Pace v. Sagebrush Sales Co.

• Decision Date: 01 February 1977
• Docket Number: No. 12684,12684
• Citation: 560 P.2d 789,114 Ariz. 271
• Parties: , 21 UCC Rep.Serv. 490 Milton G. PACE, Individually and doing business as Truck City Lumber, Appellant, v. SAGEBRUSH SALES COMPANY, Appellee.
• Court: Arizona Supreme Court

Page 789

560 P.2d 789

114 Ariz. 271, 21 UCC Rep.Serv. 490

Milton G. PACE, Individually and doing business as Truck City Lumber, Appellant, v. SAGEBRUSH SALES COMPANY, Appellee.

No. 12684.

Supreme Court of Arizona, In Division.

Feb. 1, 1977.

Skousen, McLaws & Skousen, P.C. by John Larry McLaws, Mesa, for appellant.

Hedberg & Kirschbaum by Joel R. Kirschbaum, Phoenix, for appellee.

HAYS, Justice.

This is an appeal from two orders of the trial court granting a motion for summary judgment to the plaintiff, Sagebrush Sales Company (hereinafter referred to as 'Sagebrush'), and denying Milton Pace and Truck City Lumber (hereinafter referred to as 'Pace'), the defendants, their motion for a new trial. We have jurisdiction of this appeal pursuant to 17A A.R.S. Rules of the Supreme Court, rule 47(e)(5).

This dispute arose out of a sale of lumber made by Jack Hubbard acting as an agent for Sagebrush, a New Mexico corporation and wholesale lumber supply dealer, doing business in Maricopa County, to the defendant, Pace, a wholesale and retail lumber dealer. On March 8, 1974 Hubbard offered to sell to Pace a variety of lumber items of excess inventory on special terms. Pace ordered a large portion of the materials offered. The goods were delivered to the defendant's lumber yard in a series of shipments between March 15 and March 19 of that year.

As the trucks were unloaded at the defendant's yard, the material shipped was receipted for by the defendant himself or by one of his employees. Two of the truckloads contained materials that the defendant allegedly did not order, but the defendant nevertheless permitted the unordered lumber to be unloaded without objection. The defendant did however write upon his copy of the invoice the words 'not ordered.'

Within a short time of the receipt of the unordered goods, the defendant called the plaintiff's place of business to speak to Jack Hubbard. Hubbard was not present but the defendant did talk with another employee of the plaintiff. Defendant Pace asked the employee why they were sending him extra lumber. The employee replied that he did not know but that he would have Hubbard call Pace. No further complaint was made prior to this suit.

The goods, signed, receipted and accepted by Pace, were then placed into the defendant's inventory and were henceforth continuously offered for sale to the public. A portion of the goods were sold.

The total deliveries billed to Pace amounted to $18,740.61. Of that total amount due, $6,000.00 had been paid prior to the filing of this lawsuit. Another $6,000.00 check had been received by Sagebrush but Pace stopped payment of that check apparently upon learning that suit had been instituted against him.

This suit was filed on July 3, 1974, to recover the amount still due for the lumber delivered, to wit, $12,740.61. Pace answered and counterclaimed on July 23, 1974, denying the debt and alleging defects in the material and misrepresentations on the part of Sagebrush's agent, Jack Hubbard. In January of 1975, Sagebrush moved the court for summary judgment, claiming essentially that the debt was admitted by Pace and that Pace's counterclaims were barred by his failure to notify the seller, Sagebrush, of the alleged defects. The defendant opposed the motion and moved to amend his answer and counterclaim. The motion to amend was granted, and on March 21, 1975, Pace further alleged fraud on the part of Hubbard in delivering goods of a lesser quality than represented.

On April 3, 1975, summary judgment was granted the seller, Sagebrush. Pace moved the court for a new trial and the motion was denied. This appeal followed. The ultimate issues now before us are whether there exists any material questions of fact and if not, whether the plaintiffs are entitled to judgment as a matter of law.

The defendant, Pace, urges that whether there was a sale, whether notice of defects in the shipments was given, whether notice was reasonable, and whether, irrespective of notice, fraud was involved are all questions of fact to be resolved by the jury.

The standard of review is settled. In determining the propriety of granting summary judgment we must view the evidence in the light most favorable to the party opposing the motion, Savoca Masonry Co. v. Homes & Son Constr. Co., 112 Ariz. 392, 542 P.2d 817 (1975), and must reverse the order granting the motion if, upon a review of the entire record, there are any material disputed questions of fact which if resolved against the moving party could adversely affect the final judgment. Krumtum v. Burton, 111 Ariz. 448, 532 P.2d 510 (1975).

Pace first argues that the trial court erred in assuming that a sale had been consummated concerning the two truckloads of materials not ordered by Pace. He argues that a 'sale' is a prerequisite to acceptance and that whether a sale occurred is a question of fact. We do not agree.

The defendant's concern with whether there was a sale prior to acceptance is totally inappropriate. First of all, a sale is defined as the passing of title from a seller to a buyer, A.R.S. § 44--2306(A), and as such, a sale would oftentimes be consummated by way of acceptance. Secondly, acceptance is clearly defined in A.R.S. § 44--2369 and nowhere in that section is a sale either directly or implicitly made a prerequisite to acceptance. Finally, in this case there can be no question but that Pace did accept the goods. A.R.S. § 44--2369(A)(3) defines acceptance as occurring when, among other things, the buyer does any act inconsistent with the seller's ownership. Here, Pace took possession of the goods, put them into inventory in his yard, offered them for sale to the public and did, in fact, sell a portion thereof. Moreover, he failed to effectively express dissatisfaction, made a partial payment on the goods and never attempted to return or tender the shipment back. We hold that as a matter of law Pace accepted the goods under A.R.S. § 44--2369.

The defendant next contends that whether he gave notice to the seller of the defects is a question of fact. The issue of notice arises under a breach of warranty theory. In his counterclaim the defendant asserted that the goods received were not of merchantable quality and he accordingly sought damages. A condition precent to recovery under such a breach of warranty theory is notice of the breach to the seller within a reasonable time of discovering the breach. Section 44--2370 is clear:

'C. Where a tender has been accepted:

'1. The buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy; . . .

. . .'

We have already determined that there was acceptance of the goods. The defendant argues that the seller was apprised of the defects in the lumber upon the filing of the answer and counterclaim on July 23 1974. The defendant further argues that whether that was 'within a reasonable time' is necessarily a question of fact for the jury.

Pursuant to the authorities of Dowdle v. Young, 1 Ariz.App. 255, 401 P.2d 740 (1965), and Davidson v. Wee, 93 Ariz. 191, 379 P.2d 744 (1963), we agree with the defendant that the requirement of notice may indeed be fulfilled by the pleadings themselves. Howev...