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11.6 Sellers Rights to Resell Goods Contract Sales and Lease Contracts: Performance and Breach

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541 S.W.2d 911 Page 1
260 Ark. 422, 541 S.W.2d 911, 20 UCC Rep.Serv. 110
(Cite as: 260 Ark. 422, 541 S.W.2d 911)

dict specifically stated that sale was not commer-

cially reasonable, issue of commercial reasonable-
Supreme Court of Arkansas. ness of resale of bulldozer was sufficiently raised at
Joe McMILLAN, Appellant, trial for determination of issue by the Supreme
v. Court. Ark.Stats. §§ 85-2-706, 85-2-706(1, 2).
MEUSER MATERIAL & EQUIPMENT CO.,
INC., Appellee. [2] Sales 343 384(7)
No. 76-21.
343 Sales
Sept. 27, 1976. 343VII Remedies of Seller
Rehearing Denied Nov. 1, 1976. 343VII(F) Actions for Damages
343k384 Damages
Seller brought action against buyer involving al- 343k384(7) k. Resale of Goods by
leged breach of contract for sale of bulldozer. The Seller. Most Cited Cases
Circuit Court, Washington County, Maupin Cum- Delay in excess of 14 months in resale of bulldozer
mings, J., rendered judgment in favor of seller, and by seller after alleged breach of contract for pur-
buyer appealed. The Supreme Court, Holt, J., held chase thereof by buyer was commercially unreason-
that issue of commercial reasonableness of resale of able. Ark.Stats. §§ 85-2-706, 85-2-706(1, 2).
bulldozer by seller was sufficiently raised at trial
for determination of issue on appeal; that long [3] Sales 343 383
delay in resale of bulldozer was commercially un-
reasonable; and that trial court did not abuse its dis- 343 Sales
cretion in granting seller leave to amend its com- 343VII Remedies of Seller
plaint on day before trial. 343VII(F) Actions for Damages
343k380 Evidence
Affirmed upon condition of remittitur. 343k383 k. Weight and Sufficiency.
Most Cited Cases
West Headnotes Resale of bulldozer by seller, in excess of 14
months after buyer's alleged breach of contract to
[1] Appeal and Error 30 179(1)
purchase same was of slight probative value as in-
30 Appeal and Error dication of market price at time of breach.
30V Presentation and Reservation in Lower Ark.Stats. § 85-2-706.
Court of Grounds of Review
[4] Appeal and Error 30 959(1)
30V(A) Issues and Questions in Lower Court
30k179 Sufficiency of Presentation of 30 Appeal and Error
Questions 30XVI Review
30k179(1) k. In General. Most Cited 30XVI(H) Discretion of Lower Court
Cases 30k959 Amended and Supplemental
In action involving alleged breach of contract for Pleadings
sale of bulldozer, wherein seller alleged in its com- 30k959(1) k. In General. Most Cited
plaint that it had made reasonable efforts to resell Cases
bulldozer, length of time between alleged breach
and resale were joined in issue by seller's direct Pleading 302 236(1)
testimony, and buyer in his motion for directed ver-

© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

541 S.W.2d 911 Page 2
260 Ark. 422, 541 S.W.2d 911, 20 UCC Rep.Serv. 110
(Cite as: 260 Ark. 422, 541 S.W.2d 911)

302 Pleading contract for sale of bulldozer because of asserted

302VI Amended and Supplemental Pleadings
and Repleader
302k233 Leave of Court to Amend
302k236 Discretion of Court
302k236(1) k. In General. Most Cited
Cases
Trial courts have broad discretion in matter of per-
mitting amendments to pleadings and ruling allow-
ing amendment will be sustained absent showing of
manifest abuse of discretion which materially pre-
judices complaining party. Ark.Stats. § 27-1160.
[5] Pleading 302 236(2)
302 Pleading
302VI Amended and Supplemental Pleadings
and Repleader
302k233 Leave of Court to Amend
302k236 Discretion of Court
302k236(2) k. Affected by Time of
Application in General. Most Cited Cases
In action against buyer involving alleged breach of
contract for sale of bulldozer, trial court did not ab-
use its discretion, nor were buyer's rights materially
prejudiced by virtue of fact that seller was permit-
ted on day before trial to amend his original com-
plaint, seeking recovery for full purchase price and
alleging unsuccessful reasonable efforts to resell
bulldozer, to instead allege that equipment had been
sold by seller and to seek recovery of damages
based on difference between contract price and re-
sale price. Ark.Stats. §§ 27-1160, 85-2-706,
85-2-709(1)(b), (2).
[6] Sales 343 384(7)
343 Sales
343VII Remedies of Seller
343VII(F) Actions for Damages
343k384 Damages
343k384(7) k. Resale of Goods by
Seller. Most Cited Cases
Measure of damages provided by statute on resale
of goods after breach by buyer was not inapplicable
to action against buyer involving alleged breach of
noncompliance by seller with notice requirements
where in fact, buyer received notice of seller's in-
tention to resell equipment. Ark.Stats. §§
85-1-201(26), 85-2-706, 85-2-706(3).
[7] Appeal and Error 30 1001(1)
30 Appeal and Error
30XVI Review
30XVI(I) Questions of Fact, Verdicts, and
Findings
30XVI(I)2 Verdicts
30k1001 Sufficiency of Evidence in
Support
30k1001(1) k. In General. Most
Cited Cases
On appeal, the Supreme Court is not concerned
with determining where preponderance of evidence
lies, but only whether there was any substantial
evidence to support verdict which, if supported by
any substantial evidence, must be affirmed on ap-
peal.
[8] Sales 343 88
343 Sales
343II Construction of Contract
343k88 k. Questions for Jury. Most Cited
Cases
In action against buyer involving alleged breach of
contract for sale of bulldozer, it was for trial court,
sitting as jury, to resolve conflicting versions as to
proposed delivery date of bulldozer.
[9] Sales 343 383
343 Sales
343VII Remedies of Seller
343VII(F) Actions for Damages
343k380 Evidence
343k383 k. Weight and Sufficiency.
Most Cited Cases
In action against buyer involving alleged breach of
contract for sale of bulldozer, there was substantial
evidence to support trial court's finding with regard

© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.

541 S.W.2d 911
260 Ark. 422, 541 S.W.2d 911, 20 UCC Rep.Serv. 110
(Cite as: 260 Ark. 422, 541 S.W.2d 911)
to proposed delivery date of bulldozer and con-
sequent finding that buyer, who stopped payment
on check prior to that date, was guilty of breach of
contract, and to support trial court's award of incid-
ental expenses incurred by seller in servicing bull-
dozer during 14 months from buyer's breach of con-
tract until seller resold equipment.
**912 *423 Crouch, Blair, Cypert & Waters by Mi-
chael H. Mashburn, Springdale, for appellant.
Davis, Douglas & Penix, Springdale, for appellee.
HOLT, Justice.
The trial court, sitting as a jury, found appellant
McMillan breached a contract to buy a bulldozer
from appellee Meuser and assessed $2,700 as ap-
pellee's damages ($2,595 actual and $105 incident-
al). From that judgment comes this appeal.
On December 13, 1973, the parties entered into
their agreement. The purchase price, including a
bellhousing, was $9,825, f.o.b. Springdale. Meuser
arranged transportation of the bulldozer to Greeley,
Colorado, the residence of appellant. On December
24, 1973, McMillan stopped payment on his check
asserting that since the agreed delivery date was
December 21, the delivery was past due. Appellee's
version is that the delivery date was January 1,
1974. After unsuccessful negotiations between the
parties or about two months after the appellant pur-
chaser stopped payment on his check, appellee
brought this action. On March 5, 1975, or about
fourteen months following the alleged breach of the
purchase contract, appellee sold the bulldozer for
$7,230 at a private sale. During this fourteen month
interval, the equipment*424 remained unsheltered,
although regularly serviced, on an Arkansas farm,
which was its situs when the sale contract was
made.
[1] We first consider appellant's assertion that the
resale by appellee did not constitute the good faith
and commercial reasonableness which is required
by Ark.Stat.Ann. s 85-2-706 (Add.1961). Appellee
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 3
responds that this defense was not properly raised
at trial. We must disagree with appellee. Appellee
alleged in its complaint that it had made reasonable
efforts to resell the bulldozer. The length of time
between the alleged breach and the resale were
joined in issue by appellee's direct testimony:
Q: Bill, at the end of a year what did you do with
the bulldozer? Did you decide you wanted to keep
it or did you decide to sell it?
A: No, after I kept the cat the twelve months for the
man and he didn't come get it and didn't accept it,
and this had all been filed and the paper work, and
what-have-you, on it, I turned around and started
seeking a buyer for it.
The time of the resale was again referred to,
without objection, in the cross-examination of the
appellee:
Q: I believe you also testified that you waited a
year after the 13th of December (1973), I guess, be-
fore you started trying to sell it again; is that right?
A: That is true.
Q: Okay. So from December 13, ‘73 until approx-
imately December of ‘74, you kept it?
A: I didn't try to sell it until after the first of the
year, this year. (1975)
Q: So from December 13th, 1973, until the first of
this year, you just let it sit?
A: I did.
Q: You didn't try to sell it for a whole year?
**913 A: Nope.
Furthermore, appellant in his motion for a directed
verdict specifically invoked s 85-2-706 and, inter
alia, stated ‘(T)hat sale is not commercially reason-
able and they cannot *425 rely on that for damages
in this case.’ As indicated, after review of the re-
cord, we are of the opinion that the issue of the
commercial reasonableness of the resale was suffi-
541 S.W.2d 911
260 Ark. 422, 541 S.W.2d 911, 20 UCC Rep.Serv. 110
(Cite as: 260 Ark. 422, 541 S.W.2d 911)
ciently raised at trial for our determination of the is-
sue.
[2] We turn now to appellant's contention that the
resale by appellee Meuser was not in accordance
with the requirements of s 85-2-706. The statute
provides in pertinent part:
(1) Under the conditions stated in Section 2-703 (s
85-2-703) on seller's remedies, the seller may resell
the goods concerned (f)or the undelivered balance
thereof. Where the resale is made in good faith and
in a commercially reasonable manner the seller may
recover the difference between the resale price and
the contract price together with any incidental dam-
ages allowed under the provisions of this Article
(Section 2-710 (s 85-2-710)), but less expenses
saved in consequence of the buyer's breach.
(2) Except as otherwise provided in subsection (3)
or unless otherwise agreed resale may be at public
or private sale including sale by way of one or more
contracts to sell or of identification to an existing
contract of the seller. Sale may be as a until or in
parcels and at any time and place and on any terms
but every aspect of the sale including the method,
manner, time, place, and terms must be commer-
cially reasonable. . . .
Thus, in order to recover the damages prescribed in
subsection (1), subsection (2) requires that every
aspect of the resale including the method, manner,
time, place, and terms must be commercially reas-
onable. The purpose of the resale provisions is dis-
cussed in Anderson, Uniform Commercial Code 2d,
s 2-706:19, at p. 385, where it is stated:
. . . the object of the resale is simply to determine
exactly the seller's damages. These damages are the
difference between the contract price and the mar-
ket price at the time and place when performance
should have been made by the buyer. The object of
the resale in such a case is to determine what the
market price in fact was. Unless the resale is made
at about the time when *426 performance was due
it will be of slight probative value, especially if the
goods are of a kind which fluctuate rapidly in
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 4
value, to show what the market price actually was
at the only time which is legally important.
In Comment 5 following s 85-2-706, the writers
make it clear that ‘what is such a reasonable time
depends upon the nature of the goods, the condi-
tions of the market and the other circumstances of
the case.’
In Bache & Co., Inc. v. International Controls
Corp., D.C., 339 F.Supp. 341 (1972), it was held, as
least as to the sale of securities, that the resale must
be as soon as practicable following notice of the
buyer's refusal to accept tender of the goods. There
a delay in excess of a month before resale was held
unreasonable. In Uganski v. Little Giant Crane &
Shovel, Inc., 35 Mich.App. 88, 192 N.W.2d 580
(1971), Uganski, the buyer, after his revocation of
acceptance, resold heavy equipment, a crane, some
two years and two months from the date of his no-
tice of revocation of acceptance. There the court
held his two year delay in reselling the crane was
commercially unreasonable.
[3] Here, even though we accord a liberal interpret-
ation to the U.C.C., s 85-1-106, which mandates
that remedies be so administered, we are of the
view that the resale of the bulldozer, in excess of
fourteen months after the alleged breach, will be of
‘slight probative value’ as an indication of the mar-
ket price at the time of the breach. Appellee Meuser
is in the construction business and ‘deal(s) in bull-
dozers.’ Meuser himself testified that he was
‘aware of the state of the economy in the bulldozer
market’ and since the time of the alleged breach in
December, 1973, the market for bulldozers had de-
clined due to a recession in **914 the construction
industry and high fuel prices. As indicated, he testi-
fied he made no effort to resell the goods for in ex-
cess of a year.
[4][5] Appellant asserts error in the trial court's
granting appellee leave to amended his complaint
on the day before the trial. Appellee's original com-
plaint sought recovery for the full purchase price
under Ark.Stat.Ann. s 85-2-709(1)(b) (Add.1961),
541 S.W.2d 911
260 Ark. 422, 541 S.W.2d 911, 20 UCC Rep.Serv. 110
(Cite as: 260 Ark. 422, 541 S.W.2d 911)
alleging unsuccessful reasonable efforts to resell
the bulldozer. The permitted amendment was to the
effect *427 that the equipment had been sold by ap-
pellee and it sought recovery of damages based on
the difference between the contract price and the re-
sale price. Appellant claims that such an amend-
ment made the day before the original trial date was
prejudicial on the grounds that it was too late and
changed the factual issue before the court. It is
well settled that trial courts have broad discretion in
the matter of permitting amendments to pleadings
and the ruling allowing an amendment will be sus-
tained absent a showing of manifest abuse of dis-
cretion which materially prejudices the complaining
party. Ark.Stat.Ann. s 27-1160 (Supp.1975). Bur-
ton v. Rice, 234 Ark. 354, 352 S.W.2d 568 (1962);
and Hogue v. Jennings, 252 Ark. 1009, 481 S.W.2d
752 (1972). Further, s 85-2-709(2), in pertinent
part, provides ‘(T)he net proceeds of any such re-
sale must be credited to the buyer.’ In the case at
bar we find no abuse of the trial court's discretion
nor that appellant's rights were materially preju-
diced.
[6] Neither can we agree with appellant's conten-
tion that the measure of damages provided by s
85-2-706 on resale of goods after breach by the
buyer is not applicable here because of asserted
noncompliance by appellee with the notice require-
ments. Subsection (3) of that statute requires
‘(W)here the resale is at private sale the seller must
give the buyer reasonable notification of his inten-
tion to resell.’ s 85-1-201(26) in pertinent part reads
‘(A) person ‘receives' a notice or notification when
(a) it comes to his attention.’ Appellee's complaint
alleged it had made reasonable efforts to resell the
goods. In answer to appellant's interrogatories, be-
fore the resale, appellee fully described his efforts
to resell the bulldozer. Certainly, it must be said
that the appellant received notice of appellee's in-
tention to resell the equipment.
[7][8][9] Appellant also claims error in the trial
court's finding that cancellation of the contract was
unjustified. Appellant asserts his cancellation of the
© 2010 Thomson Reuters. No Claim to Orig. US Gov. Works.
Page 5
contract was valid under Ark.Stat.Ann. s 85-2-504
(Add.1961). Appellant's argument turns upon a dis-
puted issue of fact as to the actual date of delivery.
The appellee adduced evidence that the delivery
date was January 1, 1974. This was disputed by ap-
pellant whose evidence was to the effect that the
delivery date was December 21, 1973. On appeal
we are not concerned with determining where the
preponderance of the evidence lies, *428 but only
whether there was any substantial evidence to sup-
port the verdict which, if supported by any substan-
tial evidence, must be affirmed on appeal. Nuckols
v. Flynn, 228 Ark. 1106, 312 S.W.2d 444 (1958). In
the case at bar, it was for the trial court, sitting as a
jury, to resolve the conflicting versions as to the de-
livery date. There is ample substantial evidence to
support the court's finding.
The court's award of $105 for incidental expenses
incurred by appellee in servicing the bulldozer dur-
ing the fourteen months from appellant's breach of
the contract until appellee sold the equipment is
supported by substantial evidence. In fact, ap-
pellee's testimony as to the necessity and the bene-
ficial results of the servicing and maintenance of
the equipment appears undisputed. As to the resale
of the bulldozer, the appellee, admittedly, is in the
construction business, sells bulldozer and was
aware of the declining market. As previously indic-
ated, as a matter of law, the long delay in the resale
of the bulldozer by the appellee is commercially
unreasonable. Consequently, the judgment is af-
firmed upon the condition that the award of $2,595
for actual damages is offered as a remittitur within
**915 the next seventeen days. Otherwise, the
judgment is reversed and remanded.
Affirmed upon condition of remittitur.
FOGLEMAN, JONES and BYRD, JJ., concur.
Ark. 1976.
McMillan v. Meuser Material & Equipment Co.,
Inc.
260 Ark. 422, 541 S.W.2d 911, 20 UCC Rep.Serv.
110
541 S.W.2d 911 Page 6
260 Ark. 422, 541 S.W.2d 911, 20 UCC Rep.Serv. 110
(Cite as: 260 Ark. 422, 541 S.W.2d 911)

END OF DOCUMENT

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