No. 86-188 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

INTERSTATE PRODUCTION CREDIT 

ASSOCIATION, a corporation, 

Plaintiff and Respondent, 

ROBERT K. ABBOTT and RITA 

ABBOTT, husband & wife, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Tenth Judicial District, 

In and for the County of Fergus, 

The Honorable Roy Rodeghiero, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Robert K. Abbott, pro se, Lewistown, Montana 

For Respondent: 

Craig R. Buehler, Lewistown, Montana 

Submitted on Briefs: August 14, 1985 

Decided: October 9, 1986 

Clerk 
Mr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

This is an appeal from the order of the District Court, 

Tenth Judicial District, Fergus County, authorizing plaintiff 

to take possession of collateral pursuant to a security 

agreement between plaintiff and defendants. We affirm the 

District Court order. 

Defendants raise two issues on appeal. Defendants first 

argue that plaintiff Interstate Production Credit Association 

(PCA) was not the real party in interest and therefore had no 

right to seize the collateral. Defendants contend they 

entered into an agreement with Central Montana Production 

Credit Association, and that it was incumbent on plaintiff 

Interstate PCA to prove it had an interest in the security 

agreement. Interstate PCA responds that the issue of real 

party in interest was not raised at the hearing, and is 

therefore barred from being considered for the first time on 

appeal. 

Rules 17 (a) and 9 (a), M.R.Civ.P. are identical to the 

federal rules. Rule 17 (a3 states: "Every action shall be 

prosecuted in the name of the real party in interest." Under 

Rule 9(a), M.R.Civ.P., challenges to a party's capacity to 

sue or be sued must be raised by specific negative averment 

in the pleadings. Failure of a party to raise the issue of 

capacity by specific negative averment in the responsive 

pleading or in a motion before the pleadings results in a 

waiver of that defense. Summers v. Interstate Tractor & 

Equipment Co. (9th Cir. 1972), 466 F.2d 42, 49. 

In his opening statement, counsel for Interstate PCA 

explained that Central Montana PCA and Interstate PCA were 
"one and the same identities" [sic]. Defendants did not 

object to Interstate PCA1s standing at that time, or at any 

other time during or after the hearing. Their first 

challenge to PCA1s standing is here on appeal. We therefore 

hold defendants' failure to assert plaintiff's lack of 

standing in a timely manner is a waiver of their right to 

this defense. 

The second issue raised by defendants is whether the 

District Court erred in finding the security agreement debt 

was not discharged by an accord and satisfaction. 

Defendants' claim of accord and satisfaction is based on the 

following facts. 

On January 2, 1985, defendants entered into a loan and 

security agreement with the PCA. They used their farm 

machinery, livestock and crops as collateral. The defendants 

defaulted on their regular loan installment in July, 1985. 

As of December 5, 1985, the date of the notes' maturity, 

defendants owed PCA over $130,000. In the fall of 1985, 

defendants offered to settle the debt with PCA. Defendants 

proposed to give PCA the machinery listed on the security 

agreement, listed at $66,000, plus the proceeds from sale of 

cattle in exchange for extinguishment of the debt. PCA 

refused the offer. 

On December 7, 1985, defendants received a $3,126.60 

check from the sale of cattle at the Public Auction Yards in 

Billings. The check was made jointly payable to defendants 

and PCA, since there was a chattel mortgage on defendants' 

brand to the PCA. Defendants took the check to a print shop 

in Billings and had the following language printed on the 

back of the check: 
Payee Abbott offers his interest in this draft to 

co-payee as an accord between payees, whereby 

acceptance of his interest herein will extinguish 

all obligation existing as allowed by 28-1-1401 

M.C.A. 1983. Endorsement hereof by co-payee is 

acceptance of this offer and is meant to be 

evidence of full satisfaction extinguishing all 

debt as specified 28-1-1402 eta1 supra. [sic] 

Co-payee intends hereby that its endorsement is 

acceptance of part performance after breach and 

that same operates as a full and separate receipt 

for the consideration and evidences full execution 

of accord and releases Abbott fully from all 

obligation existing now and forever. 

The typeset used was similar to that already printed on 

the check by the Public Auction Yards. 

On December 18, 1985, defendants presented the above 

endorsed check to a PCA receptionist-cashier at the Lewistown 

office, saying they had a check for payment on cattle they 

had sold. The receptionist took the check, stamped it for 

deposit, and gave defendants a receipt crediting their loan 

account. Defendants argue that since the receptionist could 

have read the printed endorsement and rejected the check, but 

did not do so, she accepted the terms of the endorsement. 

They argue that the printing on the back of the check is an 

accord, and that by cashing the check, PCA performed the 

satisfaction. Defendants rely on §§ 28-1-1401 through -1403, 

MCA, as support for their contention. 

Montana statutes define accord and satisfaction as 

follows: 

28-1-1401. Accord--definition and effect. An 

accord is an asreement to accept in extinction of 

an obligation something different from or less than 

that to which the person agreeing to accept is 

entitled. Though the parties to an accord are 

bound to execute it, yet it does not extinguish the 

obligation until it is fully executed. 

28-1-1402. Satisfaction--definition and effect. 

Acceptance by the creditor of the consideration of 

an accord extinguishes the obligation and is called 

satisfaction. 
The critical language is that "an accord is an 

agreement." This presupposes a meeting of the minds of the 

parties as to the terms of the accord. This Court has held 

"[aln accord and satisfaction is founded upon contract 

. . .. " Sawyer v. Somers Lumber Company (1929), 86 Mont. 

169, 177, 282 P. 852, 854. The essential elements of a 

contract are 1) parties capable of contracting; 2) their 

consent; 3) a lawful object and 4) adequate consideration. 

Section 28-2-102, MCA. As to the element of consent, it must 

be free, mutual and communicated by each party to the other. 

Section 28-2-301, MCA. 

The element of mutual consent is clearly lacking in the 

alleged agreement between defendants and PCA. Defendants, in 

an otherwise routine transaction, presented the PCA 

receptionist with a Public Auction Yard check, merely telling 

her they were there to present a check from sale of their 

cattle. They did not indicate to her that they were there to 

negotiate an accord. The language printed on the back of the 

check by which the defendants purport to bind PCA, was 

typeset in such a manner as to make the language appear to be 

boilerplate. Defendants admitted at the hearing below that 

they hoped no one at PCA would read the language before 

cashing the check. 

This Court has held that the endorsement of a check by a 

creditor for the purpose of cashing it is not such a writing 

as would give rise to an accord under the Montana statutes. 

Geissler v. Nelson (Mont. 1986), 722 P.2d 632, 635, 43 

St.Rep. 1372, 1376; Sawyer v. Somers Lumber Co. (1929), 86 

Mont. 169, 177, 282 P. 852, 854. The presentation of a check 

in order to trick the creditor into extinguishing an existing 

ohligation does not rise to the level of a new agreement. 
Our review of the record indicates the District Court's 

finding that no accord and satisfaction was executed, and 

that PCA was entitled to take possession of the collateral 

pursuant to the security agreement, is supported by 

substantial, credible evidence. 

We affirm the District Court. 

A@. ,&LA4 Justice 

We Concur: /'