Court Opinion

ID: 9814510
Source: CourtListenerOpinion
Date Created: 2023-08-31 23:54:25.073411+00
Date Added: 2024-06-11T15:41:33.993116
License: Public Domain

Patton, J.
I must respectfully dissent from the position reached by the majority in the first assignment of error. It is my considered opinion that since the creditor conditionally endorsed the check, he effected an explicit reservation of his rights and was therefore not subjected to accord and satisfaction. In Westview Concrete Corp. v. Hudecek Cement Contractors, Inc., supra, I expressed this same opinion in my dissent which is incorporated herein:
“* * * In 1910, the Supreme Court of Ohio in Seeds Grain & Hay Co. v. Comger (1910), 83 Ohio St. 169, set forth the general rule that where there is a dispute over an unliquidated debt and the debtor tenders an amount less than the amount in dispute upon the express condition that it shall be in full payment, the creditor must either accept the amount tendered as payment in full or return the check. Sixteen years later, this court of appeals in [J.P.] Burton Coal Co. v. [John P.] Gorman Coal Co. (1926), 22 Ohio App. 383 reached the opposite conclusion in a fact situation virtually indistinguishable from Seeds Grain & Hay Co. Burton Coal Co. was appealed to the Ohio Supreme Court which denied a motion to certify on May 2[5], 1926. It is difficult to rationalize Burton Coal Co. with Seeds Grain & Hay Co., particularly in light of the fact Burton Coal Co. makes no mention of Seeds Grain & Hay Co.
“Since this court’s decision in Burton Coal Co., the issue at bar has been before the Ohio Supreme Court only once. In 1949, the court in Platt v. Penetryn System, Inc. (1949), 151 Ohio St. 451, reaffirmed its position in Seeds Grain & Hay Co. The various courts of appeals in Ohio have followed Seeds Grain & Hay Co. and have either made no mention of Burton Coal Co. or have attempted to distinguish it. The most recent of these cases reported is Morris Skilken & Co. v. Watkins Furniture Co. (1961), 87 Ohio L[aw] Abs. 208.
“However, in 1962, one year after the Morris Skilken & Co. decision, Ohio adopted Section 1-207 of the Uniform Commercial Code (R.C. 1301.13). That section provides:
“ [‘]A party who with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as “without prejudice,” “under protest,” or the like are sufficient.^] (Emphasis added.)
“Although no Ohio courts have applied this section to the situation in the instant case, other jurisdictions have. [Citations omitted.] In Scholl v. Tollman (S.D. 1976), 247 N.W. 2d 490, the *98Supreme Court of South Dakota found that Section 1-207 of the Uniform Commercial Code applied to a situation where a creditor, under protest, deposited a check marked ‘Settlement in Full * * *’ that he had received on an unliqui-dated debt. The court held that because the creditor conditionally endorsed the check, he had effected an ‘explicit reservation of [his] rights’ under Section 1-207 and thereby did not jeopardize his rights to the balance he maintained was due. Scholl has been followed in Miller v. Jung (Fla. App. 1978), 361 S[o]. 2d 788; and in Kroulee Corporation v. A. Klein & Company, Inc. (1980), 103 Misc. 2d 441, 426 N.Y.S[upp.] 2d 206.
“I find Scholl’s interpretation of Section 1-207 to be a salutary one. Were Scholl adopted in this state, a creditor would no longer be at the mercy of the debtor facing the dilemma of either accepting the lesser amount as full settlement or returning the check and gambling his chances of collecting anything. Instead, the risk of loss would be upon the debtor who, after having received protest from the creditor, could stop payment on the check. Even if it were too late for the debtor to stop payment, he would still have the opportunity to protest the remainder the creditor claimed to be due on the debt.* * *” (Footnotes omitted.)
Accordingly, appellants’ first assignment of error has no merit.
Judgment should be affirmed.