Court Opinion

ID: 9536364
Source: CourtListenerOpinion
Date Created: 2023-08-07 06:58:32.305129+00
Date Added: 2024-06-11T14:54:21.077945
License: Public Domain

LATOURETTE, J.
Plaintiff appeals from a judgment that it take nothing by its action and from a judgment of $6,000.00 entered against it on defendants’ counterclaim.
Plaintiff, as buyer, instituted action against defendants, as sellers, to recover $6,000.00 which it had advanced to defendants on a written hop contract, entered' into between the parties on the 25th day of July, 1947, it being contended that defendants failed *394to deliver to plaintiff the quality of hops agreed to be delivered by defendants. Defendants counterclaimed on the theory that plaintiff had waived delivery of the hops pursuant to the original contract so far as quality was concerned. The jury returned a verdict in favor of the defendants on their counterclaim.
At the conclusion of the taking of the testimony, the buyer moved, with verbosity, for a directed verdict, the essence of the motion being that the sellers admitted the violation of the contract, save for the so-called waiver, and since there was no waiver in fact or in law, the buyer was entitled to a judgment for a return of the $6,000.00 advanced.
Sellers in their brief set forth the following:
“The issue involved in-this appeal narrows itself to the following proposition: Did the defendants produce and tender to the plaintiff hops which met the quality provisions of the contract entered into between the parties, subject to any modification or waiver of said provisions? If the defendants did so, the judgment should be affirmed.”
By the terms of the contract, buyer engaged to purchase from the sellers the crop of hops then growing on their eighty-acre farm in Polk county, consisting of 20,000 pounds net weight for the agreed price of 60 cents per pound for hops containing not over eight per cent leaf and stem content, and an increased, graduated price for hops of less leaf and stem content.
The sellers agreed to deliver to buyer at said prices said hops in part, or in whole, as the buyer should elect, f.o;b. warehouse, for inspection and acceptance between September 1, 1947, and October 31, 1947, said hops to be of “sound condition, good and even color, fully matured but not over-ripe, flaky, cleanly *395picked, properly dried and cured, not broken, free from vermin, mould, or other diseases, etc.”
Buyer agreed to advance to defendants, at its option and as part payment for said hops, the sum of $6,000.00 on August 20,1947, this being the “amount necessary to cultivate, grow, harvest and bale the hops hereunder sold, etc.”
The alleged waiver pleaded by defendants is as follows:
“That at the time of the execution of said agreement said hops so growing in the hop yard of the defendants, as aforesaid, showed the presence of mildew, with which plaintiff then and there was familiar, and that, immediately prior to the picking of said hops, defendants notified plaintiff that the mildew in said hops had increased and sought from plaintiff advice as to what to do, and that plaintiff, with full knowledge of said mildew in said hops, paid defendants said sum of $6,000 for the purpose and instructed defendants to pick and deliver the same to plaintiff notwithstanding, and, except as in this amended answer and counterclaim stated, defendants duly and fully performed all the terms and conditions of said agreement on their part to be performed.”
The evidence of such alleged waiver is found in the testimony of defendant Mrs. Hill, in which she testified that she called on Howard Eismann, the local agent of the plaintiff, on the 21st day of August, 1947. We quote from the transcript:
“ Q Did you have a conversation with him then ?
“A Yes. I told him we would have over 100 bales of hops, then I went on to ask him — to tell him we would not be able to give him a good-looking hop, and find out what he wanted us to do.
*396“Q What did you discuss as to the reason for not having a good-looking hop?
“A Mildew.
“MR. LEWELLING-: If the Court please, I am going to object to this line of testimony as being immaterial and irrelevant, as varying the terms of the contract. It provided for a certain quality of hop, outlined what the quality provisions are, color, etc., and these conversations would tend to vary that.
“MRS. HILL: It does vary it.
“THE COURT: Just a moment, Mrs. Hill — you cannot answer now, the lawyers are talking.
“MR. CARSON: What was that conversation, Mrs. Hill?
“A It was about the mildew condition, that it was impossible to pick it out by hand.
* * *
“MR. CARSON: What did you tell Mr. Eismann, or what did he tell you, so far as you can recall the words and substance of the conversation with respect to this mildew?
“A We all knew the mildew was there.'
“THE COURT: The question was, what was the conversation?
“A He told us to go ahead and pick the hops because he needed them, and to do the best we could.
* * *
“MR. CARSON: Did Mr. Eismann say anything in this conversation we are speaking about, Mrs. Hill, of the fact that there was mildew in your yard?
“A Mildew was mentioned, yes.
“Q By Mr. Eismann?
“A Yes.
*397“Q What did he tell you to do? When I say ‘he’, I mean Mr. Eismann.
“A He told us to go ahead and pick them and do the best we could because he needed the hops.
“Q At that time did he give you the $6,000. represented by the check marked plaintiff’s Exhibit B?
“A He sent out into the other office to get it.
“Q And it was then delivered to you, was it?
“A Yes.”
Defendants having alleged a waiver on the part of the plaintiff, the burden of proof is upon them to prove such waiver.
In the case of Propst v. William Hanley Co., 94 Or. 397, 401, 185 P. 766, involving the sale of hay, it was contended that the written contract between the parties was modified by a subsequent oral agreement. We said that the language of the complaint amounted in legal effect to stating a waiver, and we held that: “Waiver may be made the subject of a contract, for which a consideration is requisite, the same as in any other contract.” We also held in that case that where there is an estoppel, consideration for the modification is unnecessary. The above principle was later adhered to in Craswell v. Biggs, 160 Or. 547, 86 P. 2d 71.
There was no consideration for the alleged modification of the agreement going to make up the waiver because defendants did nothing that they were not legally obligated to do under the contract; likewise, there could have been no estoppel since the defendants were placed in no worse position by the alleged waiver than they were in before. In fact, they secured a benefit by the payment of the $6,000.00 to them by the buyer, which the buyer was not compelled to pay under *398the contract, in that had the buyer not advanced the $6,000.00 to the sellers for the purpose of harvesting the hops, the expense incident thereto would have fallen on the sellers.
Defendants in their brief do not discuss the foregoing cases although they were cited in appellant’s brief. They turn aside the matter in the following language:
“ * * * The principles relating to waiver as stated by the appellant no doubt have adequate authority to sustain them if applied to one or another of the many situations which have been described as ‘waiver,’ but they are applicable only in the proper situation and the facts of this case must first be considered in order to determine if the particular rules cited by the plaintiff apply to the case at bar.”
Under Point I of their brief, defendants’ position is outlined as follows:
“Wherever a contract not already fully performed on either side is continued in spite of a known excuse, the defense is thereupon lost and the injured party is himself liable if he subsequently fails to perform, unless the right to retain the excuse is not only asserted by the injured party but also assented to by the other party. 3 Williston on Contracts (Rev. Ed.), Sec. 688, p. 1983; Sheehan v. McKinstry (1922), 105 Or. 473, 483, 210 P. 167; Restatement of Contracts, Sec. 309.”
The text quoted is inapplicable to the situation before us. At the time of the alleged waiver, no excuse existed on the part of the buyer to terminate the contract because at that time the sellers were not in default. There yet remained several weeks before the delivery date, at which time the buyer under the contract had the right to inspect and then accept or reject the hops, in part or in whole, and had the further *399“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.” What the parties accomplished by the conversation was in consonance with the contract and not in contrariety thereto.
Defendants in their counterclaim do not allege a breach or default on their part. In no view of the situation could the statement of Mrs. Hill, which was hereinbefore quoted, be construed as a breach of the contract on defendants’ part. She merely told plaintiff she could not give it a prime hop, i.e., a 60-cent hop. Plaintiff under the contract was entitled to less than a prime hop at a reduced price at the time of delivery several weeks hence, if it could not get a prime hop.
In noting the cases cited under the Williston text, we find Sheehan v. McKinstry, supra, cited. Turning to that case, we find it does not support defendants’ defense of waiver, the following being the factual situation: plaintiff, who was seeking a strict foreclosure of a land contract, had agreed to give the buyer “ ‘an abstract of title to said described premises showing good and sufficient title, free and clear of all liens and encumbrances to the date of this agreement.’ ” The buyer went into possession of the property, whereupon the plaintiff turned over to him an abstract of title to the premises, after which the buyer continued to make payments for a period of time and then failed to make further payments on the contract. His defense in the suit was that the abstract did not show a merchantable title. We held that the purchaser waived the seller’s breach of the contract by making payments *400on the contract and holding possession of the property after he had received the defective abstract and knew of his defective title.
The Sheehan v. McKinstry case involves waiver by conduct, that is, the failure of a party to an executory contract to take advantage of a default or breach by the other party and, instead, his continuing to perform as though no such breach had ever occurred, and is not authority for the defendants’ position because, in the case at bar, there had been no default on the part of the defendants, and hence, there was nothing to be waived.
In the instant case, we are concerned with waiver, which is made the subject of contract — in fact, with a claimed modification of the terms and provisions of the contract. In such a case, a consideration for the waiver, or estoppel, is necessary, as was held in Propst v. William Hanley Co., supra.
Turning to Restatement, Contracts, § 309, we find that the same has no application. The three illustrations given are far afield from the principle involved in this case.
For the foregoing reasons, the sellers ’ defense of waiver was not sustained, and the buyer was entitled under the contract to recovery of the $6,000.00 advanced by it, the sellers having breached their contract, ánd the lower court should have so instructed the jury. The judgment of the lower court will be reversed with directions to enter a judgment in favor of the plaintiff against the defendants in the sum of $6,000.00.
*401Asa L. Lewelling and Bruce Spaulding, both of Salem, contra.
John E. Carson, of Salem, and Philip Eayter, of Dallas, for the petition.
Before Brand, Chief Justice, and Lusk, Latourette, Warner and Tooze, Justices.