Kilander v. Blickle Co.

• Decision Date: 22 November 1977
• Citation: 571 P.2d 503,280 Or. 425
• Parties: , 23 UCC Rep.Serv. 16 Roy P. KILANDER, Respondent, v. BLICKLE CO., an Oregon Corporation, Appellant.
• Court: Oregon Supreme Court

Page 503

571 P.2d 503

280 Or. 425, 23 UCC Rep.Serv. 16

Roy P. KILANDER, Respondent, v. BLICKLE CO., an Oregon Corporation, Appellant.

Supreme Court of Oregon, In Banc.

Argued and Submitted June 7, 1977.

Decided Nov. 22, 1977.

Christie H. Wiater, Portland, argued the cause for appellant. With her on the briefs were Miller, Anderson, Nash, Yerke & Wiener and John R. Bakkensen, Portland.

Frank M. Ierulli, Portland, argued the cause and filed a brief for respondent.

LINDE, Justice.

Plaintiff sued for a sales commission of $10,750 claimed to be owed him over and above $4,250 previously paid by defendant. Defendant pleaded an affirmative defense of accord and satisfaction by the payment of the $4,250, this being the commission defendant considered to be due. The trial court withdrew this defense from the jury. The jury returned a verdict for the $10,750 claimed by plaintiff, judgment was entered, and defendant appeals.

The case presents the single question whether a creditor's acceptance of a payment tendered in full satisfaction of a disputed or unliquidated claim can constitute an accord and satisfaction when the amount tendered is no greater than the debtor admits he owes. We hold that it can.

The dispute arose from a transaction in which defendant's president, Richard Blickle, orally agreed that defendant would pay plaintiff a commission if plaintiff obtained a buyer for defendant's dredge. According to defendant's version of the negotiations, the commission was to be either five per cent of the sale price, if defendant bore certain risks and expenses of sale, or any sum in excess of $65,000 net to defendant if plaintiff arranged a cash sale. Plaintiff denied that the second alternative was conditional on his finding a cash buyer. He obtained a purchaser who bought the dredge for $85,000 on an installment contract and claimed a commission of $20,000 less expenses incident to the sale.

Defendant paid plaintiff $4,250, or five per cent of the sale price, by two checks for $2,125. Plaintiff cashed these checks. Defendant presented evidence that each check, when delivered to plaintiff, was accompanied by a voucher stating that the check represented one-half of the total commission, the second voucher describing the second check as the "final" half of the total of $4,250. Defendant denied having seen either voucher. The evidence sufficed to make a jury issue whether there was a bona fide dispute about the amount of commission due, at the time the checks were given to plaintiff, and also whether the plaintiff received the vouchers and cashed the second check with notice that it was tendered in full satisfaction of his claim. Accordingly, the defense should have gone to the jury unless it falls outside the general rule of accord and satisfaction recognized in Schumacher v. Moffitt, 71 Or. 79, 142 P. 353 (1914) and Pederson v. Portland, 144 Or. 437, 24 P.2d 1031 (1933) and reaffirmed most recently in Edgley v. Jackson, 276 Or. 213, 554 P.2d 476 (1976), that acceptance of a check tendered in full payment will discharge an unliquidated claim disputed in good faith. ¹

The premise of an accord and satisfaction is contractual. See, e. g., Harding v. Bell, 265 Or. 202, 209, 508 P.2d 216 (1973); Capps v. Georgia Pacific, 253 Or. 248, 453 P.2d 935 (1969), and cases cited. The only argument why a creditor's acceptance of a tendered "final payment" in the amount the debtor admits he owes might not be an accord and satisfaction is that it lacks consideration. That view has been taken in some jurisdictions. See, e. g., Buel v. Kansas City Life Ins. Co., 32 N.M. 34, 250 P. 635, 52 A.L.R. 367 (1926), and an annotation in 112 A.L.R. 1219 (1938). Most authorities state that where only one debt or claim is involved, present payment of an amount admittedly due will support the consensual discharge of the entire claim. 1 Williston, Contracts (3d ed Jaeger 1957) 528-531, § 129; 6 Corbin, Contracts (1962) 163-166, § 1289, and 169-170, § 1290. That is also the position taken by the Restatement. See 2 Restatement, Contracts 792, § 420, Comment a, Illustration 2; Restatement of Contracts 2d 162-163, § 76B, Comment c and Illustration 4 (Tent. Draft Nos. 1-7, 1973). This we think is the better view. It would be too technical a use of the doctrine of consideration to release a well-counseled debtor who tenders a nominal amount beyond his admitted debt but to trap one less sophisticated who is induced to pay the undisputed amount in return for his creditor's illusory promise to forgive the rest.

The creditor who confronts the unpalatable choice between pressing...