Free Appendix - District Court of California - California

Case 5:07-cv-04808-JF

Document 60-6

Filed 07/25/2008

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EXHIBIT 18

1219457.1

Case 5:07-cv-04808-JF

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Wetlavv
2 Cal.AppAth 556 2 Cal.AppAth 556, 3 Cal.Rptr.2d 340
Page i

2 Cal.App.4th 556, 3 Cal.Rptr.2d 340

~Pittan v. Canham

Contracts 95 ~279(2)
95 Contracts

Cal.App. 2 Dist., 1992.

Court of Appeal, Second District, Division 6, California. Jeffrey A. PITTMAN, Plaintiff and Appellant,
v.

95V Performance or Breach 95k279 Tender of Performance
95k279(2) k. Suffciency of Tender. Most

Cited Cases
"Concurrent conditions" are conditions precedent which are mutually dependent, and only important

Lily V. CANHAM, Defendant and Respondent. Civ. No. B055532.
Jan. 8, 1992.

difference between concurrent condition and

condition precedent is that condition precedent must

Review Denied March 25, 1992.

be performed before another duty arises, whereas
tender of performance is suffcient in case of
condition concurrent.

Purchaser brought action against vendor for breach of land sale contract. The Superior Court, San Luis Obispo County, No. 65170,Christopher G. Money, 1., granted vendor's motion for nonsuit on grounds that

il Vendor and Purchaser 400 ~76
400 Vendor and Purchaser
400II Constrction and Operation of Contract
400k74 Time of

time was of essence of contract and neither party
tendered timely performance. Purchaser appealed.

The Court of Appeal, Gilbert, 1., held that failure of
both parties to perform concurrent conditions during

Performance and Payment 400k76 k. Concurrent Acts. Most Cited

time for performance resulted in discharge of both
parties.

Cases

Affrmed.
West Headnotes

In contract for sale of land where time was made the essence of the contract, provision requiring vendor to deliver recordable deed into escrow and provision requiring purchaser to deposit money, note and deed
of trst were concurrent conditions, and failure of
paries to tender their performances by the date set

il Contracts 95 ~279(1)
95 Contracts

for performance discharged both parties.

il Deposits and Escrows 122A ~15
122A Deposits and Escrows 122AII Conditional Deposits or Escrows
122Ak 15 k. Constrction of Escrow

95V Performance or Breach 95k279 Tender of Performance 95k279(1) k. Necessity. Most Cited Cases

Where contract creates concurrent conditions and
neither part tenders timely performance, both parties

Agreements in General. Most Cited Cases

are discharged.

il Contracts 95 ~225
95 Contracts

Escrow instruction stating that time was of the essence and that "(i)f no demand for cancellation is made, you wil proceed to close this escrow when the
principals have complied with the escrow

instrctions," could not reasonably be constred as meaning time was not trly of essence and did not
purport to give par the unilateral right to demand

9511 Constrction and Operation

951I(E) Conditions

95k225 k. Concurrent Conditions. Most Cited Cases

performance after time for performance had passed; provision merely instrcted escrow holder not to cancel escrow on own initiative, but to close escrow
should parties voluntarily and notwithstanding

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discharge mutually decide to perform.

provided: "Time is of the essence of these
instrctions. If

this escrow is not in condition to close

æ Costs 102 ~260(1)
il Costs

102X On Appeal or Error 102k259 Damages and Penalties for Frivolous Appeal and Delay
i 02k260 Right and Grounds
102k260(1) k. In General. Most Cited

by the TIME LIMIT DATE of December 24, 1987 and written demand for cancellation is received by you from any principal to this escrow after said date you shall act in accordance with (other provisions of the instructions).... (~) If no demand for cancellation is made, you wil proceed to close this escrow when
the principals have complied with the escrow instructions." Paragraph 2 of section 4 of the

Cases

Sanctions for frivolous appeal should be used most
sparingly to deter only the most egregious conduct.

instrctions provided, however, that the instructions are not intended to amend, modify or supersede the
contract.

**341 *557 Lowthorp, Richards, McMilan, Miler, Conway & Templeman and Patrick T. Loughman,
Oxnard, for plaintiff and appellant. Ilan Funke-Bilu, San Luis Obispo, for defendant and respondent. GILBERT, Associate Justice. When is a contract no longer a contract? When it
contains concurrent conditions and neither part
tenders timely performance. Unlike love or taxes

About the second week of December Canham gave a signed copy of the escrow instrctions to Pittman for

delivery to escrow. With the instrctions, Canham
included a signed deed to the propert. The escrow company pointed out, however, that the deed had not

been notarized. When Pittman contacted Canham
she told him she would have it notarized at an escro;

company near her home.

concurent conditions do not last forever. '

il We hold that where a contract creates concurent

The December 24 closing date came and went. Canham had not tendered a notarized deed nor had Pittman tendered $24,000, a promissory note or deed
of trst.

conditions and neither part tenders timely

performance, both parties are discharged. We affirm

the judgment.
*558 FACTS

By March 1988, Canham had been contacted by another broker who wanted to list the propert. On March 2 i she told Pittan she wanted $ i 0,000 per
acre. Pittan embarked on an effort to find out what

Jeffrey Pittman was a licensed real estate broker. In 1987 he contacted Lily Canham, then 85 years old, to purchase a parcel of propert she owned in San Luis

a fair price for the propert was.

In May 1988, Canham told Pittman that she had
entered into a contract with other purchasers to buy
the propert for $600,000. Pittman wrote a *559

Obispo County. After many telephone calls to Canham between May and November 1987, she
agreed to sell a 56-acre parcel to Pittan for

letter demanding that she perform on his contract, but
she sold the propert to the other buyers.

$250,000.

Pittman drafted the contract dated November 24 1987, and deposited $1,000. The contract called for ~ further deposit of $24,000 in cash with the balance of the purchase price to be paid by a note secured by a
deed of trst on the propert. Closing of escrow was

Pittman sued Canham for breach of contract. At trial
he attibuted the difference in the $250,000 he

offered Canham and the $600,000 sales price six months later to an escalating real estate market.

to be within 30 days. The contract provided that
"(t)ime is of the essence. All modification or

At the end of Pittman's case, Canham moved for a judgment of nonsuit. (Code Civ.Proc.. & 58Ic.) A
ruling on the motion was reserved, however, until all the evidence was presented. After the presentation of

extensions shall be in writing signed by the parties."

The parties executed escrow instrctions that

the evidence, the court granted the motion on the ground that time was of the essence of the contract

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and neither part tendered performance. The court
also gave a statement of decision in which it found

contract, the failure of both parties to tender

that Pittman and not Canham was responsible for the

delay in performance, **342 that Canham had not
waived time for performance, and that Pittman defaulted when he failed to tender the purchase
money, note and deed of

performance by December 24, 1987, discharged both from performing. Neither part can hold the other in default and no cause of action to enforce the contract arises. (See Pitt V. Mallalieu (1948) 85 Cal.App.2d
77.81. 192 P.2d 24.)

trst by December 24, 1987.

il Pittman relies on the portion of the escrow

DISCUSSION
Pittan contends the trial cour erred in finding he

instrctions that states: "Time is of the essence of
these instrctions.... If

this escrow is not in condition

was in default for failng to tender the purchase

to close by the TIME LIMIT DATE of December 24, 1987 and ... (i)f no demand for canceIlation is made,
you wil proceed to close this escrow when the

money note and deed of trst. He concedes that the
result reached by the trial court would be proper if his performance had been a condition precedent, but he
points out that here the contract provision requiring

principals have complied with the escrow

instructions." He claims this provision shows that
time was not trly of

the essence in this transaction.

Canham to deliver a recordable deed into escrow and the provision requiring him to deposit money, a note
and a deed of trst are concurrent conditions. Pittman

But it is diffcult to see how a paragraph that begins
with the words "(t)ime is of the essence" could

claims that unlike the failure to perform a condition
precedent, the failure of both parties to perform

reasonably be constred as meaning time is not trly
of the essence. The provision relied on by Pittman
merely instrcts the escrow holder not to cancel

concurent conditions does not automaticaIly

terminate the contract, but that one part must tender

performance before the other par is in default. (Citing Chan v. Title Ins. & Trust Co. (1952) 39
Cal.2d 253.246 P.2d 632; Rubin V. Fuchs (1969) i

escrow on its own initiative, but to close escrow
should the paries voluntarily and notwithstanding

discharge mutuaIly decide to perform. As we read the
paragraph, it does not purport to give a par the

Ca1.d 50. 81 Cal.Rptr. 373. 459 P.2d 925; Miler &
Starr. Cal. Real Estate (2d ed. 1989) & I: 1 35. p. 488.)
il Concurrent conditions are conditions precedent

unilateral right to demand performance after the time

for performance has passed. Such a constrction
would render meaningless the parties' agreement that time is of the essence.
We appreciate the reluctance of a buyer to act first by placing money into escrow. But in a contract with

which are mutually dependent, and the only

important difference between a concurrent condition

and a condition precedent is that the condition
precedent must be performed before another duty

arises, whereas a tender of performance is suffcient
in the case of a condition concurent. (i Witkin.

concurrent conditions, the buyer and seller cannot keep saying to one another, "No, you first."
Ultimately, in such a case, the buyer seeking

Summarv of Cal. Law (9th ed. 1987) Contracts. & 737. Pp. 667-668.)
il Contrary to Pittan's assertion, the failure of

enforcement comes in second; he loses.

Chan v. Title Ins. & Trust Co" SUlJra, 39 Cal.2d 253.
both
246 P.2d 632. is of no help to Pittman. There the

parties to perform concurrent conditions does not
leave the contract open for an indefinite period so that either part can tender performance at his leisure.
The failure *560 of both parties to perform

court found no default because time for performance

had been waived. (ld" at p. 256. 246 P.2d 632.)

Here the trial court held that there has been no
waiver, and there is nothing in the record that

concurrent conditions during the time for

requires us to disturb that finding.
**343 Nor is Pittman aided by Rubin V. Fuchs, supra. 1 Cal.3d 50. 81 Cal.Rptr. 373. 459 P.2d 925. There
buyer promised to deposit cash and a purchase

performance results in a discharge of both parties'

duty to perform. Thus, where the parties have made time the essence of the contract, at the expiration of time without tender by either part, both parties are
discharged. (3A Corbin on Contracts (\960) § 663, p.
18 i.) Here, because time was made the essence of the

money deed of trst before the date set for close of
escrow. Seller promised to record a tract map prior to

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that date. Recordation of the tract map would supply
the legal description for the deed of trst. SeIler,

however, did not record the tract map, and buyer
could therefore not deposit a deed of

trst.

*561 Our Supreme Court held that seIler could not
rescind for buyer's failure to perform because seller's

performance was necessarily precedent to
performance by the buyer. (Rubin v. Fuchs, SUlJra,

50. 54. 81 Cal.Rptr. 373.459 P.2d 925.) Here there

was no impediment to Pittman's tender of
performance.

il Canham requests sanctions for a frivolous appeaL. But sanctions should be used most sparingly to deter only the most egregious conduct. (In re Marriaze or Flaherty (1982) 31 Ca1.d 637. 651. l83 Cal.Rptr.
508.646 P.2d 179.) This appeal does not qualify for sanctions.

The judgment is affirmed. Costs are awarded to
Canham.

STONE, PJ., and YEGAN, 1., concur. Cal.App. 2 Dist.,1992. Pittman v. Canham 2 Cal.AppAth 556, 3 Cal.Rptr.2d 340
END OF DOCUMENT

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EXHIBIT 19

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Case 5:07-cv-04808-JF

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Welm
234 P.2d 16
37 Cal.2d 592, 234 P.2d 16

Page i

37 Cal.2d 592, 234 P.2d 16

~POTTER v. PACIFIC COAST LUMBER CO. OF CALIFORNIA CAL. 1951.

Where a claim is disputed or unliquidated and tender
of a check or draft in settlement thereof is of such

character as to give creditor notice that it must be
accepted "in fuIl discharge of his claim" or not at all, retention and use of such check or draft constitutes an "accord and satisfaction", notwithstanding creditor protests against accepting tender in full payment.

Supreme Court of California, in Baile POTTER
v.

PACIFIC COAST LUMBER CO. OF CALIFORNIA
et al.

L. A. 21779.
July 27,1951.

il Accord and Satisfaction 8 ~10(1)
-- Accord and Satisfaction

8k6 Part Payment 8k 1 0 Disputed or Unliquidated Claims
8k i O( i ) k. In General. Most Cited Cases

G. E. Potter brought an action against Pacific Coast

Lumber Company of California, and others, to
recover aIleged balance due on sale of carloads of

lumber to defendant. The Superior Court, San Luis

Obispo County, Ray B. Lyon, J., 222 P.2d 54.
entered a judgment for plaintiff and defendants

For principle of accord and satisfaction to apply in disposition of an unliquidated claim, there must be a bona fide dispute between the parties but it does not matter that there was no solid foundation for the dispute as the test is whether the dispute was honest
or fraudulent.

appealed. The Supreme Court, Spence, 1., held that

an accord and satisfaction was established as a
matter oflaw.

il Accord and Satisfaction 8 ~10(1)
-- Accord and Satisfaction

Judgment reversed with directions.
Carter, 1., dissenting.

8k6 Part Payment
8kl0 Disputed or Unliquidated Claims

8klOO) k. In General. Most Cited Cases
West Headnotes

il Accord and Satisfaction 8 ~11(3)
--Accord and Satisfaction
8k6 Part Payment

For principle of accord and satisfaction to apply in disposition of an unliquidated claim, debtor must make it clear that acceptance of what he tenders in satisfaction of claim is subject to condition that it
shaIl be in fuIl satisfaction.

8k11 Conditioned on Acceptance as Payment
in Full

il Appeal and Error 30 ~101i.(8.1)
30 Appeal and Error
30XVI Review

8k 11(3) k. Effect of Protest. Most Cited
Cases
Compromise and Settlement 89 ~5(2)

30XVI(1) Questions Findings
30XVI(l) Findings of

of Fact, Verdicts, and

Court

89 Compromise and Settlement 891 In General 89k1 Natue and Requisites 89k5 Making and Form of Agreement
89k5(2) k. Acceptance. Most Cited

30k I 0 I I On Conflcting Evidence 30k1 01 I. I In General 30k 10 I 1.1(8) Particular Cases or

Questions

30kI011.(8.1) k. In General.
Most Cited Cases
(Formerly 30k101 i. 1(8), 30kl01 1(1))

Cases

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37 Cal.2d 592, 234 P.2d 16

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A finding of trial cour, upon conflcting evidence
wil not be distubed on appeal if

in Full

there is evidence of

a substantial character which reasonably supports

8k11(2) k. Remittances on Condition. Most Cited Cases
Compromise and Settlement 89 ~5(2)

judgment.

æ Appeal and Error 30 ~996
30 Appeal and Error
30XVI Review

89 Compromise and Settlement 891 In General
89k 1 Nature and Requisites
Fact, Verdicts, and

30XVI(1) Questions of Findings 30XVI(1) i In General
Proved. Most Cited Cases

89k5 Making and Form of Agreement
89k5(2) k. Acceptance. Most Cited

30k996 k. Inferences from Facts
Conclusions of a trier of fact from evidence or

Cases Where defendant bought carloads of lumber from

plaintiff and defendant mailed to plaintiff sight draft,

attached to which were vouchers identifying
shipment for which payment was intended and setting
forth amount of corresponding invoice, with
deductions noted, and vouchers contained statements

testimony that is reasonably susceptible of conflcting
or opposing inferences wil not be set aside by an

appellate tribunaL.

that payment of draft was accepted in full settlement

il Appeal and Error 30 ~1010.1(6)
30 Appeal and Error
30XVI Review

of account, and plaintiff cashed drafts knowing of
dispute as to deductions taken by defendant, and

defendant did not regard accounts as open for further
adjustment and settlement, cashing of checks
of Fact, Verdicts, and

30XVI(I Questions
Findings

constituted as matter of law an accord and
satisfaction.

30XVI(I3 Findings of Court

30kl01O Suffciency of Evidence in
Support

W Compromise and Settlement 89 ~
89 Compromise and Settlement 891 In General
89kl Nature and Requisites

30kl01O.IInGeneral

30kI010.1(6) k. Substantial
Evidence. Most Cited Cases
(Formerly 30k101O(I))
The principle that a finding of trial court upon

89k2 k. In General. Most Cited Cases
Compromises are favored in law and a man is
allowed to negotiate for purchase of his peace

conflicting evidence wil not be disturbed on appeal if there is evidence of a substantial character which

reasonably supports judgment, and principle that
conclusions of trier of fact from evidence or

without prejudice to his rights.

testimony that is reasonably susceptible of conflcting

l2 Appeal and Error 30 ~1011.1(8.1)
30 Appeal and Error
30XVI Review

or opposing inferences will not be set aside by an
appellate tribunal, do not relieve an appellate court of
its duty of analyzing record to determine whether

there is any evidence of substantial character which

30XVI(I Questions
Findings

of Fact, Verdicts, and

reasonably supports judgment as applied to peculiar
facts of case.

30XVW)3 Findings of Cour
30k 1O Ii On Conflcting Evidence

il Accord and Satisfaction 8 ~11(2)
-- Accord and Satisfaction

30kl011. In General

30kI011.(8) Particular Cases or
Questions

8k6 Part Payment
8k 1 i Conditioned on Acceptance as Payment

30kI011.(8.1) k. In General.
Most Cited Cases (Formerly 30kl01 1.1(8), 30k101 1(1))

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37 Cal.2d 592, 234 P.2d 16

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In cases of conflcting evidence, or where contrary

inferences can be drawn from uncontradicted proof,

Where there is a real and genuine contest between the parties as to amount due and a settlement is had

whether a dispute exists concerning amounts due, and

whether tender was on condition that acceptance
would be in full satisfaction, are primarily questions of fact for trial court in determination of issue as to
whether there has been an accord and satisfaction.

without fraud or misrepresentation, for an amount
determined upon as a compromise between
conflicting claims, settlement should be upheld,

although such amount is materially less than amount claimed by person to whom it is paid.

1! Appeal and Error 30 ~ioOl(1)
30 Appeal ánd Error
30XVI Review

**17*594 Buck & O'Reily and John F. Runner, all
of San Luis Obispo, for appellants.

Renetzky & Davis, Paul W. Davis, all of San Luis
of Fact, Verdicts, and

30XVHI) Questions Findings 30XVI(I2 Verdicts
Support

Obispo, and Laura O. Coffeld, Napa, for respondent. SPENCE, Justice.

Plaintiff sought to recover the aIleged balance due
under contracts for the sale of three carloads of

30k i OO 1 Suffciency of Evidence in

lumber. Defendants pleaded an accord and

satisfaction as an affrmative defense. The trial court
30klOOl(I) k. In General. Most

made findings rejecting said defense and entered

Cited Cases

judgment in favor of plaintiff for the sum of
$1,01 1.96. From such judgment, defendants appeaL.

Appeal and Error 30 ~1010.1(10)
30 Appeal and Error
30XVI Review

Defendants argue the single proposition that the findings against the existence of an accord and
satisfaction are contrary to the undisputed facts. An
Verdicts, and

30XVI(I) Questions of Fact, Findings 30XVI(I3 Findings of Court
Support
30k101O.1 In General

examination of the record sustains defendants'

position.

30k1010 Suffciency of Evidence in
30k1010.1(8) Particular Cases
and Questions

Plaintiff, a lumber broker in Oregon, contracted to sell three carloads of Oregon lumber to defendant
company, a California corporation with offces in San
Luis Obispo. Defendants C. V. Wilson and S. G.
Truitt, as vice-president and purchasing agent,

30kI01O.1(l0) k. Contracts in
General; Sales; Landlord and Tenant. Most Cited Cases (Formerly 30kI01O(I))
Unless there is a lack of evidence to support jur

respectively, of defendant company, negotiated the
contracts. The terms of sale specified grade, widths,

and surfacing of the lumber and a stated price per *595 1,000 board feet 'F.O.B. mil,' with 2 per cent
discount for cash. At the trial defendants claimed that under business custom with respect to such sales of

finding or decision of trial court as to whether there

has been an accord and satisfaction, their
determination of that issue wil not be disturbed on
appeaL.

Oregon lumber 'F.O.B. mil,' the freight charge would be at the 'Portland rate' that is, the buyer would be obligated to pay the shipping cost as
computed from Portland to the point of destination
unless a different zone or rate was specified; that such uniform practice prevails so that the buyer may

il Compromise and Settlement 89 ~6(2)
89 Compromise and Settlement 891 In General
89kl Nature and Requisites

know what his' laid down cost is' for lumber as
supplied from various smaIl mils located in different
parts of the state, and any freight cost that the seller

89k6 Consideration
89k6(2) k. Unliquidated, Disputed, or

Doubtful Claims in General. Most Cited Cases

'may have to get the lumber into the (applicable) zone is reflected in the m il price'; and that on such basis, the buyer would regularly charge back to the seller any 'excess freight' paid to the carrier. Plaintiff

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37 Cal.2d 592, 234 P.2d 16

denied having any knowledge of such applicable
'zone system' and the existence of such business
custom. In none of

In remitting for each of the three shipments,

defendant company mailed a check or draft, attached
to which was a voucher identifying the shipment for

the three contracts in question was

there anything said concerning freight or the shipping
rate chargeable except the bare term 'F.O.B. milL.'

which payment was intended and setting forth the
amount of the corresponding invoice, with deductions noted. Printed at the top of each such voucher was the

The first order called for shipment from Oregon to San Luis Obispo. That carload arrived with a freight
bil ITom Spokane, Washington, to San Luis Obispo,

following notation: 'Payee wil please detach and
keep this statement. Payment of sight draft attached hereto is accepted in full settlement of account stated

as the result of an erroneous routing. Defendant

below, and endorsement thereof wil constitute
payee's receipt to the Pacific Coast Lumber Company of California. 'Plaintiff cashed each of the three

company paid the carrier's freight bilL. It then
remitted $2,930. I4 by check to plaintiff, this sum
representing the amount ofplaintifts invoice, less the 2 per cent cash discount and $86.40 as 'freight
overcharge' being the difference between the freight
actually paid to the carrier and the freight from

remittance checks or drafts, and then later wrote to
defendant company seeking additional payments.

Portland, Oregon.
The other two orders called for shipment,

The trial court found that defendants were indebted to plaintiff in the sum of $ 1,011.96 (apparently allowing

defendants with respect to the San Luis Obispo car
the deduction of $86.40 for the 'freight overcharge';
and with respect to the Santa Barbara car the

respectively, to Grover City, California, and Santa Barbara. The lumber in each of these carloads was
rough-miled at Seneca, in eastern Oregon; one

deductions for 'scant loading,' improper surfacing, and 'random widths'). With respect to defendants'
special plea of an accord and satisfaction, the court

carload was then shipped to Brewster, Oregon, for

'remanufacture,' and ITom there transported to Grover City, while the other carload was shipped to Portland for 're-manufacture,' and thence to Santa Barbara. On these two shipments defendant company remitted to plaintiff by check the respective amounts of $2,594.76 and $1,772.89, having deducted in each
instance the 2 per cent cash discount and the freight
rate chargeable from eastern to western Oregon,

found that the allegations thereof (except that the checks were actually sent to plaintiff and cashed by
him) were untre, thereby finding that it was not tre that by the voucher attached to each check defendant

company 'informed plaintiff that it intended the
check as full payment of a certain disputed claim,' or

that the vouchers 'informed plaintiff that the said

checks were intended as full payment,' or that
'plaintiff, by the acceptance, endorsement and/or
depositing for collection of said drafts, or in any

respectively**18 $500.35 and $361.49. In addition,

with respect to the Santa Barbara car, these further
deductions were made: '$35.71 for 'scant loading,' an extra charge exacted by the carrier because the car

had not been *596 fully loaded; $111.81 or $5 per
thousand board feet, for improper surfacing of the lumber; and $223.61, or $10 per thousand board feet,

other manner, agreed to any settlement of the amount(s) due plaintiff. 'Defendants properly contest the propriety *597 of these findings relating to the alleged accord and satisfaction as without support in
the record.

for 'random widths.' With regard to these latter two
items on the Santa Barbara car, it is undisputed that the contract called for twelve-inch stock exclusively,

r i H2l(3) The great weight of authority undoubtedly supports the rule that where a claim is disputed or

surfaced four sides; and that the lumber actually

shipped consisted of 'random widths,' all of it less than twelve-inch, and was surfaced on two sides

unliquidated and the tender of a check or draft in
settlement thereof is of such character as to give the creditor notice that it must be accepted 'in full discharge of his claim' or not at all, the retention and use of such check or draft constitutes an accord and satisfaction (I CJ,S.. Accord and Satisfaction s 34, page 528); and it is immaterial that the 'creditor protests against accepting the tender in full payment'

only. According to defendants, the basis of the
deduction for improper surfacing was the cost, at
Santa Barbara, of having the lumber surfaced as

ordered; and the basis for the deduction for 'random

widths' was the difference in retail price between the lumber ordered and that actually received.

(I AmJur. s 26, p. 228), for in such case 'the law
permits but two alternatives, either reject or accept in

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accordance with the condition' (Wiliston on
Contracts, Rev.Ed., Vol. VI, s 1856, p. 5220; see,
also, I Cal.ur. s 10, p. 134; annos. 34 A.L.R. 1035.

the record here does not justify the finding that no
accord and satisfaction was effected by the parties

in settlement of plaintiffs claim, and that the trial
court erred, as a matter of law, in adjudicating this
issue contrary to defendants' position. 2 Cal.ur. s

1044; 75 A.L.R. 905. 916:Lapp-Gifford Co. v.

Muscoy Water Co.. 166 Cal. 25. 27. 134 P.
989:Berger v. Lane. 190 Cal. 443. 447. 213 P.

542, p. 918.

45:SitJrra and San Francisco Power Co. v. Universal

Electric & Gas Co.. 197 Cal. 376. 387. 241 P.
76;Johnston v. Burett. 17 CaL.App. 497. 501. 120 P.

436;RusseIl v. Riley & Peterson. 82 Cal.App. 728.

Here the check or draft in each instance remitted to plaintiff in payment for the respective carloads of lumber had attached a voucher with a printed
statement thereon declaring, in clear and unequivocal terms, that the tender was made 'in fuIl settlement of
account stated below' and callng for acceptance

737-738. 256 P. 557:Robertson v. Robertson. 34

Cal.App.2d 113. 118. 93 P.2d 175.0f course, for the

principle of accord and satisfaction to apply in
disposition of an unliquidated claim, there must be a

'bona fide dispute' between the parties (Stub v.
Belmont. 20 Cal.2d 208. 218. 124 P.2d 826. but 'it matters not that there was no solid foundation for the
dispute' as the test is whether 'the dispute was honest

upon that precise condition. Plaintiff clearly
understood, according to his own admissions at the
trial, that defendant company intended such

remittances to constitute payment in full of the
particular claim as plainly identified on the voucher. Thus, plaintiff, in response to the question of whether he had talked to defendant Wilson before cashing the
draft tendered in payment for the first shipment,

or fraudulent'.**19B. & W. Engineering Co. v. Beam. 23 Cal.App. 164. 171. 137 P. 624; see 1
C.J.S.. Accord and Satisfaction s 32(b ), pages 515517; 1 Cal.ur. s 7, p. 131; Berger V. Lane. supra. 190

Cal. 443. 450-451. 213 P. 45;ShorteIl V. Evans-

Ferguson Corp.. 98 Cal.App. 650. 663. 277 P.
519:Everhardv v. Union Finance Co.. 115 Cal.App.

they were going to be that way about it, the best thing for me to
stated: 'Yes, I think I did; and then I felt, if

460. 465. 1 P.2d 1024.Also, the debtor must make it

clear that acceptance of what he tenders is subject to

the condition that it shall be in full satisfaction. i
Am.Jur. s 22, p. 223; Ann.Cas.1915A, 954; Lapp-

Gifford Co. V. Muscoy Water Co.. supra. 166 Cal. 25. 27-28. 134 P. 989;Biaggi V. Sawyer. 75 Cal.App.2d
105. 113-114. 170 P.2d 678.

do was to cash the draft so they couldn't stop payment on the draft. This was not a check, it was a draft. I knew that, with a dispute of that tye, that there would be a question as to my accepting that as final payment, but I figured that a bird in the hand was better than nothing. 'Plaintiff further testified that 'at the time (he) cashed (the) checks, (he) knew there
was a dispute as to the amounts'; that he checked 'the

deductions' that were taken, knew the 'ueight'
amounts to be 'so much' and had 'notice' of

the other

r4lrH6H71 In the application of

these settled rules to

items as shown 'uom the attached statement(s).'
From this testimony it plainly appears that there was a bona fide dispute between the parties, not only as to the assessable ueight charges, but also as to the other
matters listed by defendant company as deductible

the present case, defendants properly recognize that

the trial cour upon conflcting evidence wil not be distubed on appeal if there is evidence of a substantial character which reasonably supports the judgment. 'Fewel & Dawes. Inc.. V. Pratt. 17 Ca1.2d 85. 89. 109 P.2d 650.Likewise *598 it must be said that the conclusions of the trier of fact from evidence
'A finding of

items upon tender of the checks or drafts in full
settlement, and that plaintiff so understood the
explicit terms of the proffered settlement. *599 In

or testimony that is reasonably susceptible of conflcting or opposing inferences wil not be set

such circumstances, plaintiffs acceptance,

aside by an appellate tribunaL. Estate of Bristol. 23 Cal.2d 221, 223. 143 P.2d 689.But these principles
do not relieve an appellate cour of its duty of

endorsement, and cashing of the checks or drafts amounted in legal effect to an agreement that the
claims be thereby compromised and settled. Russell
v. Rilev & Peterson. supra. 82 CaL.App. 728. 737-

analyzing the record for the purose of determining

738. 256 P. 557: he 'could not accpet the benefit of
the checks by cashing them, without consenting to
the conditions endorsed thereon'

whether or not there is any evidence of substantial character which reasonably supports the judgment as
applied to the peculiar facts of

Robertson V.
communicated mental

the case. See 1 C.J.S..

Accord and Satisfaction. s 49(b), pages 565-567,
Upon such review, the conclusion is inescapable that

Robertson. supra. 34 Cal.App.2d 113. 118. 93 P.2d
175. 178; and such un

reservations as plaintiff may have had that he and

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defendants 'would be able to settle it (the dispute) one way or the other later' could not miltate against the validity of the accord and satisfaction. Creighton v. Gregory. 142 Cal. 34.41. 75 P. 569.So pertinet is
the statement in **20Johnston v. Burett. supra. 17

affect the disposition of this case. As was said in Estate of Johanson. 62 Cal.App.2d 41. at page 56.
144 P.2d 72. at page 80:'Compromises are favored in

law and a man is allowed to negotiate for the

purchase of his peace without prejudice to his
rights.' Accordingly, none of these factors, either
singly or in combination, can be said to have

Cal.App. 497. at page 501. 120 P. 436. 438:'He

(plaintiff) was bound either to reject the check, or by accepting it, accede to the defendant's terms. * * * He
could not accept the benefit, and reject the condition.
* * * The use of the check was ipso facto an

deflected from the positive position taken by defendant company in tendering the respective checks or drafts for acceptance in full discharge of
the respective accounts, or from the consequences of plaintiffs cashing such checks and drafts upon that
basis in establishment of an accord and satisfaction.

acceptance of the condition. The minds of the parties
then met, so as to constitute an accord.'
il Plaintiff argues that 'the conduct of both parties

Johnston v. Burnett. supra. 17 Cal.App. 497. 501. 120

after the receipt and cashing of the drafts' indicates
that 'neither of them intended that the prior

P.436.
I2 Plaintiff unavailngly cites cases where

acceptance by (plaintiff) of the drafts was in full settlement of his claim(s).' To this point he cites
these evidentiary considerations: that until he

accompanying correspondence failed to state that the remittance was 'intended or offered as in full of all
demands'Lapp-Gifford Co. v. Muscoy Water Co..
supra. 166 Cal. 25. 32. 134 P. 989. 992. and the

received the respective drafts, he did not know that defendants were disputing the amounts allegedly due
on the respective shipments; that after receiving the

parties' continued uncertainty as to the extent of their

first of the three drafts but before cashing it, he spoke to defendant Wilson by telephone and protested the
deductions taken; that after cashing the three drafts, he went to defendant company's Seattle office and
discussed that factors in dispute; that there then

differences called for further checking on the matter
of an adjustment, conduct clearly showing that 'they

did not consider the (prior) check a final settlement of the debt' (Work v. Associated Almond Growers. 102 Cal.App. 232. 236. 282 P. 965. 967); where evidence
of 'constrctive uaud, or at least mistake', operated

followed an exchange of correspondence between

him and defendant Wilson as to the propriety of the

deductions; and finally, the whole subject was
discussed at a meeting in Santa Barbara between

to impeach the 'conclusiveness of the asserted stated

account' dispite the notation of the words 'full
receipt' on the check (Kinkle v. Fruit Growers

himself and defendant Wilson, culminating in the
latter's offer of the settlement but that he would not

agree to it. However, these matters do not strengthen plaintiffs position. Reasonably viewed, they simply

Supply Co.. 63 Cal.App.2d 102. 115. 146 P.2d 8.14); where the debtor 'at the time the check was tendered * * * himself conceded that it did not represent the full amount due' and not only was there a failure to

show that plaintiff did not willingly assent to the
condition of 'full settlement' accompanying the three remittances; that after cashing the three drafts
tendered for acceptance on the prescribed express

plead an 'accord and satisfaction,' but it was
expressly 'pleaded that there never had been an
accounting'.Owens v. Noble. 77 Cal.App.2d 209.

terms, he nevertheless persisted in his efforts to
collect additional amounts which he claimed to be stil due under the original contracts of sale; and that defendants remained firm *600 in the position that
they had taken at the time the checks or drafts were

215. 175 P.2d 241. 244.Under such distinguishable

circumstances, it is not open to dispute that the trial cour's finding that no accord and satisfaction had
been effected by the paries was supported by
substantial evidence. But that is not the record in

**21 this case. Here the condition imposed upon

tendered, until finally, for reasons which do not
appear, defendant Wilson at the Santa Barbara

plaintiffs acceptance of the checks or *601 drafts
was clear and unequivocal that payment was
'intended as full satisfaction of the disputed

meeting made an offer of compromise, which was in turn rejected by plaintiff. As to the latter factor, it is

code law that' An offer of compromise is not an admission that anything is due' (Code Civ.Proc. s 2078), it constitutes no proof of liability, and its
admission into evidence without objection cannot

account' .Biaggj v. Sawyer. supra. 75 Cal.App.2d
105. 114. 170 P.2d 678. 683; there was no question

of mistake or fraud to impeach the conclusiveness of
the stated account; and there were no admissions by

any of defendants that they regarded the accounts as

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stil open for further adjustment and payment. While
it is tre that in cases of conflcting evidence or

loading,' improper surfacing, and 'random widths,'

where contrary inferences can be drawn from
uncontradicted proof, where 'a dispute concerning

so that it cannot reasonably be said that the parties considered, at the time of the tender and acceptance of the checks or drafts, that the only matters in

the amount due, and whether the tender was on

condition that acceptance would be in full
satisfaction, are primarily questions of fact for the
trial court'

controversy were the ueight charges. Rather, as
defendants maintain, the record clearly shows that in each instance plaintiffs entire demand was in dispute and the respective checks were intended and accepted
in full discharge of

Owens v. Noble. supra. 77 Cal.App.2d

209.215. 175 P.2d 241. 244. and 'unless there is a lack of evidence to support the finding of the jury or the decision of the trial court in that regard, their
determination of that issue (the existence of an

the entire disputed obligation.

accord and satisfaction) wil not be disturbed on
Moore v. Satir. 92 Cal.App.2d 809. 812.207 P.2d 835. 836; also D. E. Sanford Co. v. Corv Glass
appeal'

It is further suggested that defendant company, by the respective remittances in the reduced sums, paid only

the conceded amount of indebtedness on each
shipment. But that circumstances would not prevent an accord and satisfaction arising from acceptance of
the conditionally offered remittances applicable to

Coffee Brewer Co.. 85 Cal.App.2d 724. 730. 194

P.2d 127. just such lack of evidence prevails here. The record conclusively shows from plaintiffs own
testimony that he knowingly accepted the remittances from defendants on the terms definitely stated on the accompanying vouchers in unequivocal expression of their intent as 'full settlement,' for he 'figured that a bird in the hand was better than nothing. 'This state of the evidence cannot be reasonably held to give rise to conflcting inferences as to the intention of the parties
to consummate an accord and satisfaction upon the

the entire demand. While there is some conflct in the authorities on whether the payment of the conceded part of the claim is a good accord and satisfaction if
received in discharge of

the whole (anno. 112 A.L.R.

.l it is the majority view, as well as the
'tendency of

the later cases,' to 'sustain the discharge

where there is a dispute as to any part of the claim made by the creditor, although the payment is only

the smaller amount which was conceded by the
debtor to be due.'(1 AmJur. s 64, p. 251; also

tender and acceptance of the checks or drafts in
question, but rather they iresistibly point to the

conclusion that plaintiff is estopped to deny the effect of hs deliberate act in full settlement of the disputed accounts between the parties. See Creighton v.
Gregory. supra. 142 Cal. 34.41-42.75 P. 569

Wilston on Contracts, Rev.Ed., Vol. I, s 129, p. 439, and cases there cited.) Consistent with this 'tendency'

in the rationale of **22 'The later cases' is the
decision in Robertson v. Robertson. supra. 34
Cal.App.2d 113.93 P.2d 175. 177. where concededly

due payments of support money were made by

Nor is it of legal significance that the freight charges
were computed as separable items for deduction and

checks marked 'in full payment to (date)' and the only dispute between the parties involved the

constituted a major point of difference between the parties. While the ueight items were listed as definite
amounts on each of the vouchers accompanying the

question of whether a greater amount was due
pursuant to the terms of a propert settlement

remittances, the total ueight (only a part of which

agreement. In sustaining the defense of an accord and satisfaction, the court aptly stated, 34 Cal.App.2d at
page 118.93 P.2d at page 178:'The consideration for

was disputed) was for all practical puroses
integrated into the entire contract to which it related.
To this point is defendant Wilson's undisputed

the tender and acceptance of each check in a less amount was the determination of dispute, and the extinction of obligation in relation to each monthly
payment so made.'
il'The law wisely favors settlements, and where there is a real and genuine contest between the

testimony that defendant company, as the buyer of
goods f. o. b. point of manufacture, must have 'the

mil price and the freight rate' the 'delivered price' at hand so as to 'know *602 what (the) laid down cost is.' In such circumstances it would be unrealistic to

isolate the freight items and regard such items as severable undertakings in the consummation of the parties' dealings. Moreover, in the case of one
disputed shipment the Santa Barbara car there were also included, as deductible items, amounts for 'scant

parties, and a settlement is had without fraud or misrepresentation, for an amount *603 determined upon as a compromise between the conflcting
claims, such settlement should be upheld, although

such amount is materiaIly less than the amount

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claimed by the person to whom it is paid.'Post v. Thomas. 212 N.Y. 264. 106 N.E. 69. 72; in accord,

vouchers so attached to the three checks informed

B. & W. Engineering Co. v. Beam. supra. 23
Cal.App. 164. 171. 137 P. 624.It is diffcult to see
here how defendant company could have been more explicit in stating to plaintiff the conditional tender of
the checks or drafts in question, and we therefore

plaintiff that the checks were intended as full
payment; that the plaintiff indorsed and cashed each
check, and thereby agreed to the settlement intended
by the defendant corporation; that at the time of

making said payments the defendants in good faith disputed the amounts due the plaintiff.

conclude that the latter's acceptance and cashing of
such checks and drafts pursuant to their unequivocal

terms of 'full settlement' constituted, as a matter of law, an accord and satisfaction.

'The first transaction involved a carload of pine, of

specified grade, widths, surfacing, and price per thousand board feet, 'F.O.B. mil,' with 2 per cent
discount for cash. The lumber was to be shipped from

The judgment is reversed, with directions to the trial court to make findings of fact and conclusions of law and to enter judgment thereon in favor of defendants in accordance with the views herein expressed.
SHENK, EDMONDS, TRAYNOR, and SCHAUER, JJ., concur. CARTER, Justice (dissenting). I dissent.

Oregon to San Luis Obispo. Upon arrival of the
shipment, defendant corporation paid the carrier's
freight bil which covered freight from Spokane,

Washington, to San Luis Obispo. The corporation then remitted $2,930.14 by check to the plaintiff, this sum representing the amount of the plaintiffs invoice less the cash discount**23 and less $86.40 claimed as 'freight overcharge' being the difference between the freight actually paid the carrier and the ueight from Portland, Oregon. 'Subsequently defendant corporation ordered two more carloads of pine, one to be shipped to Grover
City, California, and the other to Santa Barbara.

While the factual situation disclosed by the record
may have presented a problem diffcult of solution by

the trier of fact, I can not say that there was not suffcient evidence to support the finding that
defendant corporation was indebted to the plaintiff in
the amount found, and for which judgment was

Again, it was understood that the lumber was to come from Oregon, although the plaintiff testified that he

rendered. This judgment was affrmed by the District Court of Appeal, Second Appellate District, Division
One, and I adopt, as my dissent, the opinion of that

informed defendants it would come from eastern
Oregon. The lumber in these two carloads was roughmilled at Seneca, in eastern Oregon. One

court prepared by Mr. Presiding Justice White, which is as follows:
'Defendants appeal from a judgment in favor of

carload was then shipped to Brewster, Oregon, for

're-manufacture,' and from there transported to Grover City, while the other carload was shipped to Portland for "re-manufacture' and thence to Santa
Barbara. On each of these shipments defendant corporation remitted to the plaintiff by check, deducting the 2 per cent cash discount and also

plaintiff, a lumber broker, in an action for a balance
claimed to be due under contracts for the sale of

three

carloads of lumber to the defendant corporation,

Pacific Coast Lumber Company. Defendants C. V.

deducting the items representing freight charges uom

Wilson and S. G. Truitt, as vice-president and
purchasing agent, respectively, of defendant

eastern to western Oregon. In the case of the Santa
Barbara car defendant also made certain deductions
for 'scant loading.' 'improper surfacing,' and

corporation, negotiated the contracts. The complaint

was in the form of common counts. The answer, in addition to denials, set forth an affrmative defense of

'random widths.'

accord and satisfaction, the substance of the
allegations in this respect being that three checks in

'Defendant C. V. Wilson testified that by 'F.O.B.

mill' he understood to mean F.O.B. the 'remanufacturing' mil where the lumber was finished and uom whence it was finally shipped; he and other
witnesses also testified to a custom of the lumber trade that where Oregon lumber is sold 'F.O.B. mil' a zone freight rate is often specified, but if nothing is

stated amounts had been mailed to plaintiff by
defendant corporation; that attached to each of said
checks was a voucher in which said defendant

informed plaintiff that it intended the check as fuIl payment of a certain disputed claim; that *604 the

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said about the zone, then the 'Portland rate,' from

Portland, Oregon, to destination, wil apply; in such case the custom is for the purchaser to charge back to
the seller any excess *605 ueight paid to the carrier.

was to cash the draft so they couldn't stop payment on the draft. This was not a check, it was a draft. I

knew that, with a dispute of that type, that there
would be a question as to my accepting that as final

In none of the transactions here in question was there

anything said concerning ueight or the freight rate

*606 payment, but I figured that a bird in the hand
was better than nothing.

applicable except the bare phrase 'F.O.B. mil.'
Plaintiff denied the existence of any such custom.
'In remitting for each of the three shipments,

defendant corporation mailed to the plaintiff a check
or draft, attached to which was a voucher identifying

**24 'Q. Well, Mr. Potter, at the time your cashed those checks, you knew there was a dispute as to the amounts? A. Yes, because the amount was short on the draft. I figured we would be able to settle it one
way or the other later.

the shipment for which payment was intended and
setting forth the amount of

the corresponding invoice,

with deductions noted. Printed at the top of each such
voucher was the notation:

"Q. Did you know the basis for the dispute? A. No, only from checking the deductions that I figured that
they took. I knew that the freight amounted to so

much.

"Payee wil please detach and keep this statement.
Payment of sight draft attached hereto is accepted in

fuIl settlement of account stated below, and
endorsement thereof wil constitute payee's receipt to
the Pacific Coast Lumber Company of California.'

"Q. Then you surmised, at least, that the deduction on
one item was for freight? A. That's right.

The trial court found that defendants were indebted to plaintiff in sum of $1 ,011.96; and with respect to the special defense found that the aIlegations thereof (except, of course, that the checks were actually sent) were untre, thereby finding that it was not tre that
by the voucher attached to each check defendant

what the deductions were from the attached statement with the
"Q. And on the other item, you had notice of

check, did you not? A. Yes, sir.'
'AppeIlants argue that 'on the basis of

the foregoing

corporation 'informed plaintiff that it intended the
check as full payment of a certain disputed claim,' or

testimony the ultimate fact irresistibly following is that the defendant corporation informed the plaintiff * * * that the check or draft tendered therewith was offered in fuIl payment of a certain fully identified,

that the vouchers 'informed plaintiff that the said
checks were intended as full payment. 'The court further found that 'it is not tre that plaintiff, by the

disputed claim.' Appellants' remaining two
contentions with respect to the findings are that there is no support in the evidence for the finding that by his acceptance of the checks or drafts plaintiff did not agree to a settlement, or for the finding that there was no bona fide dispute concerning the amount due.

acceptance, endorsement and/or depositing for coIlection of said drafts, or in any other manner,
agreed to any settlement of

the amount due plaintiff.'

'Appellants contend that the trial court's findings
relating to the alleged accord and satisfaction were

'As conceded by appeIlants, 'A finding of the trial
court upon conflicting evidence wil not be disturbed

contrary to undisputed facts in evidence. With respect
to the finding (implied) that plaintiff was not
informed that the checks he received were intended

on appeal if there is evidence of a substantial

character which reasonably supports the
judgment.'(Fewel & Dawes. 1nc. v. Pratt. 17 CaI.2d 85. 89. 109 P.2d 650.)I is also weIl settled that the
conclusions of a trier of fact from evidence or testimony that is susceptible of conflcting or opposing inferences wil not be set aside by an

by defendant corporation as payment in fuIl, attention is directed to testimony of the plaintiff, as follows:
"Q. Did you talk to him (Mr. Wilson) before you

cashed it? Did you call him up before you cashed it?
(Referring to the payment on the first shipment.) A.

appellate tribunaL. (Estate of Bristol. 23 CaI.2d 221,
143 P.2d 689.)

Yes, I think I did; and then I felt, if they were going to be that way about it, the best thing for me to do

'Conceding the force of appeIlants' argument that the

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evidence clearly shows the existence of a dispute as to the amount due, and further that plaintiff was informed, by the fact that the checks were for less

accepted in full settlement. The language**25 of Owens v. Noble. 77 Cal.App.2d 209. 215. 175 P.2d
241. quoting from Biaggi v. Sawyer. 75 Cal.App.2d

than the amount of his invoice, by the notations
appearing on the attached vouchers, and through

telephone conversations with defendants, that
defendant corporation contested the particular freight items in question it does not follow that the trial court
erred, as a matter of law, in concluding that no

105. 114. 170 P.2d 678. is here pertinent: "Whether there was a dispute concerning the amount due and

whether the tender was on condition that acceptance would be in full satisfaction, are primarily questions

of fact for the trial court.'In the case of Work v.
Associated Almond Growers. 102 Cal.App. 232. 236. 282 P. 965. this court quoted from cited authorities as

accord and satisfaction was consummated.
*607 'It was an essential element of defendants' proof of an accord and satisfaction that their tender of a
check for less than the amount due be expressly

follows: 'It is an essential element of accord and
satisfaction by tender of a check, that the tender is
subject to the condition that the acceptance of the

check is satisfaction in fulL. This condition is not

conditioned that if the money be accepted, it is to be in full satisfaction. (1 Am.Jur. 222, 223.)As said in the cited authority, at page 223:

shown by the mere fact that the debtor
accompanies*608 the check with an account showing a balance equal to the amount of the check, and it is disproved where the giving and acceptance of the check is followed by such conduct of both parties as clearly shows that they did not consider the check a final settlement of the debt. '(Italics added.) Also see
i Cal.ur. p. 134, par. 10; Lapp-Gifford Co. v.

"As pointed out in the preceeding section, in order
that the acceptance of an offer of payment of a lesser

sum in discharge of a greater shall result in the
discharge, it is a necessary element that the offer be

made upon condition that the creditor accept the
offered sum in full satisfaction of the indebtedness. This principle finds frequent application in the case of checks and other remittances. In order that the acceptance of the check or remittance shall operate as a full discharge, the condition that it is to be accepted in full satisfaction of the pending claim or obligation must be expressly made or the circumstances must be such as to indicate clearly to the creditor that it is so
sent.

Muscoy Water Co.. supra (\66 Cal. 25. 134 P.
989);Duncan v. F. A. Hihn Co.. 27 Cal.App. 152.

l55. l49 P. 971; Wallace v. Crawford. 21 Cal.App.2d
394.404.69 P.2d 455.'
'The record does not disclose conclusive evidence
that the plaintiff was explicitly advised that his

acceptance of the checks or drafts in any of the three transactions would be considered as an agreement to an accord and satisfaction. On the contrary, the
actions of the parties indicate simply that the

"When the assent of the creditor is sought to be
inferred from the acceptance of a less sum than that
claimed to be due, the fact that such amount is

offered in full discharge of the whole claim must have been communicated to the creditor in some
unmistakable manner. Consequently, where a check is tendered, even though it accompanies an account, if there is no expression of the condition that it must be accepted in full payment, the acceptance of the
check does not constitute an accord and satisfaction,

defendant corporation asserted that it was not liable for certain freight charges and refused to pay them. It is significant in this respect that the disputed freight charge was a separable item. The amount tendered by defendant corporation was an amount admittedly due. The trier of fact could well conclude that the amount tendered was not offered in settlement of a disputed claim, but, as above stated, in payment of a conceded indebtedness, leaving at large the question of uom which point ueight should be charged to the buyer.

as no agreement to that effect can be implied uom
the transaction. * * *'

Upon analysis, the facts herein show that an
acknowledged debtor has made a remittance of an
amount admittedly due, and now seeks to have

'Under the particular facts of the case at bar, it would

declared an accord and satisfaction because the

appear that the trier of fact was justified in
concluding, despite the printed statement on the

creditor accepted what was concededly justly due him. The trier of fact was warranted in concluding
that there was lacking an essential element of an

voucher, that the tender of each check or draft was not unequivocally stated to be on condition that it be

accord and satisfaction, to wit, that the payment was
offered and accepted in settlement of a disputed

(Q 2008 Thomson Reuters/West. No Claim to Orig. U.S. Govt. Works.
180

Case 5:07-cv-04808-JF
234 P.2d 16
37 Cal.2d 592, 234 P.2d 16

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Page 17 of 48
Page I I

37 Cal.2d 592, 234 P.2d 16

demand. Here no payment whatever was made on the 'disputed' demand.

'The situation here presented is one in which an
acknowledged debtor, disputing one small separable item of an invoice received in the regular course of business, deducts from his remittance the amount he
disputes and remits in the regular course of business

an amount admittedly owed, accompanying his check with a voucher in customary form containing printed
words to the effect that the remittance is accepted 'in

full settlement of account stated below.'It cannot be
held that as a matter of law in such circumstances

there has been an accord and satisfaction or account
stated.

"* * * to hold otherwise would put in the power of a

sharp, shrewd business man frequently to take advantage of *609 the ignorant, uneducated, or
unwary, and open the way, in the business and

commercial world, to the perpetration of frauds rather
than the honest settlement of disputes.'(Sanders

v.Standard Wheel Co.. 151 Ky. 257. 151 S.W. 674.
Ann.Cas. 1915A. 954.)

'Appellants state that they make no point of the fact

that the judgment runs against Mr. Wilson and Mr. Truitt, agents of defendant corporation, 'unless the suggestion is met with that the judgment ought to
stand against the defendant individuals even though it be reversed as to their principal.'No such problem

arising, the question need not receive further
consideration.
'The attempted appeal from the order denying

defendants' motion for new trial is dismissed. The judgment is affrmed.'
CAL. 1951. Potter v. Pacific Coast Lumber Co. ofCaI.
37 CaI.2d 592,234 P.2d 16

END OF DOCUMENT

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EXHIBIT 20

1219457.1

Case 5:07-cv-04808-JF

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Page 19 of 48

Welm
17 Cal.App.4th 158

17 Cal.App.4th 158, 21 Cal.Rptr.2d 245
17 Cal.App.4th 158

Page i

~Randas v. YMCA of

Metropolitan Los Angeles
AS, Plaintiff

public interest it is invalid under Civ. Code. ~ 1668.
Such a contract involves a transaction that exhibits

CaI.App.2.Dist.
LEMONIA T. RAND

and Appellant,

some or all of the following characteristics: it
concerns a business generally thought suitable for
public regulation, and the part seeking exculpation

v.

YMCA OF METROPOLITAN LOS ANGELES,
Defendant and Respondent.

is engaged in performing a service of great
importance to the public, which is often a matter of
practical necessity for some members of the public;
the part holds itself out as wiling to perform this
service for any member of

No. B067811.

Court of Appeal, Second District, California.
Ju114, 1993.

the public who seeks it, or

at least for any member coming within certain
SUMMARY
established standards; as a result of the essential

The trial court entered summary judgment in favor of

a YMCA in a personal injury action against it by a swimmer enrolled in a YMCA class, ruling that the
release of liability form signed by plaintiff was valid.
(Superior Court of Los Angeles County, No.

nature of the service, and the economic setting of the transaction, the part invoking exculpation possesses a decisive advantage of bargaining strength against

any member of the public who seeks the part's
services; in exercising a superior bargaining power,
the part conúonts the public with a standardized

GC006114, Coleman A. Swart, Judge.)

adhesion contract of exculpation, and makes no
provision whereby a purchaser may pay additional

The Cour of Appeal affirmed. The cour held that the release signed by plaintiff absolving the YMCA from liabilty for its own negligence was not invalid under Civ. Code. ~ 1668, as involving "the public interest."

reasonable fees and obtain protection against
negligence; and, finally, as a result of the transaction,
the person or propert of the purchaser is placed

under the control of the seller, subject to the risk of
carelessness by the seller or its agents.
il Contracts § 8--Legality--Contracts Contravening Public Policy-- Exculpatory Provisions--Release--

Swimming, like other athletic or recreational
activities, is not essential, and the release form was
neither unclear nor ambiguous. The court further held
that the release was not invalid by reason of

plaintiffs

inability to read it. In the absence of fraud,

Sports and Recreation.

overreaching, or excusable neglect, one who signs an

A release signed by a person injured while enrolled in

instrment may not avoid the impact of its terms on the ground that he or she failed to read the instrment before signing it. Although plaintiff was literate in
Greek but not English, she made no claim of úaud or

a swimming class at a local YMCA, which release

absolved the YMCA úom liability for its own
negligence, was not invalid under Civ. Code. & 1668,

overreaching, nor did she claim that the YMCA had
reason to suspect she did not or could not read the

on the ground it involved "the public interest." Swimming, like other athletic or recreational
activities, however enjoyable or beneficial, is not
essentiaL.

release she had signed. (Opinion by Woods (Fred), J.,
with Lilie, P. 1., concurring. Johnson, J., concurred

in the judgment only.)
HEADNOTES

Q) Contracts § 8--Legality--Contracts Contravening
Public Policy-- Exculpatory Provisions--Release--

Intent-- Validity.

Classified to California Digest of Offcial Reports
il Contracts § 8--Legality--Contracts Contravening

An agreement exculpating the drafter from liability for his or her own future negligence must clearly and explicitly express that this is the intent of the parties.

Accordingly, release and waiver of liability
Public Policy-- Exculpatory Provisions. If an exculpatory provision in a contract involves the

provisions stating that the undersigned released "the YMCA ... from all liability to the undersigned ... for any loss or damage ... on account of injury to ... the

(Q 2008 Thomson Reuters/West. No Claim to Orig.