A formal hearing was held pursuant to notice by Stephen F. Dean, Administrative Law Judge of the Division of Administrative Hearings, in Tallahassee, Florida on January 9, 1997.
Whether the Respondent owes the Petitioner money for watermelons allegedly purchased from Petitioner. The factual and legal issue is whether Respondent purchased the melons or acted as a broker/agent for Petitioner and attempted to sell the melons for Petitioner.
During the summer of 1996, the Petitioner entered into an agreement with the Respondent regarding Petitioner’s watermelons. The Petitioner alleges that the Respondent purchased the melons, and that he did not receive full payment for them. The Petitioner filed a claim with the Department of Agriculture, which referred the case to the Division of Administrative Hearings. The case was set for hearing, and heard as noticed.
The parties were afforded the opportunity to file post hearing briefs, but did not do so.
During the 1996 season, the Petitioner, who is a labor contractor and farmer, grew watermelons.
The Respondent, who is a building contractor and watermelon broker, was “handling” watermelons in the area around Archer, Florida.
The Respondent was represented by Tony Tharp, brother of the Respondent, who spoke with the Petitioner. As a result of an oral agreement reached between Tony Tharp and Petitioner, the watermelons which Petitioner had grown were picked by persons working for Tharp on June 20, 21, and 23, 1996.
There was no written contract or memorandum regarding the agreement of the parties.
Petitioner stated that he wanted to get his melons picked, but that he was busy with his crew and could not pick
them, and the melons needed to be picked because they were past their prime. Tony Tharp agreed to “move them” for Petitioner.
One truck load was picked and loaded on June 20; three truck loads were picked and loaded on June 21, and two truck loads were picked and loaded on June 23.
Tharp paid Petitioner $700 which was termed an “advance” by Respondent, and considered a “down payment” by Petitioner, who understood he would receive the remainder of the money due him in approximately seven days.
The trucking was arranged for by Tharp, and the Respondent bore the cost of picking and freight initially, and the merchants who received the melons paid the shipping for the melons they accepted.
The melons were shipped to markets in several states.
The first load was refused by the intended recipient, and after several attempts to dispose of the melons, they were sold at salvage for $180.
The second load was also refused, and could not be salvaged. Pictures of this load were introduced where it was unloaded in Marianna, Florida. The remaining loads of watermelons were accepted, and $4,876.43 received for them. The costs of loading the two loads which were refused was $1,149.75. The freight costs on these two loads was $3,901.83.
The Petitioner testified that the Tharp agreed to purchase the melons in the field, and, therefore, he is entitled to the purchase price for the melons.
Dennis Tharp stated he was a broker, and that the Petitioner assumed the risk if the melons could not be sold. Dennis Tharp stated that he had lost the costs of picking,
$1,149.75, and transporting, $3,901.83, the two loads of melons offset by the salvage value of $180.00, resulted in a total loss of $4,871.58.
When the costs of picking the last four loads,
$1,591.20, and the $700.00 advance on the sale is deducted from the proceeds of the sale of the last four loads, $4,876.43, the net profit on the last four loads is $2,585.23. When the profits from the sale of the last four loads is deducted from the loses on the first two loads, there is a net loss of $2,286.35. This net loss was absorbed by the Respondent.
Several of the people who were in the field testified regarding the state of the melons being picked. The melons were past their prime for picking. On the last load, the pickers refused to pick any more melons without additional compensation because so many melons were being rejected at the truck. Petitioner, who was present, concurred in this extraordinary expense.
Generally, melons are not sold because the market drops and the merchants refuse melons being shipped to them. In this
case, the first melons were rejected, and the last loads were accepted.
The quality of a watermelon cannot be determined without cutting it open which destroys its merchantability. Watermelon graders attempt to judge the quality of melons from the external characteristics; however, purchasers cut open samples upon receipt to judge their quality.
The Respondent notified the Petitioner by letter dated July 11, 1996 that the first two loads had been rejected; that he had salvaged those he could; and that the costs related to these two loads exceeded the profits due Petitioner on the last four loads.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter presented herein, pursuant to Section 120.57(1), Florida Statutes (Supp. 1996).
The burden of proof in this case is on the Petitioner.
There are several different issues raised by this case. The first is whether the contract between buyer and seller is enforceable. Section 672.201, Florida Statutes, provides:
Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom
enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.
Although it was held in J.R. Sales, Inc. v. Dicks, 521 So.2d. 366 (1988), that a oral contract for the sale of watermelons was not prohibited by this section, the facts in J.R. Sales, supra., revealed that neither party disputed that the buyer harvested and sold a specified quantity of seller’s melons; and seller did not allege that buyer’s conduct was unauthorized, but only that he was underpaid. Subsection (3)(b) of Section 672.201, Florida Statutes, provides that if the party against whom enforcement is sought admits in his pleadings or testimony that a contract for sale was made, a contract not meeting the provisions of Subsection (1), cited above, is enforceable.
In the instant case, the Respondent has not admitted in pleadings or in his testimony that he purchased the melons. Those writings do not reflect whether the melons were purchased or on consignment. One cannot determine from the extrinsic
evidence whether the agreement of the parties was for purchase in the field or on consignment. Petitioner seeks to have the trier of fact fill in terms of the agreement between the parties. This is precluded by Section 672.201(1), Florida Statutes. Therefore, under Section 672.201, Florida Statutes, the contract would be unenforceable against Respondent. However, even if one assumes
there is an enforceable contract, there are added reasons why Petitioner cannot recover.
The basis for refusal of the melons was their condition when they reached their destination. It is important to note that Petitioner was aware that picking the melons should have been commenced earlier. It is noted that it was the first two loads of melons which were refused. When the market falls and merchants seek a basis to refuse melons, it generally impacts the last shipments of melons. In this case the later shipments were accepted. The testimony of the Respondent that the melons were refused because they were not of good quality is accepted as accurate.
If one assumes that the melons were purchased in the field, the facts reveal that Petitioner knew that Respondent was not purchasing the melons for his own use, and was aware the melons were for resale. Section 672.314, Florida Statutes, provides:
Unless excluded or modified (s. 672.316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. . . .
Goods to be merchantable must be at least such as:
* * * * *
Are fit for the ordinary purposes for which such goods are used . . .
It is generally recognized that there is an implied warranty of fitness where food is sold for human consumption.
See Valdosta Milling Co. v. Garretson, C.A., 217 F.2d 625 (1955). The melons had to be honestly resaleable in the normal course of business because they were sold as watermelons for human consumption.
Section 672.316, Florida Statutes, provides certain limitations upon implied warrantees, as follows:
Subject to subsection (3), to excluded or modify the implied warranty of merchantability or any part of it, the language must mention merchantability . . . be conspicuous; and, . . . be by a writing .
. . [.]
Notwithstanding subsection (2):
When a buyer before entering into the contract has examined the goods or the sample or model as fully as he desired or has refused to examine the goods, there is no implied warranty with regard to defects which an examination out in the circumstances to have revealed to him; and
An implied warranty can also be excluded or modified by a course of dealing or course of performance or usage of trade .
. .
Testimony was received that the quality of a watermelon cannot be determined without cutting it open and examining it. Of course, this destroys the merchantability of the product. It has been held that where an agricultural product (seed) was sold by name, it raised the implied warrantee that it was true to name, and that buyer’s inspection before purchase was immaterial because its character could not be ascertained by reasonable inspection. See West Coast Lumber Co. v. Wernicke, 188 So. 357 (1939). The fact that Respondent’s crew picked the product and
Respondent had an opportunity to inspect the product was immaterial, except that it showed due diligence by Respondent in selecting the best melons possible.
Section 672.602, Florida Statutes, provides that a buyer must reject non-conforming goods within a reasonable time and seasonably notify the seller. A merchant buyer has the obligation to make reasonable efforts to sell perishable products in the seller’s behalf. In doing so, the buyer is entitled to a reasonable commission and expenses, and is not liable for conversion and is not deemed to have accepted the products.
The facts reveal a letter on July 7, 1996 from Respondent to Petitioner explaining the rejection of two loads. Respondent reported salvage of one load and attempted salvage of the other load. Respondent stated that he was deducting the cost of handling those two loads from the moneys received from the sale of the other loads.
Section 672.717, Florida Statutes, provides:
The buyer on notifying the seller of his intention to do so may deduct all or any part of the damages resulting from any breach of the contract form any part of the price still due under the contract.
If one assumes the Respondent purchased the melons in the field, then the Petitioner is rightfully entitled to the proceeds of the sale of the other four loads of melons less the costs incurred by the Respondent in shipping the melons to his buyers where the melons were rejected for failing to conform. A
summary of those transactions and the expenses relating to the rejected melons is contained in Respondent’s Exhibit 1. The Respondent’s costs on the first two loads exceeded the Petitioner’s profits on the other four loads.
There was no evidence that Respondent was negligent in his seeking a buyer for the melons or the melons were delayed in shipment causing them to deteriorate.
Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is,
That the Department enter a Final Order finding that the Respondent owes no further money to the Petitioner.
Filed with the Clerk of the Division of Administrative Hearings this 12th day of March, 1997.
All parties have the right to submit written exceptions within 15 days from the date of this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.
