Braun v. C. E. P. C. Distributors, Inc.

• Decision Date: 02 December 1980
• Citation: 433 N.Y.S.2d 447,77 A.D.2d 358
• Parties: , 30 UCC Rep.Serv. 8 Les BRAUN d/b/a Braun Equipment Co., Plaintiff, v. C. E. P. C. DISTRIBUTORS, INC., previously known as Elaine Products Co., Inc., Defendant.
• Court: New York Supreme Court — Appellate Division

Page 447

433 N.Y.S.2d 447

77 A.D.2d 358, 30 UCC Rep.Serv. 8

Les BRAUN d/b/a Braun Equipment Co., Plaintiff, v. C. E. P. C. DISTRIBUTORS, INC., previously known as Elaine Products Co., Inc., Defendant.

Supreme Court, Appellate Division, First Department.

Dec. 2, 1980.

Frank T. Simeone, Suffern, of counsel (Kornfield, Rew, Newman & Ellsworth, Suffern, attorneys), for plaintiff.

Howard L. Sherman, New York City, of counsel (Winston & Sherman, P.C., New York City, attorneys), for defendant.

Before KUPFERMAN, J. P., and FEIN, SANDLER, SULLIVAN and BLOOM, JJ.

BLOOM, Justice:

This case comes to us for determination as an action on submitted facts pursuant to Rule 3222 of the Civil Practice Law and Rules. In accordance with subdivision (b)3 of that rule it is, by stipulation of the parties, submitted to us in the first instance.

The facts, as agreed to by the parties, demonstrate that in May, 1978 defendant purchased from plaintiff certain goods required to be specially manufactured. Both parties knew and understood that the goods were to be installed on the fifth floor of 40 Wall Street, New York City, for the use of Manufacturers Hanover Trust Company, then or thereafter to be the occupant of the premises.

By mutual agreement between the parties, the contract was subsequently amended by additions and deletions to the end that the original purchase price of $23,680 was reduced to $18,905.

Plaintiff delivered the goods specifically manufactured. Subsequently, it was notified by defendant that the goods failed to conform to the specifications laid down in the purchase order and that defendant had been required to expend the sum of $4,134.50 in order to conform the goods to the purchase order and to the needs of the Manufacturers Hanover Trust Company and that, by consequence, defendant claimed a set off in the amount of that expenditure against the purchase price.

Thereafter, defendant issued a check payable to plaintiff in the sum of $14,770.50 representing the difference between the agreed purchase price of $18,905 and the claimed set off of $4,134.50. On the reverse side of the check was an endorsement which stated: "Endorsement of this check constitutes payment in full of all claims that Braun Equipment may have against Elaine Products Co. Inc." (Elaine was the name by which defendant was previously known). Accompanying the check was a letter which indicated that the check was a tender of the amount claimed to be owing and that acceptance thereof constituted a waiver of any further claim against defendant.

Plaintiff endorsed this check and negotiated it. However, prior to such negotiation plaintiff noted immediately following the endorsement placed on the check by defendant, the following: "Notwithstanding the foregoing Braun Equipment Co. accepts this payment without prejudice and with full reservation of its rights to assert a claim for $4,134.50 due under P.O. 19820, dated 5/3/1978 and Braun Invoice # 6349, dated 8/12/1978, for which this payment is accepted in part".

Thus, the issue tendered is whether the plaintiff's negotiation of the check containing defendant's endorsement constituted an accord and satisfaction.

"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, but unless and until followed by a satisfaction it has no effect" (1 N.Y.Juris., Accord and Satisfaction, § 1; Reilly v. Barrett, 220 N.Y. 170, 115 N.E. 453; Ostrander v. Ostrander, 199 App.Div. 437, 191 N.Y.S. 470). 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.

Prior to the enactment of the UCC, it is highly probable that the negotiation of the check here in question would have constituted an accord and satisfaction and would have discharged defendant from further liability. The amount due from plaintiff to defendant, although liquidated, was in dispute and the dispute was a genuine one (Schuttinger v. Woodruff, 259 N.Y. 212, 181 N.E. 361; Ostrander v. Ostrander, 199 App.Div. 437, 191...