Peck v. Stafford Flour Mills Co.

• Court: U.S. Court of Appeals — Eighth Circuit
• Citation: Peck v. Stafford Flour Mills Co., 289 F. 43 (8th Cir. 1923)
• Decision Date: 13 April 1923
• Docket Number: 6165.
• Parties: PECK v. STAFFORD FLOUR MILLS CO.

289 F. 43

PECK v. STAFFORD FLOUR MILLS CO.

No. 6165.

United States Court of Appeals, Eighth Circuit.

April 13, 1923

Jeptha H. Evans and Charles I. Evans, both of Booneville, Ark., for plaintiff in error.

Ray Campbell, of Wichita, Kan. (J. Graham Campbell, of Wichita Kan., on the brief), for defendant in error.

Before KENYON, Circuit Judge, and BOOTH and JOHNSON, District Judges.

BOOTH District Judge.

This is an action brought by defendant in error (plaintiff below) to recover damages for breach of contract. Plaintiff claimed that it had sold flour to defendant, and that he had refused to give instructions and specifications for shipment of the same, as agreed in the contract. The defense originally set up in the answer was that the contract had been canceled by mutual agreement. On the trial, defendant was allowed by the court to amend the answer by setting up as an additional defense that the contract was unilateral. At the close of the evidence the court instructed the jury to return a verdict for plaintiff for the amount demanded in the complaint. There are 23 assignments of error but those necessary to be considered may be summarized into the following:

(1) That the court erred in not holding that the contract was void for want of mutuality.

(2) That the court erred in directing a verdict for plaintiff for the amount demanded in the complaint, or for any amount.

The contract, so far as here material, provided:

'Date 8-- 12-- 20.

'The Stafford Flour Mills Company, of Stafford, Kan., (sells) and Peck's Economy Store (buys) the following commodities, subject to the terms and conditions stated herein and printed on the back hereof, which terms and conditions are binding on both parties to this contract, and cannot be modified, except by written consent of both parties, and no verbal conditions, warrants, or modifications are valid:

Packages. Brand. Bbl.

1000 bbls. flour.................... 98# Cotton Bar-None $11.50

'Terms and Conditions.

'Time of shipment, 180 days.

'Destination: Magazine, Ark.

'This contract is subject to confirmation by the seller at

'The Stafford Flour Mills Company, 'By W. Brooks, Seller, 'Ike Peck, Buyer.

'Confirmed by the Stafford Flour Mills Co., by G. W. Kendrick.

'Date 8-- 16-- 20.

'The buyer shall furnish to the seller, not less than fourteen (14) days prior to the expiration of the contract period, such specifications and instructions as will permit the seller to ship.

'(1) The seller shall have the option to delay shipment or delivery of or cancel all or any portion of this contract at any time that there remains unpaid to the seller any past-due bill against the buyer, or at any time that the property and or assets of the buyer are in the legal process of liquidation.

'(2) * * * Seller shall not be responsible for failure to ship according to the terms and conditions of this contract, where such failure is caused by any fires, strikes, labor difficulties, failure of carriers to furnish facilities, or other acts of carriers or other causes beyond the control of the seller: Provided that, when such failure does exist, the seller shall perform this contract within a reasonable time, in any event, not to exceed thirty (30) days from the termination of cause or conditions resulting in seller's inability to perform.'

The claim of want of mutuality is based upon the clauses numbered (1) and (2) above. As to (1), the argument of defendant runs something as follows: That the evidence shows that defendant was indebted to plaintiff on a former contract, when the present contract was made, and continued to be behind in his payments on the first contract during all the life of the second contract; that this fact made the cancellation of the second contract optional with plaintiff at any time; that the contract, being not binding upon plaintiff, was therefore not binding upon defendant-- in other words, was void for want of mutuality.

The argument is ingenious, but not persuasive. We pass by without comment, but without assent, the assumption that the phrase 'any past-due bill' includes those due on other contracts than the one in hand. But an option of one party to cancel, which will render the contract invalid for lack of mutuality, must be an option dependent upon the will of that party only, and not dependent upon action or inaction by the other party. In the case at bar, however, the option of plaintiff to cancel was dependent upon the failure of defendant to keep up his payments. It would be a startling conclusion that defendant, under the clause above quoted, by breaching a former contract, could thereby render the present contract unilateral as to plaintiff, and therefore not binding on the defendant. The maxim a party may not take advantage of his own wrong prevents such a conclusion.

The claim of lack of mutuality by reason of the clause (2) is also without merit. Stipulations in a contract excusing performance in case of emergencies do not destroy its mutuality. 13 Corpus Juris, 337; Klosterman v. United Elec. Co., 101 Md. 29, 60 A. 251; Marin Water Co. v. Town of Sausalito, 168 Cal. 587, 599, 143 P. 767. Furthermore, in the case at bar, the failure to perform in the contingencies mentioned was not excused entirely, but temporarily only.

The remaining question in the case is whether there was sufficient evidence to go to the jury on the defense of mutual abandonment of the contract. The contract was in writing. The cancellation relied on was an oral one; but it is well settled that a contract in writing may be varied by an oral agreement (Canal Co. v. Ray, 101 U.S. 522, 25 L.Ed. 792; Teal v. Bilby, 123 U.S. 572, 8 Sup.Ct. 239, 31 L.Ed. 263; 13 Corpus Juris, 593; 6 R.C.L. 922), even though the contract provides that no change or modification thereof can be made except in writing signed by the parties (13 Corpus Juris, 594, Sec. 611, and cases cited). And it seems that in Arkansas a contract in writing as required by the statute of frauds may be canceled by oral agreement. Vogler v. Dyer, 149 Ark. 670, 234 S.W. 504. ^[1]

But the evidence in all such cases must be clear and convincing as to the oral agreement. 6 R.C.L. 922; Ross v. Tabor, 53 Cal.App. 605, 200 P. 971. In the present case the evidence as to cancellation consisted mainly of the testimony of the defendant to the effect that on or about January 23, 1921 Mr. Barr, vice president of the plaintiff, came to defendant's place of business in Arkansas to make a collection; that a conversation took place in which defendant related the circumstances under which the contract had been entered into, and told Mr. Barr of the bad condition of the farmers, and how hard collections were, and finally that defendant said, 'Mr. Barr, I want to know about that other proposition' (the...