This is a suit to recover $22,089.80 for 20 shipments of lettuce over a period of time from November 6, 1970 to February
THE DEALINGS OF THE PARTIES IN THE PRIOR 55 LETTUCE TRANSACTIONS
There is little dispute in the record as to the 55 prior lettuce transactions which took place between Arakelian and O'Day. They are, respectively, grower and buyer, engaged in the agricultural commodity business. In all instances relevant to the case, O'Day resold the lettuce to his own customers. Between February 27, 1969 and April 13, 1970, William E. Kirchberg (Kirchberg), a food broker, contacted Arakelian and placed 55 orders for lettuce on behalf of O'Day, his principal. As is customary in the business, all orders were verbal, having in these instances been placed over the telephone. The correct quantity of lettuce for each order was shipped by Arakelian to one of several coolers where it was held under cold storage and transferred to a carrier for shipment to one of O'Day's customers at another destination. In each instance, a bill of lading was signed by the carrier in whose hands the shipment was placed. The original and several copies of the bill of lading were then sent to Arakelian where an invoice was prepared for all charges and mailed to O'Day along with a copy of the bill of lading. The invoice showed the lettuce as having been sold to O'Day, the date of shipment, the ultimate destination and the total charge. On the other hand, the bill of lading would give no indication of either O'Day's or Kirchberg's involvement in the transaction. The information it contained showed only that the quantity of lettuce had been loaded aboard and accepted by the particular carrier involved for delivery to its ultimate destination.
All except the last three invoices were paid by checks drawn by O'Day. The last three invoices, though addressed to O'Day, were paid by checks drawn by O.K. Distributors Company, a company owned by Kirchberg. Though this fact is advanced by O'Day as conflicting evidence on the issue of apparent agency between him and Kirchberg, we deem it to be of little significance in the face of notably strong evidence relating to the doctrine of apparent agency.
Arakelian never had dealings directly with O'Day. Each of the 55 orders were placed through Kirchberg.
In July or August, 1970, O'Day and Kirchberg parted company unbeknownst to Arakelian. O'Day did not notify Arakelian of this until Arakelian tried to collect the money from O'Day, well after the 20 lettuce transactions which are at issue here had taken place.
THE DEALINGS OF THE PARTIES IN THE 20 LETTUCE TRANSACTIONS AT ISSUE HERE
The factual record as to the 20 transactions occurring between November 6, 1970 and February 3, 1971, is sketchy. The only testimony is from Lillian Hodge, office manager of Arakelian, George Arakelian and Daniel K. Arakelian, his son. The documentary evidence is made up almost entirely of office records of Arakelian which include copies of the invoices and bills of lading pertaining to the 20 transactions.
According to the evidence, orders for the 20 lettuce shipments were placed with Arakelian over the telephone by Kirchberg;
O'Day denies having any connection with the 20 lettuce shipments. He contends that there is no evidence which would support dealings between him and Arakelian, nor any evidence that Kirchberg was his agent in these dealings. He argues that there is no evidence of delivery of the 20 shipments either to him or to Kirchberg. He concludes he has no contractual liability for any of the 20 lettuce transactions.
THE LEGAL ISSUES
The trial court ruled in favor of Arakelian and entered judgment against O'Day for $22,089.80 plus costs. In its judgment, the court found and concluded that Kirchberg had apparent authority to act on behalf of O'Day and bind him to the 20 lettuce sales on the basis of their dealings in the previous 55 transactions. It found that evidence of the previous transactions in which Kirchberg had acted as O'Day's agent constituted apparent authority for him to act in the 20 subsequent transactions. The court then found that the lettuce had been shipped by Arakelian to the cooler where delivery to O'Day was complete. It found that bills of lading confirming the shipments were prepared at the cooler and sent to Arakelian and that in due course an invoice for each shipment was prepared and sent to O'Day and not thereafter returned. The court concluded that each of the 20 oral transactions involved a contract for sale of goods within the Uniform Commercial Code (A.R.S. §§ 44-2305 and 44-2306A) and that the defense of the statute of frauds (A.R.S. § 44-2308) did not apply to these contracts because of the exceptions to the statute in both subsections B and C(3) of A.R.S. § 44-2308. Thus, the trial court found the contracts were enforceable against O'Day.
In our review of the record we find the evidence reasonably supports the judgment of the court and it is therefore affirmed.
The evidence pertaining to the formation of the contracts is clear. Telephone orders were received by Arakelian from Kirchberg. Although there is no evidence that Kirchberg had actual authority to bind these sales to O'Day, circumstances bringing into effect the doctrine of apparent authority are most certainly present. The principle is set forth in Restatement (Second) of Agency, § 8, as follows:
Apparent authority may be derived from a course of dealing, or from the fact that a number of acts similar to the ones in question were assented to by the principal. See 3 Am.Jur.2d, Agency, § 74.
The manifestations of O'Day in the prior 55 transactions clearly indicate a willingness by him to have Arakelian deal with Kirchberg until Arakelian had notice of termination of authority or until there had been such a lapse of time after the 55 transactions that Arakelian, in the exercise of ordinary prudence, would realize that the authority might no longer exist. As the facts reveal, Arakelian received no such notice and the period of time over which all of the transactions occurred was not so long as to make Arakelian's reliance thereon beyond the exercise of ordinary prudence. Thus, we hold the acts of Kirchberg in these transactions are binding upon O'Day.
We find the contracts at issue come within the subparagraph C(3) exception to contracts which must be in writing and therefore find it unnecessary to consider the subparagraph B exception. The relevant question here is whether the lettuce was "received and accepted" within the meaning of subparagraph C(3) by O'Day, for if it was, then the oral contracts have been performed by Arakelian and the defense of statute of frauds does not apply. In this case the transfer of the lettuce from the cooler to the motor carrier was the occasion at which the ownership in the lettuce passed from Arakelian to O'Day. We find support for this in State of Arizona v. Hendrix, 56 Ariz. 342, 107 P.2d 1078 (1940), in which books were sold to the State of Arizona, "f.o.b. cars at a central depot Chicago." The court held:
The factual link giving rise to enforceable lettuce contracts against O'Day is the apparent agency of Kirchberg. Once we have determined that Kirchberg had the power to bind O'Day to the lettuce purchases, we find that performance of the contracts by Arakelian is amply demonstrated by the delivery of the lettuce in accordance with each invoice. For these reasons we must sustain the judgment of the trial court against O'Day for the full contract price of each of the 20 lettuce shipments.
Finally, O'Day argues that it was entitled to summary judgment on its motion prior to trial. Since the motion was denied by the court, it became moot as a legal issue when the case was presented at trial. Navajo Freight Lines, Inc. v. Liberty Mutual Ins. Co., 12 Ariz.App. 424, 471 P.2d 309 (1970). We therefore find it unnecessary to review the issue on appeal.
OGG, P.J., and DONOFRIO, J., concur.