Otis, Justice
(dissenting).
This is an appeal by the plaintiff from an order granting defendant summary judgment under Rule 56 of Rules of Civil Procedure.
The plaintiff at the times here in question was a supplier of copper water tubing. On October 3, 1958, plaintiff entered an informal contract to sell tubing to defendant, evidenced by a letter from plaintiff to defendant setting out the specifications and unit prices. The agreement contemplated the sale to defendant of 135,000 feet of tubing in various sizes and specified the manner in which the country of origin would be indicated.
By December 29, 1958, plaintiff delivered to defendant a quantity of tubing which defendant concedes would require a payment of $16,351.06 under the terms of the contract except for the offset defendant here asserts. A dispute thereupon arose between the parties occasioned primarily by the fact the tubing was stamped to show it originated in the United Kingdom. Defendant claims this was in violation of the contract and substantially affected the value of the material because of the attitude some labor unions take toward the use of foreign products.
On February 16, 1959, the defendant wrote to the plaintiff registering a complaint and asserting that it had incurred expenses of $2,120 to secure the kind of material which plaintiff should have supplied. With offsetting additional adjustments, the defendant thereupon enclosed a check to plaintiff for $14,234.81 on which was inscribed, “Payment in full to date.” Plaintiff retained the proceeds of the check and thereafter brought this action, claiming the sum of $2,419.80 as the unpaid balance. (It is not clear from the record what constitutes the discrepancy between the sum of $2,120 deducted by defendant and $2,419.80 for which the plaintiff sues.) Defendant asserts that plaintiff’s action is barred by an accord and satisfaction consisting of defendant’s tender of a check in full payment and plaintiff’s acceptance of the proceeds.
Except where it has been changed by statute, under the weight of authority payment by a debtor and acceptance by a creditor of less than the full amount of a liquidated claim does not extinguish the balance of the debt because of lack of consideration. It is the general rule, however, that where the debt is unliquidated or there is a bona fide dispute, payment by the debtor of less than the creditor’s claim does constitute an accord and satisfaction if tendered in full payment and accepted by the creditor.
As I view the matter, the question for decision is whether or not the payment of a liquidated debt, from which has been deducted the precise amount the debtor claims should be offset, results in an accord and satisfaction if the proceeds of the check are appropriated by the creditor without any further manifestation of mutual consent. Volume 6 of Williston, Contracts (Rev. ed.) § 1854, notes that a few jurisdictions make the creditor’s assent a fact question and adds:
“* * * But the great and increasing weight of authority in the United States is to the contrary, and as a matter of law regards the use or retention of the check by the creditor, with knowledge of the condition, as assent to it.”
Restatement, Contracts, § 420, is to the same effect. Cases on the subject are annotated at 34 A. L. R. 1035 and 75 A. L. R. 905.
Mr. Justice Mitchell pioneered the doctrine of accord and satisfaction in Minnesota in Duluth Chamber of Commerce v. Knowlton, 42 Minn. 229, 44 N. W. 2. That action involved a guaranty subscription in the sum of $250 pledged by defendants to underwrite the expense of securing a professional employee for the plaintiff Chamber of Commerce. The defendants attempted to satisfy their obligation by the payment of a $50 check marked “in full of our subscription.” The plaintiff retained the proceeds and sued for the balance it had assessed. With respect to defendants’ claim of an accord and satisfaction, Mr. Justice Mitchell stated (42 Minn. 231, 44 N. W. 3):
“* * * The payment of the smaller sum, without any release by the plaintiff, would not constitute a satisfaction of the residue. It must have been accepted as payment in full. The mere retention of the money (to which plaintiff was entitled unconditionally) would not amount to a release, or constitute an accord and satisfaction, although it knew that it was tendered as such.”
In a later case, Marion v. Heimbach, 62 Minn. 214, 64 N. W. 386, Mr. Chief Justice Start applied the same rule, but observed that where there is a bona fide dispute, a mutual agreement to compromise for a lesser amount than the creditor claims, is sufficient consideration to support an accord and satisfaction.
In determining whether the claim and offset in the case at bar is liquidated or unliquidated, in my opinion we are governed by the decision in Demeules v. Jewel Tea Co. 103 Minn. 150, 114 N. W. 733, 14 L. R. A. (N.S.) 954. There the employee creditor on being discharged was entitled to repayment of a cash bond in the sum of $150 which he had furnished when he was hired. The debtor employer, however, deducted $83.66 which it computed to be the precise amount of its offset. The employee accepted a check for the difference marked: “Return in full of $150.00 cash bond.” With respect to the employer’s contention that there had been an accord and satisfaction notwithstanding a dispute between the parties, we held the claim was not unliquidated and that the employer suffered no detriment because it paid only what it conceded it owed. We relied on cases previously decided in Minnesota, acknowledging, however, authority to the contrary elsewhere. Although in a later case we held that the receipt and acceptance of a check marked “in payment of contract in full” was an accord and satisfaction, Beck Elec. Const. Co. v. National Contracting Co. 143 Minn. 190, 173 N. W. 413, the facts there involved a true compromise and settlement of an unliquidated claim reached after considerable negotiation.
These cases have been followed or distinguished in other decisions. Addison Miller, Inc. v. American Central Ins. Co. 189 Minn. 336, 249 N. W. 795, was an action, arising out of a fire loss, brought by an insured on five policies which covered fixtures, equipment, tools, supplies, and other goods. The parties could neither agree on the extent of coverage or the quantity and value of the material affected. We said (189 Minn. 341, 249 N. W. 798): “The subject matter fairly bristles with possibilities for disagreement and resulting compromise, * * The plaintiff not only accepted drafts marked “in full payment and satisfaction of all claims and demands for loss and damage that occurred on September 19, 1930,” but signed full releases, thereafter maintaining the settlement was not a final disposition of all of its claims. The hypothetical set out in the opinion was dictum which contemplated an offer to compromise, an acceptance, and the exchange of a note for the payment of money. The actual decision in the Addison Miller case involves an unliquidated claim and an express release. The abstract statement of law presupposes a mutual agreement of the parties. Our decision in Oien v. St. Paul City Ry. Co. 198 Minn. 363, 270 N. W. 1, did not hold that part payment of a liquidated claim needed no consideration to be binding. The court found that the defendant’s continuing to employ plaintiff was sufficient consideration for the payment to plaintiff of less than was due him for wages under their employment contract.
The rule in Minnesota has been precisely spelled out in Dwyer v. Illinois Oil Co. 190 Minn. 616, 252 N. W. 837, decided in 1934. That action involved commissions payable to plaintiff for the sale of defendant’s gasoline. The checks periodically paid to plaintiff and negotiated by him were all marked “in full settlement.” Plaintiff brought suit to recover additional amounts he asserted were due him. We held that to constitute an accord and satisfaction there must be three elements: (a) The check must be offered in full settlement; (b) it must be an un liquidated claim concerning which a bona fide dispute exists; (c) each party must make some concession to the other. We stated (190 Minn. 621, 252 N. W. 839):
“* * * But where the dispute is over which of two fixed sums represents the .debt and the party offering a check in full settlement thereof tenders no more than the smaller amount, which he admits is due, such party has made no concession and there is no consideration for the alleged accord and satisfaction. Thereupon the offeree is at liberty to accept the tendered check even though offered in full satisfaction of the claim.”
I believe the case at bar should be governed by the doctrine announced in the Dwyer decision, notwithstanding respondent’s earnest contention and the holding of the majority that the Dwyer case was overruled 4 years later by our decision in Rye v. Phillips, 203 Minn. 567, 282 N. W. 459, 119 A. L. R. 1120, decided in 1938. That case has been heralded as ending the need for consideration where a creditor agrees to accept less than the full amount of a liquidated debt. 23 Minn. L. Rev. 223. But I am of the opinion that it did not repudiate the Dwyer rule and is not here applicable. Mr. Justice Stone’s remarks on the subject of consideration were dicta, as he so characterized them, since the actual holding was confined to the question of whether parties to a contract could by mutual agreement compromise and settle the debtor’s liability on a note by the substitution of a different kind of consideration from that called for in the instrument. We held that we would not concern ourselves with whether the value of the new consideration was as great as that originally required. It is particularly significant that the court was there dealing with a new agreement expressly adopted, not only by the original parties, but by a third party as well.
In discussing the absence of consideration Mr. Justice Stone likened the situation to an executed gift or the waiver of a right. However, these doctrines depend on establishing the actual intention of the party involved and include fact questions which cannot be assumed on a motion for summary judgment but must be proved by competent evidence, with an opportunity to rebut such evidence. In Annotation, 119 A. L. R. 1123, 1129, it was observed that in the Rye case the agreement had sufficient consideration and did not fall within the rule that an agreement to accept less than the full amount of a liquidated claim is not binding. Later cases discussing the Rye decision refer to the new contract as arising out of “a promise” or a “mutual agreement.”
Walgren v. Prudential Ins. Co. 205 Minn. 202, 285 N. W. 525, held that plaintiff was barred from recovering on a double indemnity policy because she executed a compromise settlement and gave a full release with respect to a disputed claim. The court found it unnecessary to consider the Rye case. Although Brack v. Brack, 218 Minn. 503, 16 N. W. (2d) 557, relied on Rye v. Phillips for support, the court pointed out there were other grounds for reaching its decision. Mattfeld v. Nester, 226 Minn. 106, 32 N. W. (2d) 291, 3 A. L. R. (2d) 909, had to do with a husband’s liability for burying his wife and its reference to the Rye case was unrelated to the question of consideration. Cut Price Super Markets v. Kingpin Foods, Inc. 256 Minn. 339, 98 N. W. (2d) 257, involved a check sent to plaintiff by defendant, with a notation that it was in full payment of all liabilities. In the litigation which arose over the terms of a franchise agreement, the defendant contended that the negotiation of the check constituted an accord and satisfaction. We there observed (256 Minn. 356, 98 N. W. [2d] 269):
“The record fails to disclose that this check was accepted by the plaintiff as an accord and satisfaction. The rule has always been clear that the mere retention by the creditor of money to which he is entitled absolutely will not amount to an accord and satisfaction although tendered or transmitted to him as payment in full of demand. In an accord and satisfaction, it is the mutual agreement of the parties to the terms of the compromise and not the dispute which furnishes the consideration for the release. In this case the defendant paid what he admitted to be due and no more. This did not even present a compromise nor can it be an accord and satisfaction.” (Italics supplied.)
Although we found that no open dispute existed at the time the check was paid, and held there was no accord and satisfaction, we noted that the rule in the Rye case applied only to agreements affecting liquidated debts and intimated that it did not abrogate the principles set forth in the Duluth Chamber of Commerce and Marion cases.
We have stated that an accord and satisfaction may occur without an express agreement, but may be implied from circumstances “clearly and unequivocally indicating the intention of the parties.” Shema v. Thorpe Bros. 240 Minn. 459, 465, 62 N. W. (2d) 86, 90. The settlement in the Shema case, however, was reached after protracted negotiations and represented a compromise of an unliquidated claim based on fraud.
The respondent takes the position that consideration is supplied in cases of this kind by settling controversies and thereby “avoiding the delay, risk and expense in carrying such disputes to their ultimate legal determination.” I am not persuaded by that argument. Where the debt- or pays only what he admits would be required of him were the case to be litigated, he has made no concession which could be construed as the kind of compromise and settlement necessary to constitute an accord and satisfaction. Under circumstances such as these there is no logical reason why the creditor should not retain what both parties concede belongs to him, without forfeiting his right to sue for the balance. While he may have the power to do so, a debtor has neither the moral nor legal right to withhold payment of what he acknowledges he owes simply because he may thereby provoke a creditor into accepting less than is due him as the price for avoiding litigation. On the other hand, where the facts permit a finding that the debtor has paid something more than he honestly believes is due and he thereby retains the right to revert to his original position if sued, there have been mutual concessions and a compromise which have all of the elements of an accord and satisfaction.
No case in Minnesota holds that a creditor is barred from recovering the balance of a disputed claim by the mere retention of a partial payment which the debtor admits he owes. All of our decisions which find an accord and satisfaction, or which announce the doctrine by way of dictum, involve express promises, mutual agreements, executed compromises and settlements, or valid releases to which the creditor was a party. Where the parties negotiate and reach a mutually agreeable compromise, with or without consideration, each having had a voice in considering and framing the terms of the proposed settlement, it should end the controversy. Under such circumstances they should be required to adhere to their position and are bound by an accord and satisfaction. Such a solution is a far cry from a unilateral ultimatum, the effect of which is to impose on one party the will of the other under the veiled threat of withholding all remittances unless there is a prompt acquiescence by the unpaid creditor. In the latter situation there has been no real accord between the parties, let alone a valid satisfaction of the obligation.
I would adhere to our prior decisions and hold that where a liquidated obligation exists and the debtor transmits to the creditor a check marked “payment in full” which reflects a liquidated offset, and the net amount paid represents only the sum which the debtor concedes to be due, the acceptance of the check by the creditor does not constitute an accord and satisfaction in the absence of a mutual agreement based on the express promises of both parties.
For the reasons stated, in my judgment it was error to grant the defendant’s motion for summary judgment.
Paragraph IV of defendant’s answer alleges in part as follows:
“* * * In order to comply with contracts entered into by defendant with its customers, defendant was forced to and did purchase copper tubing elsewhere other than from plaintiff, and in so doing, defendant expended the sum of Two Thousand One Hundred Twenty ($2,120.00) Dollars more than the same material would have cost the defendant had it been delivered by plaintiff according to the original contract referred to herein.”
State v. Massachusetts Bonding & Ins. Co. 40 Del. 274, 9 A. (2d) 77. Cases involving the effect of counterclaims on liquidated claims are annotated in 4 A. L. R. 474 and 53 A. L. R. 768.
See, also, Curran v. Bray Wood Heel Co. Inc. 116 Vt. 21, 68 A. (2d) 712, 13 A. L. R. (2d) 728; Grindstaff v. North Richland Hills Corp. No. 2 (Tex. Civ. App.) 343 S. W. (2d) 742; Carlton Credit Corp. v. Atlantic Refining Co. 12 App. Div. (2d) 613, 208 N. Y. S. (2d) 622; Dunbier v. Stanton, 170 Neb. 541, 103 N. W. (2d) 797.
C. W. La Moure Co. v. Cuyuna-Mille Lacs Iron Co. 147 Minn. 433, 180 N. W. 540; Thompson Yards, Inc. v. Jastrow, 163 Minn. 329, 203 N. W. 960; Bashaw Bros. Co. v. City Market Co. 187 Minn. 548, 246 N. W. 358; Ball v. Thornton, 193 Minn. 469, 258 N. W. 831.
Fidelity State Bank v. Bradley, 227 Minn. 541, 544, 35 N. W. (2d) 748, 750.