Spanish Fork Packing Co. v. House of Fine Meats, Inc.

CALLISTER, Chief Justice. Plaintiff initiated this action to recover a sum defendant owed on an open account for the purchase of meat and meat products. Plaintiff asserted in its pleadings that the purchases were evidenced by seven invoices attached to the complaint; that the invoices provided that plaintiff was entitled to a reasonable attorney’s fee, and that a reasonable fee was $1,070.50. The trial court granted plaintiff partial summary judgment for the amount defendant conceded that it owed on the open account. This issue of whether defendant was contractually obligated to pay attorney’s fees was reserved for trial. Upon trial before the court, judgment was rendered decreeing that plaintiff’s claim for attorney’s fees was denied. Plaintiff appeals therefrom. Defendant was incorporated in August of 1971, previously it had been operated as a sole proprietorship by its president, Donald K. Murphey, who had previously purchased meat from plaintiff. During a time period from October 28 to November 29, 1971, defendant made purchases of meat [314] on seven occasions; this action was for the purpose of collecting the unpaid balance. Plaintiff’s president, Meyrick, testified that its customary way of conducting transactions was to have one of its salesmen call on a customer and take an order for meat. The meat was subsequently delivered, at which time the customer signed an invoice. The agent of plaintiff would leave a duplicate with the customer and return the original to plaintiff. Plaintiff’s president testified that he had never discussed with any representative of defendant the matters of payment of counsel fees, interest, or the time in which plaintiff expected the bill to he paid. He testified that the terms and conditions of the purchase are handled by salesmen and that he had no knowledge of what the salesmen said at the time they took the order. The president of defendant, Murphey, testified that he had never read the invoice. He testified that most of the meat was ordered by him or defendant’s secretary, Hor-lacher, by telephoning Gary Jensen, one of plaintiff’s salesmen. Defendant’s president testified that he did not recall discussing any terms or conditions of the sale, including interest rates or attorney fees. He •stated that he had never authorized any agent or employee to agree to pay attorney’s fees or interest on unpaid accounts. He further testified that when plaintiff’s drivers delivered the meat, they did not request anyone in particular to sign the invoice and that whoever was closest to the door signed the invoice acknowledging receipt of the meat. Based on the foregoing, the trial court found that at no time before the sale or delivery of any meat was the matter of attorney fees or interest raised or discussed by either party; that upon delivery of the meat, nothing was said by plaintiff’s agents or defendant’s employees regarding attorney fees or interest; that there was no evidence that any employee had actual or implied authority to bind defendant to pay attorney fees or interest; and that the signatures or initials on the invoices were intended to be nothing more than an acknowledgment of the receipt of the products delivered. The invoices contained in small print, the following statement: Purchaser agrees to pay for the below merchandise on the First Monday following date of purchase. A finance Charge of 1% per month (Annual Percentage Rate 12%) will be made on all past due balances. Purchaser agrees to pay attorney fees, legal costs, and all expenses involved in the event legal action is necessary for the collection of this invoice On appeal, plaintiff characterizes these invoices as contracts between the parties and asserts that defendant is bound thereby to pay reasonable attorney fees. Under [315] plaintiff’s theory there was no contract and no obligation upon defendant’s part to pay even after delivery, until the moment when by initial or signature defendant’s employees expressed defendant’s assent to be bound by the terms and conditions expressed in the invoice. Plaintiff contends that defendant by its conduct ratified the alleged unauthorized conduct of defendant’s employees of entering into contracts on defendant’s behalf. Plaintiff urges that it was incumbent upon defendant to repudiate promptly the acts of its employees, and its silence constituted a ratification. The issues of the instant action were raised in the recent case of B & R Supply Company v. Bringhurst.1 This court stated that it was appropriate to apply basic principles of contract law, namely, the creation of a contract requires a meeting of the minds of the parties; and the burden of so proving is upon the party who claims there was a contract. This court observed that the evidence indicated that the defendant had never authorized any of the persons who signed the invoices to contract on its behalf other than as an open account. This court stated: There is no affirmative showing to the contrary, nor that any contractual terms or conditions on the invoices were called to their attention, nor that they were aware of them, nor that they did anything other than to initial the invoices acknowledging the receipt of the merchandise. Under those circumstances we can see no basis for a conclusion that the defendant entered a contract to pay attorney’s fees. This court further observed in footnote 4 at page 1218 of S03 P.2d that if one ordered merchandise, which was agreed to be delivered for a requested price, that would be the extent of both the contract and the purchaser’s obligation. If upon receipt of the merchandise, the invoice or delivery slip, the purchaser signed, purported to impose further conditions or convenants, a serious question would arise as to the question of whether there was any consideration for such further obligation. In the instant action, the factual issue before the trial court was, in effect, what were the terms and conditions of the contract between the parties? Based upon substantial competent evidence, the trial court rejected the invoice as evidencing the terms and conditions mutually agreed upon by the parties. The judgment of the trial court is affirmed. Costs are awarded to defendant. ELLETT, CROCKETT and TUCK-ETT, JJ., concur. Footnotes [1] 28 Utah 2d 442, 503 P.2d 1216, 1217 (1972).