Prestype Inc. v. Carr

• Decision Date: 15 December 1976
• Docket Number: No. 57628,57628
• Citation: 248 N.W.2d 111
• Parties: PRESTYPE INC., Appellee, v. John F. CARR d/b/a M B & R Enterprises, Appellant.
• Court: Iowa Supreme Court

Page 111

248 N.W.2d 111

PRESTYPE INC., Appellee, v. John F. CARR d/b/a M B & R Enterprises, Appellant.

No. 57628.

Supreme Court of Iowa.

Dec. 15, 1976.

Frank M. Smith and Earl W. Sutton, of Sutton & Nielsen, Des Moines, for appellant.

John E. Landess, of Garten, Garten & Landess, Des Moines, for appellee.

Heard before MOORE, C.J., and MASON, LeGRAND, UHLENHOPP and McCORMICK, JJ.

MASON, Justice.

Defendant appeals from an adverse judgment entered in a law action tried to the court. Defendant, John F. Carr, is sole proprietor of M B & R Enterprises, an art supply business. Plaintiff, Prestype, Inc., is a corporation organized and doing business under the laws of the state of New York with its principal place of business in New Jersey.

This appeal stems from an action instituted by plaintiff on an open account to recover the reasonable prices and values of goods, wares and merchandise sold and delivered to defendant as listed in a bill of particulars attached to the petition. The unpaid balance of defendant's open account was alleged to be $4494.72. Defendant in answer specifically denied each of the 16 items contained in the bill of particulars. However, as a witness defendant acknowledged receipt of the merchandise referred to in each of those items.

The trial court rendered judgment for plaintiff in the amount of $3250. Costs were taxed equally to plaintiff and defendant.

I. This court's scope of review of a law action tried to the court is dictated by a number of well established principles. These principles were set out as follows in Whewell v. Dobson, 227 N.W.2d 115, 117 (Iowa 1975):

'On appeal from a law action tried to the court, as here, review in this court is only on errors assigned and the matter is not triable de novo. Under this limited extent of review the findings of fact by the trial court have the effect of a special verdict and are equivalent to a jury verdict. If supported by substantial evidence and justified as a matter of law, they are binding on us and the judgment will not be disturbed on appeal.

'Further, we must construe the evidence in the light most favorable to the trial court's judgment, and this court will not weigh the evidence or pass on the credibility of the witnesses.

'However, the rule does not preclude inquiry into the question whether, conceding the truth of a finding of fact, a conclusion of law drawn therefrom is correct, nor does it apply if in arriving at a finding the trial court erred in its ruling on evidence or in other respects upon questions of law which materially affect that decision. * * * (citing authorities).' See also Davis v. Hansen, 224 N.W.2d 4, 5 (Iowa 1974) and Frantz v. Knights of Columbus, 205 N.W.2d 705, 708 (Iowa 1973).

II. The evidence was presented in confusing order. At one point in the trial, Judge Denato had such 'difficulty following the logic and train of information' presented that he proceeded to question witness John Carr for some twelve pages in the transcript.

The parties commenced business relations in the middle of 1971 when plaintiff began selling merchandise to defendant on open account. At the time of the transaction which prompted this litigation defendant's account showed a zero balance.

In February of 1972 Charles Varner, a manufacturer's representative associated with plaintiff, approached defendant concerning the purchase of some of plaintiff's products. Negotiations between Varner and defendant resulted in the former 'phoning in' defendant's order on April 25. The terms of that order and purchase are the basis of this controversy.

William F. Rose, vice-president and general manager of Prestype, Inc., was the only witness called by plaintiff. He testified Varner informed him in an April telephone conversation he had discovered a new account in the Art House, a Des Moines business. Varner explained to Rose that M B & R Enterprises would be the actual purchaser with the merchandise 'drop shipped' to the Art House. Rose and Varner discussed the fact defendant was a relative newcomer to the art supply business and his limited financial capabilities. It appears Rose decided to give defendant a 'deal' on the cost of his order in light of its size and defendant's financial situation. Defendant's order, dictated to Rose by Varner, was then processed.

The prevailing price for plaintiff's product 'Prestype' at that time was $2.50 per sheet. Pursuant to the alleged order defendant was sent and received 4,968 sheets at the cost of $2.00 per sheet and over 300 rolls of 'Prestape' at varying costs per roll. (Defense exhibit 'B'). In addition to the reduced charge for the Prestype sheets defendant received a 55 percent discount on the total cost of his order. Rose testified defendant had made only one payment of $150 on his account toward the April purchase. Rose also testified extensively as to the billing procedure of his company.

On cross-examination of Rose it was adduced he had no communication with defendant concerning the order of April 25 prior to that date. No written order signed by defendant existed. The order and subsequent billing were processed entirely pursuant to the telephone conversation between Rose and Varner. In addition it was established plaintiff had shipped merchandise to defendant subsequent to the disputed transaction and payments had been made thereon. On re-cross Rose testified Varner was on a straight commission basis with Prestype, Inc. It was also adduced Rose had sent a letter to Varner, dated August 11, 1972, reprimanding the latter for the terms of sale quoted to defendant. (Defense exhibit 'C').

Plaintiff rested following Rose's testimony and defendant moved for a directed verdict. The grounds for that motion will be discussed hereinafter as the overruling of the motion is assigned as error.

John Carr was the only defense witness and testified Varner initially approached him with the idea of selling defendant a variety of plaintiff's products in a package deal. Defendant however balked at that idea and requested he be able to choose the merchandise he wanted. Defendant believed Varner had agreed to this. Defendant was also under the impression the agreement he had worked out with Varner called for plaintiff to send a sales representative to work with defendant to help boost sales of plaintiff's product line. Finally, defendant felt the terms of the purchase called for full payment within six months. The alleged agreement reached by Varner and defendant was not reduced to a writing.

Defendant's testimony is contradictory and confusing as to whether he actually authorized Varner to place an order for him and if so for what merchandise. In any event, before defendant got a chance to specify the merchandise he desired, the large order referred to above was delivered to him. Defendant did not want any Prestape and was unhappy with the styles and types of Prestype sent. His dismay was conveyed to Varner but defendant did not refuse the merchandise feeling that with the assistance of the promised sales representative he would be able to pay for the merchandise within the agreed upon six months. Rose called defendant about the order after Varner had informed Rose of defendant's dissatisfaction and according to defendant's testimony he and Rose attempted to iron out the problems concerning the discount, payment terms and the sales representative. Evidently defendant felt these discussions were not productive.

In rebuttal Rose testified when Varner called him to place the April 25 order there was no discussion concerning a price of 70 cents per sheet, defendant's right to choose the products he desired, full payment within six months, or the assistance of a sales representative. He also testified in a telephone conversation with defendant in August he advised defendant he was mistaken as to the payment terms on the order. He informed defendant payment had to be one-sixth each month for six months. Defendant responded that he realized six months to pay in full 'was ridiculous' but Varner offered it and he could not turn it down. Rose stated Prestype, Inc. would not 'go any further on this business with you paying at the end of six months.' There was no discussion concerning the 'mix' of products received by defendant and no mention of defendant's discount or the sales representative. The conversation ended with defendant assuring Rose a check would be sent immediately and the account would be paid off.

On cross-examination it was adduced Varner had admitted to Rose he had made a mistake in quoting payment terms to defendant. Rose reprimanded Varner and then called defendant to attempt to straighten out the payment terms. Rose stated he believed the only problem with the transaction was the terms of payment. He had no reason to believe defendant had any argument with the price and knew nothing of any promised sales representative.

At the close of all the evidence defendant again renewed the motion for directed verdict which was again overruled.

The trial court's findings of fact and conclusions of law were entered of record immediately upon the conclusion of the one-day trial. The trial court stated in pertinent part as follows:

'* * * Plaintiff in this case is bound by the representations of its agent, Mr. Varner, as to the terms of the sale. The Court accepts the Defendant's testimony that in effect no contract was made with him but by the Defendant's subsequent conduct repeated a number of times he had confirmed or adopted a contract and the only testimony the Court has as to the terms of that contract that he adopted have to do with his negotiations with Mr. Varner.

'The Court finds that the rate of 70 cents per sheet and a proportionate amount of discount as to the cost of the rolls would result in a figure of approximately $3,500 for the sheets at that rate and approximately $500 for the rolls totalling $4,000. The Court feels that the terms of the contract adopted by the...