Redmond & Co. v. Atlanta & Birmingham Air-Line Railway , 129 Ga. 133 ( 1907 )

Beck, J.

(After stating the facts.) It appears from the petition in this case that the plaintiffs accepted a certain sum tendered by the other party as the full amount due under the contract, though protesting that it was an improper amount and less than they were entitled to, and released the defendant, in consideration of such payment, from all further liability under the contract sired on. And it is insisted by defendant’s counsel that this constituted an accord and satisfaction, and that under the Civil Code, §3735, the plaintiffs are concluded, the agreement-having been actually executed by the payment of the money. Defendant insists that the payment and acceptance of the money, under the facts set forth in the petition, under the provisions of the code section just cited, is binding upon the plaintiffs as an accord and satisfaction, ■ whether the demand of the latter was liquidated or unliquidated. Dnder the view that we take of the questions made by the record, it is not necessary to decide whether that contention be sound, or whether §3735 of the code is so modified by the provisions of §3734, when the two sections are construed together, that if plaintiffs’ demand was for a liquidated amount the acceptance of the amount embodied in the receipt constituted accord and satisfaction; for in this case the demand was unliquidated. The contrary view, urged by the plaintiffs, is not countenanced by the authorities when applied to their case as stated by them. “A debt or demand is liquidated, when agreed on by the parties, or fixed as to the amount, by the operation of law.” Hargroves v. Cooke, 15 Ga. 321. “The word ‘liquidated/ in the sense of the rule that payment of a lesser sum is a discharge of the remainder where the ainount in dispute is unliquidated, but that it is not a discharge where it is liquidated, means that the amount due has been ascertained and agreed on by the parties or fixed by operation of law. The rule does not apply where there is a bona fide dispute as to the amount actually due. Treat v. Price, 66 N. W. 834, 836, 47 Neb. 875.” “A demand is not liquidated, even if it appears that something is due, unless it appears how much is due; andNwhen it is admitted that-one of two specific sums is due, but there is a general dispute as-to which is the proper amount, the demand is regarded as ‘unliquidated’ within the meaning of the term as applied to the subject of accord and satisfaction. Lestienne v. Ernst, 39 N. Y. Supp. 199, 200, 5 App. Div. 373 (citing Nassoiy v. Tomlinson, 148 N. Y. 326, 331, 42 N. E. 715); Ives v. Jefferson County Sup’rs, 18 Wis. 166, 168; Clark v. Dutton, 69 Ill. 521, 523; Green-lee v. Mosnat, 90 N. W. 338, 339, 116 Iowa, 535 (citing Nassoiy v. Tomlinson, 148 N. Y. 326, 42 N. E. 715).” The two latter quotations were taken from 5 Words & Phrases, 4174.

A brief reference to some of the items of the account upon, which the plaintiffs’ demand in this suit is based will produce th& conviction at once that it was unliquidated. One of the items alleged to be due to petitioners was for removing a certain number of cubic yards of dirt, which “petitioners show that they were-compelled to handle in a manner not contemplated by the contract, and not provided for by the contract, and that said work was. reasonably worth the sum at which it has been charged up” in the.petition. Another large item was for handling “wet excavation,”' and “petitioners show that no contract price was fixed for handling wet excavation, and that a customary and reasonable allowance for the same would have been $1.50 per cubic yard,” and that only seventy cents per cubic yard “was allowed for the same according to the final estimate of the defendant.” And “petitioners further show that the fills or slides in the tunnel amounted to 3,215 cubic yards, and that $3.00 per cubic yard was a reasonable price for handling this work, and petitioners show that no price was fixed in the contract for the payment of the same, but the defendant company arbitrarily undertook to fix the price at $1.25 per cubic yard.” Another item was for lumber which it is alleged was improperly rejected by the defendant’s engineer. It is unnecessary to enumerate all of the items charged in the petition; as it sufficiently appears, from what has been shown, that the indebtedness due to the. plaintiffs by the defendant was not ascertained or agreed upon by the parties, and can not be regarded as “liquidated” within the meaning of the term as applied to the subject of accord and satisfaction. The mere fact that the defendant acceded to the estimate of the engineer, and was willing to pay that amount without attacking it, and tendered that amount with the condition embodied in the receipt or release, did not have the effect to render the plaintiffs’ unliquidated demand a liquidated one; it did not render it one “ascertained and agreed upon by the parties or fixed by operation of law.” In the case of Chicago Railway Co. v. Clark, 178 U. S. 353, it was said, “The proposition is that the release was given without consideration, and that Clark was entitled to recover so far as the items of $40,000 and $9,558.63 were concerned, on the principle that where a liquidated sum is due, the payment of ’ a less sum in satisfaction thereof, though accepted as satisfaction, is not binding as such, for want of consideration. Cumber v. Wane, 1 Strange, 426. The rule therein laid down has been much questioned and qualified. Goddard v. O’Brien, 9 Q. B. Div. 37; Sibree v. Tripp, 15 M. & W. 23; Couldery v. Bartrum, 19 Ch. D. 394; Foakes v. Beer, 9 App. Cas. 605; Notes to Cumber v. Wane in Smith’s Leading Cases, vol. 1, 606; 12 Harvard Law Beview, 521. The result of the modern cases is that the rule only applies when the larger sum is liquidated, and when there is no consideration whatever for the surrender of part of it; and while the general rule must be regarded as well settled, it is considered so far with disfavor as to be confined strictly to cases within it. . . And the cases are many in which it has been held that where an aggregate amount is in dispute, the payment of a specified sum conceded to be due, that is, b3r including certain items but excluding disputed items, on condition' that the. sum so paid shall be received in full satisfaction, will be sustained as an extinguishment of the whole. In Fuller v. Kemp, 138 N. Y. 231, where certain items of an account were disputed, and certain items were undisputed, and defendant paid plaintiff only the amount of the undisputed items, the court held that the dispute over certain of the items made the account an unliquidated one, and that plaintiff, b3r accepting the amount of the undisputed items with notice that it was sent as payment in full, was precluded from recovering the balance of his demand.” The demand of the plaintiffs being unliquidated, it necessarily follows that the tender or offer of the sum mentioned in the receipt, upon the terms recited therein, was in effect an accord and satisfaction. By the acceptance on the part of the plaintiffs of the sum named, and the signing of the receipt containing the conditions u]3on which it was offered, the agreement to accept less than the amount of the unliquidated demand became executed; and when the plaintiffs attempted to collect the balance of the demand, the defendant could plead the executed agreement as an accord and satisfaction. And this conclusion is not affected by the fact that at the time of signing said receipt the plaintiffs entered thereon the letters “E. & O. E.,” which were abbreviations for the words “Errors and omissions excepted.” It appeared by said petition, that said voucher was presented to the plaintiffs by J. J. Spalding, attorney at law for defendant; that the said receipt was signed and delivered to the said Spalding; that the petitioners were informed in effect by the said Spalding, prior to accepting said voucher and cashing the same, that he had no authority and could not give them any relief in regard to their complaints as set forth in their petition and amendments thereto; and that, without other or further communication from any agent, officer, or attorney of the defendant, the said plaintiffs received the amount of said voucher and signed the said receipt. “Where a certain sum of money is tendered by a debtor to a creditor on the condition that he accept it in full satisfaction of his demand, the sum due being in dispute, the debtor must either refuse the tender or accept it as made, subject to the condition. If he accept it, he accepts the condition also, notwithstanding-any protest he may make to the contrary. A., being indebted to B. in an uncertain amount, sent to the C. Bank the amount which A. conceded to be due, with instructions to pay the sum to B., but only in full settlement and on his signing a receipt to that effect. B., protesting that more was due, accepted the money, and signed the receipt, but caused the bank to send back, accompanying the receipt, a letter declaring that he only received the money on account, and not in settlement. Held, that, by receiving the money, he h'ad accepted the condition on which it was tendered, and that his protest availed- nothing. Held, further, that the terms of the receipt, and the refusal of the bank to pay the money except upon his signing it, were notice to him that the bank had no authority to pay it except on the condition that it should be received in full settlement.” Treat v. Price, 66 N. W. 835. “When a party makes an offer of a certain sum ’to settle a claim, when the sum in controversy is open and unliquidated, and he attaches to his offer the condition that the sum, if taken at all, must be received in full satisfaction of the claim in dispute, and the party receives the money, he takes it subject to the condition attached to it, and it will operate as an accord and satisfaction, even though the party, at the time of receiving the money, declares that he will not receive it in that manner, but only in part payment of his debt as far as it goes.” McDaniels v. Lapham, 21 Vt. 222. “The mere act of receiving the money is an agreement to accept the same on the conditions upon which it was offered.” McDaniels v. Bank of Rutland, 29 Vt. 230, 70 Am. Dec. 406.

The claim that this release is not binding, because the sum named in the final estimate was fraudulently fixed, can not avail the plaintiffs. As plaintiffs themselves did the work and were on the ground, they were in possession of all data necessary to determine whether the engineer’s estimate was correct or incorrect, and if incorrect, to what extent, and whether his conduct was fair or unfair. The petition shows not only opportunity of knowledge and notice, but actual knowledge of the facts by which they could have made good their " present complaint that the final estimate was incorrect, unfair, and fraudulent. That being the case, they did not sign the receipt in ignorance of the fraud upon the part of the engineer, 'or of the mistake made by him. And having so signed the release with such notice, and accepted payment, they are now bound by the same. The plaintiffs had full opportunity for knowing the truth; and if they did not ascertain it with such opportunity to inform themselves, it was because of negligence upon their own part, and equity will not now relieve them of its consequences. “It is true, courts of equity will grant relief for ignorance as well as for a mistake of fact; but the principles on which relief is granted in those cases are very different. When the party has acted in ignorance of facts merely, courts of equity will never afford relief where actual knowledge could have been obtained by the exercise of due diligence and inquiry. That was the very point determined in the case of Penny v. Martin, 4 Johns. Ch. 567. Justice Story has also observed, 1 Eq. Jur. sec. 146, and note, that ‘it is not sufficient that the fact is material; but it must be such that he could not by reasonable diligence get knowledge of when he was first put upon inquiry. For if by such reasonable diligence he could have obtained knowledge of the fact, equity will not relieve him, since thatnwould be to encourage culpable negligence!” McDaniels v. Bank of Rut-land, supra.

But even if this were not the case, we think the contention of the defendant company is sound when it insists that the plaintiffs, having received the amount of money tendered by the defendant in settlement of this claim, and having executed a full release, can not set aside the same without having first, as a condition precedent to filing the suit, tendered back the money received.

The plaintiffs received the sum of $41,664.67; they received it on terms and conditions stated in the receipt signed by .them; and they ought not to be permitted to retain it and repudiate an executed agreement. The case as presented by the record makes applicable the language of Mr. Justice Cobb'in the case of Hamilton v. Stewart, 105 Ga. 300: “The retention of the amount forwarded, declared to be in full settlement of the claim held by the person to whom it is sent, coupled with a failure within a reasonable time to decline the proposition, will raise a conclusive presumption of an acceptance of the terms and conditions set forth in the proposal. While of course a party can not be bound by a settlement unless he assents to its terms, still this assent may be implied from the circumstances; and conduct inconsistent with a refusal would raise a presumption of assent, upon which the other party would have a right to act. Nothing could be clearer than the proposition that where one person delivers to another property, to be retained upon a condition stated, the party receiving it can not retain the property and repudiate the condition.” See also the cases of East Tennessee Ry. Co. v. Hayes, 83 Ga. 558, and Walker v. Wadley, 124 Ga. 282. Again, it was held in the case of Strodder v. Southern Granite Co., 94 Ga. 626, “Where an accord and satisfaction is fully executed, the party receiving the money from the other can not rescind on the ground of fraud, . . without refunding or offering to refund the money which was the fruit of the accord and satisfaction. If any exception to this general rule results from inability, by reason of poverty, to restore the money, it- is only when the fraud is not discovered . . until after the money has been expended, or otherwise put beyond the power and control of the plaintiff. To use and appropriate the money with knowledge of the imposition would be a ratification of the settlement.” We do not think that this ruling is in conflict with the case of Robinson v. Leatherbee, 120 Ga. 901, as it does not appear in that case that the money was tendered on condition that it should be accepted in full settlement of the account; but if it is in conflict, then the case of Robinson v. Leatherbee must yield to the earlier decisions which are authority for the ruling here made.

It follows from the foregoing that the court did not err in sustaining the general demurrer and dismissing the action.

Judgment affirmed on the main bill of exceptions. Gross-bill of exceptions dismissed.

All the Justices concur.