Hotel Randolph Co. v. John C. Watrous Co. , 144 Wash. 215 ( 1927 )

This is an appeal by the plaintiff from a judgment dismissing its action. Appellant sought to recover judgment for five hundred dollars, collected as rental for it by respondent, acting as agent for the collection of rents, and alleged to have been unlawfully retained. The defense was accord and satisfaction growing out of the following: At the request of appellant, the respondent sought a purchaser for certain real property and found one who offered to pay $109,000 on certain specified terms and conditions, and who deposited with the agent a check for $5,000 as earnest money. An earnest money receipt was prepared by respondent, reciting the terms of the proposed sale, which provided that it should become effective only when approved by the appellant as the owner of the property.

For some time, appellant, although frequently requested, failed to approve or disapprove, and the prospective purchaser finally demanded the return of the $5,000 check. When this was made known to an officer of the appellant company who had power to act in such matters, he, according to the testimony offered by respondent, made known that he had a better prospect for a sale in sight, and if the check were held on deposit, that fact would be an argument helpful in closing the better sale; and, according to respondent's witnesses, appellant, through the officer referred to, told them that, if they would persuade their prospect to keep the check up on deposit, appellant would, if a sale was made to its prospect, pay them five hundred dollars for their services in keeping the first offer alive, and that they might charge the five hundred dollars, when so earned, against the rents collected and in their hands.

The evidence indicates that appellant closed the sale to its purchaser on July 31, 1922, and on August 1 following, respondent made up a statement of rents collected, amounting to $975, against which it charged certain disbursements, not questioned, and also this fee for services in the sum of five hundred dollars; the final debit to appellant on the statement being "check to balance, $285.55," and sent both statement and check to the appellant. The check was not immediately cashed, and nothing was done for some little time. Later (there being some dispute as to how much later), an attorney representing appellant called at respondent's office, saying that he had come to inquire into the "mix-up" and straighten it out, if possible; and thereupon, according to respondent's witnesses, he was told of what had occurred, substantially as we have set it forth.

The attorney testified that nothing was said of any agreement to pay the five hundred dollars, but that respondent's officers claimed that five hundred dollars was due, because they had earned it and because it was just and fair that they should be so paid. That is the only testimony in the case tending to a denial of the claimed agreement; but, as we see it, on the question of accord and satisfaction; it is immaterial whether the offset was claimed by virtue of an agreement or because it was just and fair. The attorney promised to report to appellant respondent's version of the situation, and presumably did so. He later saw respondent's officers, at least once more and perhaps several times, but nothing looking toward any change in the situation was accomplished. In October, 1923, this action was commenced, and shortly thereafter appellant cashed the check and has since retained the proceeds.

[1] The appellant seems to take the position that, because admittedly the whole amount for which the check was drawn was due to it, there was no accord and satisfaction, and cites cases to the effect that, where the amount due is not in dispute, an acceptance of a sum less than the whole amount will not be a bar to the recovery of the balance. The case of London Guaranty Accident Co. v. Western Smelting Power Co., 117 Wash. 568,201 P. 914, is easily distinguishable on the facts. Ingram v.Sauset, 121 Wash. 444, 209 P. 699, while more nearly parallel, can still be distinguished upon the ground that here, after investigation by its attorney and knowledge that respondent claimed the check to be in full settlement, a meeting of the minds may be seen in the final cashing of the check.

We think this case is governed by the rule laid down in FirstNat. Bank of Ritzville v. White-Dulaney Co., 123 Wash. 220,212 P. 262. In that case, on facts very similar to those in this case, the court, after recognizing the general rule applicable to debts which are liquidated and due, deliberately adopted the majority rule to the effect that a claimed offset in dispute will render the whole debt unliquidated. So here, appellant was well advised, before it cashed the check, of the claimed offset, and being a party to the dispute well knew it existed, and, we think, to hold that there was no accord and satisfaction here would be to, in effect, overrule the White-Dulaney case, which we are unwilling to do.

[2] This disposition of the main question makes it unnecessary to consider the other questions raised; for, after accord and satisfaction, one may not raise the defense of the statute of frauds or any defense on the merits to the items which were originally in dispute. That is fundamental; otherwise accord and satisfaction would be a poor defense indeed. 12 C.J. 329.

The judgment of the trial court is affirmed.

MACKINTOSH, C.J., FRENCH, and PARKER, JJ., concur.