803 F.2d 1358 (5th Cir. 1986), 85-2688, Tex-Goober Co. v. Los Angeles Nut House, Inc.

Docket Nº:85-2688.
Citation:803 F.2d 1358
Party Name:TEX-GOOBER COMPANY, Plaintiff-Appellee, v. LOS ANGELES NUT HOUSE, INC., Defendant-Appellant.
Case Date:November 05, 1986
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 1358

803 F.2d 1358 (5th Cir. 1986)

TEX-GOOBER COMPANY, Plaintiff-Appellee,

v.

LOS ANGELES NUT HOUSE, INC., Defendant-Appellant.

No. 85-2688.

United States Court of Appeals, Fifth Circuit

November 5, 1986

Page 1359

Brian J. Hurst, David Ford Hunt, Dallas, Tex., for defendant-appellant.

Mark P. McMahon, Longview, Tex., Harold W. Nix, Daingerfield, Tex., for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of Texas.

Before GEE, RANDALL and DAVIS, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

This is an appeal by a nut house in a lawsuit over peanuts. The dispute boils down to whether Spanish No. 1 peanuts should have been substituted for Spanish Jumbo peanuts. Because the trial judge failed to submit an interrogatory to the jury on the custom for substitution in this nutty business, we remand the case for additional findings of fact.

I.

The Tex-Goober Company (Tex-Goober) agreed to sell 270,000 pounds of Spanish Jumbo peanuts to the Los Angeles Nut House (LANUT) at $.42 a pound. The contract was made in July of 1980 through a broker named Sol Sachs. Tex-Goober never delivered the peanuts because a widespread drought during the summer of 1980 made Spanish Jumbo peanuts (Jumbos) unavailable. The parties dispute whether Tex-Goober offered to substitute Spanish No. 1 peanuts (No. 1's), a slightly smaller peanut often used interchangeably with Jumbos.

Tex-Goober's failure to deliver forced LANUT to cover. By the fall of 1980, when Tex-Goober was supposed to have delivered the Jumbos, the spot market price of peanuts had more than tripled. LANUT covered by entering into a December contract for 219,000 pounds of No. 1's at $1.50 a pound. This order was placed through a broker and, coincidentally, the seller was Tex-Goober. It was not until shipments of No. 1's began arriving, however, that LANUT realized it was dealing with the same supplier that had breached the July 1980 contract for Jumbos.

Although it had just signed a December contract with Tex-Goober for No. 1's at $1.50 per pound, LANUT tried to revive the July contract price. LANUT paid for the

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No. 1's by sending Tex-Goober a check for $89,790, along with a letter explaining that the amount was based on a price of $.41 per pound. 1 Tex-Goober cashed the check. Tex-Goober's attorney then wrote to LANUT demanding payment of the balance due under the December contract. LANUT refused to pay.

In January 1983 Tex-Goober filed suit in state court for fraud and breach of contract against LANUT seeking damages of $238,710, the difference between the purchase price of 219,000 pounds of peanuts at $1.50 per pound and the price at $.41 per pound paid by LANUT. LANUT counterclaimed for $55,080, its damages for Tex-Goober's failure to deliver the remaining 51,000 pounds of Jumbos for which LANUT obtained no cover. The case was removed to federal court and tried before a jury. The district court submitted the case to the jury on the following special interrogatories:

1. Do you find from a preponderance of the evidence that Mr. Sachs was notified by Tex-Goober in the fall of 1980 that it had no peanuts to sell or that it had no jumbo peanuts to sell?

2. Do you find from a preponderance of the evidence that check No. 4812 was an accord and satisfaction of L.A. Nut House's debt to Tex-Goober?

3. What sum, if any, do you find from a...

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