Gordon v. Beck & Gregg Hardware Co. , 74 Ga. App. 566 ( 1946 )

1. A valid contract for the purchase and sale of merchandise may be made by correspondence consisting of written orders and letters internally connected one with another, and the allegations of the petition showed such a completed contract.

(a) A contract for the sale of goods to the amount of $50 or more, consummated by written correspondence, is sufficient to satisfy the requirement of the statute of frauds.

2. An effort by the seller upon the default of the buyer to sell the property by circularizing the trade, without giving notice to the buyer and without acting therein as his agent, is not an election to pursue the second remedy provided by the Code, § 96-113.

(a) Whether the plaintiff delayed an unreasonable length of time in making an election of a remedy under that Code section, is a jury question.

DECIDED NOVEMBER 7, 1946. REHEARING DENIED DECEMBER 4, 1946. Manuel Gordon, trading as Gordon Toy Manufacturing Company, sued Beck Gregg Hardware Company for damages for rescission or breach of contract. The action was in two counts, but they are substantially alike. Both seek to recover the sale price of certain articles alleged to have been purchased from the plaintiff by the defendant, when the defendant refused to accept the goods in accordance with the contract. It is necessary to set out at length the contents of the petition to make plain the points raised in the record and considered by this court.

The petition alleged: The plaintiff was engaged in the business of manufacturing and selling toys, gymnasiums, and playground equipment manufactured by him upon receipt of orders from customers throughout the United States; and the defendant was a dealer in toys, gymnasiums, playground equipment, and other items, reselling them at wholesale and retail to its customers in Atlanta and surrounding territory after purchasing from manufacturers including the plaintiff. The defendant for a number of years had been a customer of the plaintiff, and on several occasions had purchased No. 7SW and No. WLS gymnasiums from the plaintiff. On May 31, 1945, the plaintiff wrote a letter to the defendant stating that on and after that date the price of No. 7SW gymnasiums would be $12.75 each, and the price of No. WLS gymnasiums would be $13.40 each. On June 5 the defendant ordered 50 No. WLS gymnasiums from the plaintiff, on a written order form which did not state the price and which was sent in by mail; and the plaintiff manufactured and shipped these gymnasiums to the defendant at a price of $13.40 each, as quoted in the letter of May 31, and they were accepted and paid for by the defendant. Thereafter, on August 8, the defendant sent by mail to the plaintiff another written order, which was in the same general form as the order of June 5 and which did not state the price, for "100 only No. 7SW steel Gymns" and "150 only No. WLS steel Gymns;" the order directing shipment to Atlanta in January, 1946, and bearing the number "WM 548." On August 12 the plaintiff acknowledged receipt of the order and accepted it in a letter written to the defendant as follows: "This is to acknowledge with thanks receipt of your order No. WM 548, calling for 100 pcs. No. 7SW, steel gymns and 150 units No. WLS, steel gymns. We are accepting this order now, although shipping date is January 1946, and at the very same prices we have been making these sets for you per last billing, namely No. 7SW at $12.75, and No. WLS at $13.40. In order to do this we must purchase all necessary materials for these goods without delay, thus impressing upon you that under no circumstances can we make any changes in style, construction, nor agree to reduce the quantity of total purchase when the time approaches for shipment for the order in question. In a word, we want to make our position clear to you that you are ordering us to manufacture these sets especially for you, and come what may you must accept the goods when shipped. Unless we hear from you not later than August 18th, we shall proceed with order as outlined above." The defendant made no reply to the foregoing letter, but on October 26 wrote the plaintiff as follows: "Please refer to our order of August 8, 1945, No. WM548 for 250 Gym Sets and hold up shipment until further advised. We understand better values at lower prices are being offered and will be offered soon, and we just don't want to authorize shipment of this order until we can survey the market. Please acknowledge receipt of these instructions and oblige." This was the first communication received by the plaintiff from the defendant after its order of August 8, and the plaintiff replied thereto on October 30, as follows: "We have your letter of October 26th, and we are most surprised at the contents of same. It appears to the writer that you should have surveyed the markets prior to placing of your order, and for your information wish to say that confirmation is our authorization to ship, which shipment will be made at time specified. Please allow us to advise you that all the materials for you have been purchased and go into production within the next 48 hours. When time approaches for making shipment of your merchandise we deem it advisable to offer any changes in prices below those at which you purchased these goods, you will be given advantage of said changes; however, at this writing we see no way of reducing our prices to the trade. Trusting you can appreciate our position, we are," etc. The defendant then wrote the plaintiff on November 2 as follows: "Answering your letter of October 30, we are really surprised that you appear not to want to accept cancellation of our order. However, we must insist that you cancel the order as we definitely don't want shipment made and will refuse shipment if you do make it." On November 5 the plaintiff wrote the defendant again as follows: "In reply to your letter of November 2nd, wish to advise that under no circumstances will we accept your cancellation, and whether you refuse shipment or not is of little importance to us. The merchandise in question will be shipped as specified and we shall look for prompt payment of our invoice." The defendant replied on November 9 with this letter: "Replying to yours of the 5th, which refers to our order WM548, dated August 8th, 1945, placed with you for shipment in January 1946, we are surprised at your attitude. We are entirely familiar with the customs of our industry, and we think we are familiar with our legal rights in a matter of this kind. This letter is to state again to you that this order is canceled, and if you refuse this cancellation and ship this order, same will be refused by us and simply involve you in further useless expense. If you feel at this time you have any loss in the matter, you had best instigate suit." On November 13 the plaintiff wrote the defendant that: "We have your letter of November 9th, and doubt very much if you are at all familiar with the legal aspect of purchasing merchandise, causing firms to buy materials, manufacture goods for you on your bona fide orders, and then write them that you have decided to cancel your order because you can purchase similar goods elsewhere at lower prices. We suggest that you refer to letter, dated October 26th, signed by your Mr. Huie. Have already informed you that your order shall be shipped as specified, and if our invoice is not paid promptly we will not have to ask your advice what action to take in order to collect our money. It is necessary to protect our interests against firms who are going to resort to these unethical methods." The defendant replied on November 19 as follows: "Replying to your letter of the 13th, you apparently overlooked the last paragraph of our letter of the 9th, and this is to again notify you that if you feel you have suffered any loss at this time through our cancellation of the order in question, we would suggest that you instigate suit now. There is absolutely no use in your complicating the matter further or causing any more unpleasantness or expense through proceeding any further with our order or in making shipment." The final letter in the correspondence between the parties, as appears from the allegations of the petition and the exhibits attached thereto, was written by the plaintiff to the defendant on May 3, 1946, and was as follows: "As you will recall, on August 8th, 1945, you mailed us a purchase order for 100 No. 7SW Steel Gymns at our last quoted price to you of $12.75 each, and 150 No. WLS Steel Gymns at our last quoted price to you of $13.40 each. On August 12th, 1945, we wrote to you and accepted the order. In our letter to you dated August 12th, we explained to you in detail that the order could not be changed or canceled after August 18th, 1945, for the many reasons stated in said letter. Since we did not hear anything further from you, we purchased all of the necessary materials for the manufacture of the Gymns and started into production so that they would be ready for shipment in January, 1946. After we had purchased all the materials and had already been in production for about 30 days, we received a letter from you dated October 26th, 1945, in which you advised us that you wanted to survey the market and did not want us to make shipment for the time being. As you know, after that date we exchanged several letters and in all of your letters you instructed us not to make shipment and you advised us that as far as you were concerned that the contract was canceled. In our letters we insisted that we would not accept your cancellation of the contract and we still take the same position. In your final letter of November 19, 1945, you again stated that the contract was canceled and you gave us final instructions not to ship the Gymns as ordered. We have been ready, willing, and able at all times since last November to ship the Gymns to you as ordered and we are still ready to do so, but we have been prevented from making shipment by your attitude in the matter. On January 3rd, 1946, our attorney, Mr. A. L. Hodes of Philadelphia, wrote to you and stated that the Gymns were worth approximately $2100 on the open market, but at this time we are placing you on notice that we have been unable to find a market for the Gymns at any price and same can not be sold, as there is no available market for the Gymns. Under all the facts and circumstances of this case, there is no course left open to us other than to file suit for our damages. We are therefore retaining the Gymns for you at our plant here in Philadelphia, and we will instruct an attorney in Atlanta to file suit against you for the sum of $3285, which is the amount of our damages on account of your breach of contract."

The petition alleged that the plaintiff had completely fulfilled his part of the contract; that at no time had he agreed to or accepted a cancellation or rescission of the contract; that he had offered and still offers to deliver the gymnasiums to the defendant, but that the defendant had constantly refused and still refuses to accept them; that there is no available market for the gymnasiums, and it has been impossible for the plaintiff to sell them at any price; and that they are being retained by the plaintiff for the defendant, which was notified accordingly on May 3, 1946.

The defendant demurred generally to the suit as a whole, and to each of the two counts, urging three reasons why the petition was not good, stated in the briefs as follows: (1) because it shows that no contract of sale was made, as there was no unconditional acceptance of the defendant's offer to purchase; (2) because it shows that the suit is barred by the statute of frauds; (3) because it shows that the plaintiff made a binding election of a remedy different from the one sought to be enforced, and then after an unreasonable delay attempted to elect a different remedy. The trial court sustained the demurrers on the ground that the petition did not show a valid contract between the parties, and the suit was dismissed. The plaintiff excepted. (After the above statement of facts.) 1. We do not think that the petition showed that no contract of sale was made because there was no unconditional acceptance of the defendant's order; or that the petition showed that the suit was barred by the statute of frauds. These two contentions will be treated together. All of the correspondence between the parties must be considered. Briefly, it appears therefrom that the plaintiff wrote the defendant offering to sell the two kinds of gymnasiums subsequently ordered by the defendant, one at $12.75 each and the other at $13.40 each, and shortly thereafter the defendant ordered, accepted, and paid for 50 of the No. WLS gymnasiums, at $13.40 each, before placing the similar order now involved in this case. When the defendant's last order was received, the plaintiff accepted it promptly, and in doing so notified the defendant that it was accepted "at the very same prices we have been making these sets for you per last billing, namely No. 7SW at $12.75 and No. WLS at $13.40." The other recitals and statements in the letter of acceptance were unnecessary and immaterial explanations of what the plaintiff had to do in furnishing the goods, and they did not have the effect of making the acceptance conditional. Thereafter the defendant in a letter admitted the placing of the order, and sought to cancel it because "better values at lower prices are being offered and will be offered soon." This letter shows that a price had been agreed upon and the defendant knew what it was. In several other letters the defendant referred to the "cancellation of our order," to "this cancellation," and to "our cancellation," thereby admitting the placing of the order and its acceptance. We think that this correspondence clearly shows the making of a contract of purchase and sale between the parties to this case.

"The statute of frauds does not contemplate that the contract between the parties shall necessarily be made originally in writing, but requires only that, as against the party to be charged, it shall be evidenced sooner or later by a writing, signed by him or by some person legally authorized to act in his behalf. It is not necessary that the writing by which the contract is to be evidenced should have been executed simultaneously with the making of the contract; any writing, contemporaneous or subsequent, in which the party to be charged admits, over his signature, all the terms of the contract insisted on by the opposite party, is sufficient." Capital CityBrick Co. v. Atlanta Ice c. Co., 5 Ga. App. 436 (63 S.E. 562). This case holds that the requisite written evidence of a contract may be supplied from a letter written by the party to be charged, or from a course of correspondence between the parties, and any signed writing or series of writings internally connected, intelligible without parol aid, and showing or admitting an agreement coextensive with the stipulations of the alleged contract is sufficient. "The statute of frauds does not require that all the terms of the contract should be agreed to or written down at one and the same time, nor on one piece of paper; but where the memorandum of the bargain is found on separate pieces of paper, and where these papers contain the whole bargain, they from together such a memorandum as will satisfy the statute, provided the contents of the signed paper make such reference to the other written paper or papers as to enable the court to construe the whole of them together as containing all the terms of the bargain." North Co. v. Mendel,73 Ga. 400(2) (54 Am. R. 879). "There may be various writings, provided they refer one to another, but they can not be correlated and connected together by parol evidence." Lester v. Heidt,86 Ga. 226 (12 S.E. 214, 10 L.R.A. 108). Under these authorities and others that could be cited, we think that the writings executed by the parties, consisting of written orders and a number of letters written in connection with the orders, each of which letters referred to the orders or to the other letters, were sufficiently correlated and connected to show a contract of purchase and sale in writing as required by the statute of frauds. Code, § 20-401 (7).

The defendant relies on Turner v. Lorillard Co., 100 Ga. 645 (28 S.E. 383, 62 Am. St. Rep. 345), as authority for its contention that the suit was barred under the statute of frauds, because the price of the articles was not stated in the written order sent by mail from the defendant to the plaintiff. If nothing else appeared in the instant case except the written order, the decision relied on by the defendant might be in point; the holding therein being that the defect in a written order for goods which stated no price could not be supplied by parol testimony showing the establishment of a price, by dealings between the parties extending over a number of years. Clearly that ruling is not applicable here, because parol evidence is not necessary in this case to show the price of the goods. The letters exchanged between the parties, each definitely tied in with the others and with the written order under consideration, when considered together, show the price to be paid and a completed contract in writing. It was held in Foster v.Leeper, 29 Ga. 294, that letters of the defendant contained a sufficient acknowledgment of the contract to satisfy the statute of frauds; and in Georgia Refining Co. v. Augusta Oil Co.,74 Ga. 508, that the case was not within the statute of frauds, because the contract was recognized in writing in many letters of the defendants; and in Pitcher v. Lowe, 95 Ga. 423 (22 S.E. 678), that letters written by one of the parties to the other acknowledging the making of a parol contract previously entered into between them are sufficient to take the case out of the statute of frauds; and in Erwin v. Harris, 87 Ga. 333 (13 S.E. 513), that evidence of correspondence between the parties by mail and by telegraph, the letters and telegrams showing the price of the oats and terms of the contract agreed upon, showed that the contract was in writing and was not void because in violation of the statute of frauds.

2. The defendant's third contention under its demurrer is that the plaintiff had elected a remedy different from the one sought to be enforced in the suit, and after an unreasonable delay had attempted to elect another remedy. This contention is based on the Code, § 96-113, which gives the seller three different remedies on the default of the buyer: (1) the seller may retain the goods and recover the difference between the contract price and the market price at the time and place of delivery; or (2) he may sell the property, acting for this purpose as the agent of the vendee, and recover the difference between the contract price and the price on resale; or (3) he may store or retain the property for the vendee and sue him for the entire price. It appears from the petition in this case that the plaintiff undertook to sell the merchandise, after the defendant refused to accept it, by circularizing the trade throughout the country, between January and May, 1946, and the argument is that this was an election to adopt either the first or the second remedy provided in the Code. We can not agree to this contention, because the seller did not notify the buyer that he was retaining the goods, and did not sue to recover the difference between the contract price and the market price at the time and place of delivery, as provided under the first remedy; and did not notify the buyer of any effort to resell, and did not act in endeavoring to resell as the agent of the buyer, as provided under the second remedy. If a seller elects to pursue the second remedy under the statute and to sell the property, acting for this purpose as agent of the vendee, and to recover the difference between the contract price and the price on resale, "it is indispensable that notice of the intention to resell be given to the vendee by the seller."Cartersville Grocery Co. v. Taylor, 31 Ga. App. 252 (120 S.E. 447), and cit. It is not contended that the plaintiff complied with this requirement and gave the necessary notice to the defendant of his intention to resell the property; and for this reason the plaintiff can not be held to have elected to pursue that remedy.

Before filing suit, the plaintiff notified the defendant in May that the gymnasiums were retained for the defendant, and that suit would be filed for the entire purchase-price, and this would seem to be all that was necessary to adopt the third remedy provided by law. The remedies stated in the Code, § 96-113, are not exhaustive and do not exclude a different remedy to the seller where a purchaser refuses to take and pay for goods bought. Carolina Portland Cement Co. v. Columbia ImprovementCo., 3 Ga. App. 483 (60 S.E. 279). If the seller adopts either one of the remedies provided by the statute, it excludes his right to the others; "but the one which is binding upon him is the one actually adopted by him before suit." Rowland Co. v.Kell Co., 27 Ga. App. 107 (107 S.E. 602). The vendor's cause of action in a case of this character is the vendee's breach of contract, and the purpose of an election of remedies is to determine the measure of damages recoverable. Id.

Whether or not the plaintiff delayed an unreasonable time in making an election of the remedy which he pursued in this case, is a question for the jury. Bodenheimer Molasses Co. v.Edenfield, 31 Ga. App. 640 (121 S.E. 862). We can not say as a matter of law that the time which elapsed between the default of the buyer and the notice of the seller that the goods were being held for the buyer, and that suit would be filed for the full contract price, was an unreasonable delay.

3. The court erred in sustaining the demurrer of the defendant as to both counts and in dismissing the plaintiff's action.

Judgment reversed. Sutton, P. J., concurs, and Felton, J.,concurs specially.