Title: Wholesale Materials Co., Inc. v. Magna Corp.

State: mississippi

Issuer: Mississippi Supreme Court

Document:

357 So. 2d 296 (1978) WHOLESALE MATERIALS COMPANY, INC. v. MAGNA CORPORATION, d/b/a Mississippi Steel. No. 50152. Supreme Court of Mississippi. March 29, 1978. Rehearing Denied April 26, 1978. J.B. Van Slyke, Jr., Hattiesburg, L. Arnold Pyle, Jackson, for appellant. Tighe & Tighe, B. Stirling Tighe, Jackson, for appellee. Before SMITH, ROBERTSON and LEE, JJ. ROBERTSON, Justice, for the Court: On February 10, 1975, Magna Corporation, doing business as Mississippi Steel, filed suit on open account in the Circuit Court of Forrest County against Wholesale Materials Company, Inc., for $59,668.95, the balance due on sales of steel reinforcing rods from July, 1972, to October, 1974. Wholesale answered and counter-claimed, alleging that it had overpaid Mississippi Steel in the sum of $17,902.05. After a full trial, the court, sitting as judge and jury, on October 15, 1976, rendered *297 judgment for Mississippi Steel, for $69,799.47, being $59,668.95 principal and $10,130.52 interest. Wholesale has appealed, assigning as error that the court erred in holding that there was no confirmatory memoranda received by Mississippi Steel, and that the provisions of the Statute of Frauds of the Uniform Commercial Code [Miss. Code Ann. sec. 75-2-201 (1972)], applied and made unenforceable the alleged oral contract to sell steel reinforcing bars at fixed prices to Wholesale. Section 75-2-201 provides in part: Appellant contended that about April 19, 1972, J.W. McLaughlin, its president, met with W.J. Califf, Jr., vice-president of sales of appellee, at the Sun-n-Sand motel in Jackson, Mississippi, and at that time entered into an oral contract providing that appellee would sell and deliver to appellant about 2,900,000 pounds of steel reinforcing bars at a fixed base price of $5.90 per hundred pounds until December 31, 1972, and at a fixed base price of $6.35 per hundred pounds after January 1, 1973. McLaughlin testified that he, for the appellant, wrote a letter of confirmation on April 20, 1972, to Mississippi Steel. McLaughlin explained appellant's office procedure: That letter reads: No further testimony was adduced as to the actual mailing of this letter. McLaughlin also testified that he prepared a comprehensive purchase order on July 27, 1972, addressed to Mississippi Steel and embodying the terms of the oral contract, and that a copy of the purchase order was placed in the file of the Empire, Louisiana, project of W.R. Fairchild Construction Company. No testimony was adduced as to the mailing of the purchase order. Califf testified positively and unequivocally that he never received the letter of April 20, 1972, nor the purchase order of July 27, 1972. Appellant and appellee had dealt with each other for at least ten years. The usual procedure was for Wholesale to place orders by telephone, and Mississippi Steel would ship out the orders and bill Wholesale at prevailing market prices. This was the procedure followed on the Empire, Louisiana, job. From July, 1972, until April 2, 1973, orders shipped to Wholesale were billed to it at $5.79 base price per hundred pounds, and from April 3, 1973, until July 17, 1973, shipments of steel reinforcing bars were billed to Wholesale at $5.90 base price per hundred pounds. On billings after July 17, 1973, the base price was $6.35 per hundred pounds. On September 7, 1973, the prevailing market price went above $6.35 per hundred pounds, and appellee's prices, as reflected in its billings of appellant, went up accordingly. McLaughlin testified that he protested over the phone to Cotton Caldwell, president of Mississippi Steel, and that Caldwell told him that the price of steel had gone up and, in order to stay in business, Mississippi Steel had to raise prices. Later McLaughlin protested to Califf, and finally asked for a hearing before the Board of Directors of Mississippi Steel. Caldwell turned down McLaughlin's request, on the basis that this was a managerial or administrative decision, to be made by the officers of the corporation, and not by the Board of Directors. Finally when the Empire, Louisiana, job was concluded in October, 1974, and Wholesale refused to pay the balance due according to the appellee's figures, suit was filed on February 10, 1975. Under Section 75-2-201(2), it is imperative that the writing in confirmation of an oral contract be received by the party against whom its terms will be asserted, so that that party will have notice and an opportunity to object if the terms were not as stated in the writing. *299 Before section 75-2-201 supplemented the old Statute of Frauds as to dealings "between merchants", it was required that: Since failure to object in writing within ten days would estop the party to whom the confirmation writing is addressed, it becomes absolutely necessary that such party receive the confirmatory writing. It would be a simple matter for the sender of the confirmatory writing to mail it by Registered Mail Return Receipt Requested. That was not done in this case, and no proof was adduced that appellee received the letter of April 20, 1972. We think that the trial court was correct when it found that: Not having complied with the requirements of Section 75-2-201(2) to remove the alleged oral contract from the statute of frauds, we find, as did the trial court, that the statute of frauds applied. The judgment of the lower court is, therefore, affirmed. AFFIRMED. PATTERSON, C.J., SMITH, P.J., and SUGG, WALKER, BROOM, LEE, BOWLING and COFER, JJ., concur.