Warder & Lee Elevator, Inc. v. Britten

274 N.W.2d 339, 25 U.C.C. Rep. Serv. (West) 963, 1979 Iowa Sup. LEXIS 868
CourtSupreme Court of Iowa
DecidedJanuary 24, 1979
Docket61679
StatusPublished
Cited by34 cases

This text of 274 N.W.2d 339 (Warder & Lee Elevator, Inc. v. Britten) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Warder & Lee Elevator, Inc. v. Britten, 274 N.W.2d 339, 25 U.C.C. Rep. Serv. (West) 963, 1979 Iowa Sup. LEXIS 868 (iowa 1979).

Opinions

McCORMICK, Justice.

The question in this action for breach of an oral contract to sell grain is whether the trial court erred in holding defendant’s statute of frauds defense under the Uniform Commercial Code was defeated by promissory estoppel. We affirm the trial court.

This case was tried to the court at law. The trial court’s findings of fact have the effect of a special verdict and we examine the evidence in the light most favorable to the judgment. We are not bound by trial court determinations of law. Kurtenbach v. TeKippe, 260 N.W.2d 53, 54-55 (Iowa 1977).

Plaintiff Warder & Lee Elevator, Inc., operates a grain elevator in the town of Webster. The corporation president, Francis Lee, managed the elevator for many years until he suffered a slight stroke in November 1974. He was succeeded as manager by his son James who had been an elevator employee since 1964. The Lees were the only witnesses at trial.

We recite the evidence in the light most favorable to the judgment. Francis Lee was alone in the elevator office on July 4, 1974. Defendant John W. Britten, a farmer in the area, came to the office during the morning with a friend. The elevator had purchased Britten’s grain for years, and he and Lee were well acquainted. At Britten’s request Lee quoted him the price the elevator would pay for new-crop corn and soybeans for fall delivery based on market prices of the prior day.

Britten offered to sell and Lee agreed for the elevator to purchase from Britten 4000 bushels of corn at $2.60 per bushel and 2000 bushels of beans at $5.70 per bushel for October-November delivery.

The elevator did not at that time require a seller to sign a memorandum or other writing to show the agreement. Instead, [341]*341the only writing consisted of notes showing the terms of sale made by Lee for internal bookkeeping purposes. All of the elevator’s prior purchases from Britten had been upon oral agreement, and Britten had kept his promises on each occasion. In fact, no seller had previously refused to perform an oral agreement with the elevator.

It was the custom of the elevator not to speculate in grain but to act essentially as a broker. Thus on July 5, 1974, the elevator sold the same quantities of corn and beans as were involved in the Britten purchase for fall delivery to terminal elevators at Musca-tine for a few cents more per bushel.

Grain prices increased substantially during July. On July 29, 1974, Britten called Francis Lee and said he wished to “call the deal off”. Lee told him: “You cannot call it off. We sold this grain, and we expect delivery this fall.” Britten said he would not deliver the grain.

In an effort to mitigate its loss and to enable it to meet its commitment to sell the grain, the elevator purchased appropriate quantities of new-crop corn and beans from other farmers on and shortly after July 29.

In August 1974, James Lee met Britten on a street in Webster. Britten initiated a conversation in which he said he would not fulfill his agreement and offered $500 in settlement. Although counsel for Britten objected to the admissibility of the evidence at trial, the objection was untimely and no motion to strike was made. Lee rejected the offer. He told Britten the elevator had sold the grain and expected him to perform under his contract.

Britten sold his 1974 crop elsewhere.

The elevator brought this action against Britten for breach of the oral agreement, seeking as damages the loss it sustained in covering its delivery obligation under the July 5 contracts by which it sold the quantity of grain purchased from Britten. See § 554.2712, The Code. That loss was $6478.34, which was the amount, plus interest, for which the trial court entered judgment.

Britten offered no evidence at trial. He relied solely on the statute of frauds in § 554.2201, The Code. The elevator urged promissory estoppel in bar of the defense.

The statute of frauds applicable to the sale of crops is § 554.2201. Under this statute an oral contract for the sale of goods for a price of $500 or more is unenforceable, with certain stated exceptions. The elevator does not contend any of those exceptions is applicable. Promissory estop-pel is not among them.

Authority for use of promissory estoppel to defeat the statute of frauds, if it exists, must be found under § 554.1103. It provides:

Unless displaced by the particular provisions of this chapter, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating or invalidating cause shall supplement its provisions.

We have not had occasion to decide whether the provisions of § 554.2201 displace the doctrine of estoppel which would otherwise be available in accordance with § 554.1103. However, other courts which have considered the question have held the doctrine is available. Several of those decisions involved grain sales in circumstances analogous to those in the present case. See Decatur Cooperative Association v. Urban, 219 Kan. 171, 547 P.2d 323 (1976); Jamestown Terminal Elevator, Inc. v. Hieb, 246 N.W.2d 736 (N.D.1976); Farmers Elevator Company of Elk Point v. Lyles, 238 N.W.2d 290 (S.D.1976).

When other courts have refused to apply the doctrine they have done so because of a different view of the doctrine of promissory estoppel rather than because of any perceived statutory bar to its use. See Cox v. Cox, 292 Ala. 106, 289 So.2d 609 (1974); Del Hayes & Sons, Inc. v. Mitchell, 304 Minn. 275, 230 N.W.2d 588 (1975); Farmland Service Coop. v. Klein, 196 Neb. 538, 244 N.W.2d 86 (1976).

[342]*342We have long recognized promissory es-toppel as a means of defeating the general statute of frauds in § 622.32, The Code. See Miller v. Lawlor, 245 Iowa 1144, 66 N.W.2d 267 (1954); Shell Oil Co. v. Kelinson, 158 N.W.2d 724 (Iowa 1968); Johnson v. Pattison, 185 N.W.2d 790 (Iowa 1971). We see nothing in § 554.2201 which purports to require a different rule under the Uniform Commercial Code.

The listing of exceptions to the statute of frauds in § 554.2201 is plainly definitional. The provision does not purport to eliminate equitable and legal principles traditionally applicable in contract actions. Therefore it does not affect the viability of defenses to application of the rule of evidence which it defines. See White and Summers, Handbook of the Law Under the Uniform Commercial Code § 2-6 at 59 (1972) (“There is every reason to believe these remain good law, post-Code.”).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

MidWestOne Bank v. Heartland Co-op
Supreme Court of Iowa, 2020
Olympic Holding Co., L.L.C. v. ACE Ltd.
2009 Ohio 2057 (Ohio Supreme Court, 2009)
Siesta Sol, LLC v. Brooks Pharmacy, Inc.
617 F. Supp. 2d 38 (D. Rhode Island, 2007)
Stewart v. Sisson
711 N.W.2d 713 (Supreme Court of Iowa, 2006)
Tow v. Truck Country of Iowa, Inc.
695 N.W.2d 36 (Supreme Court of Iowa, 2005)
Kolkman v. Roth
656 N.W.2d 148 (Supreme Court of Iowa, 2003)
Pollmann v. Belle Plaine Livestock Auction, Inc.
567 N.W.2d 405 (Supreme Court of Iowa, 1997)
Cambron v. Moyer
519 N.W.2d 381 (Supreme Court of Iowa, 1994)
Hurwitz v. Prime Communications, Inc.
2 Mass. L. Rptr. 74 (Massachusetts Superior Court, 1994)
B & W Glass, Inc. v. Weather Shield Mfg., Inc.
829 P.2d 809 (Wyoming Supreme Court, 1992)
Matter of Scheib Trust
457 N.W.2d 4 (Court of Appeals of Iowa, 1990)
Peterson v. Petersen
355 N.W.2d 26 (Supreme Court of Iowa, 1984)
Northwest Potato Sales, Inc. v. Beck
678 P.2d 1138 (Montana Supreme Court, 1984)
Rodgers v. Baughman
342 N.W.2d 801 (Supreme Court of Iowa, 1983)

Cite This Page — Counsel Stack

Bluebook (online)
274 N.W.2d 339, 25 U.C.C. Rep. Serv. (West) 963, 1979 Iowa Sup. LEXIS 868, Counsel Stack Legal Research, https://law.counselstack.com/opinion/warder-lee-elevator-inc-v-britten-iowa-1979.