Court Opinion

ID: 9779238
Source: CourtListenerOpinion
Date Created: 2023-08-29 21:41:06.033035+00
Date Added: 2024-06-11T07:33:24.034472
License: Public Domain

OPINION ON MOTION FOR REHEARING
BISSETT, Justice.
H & H, in its motion for rehearing (which is supported by a detailed brief), contends that we erred in reversing and rendering the judgment of the trial court because there was some evidence to support the express findings of the trial court, and we failed to presume certain implied findings in support of the judgment. Its position is that we must presume the following implied findings: 1) that the contract was part written and part oral; 2) that the intention of the parties to make time of the essence is clearly manifested in the contract as a whole; 3) that H & H agreed to accept payment only if payment was mailed on March 18th; 4) that the extensions of time by H & H for payment by mail on March 18th and in hand on March 21st constituted a modification of the contract; 5) that the envelope which carried the check was mailed and postmarked at Laredo on March 20th, not on March 18th; and, 6) that the contracting parties orally agreed “that payment must be made at delivery and unless so made H & H would terminate the contract”.
The essence of a contract is an agreement. W. E. Grace Manufacturing Company v. Levin, 506 S.W.2d 580, 584 (Tex.Sup.1974). The essence of the contract in this case is an agreement that H & H sell its entire production of cattle hides to Laredo Hides at a fixed price for á stated period of time and that Laredo Hides buy all such production for cash.
The failure to make payments at the time provided in a contract does not constitute a breach of contract that will warrant its cancellation unless it is established by the contract or by surrounding circumstances that the parties intended time to be of the essence. As has been stated in the majority opinion, the contract itself did not provide that time is of the essence. On each occasion where Hinojosa testified concerning the circumstances surrounding the contract and its execution, it is apparent that he was concerned only with the problems which he attributed to Christina Valdez and with “hot” checks. There is nothing about those circumstances that remotely indicates that the parties intended that payment at the time of each delivery was of the essence of the entire contract, so that failure to pay at time of delivery for a single shipment of hides would be a ground for terminating the contract with respect to future deliveries thereunder. Under the circumstances presented by this appeal, the question of *224whether time of payment as to each delivery is of the essence of the entire contract becomes a question of law and is to be determined by the court. Texas Associates v. Joe Bland Const. Co., 222 S.W.2d 413, 418 (Tex.Civ.App. — Austin 1949, writ ref’d n. r. e.); Herber v. Sanders, 336 S.W.2d 783 (Tex.Civ.App. — Amarillo 1960, n. w. h.).
As the manifested intent of the parties as established by the contract itself or by the circumstances surrounding its execution can make time of the essence, the acceptance of late performance may indicate that the parties did not intend that time be of the essence. Superior Signs, Inc. v. American Sign Services, Inc., 507 S.W.2d 912 (Tex.Civ.App. — Dallas 1974, n. w. h.). Since the facts are undisputed that Laredo Hides did pay for the March 18th delivery of hides, and that H & H made delivery after first being notified that payment would not be made at the time of delivery and then accepted late payment, we remain convinced that time of payment was not intended by the contracting parties to he of the essence, and that the failure of Laredo Hides to make payment on delivery, under the circumstances, did not constitute an actionable breach of contract.
H & H had the right to cancel the contract as regards future installment deliveries thereunder only if Laredo Hides breached “the whole contract”. Tex.Bus. & Comm.Code, Ann., § 2.612, § 2.703. “If only the seller’s security in regard to future installments is impaired, he has the right to demand adequate assurances of proper performance but has not an immediate right to cancel the entire contract”. Comment 6 to § 2.612 of the Code. A “cash on delivery” term in an installment contract for the sale of goods makes payment a requisite before delivery of that installment is required, but the provision, of itself, will not have the legal effect of making time of payment essential to the whole contract. There is no showing in this case that the failure to pay on delivery of a single installment impaired the entire contract with respect to the remaining eighteen installment deliveries due to be performed.
There is no basis for an implied finding that the contract sued on is “part written and part oral” or that the contract as a whole manifested an intention of the parties to make time (of payment) of the essence. The contract was wholly in writing, as expressly found by the trial court.
There is no evidence in the record from which it can be implied that H & H agreed to accept payment for the March 18th delivery of hides only if the check was mailed on March 18th. The testimony of Hinojosa clearly shows that he instructed Lozano to mail the check, nothing more.
Likewise, there is no basis for an implied finding that the check was not mailed until March 20th. The witness Oribe identified the envelope, which contained the check when it was finally delivered to H & H, as being the same envelope which he mailed on March 18th. Carlos Palacios, the postmaster at Laredo, when shown the identical envelope, testified that he could not determine the date that it was postmarked in Laredo. We have carefully examined the original envelope and we cannot decipher the date of the Laredo postmark thereon. The assertion that it can be implied that the envelope was not mailed until March 20th cannot be sustained. The undisputed testimony of Oribe and Lozano conclusively shows that the check was mailed on March 18th.
H & H, in its motion for rehearing, contends that the contract was modified by an oral agreement reached in the telephone conversation of March 21st. There is no pleading that the contract was ever modified. There is no evidence of any oral agreement on March 21st, or on any other day, between the contracting parties that modified the contract.
H & H argues that there are three reasons why it was legally justified in cancel-*225ling the contract. First, the failure to pay for the hides when they were delivered on March 18th; second, failure to pay by mail on March 18; and, third, failure to pay in hand by 4:30 p. m. on March 21st. None of the reasons are valid.
First, when the truck arrived at H & H’s packing plant on March 18th without the check, H & H could have refused to deliver any hides under the explicit terms of the contract. However, it did not do so; instead, it delivered the hides with full knowledge that payment would not be made at that time. By doing so, H & H waived its right to demand payment at the time of delivery. Massachusetts Bond & Ins. Co. v. Orkin Exterm. Co., 416 S.W.2d 396, 401 (Tex.Sup.1967).
The question of waiver in this case was conclusively established. It is not a matter of inference. It was not a fact issue to be resolved by the trier of fact. Ford v. Culbertson, 158 Tex. 124, 308 S. W.2d 855, 865 (1958). H & H knowingly dispensed with the performance of something which it had a right to exact. The undisputed instruction of Hinojosa coupled with this action in making delivery left nothing to be inferred relating to waiver of the “cash on delivery” provision. Therefore, even if we were to hold that payment at the time of delivery was of the essence of the entire contract, in this case it was waived as a matter of law. Shaw Equipment Co. v. Hoople Jordan Construction Co., 428 S.W.2d 835, 840 (Tex.Civ. App. — Dallas 1968, n. w. h.); Miller v. Deahl, 239 S.W. 679, 686 (Tex.Civ.App.— Amarillo 1922, writ ref’d, overruled in part 464 S.W.2d 353, 358); 13 Tex.Jur.2d, Contracts, § 294 ; 60 Tex.Jur.2d, Waiver, § 14.
Second, payment was made on March 18th. The check was mailed on that day. H & H authorized the mailing and, therefore, bore the risk of delay in delivery. Moreover, there is nothing in Hinojosa’s testimony that even suggests that he directed Lozano to mail the check on March 18th. Whether the check was mailed on Saturday, March 18th or on Monday, March 21st, is in reality, immaterial. Where no time is specified, all that is required is that performance be accomplished within a reasonable time. Mailing of the check on March 20th would have been within a reasonable time after the telephone conversation of March 18th was concluded. It is undisputed that the check was mailed. Where the fact of mailing is undisputed, what is a reasonable time therefor becomes a question of law. Krueger v. Young, 406 S.W.2d 751 (Tex.Civ.App.— Eastland 1966, n. w. h.). The second reason is not sufficient to warrant a termination of the contract.
Finally, the failure to deliver payment by 4:30 p. m. on March 21st was not a failure to meet a condition in the contract. The demand made on Laredo Hides was outside of the contract. It was unreasonable. It was not supported by consideration. H & H was not obligated to do anything more after this demand was made than before, was still obligated to accept the payment which was already in the mails, and was still obligated under the contract to continue deliveries of hides. H & H cannot unilaterally change fixed contractual rights and obligations in the middle of performance of the contract. Failure to meet the 4:30 deadline did not justify cancellation of the contract.
H & H’s contention that Laredo Hides “purchased substitute hides from another supplier in Laredo, Texas at $10.00” cannot be sustained. The page cited in the statement of facts by H & H as authority for that contention clearly shows that those hides were sold to Laredo Hides under a written contract which was already in effect when the contract sued on in this case was made. The hides so purchased were not “substitute” hides. Laredo Hides adequately proved its damages. The testimony which appears at other pages in the statement of facts, referred to by H & H in support of its assertation that Laredo Hides did not adequately prove its dam*226ages, does not dispute the evidence introduced by Laredo Hides with reference to its damages.
We have considered each of the 129 points presented in the motion for rehearing. None have any merit.
The motion for rehearing is overruled.