Summary
In Magnolia Lumber Corporation, Inc. v. Czerwiec Lumber Co., Inc., 207 Miss. 738, 747, 43 So.2d 204, 206 (1949), it is said, "Since there was a lawful and valid contract between appellant and appellee we are of the opinion that the proffered evidence of custom and usage was properly excluded when the verdict of the jury was set aside by the trial court."
Summary of this case from O.J. Stanton Co. v. Miss. State Hwy. Com'nOpinion
No. 37255.
December 12, 1949.
1. Sales — acceptance of order placed by authorized agent of buyer.
When a broker has been authorized by buyer to place orders for the latter and the seller accepts the orders so placed the contract is thereby completed, and it is not necessary that buyer shall accept the seller's acceptance.
2. Contract of sale — custom and usage.
Where there is a lawful and valid contract between the parties to buy and to sell, complete in its terms, evidence of a custom that such a contract is not to be considered as binding, unless the buyer accepts the seller's acceptance, is properly excluded.
3. Sales — damages for breach of sales contract.
In an action for breach of a sales contract for lumber when the evidence shows without substantial dispute the quantity of the lumber involved and the amount of the advance in the price at the time of the breach, the amount of the buyer's damage may be fixed by the court, there being no essential issue of fact to submit to the jury.
Headnotes as approved by Hall, J.
APPEAL from the circuit court of Hinds County; H.B. GILLESPIE, Judge.
Franklin Franklin, and Barnett, Barnett Jones, for appellant.
The court erred in setting aside the verdict of the jury and sustaining the motion non obstante veredicto, for custom and practice made confirmation by the customer a prerequisite to the formation of the contract. Secs. 246, 248, 249, A.L.I. on Contracts; Burbridge et al. v. Gumbel et al., 72 Miss. 371, 16 So. 792; New York Life Insurance Co. v. Nessossis, 189 Miss. 414, 425, 196 So. 766; Sterling-Midland Coal Co. v. Great Lakes Coal Coke Co., 334 Ill. 281, 165 N.E. 793.
The evidence is insufficient to support a verdict for $3,750.00. Fraternal Aid Union v. Whitehead, 125 Miss. 153, 87 So. 453; Jefferson Standard Life Ins. Co. v. Jefcoats, 164 Miss. 659, 143 So. 842.
In this brief we have submitted, we think, the clear-cut issue that this honorable court is called upon to decide. The negotiations between the parties did not ripen into a contract for the failure of the customer to confirm the orders. The customer in this case was in Chicago; the shipper was in Jackson, Mississippi, and the broker who brought the parties together, or undertook to bring the parties together, was also in Chicago. The broker acting for his principal, The Magnolia Lumber Corporation, Inc. of Jackson, failed in his duty to secure for his principal a written confirmation whereby the customer would have been bound in writing to pay for the lumber when and after it was shipped. Sound business practices dictated that the customer should confirm the order, and the evidence showed it was a custom and practice for this to have been done, and if there was a conflict in the evidence as to the custom and practice, then 12 men from different walks of life were competent and able from their experience to determine on the dispute of facts as to the custom and practice the true solution and the sound solution. The appellee lumber company had a perfect defense under the statutes of fraud to defend any action brought against it for nonperformance.
The jury decided the case in favor of the defendant, the appellant here, but the court set the verdict of the jury aside and found liability existed as a matter of law that the appellant breached his contract, and further found for the plaintiff in the amount sued for, $3,750.00, when there was a dispute as to the damages, if any, sustained by the appellee for this breach of an alleged contract.
Under the authorities and principles we have stated above, it was for the jury to say whether it was the custom and practice for a customer to confirm in writing his purchase of the lumber under the circumstances as existed here, and the jury having found such custom existed on evidence that was competent, believable and in accordance with sound business practices, we respectfully submit the trial court was without authority to set aside its verdict, and we respectfully submit we are entitled to have this cause reversed and the verdict of the jury reinstated and final judgment entered in this court, or, in all events, to a reversal for a new trial as to damages alone, if the court be of the opinion a contract was actually created under this offer and alleged acceptance.
Alexander Alexander, for appellee.
Custom or trade usage inapplicable. Am. Jur. 55, Usage and Customs, pp. 269, 271, 282, 293.
The damages were fully supported by the evidence. Am. Jur. 46, p. 619; Fatheree v. Griffin, 153 Miss. 570, 121 So. 119.
Appellant partially performed the contract and such performances amounted to a ratification irrespective of question of confirmation. Hercules Manufacturing Co. v. Wallace, 124 Miss. 27, 86 So. 706; Hollister v. Frellsen, 114 So. 385; Portsmouth Cotton Oil Refining Corp. v. Madrid Cotton Oil Company, 77 So. 8 (Ala.); Walker Bros. v. Daggett, 115 Miss. 657, 76 So. 569.
Supplementary authorities. Ammons v. Wilson Company, 176 Miss. 645, 170 So. 227; Bernard Manufacturing Co. v. Miller and Robinson, 158 Miss. 892, 131 So. 274; Boyle v. Woody, 188 Miss. 44, 193 So. 917; Bernard Manufacturing Co. v. Little, 141 Miss. 762 105 So. 762; Chorley v. Miles F. Bixler Co., 127 So. 294; Couret v. Conner, 118 Miss. 374, 79 So. 230; Fanning v. C.I.T. Corp., 187 Miss. 45, 192 So. 41.
Summary and Conclusion. The court set aside the verdict of the jury and in effect granted a peremptory instruction for the appellee. The procedure was not questioned — Boyle v. Woody, 188 Miss. 44, 193 So. 917. The court's decision leaves the case just as was prior to going to the jury. The effect of the court's decision is: One — A contract existed. Two — It was breached by appellant. Three — Damages were established without material dispute.
Appellee clearly showed a contract. The weakness of Magnolia's position can be well illustrated by the time element, for example:
1. If Lamb insisted on confirmation by Czerwiec during the first conversation, August 15th, with Cline, when Lamb made his offer to sell three cars to Czerwiec, then he later (about three days) received the written orders from Cline, in Czerwiec's name, and he accepted these orders in writing (on the white copies) without insisting that a condition of confirmation by Czerwiec be incorporated in the sales contract.
2. If Lamb insisted on confirmation in his telephone conversation with Cline when Cline phoned him on the 15th of August, when Cline accepted for Czerwiec Lamb's offer of sale of thirteen additional cars, what availeth this?
Three days later came the written orders from Cline for Czerwiec for thirteen cars and Lamb accepted the said orders without inserting therein a condition of confirmation by Czerwiec. Thus the contracts as written became the contracts in full without conditions or restrictions.
3. If, after Magnolia had accepted and returned the acceptance of Czerwiec's orders, Lamb demanded of Cline, his agent, even frequently, that Czerwiec confirm his own orders, Lamb did not promptly reject or cancel the contract when Czerwiec did not confirm in writing. On the contrary, Lamb made repeated promises to ship the lumber over a period of six weeks or more and even tried to pry up the price $8.00 per thousand on September 29th, and did not formally attempt to reject the orders until November 2, when he returned all the pink copies of the orders with his "tentative order" letter.
4. Czerwiec throughout, manifested his acceptance of the orders by:
(a) Authorizing Cline to accept the offers of Magnolia and sending of orders in Czerwiec's name to Magnolia; (b) By the personal telephone conversation between Czerwiec and Lamb about October 4th when Czerwiec insisted that Lamb fulfill the orders without the increase of $8.00 per thousand demanded and Lamb's promise to see what he could do; (c) By Czerwiec's actions throughout this entire transaction, culminating in his demand for damages and the bringing of this suit.
At the risk of repetition, we should like to note once again the numerous calls and telegrams sent by the broker to Magnolia insisting on the lumber being shipped. The time element clearly shows where the breach originated, and the evidence clearly shows that the difficulty was in the price, which Magnolia itself had set. There was an offer and acceptance, which was a completed contract, followed by a part performance.
The damages were based on a universally accepted basis, and there was no dispute as to the amount of damage suffered.
The lower court was correct in sustaining the motion non obstante veredicto, and the judgment should be affirmed.
In August, 1947, Fred H. Cline, a Chicago lumber broker, having previously received from appellant's predecessor in business a list of lumber in stock available for sale, telephoned appellant's president at Jackson, Mississippi, and inquired whether the stock was still available, and upon being advised that the lumber was available and upon receiving prices thereon, Cline took the matter up with the president of appellee and received authority to place with appellant orders for sixteen carloads thereof at the quoted prices. Written orders for three cars were placed on August 15, and for the remaining thirteen cars on August 18, 1947. These orders were made up in quadruplicate; a blue copy on each order was sent to appellee, a white copy was retained by Cline, and a pink copy and a white copy were mailed to appellant; the pink copy was to be retained by appellant and the white copy had on the bottom a written acceptance of the order for the signature of the appellant. Appellant promptly executed the written acceptance on each white copy, agreeing to make shipment within two weeks to thirty days, and mailed these white copies back to Cline, who delivered them to appellee.
These orders were on printed blanks supplied by Cline. They showed the name of the shipper, the name of the purchaser, the routing and destination of the shipment, and the specifications and price on each car load. There was printed on each order a statement to the effect that it was subject to acceptance by the shipper, that the sale is based upon freight rates in force on the date of order, and that material shipped shall be in accordance with Association grading rules, and Association terms were to govern unless otherwise specified. There was also printed thereon a statement that the order is handled by Cline on a commission basis, that his obligation is only as a sales agent, and that he is not to be held for contingencies and exigencies beyond his control. On the blue copy which went to appellee there was printed a statement to the effect that the above is a copy of your order as placed with the shipper; if not correct, notify me at once; in the absence of immediate advices, this order will be considered correct by all parties concerned. On the pink copy sent to appellant there was printed "Wire me immediately if for any reason you cannot enter this order, otherwise I will understand same is accepted."
Appellant shipped one car of lumber to appellee on October 7, 1947, after the time for filling the orders had expired, and appellee promptly accepted and paid for the same and insisted upon shipment of the remainder of the orders. The price of lumber having increased in the meantime appellant declined to make any further shipments unless appellee would agree to pay an increase of $8 per thousand feet. Appellee declined to do this and brought suit against appellant for the recovery of damages in the amount of the price increase between the date of the orders and the date of breach of the contract.
Appellant defended upon the ground that there was no valid contract for sale of the lumber because under the custom and practice of lumber dealers in like situations a contract is not consummated and completed with out a ratification or acceptance of the order by the purchaser; that Cline was not an agent for and could not bind appellee, and that appellant was under no obligation to ship the lumber without appellee's authorization, acceptance or agreement to pay for the same.
At the trial it was shown without contradiction that Cline was duly authorized to place the orders with appellant, and it was not denied that appellant accepted the orders in writing and obligated itself to make shipment within the period above stated. But appellant contended that notwithstanding these facts there was no completed contract until appellee had accepted appellant's acceptance of the order, and offered evidence, which was admitted over appellee's objection, to show that such was the custom in the lumber trade. The trial court refused a peremptory instruction requested by appellee and submitted the case to a jury which returned a verdict in favor of appellant. Thereupon appellee made a motion for a judgment in its favor non obstante veredicto, which motion was sustained, the verdict was set aside, and a judgment was entered in favor of appellee for the amount sued for, from which this appeal is prosecuted.
(Hn 1) It is contended by appellant that there was never any valid contract between it and appellee because appellee did not accept appellant's acceptance of the orders. We do not agree with this position. It is undisputed that Cline was duly authorized to place the orders with appellant, and it is undisputed that appellant accepted the orders. This was sufficient to make the transaction a completed contract. The language of this Court in Bernard Manufacturing Co. v. Miller Robinson, 158 Miss. 892, 131 So. 274, 276, is directly in point: "Until appellant accepted and approved the order contract, it was a unilateral contract; but, after its acceptance and approval by appellant, it ceased to be unilateral, and was binding on both parties. There was then a valid promise for a valid promise, each being a consideration for the other." See also Portsmouth Cotton Oil Refining Corporation v. Madrid Cotton Oil Company, 200 Ala. 634, 77 So. 8.
(Hn 2) Appellant also contends that it was entitled to show the custom and usage in the lumber trade with reference to acceptance by the buyer of an acceptance by seller of the buyer's order, and that this evidence should have been permitted by the trial court to go to the jury for decision. The three witnesses offered by appellant were all lumbermen residing in Jackson, Mississippi. Instead of showing the custom in the lumber industry generally in situations such as heretofore detailed, each of these witnesses testified as to what he, himself, usually did. At best the evidence was very weak in tending to establish a custom of the trade generally. Plainly its purpose was to show that there was in fact no contract between the parties when as a matter of law under the undisputed evidence, as hereinabove shown, there was a perfectly valid and enforceable contract. In the case of Robinson v. Turfitt, 192 Miss. 160, 4 So.2d 884, 885, this Court said: "It is true that evidence of custom and usage is admissible in certain classes of cases, but the courts recognize the danger of such evidence and do not look upon it with favor, and, to be admissible in those cases, its relevancy and probative value must be clearly shown. 20 Am. Jur. p. 310, Section 333. It is said in 25 C.J.S., Customs and Usages, Section 17, page 94, `Customs and usages are strictly construed and nothing will be held to be within them which it is not proved that they cover.'" And in Fireman's Fund Insurance Company v. Williams, 170 Miss. 199, 154 So. 545, 547, it was said: "Next, it is insisted that the custom and usage alleged is sufficient in this case, independent of the oral agreement, to create an enforceable contract by implication. We are unable to perceive the validity of this contention. The patent and obvious answer to this view is that it is elementary law that usage and custom cannot create a contract or liability where none otherwise exists, and custom and usage may not be invoked in contravention of law. 17 C.J. 449, par. 7; National Savings Bank of District of Columbia v. Ward, 100 U.S. 195, 25 L.Ed. 621; First National Bank of Cincinnati v. Burkhardt, 100 U.S. 686, 25 L.Ed. 766. We think it is the universal rule that custom or usage may not be invoked to change the law. Generally, custom may be read into a contract, or the incidents thereof, or in construing the contract." Since there was a lawful and valid contract between appellant and appellee we are of the opinion that the proffered evidence of custom and usage was properly excluded when the verdict of the jury was set aside by the trial court.
It is lastly contended by appellant that the amount of appellee's damages was a question for determination by the jury. Where there is a substantial dispute as to the facts the position of appellant is of course, correct. (Hn 3) In this case the appellee alleged and proved without objection or contradiction that an average carload of lumber contains 25,000 feet, and that the fifteen cars which appellant did not ship would have contained 375,000 feet of lumber. It was further proved by positive testimony that the class of lumber in question had advanced $10 per thousand feet at the time of breach of the contract, making appellee's total damage $3,750 which is the amount of the judgment. The only effort toward contradiction of the fact of this advance is found in the testimony of the president of appellant. He admitted that the price of lumber started going up "at the end of August or around the middle of September". He would not commit himself to any estimate as to how much it advanced. His testimony was wholly insufficient to raise a jury issue on the question of the amount of the appellee's damage, and we find no error in the action of the trial court in peremptorily fixing the amount at $3,750. The judgment of the lower court is therefore affirmed.
Affirmed.
Montgomery and Alexander, JJ., took no part in the consideration or decision of this case.