Summary
In Ammons v. Wilson Co., 176 Miss. 645, 170 So. 227 the Mississippi Court held that a refusal to reject an order after the elapse of only 12 days, a price rise of 7 1/2 cents per pound on shortening, and prior dealing between the parties made up an issue for the jury as to whether or not there was an implied acceptance of the order.
Summary of this case from Brunswick Corporation v. SittasonOpinion
No. 32276.
October 26, 1936. Suggestion of Error Overruled December 7, 1936.
1. PRINCIPAL AND AGENT.
Order by purchaser from traveling salesman, containing written provisions that order was taken subject to acceptance by seller's authorized agent at point of shipment, was mere offer to purchase on purchaser's part, and was not binding on seller until received and accepted.
2. PRINCIPAL AND AGENT.
Traveling salesman who took orders subject to acceptance by employer's authorized agent at point of shipment had authority only to solicit and transmit order to employer for approval, and was without authority to make binding contract for employer.
3. CONTRACTS.
Where offeree fails to reply to an offer, his silence and inaction operate as an acceptance, where, because of previous dealings or otherwise, offeree has given offeror reason to understand that silence or inaction is intended by offeree as manifestation of assent, and offeror does so understand.
4. SALES.
In action by buyer against seller for breach of contract in refusing to fill order which buyer had given to seller's traveling salesman who was without authority to accept order, but who had sent it to seller who remained silent for twelve days before rejecting it, whether delay amounted to acceptance of order held for jury, where, in previous instances, seller had always shipped orders within a week without other notification.
5. DAMAGES.
One seeking actual damages for breach of contract must trace damages directly to breach, and make them definite enough to comply with governing rules of law.
APPEAL from the circuit court of Bolivar County. HON.W.A. ALCORN, JR., Judge.
Sillers Roberts, of Rosedale, for appellant.
An option contract to buy or sell, as in the case of other contracts, must be supported by a valuable consideration. Where, however, the option constitutes one of the terms of a sales contract, an independent consideration for the option is not necessary, for if the consideration for such contract is sufficient, it will support the subsidiary promise. If the option is given without a consideration, it is a mere offer of a contract of sale, which is not binding until accepted. If, however, acceptance is made before a withdrawal, it constitutes a binding contract of sale, although the option was not supported by a sufficient consideration.
55 C.J. 109, sec. 69.
If the court is to consider the act of appellant in giving these specifications to Mr. Tweedy as an order rather than as an acceptance of an offer, then there was imposed on appellee the duty to either accept or reject the orders and if it failed to reject them within a reasonable period of time it would constitute an acceptance thereof.
It is true that in order to make a binding contract an offer must be accepted but this acceptance can be in a number of ways, and it is not necessary that it be communicated to the one making the offer.
Hercules Manufacturing Co. v. Wallace, 124 Miss. 27, 87 So. 766.
This acceptance might be by silence or inaction where there is a duty to speak.
Such silence and inaction on the part of the offeree constitutes an acceptance of the offer.
55 C.J. 95, sec. 60; Hendrickson v. International Harvestor Co. of America, 135 A. 702; Peterson v. Graham-Brown Shoe Co., 210 S.W. 737.
This identical question has never been before the Supreme Court of Mississippi, so far as we have been able to find; however, a case very nearly in point is the case of L.A. Becker Co. v. Clardy, 51 So. 211, 96 Miss. 301.
In the case at bar there could hardly be any question as to the appellee having longer than September 4th in which to reject the orders. As shown by the record the custom was that the goods would be shipped so as to be received by appellant within a week. In this case the orders were given on August 23rd and when not received on September 4th (a period of twelve days from the date the orders were given) appellant wired appellee and was advised that the goods would not be shipped. This advice was only given by appellee after it had been requested by appellant to let the goods come forward.
In the case of Bluegrass Cordage Co. v. Luthy, 98 Ky. 583, 33 S.W. 835, the Supreme Court of Kentucky in a similar case held that where a similar order was not rejected until twelve days after submission thereof to it that it constituted an acceptance thereof.
Where there has been a course of dealing between an individual and the salesman of a seller and the seller has recognized the salesman as its salesman and has accepted the salesman's orders and made shipment thereon, and the salesman submits orders to the seller, it is clearly the duty of the seller to communicate a rejection of the order to the purchaser, otherwise the orders are deemed in law to be accepted.
Cole-McIntyre-Norfleet Co. v. Halloway, 141 Tenn. 679, 214 S.W. 817; Restatement of the Law of Contracts, page 77, sec. 72.
Even if an estoppel must be shown on appellee in order for there to have been an acceptance of the orders, we think there was an estoppel, and there was a mutuality of obligation between the parties. In previous dealings between the parties the goods had been shipped so as to be received within a week. Therefore, at the end of one week from the time the orders were placed with appellee a binding contract resulted and there was a mutuality of obligation between the parties for they were both bound, and after that time should either one fail to carry out the terms of the contract the other had the right to sue for breach of contract, and we venture to say that had the price of shortening gone down from seven and one-half cents to five cents a pound instead of going up from seven and one-half cents to nine cents a pound, and the appellant had declined to accept the shortening, the appellee would have been suing here instead of the appellant.
Hercules Manufacturing Co. v. Wallace, 124 Miss. 27.
Shands, Elmore, Hallam Causey, of Cleveland, for the appellee.
Tweedy, traveling salesman or drummer of Wilson Company, had no authority to make any binding offer, acceptance, or contract on behalf of Wilson Company.
It is not even contended that Tweedy had actual authority to bind the appellee Wilson Company in this case. We say that, under the decisions of the Supreme Court of Mississippi, Tweedy had no implied authority to bind appellee, and further, that any remote conception which Ammons might inconceivably have had that Tweedy was vested with implied authority, was legally dissipated and dissolved when the orders or offers to contract with reference to the shortening herein involved, of which Ammons was given and retained copies, contained the provision that the order was taken subject to the appellee's acceptance. This was clear, unambiguous and unequivocal notice to Ammons that Tweedy had no such authority to either accept an offer on behalf of Wilson Company, or to make an offer for it, or to agree when the goods would be shipped.
Planters Lbr. Co. v. Sibley, 130 Miss. 26; Becker v. Clardy, 96 Miss. 301; Savings Bank v. Grocery Co., 123 Miss. 443; Fairbanks Morse Co. v. Dale, 172 Miss. 271.
The provisions in the orders "this order taken subject to acceptance by sellers authorized agent at point of shipment" is valid and binding upon appellant.
Dahnke-Walker Milling Co. v. Phillips, 117 Miss. 204; Wellford Withers v. Arnold, 162 Miss. 786; Perkins v. Maurepas Milling Co., 88 Miss. 804.
The booking of shortening did not constitute an offer from appellee to sell all or any part of sixty thousand pounds, and which Ammons accepted by giving the specifications or orders.
In order to effect a binding contract between the parties, there must be an offer made by the offeror, and an acceptance by the offeree, of the exact terms of the offer. The minds of the parties must meet on one and the same purposes.
Murphree v. National Life Accident Ins. Co., 168 Miss. 667.
Appellant submits that it is the rule in Mississippi that the court will not make a contract between the parties, if they themselves have never made one.
From an examination of that portion of appellant's brief, wherein it contends that the appellee's silence constituted an acceptance, it appears that appellant bases such contention upon the ground of estoppel, that is, that the alleged holding out of Tweedy, and the alleged filling of prior orders, created a duty upon appellee to accept or reject the offer and notify Ammons of its action or decision, and that failing so to do, remaining silent for a period of time from August 23rd, and 24th, to September 4th, constituted an implied acceptance of the offer by estoppel. Appellee denies such a contention, submits that same is utterly unfounded, and says that appellee had a perfect right to remain silent, just as it did.
There is no testimony in the record as to the condition or circumstances under which the prior orders or offers were made or submitted by Ammons; no testimony as to when the bookings were, and when the specifications were submitted; no testimony as to on what or in what manner the specifications were submitted. Therefore, there is an utter lack of any testimony describing prior dealings by or with which to compare the dealings involved in the case at bar.
Regardless of what the prior negotiations were, when they were, how they were, and on what basis they were, the positive testimony appearing in this record shows that the orders or offers here involved in the form of specifications were made in writing according to their terms as shown by the record.
It is the position of appellee that its silence upon receiving the offers of Ammons and its failure to act thereon, did not constitute an acceptance actual, or implied, of such offer, creating an acceptance by estoppel.
Couret v. Conner, 118 Miss. 374.
Appellee submits that no estoppel can arise against it upon this record, because there was never, at any time, any mutuality between Ammons and it. Ammons was never bound, but could have withdrawn his offer at any time.
Y. M.V.R.R. Co. v. Jones, 114 Miss. 784.
We submit that the minds of Ammons and Wilson Company never met.
Union Mutual Life Ins. Co. v. Mowry, 24 L.Ed. 675; Plant Flour Mills Co. v. Sanders Ellis, 172 Miss. 539.
The case of Gould v. Gates Chair Co., 41 So. 675, is directly in point and is one of the best reasoned cases on this subject.
In the case of Sargent v. National Life Ins. Co., 41 A. 350, the court passed upon whether or not silence or failure to reject an offer by the offeree would constitute the basis of an implied acceptance by esoppel and held that an estoppel could not arise in such a case.
Columbia Malt Co. v. Clausen-Flanagan Corp., 3 F.2d 547; Troyer v. Fox, 298 P. 733; Carnahan Mfg. Co. v. Beebe Bowles Co., 156 P. 584; Page on Contracts (2 Ed.) sections 160 and 161; Bartlett v. Doyle, 165 S.W. 125.
Appellant has proven no market value. In order for appellant to lay a basis for the measure of damages recoverable by him in this case, it was necessary that he prove the market value of shortening on the date when the contract was breached. Appellee submits that no proof as to market value at any time has been made in this record.
Williams v. Hardee Son, 140 Miss. 155; Y. M.V.R.R. v. Levy Son, 141 Miss. 199.
Argued orally by W.C. Roberts, for appellant, and by Dugas Shands, for appellee.
Appellant brought this action in the circuit court of Bolivar county against appellee, a Delaware corporation engaged in the meat packing business with its principal office at a Kansas City, Kansas, to recover the sum of six hundred and fifty-eight dollars and seventy-four cents — damages claimed by appellant and alleged to have been caused by appellee's breach of contract to ship appellant nine hundred and forty-two cases of shortening. Appellant testified in his own behalf, and was the only witness who testified in the case. At the conclusion of the evidence, on appellee's motion, the court excluded it and directed a verdict and judgment for appellee which were accordingly entered. From that judgment appellant prosecutes this appeal.
Appellant was engaged in the wholesale grocery business at Beulah in Bolivar county Appellee, as stated, was engaged in the business of meat packing, part of which was the manufacture and sale of shortening. Appellant made the following case by his evidence: Appellee had one Tweedy as its traveling salesman in the territory including Bolivar County. On or about the 9th, 10th, or 11th of August, 1934 (appellant could not make it more definite in his testimony), Tweedy "booked" him for sixty thousand pounds of shortening at seven and one-half cents per pound tierce basis. The booking meant nothing more than the appellee was willing to receive orders from appellant for shortening up to that amount at seven and one-half cents per pound tierce basis, such orders subject to acceptance by appellee, and that by the booking appellant was not bound to order all or any part of the sixty thousand pounds, nor was appellee bound to accept orders for all or any part thereof. In other words, the evidence showed that the booking neither constituted a contract nor an absolute offer to contract — it was merely tentative. On the 23rd and 24th of August appellant, through appellee's traveling salesman Tweedy, ordered for prompt shipment nine hundred and forty-two cases of shortening, aggregating forty-three thousand, nine hundred and sixteen pounds. These orders were sent in by Tweedy. Appellant heard nothing from them until the 4th of September following, when he was advised by appellee, in response to his inquiry as to when the shipment would be made, that the orders had been declined. At that time the price of shortening was nine cents instead of seven and one-half cents a pound. In other words, appellee waited twelve days from the time the orders were given before declining to accept them. Tweedy had represented appellee in that territory for six or eight months, and during that time he had taken several orders from appellant for certain of appellee's products, which orders in every case had been accepted and shipped not later than one week from the time they were given.
The orders here involved, as well as prior ones, were in writing and contained this provision: "This order taken subject to acceptance by seller's authorized agent at point of shipment." Under this stipulation the orders constituted mere offers to purchase on appellant's part and were not binding on appellee until received and accepted. It is also true, as contended by appellee, that its traveling saleman Tweedy was without authority to make a binding contract for it. The extent of his authority was to solicit and transmit orders to his principal for approval. Becker Co. v. Clardy, 96 Miss. 301, 51 So. 211, Ann. Cas. 1912B, 355; Cape County Savings Bank v. Grocery Co., 123 Miss. 443, 86 So. 275; Fairbanks Morse Co. v. Dale Co., 172 Miss. 271, 159 So. 859.
The question in the case is whether or not, under the law, appellee should be charged with an implied acceptance of the orders by its silence. As above stated, all of appellant's previous orders had been accepted and the goods shipped not later than a week from the giving of such orders, while appellee was silent for twelve days after the giving of the orders here involved, and then refused to accept them in response to appellant's request for shipment. We think the sound governing principles are laid down in Restatement, Contracts, subsection 1 (c) of section 72, the applicable part of which is as follows:
"(1) Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases and in no others: . . .
"(c) Where because of previous dealings or otherwise, the offeree has given the offeror reason to understand that the silence of inaction is intended by the offeree as a manifestation of assent, and the offeror does so understand."
"Illustration of Subsection (1, c): 5. A, through salesmen, has frequently solicited orders for goods from B, the orders to be subject to A's personal approval. In every case A has shipped the goods ordered within a week and without other notification to B than billing the goods to him. A's salesman solicits and receives another order from B. A receives the order and remains silent. B relies on the order and forbears to buy elsewhere for a week. A is bound to fill the order."
We are not aware of any decisions of our court in conflict with these principles; certainly those relied on by appellee are not.
We are of the opinion that it was a question for the jury whether or not appellee's delay of twelve days before rejecting the orders, in view of the past history of such transactions between the parties, including the booking, constituted an implied acceptance. The evidence was rather uncertain as to the damages suffered by appellant on account of the alleged breach of the contract. If there was a breach, appellant was entitled to at least nominal damages. If there were actual damages, it devolves on appellant to trace them directly to the breach of the contract and make them definite enough to comply with the governing rules of law.
Reversed and remanded.