Kerr-McGee Chemical Corp. v. Harris

442 F.2d 1109
CourtCourt of Appeals for the Fifth Circuit
DecidedJanuary 29, 1971
DocketNo. 29147
StatusPublished
Cited by3 cases

This text of 442 F.2d 1109 (Kerr-McGee Chemical Corp. v. Harris) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kerr-McGee Chemical Corp. v. Harris, 442 F.2d 1109 (5th Cir. 1971).

Opinions

AINSWORTH, Circuit Judge:

In the period April 27 through July 27, 1966, plaintiff W. L. Harris purchased from Kerr-McGee Chemical Corporation seed, fertilizer, chemicals, and irrigation equipment in the total amount of $12,262.49.1 He paid $700 on account, in seven $100 payments during the year 1967, leaving unpaid the sum of $11,562.-49. Kerr-McGee filed suit on July 30, 1968 for this balance due on open account. Harris pleaded the Texas statute of limitations of two years from the date of delivery of each item,2 which period had expired for all items when suit was filed. Harris also counterclaimed against plaintiff Kerr-McGee for $20,-000 damages, said to represent losses by Harris as a result of alleged defects in cotton seed sold him by plaintiff. Kerr-McGee then amended its complaint to come within the provisions of the statute providing that limitation would run from the date of delivery of each item “unless otherwise specially contracted.” The allegations averring such a “special contract” are set out in the margin.3 It is obvious that at the time this suit was filed more than two years had elapsed from the date of delivery of the several articles of merchandise sold by plaintiff to defendant. However, if the merchandise was sold on credit terms on a “special contract” fixing the due date at January 15, 1967, Kerr-McGee’s suit which was filed on July 30, 1968 is within the two-year period and limitation has not run against the claim.

The District Court, sitting without a jury, in detailed findings of fact and conclusions of law, held in Kerr-McGee’s favor and entered judgment for the full balance of the account, $11,562.49, plus attorney fees of $2,000,4 and rejected Harris’ counterclaim for damages. Defendant Harris, on appeal, reiterated his contention that the whole account is barred by the Texas statute of limitation or, alternatively, that all of the account except that represented by the chemicals is barred, and that in no .event should attorney’s fees be awarded. Harris sought no review of his cross-action for damages. We affirm.

% sjs ;}: # :{:
“Actions upon * * * open accounts * * *. In all accounts * * *
the respective times or dates of the delivery of the several articles charged shall be particularly specified, and limitation shall run against each item from the date of such delivery, unless otherwise specially contracted.”

[1111]*1111In his findings of fact the Trial Judge held, in pertinent part:

“3. On or about the time of the first purchase shown in Plaintiff’s Exhibit 4, the sales representative of Plaintiff offered Defendant credit for his purchases known as ‘Harvest Terms’. Defendant understood the credit provisions known as ‘Harvest Terms’ and bought the goods in question with the understanding that he would pay for all goods he purchased on ‘Harvest Terms.’ Subsequently on June 17, 1966, Plaintiff Kerr-McGee accepted Defendant Harris’ application for credit on ‘Harvest Terms’ (Plaintiff’s Exhibit No. 3.)
“4. ‘Harvest Term’ credit required that goods be paid for as follows, with the option in the buyer as to which method of payment he would use:
(a) 5% discount if paid within 30 days;
(b) Net amount due if paid in 90 days;
(c) A service charge of %-l% if paid after 90 days.
“5. The transactions between Defendant Harris and Plaintiff Kerr-McGee constituted an agreement between said parties that Plaintiff would sell such goods to Defendant at the prices shown on Exhibit 4, and that Defendant would pay for same under credit provisions known as ‘Harvest Terms.’ The parties specially contracted that the due date of the account would be January 15, 1967. (Defendant Harris’ depositions p. 11, 12, 13, 20, 21).
“6. The date that Defendant agreed to pay for such goods was January 15, 1967, under these credit terms.
“7. The ‘date due’ shown on each item of Exhibit No. 4 — the invoices of sale —were the respective dates payments were due if the buyer elected to take the 3% discount under ‘Harvest Terms.’ These invoices were mere sales slips or a memorandum of sale and delivery ma'de for the convenience of the parties and not a written contract.”

The District Court, therefore, concluded that defendant Harris and plaintiff Kerr-McGee had entered into a mutually binding oral contract and that the parties had specially contracted that the due date of the account in question was to be January 15, 1967 (citing Art. 5526, Rev.Civ.Stat. of Texas); accordingly, that plaintiff's cause of action was not barred by the Texas statute of limitations. It was held in Gourley v. Iverson Tool Co., Tex.Civ.App., 186 S.W.2d 726, 733 (ref’d w. m. 1945), that an oral agreement is sufficient, and we find no Texas ease which requires a writing for a “special contract” to prevent the running of the statute of limitation.

This case involves considerable conflict in testimony and is one best resolved by the Trial Judge, since credibility choices between the witnesses must be made. The trier of fact who has had an opportunity to hear and observe the witnesses is in the best position to determine where the truth lies. Here the critical question is whether there was a special contract for credit terms for the merchandise sold between Harris and the farm supplier, Kerr-McGee. When Harris determined he wanted to purchase his requirements of seed, fertilizer, and chemicals for his 1966 crop he began by talking with Davis, Kerr-McGee’s store manager at Levelland, Texas. A credit information form was filled in by Davis and signed by Harris. Under the printed portion of the credit information form “Approximate Fertilizer Purchased Annually,” the following was filled in:

“Fert. 5000.00

Weed Kill 5000.00

Seed 5000.00

Jan. 15th”

Another Kerr-McGee form, a credit application for Harris, was filled in by Davis and showed “Estimated Annual Purchases $15,000-20,000,” and the recommended credit line was “20,000.” The [1112]*1112credit application stated “Will pay cash for fertilizer-chemical fall terms (%-l% after 90 days.” At the lower right corner of the credit application the following information appears: “Regular Terms 3%/30 net 90 Harvest Terms-Date Due 1-15-67.” A Kerr-McGee credit authorization dated June 17, 1966 for Harris as customer authorized “Fall Time Limit $20,000 Harvest Term,” as approved by B. C. Miller, plaintiff’s Regional Credit Manager.

Davis, who was plaintiff’s employee at the time, testified that Kerr-McGee had offered credit or harvest terms to the farmers in the county in which Harris’ farm was situated of 3% cash discount, net 90 days, with a service charge for crop terms and that he had secured his company’s approval of a $20,000 line of credit which he had recommended for Harris for the 1966' crop year.

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442 F.2d 1109, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kerr-mcgee-chemical-corp-v-harris-ca5-1971.