Opinion
3-10-1955
John H. EDGAR, Plaintiff, Cross-Defendant and Respondent, v. Dan S. HITCH, Defendant, Cross-Complainant and Appellant, and E. Braden, Defendant. Civ. 4907.
Donald D. Roff, Ventura, for appellant. Conron, Heard & James, Bakersfield, for respondent.
John H. EDGAR, Plaintiff, Cross-Defendant and Respondent,
v.
Dan S. HITCH, Defendant, Cross-Complainant and Appellant, and
E. Braden, Defendant.
March 10, 1955.
Rehearing Denied April 4, 1955.
Hearing Granted May 4, 1955. *
Donald D. Roff, Ventura, for appellant.
Conron, Heard & James, Bakersfield, for respondent.
MUSSELL, Justice.
It is alleged in the complaint herein that between March 20 and March 22, 1952, defendants purchased from plaintiff 66 tons of alfalfa hay at the agreed and reasonable value of $42.50 per ton, no part of which has been paid except the sum of $2,150.14, leaving a balance due and owing in the sum of $660. In his answer Dan S. Hitch denied that he had purchased said hay or any hay at $42.50 per ton, and alleged that he purchased approximately 500 tons of hay from plaintiff at the agreed price of $32.50 per ton; that he took delivery of approximately 66 tons of hay and paid $2,150.04 therefor; that this sum was the agreed price for the hay received by him at $32.50 per ton. He denied there was a balance due plaintiff and filed a cross-complaint in which he sought damages for plaintiff's alleged breach of the contract.
Trial was had on July 2, 1953, and the matter was submitted for decision. On September 10, 1953, defendant Hitch filed a notice of motion for leave to file an amendment to his answer to conform to proof. On September 18, 1953, plaintiff's attorney stipulated that the amended answer be filed and in it defendant Hitch set forth as a separate defense that on or about March 22, 1952, he delivered to plaintiff a check in the amount of $952.41 and informed plaintiff at the time of the delivery thereof that he intended the check as full payment of the claim alleged in plaintiff's complaint; that on the upper left hand corner of the check there appeared the following words and figures: 'Pd. in full for all Hay Bought From John Edgar @ $32.50 Ton'; that in due time plaintiff cashed said check; that plaintiff by acceptance and cashing said check agreed to the settlement intended by defendant and that at the time of said payment defendant in good faith disputed and denied liability to plaintiff for the amount claimed by him. The trial court found for plaintiff and awarded judgment in his favor for the sum of $660.00 and costs.
Defendant Hitch here contends that the findings rejecting the defense of accord and satisfaction are not supported by the evidence and that under the facts shown, the acceptance and cashing of the checks offered by defendant amounted to an accord and satisfaction.
On March 19, 1952, defendant Hitch, a hay dealer, and one E. Braden went to plaintiff's farm near Bakersfield where they met plaintiff and proceeded to a stack of baled hay which contained approximately 600 tons and had been offered for sale by plaintiff. Plaintiff testified that Hitch asked him how much he would have to get for the hay and he replied that he would have to get '$42.50'; that Hitch said he would not take all of the stack until he had a trial load; that it was then agreed that Hitch should take a load; that Hitch stated that if his customer did not object to the hay, he might take the whole stack; that Hitch agreed to pay for the first load at the scales. Defendant Hitch testified in this connection that when he looked at the hay with plaintiff he asked plaintiff what he wanted for it and plaintiff said 'He was holding the hay for $32.50 straight through as it is'; that plaintiff estimated there were about 500 tons of hay in the stack; that he told plaintiff he would go home and contact his dairyman and let him know; that he called plaintiff on the telephone that night and that the price was not mentioned in this telephone conversation; that he told plaintiff he was coming up the next day to start hauling the hay and plaintiff said 'O. K., come ahead.' On March 20, 1952, Hitch arrived at plaintiff's ranch with three trucks. He loaded them with the hay and had them weighed at the Chevron station at Greenfield. Hitch then left a check payable to plaintiff at the station for $1,197.63, which sum paid for the hay then received by Hitch at the rate of $32.50 per ton. Hitch delivered this hay to his dairyman and on the evening of March 21, 1952, called plaintiff on the telephone and told him they were coming back for three more loads of hay. The next day, March 22, 1952, Hitch weighed in his equipment at the Chevron station and learned that plaintiff had not received the check for $1,197.63. Hitch got the check to deliver it to plaintiff and proceeded to the ranch where he commenced loading his trucks. Plaintiff appeared and a dispute arose between the parties over the signing of a contract for the purchase of the balance of the hay and also the price charged and to be charged for it. Hitch refused to sign a contract and delivered the check to plaintiff. In this connection plaintiff testified that he looked at the check and knew that 'It was short'; that he asked Hitch how he figured it and Hitch said '$32.50'; that he then told Hitch he could not take any more hay at that price; that an argument then took place in which plaintiff stated to Hitch 'You can load the trucks but you are not loading it for $32.50'; that he followed the trucks to the scales and there took a check from defendant's agent as part payment. This check was payable to plaintiff, dated March 22, 1952, and on the face thereof the notation 'Pd. in full for all Hay Bought from John Edgar @ $32.50 per ton.' Plaintiff retained the two checks received from Hitch and on April 15, 1952, his attorney wrote to Hitch stating that notwithstanding the notation on the check of March 22, 1952, there was an additional sum of $661.55 due plaintiff on the transaction and that legal action would be taken if this sum was not paid within five days.
The complaint herein was filed on April 26, 1952, and on May 24, 1952, upon advice of his attorney, plaintiff cashed the two checks received from Hitch.
The record here, as in Potter v. Pacific Coast Lumber Co., 37 Cal.2d 592, 234 P.2d 16, does not justify the trial court's finding that no accord and satisfaction was effected by the parties in settlement of plaintiff's claim and we are of the opinion that the court erred as a matter of law in adjudicating this issue contrary to defendant's position. The rules applicable are stated in the Potter case, supra, 37 Cal.2d at page 597, 234 P.2d 16, and are approved in Grayhill Drilling Co. v. Superior Oil Co., 39 Cal.2d 751, 753-754, 249 P.2d 21, 22, in the following language: 'The defense of accord and satisfaction was recently considered in Potter v. Pacific Coast Lumber Co., 37 Cal.2d 592, 234 P.2d 16, in a case factually similar to the present one. This court said, 'The great weight of authority undoubtedly supports the rule that where a claim is disputed or unliquidated and the tender of a check or draft in settlement thereof is of such character as to give the creditor notice that it must be accepted 'in full discharge of his claim' or not at all, the retention and use of such check or draft constitutes an accord and satisfaction (1 C.J.S., Accord and Satisfaction, § 34, p. 528); and it is immaterial that the 'creditor protests against accepting the tender in full payment' (1 Am.Jur. § 26, p. 228), for in such case 'the law permits but two alternatives, either reject or accept in accordance with the condition' (Williston on Contracts, Rev. Ed., Vol. VI, § 1856, p. 5220 * * *). Of course, for the principle of accord and satisfaction to apply in disposition of an unliquidated claim, there must be a 'bona fide dispute' between the parties (Stub v. Belmont, 20 Cal.2d 208, 218, 124 P.2d 826), but 'it matters not that there was no solid foundation for the dispute' as the test is whether 'the dispute was honest or fraudulent'. B. & W. Engineering Co. v. Beam, 23 Cal.App. 164, 171, 137 P. 624 * * *. Also, the debtor must make it clear that acceptance of what he tenders is subject to the condition that it shall be in full satisfaction. (Citations.)' 37 Cal.2d at [page] 597, 234 P.2d at page 18.'
In the instant case plaintiff had two alternatives, either to reject or accept the checks in accordance with the notation on the face of the second check. The condition was known to plaintiff and his attorney. There was a "bona fide dispute" between the parties and it was immaterial whether plaintiff protested against accepting the tender in full payment.
The judgment is reversed.
BARNARD, P. J., and GRIFFIN, J., concur. --------------- * Opinion vacated 294 P.2d 3.