Defendant, Oak Builders, Inc., a general contractor, has appealed a judgment condemning it to pay Charles X. Miller, Inc. $900 wrongfully withheld from the final payment due on a lathing, plastering and stucco subcontract. Appellant contends the trial judge erred by rejecting its defense of accord and satisfaction. We agree and reverse that part of the judgment favorable to plaintiff.
The subcontract price of $16,784 (plus $331 in extras) was partially paid in sums totaling $11,329.20 as work progressed. Partial payments were to be made when appellant was paid by the owner, with the final payment of the balance due upon completion and acceptance of the job. While there remained an unpaid balance on the contract price of $5,785.80, defendant sent plaintiff a check dated August 12, 1971 for $4,126.62 with the notation on its face: "In Full Plaster & Lath Clearview Estates Office Bldg" and on the reverse side, this caveat was typewritten:
A statement accompanied this check itemizing the credits that the general contractor had applied against the final payment due on the contract. It included $200 for furring and $559.18 for cleaning the exterior of the building, which the plaintiff failed to do, plus $900 in liquidated damages for delay in performance.
Immediately upon receipt, an associate of Miller's attorney wrote a letter on August 13, 1971 to John Morvant, president
On August 23 1971, plaintiff's attorney wrote another letter advising that Miller had deposited the $4,126.62 check and was making demand for a balance of $1,659.18 on the Clearview job. Before negotiating the check on August 24, 1971, Miller scratched through both restrictive conditions and immediately below inscribed on the reverse side "Partial Payment," followed by the endorsement "Charles X. Miller, Inc."
When the check was tendered, plaintiff's president was aware there was a dispute between his company and the general contractor. Defendant's president Morvant so testified and his statements in this regard are corroborated by documentary evidence. For example, on numerous occasions defendant's superintendent and its president communicated with plaintiff because its performance was not timely. On several occasions, both verbally and in writing, Morvant warned Charles Miller he would back charge him for some of the liquidated damages for unduly delaying performance. Even Miller in his testimony concedes he was so warned while the contract was still being discharged and long before the check was issued.
Morvant also requested plaintiff to clean the exterior of the building after it finished the job, and upon its failure to fulfill its part of the contractual obligation, defendant was required to have his own men do the job. Although Miller's president denied his workmen had not properly cleaned the building, the trial judge accepted Morvant's statement in this regard.
A third source of dispute known to plaintiff before the check was tendered was its failure to complete "furring" work. Even plaintiff acknowledged a credit was due for this lapse and that none was given in its invoicing prior to receipt of the payment in dispute.
Under these circumstances we cannot agree with the trial judge's conclusion the defense of accord and satisfaction could not be maintained because it was not apparent to the litigants at the time of tender there was a dispute. While it may be true plaintiff did not know the exact dollar figure defendant would claim as a credit or back charges against the final payment, he was well aware appellant planned to back charge for the incomplete work and a pro rata of the liquidated damages assessed against Oak Builders under the contract.
In this case the essential elements to maintain the defense of accord and satisfaction
A statement of the law on accord and satisfaction on this particular issue is set forth in 1 C.J.S. Accord and Satisfaction § 6, at page 479:
Further this concept is expanded in § 33 at pages 522-523:
Thus the elements of accord and satisfaction are satisfied. The defense is meritorious.
Finally we turn to the issue raised by plaintiff's answer to the appeal. Our conclusion that accord and satisfaction estops plaintiff's claim for a balance on the Clearview job obviates a consideration of the contention the trial judge erred in allowing defendant a credit of $559 for cleaning the building exterior. Plaintiff again reurges we award it the sum of $122 for a plastering job on the East End School, a separate contract, for which Miller was not paid. The trial judge rejected this claim because the testimony of Charles Miller bearing upon this issue was contradicted by the testimony of the president of Oak Builders. Calling it a "standoff," the district judge held plaintiff failed to carry the burden of proof. There is nothing in the record to warrant our reaching a different result.
For the reasons assigned, the judgment appealed from is reversed in so far as it cast defendant Oak Builders, Inc., in judgment and in all other respects affirmed, costs of this appeal to be borne by appellee.
Reversed in part and affirmed in part.