Trinidad Bean & Elevator Co. v. Frosh

494 N.W.2d 347 (1992)

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Nature of the Case

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Facts

P owns and operates an elevator. D is an individual engaged in the business of farming. On or about April 26, 1988, D entered into a written contract with P, whereby P agreed to buy and D agreed to sell 1,875 hundredweight of dried, edible navy beans, which were to be delivered to D upon completion of the harvest of the 1988 crop. Dirk, who had been employed with P for only 1 month prepared the agreement, and inadvertently filled out both payment options for immediate and deferred payment. The error was first noticed by James Peterson, a commodity trader, when the contract was received in P's Denver office. James Peterson asked that someone ascertain which option D intended so that P's accounting department could process the contract. James Peterson spoke with Roberta Frosh, P's secretary at the elevator, and alerted her to the problem. Roberta Frosh had been the bookkeeper and secretary for 10 years and was the wife of D. Dirk testified that Roberta had alerted him to the error and told him to prepare a second page, limiting the payment provision to option 2. Dirk gave the second page to Roberta to obtain D's signature. Roberta denied that anyone from P had requested that she obtain D's signature. D testified that on approximately May 1, 1988, he told Larry Peterson, the elevator manager to tear up the contract. Larry Peterson testified that d never made the statement. It is undisputed that a contract with only one payment option was never signed. It is also undisputed that on or about May 1, the contract and market prices for edible navy beans were the same. On August 31, 1988, D went to the elevator office and asked Dirk whether the contract had been torn up. On September 8, D sent a letter to James Peterson at the Denver office, in which letter D stated that he felt the contract was void. No beans were delivered as promised in the contract. Because of drought conditions, the price of navy beans rose during the 1988 growing season from $16 per hundredweight (the contract price) in April, to $32 per hundredweight in late August to early September, and $36 per hundredweight in late September, when P purchased beans from other sources. The court instructed the jury that a contract existed, that the measure of damages was the price of the beans at the time of performance minus the contract price, that the time of performance was harvest time, and that D might be entitled to the defenses of mitigation of damages and P's failure to 'cover' within a commercially reasonable time after repudiation. D got the verdict and P appealed.