Case Name: American Insurance Union v. Wilson
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1927-02-07
Citations: 172 Ark. 841
Docket Number: 
Parties: American Insurance Union v. Wilson.
Judges: 
Reporter: Arkansas Reports
Volume: 172
Pages: 841–846

Head Matter:
American Insurance Union v. Wilson.
Opinion delivered February 7, 1927.
T. E. Helm, for appellant.
J. 8. McKnigM, for appellee.

Opinion:
Hart, J.,
(after stating the facts). Regardless of whether the American' Insurance Union owed O. G. Wilson $1,000, the face of his benefit certificate in the Home Protective Association, or whether it only owed him $363.35, as claimed by the defendant under the rule announced in Knight v. American Insurance Union, ante, p. 303, the judgment in the case at bar was wrong, because the defendant tendered the plaintiff the sum of $363.35 in full payment of the amount due under the benefit certificate and the plaintiff accepted the cheek and cashed it with full knowledge of the condition attached to it. The law is well settled in this State that, where a debtor sends a check to his creditor to apply upon a disputed claim, bearing on its face a statement that it is a payment in full, the reception and collection of the check, by the creditor renders it an accord and satisfaction of the debt. Barham v. Bank of Delight, 94 Ark. 158, 126 S. W. 394, 27 L. R. A. N. S. 439, and Cunningham Co. v. Rauch-Darragh Grain Co., 98 Ark. 269, 135 S. W. 831.
In these cases, as in the case at bar, it was urged by counsel for the plaintiffs that, inasmuch as the plaintiffs immediately wrote to the defendant that the check was accepted only in part payment of the debt, this was conclusive evidence that the. plaintiffs did not agree to the accord and satisfaction of the demand.
In the first case cited, in answer to this contention, the court said: "But, if the offer of payment was made upon condition and the plaintiffs so understood it, there was but one of two course open to them, either to decline the offer and return the check, or to accept it with the condition attached. The moment the plaintiffs indorsed the check and collected it, knowing that it was offered only-up on a condition, they thereby agreed to the condition, and were estopped from denying such agreement. It was then that the minds of the parties met, and the contract of accord and satisfaction was complete in law."
Again, in the second case cited, it was held that, where a'debtor sends a check to his creditor, bearing upon its face a statement that it is a payment in full, the reception and collection of the check by the creditor renders it an accord and satisfaction of the debt; and it is immaterial that the creditor wrote the debtor stating that the check was not accepted as a settlement, where no offer was made to return the check if desired by the debtor.
The reason is that the plaintiff could only accept the money upon the terms offered, which was in full settlement of his demand. He could not accept the benefit and refuse the condition. If the plaintiff was not satisfied with the sum paid him, good faith required him to refuse to accept the money, to return it to the defendant, and to bring suit for the amount he claimed to be due him. By accepting the smaller sum, which was tendered upon condition that he receive it in full payment of his demand, the plaintiff is estopped from denying the agreement.
The plaintiff in the case at bar was fully informed in the letter which accompanied the check of the condition imposed upon him and the grounds upon which the defendant imposed it. This is not a case of a liquidated claim which cannot be discharged by payment of less than it face value. The term ' ' liquidated, " when used in connection with the subject of accord and satisfaction, has reference to a claim which a debtor does not dispute. Schnell v. Perlman, 238 N. Y. 362, 144 N. E. 641, 34 A. L. R. 1023; and Chicago, Milwaukee, etc. Rd. Co. v. Clark, 178 U. S. 353, 20 S. Ct. 924.
Later cases from this court recognizing the rule are Pekin Cooperage Co. v. Gibbs, 114 Ark. 558, 170 S. W. 574, and Collier Commission Co. v. Wright, 165 Ark. 338, 264 S. W. 942, and cases cited.
The plaintiff, having accepted the check and cashed it, must be deemed also to have accepted the condition attached to it, which was that it was in full settlement of the amount due by the defendant to the plaintiff under the benefit certificate. The undisputed evidence shows that there was a tona fide dispute as to the amount due under the benefit certificate, and the payment of a smaller sum in satisfaction of the entire claim was a sufficient consideration for the release of the balance of the amount claimed.
The result of our views is that the judgment must be reversed, and, inasmuch as the plaintiff has cashed the check and used the proceeds, his cause of action will be dismissed here. It is so ordered.