Bestor v. American Nat. Stores, Inc., 48184

• Citation: 691 S.W.2d 384
• Decision Date: 16 April 1985
• Docket Number: No. 48184,48184
• Parties: John K. BESTOR, Executor of the Estate of Ted H. Greene, et al., Plaintiffs- Appellants, v. AMERICAN NATIONAL STORES, INC., et al., Defendants-Respondents.
• Court: Court of Appeal of Missouri (US)

Page 384

691 S.W.2d 384

John K. BESTOR, Executor of the Estate of Ted H. Greene, et al., Plaintiffs- Appellants, v. AMERICAN NATIONAL STORES, INC., et al., Defendants-Respondents.

No. 48184.

Missouri Court of Appeals,

Eastern District,

Division Four.

April 16, 1985.

Motion for Rehearing and/or Transfer to

Supreme Court Denied May 17, 1985.

Application to Transfer Denied

June 25, 1985.

Paul D. Sinclair, Kansas City, for plaintiffs-appellants.

Theodore Y. Blumoff, St. Louis, for American Nat. Stores, Inc.

Charles A. Newan, James W. Erwin, St. Louis, for American Investment Co. and Public Acceptance Co.

SATZ, Judge.

Plaintiffs, ¹ lessors sued defendants, lessee, American National Stores (American Stores), for breach of a lease. Plaintiffs appeal from a finding in favor of American Stores. We affirm.

Plaintiffs sued American Stores in five counts, all of which arise from a lease transaction. In Count I, plaintiffs sued American Stores for breach of the lease. ² The trial court heard only this Count in a jury waived trial. The court ruled against plaintiffs, in favor of American Stores, and ordered plaintiffs to specifically perform an "accord and satisfaction" that the court found the parties had entered. This order was not designated as final for purposes of appeal, and Counts II through V were not ruled on. Plaintiffs, nevertheless, appeal from the order entered on Count I. American Stores contends the appeal is premature.

We first dispose of American Stores' contention. American Stores pleaded an "accord and satisfaction" as an affirmative defense to all Counts. The trial court found the parties had entered into an "accord and satisfaction agreement," the terms of which required plaintiffs to release defendants from any and all claims of plaintiffs. ³ Thus, the court, by its finding, effectively disposed of plaintiffs' remaining claims, Counts II through V. Consequently, with all claims disposed of, the Court's finding on Count I is a final judgment for purposes of appeal. See, e.g., Chubb Group of Insurance Companies v. C.F. Murphy & Assoc., Inc., 656 S.W.2d 766, 771 (Mo.App.1983).

We next consider the merits of plaintiffs' appeal. Governed in our review by the well-known standards of Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976), we summarize the facts found by the trial court.

In April, 1971, plaintiffs, as lessors, entered a 25 year lease with defendant, American Stores, as lessees. American Stores vacated the premises in 1972, but continued to pay rent until October 1, 1974. American Stores then took steps which it believed worked as a termination of the lease, but plaintiffs did not agree to any termination. Later in October of 1974, an involuntary petition in bankruptcy was filed against American Stores. In January of 1975, an agreement was reached between American Stores and a committee which represented the petitioning creditors [Creditors' Committee]. In January, 1975, the Creditors' Committee sent a letter to all of American Stores' creditors, summarizing the proposed agreement in addition to soliciting claims. ⁴ The bankruptcy court then dismissed the bankruptcy petition, after a hearing on a motion to withdraw the petition.

After plaintiffs filed a claim with the Creditors' Committee, ⁵ American Stores sent plaintiffs a cashier's check, issued on June 4, 1975, representing a 10% distribution of their filed claim. The cover letter mailed with the check again summarized the contents of the Creditors' Agreement and informed the recipient that the complete agreement could be inspected at American Stores' St. Louis office. The back of the cashier's check contained a restrictive legend which read:

Endorsement In consideration of other creditors of American National Stores, Inc. (ANS) doing likewise, the payee of this check, by endorsing negotiating or depositing this check, does hereby agree with ANS that its lease with ANS covering the premises at 1375 Commerce Street, Roseville, Minnesota be and the same is hereby mutually terminated as of January 31, 1975 and the claim of the payee against ANS under said lease shall be in the amount of $67,453.83 and the payee further agrees to be bound by the provisions of a certain Agreement dated Jan. 31, 1975 between ANS, the Creditors' Committee of ANS selected at a meeting at High Point, N. Car. on October 31, 1974 and Public Acceptance Company as more fully described in the cover letter dated May 23, 1975 enclosed with this check. (Emphasis added)

Plaintiffs did not endorse, negotiate or deposit the check. Neither did they return the check, nor did they communicate to American Stores that they would not accept the check. They simply held it. American Stores continued to send additional distribution checks to plaintiffs through 1976 and 1979. These checks contained no restrictive legends. Plaintiffs cashed these checks. In September, 1979, plaintiffs filed the present action, claiming the full amount due on the lease. At that point, American Stores stopped sending distribution checks to plaintiffs.

On appeal, plaintiffs raise 15 points and 14 subpoints. We address those issues which dispose of all of plaintiffs' points.

Plaintiffs contend that the trial court erred in finding an accord and satisfaction. ⁶ More specifically, plaintiffs contend (1) they did not accept American Stores offer of an accord, (2) if they did accept, the accord lacked consideration and (3) if there was acceptance and consideration, there was no satisfaction.

Conflict of Laws

The parties raise and discuss the question of whether Missouri or Minnesota law should be used to resolve the issues raised by plaintiffs' contentions. We need not and do not address this choice of law issue. The applicable Missouri and Minnesota laws are essentially the same on the issues raised, see, e.g., Long v. Weiler, 395 S.W.2d 234 (Mo.App.1965); Don Kral Inc. v. Lindstrom, 286 Minn. 37, 173 N.W.2d 921 (1970), except, perhaps, for the issue of consideration. Compare Winter Wolff & Co. v. Co-op Lead & Chemical Co., 261 Minn. 199, 111 N.W.2d 461, 465-67 (1961) with Ayers Plastics Co. v. Packaging Products, 597 S.W.2d 177, 181 (Mo.App.1979). We resolve the issue of consideration under Missouri law, which is more favorable to plaintiffs.

Acceptance

An accord is an agreement for the settlement of some previously existing claim by a substituted performance. A. Corbin, Contracts §§ 1268, 1276, at 1025, 1041 (1952). The validity of such an agreement is dependent upon the same basic factors and principles that govern contracts generally. Ayers Plastics Co. v. Packaging Products, 597 S.W.2d 177, 182 (Mo.App.1979). Therefore, the words and acts of the parties are interpreted according to the objective theory of contracts.

As a general rule, silence or inaction cannot constitute acceptance of an offer. Revere Copper & Brass, Inc. v. Manufacturers' Metals & Chemicals, Inc., 662 S.W.2d 866, 870 (Mo.App.1983). If the offeree has no duty to speak, his silence may not be translated into an acceptance merely because the offeror attaches that effect to it. Id. Silence and inaction simply evidence no intention of the offeree. This general rule does, however, have exceptions. See Restatement (Second) of Contracts § 69 (1981). In some jurisdictions, the courts find an acceptance when a creditor holds for an unreasonable length of time a debtor's cashier's check offered to settle a pre-existing debt. See, e.g., Day-Luellwitz Lumber Co. v. Serrell, 177 Ill.App. 30, 36-37 (1913); Willis v. City National Bank, 280 S.W. 270, 273-74 (Tex.App.1925). See also Restatement of Contracts § 72(2) (1932). The precise rationale used by these courts for this holding is unclear. Their holding definitely is affected by the debtor's cashier's check being the equivalent of cash, see, e.g., Day-Luellwitz, supra at 37; Willis, supra at 273, ⁷ and may be based on the established doctrine of estoppel, Willis, supra, at 273, or on a nebulous public policy serving as a short cut to justice, Day-Luellwitz, supra at 37.

We need not, however, base our decision solely on the fact that plaintiffs unreasonably retained American Stores' cashier's check for eight years in silence. Plaintiffs did not simply retain this initial distribution check and do nothing more. Plaintiffs acted. As specifically found by the trial court, plaintiffs endorsed each of the subsequent distribution checks sent to them "with actual knowledge of the terms and conditions of the proposed agreement...." Moreover, the second check was not a cashier's check, but one of American Stores' own checks. Plaintiffs' cashing of this endorsed check which would be returned to American Stores strengthens the inference that plaintiffs' overt acts manifested acceptance.

Plaintiffs contend their evidence shows the first cashier's check was not signed because of its restrictive endorsement, and the subsequent checks were signed because they contained no such restriction. On review, this evidence is not meaningful. The trial court did not have to credit it. More important, plaintiffs' secret intentions are irrelevant under the objective theory of contracts.

Plaintiffs also contend American Stores failed to prove that plaintiffs did not communicate their rejection of the offer to American Stores, which, plaintiffs argue, was part of American Stores burden of proving the accord and satisfaction. We disagree.

The burden of proving accord and satisfaction is simply the burden of proving a contract: offer, acceptance and consideration. See, e.g., Long v. Weiler, 395 S.W.2d 234, 237 (Mo.App.1965). American Stores is saddled with that burden, but, as is generally true, is not saddled with the burden of proving a negative--that plaintiffs did not communicate their rejection.

Plaintiffs also argue that their rejection was shown by a lease Termination Agreement the parties entered into a year after plaintiffs received the first cashier's check. The Termination Agreement was not...