Goldkist, Inc. v. Brownlee

• Court: Georgia Court of Appeals
• Writing for the Court: BEASLEY; BIRDSONG; CARLEY; DEEN, McMURRAY and BANKE, P.JJ., and BENHAM; BENHAM; I am authorized to state that Presiding Judge DEEN
• Citation: Goldkist, Inc. v. Brownlee, 355 S.E.2d 773, 182 Ga.App. 287 (Ga. App. 1987)
• Decision Date: 20 March 1987
• Docket Number: No. 73295,73295
• Parties: , 3 UCC Rep.Serv.2d 1322 GOLDKIST, INC. v. BROWNLEE et al.

Page 773

355 S.E.2d 773

182 Ga.App. 287, 3 UCC Rep.Serv.2d 1322

GOLDKIST, INC. v. BROWNLEE et al.

No. 73295.

Court of Appeals of Georgia.

March 20, 1987.

Peter Zack Geer, Albany, for appellant.

Jesse G. Bowles III, Cuthbert, for appellees.

BEASLEY, Judge.

The question is whether the two defendant farmers, who as a partnership both grew and sold their crops, were established by the undisputed facts as not being "merchants" as a matter of law, according to the definition in OCGA § 11-2-104(1). We are not called upon here to consider the other side of the coin, whether farmers or these farmers in particular are "merchants" as a matter of law. ¹

In November 1983, Goldkist sued under OCGA § 11-2-712 for losses arising out of the necessity to cover a contract for soybeans. It produced a written confirmation dated July 22 for 5,000 bushels of soybeans to be delivered to it by defendants between August 22 and September 22 at $6.88 per bushel. A defense was that there was no writing signed by either of the Brownlees, as required by OCGA § 11-2-201(1).

Affidavits were submitted on both sides, and Barney Brownlee's deposition was taken. Based on the facts which were not in dispute, and favoring the plaintiff's side of the contested facts, the court agreed with the Brownlees that the circumstances did not fit any of the exceptions provided for in Section 201 and granted summary judgment. On appeal, Goldkist asserts that defendants came within subsection (2), relating to dealings "between merchants."

Appellees admit that their crops are "goods" as defined in OCGA § 11-2-105. The record establishes the following facts. The partnership had been operating the row crop farming business for 14 years, producing peanuts, soybeans, corn, milo, and wheat on 1,350 acres, and selling the crops.

It is also established without dispute that Barney Brownlee, whose deposition was taken, was familiar with the marketing procedure of "booking" crops, which sometimes occurred over the phone between the farmer and the buyer, rather than in person, and a written contract would be signed later. He periodically called plaintiff's agent to check the price, which fluctuated. If the price met his approval, he sold soybeans. At this time the partnership still had some of its 1982 crop in storage, and the price was rising slowly. Mr. Brownlee received a written confirmation in the mail concerning a sale of soybeans and did not contact plaintiff to contest it but simply did nothing. In addition to the agricultural business, Brownlee operated a gasoline service station.

In dispute are the facts with respect to whether or not an oral contract was made between Barney Brownlee for the partnership and agent Harrell for the buyer in a July 22 telephone conversation. The plaintiff's evidence was that it occurred and that it was discussed soon thereafter with Brownlee at the service station on two different occasions, when he acknowledged it, albeit reluctantly, because the market price of soybeans had risen. Mr. Brownlee denies booking the soybeans and denies the nature of the conversations at his service station with Harrell and the buyer's manager.

In this posture, of course, the question of whether an oral contract was made would not yield to summary adjudication, as apparently recognized by the trial court, which based its decision on the preliminary question of whether the Brownlee partnership was a "merchant."

Whether or not the farmers in this case are "merchants" as a matter of law, which is not before us, the evidence does not demand a conclusion that they are outside of that category which is excepted from the requirement of a signed writing to bind a buyer and seller of goods. Although it is not binding precedent, see Thunderbird Farms v. Abney, 178 Ga.App. 335, 343 S.E.2d 127 (1986), which is instructive on the same question. In so holding, we view all evidence, including reasonable inferences and deductions, in favor of respondent Goldkist. OCGA § 9-11-56(c); Georgia Intl. Life Ins. Co. v. Huckabee, 175 Ga.App. 343, 345, 333 S.E.2d 618 (1985).

To allow a farmer who deals in crops of the kind at issue, or who otherwise comes within the definition of "merchant" in OCGA § 11-2-104(1), to renege on a confirmed oral booking for the sale of crops, would result in a fraud on the buyer. The farmer could abide by the booking if the price thereafter declined but reject it if the price rose; the buyer, on the other hand, would be forced to sell the crop following the booking at its peril, or wait until the farmer decides whether to honor the booking or not.

Defendants' narrow construction of "merchant" would, given the booking procedure used for the sale of farm products, thus guarantee to the farmers the best of both possible worlds (fulfill booking if price goes down after booking and reject it if price improves) and to the buyers the worst of both possible worlds. On the other hand, construing "merchants" in OCGA § 11-2-104(1) as not excluding as a matter of law farmers such as the ones in this case, protects them equally as well as the buyer. If the market price declines after the booking, they are assured of the higher booking price; the buyer cannot renege, as OCGA § 11-2-201(2) would apply.

In giving this construction to the statute, we are persuaded by Thunderbird Farms, supra, and the analyses provided in the following cases from other states: Currituck Grain, Inc. v. Powell, 38 N.C.App. 7, 246 S.E.2d 853 (1978); Rush Johnson Farms v. Mo. Farmers Assn., 555 S.W.2d 61 (Mo.App.1977); Nelson v. Union Equity Co-Op. Exchange, 548 S.W.2d 352 (Tex.1977); Campbell v. Yokel, 20 Ill.App.3d 702, 313 N.E.2d 628 (1974); Barron v. Edwards, 45 Mich.App. 210, 206 N.W.2d 508 (1973). By the same token, we reject the narrow construction given in other states' cases: Terminal Grain Corp. v. Freeman, 270 N.W.2d 806 (S.D.1978); Sand Seed Svc. v. Poeckes, 249 N.W.2d 663 (Iowa 1977); Gerner v. Vasby, 75 Wis.2d 660, 250 N.W.2d 319 (1977); Decatur Co-op. Assn. v. Urban, 219 Kan. 171, 547 P.2d 323 (1976); Lish v. Compton, 547 P.2d 223 (Utah 1976); Loeb & Co. v. Schreiner, 294 Ala. 722, 321 So.2d 199 (1975); Cook Grains v. Fallis, 239 Ark. 962, 395 S.W.2d 555 (1965).

We believe this is the proper construction to give the two statutes, OCGA §§ 11-2-104(1) and 11-2-201(2), as taken together they are thus further branches stemming from the centuries-old simple legal idea pacta servanda sunt --agreements are to be kept. ² So construed, they evince the legislative intent to enforce the accepted practices of the marketplace among those who frequent it.

Judgment reversed.

BIRDSONG, C.J., and SOGNIER and POPE, JJ., concur.

CARLEY, J., concurs in the judgment only.

DEEN, McMURRAY and BANKE, P.JJ., and BENHAM, J., dissent.

BENHAM, Judge, dissenting.

Because I cannot agree with the majority's conclusion that appellees are merchants, I must respectfully dissent.

Appellant alleges that appellees, doing business as Brownlee Brothers, entered into an oral contract with appellant on July 22, 1983, for the purchase of 5,000 bushels of soybeans at $6.88 per bushel, to be delivered to appellant between August 22 and September 22, 1983. Appellee Barney Brownlee admitted he frequently telephoned appellant's agents and inquired about the current price for soybeans, but both he and his brother, appellee Mark Brownlee, executed affidavits in which they denied they entered into the contract alleged by appellant. Appellees maintain that the contract sent to them violates the Statute of Frauds and is unenforceable because the contract was for the sale of goods for a price greater than $500 and they, as the parties against whom enforcement is sought, did not sign it. See OCGA § 11-2-201(1). Appellant takes the position that Barney's acknowledged receipt of a confirmation of the contract and his failure to give written notice of any objection he had to its contents within 10 days of receipt deprives appellees of their statute of frauds defense. See OCGA § 11-2-201(2). The validity of appellant's argument, that sending a confirmation within a reasonable time makes enforceable a contract even though the statute of frauds has not been satisfied, rests upon a showing that the contract was "[b]etween merchants." Id. "Between merchants" is statutorily defined in the Uniform Commercial Code as meaning "any transaction with respect to which both parties are chargeable with the knowledge or skill of merchants." OCGA § 11-2-104(3). " 'Merchant' means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill." OCGA § 11-2-104(1). Whether appellant is a merchant is not questioned here; the question is whether, under the facts in the record, appellees/farmers are merchants. While the Georgia appellate courts have not expressly addressed the question of whether the farmers of Georgia are, as a matter of law, merchants under OCGA § 11-2-104(1), in a decision without precedential value under Court of Appeals Rule 35(b), a panel of this court ruled in a case similar to the one at bar that the question whether a corporate farmer was a merchant was one of fact, not law. Thunderbird Farms v. Abney, 178 Ga.App. 335, 343 S.E.2d 127 (1986). Contrary to the holding of the majority, I do not believe the record in this case establishes that appellees are merchants as that term is used in OCGA § 11-2-201(2) and defined in OCGA § 11-2-104(1).

The Official Comment to § 2-104 of the U.C.C. (codified in Georgia as OCGA § 11-2-104(1)) states: "This Article assumes that transactions between professionals in a given field require special and clear rules which may not apply to a casual or...