Opinion
No. 37367.
January 23, 1950.
1. Sales — contracts — oral evidence — when competent.
A merchant, dealing in women's suits, agreed to purchase the seller's line of such goods provided she could have the exclusive right to handle that line in that locality and the seller's agent, agreeing to that condition, endorsed the agreement on the merchant's copy of the order, but omitted the endorsement on the copy sent to the seller. The merchant on learning that the agent had accepted an order from a competing shop challenged him about it whereupon the agent assured the merchant that he would cancel the competing order; but he did not do so, and the same line was shipped to the competing shop: Held that the stated facts could be shown by oral testimony, since such testimony would not be to alter a contract, but to show that no contract had been made.
2. Sales — contracts — return of goods not contracted for, when sufficiently prompt.
Where, under the facts as above stated, the merchant did not definitely learn for about forty days that the seller would not observe or accept the contract as the merchant had definitely proposed it, and as the agent had again promised on being challenged and thereupon the merchant at once returned the unsold portion of the goods, she could not be held liable for the goods so returned.
3. Sales — contracts — meeting of minds.
In the stated situation, the failure of seller's agent to transmit to seller the written agreement, as proposed by the merchant, prevented a meeting of the minds of the parties on a material condition of the proposed contract, and there being no meeting of the minds there was no valid contract between them.
4. Costs — appeal — appellee liable only for part costs, when.
Where, arising out of the stated circumstances, in an action by the seller against the merchant for the full amount of the shipments made to her, the latter conceded liability for the price of one suit sold by her and appealed only as to the judgment against her for the full amount, the court on reversal would adjudge against appellee the costs in the Supreme Court only.
Headnotes as approved by Alexander, J.
APPEAL from the circuit court of Alcorn County; RAYMOND T. JARVIS, Judge.
W.C. Sweat, for appellant.
I. This contract was procured by fraud and on discovery of the fraud appellant had a right to rescind the contract. Gross v. McKee, 53 Miss. 536; Patton-Worsham Drug Co. v. Planters Merc. Co., 86 Miss. 423, 38 So. 209; Howie v. Platt, 83 Miss. 15, 35 So. 216; Nash Miss. Valley Motor Co. v. Childers, (Miss.) 125 So. 709; Laurel Auto Supply Co. v. Sumrall, 184 Miss. 88, 185 So. 566; Lizana v. Motor Sales Co., 163 Miss. 266, 141 So. 616; Henry v. W.T. Rawleigh Co., 152 Miss. 320, 120 So. 188; 24 Am. Jur. Section 204, p. 28; 46 Am. Jur. Section 784, p. 913.
II. The appellant had a right to show by parol evidence that the contract was procured by fraud of the appellee's salesman. Patton-Worsham Drug Co. v. Planters Merc. Co., 86 Miss. 423, 38 So. 209; Lizana v. Motor Sales Co., 163 Miss. 266, 141 So. 291; Wren v. Hoffman, 41 Miss. 616; Henry et al. v. W.T. Rawleigh Co., 152 Miss. 320, 120 So. 188.
III. When the appellant discovered the fraud she immediately rescinded the contract and returned the goods, which she had a right to do. Laurel Auto Supply Co. v. Sumrall, 184 Miss. 188, 185 So. 567; Hunt v. Sherrell, 195 Miss. 688, 15 So.2d 426; Laurel Auto Supply Co. v. Sumrall, supra, 72 A.L.R. 729.
IV. The appellant's motion for a peremptory instruction should have been granted. Salter v. Aviation Salvage Co., 129 Miss. 217, 91 So. 340, 26 A.L.R. 987; Pope v. Andrews, Smedes Marshall Chancery, 145; Parkhurst v. McGaw, 24 Miss. 134.
V. The appellee was not entitled to a peremptory instruction. Columbus Greenville R.R. Co. v. Cobbs, 156 Miss. 604, 126 So. 402; Columbian Mutual Life Ins. Co. v. Gunn, 173 Miss. 897, 163 So. 454; Pitts v. Miss. Power Light Co., 177 Miss. 288, 170 So. 817; Wheat v. Teche Lines, 181 Miss. 408, 179 So. 553; Montgomery Ward Co. v. Windham, 195 Miss. 848, 16 So.2d 553; Long v. Patterson, 198 Miss. 554, 22 So.2d 490.
William Sharp, for appellee.
I. Court erred in allowing parol evidence to supplement terms of written contract. Dowling v. Smyley, 150 Miss. 272, 116 So. 294; McInnis v. Manning, 131 Miss. 119, 95 So. 250; J.I. Case Co. v. McCoy, 111 Miss. 715, 72 So. 138; McArthur v. Fillingame, 184 Miss. 869, 186 So. 828; Continental Jewelry Co. v. Joseph, 140 Miss. 582, 105 So. 639; Paint Oil Co. v. Mangum H., 155 Miss. 876, 125 So. 248; Colt Co. v. Odom, 136 Miss. 651, 101 So. 853.
II. Appellant failed to sustain burden that contract was obtained through fraudulent representations of appellee or its duly authorized agent. Metropolitan Life Ins. Co. v. Hall, 152 Miss. 413, 118 So. 826; Willoughby v. Pope, 101 Miss. 808, 58 So. 706; Carter v. Eastman Gardner Co., 95 Miss. 651, 48 So. 615; Dunlap v. Fox, (Miss.) 2 So. 169; Parkhurst v. McGraw, 24 Miss. 134; 12 R.C.L. 424, Fraud Deceit, Section 172; 3 Elliott on Contracts, 611, Section 2458; 23 Am. Jur. 896, Fraud Deceit, Section 114; National Cash Register Co. v. Griffin, 192 Miss. 556, 6 So.2d 605; Cape County Savings Bank v. Gwin Lewis Groc. Co., 123 Miss. 443, 86 So. 275; Planters Lbr. Co. v. Silbey, 130 Miss. 26, 93 So. 440; McCaskey Register Co. v. Swor, 154 Miss. 396, 122 So. 489.
III. Appellant failed to promptly rescind contract on discovery of fraud but ratified same by her conduct. Laurel Auto Supply Co. v. Sumrall, 184 Miss. 88, 185 So. 567; 46 Am. Jur. 903, Sales, Section 773; 1 Elliott on Contracts, 121, Section 671; 2 Black on Cancellation Rescission (2d Ed.) 1336, Section 542; 2 Black on Cancellation Rescission 1270, Section 539; 46 Am. Jur. 290, Sales, Section 104; 46 Am. Jur. 909, Sales, Section 780.
IV. Appellant rescinded contract on January 19, 1948, but failed to promptly return merchandise. 2 Black on Cancellation Rescission 1346, Section 573; 46 Am. Jur. 728, Sales, Section 589; 2 Black on Cancellation Rescission 1261, Section 536; Jaggers v. Griffin, 43 Miss. 134; Memphis C.R. Co. v. Neighbors, 51 Miss. 412; Laurel Auto Supply Co. v. Sumrall, 184 Miss. 88, 185 So. 566; Annotation, 72 A.L.R. 726.
V. Appellee's motion for peremptory instruction was properly granted. Pitts v. M.P. L. Co., 177 Miss. 288, 170 So. 817; Columbus G.R. Co. v. Cobb, 156 Miss. 604, 126 So. 402; Columbian Mut. Life Ins. Co. v. Gunn, 173 Miss. 897, 163 So. 454; Wheat v. Teche Lines, 181 Miss. 408, 179 So. 553; Trucker's Exch. Bk. v. Conroy, 190 Miss. 242, 199 So. 301; Thomas v. Williamson, 185 Miss. 83, 187 So. 220; J.B. Colt Co. v. Fuller, 144 Miss. 490, 110 So. 427; H. H. Mfg. Co. v. Osterberg, (Minn.) 233 N.W. 302, 72 A.L.R. 722; Levee Com'rs. v. Montgomery, 145 Miss. 578, 110 So. 845; Carrere v. Johnson, 149 Miss. 105, 115 So. 196.
Suit was brought upon open account against appellant for $235.00 representing the shipment of women's suits upon the signed orders of appellant dated October 6, 1947. The only witness for the plaintiff was the defendant who was introduced by plaintiff, and the only other witness was an employee of the plaintiff.
From this testimony, which is uncontradicted, it appears that the order was solicited by one Miller, representative of the seller, who agreed as part of the consideration for the transaction that Miss Ligon would handle exclusively defendant's line in the City of Corinth. Such agreement is evidenced by a notation upon the copy of the order left with her, which is as follows: "Confined to this account in this town." There is no denial that the import of this notation is that she was to handle seller's line as an exclusive outlet in that locality. However, the copy of the order transmitted by the salesman to the seller did not bear this memorandum.
Upon discovery by Miss Ligon that the same line had been sold to and was being handled by another store in the same city, she canceled the contract and returned the unsold merchandise.
The answer to this contention is that Miss Ligon did not promptly rescind the contract. Moreover, it is asserted that there was no fraud in its procurement and that she may not change its terms by oral testimony.
(Hn 1) In our opinion, the oral testimony did not tend to alter but to destroy the contract. Citation need not be summoned to support such right.
The falsity of the representation is shown by the following undisputed facts: the agent Miller agreed to the condition as part of the contract; that he failed to place such condition upon the order he transmitted to his principal, and that appellant, upon an early discovery that a similar order had been placed with a local competitor, challenged Miller with this fact and was assured by him that, consistent with his agreement, he would cancel the competing order, which was not done.
The trial judge directed a judgment for the plaintiff upon the ground that the actual rescission was not promptly made and fixed the applicable period of plaintiff's knowledge of the fraud as being that between January 19, 1948, and the date the goods were returned the latter part of February. January 19 is the date upon which the defendant wrote the following letter:
"Connie Ligon's Beauty Salon And Dress Shop "Telephone 77 Filmore Street Corinth, Miss.
"January 19, 1948
"Donny Brook "New York, New York.
"Dear Sir:
"I'm sorry I won't be able to handle any more suits for this season. At the time I gave my order another shop here in this town bought the same numbers. You promised her the line exclusive after this season. So I have bought coats and suits from another line. I'm very sorry I can't have them for they are beautiful suits.
"Yours truly, "Connie Ligon."
(Hn 2) We do not think that the letter is sufficient proof that defendant then knew that Miller had broken his agreement to cancel the prior orders to her competitor. It refers to a future policy. It is true the letter discloses a knowledge that she knew the rival shop had bought the same numbers, yet such knowledge was that gained from the other shop the day defendant placed her orders, and her anxiety on this point was allayed by the subsequent assurances of Miller that the competing order would be canceled. In reply to the questions directed to this letter "At that time you knew they (the competitor) were getting this line?", she testified, "I did not know they were shipping her." And to the inquiry, "You knew they were supposed to ship her merchandise?", she replied, "No, they promised they wouldn't, but when I found they had promised her another season and they did if she would let them ship her, she would have it exclusive".
Her actual discovery came through a newspaper advertisement by the competing shop in February offering this same line of suits. The next day she shipped back the unsold goods with a copy of the advertisement and canceled the order. We do not have to adjudge whether the period between the letter and the cancellation was sufficiently prompt under the law of rescission. Her testimony is undisputed and is sufficient.
(Hn 3) We may well observe that as to the order and contract there was never a meeting of the minds of the parties. Since the copy bearing the agreement for exclusive representation was not transmitted to the principal, their minds did not meet thereon. If the copy without the notation is to be made the basis of liability, such defect likewise is found for this was not the defendant's agreement. This fact was known to and withheld by the agent from his principal. Therefore there was no contract.
Appellant concedes liability for the value of one suit sold by her and does not contest judgment against her in the sum of $26.75. Her appeal is based upon the alleged error of the trial court in granting a peremptory instruction against her for the full amount including protest fees upon checks sent by her to appellee prior to discovery of the fraud, payment on which was stopped. Appellant requested a peremptory instruction for all items except the one at $26.75. This request ought to have been granted.
(Hn 4) Inasmuch as appellant suffered a just judgment for the one item, which we do not disturb, and her appeal relates only to the balance of the account, costs only in this Court are adjudged against the appellee.
Reversed and judgment here for appellant.