Opinion
No. 39194.
April 19, 1954.
1. Sales — failure to state price — or method of determining price — contract unenforceable.
Where oral contract to sell baby chicks needed by defendants during certain season did not establish price at which they were to be furnished, but left price subject to later determination by the parties, was unenforceable as to undelivered shipments.
2. Sales — contracts — price — consideration — fix with reasonable certainty.
As a general rule, it is essential to a valid sale or contract of sale that the parties thereto, either expressly or impliedly, agree on and fix with reasonable certainty the price or consideration to be paid for the property sold, or provide some method or criterion by which it can be definitely ascertained, without leaving anything to be determined by future agreement or negotiations between the parties, and if there is no agreed consideration or price there can be no valid contract of sale.
3. Sales — baby chicks — failure to provide method for determining price — statute of frauds.
In suit to recover balance due on shipment of baby chicks by plaintiff to defendants, wherein defendants filed counterclaim for breach of plaintiff's alleged oral agreement to furnish the baby chicks needed by defendants during certain season, even if such oral agreement had been an enforceable executory contract despite failure to provide method for determining price to be paid, subsequent letter by defendants to plaintiff which made three substantial and important changes in the original understanding, amounted to a completely new oral contract; and since there was no part performance under oral contract, defendants were precluded by statute of frauds from asserting their counterclaim. Sec. 268, Code 1942.
4. Frauds, Statute of — purpose of.
The Statute of Frauds was designed to serve the salutary purpose of requiring traders and others to make written summaries of their contracts of sale before they will be enforced. Sec. 268, Code 1942.
Headnotes as approved by Ethridge, J.
APPEAL from the circuit court of Humphreys County; ARTHUR JORDAN, Judge.
Montgomery Varnado, Belzoni, for appellants.
I. The statute of frauds has no application to this case.
A. One entire contract, and partial delivery was made. Becker Co. v. E.D. Davis Drug Co., 93 Miss. 803, 47 So. 468; Clark v. Till, 177 Miss. 891, 172 So. 133; Crystal Ice Co. v. Holliday, 106 Miss. 714, 64 So. 658; Cumberland Glass Mfg. Co. v. Wheaton, 208 Mass. 425, 94 N.E. 803; Fullam v. Wright Colton Wire Cloth Co., 196 Mass. 474, 82 N.E. 711; Hughes v. Rendle Corp., 271 Mass. 208, 171 N.E. 236; Jessup Moore Paper Co. v. Bryant Paper Co., 283 Pa. 434, 129 A. 559; Moreland v. Newberger Cotton Co., 94 Miss. 572, 48 So. 187; Poole v. Johns-Manville Products Corp., 210 Miss. 528, 49 So.2d 891; Producers' Coke Co. v. Hoover, 268 Pa. 104, 110 A. 733, 734; Stonewall Mfg. Co. v. Peek, 63 Miss. 342; Sec. 268, Code 1942; 17 C.J.S., Contracts, Sec. 331 pp. 785-7; 37 C.J.S., Statute of Frauds, Sec. 156 p. 640.
B. Contract was not invalid for uncertainties. American Cotton Co. v. Herring, 84 Miss. 693, 37 So. 117; Blue Ribbon Creamery v. Monk, 168 Miss. 130, 147 So. 329 (sugg. error overruled, 168 Miss. 130, 147 So. 782); Booske v. Gulf Ice Co., 24 Fla. 550, 5 So. 247; Evers v. Gilfoil, 247 Mass. 219, 141 N.E. 926; Kirkley v. F.H. Roberts Co. (Mass.), 167 N.E. 289; McIllmoil v. Frawley Motor Co., 190 Cal. 546, 213 P. 971; Minnesota Lumber Co. v. Whitebreast Coal Co., 160 Ill. 85, 43 N.E. 774, 31 L.R.A. 529; Pugh v. Gressett, 136 Miss. 661, 101 So. 691, 38 A.L.R. 678; Silver v. Graves, 210 Mass. 26, 95 N.E. 948; Spiers v. Union Drop Forge Co., 174 Mass. 175, 54 N.E. 498; 77 C.J.S., Sales, Secs. 20(b), 21(a), 75(a) pp. 611-12, 621-3, 740, 742; Clark on Contracts (4th ed., Hornbook Series), pp. 59-60, 165-6.
II. Acceptance of the check contained in the letter of July 15, 1952, was an acceptance of the balance of the letter. The seller could not accept part of the letter and reject part of the letter at one and the same time. Colossus Company v. D.L. Fair Lumber Co., 161 Miss. 267, 136 So. 919; Hytken Bros. v. Hanover Children's Wear Co., 155 Miss. 478, 124 So. 654; Hytken Bros. v. International Dress Co., 155 Miss. 469, 124 So. 653; Merchants Manfacturers Bank v. State, 200 Miss. 291, 25 So.2d 585, 591; Ormond v. Henderson, 77 Miss. 34, 24 So. 170; S.P. Nelson Sons v. Wilkins Parks, 151 Miss. 492, 118 So. 436; 31 C.J.S., Estoppel, Secs. 109(a), 110(a) pp. 347-9, 350-51; 77 C.J.S., Sales, Secs. 68, 69 pp. 723, 727; Vol. XXIV-A, Mississippi Southern Digest, Sales, Secs. 180(1), 180(2) pp. 62-3.
III. The check for $2,156.64 was accepted in full and complete settlement for the balance due on the 38,000 chickens, which were delivered. Blue Ribbon Creamery v. Monk, supra; Craft v. Standard Acc. Ins. Co., 23 Ala. App. 246, 123 So. 265; Enochs v. Delta Cotton Oil Co., 139 Miss. 234, 104 So. 92; May Bros. v. Doggett, 155 Miss. 849, 124 So. 476; Metropolitan Life Ins. Co. v. Perrin, 184 Miss. 249, 183 So. 917; State Highway Dept. v. Duckworth, 178 Miss. 35, 172 So. 148; Yazoo M.V.R.R. Co. v. Sideboard, 161 Miss. 4, 133 So. 669; 31 C.J.S., Estoppel, Sec. 110 p. 358; Vol. V, Mississippi Southern Digest, Compromise and Settlement, Sec. 5(2) pp. 419-22.
IV. Loss of profits. Delapierre Co. v. Chickasaw Lbr. Co., 111 Miss. 607, 71 So. 872; Delta Table Chair Co. v. Y. M.V.R.R. Co., 105 Miss. 861, 63 So. 272; Eastman Gardiner Hardwood Co. v. Hall, 137 Miss. 354, 102 So. 270; Herring v. Edwards (Miss.), 29 So. 787; Mississippi Power Light Co. v. Cochran, 167 Miss. 705, 147 So. 473; Montgomery Ward Co. v. Hutchinson, 173 Miss. 701, 159 So. 862; 25 C.J.S., Damages, pp. 516-7, 519.
O.B. Triplett, Jr., Forest, for appellee.
I. The terms of the alleged agreement made in April, 1952, were left open for future negotiations, and the contract was therefore void. Burgson Co. v. Williams, Smithwick Co., 155 Miss. 351, 121 So. 817, 818; Crystal Ice Co. v. Holliday, 106 Miss. 714, 64 So. 658; Elmore v. Quillian Co. v. Parish Bros., 170 Ala. 499, 54 So. 203; Giglio v. Saia, 140 Miss. 769, 106 So. 513; Holmes v. Evans, 48 Miss. 247, 12 Am. Rep. 372; McGuire v. Stevens, 42 Miss. 724, 2 Am. Rep. 649; Pugh v. Gressett, 136 Miss. 661, 101 So. 691, 38 A.L.R. 678; Risk v. Risher, 197 Miss. 155, 19 So.2d 484, 488; Sturm v. Dent, 141 Miss. 648, 107 So. 277; Thomas Hinds Lodge No. 58, F. A.M. v. Presbyterian Church, 103 Miss. 130, 60 So. 66; Willis v. Ellis, 98 Miss. 197, 53 So. 498, Ann. Cas. 1913A, 1039; 13 C.J., Sec. 100 pp. 290, 292; 35 C.J., Sec. 123 p. 1009; 55 C.J., Sec. 380 p. 392; 77 C.J.S., Sec. 21 p. 621.
II. Each sale of baby chicks was a contract of sale by itself. Mark v. Stuart Howland Co., 226 Mass. 35, 115 N.E. 42.
III. The verbal contract alleged to have been made on July 14, 1952, was void under Section 268, Code of 1942. Sec. 268, Code 1942; 37 C.J.S., Sec. 147 p. 633; 77 C.J.S., Sec. 21 p. 621.
IV. There was no signed memorandum which satisfied the Statute of Frauds for two reasons.
A. The writing must be delivered. Howie v. Swaggard, 142 Miss. 409, 107 So. 556.
B. The writing must contain all of the terms of the contract including the price. Kervin v. Biglane, 144 Miss. 660, 110 So. 232; Sturm v. Dent, supra.
V. Appellant failed to show any lost profits by competent evidence and thereby failed to establish their counterclaim for the following reasons.
A. The damages were too uncertain and speculative. Shell Petroleum Corp. v. Yandell, 172 Miss. 55, 158 So. 787, 790; Vicksburg M.R.R. Co. v. Ragsdale, 46 Miss. 458.
B. There was no competent evidence offered to show what feed for the 56,000 chicks would have cost. Illinois Cent. R.R. Co. v. Langdon, 71 Miss. 146, 14 So. 452; Thornton v. Birmingham, 250 Ala. 651, 35 So.2d 545, 7 A.L.R. 2d 773; Whiteside v. Elliott, 142 Miss. 43, 107 So. 195; 22 C.J., Sec. 152 (Note 22) pp. 188-9; 31 C.J.S., Sec. 194 p. 933.
VI. The check for $2,156.64 was never accepted in full and complete settlement for the balance due on the 38,000 chickens which were delivered. Citizens Bank of Greenville v. Kretchmar, 91 Miss. 608, 44 So. 930.
Appellee, R.H. Fechtel, doing business as Pelahatchie Broiler Hatchery, brought this suit in the Circuit Court of Humphreys County against George J. Gordon and others, doing business as Belzoni Development Company. The declaration charged that on April 25, 1952, plaintiff sold and delivered to defendants 18,000 baby chickens at 12c each, and on May 2, 1952, 20,000 baby chickens at 12c each, and that of the total purchase price of $4,560, the defendants paid $2,160, leaving a balance due plaintiff-appellee of $2,400. The declaration had attached to it a statement of account and an affidavit.
The defendants, appellants here, George J. Gordon and other, filed an answer and a counter-claim. They admitted the purchase by them of the baby chickens as charged in the declaration, but denied that those sales were two contracts, and averred that the shipment of 38,000 baby chickens was a shipment of only part of the total contracted for; that appellee had agreed to sell appellants 56,000 more baby chickens, being their needs for the 1952 season, which agreement was breached by plaintiff. The defendants further averred that under their contract they were permitted to deduct 12c per chicken for all baby chickens that died, but not exceeding ten per cent of the shipment, and that 2,028 chickens had died out of the past shipment, leaving defendants owing the plaintiff on the shipment of 38,000 chickens only $2,156.64. In a counterclaim, the defendants averred that plaintiff had agreed to furnish them all of the baby chickens they needed for the calendar year and season of 1952; that it was agreed that the price would be fixed at the time each shipment was ordered; that on July 14, 1952, plaintiff and defendants agreed upon the shipment to defendants of 56,000 baby chickens at 13c each. The counterclaim charged that plaintiff had failed to comply with the contract initially made in the Spring of 1952, by failing to ship these 56,000 baby chickens, and averred that as a proximate result of that breach of contract, defendant lost profits of $3,443.48. Deducting the sum that the defendants admitted they owed plaintiff, $2,156.64, the defendants, counterclaimants, asked for a judgment against plaintiff for $1,286.84. The answer to the counterclaim denied any contract with the counterclaimants for the entire season of 1952, and denied a breach of any agreement. Plaintiff also pleaded that the contract as alleged by defendants was violative of the statute of frauds.
A trial on these issues was held in July 1953. Both sides introduced evidence as to the terms of the dealings and alleged agreements between them. The circuit court gave plaintiff, appellee, a peremptory instruction for the full amount sued for by him, $2,400. It therefore held that appellants had no valid counterclaim. They here complain of that ruling.
The pertinent statute of frauds is Code of 1942, Section 268: "A contract for the sale of any personal property, goods, wares, or merchandise, for the price of fifty dollars or upward, shall not be allowed to be good and valid unless the buyer shall receive part of the personal property, goods, wares and merchandise, or shall actually pay or secure the purchase-money, or part thereof, or unless some note or memorandum, in writing, of the bargain be made and signed by the party to be charged by such contract, or his agent thereunto lawfully authorized."
Appellants' counterclaim is based on the contention that in April 1952 they made an oral contract with appellee-hatchery by which appellee would furnish to appellants all of the baby chickens which appellants would need in their business for the calendar year of 1952; that it was agreed that the market price of the chickens at the time a particular order was "booked" would be the price of same; that this was one entire agreement, and in April and May they purchased from the hatchery under this contract 38,000 chickens, which was such part performance of the agreement as to make it valid. In July they ordered under the April contract 56,000 chickens, appellants assert, at a price then agreed upon of 13c per chicken; but the hatchery would not deliver 56,000 chickens, and this constituted a breach of contract, for which appellants seek damages. In response to this counterclaim, appellee, plaintiff below, asserts that no such contract for the entire season was made in April 1952; that appellee simply delivered on order the 38,000 chickens which have not been paid for; that even if such a contract was made, according to the testimony of George J. Gordon, a partner in appellants' firm, the price of any shipments of chickens had to be fixed at the time of shipment by negotiation and agreement at that time; that therefore the contract was unenforceable as to the undelivered chickens, since it was wholly indefinite as to the price; and that the July agreement was oral and invalid under the statute. We think that appellee's position is correct.
Accepting appellants' testimony at its strongest, the original agreement between the parties amounted to this: the hatchery would supply the needs of appellants during the 1952 season up to 150,000 to 160,000 chickens, provided the parties could agree upon the price at the various times when orders should be subsequently made. There was no firm offer either to buy or sell a specific number of chickens, nor was there any agreement that the existing market price at a particular market or the fair value of the chickens should govern. The only testimony for appellants indicating any understanding as to price of future shipments of chickens was that of Gordon who testified: "Q. What was the original contract? A. The usual procedure is to set the price at the time of the bookings. That is what we understood. Q. Did the price of the baby chicks fluctuate? A. Yes, sir. Q. How far ahead were they booked? A. We booked them 30 days to six weeks ahead, and the price was set on them at that time."
(Hn 1) In other words, Gordon said that the price of baby chickens fluctuated and that the parties would "set" the price on them at the time they were booked. He did not state that the price would be the market price at any particular market, and since there was no agreement as to that essential element, the contract asserted by appellants was unenforceable as to undelivered shipments. The applicable rule is stated in 77 C.J.S., Sales, Section 21, p. 621, as follows: (Hn 2) "As a general rule, it is essential to a valid sale or contract of sale that the parties thereto, either expressly or impliedly, agree on and fix with reasonable certainty the price or consideration to be paid for the property sold, or provide some method or criterion by which it can be definitely ascertained, without leaving anything to be determined by future agreement or negotiations between the parties in relation thereto; and in some jurisdictions these requirements are provided for by statute. If there is no agreed consideration or price there can be no valid contract of sale, . . ." To the same effect are Elmore, Quillian Company v. Parish Brothers, 170 Ala. 499, 54 So. 203 (1911); Risk v. Risher, 197 Miss. 155, 19 So.2d 484 (1944). See also 77 C.J.S., Sales, Section 75 (b).
As previously stated, the hatchery shipped to appellants 38,000 chickens at an agreed price of 12c, in two shipments on April 25 and May 2. In July appellants, through their agent Everitt, gave an order for 56,000 chickens, but there was no agreement as to price. Everitt reported this to Gordon, and on July 14 Gordon talked over the telephone to McAuliffie, when it was agreed, Gordon said, that the shipment of 56,000 chickens would cost 13c each. On the next day, March 15, Gordon, acting for appellants, wrote appellee a letter as follows:
"Pursuant to our telephone conversation of yesterday, you will find enclosed our check for $2,156.64 which is payment in full on the 38,000 birds which you furnished us in April, computed as per our telephone agreement as follows:
"Number of birds raised and sold out of the 38,000 — 35,972 at 12c __________________________ $4,316.64 "Less amount paid by check July 10, 1952 ____________ 2,160.00 _________ "Balance due, check attached ________________________ 2,156.64
"It is our present understanding that you will furnish us with 56,000 birds during the next three weeks as per schedule we agreed on of 20,000 on July 22d 18,000 each for the next two Tuesdays to be paid for when the birds are sold on the basis of the number of chickens raised.
"It is our understanding that this agreement holds good on up to and including 10% of our net mortality, exclusive of free chicks, and that this agreement will be in effect on every future purchase of baby chicks from your hatchery."
(Hn 3) This letter failed to make any provision whatever for the price of the 56,000 chickens. Moreover, this alleged agreement for the July shipment, relied upon by appellants, makes three substantial changes in the original agreement of the parties. It reduced appellants' liability on the shipments already made by the sum of $243.36, based upon a credit allowance to appellants of the chickens which had died out of the two prior shipments totaling 38,000. It also provided for a ten per cent mortality allowance in all future shipments. Gordon conceded that the original agreement in April 1952 contained neither of these provisions. And most importantly, the July agreement completely changed the method of payment for the chickens shipped by the hatchery. They were "to be paid for when the birds are sold on the basis of the number of chickens raised." These three material and substantial changes in appellants' original contract with appellee, assuming the correctness of Gordon's testimony, were of such a nature as to constitute a completely new and independent oral agreement. And since there was no part performance under it as required by the statute of frauds, Code Section 268, it was unenforceable.
In other words, the original agreement in April 1952 did not amount to an enforceable executory contract, because there was no agreement as to the future price of the chickens to be purchased. Gordon testified that the parties would "set" the price at the time a particular order was "booked." And even if the original oral agreement were an enforceable one, the July oral agreement amounted to a completely new contract, in that it made three substantial and important changes in the original understanding. Since the July agreement was oral and there was no part performance under it, appellants are precluded by the statute from asserting their counterclaim. (Hn 4) The statute was designed to serve the salutary purpose of requiring traders and others to make written summaries of their contracts of sale before they will be enforced. This case is a good illustration of the confusions and ambiguities which result from a failure to comply with the act, and of one reason why it was enacted.
Affirmed.
Roberds, P.J., and Hall, Lee and Holmes, JJ., concur.