General Air Conditioning Corp. v. Fullerton , 227 Ark. 278 ( 1957 )

J. Seaborn Holt, Associate Justice.

In the Spring or Summer of 1953, appellee Fullerton of Warren, Arkansas, bought on open account an air conditioner from appellant, General Air Conditioning Corporation located in Little Bock, Arkansas. The purchase price was $3,574.43. Appellant had Diet Hedrick, who appellee testified was appellant’s agent and representative, install the equipment. In November 1953 Fullerton had paid $1,000 on the account, leaving a balance due of $2,574.43 and on December 1,1953, Fullerton executed his promissory note to appellant for this balance, which bore interest at 5% and to mature on February 14, 1954. Appellee made no payments on this note before or after its due date, and appellant filed the present suit to collect the balance due. A jury trial resulted in a verdict in favor of appellee, Fullerton. From the judgment comes this appeal.

For reversal appellant relies on these points: “1. The court erred in refusing to direct a verdict in favor of appellant, (a) There was no effective accord, (b) There was no performance (fulfillment, execution) of even a supposed accord. 2. The trial court’s amendment to appellant’s Instruction No. 2 was error. 3. The court erred in giving to the jury appellee’s Instruction No. 2.” Appellee, as a complete defense to the note, “specifically pleads accord and satisfaction by which the defendant paid interest on the indebtedness and plaintiff agreed to receive back the equipment in question, which was delivered by defendant in the manner suggested by plaintiff and later ratified by plaintiff.” In effect, Fullerton testified that when he determined that he was unable to pay the balance due on the note he went to Little Rock in March or April 1954, and entered into an agreement with appellant whereby appellant agreed that it would accept and retain the original $1,000 payment made by appellee, together with the interest due on the note up to that time; that Fullerton was to hold the equipment, in effect, subject to appellant’s orders, until appellant sent its truck to pick it up, and that this agreement, in full settlement of the note, was carried out. He further testified that appellant was to send his truck from Little Rock for the equipment. Appellee also testified that appellant’s representative, Hedrick, in Warren sent one of his employees to appellee with instructions to take a sump pump, which was a part of the stored air conditioner, and appellee, after calling Hedrick, who informed him that he was acting, in effect, on appellant’s orders, turned the pump over to appellant’s agent, who sold it for $98, which appellant later on, without appellee’s consent, placed as a credit to appellee’s note. Appellee also testified that after his agreement with appellant to settle the note he had never had any agreement or understanding with appellant as to the value of the sump pump.

Appellant’s president, Mr. Wellons, testified in regard to the settlement: “Q. What I am asking you about now is any discussion you had on payment of the note after it became due. A. ... As a result of the conversation that he (appellee) and I had I told him that if he would return the goods to me promptly, we had been trying for a year to get some sort of a settlement. We had had promises and promises and promises, with no action, and that if in any of his regular trips to Lonoke he would return the goods to our place of business with immediacy being a prime consideration of it, . . . Q. You (Wellons) did have an understanding with Mr. Fullerton in Little Rock concerning the return of the equipment? A. As I have stated. Q. That’s right. It was your understanding he was going to return the equipment to you? A. That’s right. Q. And when he did the note would be cancelled? A. We would settle the note. Q. You were willing to accept the return of the equipment and cancel the note? A. When he paid the interest up to date, that is correct.” Appellant further testified, that he made an agreement with Fullerton to settle the note but in this agreement Fullerton was to deliver the equipment to appellant in Little Rock. Appellee stoutly denies this and testified that appellant agreed to send its truck to bring the equipment to Little Rock and that appellee told appellant, as an accommodation to appellant, that he, appellee, in the event one of his own trucks might be coming to Little Rock, would bring the air conditioner to appellant. Thus, we think that a question of fact was presented as to what the agreement was and whether it was carried out. Boiled down, the decisive issue in this case was the place of delivery of the property under the terms of the agreement. The jury found that the agreement to settle the note had been made and had been carried out, and we think there was substantial evidence to support the jury’s action.

We do not agree that the court erred in amending its Instruction No. 2 and in giving appellee’s Instruction No. 2, as appellant argues. Appellant’s Instruction No. 2 as modified and given by the court was as follows: “You are instructed that an accord and satisfaction is a new contract between two parties that constitutes a bar to an action on the original debt; that to constitute accord and satisfaction as a bar to this action you must find that the agreement was fully executed, unless you find that the mere promise was accepted in satisfaction. If you find then by a preponderance of the evidence that the mere promise to return the goods to General Air Conditioning Corporation was not accepted as full performance and the equipment was not returned or accepted at Warren, Arkansas, then you find for the plaintiff.” The appellant asked the court to give the instruction, leaving out the italicized words, “returned or accepted at Warren, Arkansas,” and substitute the following words ‘ ‘ completely returned or taken back. ’ ’ Appellant argues that the court, in refusing its request, erred. We do not agree, for according to appellee’s version of the agreement the equipment was to be, and was, returned to appellant at Warren, Arkansas, and accepted there, which completed the agreement.

Appellant next argues that the court erred in giving appellee’s Instruction No. 2 as follows: “You are instructed that, should you find from a preponderance of the evidence that plaintiff and defendant entered into an agreement by which the defendant agreed to pay the interest on the indebtedness and did pay such interest and plaintiff agreed to take back the equipment in question at Fullerton’s place of business in Warren, Arkansas and in fact did take back a part of the equipment, then you will find for the defendant. ’ ’ When this instruction is read in connection with No. 2 above and considered with all the instructions as a whole, we do not think it was erroneous. As indicated, it was for the jury here to determine, on the evidence presented, whether an accord and satisfaction, or an agreed settlement, had been reached by the parties. “It is well settled that the parties to a contract may at any time rescind it in whole or in part by mutual consent, and the surrender of their mutual rights and the substitution of new obligations is a sufficient consideration,” Elkins v. Aliceville, 170 Ark. 195, 279 S. W. 379. The evidence tended to show that an agreement had been reached by appellant and appellee to satisfy the note by delivering the property back to appellant at Warren, Arkansas, paying the interest due on the note up to the date of settlement, and as further consideration appellant accepted and retained the $1,000 already paid by appellee on the purchase price of the air conditioner. The agreement constituted the accord, and satisfaction was the doing of what the agreement called for.

We agree with appellant that the rule is that: “Nothing short of actual performance, meaning thereby, performance accepted, will suffice . . . Accord and part performance do not constitute satisfaction. It is merely executory so long as to its terms something remains, and the party to be charged is allowed what he has paid in diminution of the amount claimed,” Lyle v. Federal Union Ins. Co., 206 Ark. 1123, 178 S. W. 2d 651, but here, according to the testimony, there was a full performance accepted by appellant under its agreement with appellee. We think the admitted action of appellant, in sending its agent to the building in which the property was stored and taking a part of the equipment and selling it for $98, without previously having had an understanding with appellee as to the price to be paid for the sump pump, was strong evidence in justifying the jury in finding that appellant considered all the property as its own, and exercised its prerogative to take and sell all or any part of it. The above Instruction, No. 2, instructed the jury, in effect, that in the event it should find from the preponderance of the evidence that appellant had agreed to take back the equipment in question (of course, meaning all of it) at Fullerton’s place of business in Warren, Arkansas, and in fact did take back a part of the equipment, that they should then find for appellee. As indicated, the facts warranted the jury in ■finding that appellant had taken back all of the equipment at Fullerton’s place of business in Warren, and thereafter, it appears undisputed, took and sold the sump pump, a part of its property. Had the instruction read “or in fact did take back a part of the equipment” — instead of- — “and . . .”, then appellant’s objection might have merit. As pointed out, appellee’s whole case was based on full performance by appellee of the agreement, not on part performance- — and we think the court, in effect, so instructed the jury.

Affirmed.

Justice George Rose Smith dissents.