M. Schulz Co. v. Gether

• Decision Date: 08 April 1924
• Parties: M. SCHULZ CO. v. GETHER.
• Court: Wisconsin Supreme Court

183 Wis. 491

198 N.W. 433

M. SCHULZ CO.

v.GETHER.

Supreme Court of Wisconsin.

April 8, 1924.

Appeal from Circuit Court, Milwaukee County; Chester A. Fowler, Judge.

Action by the M. Schulz Company against C. R. Gether, with a counterclaim by defendant. From a judgment dismissing the counterclaim on a demurrer ore tenus, defendant appeals. Affirmed.

Appeal from a judgment of the circuit court for Milwaukee county, Hon. Chester A. Fowler, judge presiding, for damages and costs, and dismissing defendant's counterclaim upon a demurrer ore tenus.Glicksman, Gold & Corrigan, of Milwaukee (Ray T. McCann, of Milwaukee, of counsel), for appellant.

Michael Levin, of Milwaukee, and Simmons, Walker & Wratten, of Racine, for respondent.

DOERFLER, J.

In June, 1918, the parties entered into an agreement, by which the plaintiff sold to the defendant a stock of musical instruments located in the store of the Steussy-Schulz Piano Company, in the city of Manitowoc. The purchase price was $2,115, for which amount the defendant executed and delivered to the plaintiff four promissory notes, payable in 4, 8, 12, and 16 months. After the sale, a dispute arose between the parties as to whether a certain player piano was included in the stock sold, and whether the amount represented by the notes included the price of this piano. The defendant was the manager of a corporation in Milwaukee, known as the Gether Piano Company, which was indebted to the plaintiff on an undisputed and liquidated account for $139.71, and on the 1st day of March, 1919, the Gether Piano Company sent its check to the plaintiff for the sum of $139.71, with the following indorsement thereon:

“In full settlement of all claims against us and C. R. Gether, except promissory notes. [Signed] Gether Piano Company, C. R. Gether, Manager.”

Shortly after the plaintiff received this check, it made a protest thereto, and requested the defendant to except therefrom such indorsement, to which the defendant replied that the check was intended in full settlement as indicated therein. Plaintiff retained the check until some time in June, 1919, when it cashed the same, and thereafter brought the present action for the recovery of $265, the price of the player piano.

[1][2] The defendant claims that the plaintiff, by cashing the check, accepted the same in full settlement of all claims against him and the Gether Piano Company, excepting only the obligation to pay the notes, and that the transaction amounted to an accord and satisfaction. The amount owing by the Gether Piano Company was liquidated and undisputed. The price of the player piano was also liquidated and undisputed, and the only difference existing between the parties was with reference to whether the piano was included in the sale or not. An accord and satisfaction is a contract like all other contracts, and in order to be enforceable must be supported by a consideration. The amount of the check represented the actual and conceded amount owing by the Gether Piano Company to the plaintiff, and in paying such amount the piano company merely discharged its obligation. The plaintiff received what was owing to it, and the defendant parted with nothing by way of a consideration which might form the basis for a release of plaintiff's claim for the price of the player piano.

[3] The doctrine generally adopted by the courts is to the effect that where an account is liquidated and the amount owing is conceded by the debtor, the creditor will not be precluded from recovering the balance where he has received a lesser amount under an agreement that the payment thereof shall be in full satisfaction of the entire claim. That such is the law is elementary, and requires no citation of authorities. In the instant case, there being a dispute between the parties as to whether the piano was included in the purchase by the defendant, if the defendant had increased the amount of his check in an amount, however small, over and above the conceded amount owing, the acceptance and cashing of the check by the plaintiff would unquestionably have constituted an accord and satisfaction. In that event, there being a bona fide dispute, and the law favoring settlements, the accord and satisfaction would be based upon a proper consideration.

The matter in dispute with reference to the plaintiff's complaint was submitted to a jury in a special verdict, and the jury found: (1) That the piano involved was not among the stock of merchandise at the time such stock was sold; (2) that it was not included in the stock which was paid for by the giving of the notes; and (3) that the parties did not agree that the check in question should be received by the plaintiff in full settlement of the piano. The learned trial judge held that the delivery and acceptance of the check did not amount to an accord and satisfaction, for the reason that there was no consideration for the release of the claim for the piano, and therefore ordered judgment in plaintiff's favor.

Defendant's counsel rely largely on Thomas v. Columbia Phonograph Co., 144 Wis. 470, 129 N. W. 522,Frank v. Frost, 170 Wis. 353, 174 N. W. 911, and Nassoiy v. Tomlinson et al., 148 N. Y. 326, 42 N. E. 715, 51 Am. St. Rep. 695, upon the proposition that the retention of the check and the use of the proceeds by the plaintiff constitute an accord and satisfaction as a matter of law. The Thomas Case presented a question of construction of a contract of employment. A bona fide dispute existed between the parties as to a proper construction, the plaintiff claiming one thing and the defendant another. Under the plaintiff's construction, the defendant was indebted to him in a certain amount; while under the defendant's construction, the indebtedness was in an amount considerably less than that claimed by the plaintiff. The amount actually due, therefore, was unliquidated, and while such contention prevailed, the defendant sent plaintiff its check for the amount due him under its construction of the contract. Plaintiff cashed the check, and the court held that he “could not accept the offer and avail himself of the funds without assenting to the condition upon which the offer was made.” The decision of the court was largely based upon the Tomlinson Case, supra. No criticism can justly be offered of the decision in the Thomas Case, for the court there had before it a bona fide dispute on the construction of a contract, and the amount owing was unliquidated. In such cases the rule is quite universal that the acceptance of an amount less than the amount claimed, where the payment is made in settlement of a dispute, the claimant, by accepting the amount offered as a settlement, is bound by the condition.

In the Tomlinson Case a dispute arose between the plaintiff and the defendants as to the amount owing the plaintiff for commissions. The plaintiff claimed that the defendants owed him the sum of $1,500 under an agreement to pay him at one rate, while the defendants claimed that they owed him but $300, under an agreement to pay him at another rate. While this dispute continued, the defendants sent plaintiff a check for the sum of $300, the amount conceded by them to be owing, in full for commissions. The plaintiff claimed that the amount owing was in a sum considerably in excess of $300, but nevertheless cashed the check. The court held that the acceptance of the check constituted an accord and satisfaction, there being a bona fide dispute between the parties as to the amount due, and by the acceptance of the check the plaintiff also accepted the condition. It needs but little comment to distinguish this case from the instant case. The dispute there arose as to the percentage of the commissions. With full knowledge of such dispute, the actual amount being unliquidated,...