FERN v. FIRST NAT. BANK of ANADARKO

FERN v. FIRST NAT. BANK of ANADARKO
1926 OK 725
249 P. 404
119 Okla. 228
Case Number: 17017
Decided: 09/21/1926
Supreme Court of Oklahoma

FERN
v.
FIRST NAT. BANK of ANADARKO.

Syllabus

¶0 Accord and Satisfaction--Elements--Pleading and Proof.
There are three elements to constitute accord and satisfaction. (1) Liability of the defendant; (2) agreement of the amount to be paid; and (3) acceptance of this agreement in settlement of the original claim or dispute; and where a defendant sets up in his answer accord and satisfaction, he must plead and prove each of the foregoing elements before he is entitled to recover.

Commissioners' Opinion, Division No. 1.

Error from District Court, Grady County; Will Linn, Judge.

Action by First National Bank of Anadarko against B. W. Fern on promissory note. Judgment for plaintiff, and defendant appeals. Affirmed.

Wm. Stacey, for plaintiff in error.
Pruett & Wamsley, for defendant in error.

MAXEY, C.

¶1 The plaintiff in error, defendant below, purchased a hay baler and engine from a dealer in Anadarko named Maine, and as part payment gave a note for $ 500, which was payable 30 days from date. Maine immediately afterwards sold the note to the defendant in error, First National Bank of Anadarko, $ 250 was paid within 30 days, and a new note and chattel mortgage given for the balance due. This note is dated June 14, 1923, and made payable October 1, 1923. The note was not paid when due, and payment was deferred until the spring of 1924, when the defendant in error, bank, commenced pressing for collection, and finally placed the note in the hands of an attorney for collection. On May 26, 1924, the attorneys for the bank wrote the defendant regarding payment of the note, to which he replied, in substance, that he was unable to pay, but that they could take the baler and engine in full payment and return the note to him, or that he would take the baler and engine to the bank. On June 4th, the bank's attorney replied to this letter, stating, in effect, that they could not accept the proposition, but if he would bring the baler and engine in they would sell them at public auction and apply the proceeds on the note. Fern did not reply to this letter, but a short time afterwards found that the bank had sold the baler and engine, and received $ 50 for same, and credited it on the note; and thereafter brought suit against Fern for the balance due on the note. Fern's only defense was accord and satisfaction, claiming that inasmuch as the bank had taken the baler and engine and sold it, that that was a satisfaction of the note. The letters that were passed between Fern and the attorneys for the bank were introduced in evidence, and at the close of the testimony, the bank moved for a directed verdict, which motion was sustained by the court, and judgment entered for the amount due on the note. At the time of this motion for a directed verdict, or a demurrer to the defendant's evidence, as it is styled, the following colloquy took place between the trial judge and the attorneys for defendant:

"The Court: I think the demurrer is good, gentlemen. Mr. Stacey: We do not allege any specific contract in our answer at all; we say we made this proposition and they acted on it, accepted it, and acted on it. The Court: You stated to the jury that your sole defense was that you offered this baler in full payment of the note and that they accepted it and sold it. Your proof shows this state of facts, that you offered to do that and they wrote you back 'we won't do it'--Mr. Stacey: Yes, but they went ahead and did it. The Court: You say they had a mortgage on it, in your proof--Mr. Stacey: The evidence shows they didn't proceed under the mortgage. The Court: You don't sue for conversion; you sue on a positive agreement. They notified you, 'We will take it and sell it, but we will only credit you on the note for the amount it brings, and you will owe us the balance of it'; that they went on and proceeded to sell it. You didn't answer that letter, Mr. Stacey: It was sold right away, if the court please. The Court: I don't know whether it was or not. I will sustain the demurrer; judgment rendered for the plaintiff, and the jury discharged."

¶2 We quote this much from the record to show what the contention of plaintiff in error was. The defendant's answer set up the correspondence between him and the attorneys for the bank, and the taking of the baler and engine and selling it by the bank as accord and satisfaction, but we think the letters that passed between the attorneys and Fern do not constitute an accord and satisfaction. This court, in the case of Gunn v. Fryberger, 71 Okla. 170, 176 P. 248, defines accord and satisfaction as follows:

"To constitute accord and satisfaction there are three elements necessary: (1) Liability of the defendant; (2) agreement of the amount to be paid; and (3) acceptance of this agreement in settlement of the original claim or dispute."

See also, Continental Gin Co. v. Arnold, 52 Okla. 569, 153 P. 160; Gentry v. Fife, 56 Okla. 1, 155 P. 246.