LTV AEROSPACE CORPORATION v. BATEMAN No. 680.
492 S.W.2d 703 (1973)
LTV AEROSPACE CORPORATION, Appellant, v. C. C. BATEMAN, dba Bateman Construction Company, Appellee.
Court of Civil Appeals of Texas, Tyler.
Rehearing Denied April 5, 1973.
William L. Neary and David Ives, Dallas, for appellant.
Ben E. Jarvis and James R. Lewis, Tyler, for appellee.
Appellee Bateman sued appellant for breach of contract and sought recovery for lost profits, and alternatively, for damages for unrecoverable costs resulting from breach of contract by appellant. Trial was with a jury, and the court, disregarding some issues, rendered judgment for appellee for $25,000 for lost profits.
In the Fall of 1969 appellant established a plant in Tyler, Texas, for the manufacture of all-terrain vehicles. A substantial portion of these vehicles were to be exported to Southeast Asia and therefore export shipping crates or containers were required. In December, 1969, appellant circulated a detailed invitation to bid so as to find a local supplier who could manufacture the shipping containers or crates to specifications and in quantities to 8,000 containers. The containers were to be delivered
Appellee in December, 1969, received from a third party a copy of the invitation to bid, and later in that month submitted a detailed written bid to appellant. Negotiations between appellee and representatives of appellant followed and after some oral changes on both specifications and price an agreement was reached and the bid was accepted by appellant. The exact terms of the agreement were disputed at the trial.
Appellee in January, 1970, employed workmen, purchased raw materials, plant equipment and facilities and began building shipping containers or crates, the first being delivered about January 20, 1970.
In March, 1970, appellee received a written purchase order from appellant, dated January 7, 1970, requesting delivery of 900 containers of the type and at the price previously agreed. Some crates had already been delivered and accepted by appellant before the purchase order was received by appellee about March 17, 1970.
In September, 1970, appellee received an amended or revised purchase order changing and reducing the quantity of containers from 900 to 653, the number 653 being the number of containers which had already been delivered and paid for. The new purchase order also requested production of 450 container bottoms only at a price then specially agreed upon. These bottoms were manufactured, delivered and paid for.
No additional containers or bottoms were ordered or built, and appellant's Tyler plant subsequently ceased operations.
The record shows that appellant did not sign appellee's written bid, which was amended and later orally changed, and appellee did not sign either of appellant's purchase orders.
By the first three points appellant complains that, by reason of the Statute of Frauds, the trial court erred (1) by overruling its motion to strike the evidence concerning the oral contract for 8,000 containers; (2) by submitting issues Nos. 1, 2, 4, 6 and 7
The applicable statute involved here is found in Texas Business and Commerce Code, Uniform Commercial Code, sec. 2.201, V.T.C.A., which reads, in part, as follows:
The contract which appellee seeks to enforce involves sale and purchase of shipping containers of the value of substantially more than $500. Appellant did not sign appellee's written bid. Therefore, it must be determined whether the contract here is governed by Subsection (c)(1) of sec. 2.201, UCC, as specially manufactured goods for appellant and not suitable for sale to others in the ordinary course of appellee's business. We hold that the contract is so governed.
These shipping crates or containers were manufactured by appellee to detailed specifications required by appellant, and they were to be used for shipping overseas an all-terrain vehicle manufactured by appellant. They were not suitable for sale to others in the ordinary course of appellee's business. The record discloses that appellee had made a substantial beginning in manufacture of the goods, and it was done for appellant's benefit before any notice of repudiation was given or received. The contract was not rendered unenforceable by the statute because it falls under an exception
Appellant claims that there is a writing which satisfies the requirements of subsection (a), and that it is the purchase order, and therefore subsection (c)(1) cannot apply. Subsection (a) requires "some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought * * *." Emphasis ours. The issuing of a purchase order for 900 crates or containers, unsigned by appellee against whom it is sought to be enforced, is not such a writing as will satisfy subsection (a).
By points four through six appellant contends that it was error to base judgment on Special Issue No. 7 because, as a matter of law, appellee's damages are limited to actual out-of-pocket damages, and there was no finding by the jury of actual out-of-pocket damages; and that Special Issue No. 22
We disagree with these contentions. In the first place appellee was not shown by the record to be a merchant (a person who deals in goods) but a manufacturer and contractor. Secondly, the purchase order for 900 containers was written by appellant's employee on March 17, 1970, but dated back to January 7, 1970, and on the March date under the oral contract 138 containers had already been delivered by appellee to appellant. And appellant indicated by letter from J. K. Muir, manager of Purchasing, to appellee, dated April 9, 1970, that it did not consider the contract was for only 900 containers.
By points 7 and 8, appellant says the trial court erred in disregarding Special Issues 14 and 15
Appellee's objection to Appellant's point 7 may be well taken in that the point complains that the disregarding by the trial court of Special Issues 14 and 15 "produced a result contrary to the clear intent of the jury." However, point 8 raises the question whether appellee was under a duty to mitigate his damages under the circumstances of this case, and whether the trial court should have reduced the judgment by $10,000 as found by the jury in Special Issue 15.
The rule of avoidable consequence which imposes a duty on the person injured to minimize his damages by the exercise of ordinary care is recognized in Texas. Texas & Pacific Ry. Co. v. Mercer, 127 Tex. 220, 90 S.W.2d 557 (Tex. Com.App.1936); Reavis v. Taylor, 162 S.W.2d 1030 (Tex.Civ.App., Eastland, 1942, writ ref., w. o. m.); 17 Tex.Jur.2d, Damages,
However, a defendant charged with breach of contract has the burden of establishing that the injured party could have minimized or mitigated his damages to some amount and failed to do so. Tortuguero Logging Operation, Limited v. Houston,
Appellant argues that there is no evidence in the record of any attempt by appellee to mitigate his loss except by placing a for sale sign in the window of a truck. Appellee Bateman was the only witness who testified about the building, equipment, tools, vehicles and raw materials he had to acquire to perform the contract and the cost of those items. He also testified about what items could be sold and which could not be, and the approximate value of the items. A careful review of Bateman's testimony reveals there was no evidence, direct or circumstantial, from which the jury could conclude that appellee could have mitigated his damage by $10,000.00 if he was in fact or in law required to do so under such circumstances.
The judgment here is for loss of profits only; the alternative plea for out-of-pocket damages or for cost of tooling up was abandoned. Appellant had the burden to establish that appellee could have mitigated the damage if he were required to do so. Appellant failed to discharge such burden. Points 7 and 8 are overruled.
Points 9 and 10 are deemed to be without merit and are overruled.
Judgment of the trial court is affirmed.
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