## Facts

- Abbie A. Hubbell and William W. Hubbell executed a mortgage (Dec. 16, 1879) securing a $600 note payable to John M. Wakefield; Abbie signed as principal and William as surety.
- The mortgage was subject to a prior mortgage held by the Newport Savings Bank, later acquired by Otis S. Johnson.
- Johnson’s administrator obtained possession through a writ of possession (May 13, 1886) in foreclosure litigation on the bank mortgage to which Wakefield was not a party; the premises were later quitclaimed to Ida E. Brigham (Nov. 18, 1890) and then to Abbie (Oct. 6, 1903).
- Evidence indicated Abbie continued to collect rents and treat the property as her own and did not lease the property or pay rent.
- The Wakefield note was also secured by an Enfield mortgage; proceeds from an Enfield sale (about $293.03) were received in 1893 and credited as a partial payment on the note.
- Evidence further indicated William made two payments ($20 and $25) and Abbie paid about $300 around Nov. 28, 1893, and that Wakefield agreed to accept these payments (including the Enfield proceeds) in full satisfaction of the debt.
- Wakefield died Feb. 3, 1900; Frye was appointed executor Feb. 12, 1900 and sued to foreclose the Wakefield mortgage on Jan. 16, 1905.
- At trial, William was nonsuited; the jury deadlocked on how much had been paid and whether the payments were accepted in full satisfaction.
- After the plaintiff conceded the payments claimed, the court instructed that any agreement to accept them in full satisfaction would not be a defense and directed a verdict for the plaintiff for the balance; Abbie excepted.

## Issues

1. Whether a creditor’s agreement to accept part payment in full satisfaction of a liquidated debt can discharge liability for the balance (accord and satisfaction), or is ineffective for lack of consideration as a matter of law.
2. Whether the trial court erred by instructing that an agreement to accept part payment in full satisfaction could not be a defense and by directing a verdict for the plaintiff.
3. Whether other asserted defenses (including limitations and effects of the prior bank-mortgage foreclosure) barred the action.

## Decision

- The Supreme Court of New Hampshire sustained Abbie Hubbell’s exceptions and ordered a new trial.
- The court rejected the traditional rule that part payment of a liquidated debt cannot support discharge of the remainder.
- The court held that whether the lesser sum was accepted in full satisfaction is a factual question for the jury.
- Because the trial court’s instruction removed that question from the jury and supported a directed verdict on an erroneous legal premise, the directed verdict could not stand.

## Legal Principles

- A debt may be discharged when the creditor accepts a lesser sum in full satisfaction; discharge does not fail solely because the payment is less than the amount due.
- The existence of an accord and satisfaction in this setting turns on intent and agreement and is generally a jury question.
- A court errs by instructing that an asserted accord and satisfaction is legally irrelevant and by directing a verdict where the disputed issue is whether the creditor accepted the partial payments as full satisfaction.

## Conclusion

The court held that an agreement to accept partial payment as full satisfaction can extinguish the entire debt and that the jury, not the judge, must decide whether such an agreement was made and accepted; a directed verdict based on the contrary rule required a new trial.


Frye v. Hubbell, 74 N.H. 358 (N.H. 1907)