No. 70-005. (Supreme Court No. 22667.)

470 P.2d 78 (1970)

R. Courtney HANSON, Plaintiff in Error, v. Lisbeth K. LINLEY, Defendant in Error.

Colorado Court of Appeals, Div. I.

Rehearing Denied February 26, 1970.

Certiorari Granted May 12, 1970.

Attorney(s) appearing for the Case

Robert W. Caddes, Denver, for plaintiff in error.

Tilly & Graves, Denver, for defendant in error.

Selected for Official Publication.

COYTE, Judge.

This case was originally filed in the Supreme Court of the State of Colorado and subsequently transferred to the Court of Appeals under authority vested in the Supreme Court.

Around the middle of November, 1963, plaintiff in error, plaintiff below, entered into a contract with defendant in error, defendant below, for the sale of plaintiff's ranch to defendant.

Earlier, defendant had looked at the ranch, and at a subsequent meeting, plaintiff had shown defendant five horses that he had for sale. He testified that he could put the ranch sale together, but that he would have to sell these five head of horses as he would need the money for taxes around the first of April.

At the time, he had previously made arrangements to sell four of these horses through an auction sale shortly after the first of the year. He pointed out the individual mares to defendant and told her the price of each animal; total price being $5,500. Plaintiff had prepared papers on the mares for the auction. Defendant had looked these papers over, and handed them back to plaintiff. At this point, plaintiff testified that defendant stated, "I'll take them." When defendant agreed to buy the horses, plaintiff gave the papers back to defendant, including bills of sale in blank. Defendant, an experienced horsewoman having raised horses for both breeding and racing and being familiar with transfer papers, accepted the papers and claims to have thrown them aside when she got home. Later the papers were found in her accountant's office by her attorneys.

Prior to the closing of the ranch sale, defendant stated that she wanted to bring some of her horses to the ranch, and the next day she sent a number of them there.

Discussion was had as to the care of defendant's horses, and defendant agreed to pay for help if plaintiff could get someone to help feed the horses until defendant could get a foreman. Defendant told plaintiff that she needed some hay, and plaintiff showed her the hay he had in the barn loft, for which he had just paid $1,000. Some had been used, but he told defendant that she could have what was left for $600. Defendant told plaintiff that she would take the hay, and also agreed to pay for the butane that was left in the tank.

The ranch sale was closed on December 19, and the five horses were left on the ranch when plaintiff moved. At this time, defendant had exclusive possession and control of the ranch. She had hired a foreman, and he understood that the five horses belonged to her. The horses were on the ranch; the foreman cared for them. He discussed breeding plans with defendant. The foreman, during December, thought he could trade one of the horses that didn't fit into defendant's future plans to a neighbor. This trade didn't materialize for reasons other than the question of ownership on the part of defendant.

Bernard Engler, attorney for plaintiff, who closed the ranch sale, testified that after the closing Mr. Hanson and Mrs. Linley had a separate closing on the horses, hay, and other items. They stayed in his office and went over a memo that Mr. Hanson had, explaining the charges for feeding the horses, the amount of hay, the purchase of the horses, and a discussion as to when the money would be paid to plaintiff; and agreed that payment would be made some time after January 1, but prior to April 1.

Defendant had bought the ranch without the knowledge of her husband. When he heard of the purchase, he had made defendant choose between him and her ranch venture. They went to their attorneys and told them to dispose of the ranch.

When plaintiff learned of the ranch being offered for sale, he wrote to defendant on January 4, 1964, and advised her that, while the agreement was that she should pay for the horses, hay, butane, and labor over the next few months, since she was selling he felt the entire amount was now due and payable. Defendant, through her attorneys, answered the letter on January 20, 1964, to the effect that defendant hadn't made up her mind as to whether or not she would buy the horses. It was admitted in the letter that she owed for the hay, butane, and wages paid by plaintiff for defendant.

Plaintiff filed suit demanding payment for the horses, hay, butane, and labor. Defendant answered, generally denying the allegations of plaintiff's complaint, and alleged affirmatively that if there were an agreement, it was void as not being in compliance with the Statute of Frauds. Defendant also filed a counterclaim alleging that she had been an involuntary bailee of said horses and demanded that she be reimbursed the cost of feeding and caring for said horses.

The first trial was to the court. It found that there was no contract for the sale of the horses; that defendant owed for the hay, butane, and labor bill; but that defendant was an involuntary bailee and that plaintiff owed defendant for the cost of caring for the horses.

Motion for new trial was filed and granted. The case was subsequently set for trial and retried. It is this trial and the results thereof with which we are herein concerned.

At the conclusion of the trial, defendant's attorney moved that plaintiff's complaint be dismissed and stated, "* * * the oral contract for the purchase and sale of five horses is void as being within the Statute of Frauds." The court granted the motion and stated that he was granting the motion as to the horses on purely technical grounds and further stated, "It is a harsh statute, that Statute of Frauds, Mr. Hanson. But I believe if you had taken $10 down, the outcome would have been different."

The court then stated that it found the contract to be divisible, and since there had been full performance by plaintiff and acceptance by defendant on the other items, the court entered judgment in favor of plaintiff and against defendant for the hay, butane, and labor. On the counterclaim, the court held that since there was no sale, that defendant had been an involuntary bailee since September 9, 1964, the date that defendant had filed her answer denying that she was the owner of the horses, and claiming to be an involuntary bailee. The court entered judgment in favor of defendant and against plaintiff for the cost of feed and care for said horses since that date.

The court found by ruling on the motion to dismiss that there was an oral contract for the sale and purchase of the horses and that it violated the Statute of Frauds. The plaintiff testified fully as to the sale of the horses to defendant, and defendant generally denied that there was a contract. Defendant implied in her testimony that there were conditions precedent that had to occur, but which never did occur, before she could purchase the horses. However, there was no evidence to substantiate this position. There is ample testimony in the record to support the finding that there was an oral contract for the sale of the horses by plaintiff to defendant, and we agree with this finding.

Since there was an oral agreement for the sale and purchase of the five horses, is it void as not complying with the Statute of Frauds?

We hold that the trial court erred in holding the contract void.

The Statute, 59-1-12(2), C.R.S. (1963)

"(a) Every contract for the sale of any goods, chattels or things in action, for the price of fifty dollars or more shall be void unless: (b) a note or memorandum of such contract be made in writing, and be subscribed by the parties to be charged therewith; or (c) unless the buyer shall accept and receive part of such goods, or the evidence of some of them, of such things in action; or (d) unless the buyer, at the time, shall pay some part of the purchase money."

There was no memorandum and there was no payment; therefore, if the agreement is enforceable, it is because there was an acceptance and receipt.

The case of Butscher v. Yoxall, 23 Colo.App. 354, 129 P. 519 holds that livestock comes within the statute as being goods or chattels.

37 C.J.S. Statute of Frauds § 148, p. 633, states what constitutes acceptance and receipt:

"The acceptance required by the statute of frauds is some act or conduct by the buyer manifesting his assent to becoming the owner of the specific goods; the receipt required by the statute is the taking by the buyer of actual control of the goods."

Here when the defendant closed the sale on the ranch, the five head of horses were left on the ranch. At this time, defendant had exclusive possession of the ranch, and when she took possession of the ranch she took possession of the horses.

Her conduct after she took possession was that of owner. Her foreman believed that the horses belonged to her. He looked after the horses. He fed the horses. They discussed a breeding program for the mares. They discussed a sale of one of the animals.

The acceptance and receipt relate back so as to validate the sale or contract as of the date when made. Schaefer v. United States Bank and Trust Co. of California, 104 Cal.App. 635, 286 P. 723; 37 C.J.S. Statute of Frauds § 147, p. 633, Time and Acceptance of Receipt. Once an acceptance and receipt satisfying the Statute of Frauds occurs, a subsequent rejection of the goods will not invalidate the contract. 37 C.J.S. Statute of Frauds § 146, p. 633.

Accordingly, we hold that the evidence given at the trial was sufficient as a matter of law to remove the sale from the cloak of the Statute of Frauds.

Even if a contract for the sale of the horses, hay, and butane was not entered into prior to the closing of the ranch sale, then there can be no argument with the finding that a contract for the sale of these items was entered into immediately following the closing of the ranch sale. If the contract was entered into at that time, it was not a divisible contract, but a total contract for the purchase of the horses, hay, butane, and the payment of the labor bill. The evidence is undisputed that defendant used the butane, and fed the hay to her horses; and while there is no evidence of a memorandum in writing, or a part payment, the contract would be out from under the cloak of the Statute of Frauds, in that there was acceptance and receipt of at least part of the goods; that is the hay and the butane gas, as well as the horses. Howse v. Crumb, 143 Colo. 90, 352 P.2d 285.

Since there was a binding contract for the sale of the horses by plaintiff to defendant, and defendant had possession of the horses as owner and not as involuntary bailee, the judgment against plaintiff for defendant's care of the horses was in error.

Accordingly, the judgment against defendant for the hay, butane, and labor is affirmed. It is ordered that judgment also be entered in favor of plaintiff and against defendant for an additional $5,500, the selling price of the horses; that the judgment in favor of defendant against plaintiff be vacated, and that defendant's counterclaim be dismissed; and that plaintiff recover his costs incurred and interest from April 1, 1964, on the amount of his total judgment.

SILVERSTEIN, C. J., and PIERCE, J., concur.


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