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or limitations on the check itself. Petitioners received the
check accompanied by Phillips’s report, which explained the
computation of the total damages. About 3 weeks later on
December 7, 1999, Giannecchini delivered to petitioners a copy of
the release. The release provided that in return for a payment
of $36,973, receipt of which was acknowledged, Pellegri released
JTF and its associates from any claim of damages to their 1999
apricot crop resulting from pesticide applications. Although the
release failed to mention petitioners and implied that the
Pellegris were the owners of the apricots, it would have been
reasonable for petitioners to believe that cashing the check
might have discharged their claim against JTF under California
Code section 3311.
Section 1207(a) of the California Commercial Code is
identical to section 1-207 of the Uniform Commercial Code in
effect in New York, N.Y. Uniform Commercial Code Law sec. 1-207
(McKinney 1993), on which we relied in Stoller v. Commissioner,
supra. In the Stoller case we held the taxpayer in constructive
receipt of income on receipt of a check even though the amount of
the underlying obligation remained in dispute. Section 1207(b)
of the California Commercial Code states that “Subdivision (a)
does not apply to an accord and satisfaction.” The law of
California concerning accord and satisfaction on its face is
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