Cherwell-Ralli, Inc. v. Rytman Grain Co.

Facts

Cherwell (P) entered into an installment contract with Rytman (D) for the sale of Cherco Meal and C-R-T Meal. The contract called for shipments according to weekly instructions from the buyer with payments to be made within ten days after delivery. From the start, D was behind in his payments, and the arrearages were often quite substantial. P called these arrearages to D’s attention but P shipped from July 26 - April 23 until the arrearages became too great. D was concerned that P would not complete the contract because of a plant closure and the fact that the market price of the goods significantly exceeded the contract price. P and D talked about their mutual problems, and P told D that if he paid the monies in arrears that shipments would continue. D paid in full to March 31 with a check for $9,825.60. A few days later D stopped payment on his check because his driver was told that this would be the last shipment. The driver was not an employee of P. P demanded payment and D demanded written assurance of deliveries. The demand for assurance was reiterated in its direct reply to P’s demand for payment. D made no further payments either to make good on the stopped check or for 19 other accepted deliveries. P closed his plant on May 2 because of the inability to deliver goods and the stockpiling of excess material. The trial court determined that D was in default and seller was to recover $21,013.60. The trial court found that D had no reasonable grounds to doubt performance from P and that the information from the delivery person who did not work for P was not a valid reason for stopping payment. The court also found that D had, in fact, received reasonable assurances from P. It also found that D presented no reasonably accurate evidence to establish damages it might have sustained because of the seller’s failure to deliver. D appealed.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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