*1 m Gray Milling Gray partnership composed Company, Ellis Ellis Sheppard v. Frank Appellants, Marie B. M. Gray, doing under the business name William W. fictitious Sheppard, Respondents, No. es Company, Pike Grain & Securiti 222 W. 742. S. Banc, en Court 1949.

Rehearing July 30, Denied, 1949. *2 H. Warren D. appellants. James Clemens for Murphy, Jr., A. D. respondents. J. and F. Wilkins for

ELLISON, damages J. This is an action for $3453.66 for alleged delivery by and breach of contract for the sale defendants plaintiffs July, 3946, in of two of of the last fourteen cars corn. county jury, in The cause was tried the circuit court of Pike without a judgment appealed and the was for defendants. Plaintiffs to the judgment Appeals, St. Louis where the Court affirmed. The Opinion reported applica- of that court is in 215 SW. On 57. plaintiffs-appellants tion of the the cause was transferred to this court. 1945, contract, September, purchase

The made in was for to be fourteen cars of corn delivered cars each month for seven January ending July, in months, beginning in and at $1.22-% bushel, ceiling price, plus .per per based on the then Omaha 1/30^ storage charges January 1, 1946, on the last defendants-respondents independ- twelve ears. The turn contracted supply Company, to party, ently with a third the Omaha were months Shipments of the six cars for the first three the corn. Through- contract duly made, accepted plaintiffs, and at the Administra- period of Price out the whole of seven months the Office scarcity owing fixing ceiling prices corn, and tion was thereof, prices prevailed generally. those month,

In raised the April, the fourth the Government again raised price per bushel, and for and it was June Emergency expired Price Control of 1942 as Act 250. Title App. (d), p. prices A. 194. All were U. S. C. §901 up.to removed; consequence of which of such corn shot and appellants bushel. The waived first raise of $2.35 necessity accepted pressure of April. the two cars Under they accepted paid also four and cars for and June early raise. when refused to the two But forthcoming of corn then market cars that month at less than the bushel, accept declined to later purchased per bushel, car that month market one at They brought and another at then this suit $2.21-% against respondents for the difference between the actual cost of the original purchased corn it would have at thus what been per bushel, contract $3453.66. the sum of Respondents’ (1) finding defenses are: of the trial court in respondents’ substantial, evidence, favor was based on credible it; (2) this court appellants rescinded, should defer to on, waived, original or modified the* contract sued to the consideration; (3) substitution of another based on a different governmental regulations wartime per- conditions and frustrated original formance of the contract. original purchase procured contract for the of the corn was appellant partnership, doing Murfreesboro, business at Ten-

nessee, through a broker named Memphis, Carter at Tennessee. He negotiated respondents, the sale with the who engáged were Louisiana, Missouri, by long telephone business distance September 18,1945. Thereupon prepared a written confirmation of cars, the contract for the whole fourteen copies and sent to both respondents. Respondents contemporaneously issued separate their written confirmations for the sale of two cars of the for each of the seven Each months. of these bore a different number, separate contracts. September 18, 1945, All of them were dated the date of *5 all fourteen car and contract, showed the bushel, based on per ceiling the then Omaha price and includ ing “merchandising, brokerage elevation and charges.” In other words, price $1.22-%, the Omaha less than but when quoted charges were added to ceiling, other sale came per day storage per charge was figure. The bushel

to that 1/30$ it, January Except item. and the con- and additional sepárate undisputed, shown in the firmation, which was lost but the facts are following table: Invoice and

Confirmation approximate time of shipment Price Date Price bu. Contract Contract Contract Delivery bushel number date date (cid:127) Feb’y ’46 S-5055 9-18-’45 1-17-’46 $1.22-1/2 $1.22-1/2 " " " March 3-30-’46 S-5056(cid:127) " " " " storage April S-5057 5- 3-’46 &

from 9-18-’45 plus S-5058 6-14-’46

$100 S-5059 6-29-’46 June ", S-5060 Not When price per the Government bushel raised the 3$ April, corn, Company, shipping Omaha Elevator which was billing charge per did not raise the bushel for that month above the $1.22-%, increase, but and included concealed the 3$ such, by dating separate charge as storage back 1/30$ 18, to September 1945, contract, date of instead.of January provided. from as the contract The difference was $108, appellants paid increase of but the attached draft on the theory overcharge mistake, that the was a and claim made therefor respondents. giving latter appellants refunded credit for $100,. Company wrote twice, the Omaha Elevator May 25, 1946, complaining overcharge 15 and stating (in part) following (italics ours) in the second letter : you “If differently intend handle the balance of than what the you for, please calls Contract wish would advise us this before may shipping the corn so that we take the up matter to, we have sold it do not agree want to to anything contract, other than we can make different disposition.” : Company yield, Elevator refused to on June 1946, respondents wrote was' “holding your up shipment on the balance of corn until they hear you regarding referring to the $100 credit. Under this this” — coercion submitted to the cancellation credit, April actually take the two cars at raised They charged $100 back with the difference the Elevator Company separate as a item on the invoice for the next cars, May delivery, which had up been held in respondents’ stated of June 7. letter

511 raised meantime, ceiling of corn had been price In the ‡ the May several Government per by 13, and A., O. P. effective bushel recommending grain to ex- and' agencies joined requesting had May 11 be settled at grain open changes that all futures contracts on Company ceiling prices. The and the Omaha Elevator May the for and June unless refused to deliver the four cars of corn ceiling the corn cost appellants price, the new which made pay would relying grain processors, and appellants bushel. The were already obligated on their contract at raising prices. their But themselves yielded their customers without finally and the four of corn for those two months were cars shipped to appellants on or about and June as shown the accepted above table and at negotiations

The the over that corn between by mainly long telephone. appellant conducted distance Ellis Gray separately testified he made that concession for each of the two May times, June, months and did not different bind his partnership pay ceiling price the for for the corn the whole remain ing contract, is, including life the the corn to be delivered July. respondent Sheppard Frank telephoned appellant testified he Gray Ellis May the corn him before was and advised Government had raised the 25é and recom- [to $1.43] cancelled; mended that all futures contracts be and that the Omaha carry Elevator would refuse to out the contract unless Gray pay agreed would said He to do it because he desperately was so in need of corn. As to corn June, for Sheppard said Gray he couldn’t remember whether he called again, months, whether the conversation covered both but that his “impression” Gray take the corn at the for contract, the balance of the or to cancel out.

Concerning July, corn Sheppard Mr. testified on direct appellant Gray examination “we” called very Ellis days first July offered two cars for that month. He declared legally it; he had the whole month to deliver the end of the price had dropped $1.96; month the as low as Gray and that never him going informed he was buy market and the corn himself one of two cars buy did [although that month purchased respondent Sheppard’s own company July 27.] But on cross-examination witness Frank Sheppard testified his supplier, Company, position took the appellants’ July shipments of corn “had already been breached” the Government’s request recommendation and futures that such cancelled. expressed contracts And he personal request view that the Government’s was a command. He not deliver appellants he would admitted he told

further it at con- supply Company refused to the Omaha Elevator because he conceded informed bushel. Likewise he tract $1.22-1/2 open market only deliver the corn at would them that *7 per bushel; and telephoning, $2.35 the which was price on he was was the corn price. take it at So appellants that refused to that July corn shipped agreed he would have the never delivered. But he willing had stand raise. appellants been to the were Sheppard William W. business Sheppard Frank his son and ceiling that when Government associates. The latter testified the May, company his raised, April in and in prices were then first 25^ corn for which accordingly prices raised the non-delivered said, May raise, he “we” had the appellants contracted. After him Gray and notified appellant in Tennessee called Ellis Gray inquired wanted to cancel the change ivhether ceilings. ITe of the at the new contract, or to take remainder corn ac- Gray go ship ahead it and it would be declared told him to prices except ceiling. the new The corn was received at those cepted at July. the two cars ceiling entirely removed all

He that the Government stated when Gray company father prices 30, appellant on June called his [his July part July and wanted said “we” called the first his Gray] had shipped promptly. will be remembered the June corn corn [It he shipped witness said informed not been until about June 29.] Gray pay July would for the at the market have to corn Being day, informed was which the what that witness Gray it couldn’t remember father testified was $2.35], [Kis higher pay, ship said was than he wanted to and not to it. Gray On son said he and his father talked cross-examination the to Gray in. May raise, the first time after the him to 'told 25^ May, July. ship all of the of the contract corn—for In balance “ ’’ separate questions way. to he said: was understood answer It talking talking “What else could we be about.” “We were all about already agreed May, corn.” He to was was asked.if why they Gray called in June his father had and he [as testified] answered, did.” July, Gray “I don’t know that we As to he said shipped his officeand wanted the corn for called that month immedi ately supposed.” Indeed, “he raise basis he said “That 25^5 —on is what we to” If that were correct June], [back have corn it would made the cost bushel. But he readily conceded that in the conversation he refused ship appellants except at the then underlying much So for the facts. At the conclusion of the n evidence, having been tried cause to the court without jury, Mo, requested'Under Sec. appellant Code, 114(b) Civil Laws the trial court render p. 388, 847.114(b), S. A. Mo. R. § opinion held the opinion done. The —which ceiling” as stated in price of Omaha per bushel “based on then monthly six mean the confirmations, several did not ceiling September made on when the fourteen car contract was time, time to as the but contemplated the Omaha have been ob shipped. theory cars were this would On ligated pay increase on the two cars to absorb and bushel 3^ four cars April, and the increase on the 25^ held shipped May to be trial court further June. The month’s corn July, since there was no contract for that opinion SW. Appeals was unenforceable. Court of [215 l. ruling c. to this circuit deferred court. 61(3)] agree. We do we not On the face of written confirmations hold of corn purchase did not contract to the fourteen cars ceiling prices prevailing the Government from time when it to time shipped. required And we further hold *8 July price, although ceiling price the corn at the contract there was no then. This matter had the the the attention of when Carter, was made. The broker confirmation, covering first issued cars, all fourteen price stated the basis St. “$1.22-% Louis,” (italics ours), plus storage, charge per day l/30(£ the of January 1, 1946, bushel from the last twelve cars. And when respondents (in issued their evidence) six confirmations covering shipments the two monthly several ear to made from be February July, to September 18, 1945, all of them dated the. of original contract, date the stated price and all the was to be per bushel, track, Louis, basis St. and on “Price based $1.22-% ceiling price merchandising, brokerage and includes elevation and charges.” words, In other to on ears were be delivered the rail- track Louis, road at price St. but the fixed bushel was to be based on ceiling the then Omaha to other include the fixed charges specified.

Another respondents’ shows understanding. circumstance this was will recalled, As be Omaha Elevator in included its invoice for April charge corn a ceiling concealed for the raise in by dating storage force that back month, charge September 1945, whereas expressly the confirmation provided charge that should not January 1, start until Respondents, 1946. themselves, thereupon May wrote Elevator Company on stating they you wanted to “if be advised intend handle the balance differently corn than what (italics ours), the contract calls so for” purchaser they that agree did not could “make different dis- position.” This, obviously, referred raise in and not to irregularity stating the mere storage it charge. as For the latter difference, fact alone would have Furthermore, made no substantive nearly

that letter was written two weeks after the Government May 13, had been raised bnt it was not mentioned. Cer- 25^ tainly, any part respondents this did not evince belief on the time, they that right May to raise the of the accordingly. June corn

We agree are also unable to on their second assignment, the contract was parties, “modified” as regards July the two cars of corn involved here. We have mind the ^[747] requirement of Sec. 114(d) of the Civil Code, Laws Mo. p. 388, Mo. R. A. 847.114(d) S. judgment that: “The shall not § clearly set erroneous, be aside unless regard given due shall opportunity to the judge credibility' the trial coiirt to of the of the 140(c) witnesses.” But Sec. provides: same also Code appellate “give court judgment shall: such ought as such court given, have appellate to the agreeable court seem shall to law.” assignment

On this respondents again rely on much of the evi already dence discussed. It is true finally took April corn at raise and the corn at the 3‡ raise. The circumstances in which appellants did that are detailed 25^ above. Respondents’ version is appellants agreed to take May, June and ceiling price at the in force at the time was to be shipped. already But as pointed out, respondents’ letter to the Omaha Company.of May protested raise violated the contract. position That was their 3‡ as to that nearly raise government weeks after the raised the 25^5 May 13. And the fact that paid the ceiling advances 3‡ 25^ is proof not also had advance to pay the all ceilings after had been abolished on June 30. testimony Neither does the respondent William Sheppard as a *9 'support whole that view. For on cross-examination he said that appellant Gray when telephoned Ellis early in about the corn shipments for that month he (Sheppard) understood, “supposed” Gray wanted the corn shipped on the 25<¡¡ basis of it cost $1.43 And [making added, “That is what bushel]. agreed to”, referring we their conversation May. in And yet respondents refused to corn for less than the market price of In other words, their testimony position point on that conflicting. was they If July corn, they for the had not agreed on an ceilings market after were abolished, and there was no meeting alleged of minds on that modification. City Dobbins v. Bond & Mtg Co., 1001, 1010(2), 343 Mo. 124 (2d) SW. 1111, 1115(3). Another consideration the above connection is that while single was and called for shipment contract of fourteen cars of period corn over a of months at seven a definitely yet stated price,

515 paid- was to the corn in the sense that was severable dealing with it as severable parties treated monthly. And the ¥e May and June. April, shipments price raises the two obligate the did not modifications those have no doubt that a much July corn at accept the make a further modification 331-335; pp. 785-790, 17 C. J. S. §§ higher open Jur, 870-874, 315-8. pp. Am. §§ in the question important probably the most next,'and by economic of the a frustration there was case is whether country was 1945, 18, while this September made It was conditions. economy being II, was War and its World struggling in the wake of 1942. But Control Act of Emergency Priee under the administered heavy, both grains was corn and other demand for while the contracted opinion and in our fully that, realized to this suit calls Appeals of atten brief in the Court Respondents’ in mind. fact history heaviest demand “there was the to the tion fact made periods” contract-was during the aforesaid —when confirmations Furthermore, respondents’ sales performed. and to be storage charge price, separate contained, the fixed sale in addition to of corn. for each of the last twelve cars l/30(i per per bushel practice”, was a mere “trade respondents testified And while the this (the Company) supplier yet it enabled them or their by purchasing the corn in antici protect themselves option their any storing it. pation price, rise in corn when ceiling price on the contract

There was a Government If, in the contract. made, embodied was lowered, contract, ceiling price had been during life of the performance prevented would have further without doubt it by operation of law.1 original price But this in at the ceiling was raised twice then abolished. stance the None regulations forbade the sale corn at less than these administrative per can be said to have made further ceiling price. Neither Sheldon-Seatz, Coles, Inc. v. 319 Mich. impossible. 401, formance 835(5). (2d) 408(5), 832, 29 NW. authority ways2 on the effect general both

There is “unfore 1 Long Corp., Co. v. Steel Schiavone-Bonomo Structural Island Fed. (2d) 506(2), affirmed, 557; Supp. 505, 142 Fed. Seminole Rock & Sand Co. 542, 544(1); Fleming, (2d) Uchitelle, Inc., Re Kramer v. v. 160 Fed. (2d) 493, 495(5); 467, 472, Sons, Sanders v. Y. 43 NE. N. & Lowenstein 702, (2d) 457; Trading Inc., Corp. Edsil Y. 43 NE. v. Minder & N. 262, 264(1). Sons, Y. 79 NE. 297 N. See also: Restatement “Contracts”, 458, p. 852. § . S., p. 952, p. 954, 463b; Jur., p. 930-2, J. 12 Am. § 2 17 C. § § p. 935, 366. *10 § Restatement, Contracts, 458, p. duty duty “A Sec. 852: contractual or a discharged, compensation in the is absence of circumstances show- to make contrary contributing part ing intention or of the either a fault on from discharging promisor frustrating, or impossibility” seen as find, the rule far as we can performance of his contract. So App. 8, 14, 119 SW. Haren, 139 Mo. announced in Ward v. this state by his con from, party, “if a departed been has not since possible performed, be tract, charge obligation an himself with by impossible good performance is rendered must make it its unless difficulties, party. God, law, or the other Unforeseen act of Am. Nat'l And in v. great, however will not excuse him.” Schoen Ins. 57, 59(5-7), held the in Co., 935, 951, it was 352 Mo. SW. disability liability policy a was not released be surer’s life and disability, reports make of his cause of-the failure of the assured to impossibility resulting insan required by policy, due to from as theory policy, ity. ruling properly was based on the precedent a condition to re construed, reports did not make such covery. imply against impossi such This would that reservations very clearly cases, expressed in insurance at least. bilities must be any foregoing general We unable to see that citations2 are they opinion respondents- In our realized when made apply here. they September 18, corn, for the sale of the the contract of they taking chances; and took them.' As late deliberately original contract in as stood their their letter of that government about date to the Omaha the first raise of 3^S appears the doctrine of frustration of applied It contracts as contemplates only impossibility not in California but also the performance light subsequent improvidence events, equity, court, or like a court of prom decides whether the promisee or the should bear loss in the isor circumstances of the Lloyd Murphy, v. particular (2d) 48, case. Cal. 53-4(2), 153 50(4, 6). (2d) 47, Pac. But even that rule does apply not when the brought by an Government, is about act of the frustration l. idem, c. 10). 55(5), 51(9, nothing l. We find c. the cases collected in 17 (Perm. Ed.) part, p. Words & Phrases Frustration [pocket 148-9] the doctrine in application to warrant this case. only question one There is other the case. Eespondents rely strongly fact that when the Government raised the agencies “Government requested 25$ grain exchanges that all recommended to futures contracts open person subject performance duty, subsequently prevented where is to the prohibited. (b) by judicial, a executive or . . . administrative order made authority by judge a or other officer with due of the United States. . . Restatement, 288, p. Contracts, possi- See. or effect 426: “Where the assumed object bility party of a desired be either attained to a it, object on which enter contract forms or effect basis both into and this surely frustrated; promisor will is or a who is without fault causing frustration, thereby, discharged and who is in the harmed is promise performing contrary appears.” his unless intention d,uty *11 ceiling prices. at close of business on 11 be settled at It requested all was further and recommended that cash contracts be (Italics ours). quoted ap- on a handled similar basis.” words City peared Thursday, in the Kansas Grain Market Review of 9th, 1946, which was introduced in evidence. AVeunderstand this a simply newspaper. announcement in trade No Government proclamation was introduced. merely

But it will be noticed the article stated the Govern- agencies “requested ment and recommended” such action on the part grain exchanges. purport It did not even to be a command on part Emergency of the Government. At that 'time the Price U.S.C.A., Act, App. (d), p. provided Control the Ad- §921 ministrator of the Office of Price “may, Administration from time time, regtila-tions to may issue such and orders as he necessary deem carry proper purposes or in order to provisions out the of this §902, Act.” p. provided: And “As used in foregoing pro- subsection, ‘regulation visions of this the term or order’ means a regulation general or applicability order of and effect:” doAVe not “request” understand that or “recommendation” of the Govern- agency naturally ment was more than imply. those terms In other words, binding regulation it was not a or order which would invali- appellants’ purchase date contract to corn below ceiling price -rights to assert their under after prices were abolished. 140(c)

Under See. judgment Civil Code the is reversed and the cause remanded with directions to the trial court to enter judgment $3453.66, the sum of with pro interest as by law, vided All for their costs. concur. PER assignment CURIAM: The first respondents’ motion rehearing complains of error in holding our original, September, shipment 1945 contract for the of the corn not modi provide fied so as to for a price per bushel instead of $1.22-% for the two shipped cars of corn to be July, 1946, here involved. point respondents On stress broker Carter’s letter respondents. 1946 to AVethink it does not help respondents, and set out, interpretative parentheses and emphasis. It said: (in June) you “On the last two cars shipped (appellants) them (appellants) you he allowed to add to this ($1.22-%), and 25‡ (appellants) today you advises ship want to (appel- them lants) prevailing two today ears at of $2.35 basis- Omaha. nothing stipulated your “There was contract (allowing the 25‡ raise) regarding corn, this last advance you we believe .and should go your principle (Omaha to bat with Elevator Co.) and have these (July) shipped iast two cars of corn previous basis of the two (in June) .you shipped (appellants).” Murfreesboro And the per bushel. cars were These two June try get the he advised does show'

broker’s letter same July cars at that Omaha Elevator The alle- answer. pleaded in their was not But that- defense in the modified VII gation paragraph thereof was govern- placed on said corn pay “price *12 contract July being for July May, June and ment” —that the latter expressly declares broker letter price. And the Carter’s modified contract. not so was testimony equivocal and con- respondents’ Furthermore contract. And refused flicting of the modified as to the terms they here contend was July price, corn at which testimony-was appellants’ modified contract The 3^ monthly particular shipments 25<jt applied modifications July corn, record and the whole so indicates. not to the rehearing assignment in -the motion for The second is -judgment excessive, because it was based ^[750] of corn difference in the market of the two cars alone July, and appellants purchased on the market in the contract bushel), taking storage without into account the bushel, charge cent which would have of 1/30 addition had delivered the corn. pay had to say Respondents would point The is well taken. make a difference judgment by bushel. The should be reduced whatever 7‡ storage charge court finds the total on the' amount trial bought by have been under the appellants would suit. assignment Haren, third contends that Ward v. Mo. opinion, to in App. 8, 14, harmony 119 SW. referred is not in Curry Co., cited them: v. with later cases Lbr. Boeckeler 336, 343(5), (2d) 473, 476(5), and App. Mo. SW. Mount Vernon Mfg. Rolling Mill Co., 683(1), Car Co. v. Hirsch 285 Mo. 67, 71(1). But in both of these SW. cases contract was by agreement parties. Our modified citation the Ward case respondents’ with was in connection defense of frustration by subsequent independent any events modification agreement. rehearing overruled, motion for is and the cause is remanded modify judgment the trial court directions indicated paragraph preceding second hereof.