Carl D. Jackson, Doing Business under the Name and Style of C. D. Jackson & Company, Respondent, v. Otto Volkening, Doing Business under the Name and Style of Volkening & Company, Appellant

Carl D. Jackson, Doing Business under the Name and Style of C. D. Jackson & Company, Respondent, v. Otto Volkening, Doing Business under the Name and Style of Volkening & Company, Appellant. Accord and satisfaction — file use of a check sent ‘ ‘ in full settlement of all claims " — the rule that the acceptance of a sum in full satisfaction of a debt for a larger amount does not discharge the debt is not fa/ooi'ed. Where a vendor has a claim against his vendee for a balance due upon the purchase price of a certain lot of goods, and the vendee, in good faith, asserts, as an offset thereto, a claim for a rebate because of the alleged inferior quality of certain other good» purchased and paid for by him, if the vendee sends to the vendor a check for the balance of account, less the amount of the rebate claimed by the vendee, together with the following notice, “ If our settlement is not satisfactory in full payment as marked on face of check, then please return same. The check is sent in full settlement of all claims against us to date, and to be used by you only under those conditions,” and the vendor, without protest or communicating with the vendee, indorses and'uses the check, which is paid in due course of business, the transaction constitutes an accord and satisfaction, even though the vendee’s claim for the rebate was invalid. Semble, that the rule that where a liquidated sum is due the payment of part only, although accepted in satisfaction, is not, for want of consideration, a discharge'of the entire indebtedness, is not looked upon with favor, and is confined strictly to cases falling within it. Appeal by the defendant, Otto Yolkening, doing business under the name and style of Yolkening & Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 30th day of June, 1902, upon the verdict of a jury rendered by direction of the court. The action was brought to recover the sum of $675.69, a balance of account and interest thereon alleged to be owing by the défendant on the purchase price of certain marble bought by two separate contracts in writing dated the 30th day of April and the 29th day of June, 1901, respectively, and on the purchase price of a “Ko can of patent universal marble cement,” and for lighterage on certain other marble. The amended answer confesses and attempts to avoid the plaintiff’s claim by alleging an accord and satisfaction. The defendant assumed the affirmative, and at the close of this evidence, the court, on plaintiff’s motion, directed a verdict for the amount claimed in the complaint, and the defendant excepted. The evidence adduced by defendant showed that prior to the transactions mentioned in the complaint he had purchased of plaintiff, among other things, three certain blocks of marble described as “Blanc P. $ 11442,” and “Blanc P. Block % 19215 2 12215 and $ —,” cut in two pieces and numbered as indicated. The first of these blocks was purchased May 24, 1900, by an order in writing from defendant to plaintiff, which contained the following: “We herewith purchase from you the following six blocks of Blanc P. Marble ex S/S ‘ Tartar Prince.’ * * * “ The price, as agreed, for blocks containing less than twenty-five (25) cubic feet, $4.75 per cubic foot ex steamer. For blocks containing twenty-five (25) feet or more, $5.50 per cubic foot ex steamer. Lighterage and transportation from steamer to our yard to be arranged by and paid for by us. Blocks are to be invoiced according to Morton’s méasurements, which shall be final. We further agree to pay to you the full amount of your invoice in cash, inside thirty (30) days, less Z% discount. “No claims in regard to measurements, quality, defects, loss or damage in transportation, etc., will be raised by us.” The other two blocks were purchased to be delivered on arrival of the steamship 8j>artan Prince by similar contract dated January 17, 1901. Negotiations for the first order were conducted by defendant’s father. The written order filled out for signature was sent by plaintiff to defendant by mail to be signed and returned. The letter returning it contained the following: “ In regard to the Blanc P., we will rely on- Mr. Jackson’s assertion that this is'of the best quality and hope it will turn, out to our satisfaction.” On arrival of the marble sold by the first contract or order it was measured by Morton, designated -in the contract for that purpose, ánd an invoice rendered under date of May 30, 1900. The amount of the invoice was paid July 6, 1900. The defendant’s father testified that_ he first saw this block some time in June and found it was not “ Blanc P.”—i. e., not white marble — but was blue ; that he had told plaintiff, before the marble was ordered, that defendant could not use the marble unless it was of first quality, and after the marble was in the yard that he repeatedly told plaintiff that defendant could not use the marble; and that plaintiff promised to “ try to sell it to someone else; ” that plaintiff suggested that the block be sawed so that it could be determined just what quality it was and that defendant did saw it after it had been ih the yard about ten months, and that it then appeared that it was not even useful for common Italian marble. On cross-examin. ation, he testified that it was discovered before the marble was paid for that it was not good marble and that he told plaintiff that the defendant refused to pay for it, but that plaintiff said that he would have to pay for it or he could not have any more; that plaintiff had' no yards and the marble could not be taken back to his office, but that plaintiff “ said he would take back the block.” Under date of Hay 22, 1901, defendant, after sawing said block of marble, wrote plaintiff as follows: “We are sorry to be again obliged to complain about another Blanc P. Block A. H. F. 11442, which we have just sawn an¿ which is without question the vilest thing we have ever seen in Blanc P. It is, without exaggerating, no better than an F. H. or C. M. B. Block, which you will agree to when you see it. “ Please call here yourself about itwe are badly disappointed and sorry to have to complain. There must be some liberal concession made on this. Such stuff no one can be expected to take for Blanc P. . “We have also not heard from yon yet in reference to the other 2 Blocks of Blanc P. and the Block of G. F. on which you have a rebate under cónsideration.” Plaintiff replied thereto under date of May 24, 1901, as follows : “We * * * beg to advise-you that we forwarded your letter in original to our friends abroad and shall not fail to advise you as soon as we receive their reply. Tou may depend upon us doing everything in our power to further your interests.” Defendant testified that after'these letters plaintiff promised over the telephone.to call and look at the block “and then he would be able to make an adjustment of it when he got to Europe;” that Mr. Kiel, one of plaintiff’s employees, came and looked at the block and took away samples and said “that he had never seen any Blanc P. like that before that there was a general blue cast in the whole marble; that Blanc P. should have “ almost a white- cast, or just a tinge of blue in the white, almost white ; ” and that he did not consider it Blanc P. of any grade; and that its defects were apparent before it was sawed. The marble of this block is still on hand in the yard of defendant’s successor. On March 1, 1901, the defendant wrote to the plaintiff concerning the other two blocks as follows: 12215 “We have just sawed your Blanc P. Block —-—-. It has turned 2 out very poor. We are about to send you a check in settlement of your bill of Jan. 28th, but would like to hear from you first if you will not make some allowance on this block." It is sawed, and you can see it at any moment and judge for yourself. It is no better than Italian marble.. We wish you could call here to-mórrow to get this matter adjusted, and we could give you a check in settlement. * * * 12215 “We presume. —j— is about the same color, but have not sawed it yet.” The plaintiff replied: . “ * * * We beg to advise you that it is beyond our power to make any allowance'on Blanc P. marble. We can only sell what we get, and we never sell this grade of marble guaranteeing the quality. It is absolutely impossible for the quarry owners and shippers to grade the quality before the stock is sawed. Therefore, the prices are placed so low to average the quality. Anyhow, to please yon we have sent our Mr. Kiel to your factory to inspect this sawed block and we shall report this matter truthfully to our shipper. If he is willing to make any allowance, then you 'are perfectly welcome to it.” On March 5,1901, defendant sent plaintiff a check for the.amount of two separate bills including the block 12215, parts 1 and 2, less $660^ the price of that block, and requested a separate bill therefor, the same to be settled later. Plaintiff refused to accept it and returned the check. Defendant testified that he then had a conversation with the plaintiff over the telephone and that he must communicaté with his people in Italy, but that defendant should feel easy and pay for the blocks and would get justice the same as if he hád not paid for them ; that he believed plaintiff and relied on his assurance; that plaintiff had allowed rebates before under similar contracts; that defendant had to have the material that plaintiff imported ; and no one else imported it; that he had to sign the form of order in question in order to do business with the plaintiff; but plaintiff represented “ that in spite of signing these orders, that if there was anything serious the matter with the marble we would get-fair play on it.” Defendant’s father testified that when block No. 12215, parts 1 and 2, was sawed, it was found that twenty-five per cent was wasted in cutting out the colored portions. On March 7, 1901, defendant again sent the check to the plaintiff with another one for the $660, and the bills as rendered- and requested that the bills be receipted and returned. The bills were receipted and returned the following day. Defendant wrote plaintiff again reminding him of the promised rebate, on April 6 and again on May 6, 1901; but continued to deal with him and purchased, among other things, the material described in the complaint* Payment of later bills was demanded by plaintiff, and defendant demanded an adjustment of the former matters. Plaintiff threatened suit. Defendant then sent plaintiff the following letter with check inclosed: “ August 17,01. “ Messrs. C. D. Jackson & Co., “ 1 Madison Avenue : “ Gentlemen.— Enclosed we hand you check for $2763 95/100 in full settlement of our account with you to date. We have. 12215 1221~ deducted 25% of the value of Blanc P. Blocks # x Ji JL on account of their poor quality, and have deducted the entire charge as billed to us by you of Blanc P. Bl. § 11442, together with the cost of sawing. The latter block sawed 64' 4" is therefore here stored for your expense and risk, and on your account,, with the new company, ftobert H. fteid & Co., which has taken over our mill. This block is so poor that in spite of our best, endeavors we could not get them to accept it in the transfer even at the price of ordinary Italian marble. Had they been willing to take it that way, we would have asked your approval, as we have considered this block at your disposal ever since it was sawed, and your-Mr. Thiel saw and inspected it at that time, and was asked to dispose of it. He acknowledged to the writer then that it was the poorest marble he ever saw. “ Below we give you memorandum of how we arrive at amount of our check. We have no other means of arriving at a settlement with you as you have given us no satisfaction on these matters for months past. Our mill having gone into other hands, it is imperative for us to get our accounts adjusted as quickly as possible. “ In reference to the above claims, we have many times communicated with you over the phone with Mr. Jackson and also with Mr. Thiel, also here verbally with Mr. Thiel. At all times we were given assurances that these claims would be adjusted, but nothing has come of it. We also wrote you many times about it, as follows (amongst other letters): March 1, 1901, we wrote you complaining of the poor quality and color of Blanc P. Blocks 12215 2 12215. X —i— March 5, we sent yon check deducting these two blocks, but you returned same with the promise that although they were paid by us t>ur claim would be satisfactorily adjusted later. We then paid for them. Not hearing any more from you, we wrote you again, ■on April 6, about these two blocks. Meantime having frequently made verbal requests for adjustment of Mr. Thiel and Mr. Jackson, we were always assured the matter would be satisfactorily adjusted as soon as they heard from Italy. Another month elapsed, and we wrote you May 6, for adjustment on the 2 Blocks, and also on a O. F. 53492, that had meantime turned out inferior. Again we received more assurances of early adjustment and excuses that word had not yet come from Italy. Between April 6 and May 6, we continually made verbal requests at every opportunity for an adjustment. The claim we made on the C. F. Block, we are now going to release, in order to simplify the settlement, although entitled tó a rebate on same; it is not so serious a matter as the Blanc P. “ On May 22, 1901, we wrote you about the very poor quality of Blanc P. Block # 11442, which we had bought from you and just ■sawn. We also requested Mr: Jackson to call and look at it, before leaving for Europe, which he promised the writer over the phone, in order that he might adjust this matter on the other side with his people lie said. He did not call here, however, but sent Mr. Thiel who acknowledged the rank quality of this block. “ Three months nearly have elapsed now, with no satisfaction for ns on this block, although we were told the matter would be put before the shippers or firm in Italy and adjusted with us soon as reply came. “ Mr. Thiel took away samples of the best part of all of these blocks. The rankest of all is the last mentioned block, and- you and "particularly your shippers know that that should not have been sold ■as Blanc P. and particularly not for good quality. “ If our settlement is not satisfactory in full payment as marked on face of check, then please return same. The check is sent in full settlement of all claims against us to date, and to be used by you only under those conditions. “You billed the Italian blocks July 12th, but we received same only on July 16 or 17. We have at times heretofore paid you in advance of 30 days, and would have done this this time, but for the upset we have been in the last 2 or 3 weeks turning over this plant to the new company. “ Yours truly, “ VOLKENING! & CO.” The check was indorsed and used by plaintiff without protest or communication of any kind and paid in due course of business. Carlisle Norwood, for the appellant. Frederick Hulse, for the respondent. [MAJORITY — Laughlin, J.:] Laughlin, J.: We think the defendant made out & prima facie case of accord and satisfaction, and, upon the undisputed facts in the record,, in the absence of evidence that his claim to a rebate was made in bad faith, a verdict should have been directed for him instead of for the plaintiff. The rule of law is well established, undoubtedly, that where a liquidated sum is due, the payment of part only, although accepted in satisfaction, is not, for want of consideration, a discharge of the entire indebtedness, but this’ rule is not looked upon with favor and is confined strictly to cases falling within it. (Ryan v. Ward, 48 N. Y. 204, 208; Jaffray v. Davis, 124 id. 164; Kellogg v. Richards, 14 Wend. 116; Chicago, Milwaukee, etc., Ry. Co. v. Clark, 178 U. S. 353.) In Kellogg v. Richards (supra), where the acceptance of a promissory note of a third party in payment of a larger liquidated claim was held to be a complete discharge, Nelson, J., said : “ It is true there does not seem to be much, if any, ground for distinction between such a case and one where a less sum of money is paid and agreed to be accepted in full, which would not be a good plea. * * * The rule that the payment of a less sum of money, though agreed by the plaintiff to be received in full satisfaction of a debt exceeding that amount, shall not be so considered in contemplation of law, is technical and not very well supported by reason. Courts, therefore, have departed from it upon slight distinctions.” The compromise of a. doubtful claim, however, is a good consideration for the payment of money, and, in the absence of fraud or mistake, the settlement cannot be subsequently questioned on the ground that the claim could not have been enforced. (Stewart v. Ahrenfeldt, 4 Den. 189; Andrews v. Brewster, 124 N. Y. 433, 439.) In the Jaffray Case (supra) the rule was stated and approved that “ if there be any benefit, or even any legal possibility of benefit, to the creditor thrown in, that additional weight will turn the scale and render the consideration sufficient to support the agreement. * * * All that is necessary to produce satisfaction of the former agreement is a sufficient consideration to support the substituted agreement. The doctrine is fully sustained in the opinion of Judge Andrews in Allison v. Abendroth (108 N. Y. 470), from which I quote: ‘ But it is held that where there is an independent consideration, or the . creditor receives any" benefit or is put in a better position, or one from which there may be legal possibility of benefit to which he was not entitled except for the agreement, then the agreement is not mudum pactum, and the doctrine- of the common law, to. which we have adverted, has no application.’ Upon this distinction the cases rest, which hold that the acceptance by-the creditor in discharge of the debt of a different thing from that contracted to be paid, although of much less pecuniary value or amount, is a good satisfaction, as, for example, a negotiable' instrument binding the debtor and a third person for a smaller sum.” In the case at bar it is- unnecessary, to. determine whether the defendant’s claim for a rebate was valid and enforcible. The court will not inquire into the merits; it is sufficient if there was any plausible ground for a bona fide claim, and it was made in good' faith, and it is immaterial whether the dispute arose over a question of fact or of law. (General Electric Co. v. Nassau Electric Co., 36 App. Div. 510; affd., 161 N. Y. 656; Hills v. Sommer, 53 Hun, 392; Kine v. Farrell, 71 App. Div. 219; Andrews v. Brewster, supra; Goodrich v. Sanderson, 35 App. Div. 546, 551; Vorhis v. Elias, 54 id. 412; Whitaker v. Eilenberg, 70 id. 489; Zoebisch v. Von Minden, 120 N. Y. 406; Fire Insurance Assn. v. Wickham, 141 U. S. 564.) The defendant clearly released his claim to the rebate .and canceled others for which he made no deductions. The settlement thereof would be binding upon him as well as upon the plaintiff ; and the law will presume a benefit to the plaintiff and a loss to the defendant by the release of these claims. (Andrews v. Brewster, supra, 439.) One block of marble did not answer the requirements of the contract at all, and might have been rejected. The weakness of defendant’s claim lay in the fact that with some knowledge of the quality of the marble he paid for it; but the circumstances under which payment was made, it is contended, debarred the plaintiff from claiming an acceptance or that the payment was voluntary. If the claim was asserted in good faith, as the evidence shows, even though it was invalid on account of a misunderstanding of the facts or of the law, it affords a sufficient consideration for the new agreement evidenced by the accord and satisfaction. (Hills v. Sommer, supra.) It was not denied that the defendant had not paid the balance of the account on which the claim is based; but he claimed an offset on account of rebates concerning other marble for which the accounts between the parties showed that he had paid and thus the balance of the account or the extent of the defendant’s liability was disputed. In Nassoiy v. Tomlinson (148 N. Y. 326) the plaintiff claimed a commission of five per cent for selling the defendant’s farm. The defendant did not dispute the, employment or the rendition of the services; but controverted the rate of commissions, he conceding his liability for one per cent. The defendant inclosed a check for $300 to the plaintiff, that being the amount of the commissions figured at the rare of one per centum, with a blank receipt reciting that it was in full, which he requested the plaintiff to sign and return. The plaintiff used the check and did not sign or return the receipt. The court held that this was an unliquidated demand within the rule, and that it did not become a liquidated demand even as to the amount for which the defendant conceded his liability ; and, although the defendant received no benefit, having paid only the amount which he did not dispute, yet it was held that this constituted an accord and satisfaction. I see no difference in principle between that case and this; and that there is no difference, in the application of this rule concerning an accord and satisfaction, between a dispute directly involving the claim upon which an action, is founded and an offset claimed against the same, is established by high authority. (Ostrander v. Scott, 161 Ill. 339; Tanner v. Merrill, 108 Mich. 58; Chicago, Milwaukee, etc., Ry. Co. v. Clark, supra.) The case is this: The plaintiff had a claim against the defendant for a balance of account The defendant, in good faith, asserted something more than a colorable claim as an offset thereto. Thus the defendant’s liability became unliquidated, and he tendered the plaintiff a check in full settlement and imposed as a condition that its acceptance and use should constitute full satisfaction of the plaintiff’s demand against him. This, I think, constitutes an accord and satisfaction within all the authorities. Moreover, it is by no means clear that the plaintiff’s claim, standing alone, was liquidated. The contract furnished the basis of liability, but the amount depended upon the measurement of the marble and the lighterage to be agreed upon,. ' It follows, therefore, that the judgment should be reversed and a new trial granted, with costs to appellant to abide the event. Van Brunt, P. J., Ingraham, McLaughlin and Hatch, JJ., concurred. Judgment reversed, new trial ordered, costs to appellant to abide event.