Computer Network, Ltd. v. Purcell Tire & Rubber Co., 53152
| Decision Date | 01 March 1988 |
| Docket Number | No. 53152,53152 |
| Citation | 747 S.W.2d 669 |
| Court | Missouri Court of Appeals |
| Parties | 6 UCC Rep.Serv.2d 642 COMPUTER NETWORK, LTD., a Missouri Corporation, Plaintiff-Respondent, v. PURCELL TIRE & RUBBER COMPANY, a Missouri Corporation, Defendant-Appellant. |
Maurice B. Graham, Daniel Patrick Fall, Fredericktown, for defendant-appellant.
Eric Charles Harris, Flat River, for plaintiff-respondent.
This is an appeal by defendant-appellant, Purcell Tire & Rubber Company from a judgment entered by the circuit court of St. Francois County which awarded damages to plaintiff-respondent, Computer Network, Ltd., for breach of contract involving the sale of personal computers by Computer Network to defendant, Purcell. Purcell denies that a "contract" was ever intended or entered into by the parties for a definite, certain number of computers, contrary to the findings and judgment of the trial court.
The sole issues on this appeal are whether there was a contract for the sale to Purcell of twenty-one IBM personal computers and whether the contract was sufficiently definite so as to be legally enforceable so as to afford a reasonably certain basis for awarding damages. We hold, as did the trial court, that there was a definite contract entered into by the parties and affirm.
Appellant, Purcell Tire & Rubber Company is engaged in the business of the sale and distribution of motor vehicle tires. In early 1984, it had 14 or 15 stores located in Missouri and several other states. There were four located in Missouri. Robert G. Purcell is the president and chief executive officer of the company. Harry F. Chapman is its comptroller.
In 1983 and 1984, Computer Network, Ltd. engaged in the general business of selling and developing computer hardware and software. It obtained hardware from "several sources," including IBM. In this regard, Computer acted as a broker in purchasing from IBM and other companies. Curtis Lloyd Brown was the president of Computer Network. In the fall of 1983 and early 1984, Brown and certain personnel of Purcell, including Chapman, entered into discussions concerning the possibility of selling and purchasing personal computers. In December, 1983, Brown entered into discussions with the data processing manager for Purcell and "helped them develop a configuration of IBM Personal Computers to go to their retail stores." Thereafter Brown "entered into discussions with Harry Chapman to arrive at the exact price and number of computers to be sold to them."
After these discussions were held and on February 23, 1984, Brown prepared a letter, took it to Chapman at Purcell and Chapman signed it. Brown gave him a copy. The letter read as follows:
Please let this letter serve as written confirmation of our previous conversations regarding the purchase by Purcell Tire of twenty-one (21) IBM PC's over the next twelve (12) months.
The configuration of the systems you are to purchase are as follows:
IBM PC 256K--One Diskette Drive $2,454.00
Monochrome Display & Printer Adapter 335.00
Monochrome Display 345.00
10 MG Disk Drive 1,450.00
Hayes Smart Modem 1200B w/SmartCom II 599.00
Okidata Printer 92P w/Cable 649.00
IBM D.O.S. 2.1 65.00
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$5,897.00
Less 10% Discount (589.70 )
---------
$5,307.30
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As per our understanding, we have placed two machines on order for immediate delivery.
If this is in accordance with your understanding, please sign the enclosed copy of this letter and return. If this is not in accordance with your understanding, please let me know as soon as possible.
Sometime after February, 1985, after the expiration of the "agreement," Brown telephoned Chapman concerning the delivery of the remaining twelve computers and "he said that we had no such agreement, so we sent him a copy of the agreement [letter], showing him."
On September 27, 1985, Computer Network filed its petition for damages for breach of contract. It alleged that the parties "entered into a written contract regarding the sale of twenty-one (21) IBM Personal Computers" and that Purcell "breached the Agreement by not purchasing the additional twelve (12) units." Computer prayed for $25,515.60 in damages.
Purcell answered denying that it had entered into a contract to purchase the twenty-one computers, and asserted that "there never was a contract, as indicated by the letter," but "there had only been conversations regarding the possible transaction."
On January 30, 1987, the cause was heard by the trial court on a change of venue. At the hearing, Brown testified as to the facts stated above and testified that the letter was the "final and complete expression of [the] agreement." He testified that Purcell did not request the additional twelve units, that Computer Network was making a profit of $2,008.30 per unit and that it lost profits of $24,099.60.
On cross-examination, Brown was asked whether he had indicated to Chapman that "you [Brown] needed some sort of indication from him [Chapman] on how many they [Purcell] might consider purchasing." Objection was made by Computer's counsel on the ground of the parol evidence rule, but the court overruled the objection and permitted Brown to testify as to previous conversations that he did not indicate to Chapman that he needed such an indication to assist Computer in "getting" a "relationship with IBM." When questioned as to whether he knew how many stores Purcell had, Brown answered "I assumed they had 20, but I'm not truly aware of that." Brown clearly remembered a conversation with Chapman that the purchase of the computers would be based on "one at the home office and one for stores that they had at that time" and that the purchase was "directly related to the number of stores they had." As to the time of delivery, Brown testified that it was "our" understanding that Purcell "would let us know when they wanted the machines."
Mr. Chapman testified that he had had conversations with Brown about the "need for some personal computers," that Purcell had 14 or 15 stores and he admitted that he signed the February 23 letter. He was questioned as to his understanding of the meaning of the phrase near the end of the letter--"If this is in accordance with your understanding, please sign below." An objection was made on the ground that this would change the "terms of the document." The objection was overruled and Chapman testified as to the conversations he had with Brown prior to signing the letter. As to the conversations Chapman had with Brown concerning the number of units, Chapman stated that he did not Chapman testified that in the discussions with Brown, he "never agreed to purchase a total of 21 personal computers," and that
On cross-examination, Chapman denied ever placing an order for twenty-one computers, but did admit that he signed the letter and had the "ability" to make changes in it if he desired.
Following the hearing, and on March 30, 1987, the trial court found the issues in favor of Computer Network and entered judgment for $24,099.60 plus interest.
Purcell appealed. On appeal, Purcell contends that the trial court erred in concluding that there was a legally binding "contract" because the court failed to consider (1) the surrounding circumstances and facts that demonstrated a lack of mutual assent and intent to form a contract; (2) the parties' "previous conversations" and Chapman's lack of intent to contract; (3) the "ambiguity and incompleteness of the letter,"; and (4) the parties' "practical construction" of the letter.
Purcell argues that the parties only agreed to potentially purchase one computer for each retail store and for the home office, and that it never had 21 stores. It contends that parol evidence is admissible to determine whether a contract was made, and that the letter is so incomplete and indefinite so that no contract was formed. 1 Finally, Purcell contends that the court did not take into consideration the "practical construction" of the letter by the acts, declarations and conduct of the parties.
In this court-tried case, our review is governed by certain, well-known principles which proscribe appellate review: (1) we are required to sustain the judgment of the trial court unless the judgment is not supported by substantial evidence, unless it is against the weight of the evidence or unless it erroneously declares or...
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