Court Opinion

ID: 9743018
Source: CourtListenerOpinion
Date Created: 2023-08-26 21:24:09.579526+00
Date Added: 2024-06-11T07:24:38.556960
License: Public Domain

SHIRLEY S. ABRAHAMSON, C.J.
¶ 50. (<dissenting). I agree with the majority opinion and the opin*289ion of the court of appeals that an oral modification of a written agreement may be valid if one of the exceptions to the writing requirement is met.
¶ 51. Whether there was an attempt at modification under Wis. Stat. § 402.209 to operate as a waiver of the statute of frauds or whether there was part performance under Wis. Stat. § 402.201(3)(c) sufficient to satisfy the statute of frauds, a party claiming an oral modification cannot succeed unless it proves that the parties agreed to an oral modification.
¶ 52. The court of appeals got it right; the circuit court's finding of an oral modification of the contract is clearly erroneous. I do not agree with the majority opinion that the circuit court's finding of an oral modification of the price terms of the original written contract was not clearly erroneous, that is, that the circuit court's finding of an oral modification of the contract is not against the great weight and clear preponderance of the evidence.1
¶ 53. The majority opinion's review of the evidence to support a valid oral modification of the contract is no more persuasive than the circuit court's. Because the finding of an oral modification of the price terms of the original written contract is clearly erroneous, there cannot have been waiver by an attempt to modify orally the written contract. Further, even if the part performance exception to the writing requirement has been met, the *290record conclusively shows that there was no oral modification to the price terms of the original contract.
I — I
¶ 54. I agree with the majority opinion that a waiver of the statute of frauds is closely related to the inquiry whether a valid oral modification exists.2
¶ 55. The record does not support a finding that an oral modification was made. The testimony of Roger Ralston and Paul Olsen was consistent: Ralston told Olsen that if Olsen increased the quantity of his purchase, Ralston would work to modify the original contract regarding price, not that the original contract was hereby modified between the parties.3 Olsen testified that Ralston said he was going to work "to either give us free product or reduce the price per ton." Ralston needed corporate approval from Royster-Clark before the contract could be modified. This testimony should end this case in favor of Royster-Clark, as the court of appeals held.
¶ 56. Nevertheless, the circuit court found that Ralston had apparent authority to bind his principal (Royster-Clark) to an oral modification regarding price. Apparent authority is generally a question of fact. Apparent authority results from the conduct of the principal (here Royster-Clark) that causes a third person (here Olsen's Mill) to reasonably believe that the agent (here Ralston) has authority to act (here to modify the contract).4
*291¶ 57. The circuit court's finding of apparent authority (affirmed by the majority opinion) to modify the original contract without approval by Royster-Clark is not supported by the record.
¶ 58. The majority opinion and circuit court apparently infer from Royster-Clark's having previously gone along with Ralston's proposed contract modifications that either Royster-Clark's approval was not really necessary or that Royster-Clark's approval of any modification was automatic and that Olsen's Mill could therefore act with the assurance that Royster-Clark would approve any modifications Ralston proposed. None of these inferences is supported by the record.
¶ 59. The majority opinion relies on the parties' course of conduct to override Ralston's and Olsen's testimony that Ralston needed corporate (Royster-Clark's) approval of a modification of the contract. Course of conduct, sometimes referred to as custom, is a factor that may support the presence of apparent authority.
¶ 60. Yet the course of conduct in the instant case supports the conclusion that Royster-Clark's approval was required for any modification, that Royster-Clark did not always approve Ralston's proposed modifica*292tions, that Royster-Clark never expressly or impliedly waived the approval requirement, and that Olsen's Mill could not reasonably have relied on Royster-Clark's automatically approving Ralston's proposals.
¶ 61. Ralston answered affirmatively, as the majority opinion states, on cross-examination by Olsen's Mill's attorney that it was "safe to say this is one of the first times that [he] made representations to [his] customers that [his] company did not back [him] on."5 However, Ralston's entire testimony at that point in the questioning makes clear that Ralston attempted to negotiate with Royster-Clark on behalf of his customers, that he did not always get what he wanted for his customers, and that Olsen's Mill would have every reason to expect him to "try" to get some type of rebate. Ralston's examination was as follows:
Q. Is it safe to say that this is one of the first times that you have made representations to your customers that your company did not back you on?
A. I think it was the only time.
Q. And I believe you testified that over the years numerous times you would go back on behalf of your customers and try to make things right for them and for your company?
A. It was an effort in every negotiation, yes.
Q. And it was something that Olsen's Mill had done with you numerous times again over the years?
A. Yes.
Q. And would have every reason to believe that you were in fact going to try to get them or would get them some type of rebate considering the situation everybody was in?
*293A. I think they knew I was going to try.
Q. And you’d always been successful before, correct?
A. No. I didn't get — I haven't always gotten everything I wanted—
Q. But for the most part?
A. —but I always tried.
¶ 62. In addition, Olsen's examination shows that he knew that Ralston could not bind Royster-Clark on the modified contract price and that Ralston had to seek approval. Olsen testified as follows:
[Ralston] wanted us to make sure we took the product and we had some negotiation, talking, and at that time it was still raining and we made — I should say I believe I had an agreement with [Ralston] — we put three of our bins of trucks on and hauled product from [Royster's plant], and he was going to inform us if the price went down. ... [W]hatever price it was from what we purchased it to what we sold it to the farmer, was what he was going to try to get a credit.... He was going to work to either give us free product or reduce the price per ton of product we would have purchased in our fall fill. . . . (Emphasis added.)
¶ 63. Olsen's testimony is clear. He agreed to take more products, Ralston agreed to seek two possible concessions and then inform Olsen which, if either, of these concessions was granted.
¶ 64. This record shows a course of conduct that Ralston needed to get corporate approval for any modification of a written contract and Olsen's Mill knew of Ralston's need to get corporate approval. Accordingly, the circuit court's finding that the parties orally modified the original contract was clearly erroneous.
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¶ 65. I also agree with the majority opinion that part performance may satisfy the statute of frauds. See Wis. Stat. § 402.201(3)(c). Part performance may be made by payment and acceptance of such payment or by receipt and acceptance of the goods. Id. The majority is correct that the contract modification was partially performed because there was receipt and acceptance of the 34.6 tons of nitrogen fertilizer.
¶ 66. This part performance exception to the writing requirement cannot be used in the present case to support any conclusion about the content of the oral contract. Section 402.201(3)(c) states that "[a] contract which does not satisfy the requirements of sub. (1) [namely a writing] but which is valid in other respects is enforceable: . .. [w]ith respect to goods . . . which have been received and accepted" (emphasis added). In other words, part performance can be used to establish the existence of a contract, even one that should have been in writing. The parties may then prove the terms of that oral contract by oral testimony.
¶ 67. As I have already discussed, the content of the oral contract claimed by Olsen's Mill did not include a promise by Royster-Clark to rebate the price of the 2,000 tons of nitrogen fertilizer from the original contract. On the contrary, the testimony is unequivocal that Ralston would only try to get a rebate; that he did not have authority to modify the price of the original contract; and that he had to get approval from somebody else at Royster-Clark for any modification.
¶ 68. I conclude that part performance of the oral contract for 34.6 tons, and part performance of the original contract, though taking into account any oral agreement outside the writing requirement, do not, on *295this record, support a finding of an oral change in the price terms of the original written contract.
¶ 69. Because the circuit court was clearly erroneous in determining that there was an oral agreement to change the price terms of the original written contract, I dissent.
¶ 70. I am authorized to state that Justice ANN WALSH BRADLEY joins this dissent.

 Robertson-Ryan & Assocs. v. Pohlhammer, 112 Wis. 2d 583, 592, n.*, 334 N.W.2d 246 (1983) (Abrahamson, J., dissenting) (under Wis. Stat. § 805.17(2) (2003-04) the "clearly erroneous" test applicable to the findings of fact of a circuit judge sitting without a jury is the same as the "against the great weight and clear preponderance of the evidence" test); Noll v. Dimiceli's, Inc., 115 Wis. 2d 641, 643, 340 N.W.2d 575 (Ct. App. 1983) (same).

 Majority op., ¶ 22.

 Id., ¶ 35.

 Iowa Nat'l Mut. Ins. Co. v. Backens, 51 Wis. 2d 26, 33-34, 186 N.W.2d 196 (1971); Ivers & Pond Piano Co. v. Peckham, 29 *291Wis. 2d 364, 139 N.W.2d 57 (1966); Wis. Cent. Ry. Co. v. Phoenix Ins. Co., 123 Wis. 313, 101 N.W. 703 (1904).
The Wisconsin cases adopt 1 Restatement of Agency § 8 (1933), relating to apparent authority. These cases are still good law in this state. For similar statements about apparent authority, see 1 Restatement of Agency 2d § 8 (1957); 1 Restatement of Agency 3d § 2.03 (Tent. Draft No. 2 2006); Harold Gill Reus-chlein & William A. Gregory, The Law of Agency and Partnership § 23, at 57-64 (2d ed. 1990); 1 Floyd A. Meechem, A Treatise on the Law of Agency §§ 720-26, at 5081-83 (1914); and Warren A. Seavey, Law of Agency § 22, at 43-45 (1964).

 Majority op., ¶ 28.