under seal extinguishes the debt, notwith-
standing the provision of the Revised Statutes allow-
ing the want of consideration for a sealed instrument
to be shown (Stearns v. Tappin, 5 Duer, 294). But by
the present law, a release, with neither a seal nor a
new consideration, is void (Von Gerhard v. Lighte, 13
Abb. Pr., 101; Seymour v. Minturn, 17 Johns., 169;
Dewey v. Derby, 20 id., 462; Jackson v. Stackhouse,
1 Cow., 122). The justice of its restrictions may well
be doubted. The commissioners recommend the sub-
stitution of the words "in writing" for "under seal."
See notes to section 735.

S742. A general release does not extend to claims

which the creditor did not know or suspect to exist
in his favor, at the time of executing the release.
Lyall v. Edwards, 6 H. & N., 337.

Certain

claims not

affected by

general re lease.

Release of several

joint

debtors.

S743. A release of one of two or more joint debtors does not extinguish the obligations of any of the others, unless they are mere guarantors; nor does it affect their right to contribution from him.

This provision is new (see Cornell v. Masten, 35 Barb., 157; Bronson v. Fitzhugh, 1 Hill, 185; Hoffman v. Dunlop, 1 Barb., 185; Parsons v. Hughes, 9 Paige, 591; Catskill Bank v. Messenger, 9 Cow., 37; Rowley v. Stoddard, 7 Johns., 207). By statute, a release may be so drawn as to discharge one only of several joint debtors (3 R. S. [5th ed.], 65; Laws 1838, ch. 257): and as the intention of the creditor is evident enough from the form of the release, the justice of this pro vision can hardly be disputed.

PART II.

CONTRACTS.

TITLE I. Nature of a contract.

II. Manner of creating contracts.
III. Interpretation of contracts.
IV. Unlawful contracts.

V. Extinction of contracts.

TITLE I.

NATURE OF A CONTRACT.

CHAPTER I. Definition.
II. Parties.

III. Consent.

IV. Object.

V. Consideration.

CHAPTER I.

DEFINITION.

SECTION 744. Contract, what.

745. Essential elements of contract.

S744. A contract is an agreement to do or not to Contract, do a certain thing.

McNulty v. Prentice, 25 Barb., 204; Sturges v. Crown.

inshield, 4 Wheat., 197.

what.

$ 745. It is essential to the existence of a contract Essential that there should be:

1. Parties capable of contracting;

elements of contract.