Winter Wolff & Co. v. Co-op Lead & Chemical Co.

• Decision Date: 27 October 1961
• Docket Number: No. 38134,CO-OP,38134
• Citation: 111 N.W.2d 461,261 Minn. 199
• Parties: WINTER WOLFF & COMPANY, Appellant, v.LEAD & CHEMICAL COMPANY, Respondent.
• Court: Minnesota Supreme Court

Page 461

111 N.W.2d 461

261 Minn. 199

WINTER WOLFF & COMPANY, Appellant, v. CO-OP LEAD & CHEMICAL COMPANY, Respondent.

No. 38134.

Supreme Court of Minnesota.

Oct. 27, 1961.

Syllabus by the Court.

1. Where plaintiff and defendant entered into a contract under which plaintiff agreed to sell and deliver a specified quantity of goods according to specifications in the contract and plaintiff is unable to complete the contract, giving rise to a dispute as to the amount due for part performance, the account is unliquidated.

2. Where a debtor offers the amount he claims is due on an unliquidated account and the creditor accepts such offer, there is an accord and satisfaction.

3. An agreement by a creditor to accept less than the amount due on a liquidated, past-due indebtedness in discharge of the whole debt is binding on the creditor without any further consideration.

4. A creditor's retention of a check offered by a debtor in full settlement of a liquidated debt constitutes an acceptance of an offer to settle that indebtedness in full.

Eustis & Keith, Warren P. Eustis, Rochester, for appellant.

Firestone, Fink, Krawetz, Levy & Miley, James H. Levy, St. Paul, for respondent.

KNUTSON, Justice.

This is an appeal by plaintiff from a judgment entered pursuant to an order of the trial court granting summary judgment to defendant.

On or about October 3, 1958, plaintiff sold and agreed to deliver to defendant 135,000 feet of imported copper tubing under the terms of the following contract:

'STATE METALS DIVISION WINTER WOLFF & CO.

'76 BEAVER STREET NEW YORK 5, N.Y.

'Co-op Lead & Chemical Co.

34 East Fillmore Street

St. Paul 1, Minn.

'Gentlemen: CONTRACT #784/S

'We herewith confirm having sold to you the following:

'Material: Seamless drawn electrolytic copper water tubing, as per ASTM B--88. In coils, soft, 60 feet each.

'Quantity: (a) 75,000 feet - 3/4 K

(b) 50,000 feet - 1/2 L

(c) 10,000 feet - 1 K

'price: (a) $ .2929 per foot

(b) $ .1344 per foot

(c) $ .3700 per foot

'Delivery: F.O.B. Piers New York

'Shipment: October/November - in 3 monthly shipments of about equal weights, from abroad.

'Payment: Net - Cash

'Packing: In wooden cases of 500 lbs. net.

'Markings: CLC Made in England, size, weights, #1 and up.

Coils must be embossed Type K or L - NOT ENGLAND 'ENGLAND': ONLY a cellophane sticker or indelible ink.

'Remarks: Please sign the attached green copy of this contract and return it to us.

MINIMUM SHIPMENT: 30,000 pounds gross weight.

'Very truly yours,

'STATE METALS DIVISION

WINTER, WOLFF & COMPANY

Henry W. Fischer

'Accepted _ _

'THIS CONTRACT SUBJECT TO STRIKES, ACCIDENTS, SHUT-DOWNS, DELAY OF CARRIERS, EMBARGOES AND OTHER CAUSES BEYOND OUR CONTROL

'Date 10/3/58'

After delivering 68,040 feet of tubing, plaintiff was unable to supply more that complied with the contract specifications. If the contract had been performed in full, defendant would have been indebted to plaintiff for the tubing delivered in the amount of $16,654.61. Because of plaintiff's inability to complete the contract, defendant was compelled to procure tubing elsewhere at a price higher than that at which plaintiff had agreed to furnish it. Thereupon, a dispute arose as to the amount of defendant's indebtedness to plaintiff under the contract for partial performance. In order to settle the dispute, defendant wrote iplaintiff a letter on February 16, 1959, offering to settle the account for $14,234.81. Defendant enclosed a check in that amount in the letter. On both the front and the back of the check appeared the words 'Payment in full to date.' The letter of transmittal reads:

'Feb. 16, 1959

'State Metals

Div. Winter Wolff & Company

76 Beaver Street

New York 5, N.Y.

'Attn: Mr. Henry W. Fischer

'Gentlepen:

'We received the following material on your Invoice B-26016:

23.700 ft. 1/2 L or 1,300 feet short

23,000 ft. 1/2 M or 2,000 feet short 460 ft. 1/2 L Cooper was damaged

'We notified you of this on May 23, 1958 and also by phone.

'We also notified you in regard to Invoice B-27096 on Jan. 30, 1958. In regard to compietion of contract 784/S, we wrote you on Jan. 9, 1959 and Jan. 19, 1959.

'We find, to date, it will involve an additional expense which we failed to understand in our rush to replace the material you so negligently did not supply in time and properly.

'However, since we want to forget the whole deal, we are mailing you a check for payment to date in full as follows:

                Invoice B-26016             $   203.43
                Invoice B-27096              16,351.18
                Less 10% on 1" K                199.80
                Less per letter of 1/9/59     2,120.00
                                           -----------
                                           $ 14,234.81
                

'Since you well know what we must do to replace the material you failed to ship to us, the above settlement should be satisfactory to you.

'Very truly yours,

'CO-OP LEAD & CHEMICAL CO.

H. Henderson

'CHECK #5551 - 14234.81 ENCLOSED.'

Plaintiff accepted and cashed this check and thereafter brought the present action to recover the sum of $2,419.80, representing the difference between what would have been due for the tubing delivered if the contract had been performed and the amount so paid by defendant. Defendant interposed an answer, alleging that because of plaintiff's breach of the contract it was entitled to an offset in the sum of $2,120 ¹ due to its damages resulting from a breach of the contract, and denying any liability. Upon these facts, which are undisputed except as to defendant's right to an offset, the trial court granted defendant's motion for summary judgment.

The trial court based its decision on its conclusion that the indebtedness, whatever it was, constituted an unliquidated account as to which there existed a bona fide dispute concerning the amount due. It is conceded by plaintiff that if the court was right in this respect, tender by the debtor of an amount less than the creditor claimed to be due and acceptance of that amount by the creditor would constitute an accord and satisfaction. ² Plaintiff claims, however, that the court erred in holding that the indebtedness was an unliquidated debt. It contends that as to a liquidated account the above rule has no application and that the creditor's acceptance of a check, even though submitted as payment in full, does not constitute an accord and satisfaction if the account is a liquidated debt.

1. That a dispute existed between the parties as to the amount due on the part of the contract that was performed can hardly be open to question. The contract was an entire one for delivery of a specified amount of goods. Plaintiff performed only part of the contract. If it had fully performed, the amount would have been liquidated. Having breached the contract, the amount due for part performance was open to question. Plaintiff's appeal here is based on the premise that there is a disputed question of fact as to defendant's right to an offset which should be tried and that consequently defendant was not entitled to summary judgment. It is not based on the premise that plaintiff is entitled to summary judgment because there are no disputed questions of fact. If a dispute exists now as to the amount due, it existed in the same manner when defendant made its tender. If no motion for summary judgment had been made, the issue before the trial court would have been how much defendant owed plaintiff. Involved in that decision would be a determination of whether defendant was entitled to damages for a breach of the contract and, if so, how much. How then can it now be said that no dispute existed at the time defendant made its tender and plaintiff accepted the same' It must be conceded that if a genuine dispute as to the amount due on the account existed the account is unliquidated by any test.

In Oien v. St. Paul City Ry. Co., 198 Minn. 363, 374, 270 N.W. 1, 6, we said:

'Where there is one entire claim as, for instance, the amount of wages earned for services for a specified time, and it is admitted by the creditor and debtor that one of two specific sums is the correct amount, but the parties are in dispute as to which amount is correct, the demand is to be regarded as disputed and unliquidated. The dispute is as to the whole amount. So, where the parties disagree as to the amount due from one party to the other, under the contract, the claim is unliquidated and the rule of accord and satisfaction applies.

In Addison Miller, Inc. v. American Central Ins. Co., 189 Minn. 336, 249 N.W. 795, many of the cases of similar import are discussed. We there quote with approval the following language from Nassoiy v. Tomlinson, 148 N.Y. 326, 330, 42 N.E. 715, 716 51 Am.St.Rep. 695, 697 (189 Minn. 341, 249 N.W. 797):

'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 demand is regarded as 'unliquidated,' within the meaning of that term as applied to the subject of accord and satisfaction.'

In the Addison Miller case we also said (189 Minn. 342, 249 N.W. 798):

'The case is the same as that, we shall suppose of a matured promissory note, given by the maker to cover the purchase price of three large items of merchandise. When demand for payment is made, the maker admits liability for a substantial amount, but says that as to items 1 and 2 he is not liable for the full price because of breach of warranty or some other honest claim. As to item 3 he says the goods were worthless, and he won't pay anything on account of them. He makes an offer of what he considers the fair value of items 1 and 2, tells the payee that he won't pay more, and that, if that offer is accepted, the note must be surrendered and the whole thing settled. The payee accepts the offer, gets the money, and surrenders the note. Certainly thereafter he cannot recover because the settlement intentionally...