American Chocolates, Inc. v. Mascot Pecan Co., Inc.
| Citation | 592 So.2d 93 |
| Decision Date | 18 December 1991 |
| Docket Number | No. 89-CA-0077,89-CA-0077 |
| Parties | 124 Lab.Cas. P 57,300 AMERICAN CHOCOLATES, INC. v. MASCOT PECAN COMPANY, INC., Mills Tarver, Kenny Tarver and Henco, Inc. |
| Court | United States State Supreme Court of Mississippi |
William B. Weatherly, Gulfport, for appellant.
Henry Laird, Mize Blass Lenoir & Laird, Roger T. Clark, Robert H. Walker, Scherry J. LeSieur, Bryant Colingo Williams & Clark, Gulfport, for appellee.
Before HAWKINS, P.J., and PITTMAN and McRAE, JJ.
The circuit court of Harrison County, First Judicial District, granted summary judgment in favor of Mascot Pecan Company, Inc., and its officers Mills Tarver, Kenny Tarver, and Henco, Inc., against American Chocolates, Inc. The court found that American Chocolates was an employee of Mascot Pecan subject to a terminable-at-will employment contract, that Miss.Code Ann. Sec. 15-3-1 (1972) barred American Chocolates' breach of contract claim against Mascot Pecan and that American Chocolates presented no genuine issue of material fact in its cause of action against Henco. American Chocolates has appealed.
We find that Miss.Code Ann. Sec. 15-3-1 is no bar to American Chocolates' suit, that genuine issues of material fact do exist as to the breach of contract issue and the tortious interference with contract claim, and reverse for trial on the merits.
American Chocolates, Inc., a close Mississippi corporation, with principal offices in Gulfport and whose principal shareholder was Jarrell Evans, entered into an oral brokerage agreement with Mascot Pecan, Inc., a Georgia corporation, under which American Chocolates undertook to secure Henco, a corporation with principal offices in Selmer, Tennessee, as a customer of Mascot Pecan for the purchase of candy products.
The agreement between American Chocolates and Mascot Pecan was that if American Chocolates secured Henco as a customer of Mascot Pecan's products then American Chocolates would be paid a commission of five percent on the sales price of all products sold by Mascot Pecan to Henco. American Chocolates did in fact secure Henco as a customer and was paid a five percent commission until July 23, 1984. Serious problems developed with Mascot Pecan in distribution, consistency, and quality of the product. Mascot Pecan and Henco made adjustments to improve business. This included reducing the amount of commission paid to American Chocolates from five percent to three and one-half percent and later to three percent.
Thereafter, Mascot Pecan informed American Chocolates it was terminating their agreement. There was contention on the part of Mascot Pecan that this represented the wishes of Henco to reduce costs, which was disputed by Henco. Following the termination of the agreement, American Chocolates filed suit against Mascot Pecan for breach of contract and against Henco for tortious interference with a contractual relationship.
Following discovery defendants Mascot Pecan and Henco moved for and were granted summary judgment dismissing the complaint. In his opinion the circuit judge first found that the relationship between American Chocolates and Mascot Pecan was that of an employee-employer and therefore terminable at will by either party and, second, that the statute of frauds barred recovery even if the contract were not terminable at will. As to the statute of frauds, the court found that the contract was one not to be performed within fifteen months. In granting summary judgment, the court found that there was insufficient evidence to make a jury issue on tortious interference with a contractual relationship. American Chocolates has appealed.
Mississippi's statute of frauds in pertinent part states:
An action shall not be brought whereby to charge a defendant or other party:
....
(d) upon any agreement which is not to be performed within the space of fifteen months from the making there; or
(e) ... unless, in each of said cases, the promise or agreement upon which such action may be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith or signed by some person by him or her thereunto lawfully authorized in writing.
Miss.Code Ann. Sec. 15-3-1 (1972).
It should be noted that when American Chocolates secured Henco as a customer for Mascot Pecan products, it had fully performed its part of the agreement. There was nothing more for American Chocolates to do. This Court held in Pountaine v. Fletcher, et al., 158 Miss. 720, 126 So. 471 (1930), that:
[T]he statute of frauds has no application where there has been a full and complete performance of the contract by one of the contracting parties, and the party so performing may sue upon the contract in a court of law; he is not compelled to abandon the contract and sue in equity or upon a quantum meruit.
Also, Gibbons v. Associated Distributors, 370 So.2d 925, 927 (Miss.1979), "[t]he general rule is that the complete performance by one party of an oral contract not to be performed within the statutorily prohibited period--fifteen months--takes the contract outside of the statute of frauds." Also, 37 C.J.S. Statute of Frauds, Sec. 251 (1943); 73 Am.Jur.2d Statute of Frauds, Sec. 533 (1974); Restatement (Second) of Contracts, Sec. 130 (1981); Landry v. Moody Grishman Agency, Inc., 254 Miss. 363, 181 So.2d 134 (1965) (); Puget Sound Pulp and Timber Co. v. O'Reilly, 239 F.2d 607 (9th Cir.1956).
This Court has also held that where the contract is for an indefinite period with a possibility of performance within fifteen months, it is not within the statute of frauds. Beane v. Bowden, 399 So.2d 1358, 1361 (Miss.1981); Crabb v. Mid-American Dairymen, Inc., 735 S.W.2d 714 (Mo.1987) (en banc).
The circuit judge of course was correct when he held that Mascot Pecan had a right to terminate the contract. 1 The contract between these parties was of indefinite duration. It was therefore subject to cancellation by either party upon reasonable notice. Hazell Machine v. Shahan, 249 Miss. 301, 161 So.2d 618, 624 (1964); King v. Exxon, U.S.A., 618 F.2d 1111, 1119 (5th Cir.1980); Roberts v. Southern Wood Piedmont Co., 571 F.2d 276 (5th Cir.1978); 2 Corbin on Contracts, Sec. 446 (1950); 17A C.J.S. Contracts, Sec. 398 (1963); 17 Am.Jur.2d Contracts, Sec. 486 (1964). This cancellation only affected executory functions yet to be performed. It could not relieve Mascot Pecan of an obligation it had resulting from a past performance by American Chocolates. Cessna Aircraft Company v. Aviation, Inc., 243 F.2d 815, 818 (10th Cir.1957); United States v. Southern Gulf Lumber, 106 F.Supp. 815, 818 (S.D.Ala.1952); Grant v. Aerodraulics Co., 91 Cal.App.2d 68, 204 P.2d 683, 686 (1949); 17 Am.Jur.2d Contracts, Sec. 518 (1964); 17A C.J.S. Contracts, Sec. 404 (1963).
Closely analogous is the Pennsylvania case of Linn v. Employers Reinsurance Corporation, 397 Pa. 153, 153 A.2d 483 (1959), where an insurance agent sued an insurance company...
To continue reading
Request your trial
-
Ed Dewitte Ins. Agency, Inc. v. Fin. Assocs. Midwest, Inc.
...of frauds even though it was not owed a commission until after a client it had referred paid a fee); American Chocolates, Inc. v. Mascot Pecan Co. , 592 So.2d 93, 94-95 (Miss. 1991) (plaintiff fully performed contract by securing customer for defendant, entitling it to the agreed-upon perce......
-
Ed DeWitte Ins. Agency, Inc. v. Fin. Assocs. Midwest, Inc.
...App. 2005) (doctrine of full performance by one party isn't conditioned on performance by third parties); Am. Chocolates, Inc. v. Mascot Pecan Co. , 592 So.2d 93, 94 (Miss. 1991) (holding that plaintiff had fully performed contract entitling it to 5% commission on future sales to defendant ......
-
City of Starkville v. 4-COUNTY ELECTRIC POWER ASSN.
...period are terminable at will by either party upon giving reasonable notice to the other party. American Chocolates, Inc. v. Mascot Pecan Co., Inc., 592 So.2d 93, 95 (Miss.1991) (agreement between American Chocolates and Mascot Pecan that if American Chocolates secured Henco as a customer o......
-
Zeitoun v. Seal
...out of the operation of the statute." U.S. Finance Co. v. Barber, 157 So. 2d 394, 397 (Miss. 1963); see Am. Chocolates, Inc. v. Mascot Pecan Co., Inc., 592 So. 2d 93, 93 (Miss. 1991). Zeitoun maintains that Seal verbally agreed to sell DSA's then-current PSA with Wesley to EB, as well as a ......