Decker v. George W. Smith & Co.

• Decision Date: 06 March 1916
• Citation: 96 A. 915,88 N.J.Law 630
• Parties: DECKER v. GEORGE W. SMITH & CO.
• Court: New Jersey Supreme Court

96 A. 915

88 N.J.Law 630

DECKER

v. GEORGE W. SMITH & CO.

Court of Errors and Appeals of New Jersey.

March 6, 1916.

(Syllabus by the Court.)

Appeal from Supreme Court.

Action by William E. Decker against George W. Smith & Co., a corporation. From a judgment for plaintiff, defendant appeals. Affirmed.

Peirce & Hoover, of Newark, for appellant. J. Emil Walscheid, of Union, for appellee.

TRENCHARD, J. David E. Kennedy, Inc., a corporation of New York, entered into a contract" with George W. Smith & Co., a corporation of New Jersey, to do certain cork flooring, required by Smith & Co.'s contract with the trustees of Princeton University, for which the Kennedy Company was to receive $3,600. Certain payments were made on account, leaving due $357.60. This claim was assigned by the Kennedy Company to Decker, who brought this suit therefor. The defendant company filed a counterclaim based upon an alleged supplemental agreement that it was to be allowed, in deduction from the contract price, for the omission of certain parts of the flooring under the dressers and counters, the cost of which amounted to $317.60, and a further counterclaim for $40 for work on the dresser and drawers, which the defendant says it was obliged to do because of the negligent performance of work by the plaintiff's assignor. The defendant also set up accord and satisfaction. The trial, at the Hudson circuit, resulted in a verdict for the plaintiff's claim, less the counterclaim of $40, and the defendant appeals from the consequent judgment.

We are of the opinion that the judgment must be affirmed.

The first point argued is that the trial judge erred in refusing to direct a verdict for the defendant on the ground that there was an accord and satisfaction. We think the point is not well taken.

A consideration is necessary to render an accord and satisfaction valid. The consideration may present itself in many different shapes, but in some form or other it must be found. There must be some advantage, or presumed or assumed advantage, accruing to the party who yields his claim, or some detriment to the other party. Daniels v. Hatch, 21 N. J. Law, 391, 47 Am. Dec. 169; 1 C. J. 528.

To constitute a valid accord and satisfaction, it is essential that the debtor shall have offered what was given, and that the creditor shall have accepted it with the intention that it should operate as a satisfaction. The intention of the parties, which is. of course, controlling, must be determined from all the circumstances attending the transaction. Morris Canal, eta, Co. v. Van Vorst, 21 N. J. Law, 100; Oliver v. Phelps, 20 N. J. Law, 180; Rose v. American Paper Co., 83 N. J. Law, 707, 85 Atl. 354; 1 C. J. 529, 530. See, also, Cooke v. McAdoo, 85 N. J. Law, 692, 90 Atl. 302.

Where the debt or demand is liquidated or certain and is due, payment by the debtor and receipt by the creditor of a less sum is not a satisfaction thereof, although the creditor agrees to accept it as such, if there be no release under seal or no new consideration given. Castelli v. Jereissati, 80 N. J. Law, 295, 78 Atl. 227; Roberts v. Banse, 78 N. J. Law, 57, 72 Atl. 452; Gussow v. Beineson, 76 N. J. Law, 209, 68 Atl. 907; Eckert v. Wallace, 75 N. J. Law, 171, 67 Atl. 76; Chambers v. Niagara Fire Ins. Co., 58 N. J. Law, 216, 33 Atl. 283; Line v. Nelson, 38 N. J. Law, 358; Braden v. Ward, 42 N. J. Law, 518; Daniels v. Hatch, 21 N. J. Law, 391, 47 Am. Dec. 169; 1 C. J. 539.

But where a claim is unliquidated, or in dispute, payment and acceptance of a less sum than claimed in satisfaction operates as an accord and satisfaction. The concession made by one of the parties is a good consideration for the concession made by the other, or, as otherwise expressed, the fact of the uncertainty of the claim or an honest difference as to what is due on an unliquidated demand furnishes the consideration. Rose v. American Paper Co., 83 N. J. Law, 707, 85 Atl. 354; 1 C. J. 551, 552, 553.

In the case at bar, the alleged accord and satisfaction is rested mainly upon the following matters of fact: The defendant sent plaintiff's assignor a check for the balance due less the counterclaims. On the back of the check was written "the payee by indorsement accepts this voucher check in full payment of the following account," and this indorsement was followed by a statement of a prior cash payment, the check, and a "charge" of the counterclaims. The check was inclosed with a separate statement to the same effect, but no letter accompanied them. The plaintiff's assignor crossed out the charge of the counterclaims upon the back of the check, indorsed and deposited it for collection, and notified the defendant that it was accepted "on account." The check was paid in due course. Now the acceptance "on account" by a creditor of a check declared by the debtor to be in full payment, when in fact the debt was a liquidated demand concededly due, does not constitute an accord and satisfaction. Eckert v. Wallace, 75 N. J. Law, 171, 67 Atl. 76.

Where, however, a claim is disputed or unliquidated, and the tender of a check in settlement thereof is of such a character as to give the creditor notice that it must be accepted in full satisfaction of the claim or not at all, the retention and use thereof by the creditor constitutes an accord and satisfaction. Rose v. American Paper Co., 83 N. J. Law, 707, 85 Atl. 354; 1 C. J. 562. The trial judge sent the case to the jury on the question whether or not there was a dispute between these parties with respect to the items represented by the counterclaims. The defendant, as we have pointed out, by its pleadings and evidence, claimed two separate and distinct disputes and...