Clark v. Compania Ganadera de Cananea, S. A.

• Decision Date: 16 October 1963
• Docket Number: No. 7156,7156
• Citation: 94 Ariz. 391,385 P.2d 691
• Parties: G. W. CLARK and Ben F. Williams, Sr., Appellants, v. COMPANIA GANADERA de CANANEA, S. A., a corporation, et al., Appellees.
• Court: Arizona Supreme Court

Page 691

385 P.2d 691

94 Ariz. 391

G. W. CLARK and Ben F. Williams, Sr., Appellants, v. COMPANIA GANADERA de CANANEA, S. A., a corporation, et al., Appellees.

No. 7156.

Supreme Court of Arizona, In Division.

Oct. 16, 1963.

Rehearing Denied Dec. 10, 1963.

Ben F. Williams, Jr., and W. Shelley Richey, Douglas, for appellants.

Evans, Kitchel & Jenckes, Phoenix, for appellees Compania Ganadera De Cananea, S. A., Ranchos De Cananea, Octavio Elias, Enrique Cubillas, Kemper Marley and Frank T. Greene.

Gentry & McNulty, Bisbee, for appellees Estate of Mary Greene Wiswall, deceased, and George A. Wiswall, Executor.

John M. Williams, Douglas, for appellee Florence G. Sharp.

James M. Murphy, Tucson, for appellee Clarence Kirk Greene.

James v. Robins, Nogales, for appellee Charles Harrison Greene.

Beer, Seaman & Polley, Phoenix, for appellees, Virginia Sturdivant and Cia. Minera de la Trinidad, a corporation, Trustee for Virginia Sturdivant.

JENNINGS, Justice.

G. W. Clark and Ben F. Williams, Sr., brought this action for breach of contract against Compania Ganadera de Cananea, Ranchos de Cananea and numerous other defendants. At the close of plaintiffs' case the trial court directed a verdict for all defendants except Compania Ganadera de Cananea and dismissed the complaint without prejudice as to the latter. All of the defendants in the lower court excepting Compania Ganadera de Cananea and Kemper Marley are parties to this appeal and are hereinafter referred to as appellees. The main question raised is whether the directed verdict was proper under the circumstances.

The transaction involved in this action commenced on August 21, 1957, when Texas Order Buying Company, appellants' assignor, wrote a letter to Ranchos de Cananea and/or Compania Ganadera de Cananea as follows:

'RANCHOS DE CANANEA

'Apartado Postal No. 12

'Cananea, Sonora, Mex.

'August 21, 1957.

'Ranchos de Cananea and/or Cia. Ganadera de Cananea, S. A., Cananea, Sonora, Mexico.

'I hereby confirm my offer made verbally to Mrs. Florence G. Sharp and Mr. C. Kirk Greene, representing the companies above, on August 20, 1957, as follows:

'I agree to buy up to 2000 head of steer yearlings for delivery about November 1, 1957 and up to 4500 head of ORO steer calves for delivery in December, 1957 and April or May, 1958, the exact dates to be determined later.

'The price will be $25.50 per cwt. on the steer yearlings and $26.00 per cwt. on the steer calves, delivered on the American border and paid for on the weights determined by he U. S. Customs House for payment of duties.

'These cattle will be shown to me on your ranches in Mexico, at which time I will be allowed to take a cut of 10% in addition to any unmerchantable steers.

'The cattle to be crossed will be placed in dry corrals for not less than 12 hours and will not be fed or watered until after they have been weighed.

'I hereby tender my check for $60,000.00 (sixty thousand dollars) as earnest money, at the rate of $10.00 per head, to be deducted from the final settlement. I agree to furnish a bank guaranty for the balance owed on the cattle as soon as the sales contract is signed by you.

'Delivery of the cattle is contingent upon there being no restrictions imposed by Mexico or the United States on competent authority.

'You agree not to bank this check until the sales contract is signed by both parties, or their authorized representatives and in case it is not signed within a reasonable time you will return this check to me on demand.

'Texas Order Buying Company

'By G. W. Clark'

'Receipt of $60,000.00 (sixty thousand dollars) earnest money is acknowledged herewith.

'F. G. Meyer

'Office Manager'

'Copy of contract is to be sent in with draft when it is sent in for collection.' (Emphasis ours.)

In addition to signing the offer of purchase on behalf of Texas Order Buying Company, Clark also issued to Fred G. Meyer a draft for Sixty Thousand Dollars ($60,000.00). The draft was made payable to the order of Ganadera and Meyer acknowledged receipt thereof in his capacity as office manager of Ranchos.

On September 27, 1957, a meeting was held by certain officials of Ranchos and the following resolution was adopted:

'RANCHOS DE CANANEA

'MEETING OF CO-PROPRIETORS, HELD ON SEPTEMBER 27, 1957, AT CANANEA SONORA, MEXICO.

'EXTRACT OF MINUTES

'RESOLVED, that the proposition made by Texas Order Buying Company, represented by Mr. G. W. Clark, under date of August 21st, 1957, be and it is hereby accepted, to purchase from Ranchos de Cananea the cattle therein set forth, at the prices bid; and that Mr. Fred G. Meyer be, and he hereby is, authorized and directed to carry out this Resolution, adopted by majority of the co-proprietors and by a majority of interests in Ranchos de Cananea, and to executed the necessary documents in order that the aforesaid sale may be effectuated, up to and including the delivery of the cattle involved and the payment to Ranchos de Cananea, of the price thereof. Inasmuch as Compania Ganadera de Cananea, S. A., is the Company which ordinarily has made heretofore the exportations of cattle, there should be sold to the said Compania Ganadera de Cananea, S. A. the number of head of cattle which the latter Company should in turn sell to the Texas Order Buying Company, represented by Mr. G. W. Clark, in order that said Compania Ganadera de Cananea, S. A., may execute all documents necessary for the sale and exportation of the cattle, all such transactions to be carried out in the manner in which they usually have been made in the past, with regard to their transfer from Ranchos de Cananea to Compania Ganadera de Cananea, S. A.' (Emphasis ours.)

'Emilio Segura, Jr.,

'Secretary.'

Subsequently, on October 1, 1957, a formal written contract was entered into by Texas Order Buying Company and Ganadera as follows:

'COMPANIA GANADERA DECANANEA, S. A.

'Cananea, Sonora, Mexico.

' This contract was made and entered into this 1st day of October, 1957, by and between Texas Order Buying Company, of Amarillo, Texas, buyer, and Compania Ganadera de Cananea, S. A, seller.

'The buyer has this day agreed to purchase and the seller has this day agreed to sell and deliver at the line corrals, Palominas, Arizona, on the specified delivery dates, the following cattle:

'2,000 head or more, ORO steer yearlings at $25.50 USCy. per cwt.

'4,000 head or more, ORO steer calves, at $26.00 USCy. per cwt.

'Merchantable cuts, steer yearlings, at $18.50 USCy. per cwt.

'Merchantable cuts, steer calves, at $23.00 USCy. per cwt.

'Sale and delivery of these cattle is contingent upon their being no restrictions impossed on their exportation by either Mexican or American competent authorities, or by acts of God. If delivery cannot be made, the deposit of $60,000.00 will be returned to the buyer immediately.

'The buyer will be allowed a 10 per cent cut, after unmerchantable cattle are taken out. The cattle will be cut on our ranches in Mexico.

'Shrink and weighing conditions: The cattle will be dry-penned no less than twelve hours before weighing and will not be fed or watered before they are weighed.

'The payment for cattle will be made, for each crossing, on the Mexican side, as soon as the United States Customs weights are determined, a bank guarantee to be furnished to vendor Company by December 1st, 1957.

'Seller acknowledges receipt of $60,000.00 dollars paid by buyer as partial payment on said cattle, which amount will be deducted from each settlement at the rate of $10.00 dollars per head.

'Delivery dates will be as follows:

'2,000 head ORO steer yearlings--December 10, 11, 12, 1957.

'2,000 head ORO steer calves, December 18, 19, 20, 1957.

'2,000 head ORO steer calves, April 30, 1958; approximate dates.

'If yearlings are delivered first, buyer will withhold four cents per pound until the 2000 calves are delivered, when final settlement will be made.'

'Accepted at Cananea, Sonora, Mexico, October 1, 1957.

'TEXAS ORDER BUYING COMPANY.

COMPANIA GANADERA DE CANANEA, S. A.

'G. W. Clark

'Witness ________

F. Meyer, Treasurer

Witness Emilio Segura Secretary'

When the draft was sent in for collection on or about October 9, 1957, there was attached to it the letter-offer of August 21, 1957, the Ranchos' resolution of September 27, 1957, and the October 1, 1957 contract.

During the year 1958, three thousand seven hundred sixty-six (3,766) head of cattle, including steer calves and yearling steers, were delivered to Texas Order Buying Company. No other cattle were delivered at any time, leaving an undelivered balance of two thousand one (2,001) head of steer calves and two hundred thirty-three (233) head of yearling steers.

After the delivery of the cattle, defendants Mrs. Florence G. Sharp and Clarence Kirk Greene sold their interests in Ranchos to defendants Elias and Cubillas, respectively. ¹

Thereafter, Texas Order Buying Company assigned to appellants all of its rights in the purchase agreement represented by the offer of August 21, 1957, Ranchos' resolution of September 27, 1957, and the contract of October 1, 1957.

Appellants' first assignment of error directs our attention to the question of whether the trial court erred in directing a verdict insofar as it ruled that the offer of August 21, 1957, and the alleged acceptance of Ranchos via the resolution of September 27, 1957 were merged into the written contract between Ganadera and Texas Order Buying Company, dated October 1, 1957. This ruling absolved Ranchos of any liability whatever for the reason that Ranchos did not enter into the latter contract.

The trial court erred when it directed a verdict in favor of Ranchos on the ground of merger. Merger with respect to the law of contracts refers to the extinguishment of one contract by its absorption into another contract. Whiddon v. General Mills, Inc., 347 S.W.2d 7 (Tex.Civ.App.1961). A preliminary contract, either oral or written, is not merged into a later one unless the...