Barlow v. International Harvester Co.

• Decision Date: 11 June 1974
• Docket Number: Nos. 11354,11342,s. 11354
• Citation: 522 P.2d 1102,95 Idaho 881
• Parties: Hubert R. BARLOW, Plaintiff-Respondent, v. INTERNATIONAL HARVESTER COMPANY, a corporation, Defendant-Appellant. UPPER VALLEY EQUIPMENT CO., a corporation, Plaintiff-Respondent, v. INTERNATIONAL HARVESTER COMPANY, a corporation, Defendant-Appellant. . Rehearing Denied
• Court: Idaho Supreme Court

Page 1102

522 P.2d 1102

95 Idaho 881

Hubert R. BARLOW, Plaintiff-Respondent, v. INTERNATIONAL HARVESTER COMPANY, a corporation, Defendant-Appellant.

UPPER VALLEY EQUIPMENT CO., a corporation, Plaintiff-Respondent, v. INTERNATIONAL HARVESTER COMPANY, a corporation, Defendant-Appellant.

Nos. 11354, 11342.

Supreme Court of Idaho Rehearing Denied June 11, 1974 (Vacating Prior Opinion).

Richard C. Fields, of Moffatt, Thomas, Barrett & Blanton, Boise, for defendant-appellant.

A. L. Smith, of Albaugh, Smith & Pike, Idaho Falls, for plaintiffs-respondents.

DONALDSON, Justice.

The petition for rehearing filed April 12, 1974, is denied.

The previous opinion issued in this case on March 25, 1974, is withdrawn and this opinion is hereby substituted therefor.

This is an appeal by International Harvester Company, Inc., from two judgments awarding money damages to Hubert R. Barlow and Upper Valley Equipment Co., Inc., for slander and tortious interference with contract. Barlow and Upper Valley originally commenced two separate actions against International Harvester and five of its employees. The five individual defendants were F. L. Fernald, district manager of the Portland, Oregon, regional office of International Harvester, now retired; D. F. Carlson, Portland, district credit manager; Harvey Martin, sales manager for the Portland district; Joe Peterson, area representative of the credit department; and Eldred W. Olson, a managerial employee for the Portland district. The actions were predicated on basically the same set of facts and were consolidated for trial by the stipulation of all the parties.

During this litigation, the defendants moved for summary judgment, directed verdict, and judgment notwithstanding the verdict or in the alternative for a new trial. All of these motions were denied by the district court and the appellant, International Harvester, assigns these denials as error.

We will not discuss at length the district court's denial of defendants' motion for summary judgment, except to say that the district court's refusal was correct. 'It is a fundamental rule of law that a summary judgment may not be granted where a genuine issue of material fact exists.' Davis v. McDougall, 94 Idaho 61, 63, 480 P.2d 907, 909 (1971); I.R.C.P. 56(c). To enumerate only a few of the issues of fact 'requiring the weighing procedures of a trial,' Stationers Corporation v. Dun &amp Bradstreet, Inc., 62 Cal.2d 412, 42 Cal.Rptr. 449, 452, 398 P.2d 785, 788 (1965), there was a question whether any of the allegedly tortious acts were in fact committed; there was, as will be discussed infra, the issue of whether the allegedly slanderous statements, though privileged, were uttered with malice. There was also a question of whether the alleged interference with contract was justified. All these issues are jury questions and it would have been error for the district court to grant the defendant's motion for summary judgment.

On a motion for directed verdict pursuant to I.R.C.P. 50(a) or for judgment notwithstanding the verdict, purusant to I.R.C.P. 50(b), the moving party admits the truth of the adverse evidence and every inference that may be legitimately drawn therefrom. Mann v. Safeway Stores, Inc., Idaho, 518 P.2d 1194 (1974); Curtis v. Dewey, 93 Idaho 847, 848, 475 P.2d 808 (1970); Bratton v. Slininger, 93 Idaho 248, 253, 460 P.2d 383 (1969). Neither motion should be granted if there is substantial evidence to justify submitting the case to the jury or to support the verdict once it has been returned. Mann v. Safeway Stores, Inc., supra; Dawson v. Olson, 94 Idaho 636, 641, 496 P.2d 97 (1972); Curtis v. Dewey, supra, 93 Idaho at 849, 475 P.2d 808; Mabe v. State ex rel. Rich, 86 Idaho 254, 385 P.2d 431 (1963).

'By substantial, it is not meant that the evidence need be uncontradicted. All that is required is that the evidence be of such sufficient quantity and probative value that reasonable minds could conclude (that a verdict in favor of the party against whom the motion was made) was proper.' Mann v. Safeway Stores, Inc., supra, 518 p.2d at 1198.

The motions for directed verdict and judgment notwithustanding the verdict were properly denied. Although the testimony presented at the trial of these actions was in many instances conflicting, the respondents introduced substantial competent evidence to support the following versioin of the controversy.

Upper Valley Equipment Company, an Idaho corporation, had carried on a profitable and flourishing business as a dealer in farm equipment in Rexburg, Idaho, since 1963. Upper Valley held the Rexburg franchise for the sale and distribution of International Harvester farm equipment. Respondent Hubert Barlow had been employed by Upper Valley since 1963 in the capacity of manager of its Rexburg dealership. Under Barlow's management, the dealership had grown to be one of the largest in the area. Until 1969, the stock in Upper Valley was owned by Snake River Equipment Company, a corporatioin controlled by Barlow's uncle, George Watkins. Either Watkins personally, or Snake River Equipment, was the guarantor of Upper Valley's line of credit with International.

Barlow had for some time been desirous of acquiring ownership of Upper Valley, and was encouraged in this wish by his uncle. However, Barlow was in need of 'working capital.' Such working capital was needed for Upper Valley to function successfully because it made many sales on credit, but was contractually required to pay International the full wholesale price of each piece of new equipment immediately after it was sold by the dealership. As a matter of practice, a ten-day grace period was allowed, after which interest was added to the amount due. Therefore, the more flourishing and successful the business, the more working capital was needed for the business to continue to sell the equipment to its customers 'on time,' and at the same time pay International.

Early in 1969, Barlow worked out the following solution to his problem. Barlow's mother was the owner of a large block of stock in the Snake River Equipment Company, the corporation which owned the Upper Valley stock. Barlow's mother exchanged her Snake River stock for all the Upper Valley stock and then gave Barlow fifty-five per cent of it, in return for his promise to support her. At Barlow's request, she assigned the balance of the stock, forty-five per cent, to Robert Pinder, pursuant to an agreement between Barlow and Pinder that Pinder would furnish $100,000 of working capital to the corporation and assume the role of guarantor of its debts, in exchange for forty-five per cent of its stock. The $100,000 in working capital promised by Pinder was absolutely essential for the continued successful functioning of the Upper Valley equipment dealership.

Early in 1969, after Barlow and Pinder had acquired the stock in Upper Valley, they set about arranging for the continuation of the International Harvester franchise under Upper Valley's new ownership. In April, 1969, Barlow and Pinder flew to Portland for discussions with F. W. Fernald, the district manager of International's Portland, Oregon, regional office, and Harvey Martin, sales manager for the Portland district. Barlow and Pinder explained the new ownership of Upper Valley and the agreement by which Pinder was to provide the dealership with working capital. Pinder and Barlow submitted financial statements and Pinder signed a written guarantee of Upper Valley's line of credit with International.

On June 12, 1969, a 'written dealer sales agreement' retroactive to February, 1969, was executed, transferring the International Franchise to Upper Valley under the new, Barlow-Pinder ownership. The agreement was mailed to Barlow on June 16, 1969. All during the period of the change in ownership, Upper Valley was conducting business as usual, and selling a large volume of equipment.

On July 1, 1969, Barlow's banker informed him that a check for $13,500, payable to International Harvester Company, was at the bank and that there were insufficient funds to cover it. Barlow asked the banker to hold up the check temporarily and the banker said that he would hold it for five days, as he had done routinely before. Barlow was not concerned at this point because he knew that Pinder would, pursuant to the financing contract, provide the capital needed to cover the check. On July 3, 1969, Barlow called Pinder in Salt Lake City and told him that he needed new capital. Pinder asked how much, suggesting as much as $50,000. Barlow said that $15,000 would be sufficient. As the next three days were non-business days (the Fourth of July, a Saturday, and a Sunday), Pinder's check for the $15,000 did not reach Barlow's bank until Monday, July 7, 1969. Meanwhile, the insufficient fund check for $13,500 was returned to International, and was received at its offices on or about July 8. On that same day, a Mr. Gruber, a credit employee of International Harvester, called on Barlow regarding the insufficient fund check. Barlow told Gruber that $15,000 had been received from Pinder and that the $13,500 check would be honored, but Gruber disregarded that information and demanded a certified check for the $13,500 plus other amounts that had come due, amounting to $34,000 in all. Barlow then collected some accounts receivable and paid all of the balance owing to International except approximately $8,000. He thereupon called Pinder on July 9, or July 10, 1969 and asked for an additional $10,000. Pinder refused to send the money saying that he was about to leave for Panama on business and telling Barlow to stall International Harvester. It appears from Pinder's testimony that the reason for his refusal was that shortly before Barlow's request, Pinder had received a long-distance telephone call from Harvey Martin, the district sales manager for International Harvester. According to Pinder's testimony, Martin told him that Barlow was a liar and a...