National Farmers Organization v. Bartlett and Company, Grain

This is a diversity action brought by the National Farmers Organization (hereinafter Seller) against Bartlett and Company, Grain (hereinafter Buyer) to recover an alleged balance due, in the stipulated amount of $18,441.62, on the price of grain sold and delivered under four of a series of fourteen contracts between the parties. The Buyer admits that the $18,441.62 was withheld from the total payment otherwise due but claims by way of setoff that the stated sum was properly withheld as damages due it by virtue of the Seller’s alleged breach or anticipatory repudiation of all fourteen contracts. The pertinent facts were largely stipulated, and the cause was tried to the district court sitting without a jury. The court, agreeing with the Buyer that the Seller had breached or anticipatorily repudiated all fourteen contracts, rendered judgment for the Buyer. We affirm.

I.

Prior to January 30,1973, the parties had entered into forty-five contracts for the sale of grain. Of these contracts, thirty-one were performed in full by both parties and are not in issue. The remaining fourteen, which are the subject of this lawsuit, are summarized in the following table.

Contract No. 7415 was for the sale of corn; each of the others was for the sale of wheat.

The controversy over the above contracts began in December 1972. As of December 1, the only contract on which the delivery date had passed was No. 996; although the September 22 last delivery date had long since expired, 1672 of the 5,000 bushels called for under the contract remained undelivered. Deliveries were due in December on Nos. 22868, 1389, 7415 and 1824. At the end of the month, none of the 40,000 bushels had been delivered on No. 22868, 16,480 of the 20,000 bushels had been delivered on No. 1389, 19,364 of the 30,000 bush *1353 els had been delivered on No. 7415, and 8,125 of the 13,000 bushels had been delivered on No. 1824. Additional deliveries on these four contracts, although late, were tendered and accepted in January 1973; by the end of January, 31,725 of 40,000 bushels remained undelivered on No. 22868, 397 of 20,000 bushels remained undelivered on No. 1389, 8,049 of 30,000 bushels remained undelivered on No. 7415, and 648 of 13,000 bushels remained undelivered on No. 1824. In addition, none of the 2,700 bushels due in January under No. 1845 were delivered. The eight contracts not mentioned above in this paragraph had last delivery dates subsequent to January 31, 1973. No deliveries were ever made on any of these contracts, except that 3,943 of 12,000 bushels due no later than March 15 under No. 1371 were delivered in January. On several occasions during the month of January, prior to January 26, the Buyer had given notice to the Seller that the Seller had not completed delivery on certain contracts by the delivery dates designated in the contracts.

Beginning early in December 1972 and continuing throughout January 1973 the Buyer “was retaining some of the purchase price of grain actually delivered as protection against realized or potential loss caused by failure on the [Seller’s] part to perform all contracts not yet fully performed.” 1 On several occasions during December and January the Seller made verbal demands for the purchase price of grain already delivered.

On or about January 26, 1973, the Seller notified the Buyer that the Seller “was not going to deliver any grain to [Buyer] on any of the 14 outstanding contracts between the parties unless and until [Buyer] paid [Seller] a substantial amount of money due on deliveries already made as of that date on contracts Nos. 22868,1371,1389 and 1824.” 2 The Seller did in fact suspend performance on all fourteen contracts as of January 27. Thereafter, no grain was ever tendered under any of the contracts.

It is the above communication which the Buyer elected to treat as an anticipatory repudiation of the contracts not yet due. On January 30, the Buyer sent the Seller the following telegram (punctuation supplied in part):

AS OF TODAY’S MARKET CLOSE WE ARE BRINGING ALL OUTSTANDING CONTRACTS WE HAVE WITH YOUR OFFICE TO CURRENT MARKET PRICE, NAMELY, OUR CONTRACTS 996, 1338, 1366, 1371, 1380, 1425, 1575, 1729, AND 22868. SETTLEMENT WILL BE FORTHCOMING.

On or about January 30-31, the Buyer mailed a debit memo and two credit memos to the Seller. The numerical accuracy of the figures used and calculations made in these memos is stipulated. 3 These memos reflect a balance due the Seller for deliveries made under contracts Nos. 22868, 1371, 1389, and 1824 of $72,894.89 and a balance due the Seller for deliveries made under contract No. 7415 of $1,919.50, for a total balance due of $74,814.39.

*1354 The same credit and debit memos claimed setoffs on thirteen of the fourteen contracts, 4 in each case by virtue of the Seller’s past breach or alleged anticipatory repudiation of the particular contract. The claimed setoffs were as follows: