Continental Grain Co. v. Simpson Feed Co., B-207.

Decision Date17 December 1951
Docket NumberNo. B-207.,B-207.
Citation102 F. Supp. 354
PartiesCONTINENTAL GRAIN CO. v. SIMPSON FEED CO., Inc.
CourtU.S. District Court — Eastern District of Arkansas

Karol A. Korngold, St. Louis, Mo., Kaneaster Hodges, Newport, Ark., W. D. Murphy, Jr., Batesville, Ark., for plaintiff.

Fred M. Pickens, Jr., Wayne Boyce, Newport, Ark., for defendant.

LEMLEY, District Judge.

This cause, submitted on written briefs, comes on for hearing upon the plaintiff's motion, filed herein pursuant to Rule 50(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A., for judgment in accordance with its motion for a directed verdict, which latter motion was made at the conclusion of all of the evidence in the case and upon which we reserved our ruling at the trial. The material facts are practically undisputed with one exception which will be hereinafter discussed, and are substantially as follows:

Plaintiff is a Delaware corporation engaged in buying and selling grain, including soybeans, and has its principal place of business in St. Louis, Missouri. The defendant is an Arkansas corporation and operates a grain elevator at Newport, Arkansas. On September 14, 1950 the parties entered into a contract under the terms of which the plaintiff agreed to buy from the defendant, and the defendant agreed to sell to the plaintiff, 10,000 bushels of soybeans of a certain grade and quality at $2.20 per bushel; delivery was to be made during the period from October 1, 1950 through November 30, 1950, at seller's option, and the plaintiff was to furnish shipping instructions to the defendant as the several carloads of beans were loaded. A carload of soybeans contains approximately 2,000 bushels.

On October 30, 1950 the defendant loaded a car of beans for the plaintiff and called on the latter for shipping instructions which were furnished on the same day; these beans were shipped to an oil mill in Abilene, Texas, to which they had been sold by the plaintiff. Upon shipment, the defendant drew a draft on the plaintiff for 90% of the purchase price of the beans; this was in accordance with the custom of the trade; and the draft was duly paid when presented. The remaining 10% has not been paid.

On October 31, 1950 the defendant loaded another carload of beans for the plaintiff and called upon it for shipping instructions. There is a conflict in the evidence as to just what took place when these instructions were requested; a witness for the defendant testified that the plaintiff's agent stated that the instructions would be furnished within 30 minutes; the plaintiff's agent testified that defendant's agent was told that plaintiff desired to consign this carload of beans to New Orleans for export, that a clearance would have to be obtained from the authorities at that point for the reception of the beans, and that shipping instructions would be furnished as soon as such a clearance was obtained, which might be in 30 minutes or as late as two days.

In any event, shipping instructions for this car were not given until November 2, about 48 hours after they had been requested, and when plaintiff furnished the instructions it was informed that the defendant considered that the contract had been breached, and that no more beans would be shipped thereunder. Plaintiff declined to agree to cancellation and insisted on performance; the defendant, however, refused to deliver any more beans under the contract.

Between October 31 and November 2 the railroad began to press the defendant either to move the carload of beans or to unload it, as there was a car shortage. Defendant had commitments with parties other than the plaintiff for the sale of soybeans, and when the railroad insisted that the car be moved or unloaded, defendant billed it out to another of its customers. After this billing of the car, but before it was moved, the defendant received the instructions from the plaintiff with which it declined to comply.

As stated, the plaintiff declined to accept the defendant's repudiation of the contract, and its attitude in this connection was communicated to the defendant on November 2 and again on November 7. On November 27 plaintiff wrote the defendant and offered it an extension of time for delivery under the contract; in this letter it warned the defendant that unless the contract was complied with it would go on the market as of 9 A. M. on December 1 and buy beans for the defendant's account and charge the latter with the difference between the contract price and the market price. Defendant, however, did not avail itself of the offer of extension, nor did it deliver any more beans to the plaintiff.

Between the date of the contract and November 30 the price of soybeans rose substantially and steadily. On November 2 the price was substantially higher than it was on September 14, and on November 30 and December 1 it was substantially higher than it was on November 2. There was no material difference in price, however, between November 30 and December 1.

On December 1, 1950 the plaintiff purchased 8,000 bushels of soybeans for the defendant's account, and thereafter brought this action to recover the difference between the market price paid for the beans and the contract price plus interest.

The defendant in its pleadings and at the trial admitted the execution of the contract sued upon and further that it had shipped only one carload of beans, but it contended that the delay of the plaintiff in furnishing shipping instructions with respect to the second carload was a substantial breach of the contract which justified it in refusing further performance. Defendant also filed a cross-complaint asking judgment against the plaintiff for that portion of the purchase price of the first carload of beans for which it had not been paid; its contention in this regard is not denied.

The case was tried to a jury, and, as stated, at the conclusion of all of the evidence plaintiff moved for a directed verdict. We reserved our ruling, and the case was submitted upon interrogatories1; the jury was unable to agree upon its answers and was finally discharged. Thereafter, the plaintiff filed its present motion.

In support of the motion, plaintiff contends: (1) that, on the evidence, the question of whether the plaintiff furnished the defendant with shipping instructions for the second carload of soybeans within a reasonable time after being notified that the beans were loaded, is a question of law for the Court, and that the Court should declare, as a matter of law, that such instructions were given within a reasonable time; (2) that the question of whether the delay in furnishing shipping instructions amounted to a material breach of the contract, which justified the defendant in treating it as rescinded, is, likewise, a question of law for the Court and that the evidence is conclusive that the delay was such that it did not constitute a material breach, justifying the defendant in treating the contract as rescinded, either in whole or in part; and (3) in the alternative, that the contract was severable as a matter of law, and that plaintiff's breach, if any, was not in any event material as to the final 6,000 bushels of beans called for by the contract and, therefore, the Court should enter judgment for the plaintiff at least with respect to such 6,000 bushels. The defendant controverts all of these contentions.

In passing upon the motion, the evidence, and the inferences which may be fairly drawn therefrom, must be considered in the light most favorable to the defendant; and if there is substantial evidence in the record tending to establish a material breach of the contract on the plaintiff's part which would justify the defendant in refusing further performance, the plaintiff's motion should be denied. Duncan v. Montgomery Ward & Co., 8 Cir., 108 F.2d 848; Jones v. United States, 8 Cir., 112 F.2d 282; Johnson et al. v. J. H. Yost Lumber Co., et al., 8 Cir., 117 F.2d 53; Brinegar v. Green, 8 Cir., 117 F.2d 316; Coen v. American Surety Co., 8 Cir., 120 F.2d 393; Long v. Clinton Aviation Co., 10 Cir., 180 F.2d 665. On the other hand, if there is no substantial evidence to that effect, judgment should be entered for the plaintiff. Dustin Grain Co. v. McAllister, 8 Cir., 296 F. 611.

Under the terms of the contract, the plaintiff was required to furnish shipping instructions to the defendant within a reasonable time after being notified that the latter had beans ready for shipment under the contract, and an unreasonable delay in furnishing such instructions would constitute a breach of the contract. Majestic Milling Co. v. Copeland, 93 Ark. 195, 124 S.W. 521; Joppa Mattress Co. v. Arkansas Valley Cotton Oil Co., 101 Ark. 548, 142 S.W. 831. Plaintiff contends in this connection that, as a matter of law, the delay of 48 hours in furnishing shipping instructions for the second carload of beans was not unreasonable but we do not know that we can say that reasonable men might not differ on that point, particularly in view of the conflicting evidence as to what was said by plaintiff's agent when notified that the second carload of beans was ready for shipment, which conflict, of course, must be resolved in favor of the defendant. It does not necessarily follow, however, that the plaintiff is not entitled to judgment on its motion, since if plaintiff's breach, if any, was purely technical and insubstantial, such would not justify the defendant in refusing further performance, although it might give rise to a claim for damages, if any were sustained; Uniform Sales Act, Sections 45(2) and 65, Ark.Stats. §§ 68-1445(2) and 68-1465; Helgar Corporation v. Warner Features, Inc., 222 N.Y. 449, 119 N.E. 113. Therefore, the substantial question involved here is whether or not the breach in question was sufficiently material to justify the defendant in attempting to cancel the contract.

The question of the materiality of a breach of the contract under the sections of the Uniform Sales Act...

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4 cases
  • Reliance Cooperage Corp. v. Treat
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • April 22, 1952
    ...a purchaser who insisted upon performance of a contract after a seller's anticipatory repudiation, arose in Continental Grain Co. v. Simpson Feed Co., D.C. E.D.Ark., 102 F.Supp. 354 (tried in the Eastern District of Arkansas). In that case Judge Lemley, we think, correctly decided that the ......
  • Cargill, Inc. v. Atkins Farms, Inc.
    • United States
    • U.S. District Court — Western District of Arkansas
    • October 28, 1976
    ...Co. v. McAllister, 8 Cir., 296 F. 611. A similar case was decided by this Court, Lemley, J., on December 17, 1951, Continental Grain Co. v. Simpson Feed Co., 102 F.Supp. 354, affirmed by our Eighth Circuit Court of Appeals on October 28, 1952, Simpson Feed Co. v. Continental Grain Co., 199 ......
  • Quaker Oats Co. v. Brinkley Dryer & Storage Co., Civ. A. No. H-646.
    • United States
    • U.S. District Court — Eastern District of Arkansas
    • July 31, 1958
    ...market price on said date and the contract price. Reliance Cooperage Corp. v. Treat, 8 Cir., 195 F.2d 977; Continental Grain Co. v. Simpson Feed Co., D.C.E.D.Ark., 102 F.Supp. 354. ...
  • Simpson Feed Co. v. Continental Grain Co., 14597.
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • October 28, 1952
    ...the undelivered beans on November 30, 1950, the last date upon which performance was due under the contract. Continental Grain Co. v. Simpson Feed Co., Inc., D.C., 102 F. Supp. 354. There is little dispute as to the facts which gave rise to this controversy. On October 30, 1950, the defenda......

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