Paramount Sales Co., Inc. v. Stark

• Decision Date: 07 May 1985
• Docket Number: No. 13733,13733
• Citation: 690 S.W.2d 500
• Parties: 41 UCC Rep.Serv. 441 PARAMOUNT SALES CO., INC., Appellant, v. Raymond STARK, Jr., and Mary Stark, Respondents.
• Court: Missouri Court of Appeals

Page 500

690 S.W.2d 500

41 UCC Rep.Serv. 441

PARAMOUNT SALES CO., INC., Appellant, v. Raymond STARK, Jr., and Mary Stark, Respondents.

No. 13733.

Missouri Court of Appeals,

Southern District,

Division Three.

May 7, 1985.

Mark D. Pasewark, James A. Gottschalk, Vogler & Smith, St. Louis, for appellant.

No appearance for respondents.

CROW, Presiding Judge.

Paramount Sales Co., Inc. ("Paramount"), a Tennessee corporation, wholesales "drug sundries," primarily to drugstores and variety stores. Paramount sued Raymond Stark, Jr. ("Ray") and his wife, Mary, claiming that Ray and Mary, doing business as partners under the name "Steelville Drug Store," bought merchandise from Paramount totaling $3,234.93, which sum the Starks refused to pay. The trial court, sitting without a jury, entered judgment for $750 in favor of Paramount and against the Starks. Additionally, the judgment ordered the Starks, at their expense, to return all items "still in the original shipping boxes" to Paramount.

In reaching that decision, the trial court found that not all of the merchandise was merchantable and further found, at least inferentially, that the Starks had rejected the nonconforming items.

Paramount appeals, insisting there was no substantial evidence (a) to support a finding that the "bulk" of the merchandise was nonconforming, or (b) to support a finding that the Starks "rejected the goods as required by the Uniform Commercial Code." Paramount also maintains that the provision in the judgment "permitting" the Starks to return the "unsold" goods to Paramount "for credit" is erroneous, inasmuch as there was no evidence of any such right under the contract.

Our review is governed by Rule 73.01(c), Missouri Rules of Civil Procedure (16th ed. 1985), and Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). The judgment will be sustained unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law. Credibility of witnesses and the weight to be given their testimony is for the trial court, Estate of Graves, 684 S.W.2d 925, 928 (Mo.App.1985); Mills v. 1st National Bank of Mexico, 661 S.W.2d 808, 810 (Mo.App.1983), which is free to believe none, part or all of the testimony of any witness. Lee v. Rolla Speedway, Inc., 668 S.W.2d 200, 206 (Mo.App.1984); Lohrmann v. Carter, 657 S.W.2d 372, 377 (Mo.App.1983). We assume the trial court believed the testimony and evidence consistent with its judgment. McComas v. Umlauf, 641 S.W.2d 809, 812 (Mo.App.1982); McClelland v. Williamson, 627 S.W.2d 94, 96 (Mo.App.1982).

Viewed in light of those principles, the evidence establishes that in the autumn of 1982, Jay Cannon, a sales representative for Paramount, presented a "sales pitch" to Ray, the gist of which was that merchandise obtainable from Paramount, if set up in various displays in the front of the Starks' store, would give the store a "new look."

Ray thereupon placed an order with Cannon for numerous items. According to Ray, Cannon promised that all items would be shipped "at one time," and that he (Cannon) would return and help set up the displays.

A shipment from Paramount subsequently arrived. Michele Garvey, an employee of the Starks', testified that the first few items unboxed were "small jewelry items," which were fine. They were marked with prices and displayed for sale.

The next items opened, "the coasters, the pottery, and the Irvingware," were blemished. Specifically, said Ray, the coasters were "chipped away and faded," there were "flaws" in the pottery, and the Irvingware was "chipped and rusted." Ms. Garvey explained that those items were not "something that we wanted to put out for our customers, we wouldn't purchase it ourselves, so we wouldn't put it on the shelf."

Additionally, the shipment did not contain all of the merchandise Ray had ordered. Consequently, it was impossible to arrange the displays as planned.

Ms. Garvey reported the situation to Paramount's home office by phone. She testified she was told that Paramount would send a representative to inspect anything that was damaged and that the missing merchandise would be "forthcoming soon."

Ray also telephoned Paramount. He testified:

"I called, told them what had happened. Told them I was not satisfied with quality of the merchandise, and asked them if they would send, you know, a prepaid UPS pickup on it, and I wouldn't even unpack the rest of it.

"They refused to do that, said that once I received it, it was my problem and I was stuck with it. Now, those were the words that came from the lady I talked with.

"So, I would have been very happy to have sent it back, but since the merchandise was not up to standard, I didn't see any reason why I should go through $150 worth of shipping cost to get it back to them, when I was receiving inferior merchandise in the first place."

According to Ms. Garvey, the items that had been opened and found unacceptable were put back in their boxes, and they, along with the unopened items, were stored in a back room. Other shipments subsequently arrived and, according to Ray, were stored with the original shipment.

Ray testified he kept calling Paramount but the only response he ever received "was a nasty note saying, you've got to pay for it." Neither Cannon nor any other representative of Paramount ever came by to inspect the merchandise.

The Starks persisted in their refusal to pay. Paramount sued.

The cause was tried approximately a year after the first shipment. Lyman Parsons, Paramount's sales manager, appeared as a witness. Parsons testified that before coming to court, he went inside the Starks' store and observed that some items displayed for sale were identical to items sold by Paramount. Parsons admitted, however, that the items could have come from another distributor.

Ray conceded that his clerks might have put some of the merchandise from Paramount on display for sale, but he insisted that "most of it is still back in the back in the cartons that they came in." ¹ Ray had no estimate as to what amount might have been sold.

Ms. Garvey acknowledged that some of the merchandise from Paramount was displayed for sale and that some of the jewelry and a "Country Kitchen" utensil set had been sold.

Paramount's first assignment of error is that the trial court's judgment that the "bulk" of the merchandise was nonconforming is not supported by substantial evidence. Therefore, argues Paramount, the trial court erred in refusing to hold the Starks liable for "the full contract price."

The assignment of error misstates the record. As noted at the start of this opinion, the trial court found that not all of the merchandise was merchantable. Nowhere in the record do we espy a finding that the "bulk" was nonconforming. While the difference may be merely in degree, or perhaps a matter of semantics, we nonetheless point it out before assaying the assignment for merit.

Paramount acknowledges the applicability of the "Uniform Commercial Code--Sales," §§ 400.2-101 to 400.2-725, RSMo 1978, ² to the dispute between it and the Starks. Citing R.R. Waites Co., Inc. v. E.H. Thrift Air Conditioning, Inc., 510 S.W.2d 759 (Mo.App.1974), Paramount asserts that delivery of conforming goods by a seller to a buyer requires the buyer to accept the goods and pay the seller. Paramount insists that such rule applies here.

Section 400.2-106(2) states:

"Goods or conduct including any part of a performance are 'conforming' or conform to the contract when they are in accordance with the obligations under the contract."

Section 400.2-601 provides, in pertinent part:

"... if the goods ... fail in any respect to conform to the contract, the buyer may

(a) reject the whole; or

(b) accept the whole; or

(c) accept any commercial unit or units and reject the rest."

Section 400.2-105(6) states:

" 'Commercial unit' means such a unit of goods as by commercial usage is a single whole for purposes of sale and division of which materially impairs its character or value on the market or in use. A commercial unit may be a single article (as a machine) or a set of articles (as a suite of furniture or an assortment of sizes) or a quantity (as a bale, gross, or carload) or any other unit treated in use or in the relevant market as a single whole."

In the instant case, there was substantial evidence that the original shipment of merchandise failed to conform to the contract, in that a considerable number of items ordered by Ray were missing. The amount of the invoice for the first shipment was $2,347.10. At trial, Paramount produced invoices for three of the later shipments which amounted, in the aggregate, to $755.46. ³ Based on the invoices alone, the first shipment was less than 76 per cent of the total order.

More importantly, however, the testimony of Ray and Ms. Garvey was sufficient to support a finding that a substantial number of items in the first shipment were damaged or blemished and therefore nonconforming under the implied warranty of merchantability in § 400.2-314. ⁴ In that regard, Ms. Garvey explained that after opening the box in which defective items were first discovered, she and another clerk "went through several other of the boxes to see if everything was that way, or if we had just pulled one item that might have had that." She found that most of the items they opened were blemished.

This testimony was sufficient to support a finding that the goods in the initial shipment failed to conform to the contract within the meaning of § 400.2-601 ⁵ (quoted earlier in part), thereby permitting the Starks to reject that shipment--and those that followed--or to accept any commercial unit or units and reject the rest. § 400.2-601(a) and (c).

While the trial court did not articulate any finding in quite those terms, the trial court did find that the Starks were "not able to merchandise, or sell, certain...