This is an action for breach of contract. The case was tried to
the court and judgment was entered for the plaintiff. Both
parties appeal. The defendant asserts that the trial court erred
in its finding that he breached the contract. Plaintiff contests
the amount of the judgment.
Plaintiff is a buyer and distributor of popcorn. His business
office is in Garden City. He operates a plant at Stratford,
Texas. Defendant is engaged in farming and it appears that he is
the operator of land in Thomas County. The written contract that
is the subject of this lawsuit was entered into by the parties in
It was agreed by the parties that in 1973 defendant would raise
380 acres of popcorn and the plaintiff would buy the crop.
Plaintiff was to provide seed popcorn at a stated price.
Plaintiff was to purchase the popcorn crop, shelled and delivered
by defendant to plaintiff's plant at Stratford, Texas, at a price
of $4.75 per hundredweight. The popcorn was to be delivered by
defendant upon plaintiff's order. Plaintiff was to order delivery
of one-third of the crop by March 30, 1974, one-third by June 30,
1974, and the balance by September 30, 1974. The contract
included other terms that dealt with the quality of the popcorn
to be delivered, payments to be made by plaintiff to defendant
storage and transportation, interest to be paid by plaintiff on
the popcorn held in storage by defendant from the time of harvest
to the time of delivery, and other matters. The particular
provisions of the contract that give rise to this litigation are
"12. Baker agrees to pay Grower for the above corn
when delivered and in addition thereto, agrees to pay
storage fees, in and out charges, transportation
charges, and the accrued interest on each bushel or
cwt. of corn as delivered.
"13. It is further understood and agreed that if
Baker, for any reason, fails, neglects, or refuses to
pay Grower for said popcorn along with the heretofore
specified charges at the time of delivery, then, and
in that event, the remaining undelivered popcorn in
Grower's possession shall, at Grower's option, be
released by Baker for Grower to retain or dispose of
as he sees fit."
The requirement for payment on delivery was made a part of the
contract at defendant's request.
Some time in January, 1974, plaintiff telephoned defendant and
asked that he begin delivery to the Stratford plant. The first
truckload was delivered at about 5:00 P.M. on Saturday, February
2, by defendant and his employee, Boucher. Plaintiff's plant
manager, Martin, gave a weight ticket to defendant. A second
truckload was delivered on Monday, February 4, by Boucher. Martin
gave a weight ticket to Boucher. On neither occasion did
defendant or Boucher ask Martin for payment for the popcorn
delivered and Martin did not offer to pay.
During the week of February 4, Martin telephoned defendant and
asked when further deliveries would be made. Later that same
week, plaintiff telephoned defendant and asked about the delay.
Defendant told Martin and plaintiff that he was having equipment
problems and that Boucher had been ill. In neither of the
telephone conversations was there any discussion of payment. On
Monday, February 11, defendant sent a written notice of
termination of the contract claiming that plaintiff had breached
the contract by failing to pay on delivery as required by
paragraphs 12 and 13. Upon receipt of the notice of termination
on or within a few days following February 12, plaintiff sent
checks to defendant in payment for the two loads that had been
delivered. After sending the notice of termination, defendant
entered into a contract with a third party for the sale of the
balance of the 1973 popcorn at a price of $8.00 per
hundredweight. This contract was performed by defendant's
delivery of 1,600,000 pounds of popcorn.
Martin testified that he made no payments for popcorn at
Stratford. The practice was that copies of weight tickets were
sent to plaintiff's Garden City office where checks were written
and mailed. At the time of defendant's two deliveries, Martin
would accumulate weight tickets and send them to Garden City so
that they would arrive on Monday mornings. He did not know when
he had sent the weight tickets for the February 2 and 4
Defendant testified that at the time he made his contract to
sell the balance of his 1973 crop to the third party, popcorn was
selling for $8.00 and the commodity market price was between
$7.00 and $7.25. He further testified that after the 1974 harvest
popcorn was selling for around $14.00. Plaintiff testified that
he had to pay $10.30 for some replacement popcorn. The trial
court awarded damages of $52,000. This amount represents the
value of 1,600,000 pounds at $3.25 per hundredweight, the
difference between the parties' contract price of $4.75 and an
The trial court's findings were in part as follows:
"2. That the defendant knew or should have known
that the plaintiff's business office was located in
Garden City, Kansas, and that in the normal course of
events payment would be made from that office. That
Garden City, Kansas, is on a direct route from the
plaintiff's grain receiving facilities in Stratford,
Texas, to the defendant's farm and that nothing
prevented the defendant or his agents, servants and
employees from stopping off on their way back from
delivering the grain and requesting payment or
obtaining payment from plaintiff's business office in
Garden City, Kansas. That the evidence discolses
[sic] that any request for payment would have been
promptly handled and that the plaintiff had ample
funds with which to make the payment and the only
reason payment was not made was the failure of the
defendant to request it.
"3. That between the time that the contract for the
production of the popcorn was entered into and the
time for delivery the price of popcorn had risen
sharply and that it was greatly to the defendant's
financial advantage if he could in some way get out
of his contract for the sale of popcorn.
. . . .
"The Court concludes that the parties are under a
duty to deal fairly with each other in good faith and
that the defendant breached this duty by declaring a
termination of the contract upon a technical pretense
and that therefore as a matter of law the plaintiff
is entitled to recover the damages suffered.
"The Court further concludes that to interpret the
contract to require immediate payment ...