Franklin County Co-op. v. MFC Services (A.A.L.), 54026

• Decision Date: 21 December 1983
• Docket Number: No. 54026,54026
• Citation: 441 So.2d 1376
• Parties: 37 UCC Rep.Serv. 1465 FRANKLIN COUNTY COOPERATIVE v. MFC SERVICES (A.A.L.).
• Court: Mississippi Supreme Court

Page 1376

441 So.2d 1376

37 UCC Rep.Serv. 1465

FRANKLIN COUNTY COOPERATIVE v. MFC SERVICES (A.A.L.).

No. 54026.

Supreme Court of Mississippi.

Dec. 21, 1983.

John L. Maxey, II, Glenda W. Tomlinson, Cupit & Maxey, Jackson, for appellant.

James H. Herring, Herring & Self, Canton, for appellee.

Before WALKER, P.J., and BOWLING and PRATHER, JJ.

BOWLING, Justice, for the Court:

Appellant Franklin County Cooperative filed a complaint against appellee, MFC Services (MFC) alleging a breach by appellee of an oral contract for the sale of a specified quantity of soybean seed. The lower court sustained appellee's motion to dismiss under Rule 12(b)(6) of the Mississippi Rules of Civil Procedure (MRCP) and it is this action which is assigned as appellant's sole assignment of error.

On January 7, 1982, the manager of appellant telephoned appellee, talked with one Henderson, the employee of appellee who answered the phone, and received quotations on the prices of various kinds of soybean seed. Appellant thereupon placed an order for the purchase of 15,000 bushels of a designated variety of soybean seed at an agreed upon price (over $500) and delivery date. In concluding the conversation appellee's employee stated that "If there is any problem, we will get back to you." Following that initial telephone conversation, Henderson examined the notes she had made during the call and discovered that she had written down 1,500 bushels rather than 15,000 bushels. In order to confirm the fact that the order was for 15,000 bushels, Henderson telephoned the manager of appellant and received confirmation of the correct amount. Henderson closed this second telephone conversation with the statement, "O.K., we will take care of it."

The following morning Henderson informed her superior at MFC, Elmo Collum, of the receipt of appellant's oral order. Collum was unwilling to accept the offer because of its unusually large amount, and he telephoned appellant's manager to advise him that appellee would not accept appellant's offer to purchase the seed. Also on that day, appellee's general counsel, Milton Mitchell, telephoned appellant to confirm appellee's unwillingness to accept the offer.

By letter dated January 11, 1982, Mitchell wrote appellant and recounted the above facts in detail. ¹ In this letter, appellee adopted the position that no contract of sale had been formed since Henderson had allegedly expressed a condition precedent to acceptance of the offer, namely procuring the approval of her superiors. In its complaint filed in the court below appellant attached this letter as an exhibit evidencing appellee's intention not to perform under the terms of the alleged contract.

MRCP 12(b)(6), the successor to the common law demurrer, provides that the defense of failure to state a claim upon which relief can be granted may, as here, be asserted by motion. We note that the comment which follows this Rule provides in pertinent part that to grant this motion "there must appear to a certainty that the plaintiff is entitled to no relief under any set of facts that could be proved in support of the claim." We are mindful of the current judicial practice favoring disposition of cases on their merits. Accordingly, we are of the opinion that the above criteria express the proper principles to be employed in passing upon a motion to dismiss under MRCP 12(b)(6).

The trial judge sustained the appellee's motion to dismiss on the basis that the alleged oral contract did not, as affirmatively pled by appellee, satisfy our statute of frauds. ² Mississippi Code Annotated Section 75-2-201(1) (1972), provides that a contract for the sale of goods for the price of $500 or more is not enforceable unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought. In his order sustaining the motion the trial judge emphasized the fact that Mitchell's letter not only denied there was a contract, but also referred to the telephone conversations appellee had with appellant denying the existence of a contract.

The official comment to UCC Sec. 2-201(1) states that "all that is required is that the writing afford a basis for believing that the offered oral evidence rests on a real transaction." In Derden v. Morris, 247 So.2d 838, 839 (Miss.1971), we held that a memorandum must satisfy three requirements to take a case outside the statute of frauds. The memorandum or writing must (a) evidence a contract for the sale of goods, (b) it must be signed by the party against whom enforcement is sought, and (c) it must specify a quantity. We observe that Mitchell's letter contains the statement Henderson made in closing her second telephone conversation with appellant, "O.K., we will take care of it." This language clearly signifies acceptance on the part of appellee notwithstanding any secret intentions Henderson failed to express to appellant. In so stating we do not adjudge Mitchell's letter as constituting a writing sufficient to render the contract enforceable under MCA Sec. 75-2-201(1). We merely rule that the trial judge erred in sustaining appellee's motion to dismiss as it deprived appellant of the chance to develop his case in furtherance of his claim. This ruling is consistent with our holding in Crawler Parts, Inc. v. Hill, 441 So.2d 1357 (Miss.1983), where we held it was error for the trial court to sustain the executrix's motion to strike the claim against Channel's estate. In that case we were of the opinion that the claimant was entitled to an evidentiary hearing so that a determination of the merits of appellee's statute of frauds defense could be made.

Hence, when the complaint and the letter attached as an exhibit are measured by the above-stated rules governing consideration of a 12(b)(6) motion, it is apparent that appellant stated a set of facts supporting a common law action for breach of contract which, if proved, entitled him to relief. Appellant alleged an oral contract, a reduction of the terms of the contract to writing, anticipatory breach and damage.

Furthermore, we observe that pursuant to MCA Sec. 75-2-201(3)(b), appellant might be able to obtain an admission by appellee or one of its agents that a contract for sale was made. This particular subsection provides that the admission can be made by "pleading, testimony or otherwise in court ..." (Emphasis added). In this regard, it is conceivable that appellant could obtain testimony relating to the parties' course of dealing, if any, or the usage of trade observed in the filling of such seed orders. ³ This, then, is an alternative method which the appellant should be afforded the opportunity of utilizing to enforce the alleged contract and so constitutes an additional ground for ruling that the trial judge committed reversible error in sustaining appellee's motion to dismiss under 12(b)(6). Accordingly, we hold that the motion to dismiss should have been overruled.

REVERSED AND REMANDED.

PATTERSON, C.J., WALKER and BROOM, P.JJ., and ROY NOBLE LEE, HAWKINS, DAN M. LEE, PRA...