Lish v. Compton

547 P.2d 223, 18 U.C.C. Rep. Serv. (West) 1174, 1976 Utah LEXIS 780
CourtUtah Supreme Court
DecidedMarch 11, 1976
Docket14111
StatusPublished
Cited by37 cases

This text of 547 P.2d 223 (Lish v. Compton) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lish v. Compton, 547 P.2d 223, 18 U.C.C. Rep. Serv. (West) 1174, 1976 Utah LEXIS 780 (Utah 1976).

Opinions

CROCKETT, Justice:

Grain broker Lloyd Lish sued Dean Compton alleging breach of a verbal contract to sell plaintiff his 1973 wheat crop, expected to be about 15,000 bushels, from defendant’s farm at Sublett, Idaho. The defense asserted was that there was no valid agreement ever entered into because the amount was over $500 and there was no contract in writing as required by statute.1

A jury answered interrogatories favorable to the plaintiff’s contentions. The court entered judgment in accordance therewith and assessed damages of $13,150. Defendant attacks the finding that there was a binding contract, and also contends that even if liability did exist, the computation of damage was excessive.

On August 2, 1973, the plaintiff Lish telephoned the defendant Compton and talked about the purchase of the latter’s wheat crop soon to be harvested. The price discussed, and which plaintiff claims was agreed upon, was $3.30 per bushel for about 15,000 bushels. Plaintiff asserts that he made a notation of this agreement in his notebook of that day; and that he committed this same 15,000 bushels of wheat to the Pillsbury Mills at Ogden for $3.45 per bushel, to be delivered upon the harvesting of the wheat. In view of the rule of review which requires us to survey the evidence in the light favorable to the jury’s finding, we take the following critical facts as stated in the plaintiff’s own ' brief:

“On August 3, 1973, the plaintiff entered in his notebook written notation of the purchase thus: ‘red wheat, rye mix . . . 15,000 bushels, $3.30 per bushel, as is.’ This confirmation was mailed by the plaintiff [225]*225to the defendant on or about August 14, 1973, and was received by the defendant in the mails in the afternoon of August IS, 1973.”

The statute upon which the controversy in this case devolves is Section 70A-2-201:

Formal requirements — Statute of frauds. — (1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought

The plaintiff of course concedes that the contract was for over $500 and that therefore, under the statute, would normally be required to be in writing. His contention is that the transaction comes within the exception of subsection (2) of that statute:

Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements' of subsection (1) against such party unless written notice of objection to its contents is given within ten days after it is received.

The defendant’s principal argument as to the unsoundness of the judgment is that there is no justification for finding that he was acting as a “merchant” in the transaction. In directing attention to that issue, it is pertinent to observe that the plaintiff, who is regularly engaged in the buying and selling of grain, fits very well into the commonly understood meaning of that term. The problem is as to the defendant. Either on his own, or with his father, he has been a hay and grain farmer for 25 years. He has not and does not buy and sell from or for anyone, other than what is produced on his own farm. Nor does he maintain a roadside stand or otherwise continuously offer his produce to the public for sale. But the defendant does keep conversant with market prices and each year negotiates and contracts to sell his crops to his best advantage. Upon these facts the trial court submitted to the jury the question as to whether the defendant was acting as a “merchant” in the transaction, to which they answered “Yes.”

In regard to the submission of that question to the jury, this is to be said: It is the prerogative and the duty of a jury to resolve issues of fact. But it is the prerogative and duty of the trial court to determine questions of law. There was no dispute as to the facts relating to whether the defendant was a “merchant.” Therefore that issue was one of law for the court to rule upon.

In order to ascertain the meaning and application of the statute it is proper to look to its background and purpose. This appears to be that transactions of comparatively substantial and serious nature should be in writing. But there is carved out of that generality the exception as between “merchants.” The reason for this is that merchants are of necessity engaged in numerous transactions, so it is desirable that they can be handled in an expeditious manner. Accordingly, the exception in subsection (2) of the statute provides for a procedure, as between merchants, whereby an oral contract may ripen into a binding contract if one party gives the other a written confirmation within a reasonable time, to which the recipient has ten days in which to give written notice of objection.

The fact that defendant kept conversant with the current price of wheat and planned to market it to his advantage does not necessarily make him a “merchant.” It is but natural for anyone who desires to sell anything he owns to negotiate and get the best price obtainable. If this would make one a “merchant,” then practically anyone who sold anything would be deemed a merchant, hence would be an exception under the statute and the need for a con[226]*226tract in writing could be eliminated in most any kind of a sale.2

We think the meaning of the térm “merchant” as used in the statute under consideration refers primarily to one whose occupation is that of buying and selling.3 However, we would not exclude therefrom one who sells products he makes or raises, or otherwise acquires, if that is done with such regularity that it forms at least a substantial part of his occupation. But we think it is neither consistent with the intent and purpose of the statute, nor with the ordinarily understood meaning of its language, to apply it to anyone such as this defendant who simply sells his crops annually. Consequent to what we have said, it is our opinion that the trial court should have ruled as a matter of law that under the circumstances shown here the defendant was not a “merchant” within the meaning of the statute.

Plaintiff also relies upon the subsection (3)(b) of the statute which provides that even though the contract is not in writing it is enforceable “if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made . . . ” It is true, as plaintiff asserts, that the defendant acknowledged the conversation concerning the purchase of his grain; and further stated that if he had received confirmation within a reasonable time he would have considered himself bound thereby. But just as the plaintiff relies on the statute to impose liability upon defendant, the latter is also entitled to its protections.

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Bluebook (online)
547 P.2d 223, 18 U.C.C. Rep. Serv. (West) 1174, 1976 Utah LEXIS 780, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lish-v-compton-utah-1976.