Minnesota Farm Bureau Marketing Corp. v. North Dakota Agr. Marketing Ass'n, Inc.

• Decision Date: 17 October 1977
• Docket Number: No. 76-2045,76-2045
• Citation: 563 F.2d 906
• Parties: MINNESOTA FARM BUREAU MARKETING CORPORATION, v. NORTH DAKOTA AGRICULTURAL MARKETING ASSOCIATION, INC., a North Dakota Corporation, etc., Appellee, v. Richard A. LARSEN, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 906

563 F.2d 906

MINNESOTA FARM BUREAU MARKETING CORPORATION, v. NORTH DAKOTA AGRICULTURAL MARKETING ASSOCIATION, INC., a North Dakota Corporation, etc., Appellee, v. Richard A. LARSEN, Appellant.

No. 76-2045.

United States Court of Appeals Eighth Circuit.

Submitted Aug. 31, 1977.

Decided Oct. 17, 1977.

Herbert L. Meschke, Minot, N. D., argued, concluded argument and filed brief, and appendix, for appellant.

John M. Nilles, Fargo, N. D., argued, and Frank J. Magill and Stephen W. Plambeck, Fargo, N. D., on brief, for appellee.

Before ROSS, STEPHENSON and HENLEY, Circuit Judges.

ROSS, Circuit Judge.

In February 1976, Minnesota Farm Bureau Marketing Corporation (hereinafter MFBMC) was awarded a judgment against North Dakota Agricultural Marketing Association (hereinafter NDAMA) due to NDAMA's failure to fulfill contracts for the sale of grain. ¹ NDAMA in turn made several farmers, who had failed to deliver grain, third-party defendants; among them was Richard Larsen, the appellant. Larsen had delivered six loads on his contract but failed to deliver the balance agreed upon.

NDAMA contended that it had served only as the farmers' agent for the purpose of procuring buyers for the farmers' grain, and that upon the farmers' failure to deliver the grain to MFBMC, the buyer, and the agent's subsequent payment of damages to the buyer in the initial suit, the farmers as principals became obligated to indemnify their marketing agent, NDAMA. After trial to a jury the trial court adopted NDAMA's theory, and on post-verdict motion ordered that NDAMA be indemnified for the sum it had paid out in damages, less any counterclaims which the farmers could prove. Only one farmer, Richard Larsen, appeals the judgment. We affirm.

Agency

The jury determined that Larsen and NDAMA were principal and agent respectively, and were not a seller and a buyer in this transaction. The trial court refused to upset this finding in Larsen's post-verdict motion, and we agree that sufficient evidence supports it. With respect to NDAMA's agency status, the trial court made the following conclusions which accurately reflect our reading of the transcript It is undisputed that all the Third-Party Defendants contacted NDAMA to obtain a buyer for their grain at a certain price. * * * Each of them received from NDAMA copies of the confirmation of sale to MFBMC which specifically stated: "We confirm your sale of . . . today to . . ." The confirmation designated the kind of grain and the buyer in each case. There is evidence the farmers accepted the confirmation.

Under North Dakota law, "(a)gency is the relationship which results where one person, called the principal, authorizes another, called the agent, to act for him in dealing with third persons". NDCC § 3-01-01 (1975). Under the law of agency, the evidence recited above was sufficient to sustain the finding of the jury that a principal-agency relationship was created. Third-Party Defendants further contend there was no agency relationship as a matter of law because they had no control over the activities of NDAMA once the contracts were formed. * * * There is evidence from which the jury could find the farmers did not intend to sell their grain to NDAMA nor did the latter intend to buy their grain at any time. Further, there is evidence from which the jury could find the farmers solicited the services of NDAMA specifically to find third parties who could buy their grain.

The Third-Party Defendant farmers reserved as much control over NDAMA's actions as they wished. Before NDAMA completed the assignments for which it was employed, the farmers could have revoked their authority. NDCC § 3-01-11 (1975). The principals did not reserve authority to name the buyers who could be solicted by NDAMA. They did retain control over the quantity of grain to be sold and the price for which it would be sold.

The Court is not free to weigh the evidence and set aside the verdict of the jury merely because the jury could have drawn different inferences or conclusions or because the Court may feel that other results are more reasonable. * * *

Though at trial Larsen denied knowing the sale of his grain was to Minnesota Farm Bureau Marketing Corporation, and not NDAMA, testimony at trial also shows that Larsen called NDAMA on May 21, 1973, in an effort to find a buyer for the 12,000 bushels of durum, that NDAMA returned a call to Larsen on May 22, 1973, quoting the price and terms then available, and that Larsen orally accepted. A written confirmation on an NDAMA confirmation form dated May 22, 1973, was then sent to Larsen within a few days of the phone call; it stated: "We confirm your sale of durum today to Minnesota Farm Bureau Mkt." ²

Viewing the evidence from the limited perspective afforded an appellate court, and in the light most favorable to the verdict, we conclude that the trial court correctly upheld the determination of the jury on the issue of agency. ³ Likewise, we are not persuaded from our reading of the record that the trial court abused its discretion in failing to grant Larsen a new trial. Lincoln Carpet Mills, Inc. v. Singer Co., 549 F.2d 80, 81-82 (8th Cir. 1977).

Larsen contends, however, that in any event he did not receive a fair trial on the agency issue. He makes the following allegations of error:

(1) the trial court refused to use Larsen's proffered instruction on control of the agent by the principal;

(2) the trial court refused to admit into evidence jury finding XV in the prior action between MFBMC and NDAMA;

(3) the court excluded evidence of prior contracts between the farmers (not Larsen) and NDAMA, which were clearly buy-sell agreements;

(4) the court excluded from evidence a footnote from an auditor's report which identified certain grain contracts as NDAMA's contracts to purchase grain from farmer members without reference to NDAMA's agency status;

(5) the court excluded from evidence state court pleadings in suits commenced by NDAMA against other individual third-party defendant farmers.

We answer these contentions in order.

Larsen's requested instruction on "control" is taken from a comment in the Restatement Agency 2d which supplements the Restatement definition of agency. This single sentence, ⁴ taken from the lengthy comment, is an explanatory statement of the general § 1 definition which reads: "(1) Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act."

Aside from the observation that it may be taken out of context, Larsen has not cited any authority which would indicate that it was error to omit the proffered instruction under North Dakota law. Having reviewed the instructions in their entirety, we are persuaded the instructions as given by the trial court correctly restate the North Dakota statutory and case law. See, e. g., N.D.Cent.Code 3-01-01; Tostenson v. Ihland, 147 N.W.2d 104, 109 (1966); Lander v. Hartson, 77 N.D. 923, 47 N.W.2d 211, 214-15 (1951).

We reject the contention that the court improperly exercised its discretion in not admitting its finding XV. That finding, from the initial portion of the suit against NDAMA states: "In connection with said contracts NDAMA at all times dealt with MFBMC as a principal." Finding XV is not, as Larsen contends, required to be introduced pursuant to Fed.R.Evid. 106 ⁵ simply because the trial court had introduced findings IV, V, VI, and VII. These four findings, relating to each of the third-party defendant farmers, establish in Larsen's case that MFBMC and NDAMA entered into a contract for 12,000 bushels of durum, that NDAMA did not deliver approximately 7,300 bushels and had breached the contract, and that the breach required MFBMC to effect cover. NDAMA thereby became indebted to MFBMC in the amount of $41,645.24. These findings were admitted as evidence of the amount of indebtedness, and we conclude that no misleading impression was created by failing to introduce finding XV as well. See Fed.R.Evid. 106, Note of Advisory Committee.

Finding XV was also relevant, Larsen argues, under Restatement Agency 2d § 14J, comment b, which makes a transferee's (NDAMA) dealing in his own name with another's goods one of seven factors indicating a sale. However, the trial court did instruct that dealing in one's own name was a factor indicating a sale, and there was evidence to support that instruction. Moreover, the court had also instructed that "under the law North Dakota Agricultural Marketing Association could have been an agent of a Defendant, and as agent for a Defendant acted as a principal in its dealings with Minnesota Farm Bureau Corporation." (Emphasis added.) Larsen has not assailed this as an incorrect statement of the law, and its inclusion diminished the probity of finding XV for his argument.

We also conclude that the trial court did not abuse its discretion in refusing to admit the prior buy-sell agreements entered into between NDAMA and farmers Faul and Howey. The trial court has broad discretion in determining the relevancy of proposed evidence. United States v. Johnson,516 F.2d 209, 214 (8th Cir. 1975). The grain contracts in question were dissimilar to the documents involved in this transaction and Larsen was not a party to any of these previous sales agreements.

We likewise uphold the district court's discretion in excluding, for foundational reasons, footnote twelve of an auditor's report on NDAMA in which a CPA firm stated that "(t)he company has unrecorded contracts totaling approximately $450,000 to purchase grain from North Dakota Farm Bureau members, wherein these farmers are to deliver grain to a selected grain terminal in the company's name." (Emphasis added.) The accountants' characterization of these transactions as "contracts * * * to purchase grain" was not adequately shown by Larsen to be related to a matter within the...