Crucible Steel Co. of America v. Premier Manufacturing Co.

We find it unnecessary to consider the claims for correction of the finding, because the question whether the judgment for the defendant on the issue of accord and satisfaction can be supported, turns wholly on the construction to be put upon the writing on the back of the check dated June 18th.

The defense of accord and satisfaction requires the defendant to allege and prove a new contract based upon a new consideration. "There must be a new agreement with a new consideration." Goodrich v.Stanley, 24 Conn. 613, 621. There must be a meeting of the minds. The new consideration must be offered by the debtor and accepted by the creditor with intent to satisfy the whole claim; and when, as in this case, the assent of the creditor is sought to be inferred from the acceptance of a less sum than is claimed to be due, the fact that such sum is offered in discharge of the whole claim must "be made known to the creditor in some unmistakable manner." 1 Corpus Juris, 529. "To constitute an accord and satisfaction it is necessary that the money should be offered in satisfaction of the claim, and the offer accompanied with such acts and declarations as amount to a condition that if the money is accepted, it is accepted in satisfaction, and such that the party to whom it is offered, is bound to understand therefrom, that if he takes it, he takes it subject to such condition." Preston v. Grant, 34 Vt. 201, 203; Fuller v. Smith, 107 Me. 161, 165, 77 A. 706; Girard Fire Marine Ins. Co. v. Canan, 195 Pa. 589, 46 A. 115.

In this case there were five shipments of merchandise from the plaintiff to the defendant which appear to have been separately contracted for, to have been ordered and shipped on different dates, and to have been separately billed to the defendant. Three of these invoices were not disputed as to amount or liability; and the other two were in dispute when the defendant's letter of May 15th was written. It will be noted that this letter was not an offer to pay two out of the three undisputed claims, and did offer to pay one of the disputed items, and that the settlement proposed is not in accord and satisfaction of the whole account, but in settlement of all matters at issue "with the exception of one bill for $105." This letter does not treat the account as a single claim and offer to settle up by the payment of a lump sum, but deals with the separate invoices, so far as they are mentioned at all, and proposes to pay some and not to pay another. This, we think, may have some bearing on the construction which the plaintiff might fairly put upon the check of June 18th. In the same connection it appears, from the absence of any mention of it, that no letter of explanation accompanied this check. If the defendant intended to notify the plaintiff in plain language that the check was offered on condition that if accepted it must be accepted in satisfaction of the whole account, it would have been easy to do so in a letter enclosing the check. It is said that the memorandum on the back of the check serves the purpose of an explanatory letter, and if the general statement "in full of invoices to date" stood alone, it might be understood as a tender of payment in satisfaction of all invoices to date. That being so it was unnecessary to add anything more. Nevertheless, the memorandum then proceeds to enumerate the three undisputed invoices and to claim a specific deduction of $4.69 from their aggregate amount, and the result thus reached is the precise amount for which the check was drawn. The coincidence is irresistible. It is impossible to understand this part of the memorandum otherwise than as an itemized list of the invoices intended to be paid by the check, less the counter-charge. Besides, all this specification and addition of selected invoices as well as the specific deduction of a claimed counter-charge from their sum, is entirely out of place in an offer to settle the whole account, including other invoices nor referred to, for a gross amount. The result is that, taking the check as a whole it does not clearly express the condition that if accepted it must be accepted in satisfaction of the whole amount. In saying this we do not impugn the finding that the defendant intended by this check to settle all matters in dispute; but to point out that the check, unexplained, is not an adequate expression of that intent.

In view of the finding that the invoices listed on the back of the check were not then and never had been in dispute, the plaintiff was fairly entitled to suppose that the check was intended in full settlement of those three invoices less the claimed counter-charge for $4.69. There is no finding that the plaintiff understood the check as an offer of settlement of the whole account. The finding is that the plaintiff applied the check in payment of the invoices listed thereon, and we think it had a right to do so. In other words, we hold that the writing which is offered as the only evidence of the payment conditioned on a satisfaction of the whole account is on its face insufficient in law to justify the inference that the plaintiff, by accepting the payments, has precluded itself from suing for the balance of the indebtedness.

It appears from the memorandum of decision that the trial court has found the issues raised by the first defense in favor of the plaintiff as regards the two items mentioned in paragraph one of that defense. These items amount to $169.82.

There is error, the judgment is reversed and the cause remanded to the Court of Common Pleas in Fairfield County with directions to enter judgment for the plaintiff in the sum of $169.82, with interest from the date of the writ.

In this opinion the other judges concurred.