Howland v. Iron Fireman Mfg. Co.

• Decision Date: 28 February 1950
• Citation: 215 P.2d 380,188 Or. 230
• Parties: HOWLAND v. IRON FIREMAN MFG. CO.
• Court: Oregon Supreme Court

215 P.2d 380

188 Or. 230

HOWLAND v. IRON FIREMAN MFG. CO.

Supreme Court of Oregon.

February 28, 1950

On petition for rehearing.

Manley B. Strayer, Hugh L. Biggs, George H. Fraser, and Hart, Spencer, McCulloch, Rockwood & Davies, all of Portland for appellant.

Ralph A Coan, Marvin S.W. Swire, and Coan & Rosenberg, all of Portland, for respondent.

Before LUSK, C. J and BRAND, BAILEY and HAY, JJ.

BRAND, Justice.

In our former opinion we found prejudicial errors as stated. Accordingly we set aside the verdict and judgment and granted a new trial. The defendant, however, contends that it was entitled not merely to a new trial, but rather to final judgment. It has therefore filed a petition for rehearing. Considering the question presented to be a most important one, we requested briefs, which have been received and studied.

After holding that the contract relied upon by the plaintiff was within the statute of frauds and was unenforceable unless taken out of the statute by such performance referable to the contract as is required by O.C.L.A. § 71-104, we said :

'* * * The testimony of plaintiff and defendant was in violent disagreement as to the agreement pursuant to which sales deliveries, and acceptances and payments were made, and since the evidence is conflicting as to whether the sales to plaintiff were pursuant to the alleged exclusive contract or the nonexclusive dealership, it follows that there was a question of fact for the jury to determine and that question was whether the sales, deliveries, etc., were referable to the oral contract claimed by plaintiff. * * *'

In its petition for rehearing defendant presents a single contention, namely, that we 'erred in holding that there was a question of fact for the jury to determine whether the sales and deliveries of oil burners to respondent were referable to the oral contract claimed by the respondent.'

Considerable attention is devoted by both parties to the evidence that in a few instances the defendant company received inquiries concerning oil burners and referred prospective customers to the plaintiff. In several instances the inquiry came from persons outside Multnomah County and the action of defendant as to them is therefore without any significance. We have considered each case with care and the most that can be said is that upon the evidence the trier of the fact might draw an inference either that defendant's action was or was not done with reference to the exclusive contract claimed by the plaintiff. The practice of thus referring inquiries had been followed both before and after the making of the alleged contract.

Having reference to the terms of the statute: 'A contract to sell or a sale of * * * goods * * * shall not be enforceable * * * unless the buyer shall accept * * * and actually receive * * *', O.C.L.A. § 71-104, the essential question is whether the action of the parties relative to acceptance and receipt was so clearly referable to the contract alleged by plaintiff, as to take it out of the statute of frauds and whether it was for the court or the jury to decide the question.

At the threshold of any discussion of the authorities, two distinctions must be made; the first, between the rule which applies in law and that which applies in equity; the second, between the rule in actions by the buyer and the rule and actions by the seller, on an oral contract for the purchase or sale of goods.

This court has considered many cases in which specific performance has been sought by one in the position of buyer or donee or lessee of an alleged oral contract for the conveyance or devise of land, or for the leasing thereof for a period longer than one year. The relevant statute is O.C.L.A. § 2-909. That section provides that such oral contracts are void unless there is a note or memorandum in writing satisfying the statutory requirements. There is not a word in the statute concerning part performance or suggesting that such cases may be taken out of the operation of the statute and enforced in equity. Courts of equity have developed a body of judge-made law under which relief is granted, notwithstanding the statute, upon the theory that equity will not permit the statute of frauds to become the instrument for the perpetration of fraud. 49 Am.Jur., Statute of Frauds, § 421, p. 725. Accordingly, part, or full performance, as the case may require, if done in pursuance of the contract and referable thereto, showing that the plaintiff relied upon the agreement, and on the defendant's endorsement or acquiescence, is held sufficient to authorize specific performance. The rule operates on the theory of estoppel by conduct to assert the statute. 49 Am.Jur., Statute of Frauds, § 422, p. 727. The authorities are reviewed in the following recent cases: Hunter v. Allen, 174 Or. 261, 147 P.2d 213, 148 P.2d 936; Dodge v. Davies, 181 Or. 13, 179 P.2d 735; Tiggelbeck v. Russell et al., Or., 213 P.2d 156. Of the cases cited by defendant in its brief on petition for rehearing, four were suits in equity. Brown v. Lord, 7 Or. 302; Le Vee v. Le Vee, 93 Or. 370, 181 P. 351, 183 P. 773; Reynolds v. Scriber, 41 Or. 407, 69 P. 48; and Tonseth v. Larsen, 69 Or. 387, 138 P. 1080. In each of these cases the court defined, though in somewhat different terms, the test of part performance as employed in equity. Even in equity we have never held that the evidence of part performance must be undisputed. Whether the requirements of equity have been satisfied may be shown by a preponderance of the evidence. Losey v. O'Hair, 160 Or. 63, 83 P.2d 493.

Actions at law to enforce rights under oral contracts for the sale of goods rest on a different foundation. The statute provides that such contracts are not enforceable 'unless * * *', and then follow the statutory provisions, compliance with which may take the case out of the statute. As distinguished from the function of a court of equity which enforces its own rules, the function of a court of law, under the sales act, is primarily that of statutory construction, having in view the presumed intent of the legislature.

In the simple case of an action by the seller on a specific contract, where there is no dispute as to its terms, proof of acceptance and receipt by the buyer, who is the one to be bound, clearly satisfies the statute and establishes the right to recover the price. There is nothing to which acceptance and actual receipt of the goods could be referable except the alleged specific oral contract. Consequently the courts have frequently held that the plaintiff may prevail upon proof of acceptance and receipt without discussing the question of referability. If title and possession passed to the buyer, plaintiff recovers. Even here, however, the decisions construe the statute as requiring action on the part of both parties.

'No act of a seller alone can constitute a delivery taking the contract out of the statute of frauds, without a receipt and acceptance by the buyer.' 49 Am.Jur., Statute of Frauds, § 272, p. 590.

'The requirement as to receipt and acceptance demands the action on the part of both parties, for acceptance implies delivery, and there can be no complete delivery without acceptance. No act of the seller alone, however positive and unequivocal, can have this effect. Also, acquisition of possession by the buyer without the consent of the seller cannot operate as a compliance with the statute, as where the buyer without the consent of the seller takes the goods under a writ of replevin.' 49 Am.Jur., Statute of Frauds, § 273, p. 590.

'* * * There must be some unequivocal act or conduct over and beyond the mere terms of the verbal agreement indicating, on the one hand, an intent to vest the ownership and absolute dominion in the buyer, and on the other hand, an intent to take the goods as owner of such title as the contract calls for in performance of the agreement. * * *' 49 Am.Jur., Statute of Frauds, § 275, p. 591.

As stated in an Illinois case:

'* * * In order to fulfill the requirements of the statute, so as to avoid its effect, there must be a delivery of the goods sold, from the seller to the buyer, and an acceptance by the buyer, with an intent on the part of both parties of vesting the right of possession in the buyer. In order to determine whether or not the buyer has accepted and received the goods and the seller has delivered them to the buyer, with the intention of vesting the right of possession in him, it is necessary to consider the intention of the parties, as shown by what they did. Of course, the intent must be mutual, on the part of the seller to deliver to the buyer, and on the part of the buyer to accept from the seller. Either party alone may not effect a delivery and acceptance. 27 C.J. 244; Chicago Metal Refining Co. v. Jerome Trading Co., 218 Ill.App. 333.' Illinois Meat Co. v. American Malt and Grain Co., 229 Ill.App. 311. Compliance with the rule thus stated is ordinarily sufficient.

When, in the simple type of case referred to, there is a conflict in the evidence as to whether the defendant buyer accepted and received the goods, the question is one for the jury. Meyer, W. & Co v. Thompson & Co., 16 Or. 194, 18 P. 16; Galvin v. MacKenzie, 21 Or. 184, 27 P. 1039; Richey v. Robertson, 86 Or. 525, 169 P. 99; Barrett Mfg. Co. v. D'Ambrosio, 90 Conn. 192, 96 A. 930; Becker v. Holm, 89 Wis. 86, 61 N.W. 307; Augusta Cooperage Co. v. Plant, 163 Ark. 49, 259 S.W. 12; Crowley v. Marshall, 80 N.H. 442, 118 A. 673; Castle v. Swift & Co., 132 Md. 631, 104 A. 187; Houghtaling v. Ball et al., 19 Mo. 84, 59 Am.Dec. 331; Waite v. McKelvy, 71 Minn. 167, 73 N.W. 727; Charlotte Harbor & N. Ry. Co. v. Burwell, 57 Fla. 217, 48 So. 213; Klein-Messner Co. v. Fair Waist & Dress Co., 217 A.D....