Court Opinion

ID: 9697064
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:05:01.539421+00
Date Added: 2024-06-11T18:20:28.978408
License: Public Domain

Brodkey, J.,
concurring.
Although authoring the majority opinion in this case, I do not believe it goes far enough, and I believe that this court should squarely face and resolve the question of whether the defendant was a “merchant” as defined in section 2-104, U. C. C. Logically, the question of whether the defendant was a “merchant” should be resolved before this court determines whether there has been compliance with other requirements in subsection (2) of section 2-201, U. C. C. More significantly, an important question of law has been left undecided, despite the fact that the question was properly raised, decided by the *239trial court, and thoroughly briefed on appeal. In view of the controversy over this issue in other jurisdictions, this court should resolve the issue so that farmers and grain elevators know what is required with respect to contracts for the sale of grain in this state.
I believe that the defendant was acting as a “merchant” as defined in the code when he entered into the oral contract. Section 2-104, U. C. C., defines “merchant” as follows: “ ‘Merchant’ means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill.” Under the facts of this case, the question is whether the defendant is either a person who “deals” in wheat, or is one who by his occupation as a wheat farmer holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction of selling wheat to a grain cooperative.
The question of whether a farmer who sells his crops is a merchant under the Uniform Commercial Code is one of first impression in this state, and courts in other jurisdictions are sharply divided on the issue. In five cases it has been held that a farmer who does nothing more than sell his crop annually is not a “merchant” with respect to annual sales. See, Sand Seed Service, Inc. v. Poeckes, 249 N. W. 2d 663 (Iowa, 1977); Decatur Cooperative Assn. v. Urban, 219 Kan. 171, 547 P. 2d 323 (1976); Lish v. Compton, 547 P. 2d 223 (Utah, 1976); Loeb & Co., Inc. v. Schreiner, 294 Ala. 722, 321 So. 2d 199 (1975); Cook Grains, Inc. v. Fallis, 239 Ark. 962, 395 S. W. 2d 555 (1965). The common element of these cases is that in each the courts relied on the Com*240ment, part 1, to section 2-104 of the code, in which it is stated that the provisions in Article 2 concerning merchants were intended to apply to “professionals” and not to a “casual or inexperienced seller or buyer.” The courts in each case concluded, often summarily, that a farmer who only sells his crop annually is not a “professional” with respect to such sales, but is merely a “casual seller.” Courts have reached the conclusion that a farmer is only a casual seller even in cases where the farmer in question had been in the business of growing and selling wheat for so long as 20 years, and was conversant with the grain market, grain prices, and the customary practices involved in selling grain to elevators. See, Decatur Cooperative Assn. v. Urban, supra; Lish v. Compton, supra.
In these cases the courts also emphasized the fact that the farmers in question sold only their own produce, and did not buy products from other persons and resell them. In stating that the term merchant refers primarily to one whose occupation is that of buying and selling, courts relied in part on dictionary definitions in which “merchant” is defined as one engaged in the purchase and sale of goods, or as a “trafficker” or “trader.” See, Lish v. Compton, supra; Sand Seed Service, Inc. v. Poeckes, supra. In Cook Grains, Inc. v. Fallis, supra, the court referred to Words and Phrases and precode cases in an attempt to define the words “farmer” and “merchant,” and concluded that a farmer was not a merchant in view of the “plain and ordinary meaning” of those two words. The need to resort to dictionaries or precode cases when the term “merchant” is defined in section 2-104 of the code is not explained in these decisions.
A final reason given for holding that a farmer is not a merchant is that the framers of the code did not so intend, or that the framers or legislators adopting the code should have used clear and ex*241plicit language if they had so intended. See, Cook Grains, Inc. v. Fallis, supra; Loeb & Co., Inc. v. Schreiner, supra. No citation of authority for this proposition is given in either case.
In eight cases, with facts similar to those in the present case, courts from other jurisdictions have held that a farmer is a merchant. See, Nelson v. Union Equity Co-op. Exchange, 548 S. W. 2d 352 (Tex., 1977); Sierens v. Clausen, 60 Ill. 2d 585, 328 N. E. 2d 559 (1975); Rush Johnson Farms, Inc. v. Missouri Farmers Assn., Inc., 555 S. W. 2d 61 (Mo. App., 1977); Currituck Grain Inc. v. Powell, 28 N. C. App. 563, 222 S. E. 2d 1 (1976); Ohio Grain Co. v. Swiss-helm, 40 Ohio App. 2d 203, 318 N. E. 2d 428 (1973); Continental Grain Co. v. Brown, 19 U. C. C. Rept. Serv. 52 (W. D. Wis., 1976); Continental Grain Co. v. Martin, 536 F. 2d 592 (5th Cir., 1976).; Continental Grain Co. v. Harbach, 400 F. Supp. 695 (N. D. Ill., 1975). The rationale for holding that an experienced grain farmer is a merchant when he sells his crop, as set forth in these cases, is as follows.
First, it has been noted that it is unnecessary and improper to look to a dictionary definition of the term “merchant” in resolving the issue because the term is specifically defined in section 2-104 of the code. See, Nelson v. Union Equity Co-op. Exchange, supra; Currituck Grain Inc. v. Powell, supra. It has also been stated that nothing in the code indicates that the framers contemplated exempting farmers from merchant status. See Continental Grain Co. v. Brown, supra. Therefore these courts have referred solely to the specific statutory definition of the term “merchant,” and have not resolved the issue by reference to the “plain and ordinary” meaning of the term, or to unstated legislative intent.
Courts holding farmers to be merchants have rejected the view that a farmer is a simple tiller of the soil unaccustomed to the affairs of business and the market place. They have noted that the practices *242involved in the marketing of crops are well known to, and widely followed by, farmers, and that the marketing of a crop is as important to the farmer as the raising of it. See, Sierens v. Clausen, supra; Rush Johnson Farms, Inc. v. Missouri Farmers Assn., Inc., supra; Currituck Grain Inc. v. Powell, supra; Ohio Grain Co. v. Swisshelm, supra. Viewing the farmer as an agribusinessman, these courts have concluded that a farmer is not a casual or inexperienced seller, but that he is a professional with respect to the sale of his crop.
Courts holding a farmer to be a merchant have also relied on the language in the Comment, part 2, to section 2-104 of the code. In that comment it is stated that four provisions applicable to merchants in Article 2 dealing with the statute of frauds, firm offers, confirmatory memoranda, and modification “rest on normal business practices which are or ought to be typical of and familiar to any person in business. For purposes of these sections almost every person in business would, therefore, be deemed to be a ‘merchant’ under the language ‘who ... by his occupation holds himself out as having knowledge or skill peculiar to the practices ... involved in the transaction . . .’ since the practices involved in the transaction are non-specialized business practices such as answering mail.” Courts relying on this language have stated that holding the farmer to be a merchant, insofar as the statute of frauds is concerned, places no greater burden on him or her than to answer mail and object to a written confirmation of an oral contract. See, Nelson v. Union Equity Co-op. Exchange, supra; Continental Grain Co. v. Brown, supra; Rush Johnson Farms, Inc. v. Missouri Farmers Assn., Inc., supra. It has been held that a farmer is a merchant not only because he has knowledge or skill peculiar to the practices involved in selling his crop, but also because he “deals” in goods of the kind (the crop), and has *243knowledge or skill peculiar to the goods involved in the transaction. See, Nelson v. Union Equity Co-op. Exchange, supra; Rush Johnson Farms, Inc. v. Missouri Farmers Assn., Inc., supra.
Commentators have been uniformly critical of the cases which hold that a farmer who has established himself in the business of raising a crop and selling it for profit is not a merchant. See, 1 Anderson, Uniform Commercial Code, § 2-104:6, p. 221 (2d Ed., 1970); Bender’s U. C. C. Service, Duesenberg & King, Sales and Bulk Transfers, § 1.02, pp. 1-18 to 1-20, and p. 13, 1977 Cum. Supp.; Note, The Farmer as Merchant Under the U. C. C., 53 N. D. L. Rev. 587 (1977); John F. Dolan, “The Merchant Class of Article 2: Farmers, Doctors, and Others,” 1977 Wash. U. L. Q. 1.
I believe that the more persuasive reasoning on the issue is found in those cases in which farmers have been held to be merchants. A farmer whose occupation is raising grain and selling it for a profit can hardly be considered a “casual” seller. Under the statutory definition, the term “merchant” includes almost every person in business insofar as the statute of frauds is concerned since the practices involved in the relevant transaction are nonspecialized business practices such as answering mail. See Comment, part 2, to section 2-104, U. C. C. The purpose of the merchant exception to the statute of frauds was to put professional buyers and sellers on an equal footing by changing former law under which a party who received a written confirmation of an oral agreement of sale, but who himself had not signed anything, could hold the other party to the contract without himself being bound. See, 1 Hawk-land, A Transactional Guide to the Uniform Commercial Code, § 1.1201, pp. 25 to 27 (1964); White & Summers, Uniform Commercial Code, § 2-3, pp. 47, 48 (1972). Holding established grain producers to be merchants is consistent with this purpose.
*244This is not to say that farmers, as a class, are merchants as a matter of law. The inquiry in each case must be whether the farmer in question is in fact engaged in the business of raising and selling crops for a profit, as evidenced by his individual experience and prior activities. If the facts relevant to this question are undisputed, the trial court may properly determine whether the farmer in question is, or is not, a merchant as a matter of law. See, Nelson v. Union Equity Co-op. Exchange, supra; Decatur Cooperative Assn. v. Urban, supra. Otherwise it is a question of fact to be determined by the trier of facts. See Sand Seed Service, Inc. v. Poeckes, supra.
In the present case, the relevant facts are not in dispute. The defendant has been a wheat farmer for more than 30 years, and presently cultivates approximately 1,000 acres of land each year. He makes it his business to be conscious of wheat prices and changes in the market. He has sold his wheat to grain elevators many times, and sold more than 74,000 bushels of wheat to the plaintiff alone between 1967 and 1973. On these facts, I believe that the trial court erred in concluding that the defendant was not a merchant. Defendant’s primary occupation was clearly raising and selling wheat for a profit, and therefore he was a person who, by his occupation, held himself out as having knowledge peculiar to the practices involved in the transaction of selling grain. See Nelson v. Union Equity Co-op. Exchange, supra.
Although I conclude that the defendant was acting as a merchant when he entered into the oral contract, I agree that the contract is unenforceable because the defendant did not receive a confirmation in writing of the oral contract within a reasonable time. Although it is possible to dispose of this case solely on that ground, I believe that this court should resolve the question of whether the defendant was a merchant and settle the law in this area.