Kibler v. Frank L. Garrett & Sons, Inc., 39024

• Decision Date: 04 April 1968
• Docket Number: No. 39024,39024
• Citation: 73 Wn.2d 523,439 P.2d 416
• Court: Washington Supreme Court
• Parties: William F. KIBLER, Appellant, v. FRANK L. GARRETT & SONS, INC., Respondent.

Page 523

73 Wn.2d 523

439 P.2d 416

William F. KIBLER, Appellant, v. FRANK L. GARRETT & SONS, INC., Respondent.

No. 39024.

Supreme Court of Washington, En Banc.

April 4, 1968.

Freise & Jones, Walla Walla, for appellant.

Williams & Golden, Eugene T. Golden, Walla Walla, for respondent.

ROSELLINI, Judge.

This action on a contract was dismissed at the close of the plaintiff's evidence, the trial court finding, although it had not been pleaded, that there had been an accord and satisfaction. The plaintiff has appealed.

The facts are these: The plaintiff was hired by the defendant to harvest his wheat crop. There was no agreement on the price to be paid. According to the plaintiff's evidence, he told the defendant that, if the wheat crop proved to be more than 50 bushels per acre, the price would be 18 cents per bushel and perhaps more, depending on the circumstances. He testified that the crop was in excess of 50 bushels per acre and there were harvesting difficulties which had not been anticipated due to the presence of guy wires, roads, and risers. He sent the defendant a bill based upon a charge of 25 cents per bushel, but later sent a corrected bill for $876.20 based on 20 cents per bushel. The response which he eventually received to this billing was the following letter and a check for $444:

This check is for $10.00 an acre, and 37 acres is $370.00. This is what you offered to harvest our wheat for. Seeing that the wheat was fairly heavy, we are paying you $2.00 an acre more, which makes a total of $444.00. Your total pay is 50% More than we paid last year for harvesting the same acres, and 20% More than you agreed to do it for. Billing on this acreage for approximately $30.00 an acre is ridiculous.

Upon receipt of these items, the plaintiff called his attorney and asked if he could safely deposit the check. The attorney asked him to read the notations on it. He read the typewritten notation: 'Harvesting Wheat Washington Ranch' and the printed words 'Frank L. Garrett & Sons, Inc.', but he did not see a line of fine print on the check which read: 'By endorsement this check when paid is accepted in full payment of the following account.' The attorney told him he could deposit the check. He did not communicate further with the defendant but proceeded to bring this action.

As we have said, accord and satisfaction was not pleaded as a defense. However, the trial court, observing the fine print on the check and drawing it to the attention of the parties, concluded that, taken in conjunction with the letter, this notation established as a matter of law that there had been an accord and satisfaction.

The rules governing the question of accord and satisfaction are set forth in the leading case of Graham v. New York Life Ins. Co., 182 Wash. 612, 47 P.2d 1029 (1935). They are as follows:

(1) Whether there has been an accord and satisfaction in any given case is generally a mixed question of law and fact.

(2) But where the facts are not in controversy, it is purely a question of law for the court.

(3) To create an accord and satisfaction in law, there must be a meeting of minds of the parties upon the subject and an intention on the part of both to make such an agreement.

(4) An accord and satisfaction is founded on contract, and a consideration therefor is as necessary as for any other contract.

(5) Where the debtor pays what in law he is bound to pay and what he admits that he owes, such payment by the debtor and its acceptance by the creditor, even though tendered as payment in full of a larger indebtedness, do not operate as an accord and satisfaction of the entire indebtedness, because there is no consideration therefor.

(6) Generally speaking, when a debtor sends to his creditor a check in an amount that the debtor is willing to pay, and at the same time informs the creditor that the debtor intends the check to be considered as full payment, then, by accepting and cashing the check, the creditor agrees to the settlement and cannot thereafter seek additional compensation.

(7) But the rule just stated does not apply where there is an agreement that a certain sum shall be paid on account and not in full settlement, and the sending of a check stating that it is in full settlement does not, as a matter of law, under such circumstances, effect an accord and satisfaction.

(8) Nor does that rule apply where the debt or amount is liquidated or certain and due, unless there is a new consideration.

(9) Where the amount of a debt or obligation is unliquidated or in dispute, then the tender by the debtor of a certain sum in full payment of the debt, followed by acceptance and retention of the amount tendered, establishes an accord and satisfaction; but if the amount be liquidated or undisputed, then such tender and acceptance do not establish an accord and satisfaction.

The facts are not in dispute in this case, therefore the question is one of law. Did the letter and the check and the cashing of the latter constitute an accord and satisfaction? The claim was unliquidated; therefore, if the check was intended as full payment and that fact was communicated to the plaintiff, his cashing of the check completed the accord.

The important question to determine is whether there was a meeting of the minds. In order for this to have occurred, the defendant must have made his intention clear to the plaintiff. The trial court was of the opinion that the letter, when read in conjunction with the fine print on the check, manifested that intention.

The letter itself does not state that the check is sent in full payment. Such an intent might be gleaned from the language that he considers it all that is reasonably owing to the plaintiff. Yet the last sentence equivocates. The amount asked by the plaintiff is ridiculous, the defendant says, but he does not say, 'I will pay no more than the amount enclosed.' We think the letter leaves the question of the amount owed open to further negotiation. The fact that the plaintiff did not attempt further negotiation does not alter the import of the language of the letter.

In Ingram v. Sauset, 121 Wash. 444, 446--447, 209 P. 699, 700, 34 A.L.R. 1031 (1922), this court said:

The rule is thus stated in 1 Cyc. 332.

'To constitute an accord and satisfaction it is necessary that the money should be offered in full satisfaction of the demand, and be accompanied by such acts and declarations as amount to a condition that the money, if accepted, is accepted in satisfaction; and it must be such that the party to whom it is offered is bound to understand therefrom that, if he takes it, he takes it subject to such conditions. The mere fact that the creditor receives less than the amount of his claim, with knowledge that the debtor claims to be indebted to him only to the extent of the payment made, does not necessarily establish an accord and satisfaction. * * *'

Since there were no conditions attached to the acceptance of the check in this case, the letter was not an offer of an accord.

Was the condition sufficiently expressed on the check itself? It is unquestioned that the plaintiff did not see the fine print, and his attorney did not see it. The defendant's attorney did not notice it, apparently, until it was called to his attention at the trial. This was a form check, presumably used in the payment of all of the defendant's accounts, whether the payments made were payments in full or partial payments. There was nothing on the check to indicate that the language was particularly applicable to the plaintiff's claim. The trial court felt that the tone of the letter cast upon the plaintiff the duty to examine the check minutely or cash it at his peril. We do not agree. The burden is upon the party alleging an accord and satisfaction to show that there was indeed a meeting of the minds. See Brear v. Klinker Sand & Gravel Co., 60 Wash.2d 443, 374 P.2d 370 (1962). If the language contained in the fine print on the check was of significance in forming an accord, it must appear that the fact of its significance was brought to the plaintiff's attention. The evidence is to the contrary.

In the case of Washington Fish & Oyster Co. v. G. P. Halferty & Co., 44 Wash.2d 646, 269 P.2d 806 (1954), the respondent sued to recover the balance due on a contract. A partial payment had been made by a check with a voucher attached bearing a similar notation, accompanied by a detailed statement showing the 'balance' as that amount which was contained in the check. This court held that the language on the check was of no significance, inasmuch as it was a form voucher apparently attached to all checks of the company. It is true that in that case the respondent had received checks previously from the company, presumably with the same form of voucher attached, and that in this case there was no evidence that the parties had had previous dealings, but we do not think that fact is determinative. It is the fact that the notation is obviously formal and applies to all payments made by check, whether or not they are intended as full payment, that renders the language ineffective, and also the fact that it is in print so small that no recipient can be presumed to have...