Frazier v. Ray.

• Decision Date: 04 October 1923
• Docket Number: No. 2738.,2738.
• Citation: 29 N.M. 121,219 P. 492
• Parties: FRAZIERv.RAY.
• Court: New Mexico Supreme Court

29 N.M. 121

219 P. 492

FRAZIER

v.RAY.

No. 2738.

Supreme Court of New Mexico.

Oct. 4, 1923.

Syllabus by the Court.

An “accord and satisfaction” is the entry into, and the performance of, an agreement between two or more parties to an unliquidated or disputed claim or cause of action, whereby one undertakes to perform, and the other to accept, something different to which each considers himself entitled.

Where a debtor to an unliquidated or disputed claim tenders a given sum in full settlement thereof, and the creditor, with the knowlege of such fact, accepts and receives such sum, he accepts the condition, as he cannot receive the payment without accepting the condition.

Upon such a tender being made, the creditor has but one of two alternatives open to him, either to accept it as tendered, or to reject it.

In cases where parties to a disputed claim have settled their differences by accord and satisfaction, the court will not go beyond such settlement to determine which of them was right in his contention. It will only determine whether or not a dispute existed between them at the time such accord and satisfaction occurred.

Appeal from District Court, Mora County; Leahy, Judge.

Suit by James T. Frazier against George H. Ray. From a judgment for plaintiff, defendant appeals. Reversed and remanded, with directions.

Where parties to a disputed claim have settled their difference by accord and satisfaction, the court will not go beyond such settlement to determine which of them was right in his contention, but will only determine whether or not a dispute existed.

Hunker & Noble, of Las Vegas, for appellant.

William G. Haydon and A. T. Rogers, Jr., both of East Las Vegas, for appellee.

BRATTON, J.

The appellee instituted this suit to recover the sum of $1,131, being the balance due upon a commission of $2,631 earned by him upon the sale of certain cattle belonging to the appellant. He charged that the parties had agreed upon a commission of $1 per head for all cattle sold; that through his instrumentality the appellee sold to C. L. Anceney, of Boseman, Mont., 2,631 head of cattle; that the appellee had paid him $1,500 to apply upon such commission, leaving still due the sum sued for.

The appellant denied that any agreement for the payment of $1 per head upon such cattle had been had, and pleaded, by way of accord and satisfaction, that he had paid the appellee the sum of $1,500 in full settlement for his services rendered.

The trial court, having heard the case without a jury, made findings of fact and rendered judgment in favor of the appellee for the full sum sued for. This appeal followed.

It is contended by the appellant that, under the findings of the lower court, judgment should have been rendered in his favor, and, that the court erred in its conclusion of law that the appellee was entitled to recover under the facts, as found by the court.

It appears from the evidence that the negotiations between the appellant and Mr. Anceney, the person to whom the cattle were sold, covered several months' time, during which three shipments of cattle were made; that such dealings were concluded on May 17, 1919, when a certain shipment was made from Las Vegas, at which time the purchaser made final settlement with the seller; that when these things had been done, the parties to this suit took up the subject of the commission to be paid, whereupon a dispute arose between them, the appellee contending that he had agreed upon $1 per head as such commission, while the appellant contended that no fixed sum had been agreed upon, that he had only agreed to treat the appellee right with regard to such matter. The trial court found that on February 13, 1919, $1,000 had been paid upon account; that during such negotiations, so had on May 17, 1919, and while such dispute existed, the appellant gave to the appellee a check in the sum of $500, with the words “in full” written thereon; that he advised the appellee it was tendered in full settlement; that the appellee objected to receiving such check under such conditions, and the appellant then advised him to return such check unless it was so accepted, which the appellee failed to do. On the contrary, he kept and cashed the same, and retained the proceeds thereof. The findings of the court upon this phase of the case are:

“That at the time the said check for $500 was delivered, a dispute arose over the balance due. That the defendant tendered to the plaintiff his check of $500, with the words ‘in full’ written on the said check. That at the time said Five Hundred ($500) Dollar check was tendered to plaintiff, the plaintiff objected to receiving said check as payment in full. That upon the objection of plaintiff to receiving said check as payment in full, defendant requested him to return said check unless it was so accepted, but that plaintiff nevertheless cashed said check and received the money therefor.”

[1][2] The question before us is whether or not these facts constitute an accord and satisfaction which precludes the appellee from recovering. An accord and satisfaction is a method of discharging a contract, or settling a cause of action arising either from a contract or a tort, by substituting for such contract or cause of action an agreement for the satisfaction thereof and the execution of such substituted agreement. It is an agreement and the performance thereof, whereby one of the parties undertakes to perform and the other to accept in satisfaction of a claim or demand something other and different from that to which each considers himself entitled. To be effective, it must involve an unliquidated or disputed claim, as an existing dispute is one of the elements necessary to make such an agreement and its performance binding upon either party. Where no dispute exists with regard to the sum due, no consideration exists to support the agreement of the creditor to receive less than the agreed sum, or to release the debtor from the unpaid portion thereof. From the findings it appears that all of these necessary elements were present; the dispute then existed; a sum different from that claimed by the creditor to be due was paid; the debtor did not then admit he owed such sum; it was paid with the limitation and condition attached that it was in full settlement; and, when the appellee accepted and cashed such check and appropriated unto hmself the proceeds thereof, well knowing that such payment was burdened with such condition, he thereby accepted it as tendered. He could not accept the benefit of such tender without likewise accepting its condition.

[3] When a tender is made by a debtor to a disputed claim, under such circumstances that the creditor must understand it is offered in full payment, he has but one of two alternatives open to him--either to accept it as tendered, or to reject it and after accepting it he will not be heard to say that it was accepted under protest or upon any terms and conditions different from those imposed by the debtor who has the right to prescribe the conditions under which he makes the tender. Such a creditor is conclusively estopped to say that he did not accept such tender in full payment of his demand. The moment the appellee cashed the check, the minds of the parties met, and they mutually agreed that it constituted full payment. These principles have been thus announced in 1 C. J. 562:

“The foregoing principles relating to acceptance in satisfaction find very frequent application in the case of checks and drafts. When a claim is disputed or unliquidated and the tender of a check or draft in settlement thereof is of such 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. And it is immaterial that the creditor does not return a receipt in full, or that he sends receipt ‘on account,’ or protests that he does not accept the tender in full satisfaction of the claim. If he is not willing to accept the check in full payment, it is his duty to return it without using it.”

And in 1 R. C. L. 194, it is said:

“Thus, if the debtor tenders the amount he claims to be due, but upon the condition that it be accepted in discharge of the whole demand, and it is accepted, there is an accord and satisfaction on the principle that one accepting a conditional tender assents to the condition. And the fact that the creditor protests against accepting the tender in full payment will not prevent the transaction from constituting a good accord and satisfaction when the debtor still insists that it must be accepted in full payment or not at all.”

In Barham v. Delight, 94 Ark. 158, 126 S. W. 394, 27 L. R. A. (N. S.) 439, which was followed upon the second appeal of that case, reported in Barham v. Kizzia, 100 Ark. 251, 140 S. W. 6, as well as in Pekin Cooperage Co. v. Gibbs, 114 Ark. 559, 170 S. W. 574, and Mosaic Templars of America v. Austin, 126 Ark. 327, 190 S. W. 571, the Supreme Court of Arkansas said:

“If the offer or tender is accompanied by declarations and acts so as to amount to a condition that, if the creditor accepts the amount offered, it must be in satisfaction of his demand, and the creditor understands therefrom that if he takes it he takes it subject to that condition, then an acceptance by the creditor will estop him from denying that he has agreed to accept the amount in full payment of his demand. His action in accepting the tender under such conditions will speak, and his words of protest only will not avail him.”

Again, the Supreme Court of Missouri, in McCormick v. City of St. Louis, 166 Mo. 315, 65 S. W. 1038, said:

“The appellant's second suggestion, offered to defeat the...