January 10, 1908.
Cephas Brainerd, for the appellants.
George D. Beattys, for the respondent.
The plaintiffs appeal from a judgment dismissing the complaint. There is no dispute as to the facts, the evidence being wholly documentary, and the only question is whether the receipt and retention by plaintiffs of a check sent them by defendant constituted an accord and satisfaction. The action was for a balance claimed to be due on a sale of Borneo rubber by plaintiffs to defendant. The answer alleges that prior to the sale plaintiffs warranted and represented that the rubber in being washed, dried and worked would not shrink more than forty per cent of the net weight, and further agreed that if the said rubber did shrink more than forty per cent, defendant could settle and pay for the rubber at a net price of seventy cents per pound dry weight. It was further alleged that plaintiffs furnished defendant before the sale with a special sample of the rubber taken from the bulk of the goods, with which sample the plaintiffs agreed said rubber should in all respects equal; that defendant purchased the rubber relying on said representations and sample, but that the rubber delivered did not correspond with the sample, and was not as represented and warranted, in that in the process of washing, drying and breaking down it shrunk in weight nearly fifty-three per cent, and being worth at seventy cents per pound net weight $231.43 less than it would have been worth at forty-two cents per pound if it had been as represented. The plaintiffs in reply admit delivering a sample of rubber prior to the sale, but deny any warranty or representations, and the defendant's reliance thereon, and allege that in purchasing the rubber the defendant relied wholly upon its own examination of the sample.
The action is for the sum of $231.43, being the difference between the price of the rubber at forty-two cents per pound, the agreed price, and seventy cents per pound dry weight. The rubber was shipped on January 13, 1904, and was received by defendant about January 20, 1904, for, on that date, defendant wrote a letter acknowledging the receipt, and promising to mail a check on the following Friday. On January twenty-first defendant again wrote, saying that it had been informed by the factory superintendent that the quality of the rubber was very poor, and that it should, before paying for the same, wait for the shrinkage. On January twenty-third plaintiffs replied, declining to admit any claim on the rubber and asking for a prompt remittance. On January 30, 1904, defendant wrote, inclosing a check for $800, and saying that it would remit balance as soon as the shrinkage on the rubber had been ascertained.
On February 1, 1904, plaintiffs wrote, acknowledging the receipt of the check for $800, and stating that that payment left a balance due of $293.67. They also specifically declared that "the arrangement regarding shrinkage ceased with your examination of the large sample of about eight pounds sent on 30th December and your definite order for one ton on the 7th January at 42c. per lb." On February 6, 1904, defendant wrote, inclosing check for $62.25, "in settlement of your invoice of Jan. 11th," and then explained how this sum was arrived at, as follows: "When this rubber was purchased from your representative, he guaranteed that the rubber would not have a shrinkage of more than 40%, or in other words, the rubber would not cost us more than 70c. per lb. dry weight. This rubber weighed up 1230 lbs. dry weight, at 70c. would be $861. We have already paid you $800, and the check inclosed covers balance due on this invoice, also cartage of $1.25." To this letter plaintiffs replied at once, acknowledging the receipt of the check for $62.25, with which they credited defendant's account, and stating that there still remained due $231.42, of which they demanded payment. They again denied that there had been any warranty or representations. Upon evidence of this transaction the court below decided that the receipt and retention of the check for $62.25 constituted an accord and satisfaction, and dismissed the complaint. This as we think was erroneous. "Ordinarily the retention of a check inclosed in a letter which refers to the amount as the balance due on accounts between the parties will not be held to be an accord and satisfaction so as to bar an action for the balance due. * * * It is only in cases where a dispute has arisen between the parties as to the amount due and a check is tendered on one side in full satisfaction of the matter in controversy that the other party will be deemed to have acquiesced in the amount offered by an acceptance and a retention of the check." ( Eames Vacuum Brake Co. v. Prosser, 157 N.Y. 289, 300.) In the present case the only controversy was as to the alleged warranty, and the only question between the parties was as to whether there had been such a warranty or not. No check was ever sent in settlement of that controversy, and as to it there was, therefore, no accord and satisfaction. The sum of $62.25, for which a check was sent, was not in settlement of any controversy, for the defendant admittedly owed that amount in any event, and as to it there was no controversy whatever. The case falls squarely within the rule of Eames Vacuum Brake Co. v. Prosser ( supra), and Laroe v. Sugar Loaf Dairy Co. ( 180 N.Y. 367). It differs essentially from cases in which the plaintiff's claim was for an unliquidated amount, and the payment was, in terms, made in full settlement. In the present case there is no question as to the amounts. Upon the only question in controversy between the parties there was no attempt or intention to pay anything in satisfaction, and hence there could be no accord. That controversy remained open, and it is evident that both parties so understood it.
The judgment and order should be reversed and a new trial granted, with costs to appellant to abide the event.
PATTERSON, P.J., INGRAHAM and CLARKE, JJ., concurred; LAUGHLIN, J., dissented.
I am of the opinion that the acceptance and use of the check for $62.25 constituted an accord and satisfaction. The question arises over the purchase of one ton of Borneo rubber by the defendant from the plaintiffs at the agreed price of forty-two cents per pound. After the delivery of the rubber, the defendant claimed that it was of a very poor quality and declined to pay for it until the amount of shrinkage could be ascertained. The defendant in the meantime remitted to the plaintiffs a check for $800 to apply on account. The total purchase price of the rubber, if it had been of good quality and did not shrink in weight, would have been $1,093.67. The plaintiffs insisted that the weight should be determined as of the time of delivery and not at a later period after shrinkage had taken place. The defendant received the rubber on the 20th of January, 1904. On the sixth day of February thereafter, and after the plaintiffs had rejected the contention of the defendant that it was entitled to a deduction on account of excess of shrinkage, the defendant inclosed a check for $62.25 to the plaintiffs with a letter stating that the rubber had been purchased under a guaranty that there would not be a shrinkage of more than forty per cent, which would make the purchase price, dry weight, seventy cents per pound, and that the dry weight of the rubber was 1,230 pounds, which at seventy cents per pound, would amount to $861, to which $1.25 was added for cartage, and that the check was sent to cover the balance due on the invoice which was for $1,093.67. It is manifest that the vendee did not even concede its liability to the vendors for the amount which it paid. It had asserted that the rubber was of poor quality and that it did not come up to the guaranty with respect to shrinkage; but with a view to settlement, it offered to pay on the basis of the purchase price, deducting for the excess of shrinkage. The claim was unliquidated, the amount of the defendant's liability was in dispute and, therefore, when the plaintiffs accepted and used the check sent in full settlement, it constituted an accord and satisfaction. ( Nassoiy v. Tomlinson, 148 N.Y. 326; Dunn v. Whalen, 120 App. Div. 729; Jackson v. Volkening, 81 id. 36; affd., 178 N.Y. 562.)
I, therefore, vote for affirmance of the judgment.
Judgment and order reversed, new trial ordered, costs to appellant to abide event.