Potter v. Hatter Farms, Inc.

• Jurisdiction: Oregon
• Citation: Potter v. Hatter Farms, Inc., 641 P.2d 628, 56 Or.App. 254 (Or. App. 1982)
• Docket Number: No. 118,337,118,337
• Parties: , 29 A.L.R.4th 997, 33 UCC Rep.Serv. 819 Charles K. POTTER, and Angelyn Potter, dba Northwest Turkey Hatchery, Respondents, v. HATTER FARMS, INC., an Oklahoma corporation, Appellant. ; CA A20256.
• Court: Oregon Court of Appeals
• Decision Date: 08 March 1982

Page 628

641 P.2d 628

56 Or.App. 254, 29 A.L.R.4th 997, 33

UCC Rep.Serv. 819

Charles K. POTTER, and Angelyn Potter, dba Northwest Turkey Hatchery, Respondents, v.HATTER FARMS, INC., an Oklahoma corporation, Appellant.

No. 118,337; CA A20256.

Court of Appeals of Oregon.

Argued and Submitted Sept. 21, 1981.

Decided March 8, 1982.

Paul R. Romain, Portland, argued the cause for appellant.With him on the briefs were Marva Graham and Ragen, Roberts, O'Scannlain, Robertson & Neill, Portland.

Philip J. Hand, Woodburn, argued the cause for respondents.With him on the brief was Klein & Hand, Woodburn.

Before GILLETTE, P. J., YOUNG, J., and ROBERTS, J. Pro Tem.

GILLETTE, Presiding Judge.

In this oral contract action, defendant appeals from a jury verdict in favor of plaintiffs(Potters).Defendant argues that: there was no substantial evidence that a contract existed between it and Potters; even if an oral agreement was reached, it was unenforceable because it violated the Uniform Commercial Code(UCC)Statute of Frauds; and plaintiffs were not entitled to raise promissory estoppel as a bar to their Statute of Frauds defense.We affirm.

Plaintiffs operate a turkey hatchery in Oregon.The hatchery processes turkey eggs through incubation to hatching, at which time new turkey "poults" are sold to growers.Defendant is a turkey grower in Oklahoma; it raises turkeys and sells them to food processing companies.

The arrangement between the parties began with a telephone call.PlaintiffCharles Potter testified that Gil Kent, production manager of Hatter Farms, first contacted him by phone in November or December, 1978, and stated an interest in purchasing some poults from the Potters' company.The men then met in January, 1979, at the Tulsa, Oklahoma, airport.At that time, according to Potter, he and Kent entered into an oral contract.Potter testified that he agreed to sell and Kent agreed that Hatter Farms would buy 192,000 poults for eighty cents per poult, plus charges for egg dipping, inspections and toe clipping.

The men also discussed transportation of the poults during the January meeting, but the exact means of transportation was left undecided.They agreed at that time that, because poults are neither fed nor watered in transit, transportation from Oregon to Oklahoma should take no longer than 40 hours.Potter testified, however, that the 40-hour figure was merely a goal set by the parties and that the agreement was not contingent upon finding transportation to attain that goal.In essence, Potter testified that he and Kent reached an oral contract for sale of the poults with the exact method of transportation left to be decided later.The parties agreed, according to Potter, to find transportation that was as quick and inexpensive as possible.Potter stated that, aside from the open transportation term, there was no disagreement whatsoever as to the terms of the contract.

Subsequent to their January discussion, both parties investigated transportation possibilities.One was to fly the poults to Chicago and truck them from there to Oklahoma.Robert Hatter, the president of defendant corporation, claimed at trial that such a method of transportation was not practical.He admitted, however, that it was possible to transport the poults in that manner.Potter testified that the cost of trucking the poults from Chicago to Oklahoma was too high, but that it was "not totally out of reason," because the alleged agreement occurred during the off-season when demand for turkey poults was high and supply was low.William Lewis, who had 30 years experience buying and selling turkey poults, testified that the estimated cost of the poults, including transportation, was "not too exorbitant" for poults during the off-season.

Potter met with defendant's representatives again in June, 1979.He had been contacted by two customers in California who expressed interest in buying the poults involved in this case, and the purpose of the June meeting was to determine if Hatter Farms still needed the poults.He explained:

"My purpose in selling turkeys is to protect our customer to the utmost, and in order to do that I make very solid commitments, and the people in California understood when the poults were going and that I had been back there and they had been confirmed and sold in January, and I told them I would go back and see if there was any problem with them taking them, or if they needed them, and I got no indication that they didn't need them."

Gil Kent testified that he told Potter that it was unwise for Potter to hold the poults for defendant, because neither party had arranged a suitable means of transportation.Potter testified, however, that he was certain at the end of the meeting that defendant still intended to buy the poults from him and that there were no contractual terms left to be worked out.Potter subsequently turned down an offer from the California buyer to buy the poults.

In August, 1979, Gil Kent informed Potter that defendant would be unable to use the poults.This action followed.

Defendant first claims that no contract for the sale of poults existed.It argues that transportation was so essential an element of any such contract that failure to agree on it indicates a lack of intent to contract.Alternatively, it argues that, even if a contract existed, it was conditioned upon the occurrence of and agreement upon transportation, which never occurred.

We cannot overturn the jury's decision on the basis of insufficient evidence unless there was no evidence to support the verdict.Allison v. Shepherd, 285 Or. 447, 454, 591 P.2d 735(1979).There was evidence here, based on Potter's testimony, that he and defendant's representatives entered into an oral contract.The fact that the transportation term was left open is not fatal to the agreement, because Potter testified that the agreement was not conditioned upon finding ideal transportation.The cost of the poults shipped by the available transportation was, according to the evidence, high but not unreasonable.ORS 72.2040(3) states:

"(3) Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy."¹

We hold that there is sufficient evidence that the requirements of this statute were fulfilled.

Defendant next argues that the trial court erred by not granting defendant's motions for summary judgment, for directed verdict and for judgment n.o.v., because the alleged oral contract was unenforceable in that it violated the UCC Statute of Frauds.ORS 72.2010.Plaintiffs respond that the defendant was barred on the basis of promissory estoppel from raising the Statute of Frauds as a defense.

Traditionally, a promissory estoppel claim has been used to supply the element of consideration where to refuse to enforce an otherwise valid promise would work an injustice on a party who relied to his detriment on the promise.Calamari & Perillo, The Law of Contracts, §§ 99-105(1970).In Stevens v. Good Samaritan Hosp., 264 Or. 200, 504 P.2d 749(1972), however, the Oregon Supreme Court held that promissory estoppel could be used to defeat the application of Oregon's general Statute of Frauds.²See also, United Farm Agency v. McFarland, 243 Or. 124, 411 P.2d 1017(1966).

The issue in the present case is whether promissory estoppel should be allowed as an exception to the UCC Statute of Frauds.ORS 72.2010.That statute is worded somewhat differently from the general Statute of Frauds in ORS 41.580.It states:

"(1) Except as otherwise provided in this section a contract for the sale of goods with a 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 the term agreed upon, but the contract is not enforceable under this subsection beyond the quantity of goods shown in such writing.

"(2) Between merchants, if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) of this section against such party unless written notice of objection to its contents is given within ten days after it is received.

"(3) A contract which does not satisfy the requirements of subsection (1) of this section but which is valid in other respects is enforceable:

"(a) If the goods are to be specifically manufactured for the buyer and are not suitable for the sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or

"(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; or "(c) With respect to goods for which payment has been made and accepted or which have been received and accepted in accordance with ORS 72.6060."

Estoppel is introduced into the Code through ORS 71.1030, which states:

"Unless displaced by the particular provisions of the Uniform Commercial Code, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating or invalidating cause shall supplement its provisions."(...