Motorola Communications & Electronics, Inc. v. South Georgia Natural Gas Co., 38998

• Court: Georgia Court of Appeals
• Writing for the Court: FRANKUM; TOWNSEND, P. J., and JORDAN
• Citation: Motorola Communications & Electronics, Inc. v. South Georgia Natural Gas Co., 121 S.E.2d 672, 104 Ga.App. 376 (Ga. App. 1961)
• Decision Date: 14 September 1961
• Docket Number: No. 38998,No. 2,38998,2
• Parties: MOTOROLA COMMUNICATIONS & ELECTRONICS, INC. v. SOUTH GEORGIA NATURAL GAS COMPANY

Page 672

121 S.E.2d 672

104 Ga.App. 376

MOTOROLA COMMUNICATIONS & ELECTRONICS, INC. v. SOUTH GEORGIA NATURAL GAS COMPANY.

No. 38998.

Court of Appeals of Georgia, Division No. 2.

Sept. 14, 1961.

Syllabus by the Court

1. 'When a creditor receives and retains a sum of money from his debtor less than the amount actually due him with the understanding, either express or implied, that it is received by him in satisfaction of his claim or demand, he cannot thereafter treat it as a nullity and recover the balance, * * *' Rivers v. Cole Corporation, 209 Ga. 406, 73 S.E.2d 196.

2. However, the parties to an accord and satisfaction may by a subsequent agreement rescind the same and restore the debt to its original status, or a party may repudiate or waive beneficial rights under an accord and satisfaction.

Motorola Communications & Electronics, Inc. filed its petition in the Superior Court of Thomas County against South Georgia Natural Gas Co. to recover the purchase price of certain radio equipment under a written contract between the parties. The defendant filed an answer denying the material allegations of the plaintiff's petition, and further alleged breach of warranty and failure of consideration. The defendant later filed an amendment to its answer alleging accord and satisfaction of the debt. The defendant alleged that it sent a check to the plaintiff attached to the following letter, dated September 1, 1960: 'We enclose herewith our check in the amount of $2,215, in full payment of this company's indebtedness to Motorola Communications & Electronics, Inc. This takes into consideration your agreement that we would owe you nothing on account of the two-way VHF radio system unless its performance proved satisfactory to us. Its performance has not proved to be satisfactory, after several months of adjustments, effort and patience. You are therefore requested to remove the system at your earliest convenience without cost, expense or charge of any nature to South Georgia Natural Gas Company.'

Plaintiff filed a motion to strike the amendment to the defendant's answer on the ground that the amendment failed to set forth facts sufficient to constitute a plea of accord and satisfaction. The trial court overruled the motion, and this ruling is assigned as error in this appeal.

Subsequently, the defendant filed a motion for a summary judgment upon the ground that there had been an accord and satisfaction of the plaintiff's claim, basing the motion upon the aforesaid letter and the acceptance of the check enclosed therewith by the plaintiff. Pursuant to the summary judgment procedure both parties filed affidavits. Evidence by interrogatories was taken by each party. The interrogatories, affidavits, and the allegations of the petition and answer show that on September 1, 1960, there existed at least three contracts between the plaintiff and defendant. The first was a contract for the plaintiff to supply certain two-way radios to the defendant company, and it was agreed that if such radios would operate satisfactorily, the defendant would purchase them. The second contract provided that the plaintiff was to complete an engineering survey whereby the defendant could determine whether certain electronic equipment could be feasibly used. In the event the defendant purchased the equipment, the cost of the survey would be borne by the plaintiff, but if the defendant did not purchase the equipment, the defendant would pay for the survey, namely, $2,215. The plaintiff entered into a third contract with the defendant whereby the plaintiff agreed to maintain the two-way radio equipment at a stated monthly sum.

The answers to interrogatories on behalf of the plaintiff showed that the defendant paid to the plaintiff the monthly maintenance payments for a period of six months after transmission of the letter of September 1, 1960, to the plaintiff.

The trial court sustained the defendant's motion for summary judgment, and this ruling is assigned as error in this appeal.

Altman & Johnson, Billy G. Fallin, Thomasville, for plaintiff in error.

Alexander, Vann & Lilly, T. Heyward Vann, Thomasville, for defendant in error.

FRANKUM, Judge.

1. The sole question to be determined is whether the correspondence and acts of the respective parties, as reflected by the record in the instant case, constitute accord and satisfaction so as to bar the plaintiff's right to pursue an action for the purchase price of the radio equipment.

'When a creditor receives and retains a sum of money from his debtor less than the amount actually due him with the understanding, either express or implied, that it is received by him in satisfaction of his claim or demand, he cannot thereafter treat it as a nullity and recover the balance, * * *.' Rivers v. Cole Corporation, 209 Ga. 406, 73 S.E.2d 196. As stated in Citizens' & Southern Bank v. Union Warehouse & Compress Co., 157 Ga. 434, 122 S.E. 327, 336: 'The reason of this rule is that, payment being made upon condition, the acceptance of the payment carries with it the acceptance of the condition.' While it is true that every payment made on an account does not constitute an accord and satisfaction of the whole account (see American Associated Companies v. Vaughan, 213 Ga. 119, 97 S.E.2d 144; United States Fidelity & Guaranty Co. v. Campbell Decorating Co., 102 Ga.App. 694, 117 S.E.2d 556), the payment to the plaintiff by the defendant, together with the accompanying letter, shows conclusively that the defendant was making a final payment of its indebtedness to the plaintiff. Implicit in the letter was the condition that the defendant would not be obligated to purchase the radio equipment if the plaintiff accepted the defendant's check.

Receipt of the defendant's letter and check was acknowledged by the plaintiff in a letter to the defendant's president which stated, in part, that the defendant's check in the amount of $2,215 was received, but that it 'suffices to pay only that portion of your Company's indebtedness to Motorola Communications and Electronics, Inc., which arose as a result of the survey conducted on your behalf pursuant to your Purchase Order No. 1061, dated January 7, 1960. The check does not provide any consideration over that which you agreed to pay for the survey and cannot be accepted as any more than payment for said survey in accordance with your legal obligations with regard thereto.' The plaintiff undertook to refuse the offer of settlement (while keeping the proceeds of such check) which effort was futile. As stated by Justice Duckworth (now Chief Justice) in his dissent in Sylvania Electric Products, Inc. v. Electrical Wholesalers, Inc., 198 Ga. 870, 879, 33 S.E.2d 5, 11, which was approved and adopted in Rivers v. Cole Corporation, 209 Ga. 406, 73 S.E.2d 196: 'Had the creditor while in the very act of...