Opinion
No. 29088.
January 19, 1931. Suggestion of Error Overruled March 2, 1931.
ACCORD AND SATISFACTION. Compromise and settlement. In suit for accounting of rents due under contract for lease of gravel machinery, evidence held to establish accord and satisfaction between parties.
Contract covered lease of certain machinery to be used for mining gravel and required lessee to pay rental at an agreed rate per ton not less than and not exceeding a stipulated amount per month. After termination of contract, dispute arose between parties involving balance of rent due under terms of contract.
APPEAL from chancery court of Leflore county. HON. R.E. JACKSON, Chancellor.
J.W. Bradford, of Itta Bena, for appellant.
The receipt, retention and appropriation by appellee of the checks from time to time mailed them by appellant with positive notations thereon "payment in full for all preceding dates" constitutes an accord and satisfaction.
May Brothers v. Doggett, 124 So. 476.
Wells, Jones, Wells Lipscomb, of Jackson, for appellant.
Where checks are sent by the debtor and accepted by the creditor which bear a notation that such checks are payment in full to a certain date, the acceptance constitutes an accord and satisfaction, irrespective of whether or not there is a dispute as to the amount due.
Clayton v. Clark, 74 Miss. 499; Greener Sons v. Cain, 101 So. 859; Domick v. Brookhaven Box Company, 120 So. 193; Cooper v. Y. M.V. Railroad, 35 So. 162; Enochs v. Delta Cotton Oil Co., 104 So. 92; Philips v. St. Paul Fire, 125 So. 705; May Bros. v. Doggett, 124 So. 476; 1 R.C.L. 194; Hotel Randolph v. Watson, 53 A.L.R. and note.
Where the relations are not confidential and the parties deal at arm's length, there is no duty of disclosure and silence is not fraud; and this is true whether the facts are equally within the means of knowledge of both parties, or peculiarly within the knowledge of one party and of such a nature that the other has no right to expect information.
26 C.J. 1076, par. 18; Hall v. Thompson, 1 S. M. 443.
Appellee by its long delay in bringing this suit has ratified the contracts.
Whittington v. H.T. Cottam Company, 130 So. 745.
Kimbrough, Tyson Kimbrough, of Greenwood, for appellee.
Whether accord and satisfaction, was constituted in this case through the acceptance by the King Construction Company of the various checks reciting that they were payment in full of the rent up to certain dates, under the familiar general rule of law of accord and satisfaction no such accord and satisfaction is shown under the facts in this case, for the reasons that at the time of the issuance and acceptance of said checks (a) there was no dispute between the parties as to the amount due, and (b) the amounts paid were less than the amounts due.
As in the case of other contracts procured by fraud, a contract of accord and satisfaction so procured on the part of the debtor is not binding upon the creditor.
1 R.C.L. 201 (38); 1 C.J. 567 (104); St. L. S.F.R.R. Co. v. Ault, 28 So. 102; Dana v. G. S.I.R.R. Co., 64 So. 214.
An important exception to the rule that mere silence is not fraud exists where the circumstances impose the duty on a person to speak and he deliberately remains silent. Where the law by reason of the relation of the parties, their respective means of knowledge, or other circumstances imposes a duty upon one of them to disclose all material facts known to him and not known to the other party mere silence in the violation of this duty with intent to deceive will amount to fraud as being a deliberate suppression of the truth and equivalent to the assertion of a falsehood.
26 C.J. 1071 (14); 12 R.C.L. 306, 307, 309 (pars. 67, 68, 69); 2 Pomeroy (4 Ed.), sections 901, 902; Hoops v. Newman, 2 S. M. 71; Simmons v. Cutrer, 12 S. M. 584.
The rule that failure to disclose facts is not fraud does not apply where the circumstances are such as to impose a duty to disclose them and there is such a duty where the parties stand in a fiduciary relation to each other, or where one party knows that the other relies on him to tell him truly as to the facts of the case, in which case a duty arises not to conceal anything material to the bargain and this although the parties do not stand in what is generally described as a fiduciary relation.
13 C.J. 834 (283); 1 Elliott on Contracts, 208 (123): 26 C.J. 1077, note 68; 2 Pomeroy (4 Ed.), sec. 902.
A confidential relation exists when confidence is imposed by one party and a trust accepted by the other, when a confidence has been imposed and betrayed or when influence has been acquired and abused. It embraces both technical and fiduciary relations and those informal relations where one man trusts and relies on another.
Dale v. Jennings, 107 So. 175-179.
The King Construction Company filed its bill against W.H. Rucker in the chancery court of Leflore county seeking to recover a balance of interest alleged to be due on certain machinery used for mining gravel; also it sought a reformation of the contract as to a date and accounting as to the quantity of gravel mined by Rucker with said machinery.
The applicable part of the lease contract is in these words:
"The terms of said lease shall be until April 15, 1921, and as long thereafter as the party of the second part (W.H. Rucker), his heirs or assigns, may require the same.
"Provided that the party of the second part, his heirs or assigns, may at any time after the said April 15th, 1921, upon their option, relinquish and surrender the said machinery, implements and equipments as above enumerated and terminate this agreement by giving the party of the first part thirty days' notice, after which the party of the first part agrees to remove promptly all said machinery, implements and equipments from the said lands, leaving undisturbed, however, all railway tracks, frogs and switches, subject to the terms of an agreement made between party of the first and party of the second part, and dated December 6th, 1919.
"During the time the party of the second part shall use and retain said machinery, implements and equipments, he shall pay to the party of the first part, four cents per ton for all material he shall load and ship with said machinery, implements and equipments.
"Provided, however, the said payments shall not be less than Four Hundred Dollars ($400) per month, nor more than One Thousand Dollars ($1,000) per month, beginning and dating from July 21st, 1921, settlements to be made on or before the 10th of each month for the tonnage of materials loaded and shipped the previous month."
This contract was dated the 30th day of June, 1920.
The bill further alleged that the total amount paid by Rucker to the King Construction Company from July 1, 1920, until the termination of the contract in March, 1922, was seven thousand three hundred dollars, and alleged, in substance, that, from the inception of the contract until August 1, 1921, there had been a payment by check of four hundred dollars per month on the part of Rucker, and thereafter a payment by check of three hundred dollars per month.
The bill further alleged that the proper construction of the contract was as follows: Rucker was to pay four cents per ton for all gravel mined, the rental not to be less than four hundred dollars per month nor exceeding one thousand dollars per month, and that it was the duty of Rucker to report the quantity of gravel mined each month, which he had failed to do, refusing to make any report on demand, first made after the termination of the contract.
Appellee charged, on information and belief, that Rucker had mined more than ten thousand tons per month, and that there was due from him to the appellee a considerable sum if an accounting were had.
The prayer of the bill was for a reformation of the contract, correcting and amending the date so that it should read July, 1920, instead of 1921. It prayed for a discovery and accounting of the tonnage of gravel mined by Rucker, and for a decree against him for the amount of the balance found to be due on such accounting.
Rucker answered, denying the construction of the contract claimed by the King Construction Company, and asserting that he had paid all the rental due under the contract and agreement with the former. He alleged that under the terms of the contract, after April 15, 1921, he had the option to continue to rent the machinery and equipment as he saw fit, and that by correspondence the original contract was modified so that after August 1, 1921, under the terms as modified, he was only required to pay three hundred dollars per month, and that he had fully paid all rental due on the two contracts.
In appellant's answer was contained a plea of accord and satisfaction, in that he had made payment of his rents by checks, and had specifically marked on most of the checks the date to which he claimed the rent was paid, and that at the end of the contract he had sent a check marked "Rent in full," that he had never been called on to render any statement of the quantity of gravel mined by him to the King Construction Company, and that the latter had, without complaint, received the check in full payment and satisfaction of all claims for rent against him.
With his answer he filed a complete discovery, giving the tonnage of gravel mined each month, from the inception to the termination of the contract. This discovery showed that from July, 1920, to December, 1920, the tonnage of gravel mined was less than ten thousand tons; and that from December, 1920, until June 1, 1921, the tonnage mined was in excess of ten thousand tons. The month of June, 1921, showed less than ten thousand tons; and the whole accounting showed that under the terms of the contract, as construed by the King Construction Company, there would have been a considerable sum due the latter.
The chancellor entered a decree against Rucker for the sum of one thousand eight hundred six dollars as a balance of rental due and unpaid from July 1, 1920, until August 1, 1921. He further entered an order denying any relief to the King Construction Company subsequent to August 1, 1921, and held that a new contract had been entered into by which a flat rental of three hundred dollars per month was due and had been paid, thereby denying the plea of accord and satisfaction interposed by the defendant. An appeal was prosecuted therefrom to this court by Rucker; and a cross-appeal was prosecuted by the King Construction Company.
In the main the evidence is addressed to the construction placed upon this written contract by the parties, and to the correspondence between them, together with the canceled checks given by Rucker in his payments of rent to the King Construction Company.
The pertinent facts, as disclosed by the checks, are about as follows: On January 5, 1921, the King Construction Company wrote Rucker a letter in which they used this language, after making a sale price for the machinery: "However, we consider the rental of four hundred dollars per month which you are paying us as very low, as we are getting the same sum per month for one small shovel with no extras whatever included with it." Rucker inclosed no statement of the tonnage of gravel mined by him, nor did he make any misrepresentation with reference thereto; he did not mention the tonnage.
The evidence conclusively showed that there was never any dispute between the parties during the life of the contract, not until after their contractual relations had ceased, on March 20, 1922. On June 22, 1921, the King Construction Company received Rucker's check by mail, on which check appeared the following notation: "Rent in full to July 1st, 1921." And the evidence conclusively shows that Rucker remitted, and the King Construction Company received and cashed, checks for four hundred dollars per month for each of the months from August, 1920, to June 30, 1921; and on most of the checks would be marked the date to which Rucker was asserting that the check was intended to pay the rent to the date which the notation on the checks indicated. The officers of the King Construction Company, testifying, admitted that they received and cashed these checks, and wrote the letters indicating that they were receiving the sums specified as rent, but said they thought Rucker was an honest man, and that he would, upon accounting, pay them any excess; that they did not actually know there was any excess in any given month. They frankly admitted that they had never called for any statement of the amount of gravel mined from the inception to the termination of the contract.
They further admitted that they wrote the letter in which it was agreed to reduce the rent to three hundred dollars per month, but insisted that they thought they were simply reducing the minimum amount to be paid. But there is nothing in this record to show otherwise than that the three hundred dollars monthly rental was agreed to, was paid by Rucker, and received by the King Construction Company, without any complaint or protest from the latter.
As evidencing the manner of payment of rent by Rucker to the King Construction Company, checks were sent, dated June 2, 1921, August 15, 1921, November 10, 1921, March 2, 1922, and March 9, 1922, on which was indorsed, "Rent in full to" a specified date; and the last check of March 28, 1922, for two hundred dollars, has the indorsement, "Rental on machinery to March 20th, 1922, 2/3 of month." All of these checks were received and collected by the King Construction Company. There is in evidence a letter from Rucker to the King Construction Company, written in March, 1921, inclosing a check for the rental on a flat basis for the current month, and for a month in advance, to which the King Construction Company replied, acknowledging receipt of the rent in advance, and thanking Rucker for so paying it.
There was an accord and satisfaction under the holdings of this court, beginning with the case of Clayton v. Clark, 74 Miss. 499, 21 So. 565, 22 So. 189, 37 L.R.A. 771, 60 Am. St. Rep. 521, and reannounced in May Bros. v. Doggett, 155 Miss. 849, 124 So. 476. Also Greener Sons v. Cain Sons, 137 Miss. 33, 101 So. 859; Domick v. Brookhaven Box Co., 153 Miss. 22, 120 So. 193; Cooper v. R. Co., 82 Miss. 634, 35 So. 162; Enochs v. Cotton Oil Co., 139 Miss. 234, 104 So. 92; Phillips v. St. Paul Fire Marine Ins. Co., 156 Miss. 41, 125 So. 705.
Appellee and cross-appellant urged that it was a fraud on Rucker's part in that he failed to report the tonnage of gravel mined monthly. The subject of tonnage was never mentioned in the correspondence between the parties, and there was no oral communication during the existence of the contract. It is certain that in March, 1921, when Rucker paid the rent in advance, the King Construction Company could not have mistaken the fact that the former was remitting a flat monthly payment in full of his rent, without reference to tonnage. Both parties to the contract were silent in regard to the subject; in fact, both parties apparently abandoned the contract. This is true, regardless of the several contentions as the proper construction of the contract. There was in this case no controverted question of material facts.
Having determined that there was an accord and satisfaction, it follows that Rucker was not liable to the King Construction Company for additional rent on a tonnage basis.
Reversed, and decree here for appellant, Rucker, on direct and cross-appeal.