Aguiar v. Harper & Row Publishers, Inc.

• Decision Date: 21 June 1982
• Court: New York City Court
• Parties: , 34 UCC Rep.Serv. 6 Walter R. AGUIAR, Plaintiff, v. HARPER & ROW PUBLISHERS, INC., Defendant.

Page 519

452 N.Y.S.2d 519

114 Misc.2d 828, 34 UCC Rep.Serv. 6

Walter R. AGUIAR, Plaintiff, v. HARPER & ROW PUBLISHERS, INC., Defendant.

Civil Court of the City of New York,

New York County, Special Term,

Part I.

June 21, 1982.

Pops & Estrin, New York City, for plaintiff Walter R. Aguiar.

James A. Fox, New York City, for defendant Harper & Row Publishers, inc.

ETHEL DANZIG, Judge:

The issue to be determined by this Court on defendant's motion for summary judgment is whether plaintiff Aguiar's acceptance of a check from defendant Harper & Row Publishers, Inc., and negotiation of it after placing on the back the words "Cashed under protest ... does not represent full amount claimed ...", operated as an accord and satisfaction barring plaintiff from bringing this action, or whether plaintiff thereby reserved his rights to pursue his claim pursuant to section 1-207 of the Uniform Commercial Code.

FACTS

The plaintiff, Walter Aguiar, is a photographer specializing in photographs of South America. This lawsuit arises out of a claim by Mr. Aguiar for permission fees allegedly owed to him by the defendant for the unauthorized extended use of his photographs in The Human Expression, a book published by J. B. Lippincott Company (hereinafter "JBL") which is now a subsidiary of defendant Harper & Row. Prior to the publication of the book, JBL requested, by use of a standard purchase order form, permission from plaintiff to reproduce ten, and later an additional five, of his photographs in a text book for senior high school students in the subject areas of world history and world cultures. At the beginning of each invoice which he sent in response to the purchase orders, Mr. Aguiar wrote that he was granting reproduction rights to the specified color transparencies "Solely for one-time, non-exclusive, U. S., English language, hard cover, single edition rights...."

On or about November of 1980, plaintiff discovered that some copies of the book ¹ had been shipped to Canada for sale there. By letter dated November 28, 1980, plaintiff demanded that defendant make an additional payment to him of $3,513.13 for the "English language, world distribution rights" to the 15 color transparencies reproduced in The Human Expression. ²

On December 12, 1980, Robert Spence, Vice-President and Publisher of Harper & Row's School Department, responded to Mr. Aguiar's letter, admitting that 72 copies of the book had been sold in Canada and that Mr. Aguiar had apparently billed JBL only for one-time, U. S. English language rights. Mr. Spence went on to say that since the sales of the book in Canada represented only two-tenths of one percent of the sales in the United States, he believed that Mr. Aguiar had already been adequately compensated. Nonetheless, he enclosed a check for $441.88, which was 25% of the amount originally paid to plaintiff, "as an act of good will" and indicated this was to be "in full satisfaction of (his) claim for past and future sales" of the book. Mr. Aguiar returned the check stating that it was unacceptable, and claiming that he was entitled to twice his basic fee since the book now came within the "World Distribution Rights" fee bracket.

A response was sent to Mr. Aguiar on December 23, 1980 by Edward H. Miller, Vice-President and General Counsel of Harper & Row, who stated that after reviewing the case, he agreed with Mr. Spence's assessment and was, therefore, again enclosing the check previously proffered and refused. This time plaintiff signed the check and negotiated it, but with the following endorsement--partially written and partially typed--on the back:

"Cashed under protest. The figures on this check does not represent full amount claimed and it is not of my full satisfaction. It is only on account of my claim toward Canadian distribution rights of my photographs published in the book The Human Expression. Cashed under protest".

Plaintiff then commenced this action for $3,237.77 by summons and indorsed complaint dated March 10, 1981.

DISCUSSION

The term "accord and satisfaction" has been defined as follows:

" 'An agreement whereby one party undertakes to give or perform, and the other to accept in settlement of an existing or matured claim, something other than that which he believes himself entitled to, is an accord, and the execution of such an agreement is a satisfaction. An accord, when followed by a satisfaction, is a bar to the assertion of the original claim'.... (1 N.Y.Jur., Accord and Satisfaction § 1; Reilly v. Barrett, 220 N.Y. 170 Ostrander v. Ostrander, 199 App.Div. 437 ). In order for the compromise to be binding, it is necessary that the amount in dispute be unliquidated or, if liquidated, that there be genuine disagreement as to the amount due".

Braun v. C.E.P.C. Distributors, 77 A.D.2d 358, 360, 433 N.Y.S.2d 447 (1st Dept. 1980).

Despite plaintiff's suggestion that the amount in this case is liquidated because it is based on American Society of Magazine Publishers (hereinafter "ASMP") rates for one-time world distribution rights and is in accordance with industry standards, this Court does not have before it sufficient information to determine exactly what ASMP rates are, and what, if any, applicability they have to the fees allegedly owed plaintiff in this case. Consequently, for purposes of this decision, the Court finds that there is "genuine disagreement as to the amount due", and that defendant therefore had a right to impose conditions in connection with the payment made. See Hudson v. Yonkers Fruit Co., 258 N.Y. 168, 179 N.E. 373 (1932). Harper & Row's letters to Mr. Aguiar clearly indicated that his acceptance of the check would constitute full satisfaction of his claim. Under the common-law theory of accord and satisfaction, the plaintiff could not accept the payment and reject the conditions on which it was made. Hudson v. Yonkers Fruit Co., supra; Nassoiy v. Tomlinson, 148 N.Y. 326, 42 N.E. 715 (1896); Carlton Credit Corp. v. Atlantic Refining Co., 12 A.D.2d 613, 208 N.Y.S.2d 622 (1st Dept. 1980), aff'd 10 N.Y.2d 723, 219 N.Y.S.2d 269, 176 N.E.2d 837 (1961).

" 'Under such circumstances the assent of the creditor to the terms proposed by the debtor will be implied, and no words of protest can affect the legal quality of his act'. (Fuller v. Kemp, 138 N.Y. 231, 237, 33 N.E. 1034, 1035)".

Hirsch v. S. Berger Import & Mfg. Corp., 67 A.D.2d 30, 414 N.Y.S.2d 324, 328 (1st Dept. 1979), mot. to dismiss appeal granted 47 N.Y.2d 1008, 1012, 420 N.Y.S.2d 221, 394 N.E.2d 290 (1979).

Plaintiff, however, claims that section 1-207 of the Uniform Commercial Code is applicable to this case and prevents the result mandated by the common law theory of accord and satisfaction. U.C.C. § 1-207 provides that "A party who with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as 'without prejudice', 'under protest' or the like are sufficient. L.1962, C. 553, eff. September 27, 1964."

The New York Annotations to the Official Comment to section 1-207 state that:

"This section permits a party involved in a Code-covered transaction to accept whatever he can get by way of payment, performance, etc., without losing his rights to demand the remainder of the goods, to set-off a failure of quality, or to sue for the balance of the payment, so long as he explicitly reserves his rights.... The Code rule would permit, in Code-covered transactions, the acceptance of a part performance or payment tendered in full settlement without requiring the acceptor to gamble with his legal right to demand the balance of the performance or payment. (New York Anns. to Official Comment, McKinney's Cons.Laws of N.Y., Book 62 1/2, Uniform Commercial Code § 1-207, p. 65)".

It is the defendant's position, however, that the transaction involved in this case is not a "Code-covered...