Hilt v. Draper, 19181
| Decision Date | 19 August 1992 |
| Docket Number | No. 19181,19181 |
| Citation | 122 Idaho 612,836 P.2d 558 |
| Parties | Cecil HILT, Plaintiff-Respondent, v. Larry Wayne DRAPER and Mrs. Larry Wayne Draper, husband and wife; Wayne Dewey Draper and Mrs. Wayne Dewey Draper, husband and wife; Defendants-Appellants, and Jeff Hartman and Mrs. Jeff Hartman, husband and wife, Defendants. |
| Court | Idaho Court of Appeals |
Hepworth, Nungester & Lezamiz, Twin Falls, for defendants-appellants. Jeffrey J. Hepworth, argued.
May & May, Twin Falls, for plaintiff-respondent. Mark D. Stubbs, argued.
SUBSTITUTE OPINION
The Court's prior opinion dated June 17, 1992, is hereby withdrawn.
This case involves the dealings of three parties during the summer of 1988: Larry Draper, a farmer who sold hay; Jeff Hartman, a hauler who bought hay and resold it or acted as an agent in hay sales transactions; and Cecil Hilt, a dairyman who purchased hay. Hilt sued Draper and Hartman claiming breach of contract for failure to deliver hay. Default judgment was entered against Hartman and he is not a party to this appeal.
A magistrate conducted a trial of this case, without a jury. The evidence consisted solely of affidavits, deposition testimony and exhibits. Hilt obtained a judgment against Draper for $12,318 with interest, as well as costs and attorney fees. Draper appealed to the district court, which affirmed the magistrate's judgment, but modified the attorney fees awarded. Draper appealed again. We reverse the judgment and district court's appellate decision and remand for entry of a judgment for the Drapers.
The issues in this appeal are as follows. Did the trial err in finding that Draper and Hilt had a contract for the sale of hay created through Hartman as an agent for both parties, and that Draper breached that contract? Alternatively, if there was no contract between Draper and Hilt, did Draper and Hartman contract for the benefit of Hilt, and is that third-party beneficiary contract enforceable by Hilt? Did Draper ratify the agreement made between Hartman and Hilt by accepting and cashing a check from Hilt? Did the district court erroneously modify the magistrate's award of attorney fees to Hilt? The parties seek attorney fees on appeal pursuant to I.C. § 12-120.
Following trial, the magistrate made extensive findings of fact in his memorandum decision. We readily accept and summarize below those findings which were not challenged in the initial appeal to the district court. In addition, we summarize the evidence bearing on disputed facts which are critical to our opinion, recognizing, however, that the evidence must be construed most favorably toward the respondent.
In May, 1988, Hartman contacted Larry Draper and offered to buy his entire 1988 alfalfa hay crop for $60 per ton. Draper accepted this offer. Although Draper did not ask Hartman where the hay would be used, Hartman told Draper that in addition to using hay at his parents' dairy, he supplied hay to five or six other dairies. Draper and Hartman testified that their agreement included the condition that the hay must be paid for before it could be taken from Draper's farm. The hay and farm were not owned by Larry Draper, but by his parents, Wayne and Marjorie Draper; however, he managed the farm for his parents. Accordingly, we will use the name "Draper" to mean Larry Draper, individually, but also representative of his wife and his parents.
After Hartman contracted to buy Draper's hay, he went to the Hilt dairy, where he had delivered hay the previous year, to see if Hilt needed some "good" hay. Hartman told Hilt that the hay was from Draper Farms and that the price would be $60 a ton. Hartman did not state that he was there on behalf of Draper; although that was what Hilt thought because Hartman said, "[t]hey [the Drapers] have good hay for sale." Later, Hilt decided to buy some because he was familiar with the quality of Draper Farms hay, although he had never purchased any previously. On July 5, Hilt ordered 400 tons of hay at $60 per ton from Hartman. Hilt and Hartman also agreed that Hilt would pay Hartman $10 per ton for hauling. According to Hilt's deposition testimony, Hartman did not tell Hilt that Hartman had to pay Draper for the hay before he could pick it up. Hilt testified that Hartman had asked for a "deposit" or "earnest money" for Draper.
On July 5, Hilt wrote a $3,000 check payable to Draper with the inscription "deposit 400 ton hay." Hilt gave the check to Hartman and told him to give it to Draper and say, "It's a deal." However, Hartman testified that when he gave Draper the check, he did not tell Draper how much hay Hilt needed. Rather, Draper endorsed and cashed the check.
During June and July, Hartman gave Draper several checks totaling more than $30,000 in payment of hay. Hartman had obtained the checks from various dairy operators who wanted hay, including his own parents. During this same time, Hartman hauled more than thirty loads of hay from the Draper farm, having each load weighed at an independent weighing station.
On July 20, Draper and Hartman met to "square things up." Draper used the load weight tickets provided by Hartman and his own records of payments received to determine how he and Hartman stood on that date.
Hartman continued to haul more hay after July 20. On July 28, he again sent two men with his truck to the Draper farm. The men gave Draper a $2,738 check from a dairyman who had previously paid for and received Draper hay. It is undisputed that Hartman had failed to always pay Draper in advance for hay he hauled from Draper's farm. This last check brought Draper almost even with Hartman but, consistent with his agreement with Hartman, Draper refused to allow the men working for Hartman to take delivery of any more hay unless he was paid in advance. By this time Draper had heard that Hartman owed thousands of dollars to other farmers for hay he had hauled away but did not pay for.
Hartman personally met with Draper about July 29. He told Draper that Draper had "a commitment to Cecil Hilt." Hartman testified that Draper knew that he owed Hilt hay, based on the statement Hartman had made to Draper, "You have a deposit on the hay from Cecil Hilt." However, Draper testified that he did not believe he had an obligation to Hilt.
When Hartman informed Hilt of his inability to deliver hay, Hilt telephoned Draper and angrily inquired about the 400 tons of hay he had ordered from Hartman. Draper responded that the hay was gone, because he had contracted with another dairyman. Draper took the position that he had made no deal with Hilt; that Hartman had received all of the hay he had paid for, and that Hilt must look to Hartman for any hay which Hartman failed to deliver. Hilt never received any of Draper's alfalfa hay. 1 Rather, Hilt purchased hay from Joe & Martin Trucking at higher prices. Hilt filed suit against Draper for the extra cost above $60 per ton he had paid Joe & Martin Trucking for 400 tons of hay.
The magistrate found that Hartman and Draper knew that the hay was also for other parties and not to be used exclusively by Hartman at his parents' dairy. The magistrate ruled that Hartman acted as "a go-between, a middleman and/or a factor." The magistrate also found that the contract had arisen because Hartman had been an agent of Hilt and Draper at various times during the transactions. The magistrate stated that "Draper treated Hartman as a factor or trucking broker and not as the buyer of his crop." As support for this conclusion, the magistrate cited Draper's knowledge that the hay was hauled to others, his acceptance of checks from others, and his review of the weight slips with Hartman to verify delivery to the people from whom he had received checks.
The magistrate concluded that Draper was liable to Hilt for breach of contract on an agency theory. The magistrate found that Hartman was Draper's agent or alternatively, that Hartman had apparent authority to bind Draper, which Hilt had reasonably relied upon. The third basis for the magistrate's decision was that Hilt was a known and intended beneficiary of the contract between Hartman and Draper and was entitled to enforce that contract. The magistrate ruled that Draper had breached the contract by failing to deliver, or to allow Hartman to deliver, the hay to Hilt.
On appeal, the district court affirmed the judgment entered by the magistrate, but modified the magistrate's award of attorney fees. The district court agreed with the magistrate that Draper was liable to Hilt, but did so based upon the theory of ratification. The court stated, "[i]t is highly doubtful that Draper ever authorized Hartman in advance to obligate him to deliver hay to Hilt." The court also stated that "[t]he act of endorsing [the] check and cashing it effectively ratified the actions of Hartman...." The court further determined that the act of cashing the check had clothed Hartman with apparent authority to contract with Hilt on his behalf. The court held that the magistrate had properly awarded attorney fees to Hilt with the exception of the portion of the fees attributable to Draper's motion to compel, pursued during pretrial discovery proceedings. The district court ordered the magistrate to subtract the fees charged for that hearing from the fee awarded.
We review the trial record independently from, but with due regard for, the district court's appellate decision because the issues before us are the same as those considered by the district court. Hentges v. Hentges, 115 Idaho 192, 765 P.2d 1094 (Ct.App.1988). Considering the letter and spirit of I.R.C.P. 52(a), we must uphold the magistrate's findings of fact unless they are clearly erroneous, even where, as in this case, the evidence is entirely in...
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