Electrical Wholesalers Inc. v. Sylvania Electric Products Inc.

Under the facts of this case the account sued on was settled by the acceptance by the plaintiff of a check accompanied by a letter stating that the check was in payment of the account, and showing debits and credits as contended for by the defendant, where neither the check nor its proceeds were returned to the defendant before the filing of the action on the account.

DECIDED MAY 24, 1944. REHEARING DENIED JUNE 7, 1944. Sylvania Electric Products Inc. sued Electrical Wholesalers Inc. on an open account for $1805.47 principal, and interest from July 15, 1942. The defendant answered and set up that the indebtedness was in dispute, and that it was paid in full by check number 1134, dated July 15, 1942, in the sum of $655.34, payable to the plaintiff. The answer further alleged that this check was transmitted with a letter to the plaintiff showing the details of the settlement, which showed a credit deducted for direct sales by the plaintiff to Marietta Aircraft Assembly Plant of $2000, and that there was no reply to the letter and the account was settled by the acceptance of the check. The letter is as follows: "Check is enclosed for $655.34 in payment of June account as follows: Unpaid June invoice, $2709.53. Deduction 2% cash discount $54.19; less amount retained as commission on sale of Miralumes for installation in Marietta Aircraft Assembly Plant (at 5c per fixture), $2000.00. Total deductions, $2054.19. Net amount paid, $655.34. With reference to the retention of $2000.00, there is attached copy of our letter to Mr. Rausch dated July 1st and his reply of July 8th. In our letter to Mr. Rausch, and subsequent conversation with your Mr. Saussy, we have tried to make our position clear, and it is regrettable that we could not see the matter from the same angle. Other manufacturers made direct bids on this job just as your company did, but they included a protection for their jobbers. Hygrade has always advocated a very strict jobber policy, but the size of this order seems to have overshadowed the importance of a jobbing place in the picture." By amendment the defendant sought to recover of the plaintiff $234.35 represented by certain credits shown on the account sued on. The jury found for the plaintiff the full amount sued for with interest. The defendant's motion for a new trial was overruled and it excepted. The evidence demanded a finding for the defendant as to the settlement of the June account in full. While the evidence shows that prior to sending the check in payment of the June account, the plaintiff had informed the defendant, both by letter and statements from its officials, that the commissions on the aircraft sales would not be allowed; yet the plaintiff received the check purporting to be in full payment of the June account (the one sued on), accompanied by a letter showing that the defendant was claiming credit for a $2000 commission on the aircraft sales. The plaintiff retained the check and its proceeds, and up to the filing of the suit on November 25, 1942, had not returned the check, — in fact had cashed it, and had not returned the proceeds to the defendant. This conduct was the settlement of the account in full by the actual acceptance of a sum for a less amount than that admitted to be due, and is binding whether there was a bona fide dispute or not. The payment of the money was sufficient consideration. Code, §§ 20-1201; 20-1204; King v. liberty Mutual Life Ins. Co., 59 Ga. App. 496 (1 S.E. 223), and cit.; Bowen v. Waxelbaum, 2 Ga. App. 521 (3) (58 S.E. 784); Whatley v. Troutman, 60 Ga. App. 23 (2 S.E.2d 731); David D. Doniger Co. v. Briggs, 61 Ga. App. 699 (7 S.E.2d 321); Dunn v. Meyer, 193 Ga. 91 (17 S.E.2d, 275), and cit. The failure to return the check, or its proceeds, to the defendant within a reasonable time was an acceptance of the proposal that it be treated as payment in full for the June account. Hamilton v. Stewart, 105 Ga. 300 (31 S.E. 184); Hamilton v. Stewart, 108 Ga. 472 (34 S.E. 123); Elrod v. M. C. Kiser Company, 13 Ga. App. 471 (79 S.E. 375); Ryan v. Progressive Retailer Publishing Co., 16 Ga. App. 83 (84 S.E. 834); Scott v. Crain, 55 Ga. App. 514 (190 S.E. 629), and cit. What is stated above covers all the assignments of error. The defendant in error cited only one case, that of C. S. Bank v. Union Warehouse Compress Co.,157 Ga. 434 (122 S.E. 327), in which it was stated: "As there may be a tender upon condition that acceptance shall extinguish the claim of the creditor, so there may be an acceptance on condition that it would not extinguish the liability of the debtor." Under the facts of that case the tender was made with the notice that the acceptance was on condition that it would not extinguish the liability. Such a tender after notice that acceptance would not extinguish the liability amounted to an abandonment of the tender on condition that acceptance would extinguish the claim. The ruling is not applicable under the facts of this case.

The court erred in overruling the motion for a new trial.

Judgment reversed. Sutton, P. J., and Parker, J., concur.