G & H Land & Cattle Co. v. Heitzman & Nelson, Inc.

628 P.2d 1038, 102 Idaho 204, 31 U.C.C. Rep. Serv. (West) 541, 1981 Ida. LEXIS 324
CourtIdaho Supreme Court
DecidedMay 12, 1981
Docket13064
StatusPublished
Cited by10 cases

This text of 628 P.2d 1038 (G & H Land & Cattle Co. v. Heitzman & Nelson, Inc.) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
G & H Land & Cattle Co. v. Heitzman & Nelson, Inc., 628 P.2d 1038, 102 Idaho 204, 31 U.C.C. Rep. Serv. (West) 541, 1981 Ida. LEXIS 324 (Idaho 1981).

Opinions

McFADDEN, Justice.

On May 23, 1974, Heitzman Produce agreed to purchase from G & H Land & Cattle Company all potatoes to be grown by G & H on its acreage in Jerome County. Heitzman Produce’s obligation to purchase was contingent upon the potatoes meeting the size specification set forth in the contract. The potatoes grown did not meet the size specification, and Heitzman Produce refused to accept and pay for the potatoes. G & H brought an action alleging breach of contract. The trial court entered judgment in favor of Heitzman Produce. We affirm.

The facts are not in dispute. The relevant provisions of the contract are as follows:

“3. Specifications. All potatoes shall meet the following specifications: 70% or more of said potatoes must be 6 oz. or larger....
10. Grade, size and tare shall be established from samples taken by Federal inspections and/or under their supervision or others mutually selected, and by standards of Federal-State Inspection Service. Tare, as used herein, shall include rot, dirt and serious greens (green with 4 oz. clip allowed to seller). Samples to be washed before inspection and Seller or his representative may be present at taking [206]*206of inspection of samples. Decision of Federal-State Inspectors to be binding on all parties concerned. Inspection fee shall be divided equally between Seller and Buyer. All dirt and debris accumulated prior to the point of where sample is taken at delivery shall be weighed back over scales as part of light loan weight.”

G & H began harvesting the contract potatoes on September 26 or 27,1974. During the first day of harvest, Edward Harper, the president of G & H, noticed that the potatoes did not appear to meet the contract specifications. On that same date, Mr. Harper telephoned Edward Heitzman, the president of Heitzman Produce, and advised him that the harvesting of the potatoes had begun and of the apparent failure of the potatoes harvested to meet the size requirement of the contract.

Within several days after that telephone conversation, Mr. Heitzman personally inspected the potatoes being harvested and expressed his agreement with Mr. Harper that the potatoes were undersized and would not meet the contract specifications. Also, in early October, Joseph Schwartz, a potato buyer for a California potato processing plant, and Harold Artunian, the president of the processing plant, personally inspected the potatoes being harvested in the field. Mr. Artunian advised Mr. Harper at that time that the potatoes did not meet the contract specifications regarding size.

On October 2 and 3,1974, two truck loads of potatoes were taken from G & H’s field and were transported by Heitzman Produce to Mr. Artunian’s California processing plant. Approximately three weeks thereafter, Heitzman Produce was notified by Mr. Artunian that the potatoes shipped were too small to be used in his processing equipment. Mr. Heitzman then telephoned Mr. Harper and informed him that the potatoes were too small and were not “usable.” Heitzman Produce paid the contract price for the two loads of potatoes, Mr. Heitzman testifying that it is common practice to pay for any potatoes tested in order to keep the goodwill of the growers.

G & H continued to harvest the potatoes through October 23, 1974. In total, 111 loads of potatoes were placed in G & H’s ranch storage facilities. Pursuant to the agreement, an additional 10 loads were transported to, and stored in, storage facilities owned by Heitzman Produce, as G & H’s facilities could not adequately store the entire crop.

On November 6 or 7, 1974, approximately two weeks after the completion of the harvest Heitzman Produce began preparations for removing the potatoes from storage. Mike Heitzman, an employee of Heitzman Produce, was in charge of the loading, and commenced with the ten loads stored in their cellar. On November 15, 1974, an inspection for size pursuant to the contract was done by Max Moffatt, a state potato inspector. Mr. Moffatt inspected three of the ten loads of the potatoes as they came out of storage and determined that only 39.2% of the potatoes were six ounces or over. Based on this inspection Heitzman Produce, through Mike Heitzman, orally informed G & H on November 18, 1974, that it was rejecting the balance of the crop. Heitzman Produce paid for all ten loads of potatoes transported and subject to inspection, again for the purpose of goodwill.

Mr. Harper, Mr. Heitzman and Mr. Schwartz met on December 7, 1974, to discuss the rejection of the balance of the crop. Mr. Harper requested that another test be conducted to determine if the potatoes met contract specifications. A test of 105,000 pounds of potatoes was conducted by a state inspector on December 14, 1974, with the results showing only 54% of the potatoes being six ounces or over. Based upon this test Heitzman Produce again rejected the potatoes; however, they paid for the potatoes tested, as was the company’s custom. In total, Heitzman Produce paid the contract price for 439,500 pounds of potatoes, representing the two loads taken to California, the ten loads subject to inspection on November 15, 1974, and the two loads inspected on December 14, 1974.

Thereafter, pursuant to Mr. Harper’s request, on December 13,1974, Heitzman Pro[207]*207duce served G & H with a written notice of rejection.

On April 13, 1977, G & H filed this claim against Heitzman Produce alleging breach of contract. After hearing the case, the district court judge in his memorandum opinion specifically found that the size requirement for the potatoes contained in the contract was never modified by the parties nor waived by Heitzman Produce; and that Heitzman Produce had no obligation to accept any of the potatoes since they did not meet the size specification. Accordingly, judgment was entered in favor of Heitzman Produce on August 1, 1978, with costs and attorney fees awarded to Heitzman Produce.

On appeal, G & H contends that the trial court erred in failing to consider any applicable provisions of the Uniform Commercial Code (UCC) as adopted in Idaho, and that pursuant to the UCC, Heitzman Produce did not act reasonably in rejecting the nonconforming potatoes tendered to it by G & H. Heitzman Produce counters that the trial court reached the proper decision, and that at all times it acted in a commercially reasonable manner.

As in the case of Borges v. Magic Foods, Inc., 101 Idaho 494, 616 P.2d 273 (1980), the potatoes here were movable at the time they were identified in the contract, therefore were “goods” within the purview of the UCC, I.C. § 28-2-105, and consequently, the transaction in dispute is governed by the UCC as adopted in this state, I.C. §§ 28-2-101 et seq.

Whether the trial court’s disregard of the UCC is to be considered as error, harmless or reversible, is dependent upon our determination whether the decision below can be sustained under the applicable provisions of the UCC. The case law is replete with decisions holding that if a decision of a lower court is correct, but is founded on an incorrect theory, it will be affirmed on appeal upon the correct theory. See, e. g., Robison v. Compton, 97 Idaho 615, 549 P.2d 274 (1976); City of Weippe v. Yarno,

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G & H Land & Cattle Co. v. Heitzman & Nelson, Inc.
628 P.2d 1038 (Idaho Supreme Court, 1981)

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Bluebook (online)
628 P.2d 1038, 102 Idaho 204, 31 U.C.C. Rep. Serv. (West) 541, 1981 Ida. LEXIS 324, Counsel Stack Legal Research, https://law.counselstack.com/opinion/g-h-land-cattle-co-v-heitzman-nelson-inc-idaho-1981.