Court Opinion

ID: 9640958
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:19:45.164595+00
Date Added: 2024-06-11T18:10:34.104542
License: Public Domain

SAM D. JOHNSON, Justice,
dissenting.
This dissent is respectfully submitted.
Carroll Nelson, the defendant farmer, grows two cash crops, cotton and wheat, on his 1,200-acre farm near Mangum, Oklahoma. Union Equity Co-Operative Exchange sued Nelson alleging an oral contract for the sale of his yearly wheat crop. By the terms of this alleged oral contract, Nelson sold his 1973 wheat crop, estimated at 5,000 bushels, for a total sum of $17,800 and obligated himself to deliver it by August 31, 1973. Since there is no written instrument signed by Nelson, and since the sale price exceeded $500,'recovery upon such an oral contract would usually be barred by the statute of frauds [Section 2.201(a), Texas Business and Commerce Code Annotated].
Union Exchange, however, asserts it is entitled to enforce this oral contract because of an exception to the statute of frauds contained in Section 2.201(b). Section 2.201(b) allows an oral contract between “merchants” to be enforced “if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, unless written notice of objection to its contents is given within ten days after it is received.” The majority of this court holds that Nelson, a farmer, is a “merchant.” It is that holding with which this writer vigorously disagrees.
The facts on which the majority relies for its determination are contained in its ninth and tenth paragraphs. These facts are: Nelson is a resident of Oklahoma and owns 1,200 acres of land.
He grazes cattle and has grown cotton and wheat there since 1967.
He has one wheat crop a year which he has sold annually since 1967.
He is knowledgeable about growing and selling crops — he has made it his usual practice to determine the best price obtainable for them.
He stays abreast of the current market by listening to the market reports on the radio and by asking grain dealers for market prices.
Prior to the date of the alleged oral contract, he phoned Union Exchange several times to inquire about prices.
He entered into a contract in 1972 with Union Exchange, which was rescinded by the parties.
In the previous five years he sold his wheat to a milling company (not the plaintiff in issue) by written contracts signed by both parties.
He sold his 1973 wheat crop to the same milling company (again, not the plaintiff in issue) for $5.25 per bushel.
These are the facts, and all the facts, on which the majority relies.
A “merchant” is defined in Webster’s New International Dictionary (Second Edition) as “any one making a business of buying and selling commodities; a trafficker; a trader; . . . one who traffics on *359a large scale, especially] with foreign countries. One who carries on a retail business; a storekeeper or shopkeeper.”
From the facts recited by the majority, it is unreasonable to conclude that Nelson, a farmer, was a “merchant.” The majority opinion violates the clear, ordinary meaning of that word as well as the definition contained in Section 2.104(a). That Section states:
“ ‘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.”
The intent of this Section is violated when a farmer, or any other individual who is a casual seller or buyer, is held to be a “merchant.” This intent is made obvious by the first comment to Section 2.104(a), which provides:
“This Article assumes that transactions between professionals in a given field require special and clear rules which may not apply to a casual or inexperienced seller or buyer.” [Emphasis added.]
In the instant case the evidence shows that Nelson, the farmer and producer of wheat, sold such wheat only one time per year. There is no indication that this farmer was a “professional” in the field of merchandising wheat or anything else; the evidence does no more than indicate a casual sale, a sale of wheat one time per year.
The majority holding that this farmer is a “merchant” not only violates the spirit of the law of Section 2.104(a), but also the letter of that law. Under the definition of Section 2.104(a), a person is a “merchant” if he (1) deals in goods of the kind involved in the transaction; (2) by his occupation holds himself out as having knowledge or skill peculiar to the practices involved in the transaction; (3) by his occupation holds himself out as having knowledge or skill peculiar to the goods involved in the transaction; or (4) employs an intermediary who, by his occupation, holds himself out as having such knowledge or skill.
This evidence is legally insufficient to establish that Nelson satisfied the first statutory criterion of being one who deals in goods of the kind involved in the transaction. As stated previously, the comment to Section 2.104(a) makes it clear that a “merchant” is a professional in business and does not include a casual seller or buyer. It is inconceivable that farmers who generally sell by written contract a single crop each year to one buyer are professionals in business and therefore “merchants.” Under such determination, every farmer in the state, of course, would be a “merchant.” Using the majority’s own definition, it is indisputable that Nelson did not “deal” in wheat. He produced wheat and he sold wheat, but he did not traffic, buy and sell, or transact business in it. One sale a year of a commodity produced is less than a scintilla of evidence that the farmer “deals” in farm crops. Other courts have so held. Loeb and Company, Inc. v. Schreiner, 294 Ala. 722, 321 So.2d 199 (1975); Cook Grains, Inc. v. Fallís, 239 Ark. 962, 395 S.W.2d 555 (1965); Decatur Cooperative Association v. Urban, 219 Kan. 171, 547 P.2d 323 (1976); and Lish v. Compton, 547 P.2d 223 (Utah 1976).
Nor does Nelson satisfy the second criterion. His occupation as a farmer who owns land, grazes cattle, and sells one crop a year by written contract is legally insufficient to indicate that he has knowledge or skill peculiar to the practices involved in the transaction. There is no justification on the basis of the evidence in this case to conclude that Nelson’s occupation indicates any knowledge of the professional business practice of allowing a letter signed by only one party to create a binding contract if the recipient of the letter does nothing. The statute correctly attributes such knowledge to merchants; there is no indication that it was ever intended to attribute such knowledge to farmers.
The third criterion of Section 2.104(a), that the individual’s occupation indicates *360knowledge or skill peculiar to the goods involved, is not applicable to this fact situation involving an exception to the defense of the statute of frauds [Section 2.201(b)]. The term “merchant” is employed in at least thirteen significant provisions of the Texas Business and Commerce Code.1 Accordingly, the definition of “merchant” must be a broad one and every criterion of this broad definition may not always apply to a given provision. This view is supported by the following comment to Section 2.104(a):
“2. The term ‘merchant’ as defined here roots in the ‘law merchant’ concept of a professional in business. The professional status under the definition may be based upon specialized knowledge as to the goods, specialized knowledge as to business practices, or specialized knowledge as to both and which kind of specialized knowledge may be sufficient to establish the merchant status is indicated by the nature of the provisions.” [Emphasis added.]
The provision involved in this suit, Section 2.201(b), contemplates an awareness of the professional business practice of employing a confirming memorandum signed only by one party to create a binding contract, notwithstanding the statute of frauds. While the act of dealing in goods or one’s occupation may indicate awareness of such a practice, knowledge or skill peculiar to the goods cannot.
It is undisputed even by the majority that the fourth criterion of Section 2.104(a) is not satisfied.
Clearly, a literal application of the statute does not support the view of the majority. Further, the weighing of the burden on the farmer to bbject to every letter he receives against the burden on the buyer to await the return of a signed contract does not provide persuasive support for the majority view. Although Allenberg Cotton Co., Inc. v. Pittman, 419 U.S. 20, 26-29, 95 S.Ct. 260, 42 L.Ed.2d 195 (1974), discusses the virtues of forward contracts, that case involved a written agreement signed by both parties and the opinion does not consider the issue of the respective burdens of the parties regarding the creation of forward contracts.
Finally, it is unreasonable for a professional grain dealer, experienced in the commodity market, to assume that a farmer who sells a single crop of wheat a year has knowledge of the professional business practice of employing a memorandum signed only by one party to create a binding agreement.
The unfortunate result of the majority decision is not only that every farmer in Texas is held to be a “merchant,” but every individual who from time to time buys or sells significant household or personal items, house trailers, boats, or automobiles also becomes a “merchant.” Each of these persons would be a “merchant” and would be bound by a confirming letter sent by a buyer or seller if the person did not object to it.
Justices STEAKLEY, McGEE, and YARBROUGH join in this dissent.

. Sections 2.103, 2.201, 2.205, 2.207(b), 2.209(b), 2.314, 2.327, 2.402(b), 2.403, 2.509(c), 2.603, 2.605(a)(2), and 2.609(b).