Lake Village Implement Co. v. Cox

• Decision Date: 27 March 1972
• Docket Number: No. 5--5834,5--5834
• Citation: 252 Ark. 224,478 S.W.2d 36
• Parties: , 10 UCC Rep.Serv. 1398 LAKE VILLAGE IMPLEMENT COMPANY, Inc., Appellant, v. Crowell COX, Appellee.
• Court: Arkansas Supreme Court

Page 36

478 S.W.2d 36

252 Ark. 224, 10 UCC Rep.Serv. 1398

LAKE VILLAGE IMPLEMENT COMPANY, Inc., Appellant, v. Crowell COX, Appellee.

No. 5--5834.

Supreme Court of Arkansas.

March 27, 1972.

Clifton Bond, Monticello, William H. Drew, Lake Village, for appellant.

Ross & Ross, Monticello, for appellee.

FOGLEMAN, Justice.

This is the second appeal in this case, which was commenced October 17, 1968, by appelllant Lake Village Implement Co., Inc., to replevy certain farm equipment for harvesting silage crops in the possession of appellee Crowell Cox. We reversed a judgment in favor of appellee for possession of the equipment and for $2,000 on his counterclaim for damages for loss of a 95-acre crop of silage, loss on cattle he expected to feed the silage and a down payment on the equipment. We held that the loss on the cattle was too remote to constitute a proper element of damages and that appellee could not recover both possession and his down payment. See Lake Village Implement Co. v. Cox, 249 Ark. 733, 461 S.W.2d 108. After remand, appellant amended its complaint to ask, in the alternative, for a recovery of the farm equipment and damages for detention, or for the balance due on the purchase price. Appellee also amended his pleadings to allege a repudiation and breach of a contract to sell and deliver possession of the equipment and prayed for recovery of $14,250 for loss of the silage crop, the down payment of $1,850 and $150 as the value of a four- wheel wagon, cylinder and hydraulic hose on which the equipment was mounted when repossessed and delivered to appellant.

Appellant, the seller of the goods, relies upon four points for reversal which are, in essence, failure of the circuit judge to direct a verdict in its favor for possession of the equipment, failure to direct a verdict in its favor contending that appellee's counterclaim was based upon an alleged contract not to be performed within one year and not signed by appellant and thus within the statute of frauds, and that the evidence of this alleged contract was contrary to the final written expression of the agreement in violation of Ark.Stat.Ann. § 85--2--202 (Add.1961), and failure to require appellee to elect whether he sought recovery of the fair rental value of the equipment under the replevin statutes or to rescind the contract and recover his down payment and other items of damage recited in Ark.Stat.Ann. § 85--2--711 (Add.1961).

There was considerable conflict in the testimony as to the transaction between the parties. Appellant did sell appellee the farm equipment in question for cutting silage. The purchase price was $5,850. Most of the dealings on behalf of appellant were conducted by a salesman named George Kirkland. Appellee contends that the contract was evidenced by a retail purchase order prepared by Kirkland and signed by appellee. That document, dated August 10, 1968, described the equipment, listed the total price as $5,850, with cash on delivery $1,850, and the balance as '$4,000 to be financed.' On the other hand, appellant's owner and manager testified that he disapproved this contract because of the statement that the balance was to be financed and that Cox later came to appellant's place of business and told Kirkland to order the equipment, saying that it would be paid for on delivery. The equipment was ordered after appellee's check for $1,850, dated August 10, 1968, as down payment had been first rejected by the bank and then paid on August 23. Kirkland testified that the agreement evidenced by the purchase order meant that Cox was to arrange for financing the balance of the purchase price and that, since the equipment was specialized, appellant would not order it until financing was arranged. It was for that reason, said Kirkland, that he accompanied or assisted Cox in attempting to obtain loans to pay the balance. He claims that when these efforts were unavailing, he offered to refund the down payment, so Cox could buy the equipment elsewhere, whereupon Cox told him to order the equipment, assuring him that the balance of the purchase price would be paid in cash upon delivery. The equipment was ordered between the first and fifth of September and delivered to the Cox farm before September 15. Kirkland said that he made an unsuccessful attempt to collect the balance from Cox two days later and when several other such attempts failed, he obtained a title retaining note dated September 17, 1968, and three postdated checks for the balance some 10 or 12 days after the equipment was delivered. He explained that Cox was in a hurry, so the note was not completely filled out, but that the amount and due date were filled in when Cox signed it and a partially completed financing statement. According to Kirkland, the checks were dated so that they would clear after a cattle auction then scheduled. The checks were dated September 24, September 30 and October 15, 1968. Festinger, the owner and manager of appellant said that payment was refused on the first two of these checks, and that he sent Kirkland out to see Cox. Kirkland testified that his demand for possession of the equipment then made was refused, and that the equipment was thereafter replevied.

On the other hand, appellee Cox testified that when he went to purchase the equipment, he told Kirkland he had a silage crop and needed the equipment to harvest it, that he signed the financing statement the same day he ordered the equipment and that the equipment had been delivered when, at Kirkland's request, the two went to various banks to obtain financing on the balance of the purchase price, which he said he had agreed to pay in two equal annual installments. Cox said that the equipment had remained unused for about three weeks when Kirkland called on him just as he was preparing to harvest the silage crop and asked that the equipment be returned to the dealer's lot during an inspection so there would be no inventory shortage due to the failure to obtain financing. Cox added that when he refused, Kirkland brought a $4,000 note which Cox signed and then Kirkland returned about three days later and obtained Cox's signature on the three postdated checks, as security, even though Cox told him there was no money in the bank to cover them. Cox denied telling Kirkland that he would pay the checks after he sold some cattle at a sale, and said that he signed them upon the agreement that they would not be cashed. He said that the equipment had been used only two hours when replevied on October 17, 1968.

We find no reversible error in the circuit court's failure to direct a verdict in favor of appellant for possession of the equipment. It had been in appellant's possession since the sheriff took it under the writ of replevin. Appellee, on the second trial, did not seek to recover possession, but claimed that appellant had repudiated and breached its contract by repossessing the equipment when he was not in default. There was at least a question of fact as to appellant's entitlement to possession, but appellee is certainly in no position to claim any right to possession of the property after having elected to rescind the contract.

The contract was not within the statute of frauds, regardless of which version is accepted because the equipment had been delivered to, received and accepted by appellee, who had paid part of the purchase price. It was fully performed by appellant and capable of full performance within a year, except for the payment of the purchase price. It must appear from the terms of the contract that it was not to be performed within one year in order to bring it whthin the operation of the statute. Johnson v. Cheek, 163 Ark. 176, 259 S.W. 368. See also, Ark.Stat.Ann. § 85--2--202. We have held that the statute does not apply to contracts which may be completely performed on one side when nothing remains to be done during a period longer than one year, except for the payment of compensation. Manufacturers' Furniture Co. v. Read, 172 Ark. 642, 290 S.W. 353; Reed Oil Co. v. Cain, 169 Ark. 309, 275 S.W. 333. While in these cases, the full performance was by the party seeking to recover the consideration for the contract, the weight of authority seems to be that the contract is taken out of the operation of the statute when there has been, or could be, full performance on the part of the other party. 37 C.J.S. Frauds, Statute of § 50, p. 560; 37 C.J.S. Frauds, Statute of § 254. p. 774. This seems to us to be the better rule, at least in cases involving the sale of goods.

We find no merit in appellant's contention that it should have been granted a directed verdict because the testimony on behalf of appellee was prohibited by § 85--2--202 as a contradiction of the financing statement, title retaining note and postdated checks signed by appellee. The section of the UCC relied upon by appellant bars evidence of a prior or contemporaneous oral agreement to contradict terms with respect to which confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement. Of course, Cox stoutly denies that these instruments were intended as the final expression of the agreement of the parties, but...