Whewell v. Dobson
| Decision Date | 19 March 1975 |
| Docket Number | No. 56539,56539 |
| Citation | 227 N.W.2d 115 |
| Parties | 16 UCC Rep.Serv. 710 Donald WHEWELL, Appellee, v. Kenneth DOBSON and Colleen Dobson, d/b/a Gate City Seed Co., Keokuk, Iowa, Appellants. |
| Court | Iowa Supreme Court |
Norman & Younggren, Keokuk, for appellants.
James P. Hoffman, Keokuk, and Stanley L. Tucker, Carthage, Ill., for appellee.
Submitted to MOORE, C.J., and MASON, LeGRAND, REES and REYNOLDSON, JJ.
Defendant Kenneth Dobson appeals from judgment awarding plaintiff damages following trial to the court of a law action for breach of contract to purchase Christmas trees.
September 4, 1970, Donald Whewell, plaintiff-seller, and Kenneth Dobson, defendant-buyer, entered into a contract for the sale of four hundred Christmas trees. Plaintiff is an Illinois resident whose business is the wholesale and retail sale of Christmas trees. Both Kenneth Dobson and his wife Colleen were defendants. Colleen was later dismissed as a defendant. Defendant's business in Keokuk is known as the Gate City Seed Company.
The agreed price for the trees was $3.75 apiece, or a total of $1500.00 due upon delivery on or about December 1, 1970. Sometime in the latter part of September 1970, however, plaintiff received defendant's copy of the tree order with the word 'cancel' written across its face. This was followed by a letter from defendant on October 2 informing plaintiff of the desire to cancel the tree order.
The trial court found that prior to receipt of the cancelled order and the October 2 letter, plaintiff had contracted with a Michigan firm to purchase four hundred Christmas trees at $3.25 apiece. Upon receiving defendant's communications, plaintiff unsuccessfully attempted to cancel the contract with the Michigan firm, which subsequently shipped plaintiff the trees.
October 30 plaintiff's attorneys wrote defendant demanding assurances of intent to perform the contract. Defendant was given until November 6 to respond after which time plaintiff would take action to minimize his damages.
November 3 defendant's attorneys responded and advised plaintiff defendant would not be able to accept delivery, whereupon plaintiff's attorneys wrote back asking that defendant advise them if he absolutely would not accept delivery. This defendant's attorneys did November 6.
Plaintiff subsequently attempted to sell the Christmas trees and was able to dispose of 124 of them at $3.00 apiece by late December. He also sent loads to Peoria and Elgin, Illinois, but was unable to sell the trees. In these attempts, plaintiff incurred $85 in trucking expenses.
Plaintiff after alleging some preliminary facts in his petition alleged facts relating to the formation of the contract for the sale of 400 Christmas trees, defendant's repudiation of this contract, the facts constituting the elements of his damages and prayed for judgment in the amount awarded. Defendant in answer admitted some paragraphs and denied others but did not assert any affirmative defense to plaintiff's claim.
The trial court rendered judgment for plaintiff in the amount of $1212.71 plus interest and costs.
Defendant moved for a new trial after rendition of judgment against him, arguing plaintiff waited too long in attempting to sell the trees after notification of cancellation, and that the trial court failed to consider plaintiff's acceptance of repudiation. The trial court overruled the motion citing the short Christmas tree selling season. The court reasoned that by the time plaintiff received notification of defendant's desire to cancel the contract, one-third of the time between the signing of the agreement and the delivery date had elapsed. Furthermore, the fact this contract was entered into in early September indicated other tree sale transactions would have been entered into about the same time, thus eliminating other outlets for these trees at the time of cancellation.
Defendant asserts his appeal presents six issues for review. However, examination of the record discloses some of these claimed errors were not properly preserved in the course of the trial court's proceedings for review in this court.
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. Luddington v. Moore, 261 Iowa 641, 645--646, 155 N.W.2d 428, 431--432; Mullenger v. Clause, 178 N.W.2d 420, 426 (Iowa 1970).
I. Defendant contends the extent of plaintiff's damages is controlled by section 554.2610, The Code, and that although subparagraph a of this section allows the aggrieved party (plaintiff here) a commercially reasonable time to await performance by the repudiating party (defendant here), any delay in the resale of Christmas trees would be unreasonable as a matter of law and plaintiff is thus foreclosed from relying on this subsection.
Plaintiff agrees defendant's action in attempting to cancel his order for 400 Christmas trees constituted an anticipatory repudiation pursuant to section 554.2610 but maintains defendant's repudiation substantially impaired the value of the contract to plaintiff and gave him the right to await performance for a commercially reasonable time and to demand assurance under Code section 554.2609, since reasonable grounds for insecurity had come to plaintiff's attention with respect to defendant's performance.
At the outset, it is agreed by both parties Christmas trees are 'goods' under the Uniform Commercial Code. Section 554.2105 provides:
'Definitions: transferability--'goods'--'future' goods--'lot'--'commercial unit.'
'(1) 'Goods' means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than money in which the price is to be paid, investment securities (Article 8) and things in action. * * *.'
Thus, Article 2 of the Uniform Commercial Code on Sales should be applied in resolving this dispute, with section 554.2610 being pertinent to the instant facts.
'554.2610 Anticipatory repudiation. When either party repudiates the contract with respect to a performance not yet due the loss of which will substantially impair the value of the contract to the other, the aggrieved party may
'(a) for a commercially reasonable time await performance by the repudiating party; or
'(b) resort to any remedy for breach (section 554.2703 or 554.2711), even though he has notified the repudiating party that he would await the latter's performance and has urged retraction; and
'(c) in either case suspend his own performance or proceed in accordance with the provisions of this Article on the seller's right to identify goods to the contract notwithstanding breach or to salvage unfinished goods (section 554.2704).'
As we understand the contentions of the parties, set out earlier, one of the questions presented for review by this appeal is whether plaintiff's effort to resell the Christmas trees was attempted within a commercially reasonable time in view of the rapid rate cut Christmas trees decline in value as shown by this record.
If there were in fact an anticipatory repudiation, plaintiff would have had the option of exercising the powers provided in section 554.2610. The Uniform Commercial Code comments discuss the doctrine as follows:
'* * * (A)nticipatory repudiation centers upon an overt communication of intention or an action which renders performance impossible or demonstrates a clear determination not to continue with performance.' Comment 1, section 554.2610.
Comment 2, section 554.2610.
The Uniform Commercial Code comments should be given due consideration as they express the intention of the drafters. Warren's Kiddie Shoppe, Inc. v. Casual Slacks, Inc., 120 Ga.App. 578, 171 S.E.2d 643, 645.
There is substantial evidence which would support a finding a repudiation of the contract did here occur, either when defendant wrote 'cancel' across the face of the instrument or when the final letter was sent stating defendant would not accept delivery of the Christmas trees. It would be more logical to conclude the repudiation came to pass at the time defendant 'cancelled' the tree order as it evidenced 'a clear determination not to continue with performance' or a reasonable indication of a 'rejection of the continuing obligation.' The trial court apparently found the repudiation occurred at the earlier date.
In fact defendant concedes in written brief and argument he repudiated the contract before the performance date--about December 1, 1970.
Under section 554.2610, Uniform Commercial Code...
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