Court Opinion

ID: 9536365
Source: CourtListenerOpinion
Date Created: 2023-08-07 06:58:32.311041+00
Date Added: 2024-06-11T14:54:21.081077
License: Public Domain

Petition for Rehearing
WARNER, J.
The defendants have petitioned for a rehearing. Their prime objection to our previous opinion is found in their challenge to our holding that the claimed waiver of the standard for the hops was not supported by a consideration. They now urge that we were in error for failing to hold that the waiver was one of election between two inconsistent rights, which, as they contend, needs no consideration.
For convenience, we shall hereinafter refer to.the defendant respondents as “the growers” and to the plaintiff appellant as “the buyer.”
In our former opinion we held that there was no consideration to support the waiver there pleaded. Our conclusion in that respect accords with the first of the nine different definitions of waiver enumerated by Professor Williston, each being predicated upon a different set of circumstances giving rise to the particular type of waiver there defined. The first of these (3 Williston, Contracts (rev. ed.) 1960, § 679) is as follows:
“An agreement for sufficient consideration, made as part of or in substitution for an obligation previously made and still unperformed, which pro*402vides for a performance different from or substituted for that to which the parties were bound and entitled by the original obligation. This should be called a collateral promise or substituted contract or accord, which rescinds rather than waives the inconsistent terms of the prior obligation.”
Exemplification of waiver as there defined is found in Craswell et al. v. Biggs et al., 160 Or. 547, 86 P. 2d. 71, and Propst v. William Hanley Co., 94 Or. 397, 185 P. 766.
The growers seek to avoid the effect of this by arguing, as they do in their petition for rehearing, as follows :
“* * * the respondents do not claim a change or modification of the terms of the contract, made by mutual assent or otherwise, but simply that the buyer was required by the terms of the contract, in its sole determination and judgment, to elect whether to make or withhold the picking advance, and that by making the advance under all the circumstances surrounding the parties at the time the contract was made, and at the time the advance was made, it made a choice by its overt acts and conduct between two entirely inconsistent rights, either of which it might have then asserted, at its will alone.” (Italics ours.)
They attempt to thereby bring themselves within the scope of Professor Williston’s second definition of waiver (3 Williston, Contracts (rev. ed.) 1960, § 679) which reads: “An election whereby a party who has a choice of several rights or remedies adopts one and thereby destroys all right to others.” By way of emphasizing the availability of the doctrine of waiver by election in this jurisdiction, the growers call our attention to Johnson et ux. v. Feskens et ux., 146 Or. 657, *40331 P. 2d 667, where this court quoted with approval the statement of Mr. Justice Holmes in Bierce v. Hutchins, 205 U. S. 340, 27 Sup. Ct. 524, 51 L. Ed. 828: “ ‘Election is simply what its name imports: a choice shown by an overt act, between two inconsistent rights, either of which may be asserted at the will of the chooser alone.’ ”
There is no question that waiver may arise from conduct under certain circumstances, and that an election between two inconsistent rights may constitute an example of that kind.
The growers’ claim of waiver by election here is predicated upon the buyer’s advance of $6,000.00 to the growers on August 20, 1947, under the contract and in the face of the provision reading as follows :
“ * * * Buyer shall not be obligated to make the advances hereunder, or any part thereof, if at any time the hops contracted hereunder, in the sole and exclusive opinion of buyer, shall not be up to the quality or quantity herein provided, or are in danger of not coming up to such quality or quantity thereafter * *
This provision, which we shall hereinafter refer to as the “escape clause,” is solely for the benefit of the buyer.
The growers state their position with reference to the effect of this clause as follows:
“* * * This advance was obviously made in consonance with the contract provisions, and yet an excuse existed for not maldng the advance, as shown by the pleadings and evidence. Furthermore, the buyer admittedly knew of its right to make or withhold the advance, and had simply reached a point in the life of the contract, and under its terms, when the buyer was squarely faced with the election *404whether to call for the growers ’ continued performance or abandon the contract.”
 Every waiver does not necessarily create an estoppel. Johnson et ux. v. Feskens et ux., supra, at page 662. However, waivers creating estoppels can be successfully asserted only by those who have been misled to their prejudice. Mitchell v. Hughes, 80 Or. 574, 157 P. 965; First National Bank of Portland v. Stretcher et al., 169 Or. 532, 538, 129 P. 2d 830. Also see Castleman v. Stryker et al., 109 Or. 207, 227, 219 P. 1084.
The growers claim that they come within the purview of this rule, as disclosed by the following found in their petition:
“By making the advance, the buyer impliedly gave its permission to the sellers to excuse their performance in the future of a condition which might otherwise have prevented their recovery under the contract. The sellers acted in reliance upon the-permission so given by immediately beginning the harvest of the crop, which they would not have done had the buyer found that the hops were not up to the quality or quantity required by the contract and had therefore elected to refuse the picking advance.” (Italics ours.)
The foregoing claim of reliance upon the so-called waiver by election to the detriment of the growers is untenable. In addition to the buyer’s obligation to take the hops if they are of contract standard when delivered, the buyer also enjoys an option to buy the hops if they are less than standard at that time. This is a valuable right and is predicated upon that part of the contract reading:
“If buyer rejects all or any portion of the hops sold hereunder because the same are inferior, for *405any cause whatever, as to the quality provided for herein, it shall nevertheless be the duty of seller to tender such hops so rejected to buyer, and buyer shall have the right and option of accepting such rejected hops or any part thereof at a reduction in price equal to the difference in value of the said hops and the value of hops of the quality specified in this contract.”
This right justifies the buyer at the time fixed for the advancement in speculating on whether or not he should risk further investment in the contracted commodity and hope to recoup the same at the time of delivery, if he then feels their quality warrants buying them as rejected hops.
The act of the buyer in making the advance did not change one whit the growers’ obligation under the contract. Their duties were not thereby diminished nor their burdens enhanced. They had committed themselves to deliver 20,000 pounds of their hops to the buyer, whether they were. of contract grade or less. The advance money insured the consummation of that obligation on their part.
The growers acquired no rights under the escape clause. Their rights were in no way enlarged by the fact that the buyer elected to make an advance even though, in the growers’ opinion, the buyer might have rightfully refused to do so. The escape clause gives the buyer on the date fixed for the advance, that is, August 20, 1947, only the right to refuse to do so if, at that time or any time prior thereto, the buyer in the honest exercise of his judgment determines (1) that the hops are not up to the quality or quantity provided by the contract, or (2) they are in danger of not coming up to such quality or quantity. The buyer, in the exercise of the judgment accorded him under *406that clause, might well have concluded that the defects which he observed were transient in character, that is to say, that even though the hops did not at that time meet the tests of the contract in every respect, such defects, if any, might nevertheless be later corrected by proper cultivation, processing or otherwise before the date fixed for their delivery. It is true that the buyer’s conclusions as to such a possibility might ultimately prove disappointing, but he nevertheless had that right to so speculate; and if he did so, no injury inured to the growers thereby, and no benefit can be claimed by them by reason thereof. The buyer, at the time of the advance, might well have concluded that even if the quality defects then present and known continued to the time of delivery, he would, notwithstanding, be interested in buying them as rejected hops and at the prices provided for in the contract, as he had a right to do under such circumstances.
Under all the circumstances, we are unable to see how the growers can successfully claim waiver or, claiming it, demonstrate that they have been misled to their prejudice by the buyer’s act in making the advance he contracted to make and which was accepted by them and used as the contract provided.
We have examined and considered the opinions in the following cases rendered on January 31, 1951, by the United States Court of Appeals for the Ninth Circuit: Hugo V. Loewi, Inc., v. Geschwill, 186 F. 2d 849; Hugo V. Loewi, Inc. v. Smith, 186 F. 2d 858; and John I. Haas, Inc., v. Wellman, 186 F. 2d 862. These constitute a series of eases all involving contracts for the purchase and sale of hops grown in the Willamette valley in the year 1947. Although these cases are common to the ease at bar in that they involved hop con*407tracts for the purchase and sale of hops and wherein the question of “mildew” was an issue, they are unlike the one before us in that in none of them did the grower concede a quality defect, as here, and plead waiver or estoppel as a defense. In the Hugo V. Loewi, Inc., v. Smith case, our first opinion was cited to the court, where it was reviewed and disposed of by Judge Bone with the observation:
“It is our view, and apparently the view of the appellant, that there was no finding of waiver or estoppel by the trial court in the instant case. Therefore, the cited case is not germane to any issue before us * *
Beyond that, neither waiver nor estoppel is discussed in any of these recent federal cases, and they are of no aid here.
The growers also contend that the contract itself does not include any express agreement obligating the growers to repay the advances made by the buyer. In this they are clearly contradicted by the following language found in the contract:
“* * * In the event said hops are not delivered as herein provided, and advances previously made cannot be applied on the purchase price of said hops, the amount of such advances, with interest, shall be repayable to buyer at the time such delivery of hops should have been made * *
In this matter the growers forthrightly admit that the hops were below contract standard and were valueless at the time of delivery. Even if we accept the doctrine of waiver as expounded by the growers and hold, as they urge us to do, that the buyer by maldng the advance of $6,000.00 waived any right to thereafter reject the hops on the ground of inferior quality, such *408waiver would not operate as a waiver of the growers ’ obligation to repay the advance money as was required in the foregoing contract provision, and their obligation thereunder to repay would continue in full force and effect.
The petition is denied.