Jon-T Farms, Inc. v. Goodpasture, Inc.

554 S.W.2d 743, 1 A.L.R. 4th 512, 21 U.C.C. Rep. Serv. (West) 1309, 1977 Tex. App. LEXIS 3026
CourtCourt of Appeals of Texas
DecidedJune 13, 1977
Docket8720
StatusPublished
Cited by33 cases

This text of 554 S.W.2d 743 (Jon-T Farms, Inc. v. Goodpasture, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jon-T Farms, Inc. v. Goodpasture, Inc., 554 S.W.2d 743, 1 A.L.R. 4th 512, 21 U.C.C. Rep. Serv. (West) 1309, 1977 Tex. App. LEXIS 3026 (Tex. Ct. App. 1977).

Opinions

ELLIS, Chief Justice.

Goodpasture, Inc., as plaintiff, instituted two consolidated breach of contract suits involving the purchase of grain from Jon-T Farms, Inc., the defendant. Jon-T Farms filed a counterclaim seeking recovery for grain delivered but not paid for. Judgment was rendered on a jury verdict favorable to the plaintiff. Goodpasture was awarded a total net recovery in the sum of $69,886.12, after deducting credits allowed on Jon-T’s counterclaim, on one of the contracts. Neither party was awarded any recovery on the other contract.

Jon-T’s appeal has raised various issues concerning: the nature of the alleged breach; alleged waiver of the breach; applicability of certain remedies for breach under the provisions of the Uniform Commercial Code; evidential support for damages awarded; manner of submission of special issues; and the counterclaimant’s plea for statutory attorney’s fees. We have concluded that the judgment of the trial court correctly disposed of the basic issues. Affirmed.

The first contract was dated January 17, 1973, and obligated Jon-T to sell Goodpas-ture 10,000,000 pounds of Number 2 yellow grain sorghum at $2.70 per hundredweight. Grades were to be “official” and the grain was to be shipped during October and November, 1973. Shipping terms were “FOB Cars West Texas TCP (Texas Common Point) Area.” Payment was to be by drafts at a Houston bank. The second contract, dated July 24, 1973, obligated Jon-T to sell 5,000,000 pounds at $4.35 per hundredweight. Goodpasture recovered on only the first ($2.70) contract and it is the only contract involved in this appeal. Throughout this opinion, it will be referred to as “the contract.”

In accordance with the contract terms, Jon-T began shipping the grain in October, 1973. By November 30 (the end of the stated delivery period), however, only 2,023,480 pounds of grain had been shipped. A shortage of rail cars had caused Jon-T’s failure to complete delivery on time. Jon-T continued to ship grain, however, and Good-pasture encouraged these late deliveries. On December 8, 9 and 10, Goodpasture used its own trucks to transport twenty-four (24) loads of grain from Seminole to the rail-head at Seagraves, Texas, where it was stored in Goodpasture’s warehouse.

The evidence is undisputed that the price of grain began to rise subsequent to the execution of the first contract on January 17,1973, and continued to rise until November of 1974, when it reached a price of $7.00 per hundredweight. On December 11 or 12, 1973, the market price was $4.48; in March of 1974, between $5.35 and $5.50; and in October or November, 1974, approximately $7.00 per hundredweight.

By a letter addressed to Goodpasture dated December 10,1973, Jon-T stated that the contract had expired and that Jon-T would extend the contract through December, 1973 at a 60 cent per hundredweight upc-harge. On December 13, Goodpasture suspended payments to Jon-T and (by Telex) ordered its employees to “Honor no more drafts on Jon-T until further advised.” On the same day (December 13), Goodpasture’s president visited with John Thomas of Jon-T. In that conversation, Jon-T was urged to honor the contract and was told that its drafts would be honored if discounts were allowed for non-conforming grain. One carload of non-conforming grain was released back to Jon-T on December 14.

This suit for breach of contract was instituted by Goodpasture on December 17, 1973. Jon-T attempted to draft on Good-pasture on December 19, but the draft was refused because discounts for non-conform[746]*746ing grain had not been allowed. Although it paid no drafts thereafter, Goodpasture accepted and unloaded six (6) carloads of grain between December 10 and December 21. As of this last date, Jon-T had delivered 4,167,550 pounds of the 10,000,000 it had contracted to deliver. Goodpasture had paid for 2,205,660 pounds.

This case was tried to a jury in November, 1975. The jury found that Jon-T had breached and/or repudiated the contract, causing Goodpasture to sustain $121,179.84 in damages. This amount included $2,558.69 of incidental damages. Jon-T was allowed a set-off of $51,293.72 and judgment in favor of Goodpasture was rendered on the verdict for $69,886.12. Jon-T has appealed on fourteen (14) points of error.

In its first four points of error, Jon-T has argued that Goodpasture waived any breach of contract by Jon-T. Both parties agree that the contract was extended past November 30 and continued in effect at least until December 10. Jon-T has attributed this extension to Goodpasture’s reinstatement of the contract after Jon-T breached the contract by failing to complete delivery on the contract by November 30. Goodpasture, on the other hand, has argued that there was no breach of the contract on December 1 because Goodpasture extended the time for delivery. Goodpasture was granted this option in the contract. It is our opinion that under the provisions of the contract, Goodpasture was entitled to extend time for delivery and that the evidence showed such an extension was given. Under either theory, however, the result is the same; the contract was in effect at least until December 10.

Goodpasture has argued that the letter sent by Jon-T on December 10 constituted a repudiation of the contract. According to comment 2 to section 2.610 of the Business and Commerce Code, repudiation occurs when one party declares his intention not to perform under the contract or declares that he will not perform except on conditions which go beyond the contract. Decisions rendered since the Code was enacted support this construction. See, e. g., Laredo Hides Co., Inc. v. H & H Meat Products Co., Inc., 513 S.W.2d 210 (Tex.Civ.App.—Corpus Christi 1974, writ ref’d n. r. e.). The letter in question stated:

You are aware that Contract 16811 for 10,000,000 pounds expired in November. We will extend this contract through December, 1973 at $0.60 per cwt upcharge.

When given the “fair reading” suggested by Code comment 2, supra, this letter communicated an intention not to be bound by the contract and a demand for performance going beyond the terms of the original contract. In our opinion, this was a repudiation of the contract and the jury finding to that effect is supported by ample evidence.

Jon-T, however, has argued that a repudiation of an installment contract can be waived and the contract reinstated under Tex. Bus. & Comm. Code Ann. § 2.612(c). That statute provides:

(c) Whenever non-conformity or default with respect to one or more installments substantially impairs the value of the whole contract there is a breach of the whole. But the aggrieved party reinstates the contract if he accepts a nonconforming installment without seasonably notifying of cancellation or if he brings an action with respect only to past installments or demands performance as to future installments.

It has been argued that Goodpasture’s conduct constituted a waiver of Jon-T’s repudiation as a matter of law.

We doubt that section 2.612(c) was intended to cover a repudiation such as this one. Comment 6 to that section states that this provision was not intended to cover true repudiation. Furthermore, Jon-T did not retract its repudiation as allowed by section 2.611.

In any event, Goodpasture’s actions would not have amounted to waiver as a matter of law as Jon-T has suggested.

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554 S.W.2d 743, 1 A.L.R. 4th 512, 21 U.C.C. Rep. Serv. (West) 1309, 1977 Tex. App. LEXIS 3026, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jon-t-farms-inc-v-goodpasture-inc-texapp-1977.