Court Opinion

ID: 9722911
Source: CourtListenerOpinion
Date Created: 2023-08-26 09:55:05.350668+00
Date Added: 2024-06-11T18:24:41.991436
License: Public Domain

Mr. JUSTICE STOUDER, dissenting: I do not agree with the majority for I believe its holding represents a serious inroad on the extent to which partners may rely on settlements made with one another respecting unliquidated claims. The majority opinion permits a partner, after accepting a payment in full satisfaction of all partnership claims, to avoid that settlement without pleading or proving fraud or deception. Although conceding that partners may effect an accord and satisfaction, as other creditors and debtors may do, the majority opinion undermines that principle by holding that no accord and satisfaction occurred here. No hint is given in the majority opinion as to when partners may enter into an accord and satisfaction. Instead, the majority relies on broad statements of partnership law without applying them to the case at bar. For these reasons I can only conclude that the majority opinion effectively precludes the use of an accord and satisfaction in a partnership context. I believe that an accord and satisfaction occurred in the instant appeal and operated to bar the plaintiffs claim. An accord and satisfaction may be supported on this record either because of the plaintiff s certification of the defendant’s check, or because of the plaintiffs retention of the check for an unreasonable period of time. As a general rule, it is a complete defense to an action for a partnership accounting that there has been a complete private settlement between the partners. (29 Ill. L.&Pr. Partnership §281 (1957).) An accord and satisfaction is a settlement of a former difficulty or dispute which extinguishes the original demand and bars any action or proceeding thereon. 1 Ill. L.&Pr. Accord & Satisfaction §§1, 3, 61 (1953). Under the Uniform Commercial Code, certification of a check operates as an acceptance. When a check is certified at the request of the holder, the drawer is discharged. (Ill. Rev. Stat. 1973, ch. 26, par. 3—411 (1).) If the original obligor is discharged on the instrument (see Ill. Rev. Stat. 1973, ch. 26, par. 3 — 601(l)(g)), he is also discharged on the original obligation. (Ill. Rev. Stat. 1973, ch. 26, par. 3 — 802(1)(b).) Since the plaintiff as holder of the check procured certification, the defendant as drawer was discharged. The defendant, having been discharged on the instrument, was also discharged on the obligation. Therefore, the plaintiffs certification of defendant’s check constituted an accord and satisfaction so as to bar the plaintiffs claim. There is yet another theory upon which an accord and satisfaction may be based. Plaintiffs retention of defendant’s check for an unreasonable period of time constituted an accord and satisfaction so as to bar his claim. Around June 24, 1969, plaintiff received by mail a Storm Master check in the amount of *2,107.90. On the back of this check, the following endorsement was included: “The endorsement of this check constitutes a full release of all claims for travel expenses and other monies covering the association between John Jacobs and Bob Kreutz from January 1, 1969 to May 9, 1969.” Shortly after receiving this check, plaintiff had it certified at the Jefferson Trust & Savings Bank of Peoria. Plaintiff retained the check for almost a year and did not return it until May 6, 1970, when he filed a reply to defendant’s affirmative defense. Although the majority glosses over this fact, the rule is that retention of a check for an unreasonable period of time may constitute an acceptance of the conditions of the tender imposed by the debtor. Where the check or draft of a bank or third person is retained by a creditor and not returned with reasonable promptness, although it is not cashed or deposited, the creditor will be deemed in law to have accepted the offer of satisfaction, and an accord and satisfaction is effected. (1 Ill. L.&Pr. Accord ir Satisfaction §27 (1953).) Compare Day-Luellwitz Lumber Co. v. Serrell, 177 Ill. App. 30 (retention of check for 3M months held unreasonable time as a matter of law), with Danks v. Kropp Steel Company, 21 Ill. App. 2d 252, 157 N.E.2d 694 (approximately 2 years held unreasonable). Even if plaintiff’s retention of defendant’s check for almost a year be deemed reasonable in the circumstances of this case, at a minimum, the plaintiff’s claim would be barred by such retention when he filed the law suit. But, as indicated above, the plaintiff did not return the check until he filed a reply to defendant’s affirmative defense. PlaintifFs failure to return the check at the time he filed this law suit, without cashing or depositing it, operates as an accord and satisfaction, since this conduct constitutes an acceptance of the check as payment or settlement of the claim. The majority opinion relies upon various statements of law relative to the fiduciary obligations of a partner. I do not believe these authorities provide any support for the plaintiff’s position, since the record discloses that the plaintiff’s claim was based neither on fraud or mistake, nor on breach of a fiduciary obligation. For example, in Reed v. Engel, 237 Ill. 628, 86 N.E. 1110, the court held that even though no partnership existed between the parties, if one party was deceived by the other regarding his share of the profits, an accord and satisfaction based on such deception would be set aside. In the instant appeal, the plaintiff s claim was for an accounting, and an examination of the record discloses that no claim of deception or fraud was made. When the plaintiff certified the defendant’s check, the plaintiffs claim was barred by virtue of an accord and satisfaction, and the defendant’s obligations as a fiduciary, were terminated. The plaintiff failed to challenge the validity of this accord and satisfaction on the basis of fraud or nondisclosure, but instead filed an action for an accounting. The accounting could only apply with respect to those matters occurring while the partnership obligation was still in force. The majority emphasizes defendant’s duties as a partner, but fails to place any legal significance upon the plaintiffs certification of defendant’s check. I agree defendant was subject to the obligations of a fiduciary, as was the plaintiff, while the partnership agreement existed, but once that relationship terminated no such obligation continued. The weakness in the majority opinion, I believe, is this failure to distinguish defendant’s duties before the certification and after. Plaintiff’s action for an accounting could only be successful if he avoided the effect of the accord and satisfaction. Having failed to do this, that settlement must stand. The fact that the settlement was made on the wrong basis, or that the plaintiff received an amount considerably less than he was entitled to, are not sufficient an amount considerably less than he was entitled to, are not sufficient reasons for disregarding the settlement. See Janci v. Cerny, 287 Ill. 359, 122 N.E. 507. An examination of plaintiff s brief discloses that he relies primarily on the gross disparity between the original accounting provided by the defendant, as represented by the check defendant gave to plaintiff, and the accounting ultimately approved by the court. It is urged that this disparity proves defendant did not act with the highest standards of honor and honesty required of his fiduciary relationship. This argument seems nothing more than mere bootstrap. As in every case for an accounting decided in favor of a plaintiff, an amount may be found due in excess of that initially provided or offered. But, this consequence falls short of establishing fraud. I believe the plaintiff s actions constituted an accord and satisfaction so as to bar his claim for an accounting either because he certified the check, or because he retained it for an unreasonable period of time. Plaintiff is entitled to the amount of the certified check and no more. I would reverse. I respectfully dissent.