Lewis v. Hughes

Decision Date29 October 1975
Docket NumberNo. 11,11
Citation346 A.2d 231,276 Md. 247
Parties, 88 A.L.R.3d 406, 18 UCC Rep.Serv. 52 Bettie LEWIS v. Herbert H. HUGHES.
CourtMaryland Court of Appeals

George W. Shadoan, Rockville (Shadoan & Mack, Rockville, on the brief), for appellant.

Carl Harrison Lehmann, Upper Marlboro, for appellee.


DIGGES, Judge.

Whether the writing requirement of the Statute of Frauds contained in Title Two of the Uniform Commercial Code, Md. Code Ann. (1975), Commercial Law Article, § 2-201, prevents the enforcement of an oral contract for the sale of a mobile home is the question we must settle in this case. Judge Robert E. Clapp, Jr., sitting without a jury in the Circuit Court for Montgomery County, resolved this issue by deciding that under § 2-201(1) the contract, between Bettie Lewis, the plaintiff-appellant, and Dr. Herbert H. Hughes, the defendant-appellee, was not enforceable because the writing evidencing the contract, though signed by an agent of the appellee, was inadequately subscribed inasmuch as the agent did not have authority to execute such a memorandum on behalf of the doctor. Without determining whether the circuit court was correct in holding that this agreement cannot pass muster under the signature requirement of § 2-201(1), we conclude that it can be enforced under § 2-201(3)(b) since Dr. Hughes admitted in his testimony at trial that the contract was made. Consequently we will reverse and remand the case for an assessment of damages.

The chronicle of this case begins in the spring of 1973 when the appellant agreed to sell her 1967 Hillcrest mobile home to Phillip and Joyce Walters subject to the condition that Midway Mobile Home Park, located in Laurel, Maryland, permit the purchasers to rent the space on which the house trailer was then situated. Mrs. Lewis immediately sought the consent of the trailer park's managers, who informed her that no decision would be made until a formal application was filed; however, the managers added that these prospective occupants were unlikely to be accepted since Mrs. Walters' brother already lived in the mobile home park and park rules prohibited relatives of current residents from becoming tenants. Piqued by this rule, the appellant protested to Dr. Hughes, the owner of the trailer park, who indicated that he had no knowledge that such a rule existed but would look into the matter; Mrs. Lewis then complained to James L. Baer, Esq., an attorney appellant knew to have represented the doctor in the past, who in turn relayed her message to the appellee. On May 2 or 3 the doctor informed Mr. Baer that he had revoked the rule prohibiting relatives as tenants and asked him to so notify the appellant. This, unfortunately, did not end the dispute, as on May 4 or 5 Dr. Hughes advised the attorney that the trailer park superintendents were upset at being overruled by him and that, in order to mollify both his managers and the appellant, he would consider purchasing the mobile home himself. At the doctor's request, Mr. Baer, on May 7, apprised Mrs. Lewis of the appellee's plight and of his resulting interest in acquiring the trailer; later that same day the appellant replied to the attorney that she was willing to sell the house trailer to Dr. Hughes for $5,000. On May 7 Mr. Baer reported appellant's offer to Dr. Hughes, who, without comment as to terms of payment, assented to the $5,000 purchase price. The attorney then signed and mailed to Dr. Hughes a letter, dated May 8, 1973, in confirmation of that conversation. 1 Mrs. Lewis was notified on May 9 by Mr. Baer of the doctor's acceptance of her offer. 2 However, the appellee on May 21 informed Mrs. Lewis that he would not pay the full $5,000 at the time of settlement, offering instead $3,500 cash or, alternatively, $5,000 over a period of time, which prompted the appellant to sell the mobile home elsewhere and to institute this suit for fraud 3 and breach of contract.

The circuit court, relying on those facts, held that there was an oral contract between the appellant and Dr. Hughes for the sale of the house trailer, a conclusion which appellee does not challenge on this appeal. Nonetheless, the court decided that the contract was unenforceable under § 2-201(1) of the UCC, which reads:

'Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense 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 or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.' 4

To satisfy this statutory requisite, appellant relies on the May 8 letter sent by the attorney to Dr. Hughes in confirmation of their previous telephone conversation. 5 Although the circuit court found that letter to be 'sufficient written evidence of the existence of a prior oral contract,' a conclusion which is also not contested by appellee, the court held that it is not subscribed in accordance with the dictates of § 2-201(1) and thus could not be relied on to satisfy the writing requirement. The defect, as perceived by the trial court, was that the only signature appearing on the letter was Mr. Baer's and, even though he was an agent of Dr. Hughes with 'authority to transmit (appellee's) acceptance to the (appellant),' he had not been empowered to 'make any written memorandum of the sale'; thus he was not an 'authorized agent' within the meaning of § 2-201(1). See generally §§ 1-103 and 1-201(43). We find it unnecessary to consider whether the circuit court correctly determined the extent of the agent's authority, 6 as we conclude that the Statute of Frauds has been otherwise satisfied.

'A contract which does not satisfy the requirements of (§ 2-201(1)) but which is valid in other respects is enforceable

(b) If the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; . . ..'

The appellant asserts that Dr. Hughes repeatedly acknowledged the existence of the contract in his testimony and that therefore, regardless of its enforceability under § 2-201(1), the agreement is enforceable under § 2-201(3) (b). The sole response of appellee to this argument is that it was not raised below and thus, under Rule 885, is not properly before this Court for decision. Considering at the outset appellee's Rule 885 contention, it is true that in Laporte Corp. v. Cement Corp., 164 Md. 642, 645-46, 165 A. 195 (1933) our predecessors held that when a defendant pleads the general issue and asks for a directed verdict on the grounds of legally insufficient evidence, without pleading the Statute of Frauds below or objecting to the alleged contract on the basis of it, the statute may not be raised for the first time on appeal. 7 On a motion for reargument in Laporte, 164 Md. at 651-53, 165 A. 195, which is also reported in 168 A. 844 (1933), the Court reaffirmed its decision, declining to follow the rule of prior cases, e. g., Morgart v. Smouse, 103 Md. 463, 467, 63 A. 1070 (1906); Hamilton v. Thirston, 93 Md. 213, 220, 48 A. 709 (1901); Semmes v. Worthington, 38 Md. 298, 317 (1873); Billingslea v. Ward, 33 Md. 48, 51 (1870), that the filing of a general issue plea preserves for appeal the question of whether the Statute of Frauds has been satisfied. The decision in Laporte was later adhered to by this Court in Friedman v. Clark, 252 Md. 26, 31, 248 A.2d 867 (1969) and Dove v. White, 211 Md. 228, 234-37, 126 A.2d 835 (1956). But see Smith v. Biddle, 188 Md. 315, 318, 52 A.2d 473 (1947). In the case before us, however, while not specifically raised below by either party's pleadings, 8 the question of whether the Statute of Frauds had been complied with was argued in the circuit court by both appellant and appellee, and it was on that issue that the trial judge decided the case. Although the parties and the trial court in discussing the Statute of Frauds issue concerned themselves with whether the requisites of subsection 1 of the statute were satisfied, we think that sufficient to preserve for appeal the issue of whether the statute was fulfilled via subsection 3(b). Subsection 1 itself specifically states that it is to apply '(e)xcept as otherwise provided in this section,' which directs attention to the remainder of § 2-201, including subsection 3(b). Furthermore, when the appellee argued below that the contract was barred by the Statute of Frauds and the appellant responded that § 2-201 was satisfied, all facets of the issue were preserved for appeal; for, as stated in the decision on the motion for reargument in Laporte,

'what may be regarded as reasons in support of a point, as distinguished from the point or question itself, need not appear stated in the record; this court will review a decision on the point without restriction to the reasons considered below.' 164 Md. at 652, 168 A. at 845.

Consequently, we conclude that the issue of whether the contract can be enforced pursuant to the provisions of § 2-201(3)(b) is properly before us.

The next step in deciding whether the statute bars enforcement of the contract is to determine just what, if anything, Dr. Hughes did admit concerning the agreement during the course of his testimony at trial. An examination of the record discloses that the doctor testified as follows:

'Q. This . . . conversation (with Mr. Baer), did you regard that as a meeting of the minds that you were to buy a trailer from Mrs. Lewis for $5,000 then or in the immediate future?

A. No, sir, I did not.


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