Olson v. Wilson & Co., 48270

• Decision Date: 05 May 1953
• Docket Number: No. 48270,48270
• Citation: 58 N.W.2d 381,244 Iowa 895
• Parties: OLSON v. WILSON & CO.
• Court: Iowa Supreme Court

Page 381

58 N.W.2d 381

244 Iowa 895

OLSON v. WILSON & CO.

No. 48270.

Supreme Court of Iowa.

May 5, 1953.

Fitzgibbons & Fitzgibbons, of Estherville, for appellant.

Lee & Anderson, Estherville, for appellee.

LARSON, Justice.

On or about August 1, 1951, the plaintiff sold thirty head of cattle, by oral contract, to the defendant, through defendant's agent, a Mr. Johnson. Plaintiff claimed he was to receive thirty-five cents a pound for the cattle, plus the excess if they were dressed out at a better grade. Defendant admits buying the cattle but denies plaintiff's claim as to the price agreed upon and contends that the cattle were purchased from plaintiff on a grade and yield basis in compliance with O. P. S. regulations. Under plaintiff's claim they amounted to $10,725.75. Under defendant's claim the amount due was $9,372.80.

After delivery of the cattle to defendant on August 6th, plaintiff received a draft in the net sum of $9,372.80, which was marked 'in full payment of the above items.' The items were listed as 'cattle, 30 head, weight 30645, price $30.59, amount $9374.30, average test.' On August 16th, through his attorney, plaintiff, by letter acknowledged receipt of the draft and advised defendant of his demand for $1351.45 in addition to the amount received. This letter stated, 'Mr. Olson has not cashed this check and will not cash the check until he has been paid the additional sum of $1351.45 which is the amount owing him for thirty head of cattle at 30cents per pound.' Plaintiff also threatened the commencement of suit if the balance claimed was not received by August 30, 1951. Defendant replied by letter of August 23d stating that they were making a 'detailed investigation' of the matter in dispute and would advise plaintiff when it was completed.

On September 14, 1951, plaintiff through his attorney, again wrote the defendant company asking that defendant grant permission to plaintiff to cash the original draft without prejudice to plaintiff's claim for the balance, suggesting these words, 'That Myrl Olson may endorse and cash Wilson & Co.'s Draft No. 9634, dated August 6, 1951, in the sum of $9372.80 without prejudice to any claim or rights he may have against your company, and that your company will not construe said endorsement and presentation for payment to be an admission by Mr. Olson that he has been paid in full for said 30 head of cattle weighing 30645 pounds.'

On September 17, 1951 the defendant company wrote plaintiff's attorney advising him it had completed an investigation and was satisfied that there was no guaranteed price of thirty-five cents per pound, and that the draft represented a remittance on the basis of grade and yield of the cattle slaughtered, and that the plaintiff had received payment for their full value. This letter also stated: 'Your communication of September 14th concerning the cashing of the check is, of course, a matter for the decision of Mr. Olson, since he was paid the full value of his cattle and this value was contained in our original remittance.'

On October 1, 1951, the plaintiff through counsel again wrote defendant as follows:

'This letter is to advise you that today Myrl Olson presented for payment your draft No. 9634 in the sum of $9372.80. However, it is Mr. Olson's intention to consider this draft as only a partial payment on the 30 head of cattle sold to your company. It is not Mr. Olson's intention to accept this draft in full satisfaction of his claim against your company nor is the accpetance of this draft to be considered as an accord and satisfaction * * * Mr. Olson does not intend to waive any rights or claims he may have for the balance in the sum of $1351.45 * * *.'

This letter was delivered to defendant two days later in Albert Lea, Minn. The draft was payable at First National Bank in Chicago, Illinois. Copies of the letters were filed as exhibits and were not denied. The present suit was commenced October 3, 1951, with plaintiff asking judgment against defendant for the sum of $1351.45.

Based upon the correspondence between the parties, the defendant, in addition to denying plaintiff's version of the contract, pleaded accord and satisfaction and asked dismissal of plaintiff's action. Defendant also made application to the court to adjudicate separately in advance of trial, in accordance with Rule 105, 58 I.C.A., the law issue of accord and satisfaction. The matter was submitted on the uncontroverted allegations of the pleadings on April 25, 1952 and the learned trial court in finding for the defendant held as a matter of law that there was an accord and satisfaction. We agree.

The only question before us is whether under the record there was an accord and satisfaction established as a matter of law.

The law looks with favor on the adjustment and settlement of controversies without resorting to court action. Shahan v. Bayer Vehicle Co., 179 Iowa 923, 162 N.W. 221. Settlement by accord and satisfaction involves essentially a new contract or agreement, and the elements of a new contract must be found in the settlement to make it valid. Kellogg v. Iowa State Traveling Men's Association, 239 Iowa 196, 29 N.W.2d 559. Obviously each case must be determined upon its own facts and circumstances. However, there are certain rules and decisions which guide and control transactions of this kind, such as those affecting liquidated and unliquidated claims, and the acts of the parties relating to intention, consideration, necessary implications, and bona fide disputes. We shall discuss them as they relate to this case, which is not complicated. It involves only a simple dispute between two parties over the terms of an oral agreement by which plaintiff sold and delivered cattle to the defendant.

I. There are many definitions of accord and satisfaction. 'Accord and satisfaction is a method of discharging a contract or cause of action, whereby the parties agree to give and accept something in settlement of the claim or demand of the one against the other, and perform such agreement, the 'accord' being the agreement, and the 'satisfaction' its execution or performance.' 1 C.J.S. Accord and Satisfaction, § 1, p. 462.

In an early Iowa case, Perin v. Cathcart, 115 Iowa 553, 557, 89 N.W. 12, 13, Judge Deemer said: 'But as an accord and satisfaction is an executed agreement whereby one of the parties undertakes to give, and the other to accept, in satisfaction of a claim arising either from contract or tort, something other or different from what he is or considers himself entitled to, no invariable rule can be laid down, with any degree of certainty, as to what constitutes such an agreement. Each case must be determined largely on its peculiar facts. To constitute a valid accord and satisfaction, not only must it be shown that the debtor gave the amount in satisfaction, but that it was accepted by the creditor as such. Jones v. Fennimore, 1 G.Greene 134; Weddigen v. [Boston Elastic] Fabric Co., 100 Mass. 422. The agreement need not be express, but may be implied from circumstances, as shown in the cases just cited. Where an offer of accord is made on condition that it is to be taken in full of demands, the creditor, doubtless, has no alternative but to refuse it or accept it upon such conditions. Keck v. [Home Owners Mut. Fire] Insurance Company, 89 Iowa 200, 56 N.W. 438.'

While in the broad field of the law relating to accord and satisfaction, there has been much confusion and conflict, and all of the cases cannot be reconciled, the decisions of this court have been consistent and sound. This is especially true when such matters involve accord and satisfaction of single unliquidated claims, such as we have here presented to us.

Plaintiff and defendant entered into a contract for the sale purchase of cattle, and the dispute centers upon the basis of the purchase. There is no dispute excepting the bona fide dispute as to the basis of the computation per pound for the cattle. Plaintiff contends it was on the basis of thirty-five cents a pound, plus the excess if they were dressed out at a better grade, and defendant contends the basis was on a grade and yield in compliance with the O. P. S. regulation. This was the issue to be resolved in settlement.

II. According to Webster's New International Dictionary, a claim for debt or damage is 'liquidated' in law when the precise amount thereof is fixed, or has been agreed upon. Kellogg v. Iowa State Traveling Men's Association, supra; State ex rel. Fletcher v. Naumann, 213 Iowa 418, 429, 239 N.W. 93, 98, 81 A.L.R. 483. In Williston 1, on Contracts, Rev.Ed., Sec. 128, 'An unliquidated claim is one, the amount of which has not been fixed by agreement or cannot be exactly determined by the rules of arithmetic or of law.'

Plaintiff's claim had not been and could not be exactly determined by the rules of arithmetic or by law. It had not been fixed by mutual agreement. We have said, 'If it a admitted that one of two sums is due, but there is a dispute as to which is the proper amount, the demand is unliquidated within the meaning of accord and satisfaction.' Schultz v. Farmers' Elevator Co., 174 Iowa 667, 675, 156 N.W. 716, 719, citing Greenlee v. Mosnat, 116 Iowa 535, 90 N.W. 338; Sparks v. Spaulding, 158 Iowa 491, 139 N.W. 1083.

In the Greenlee case we said [116 Iowa 535, 90 N.W. 339]: 'As related to the subject of accord and satisfaction, the term 'liquidated' * * * means one where the amount due has been ascertained and agreed upon by the parties, or is fixed by operation of law. * * * When not so determined, it is the subject of compromise.' This case affirms the rule stated in Nassoiy v. Tomlinson, 148 N.Y. 326, 330, 42 N.E. 715, 716, 51 Am.St.Rep. 695. 'A demand is not liquidated even if it appears that something is due, unless it appears how much is due; and when it is admitted that one of two specific sums is due, but there is a genuine dispute as to which is the proper amount, the...