Caseflicks

Court of Appeals of North Carolina • 1994

Buffaloe v. Hart

441 S.E.2d 172 | 114 N.C. App. 52 | 1994 N.C. App. LEXIS 267

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Takeaway

In short, this case shows that an unsigned buyer's check does not itself satisfy the UCC statute of frauds, but an oral goods contract may still be enforceable when the parties' conduct supports jury findings of accepted goods and accepted partial payment.

Background

Homer Buffaloe, a tobacco farmer, orally agreed to buy five tobacco barns from Patricia and Lowell Hart for $20,000, payable in four annual installments of $5,000. Buffaloe already possessed the barns under an earlier rental arrangement, but after the sale agreement he reimbursed the Harts for insurance, paid for repairs, advertised the barns for sale, sought an auctioneer, and accepted deposits from prospective purchasers.

In October 1989, Buffaloe delivered Mrs. Hart a $5,000 check bearing the notation that it was for the five barns. Mrs. Hart offered a receipt, but Buffaloe said the check would serve as the receipt. The Harts kept the check for several days, then tore it up and returned it, saying they no longer wished to sell because they had sold the barns to someone else. The Harts ultimately sold the barns to the same people who had been negotiating with Buffaloe.

Buffaloe sued for breach of contract. The Harts denied that an enforceable contract existed and invoked the UCC statute of frauds. The jury found a contract, found that Buffaloe accepted the barns and that the Harts accepted payment, found a breach, and awarded Buffaloe $21,000. The trial court denied the Harts' motions for directed verdict and judgment notwithstanding the verdict, and they appealed.

Issues

Issue #1

Whether Buffaloe's personal check, standing alone, satisfied the UCC statute of frauds for a sale of goods exceeding $500.

Holding

No. The check did not satisfy N.C. Gen. Stat. § 25-2-201(1) because it was not signed by the Harts, the parties against whom enforcement was sought.

Reasoning

The tobacco barns were goods under UCC § 2-105, and their $20,000 price brought the transaction within the statute of frauds. Section 25-2-201(1) requires a writing indicating a sales contract, signed by the party to be charged, and stating a quantity.

Although Buffaloe's check identified five barns, named Patricia Hart as payee, stated $5,000, and bore Buffaloe's signature, it contained no signature or endorsement by either defendant. Mr. Hart was not even named on the check. Because the sellers did not sign the alleged memorandum, the check itself could not make the oral agreement enforceable under § 25-2-201(1).

Issue #2

Whether substantial evidence supported the jury's finding that the parties' conduct brought the oral sale contract within the part-performance exception to the UCC statute of frauds.

Holding

Yes. The evidence permitted the jury to find that Buffaloe accepted the barns and that the Harts accepted his partial payment, making the agreement enforceable under § 25-2-201(3)(c).

Reasoning

Section 25-2-201(3)(c) permits enforcement of an otherwise valid oral contract for goods that have been received and accepted, or for which payment has been made and accepted. Acceptance of goods or payment may be shown by conduct, and whether acceptance occurred is ordinarily a factual question for the jury.

Viewed in Buffaloe's favor, the evidence showed more than continued possession under the earlier rental arrangement. After the sale agreement, he reimbursed the Harts for insurance that he understood was his responsibility only as owner, paid for repairs, represented to others that he had purchased the barns, advertised them for sale, hired an auctioneer's assistance, and took deposits from prospective purchasers. This was substantial evidence that he accepted the barns under the purchase agreement.

There was also substantial evidence that the Harts accepted Buffaloe's first installment. Buffaloe personally delivered the check with a notation identifying it as payment for the five barns; Mrs. Hart offered him a receipt; and the Harts retained the check from about October 22 or 23 until it was mailed back on October 26. A reasonable jury could treat this retention as acceptance of payment, even though the Harts later tore up and returned the check.

Because reasonable jurors could find both acceptance of the goods and acceptance of partial payment, the trial court properly denied the Harts' motions for directed verdict and judgment notwithstanding the verdict. The jury's verdict established an enforceable oral contract and the Harts' breach of it.