Beam v. Monsanto Co., Inc.
| Decision Date | 09 February 1976 |
| Docket Number | No. 75--148,75--148 |
| Citation | 259 Ark. 253,532 S.W.2d 175 |
| Parties | , 1976-1 Trade Cases P 60,720 jim BEAM and Bill Beam, d/b/a Beam Bros. Contractors, Appellants, v. MONSANTO COMPANY, INC., a corporation, Appellee. |
| Court | Arkansas Supreme Court |
Batchelor & Batchelor, by Fines F. Batchelor, Jr., Van Buren, for appellants.
William M. Stocks, Fort Smith, for appellee.
This is an appeal by Jim Beam and Bill Beam, d/b/a Beam Brothers Contractors, Inc., from a circuit court order sustaining a demurrer to their counterclaim, as amended, in a suit filed by the appellee, Monsanto Company, Inc., for balance owed on open account. The final demurrer from which comes this appeal was on the grounds that the counterclaim, as amended, failed to state a cause of action under Ark.Stat.Ann. §§ 70--301--70-- 307 (rePl.1957), and because the relief sought under the counterclaim, as amended, was barred by the statute of limitations. The trial court sustained the demurrer on both grounds.
The points on which the appellants rely for reversal are designated as follows:
'Appellants' pleadings state a cause of action in fraudulent misrepresentation in sales resulting in damages.
The trial court erred in holding that the Arkansas Unfair Practices Act, Ark.Stats. 70--301--70--314 has no application to vertical competition, by sustaining demurrer to prayer for relief and damages.
The trial court erred in holding that the statute of limitations had run upon claims of appellants, as a matter of law, based upon the pleadings.
The trial court erred in refusing to compel discovery by requiring appellee to respond to interrogatories served.
The trial court erred in denying summary judgment in favor of appellants.
Under Arkansas Practice, a demurrer may not be filed after the filing of an answer in the action.'
This litigation was commenced on March 25, 1970, when Monsanto filed suit against Beam Brothers for balance on account, for oil and related products purchased and used by Beam Brothers in mixing asphalt concrete paving material at their plant at Fort Smith and later at Prescott, Arkansas. By amendment filed June 8, 1970, Monsanto alleged that Beam Brothers was indebted to Monsanto in the amount of $14,341.24 for merchandise and material furnished between March 19, 1969, and September 30, 1969. A number of amendments, motions, interrogatories and answers thereto were filed by the parties and on November 30, 1971, Beam Brothers filed a separate answer and counterclaim designated 'Cross-Complaint' in which they alleged an assignment which should have been applied on the alleged indebtedness, and otherwise they denied the allegation in the complaint. In paragraph III of their answer Beam Brothers alleged as follows:
'These defendants further specifically allege that the plaintiff specifically represented to defendants that it was selling to them the A C Oil for the making of asphalt concrete by said defendants at as low a price as it was selling to anyone else, when, in fact, from approximately May, 1966, through the last purchase of said oil from plaintiff, which plaintiff alleges to have been September 25, 1969, plaintiff was charging these defendants more per ton for said oil than it was charging to other customers who were buying such materials of like quantity and quality in different locations, sections, communities, cities, and portions thereof in this State with the intent to destroy competition of these defendants who were regular established dealers in such commodities, products and services and prevent these defendants from competing with other persons, firms and corporations, in violation of Ark.Stats. 70--301 and following, and that any amounts which plaintiff claims to be owed to it, in fact any be found to be owed, would be owed under a contract, expressed or implied and made by and between persons, firms and corporations in violation of the provisions of Ark.Stats. 70--301 through 70--307, therefore under the provisions of Ark.Stats. 70--309, said contract is illegal and no recovery can be had thereon or by reason thereof.'
The designated cross-complaint then alleged in part as follows:
'These defendants were previously engaged in contracting business which includes bidding upon Arkansas Highway Department, highway jobs, building streets, driveways, parking areas and other improvements of asphalt construction, and as a part thereof operated a plant which made asphalt from its various components including, but not limited to an A C type oil which was purchased from plaintiff, and gravel, and other ingredients, from (for) such manufacturing said asphaltic cement which was used in their business. While this business was originally commenced in the area of Fort Smith, Arkansas, it was moved to Prescott, Arkansas, where it operated at all times material hereto.
Said plaintiff being a person, firm or corporation doing business in the State of Arkansas and engaged in the production, manufacture, distribution or sale of any commodity or product, or service or output of a service trade, or general use or consumption, unlawfully, and with the intent to destroy the competition of a regularly established dealer in such commodity, product of service, did discriminate between different sections, communities and cities and portions thereof, and between different locations in such sections, communities, cities and portions thereof in this State by selling and furnishing said commodity, product and service at a lower rate to one section, community and city, or any portion thereof, and in one location in such section, community and city and any portion thereof than in another, after making allowance for difference, if any, in the grade or quality, quantity and in the actual cost of transportation from point of production or manufacture. That by reason thereof, these defendants were unable to competitively bid upon various jobs, and particularly Arkansas State, Federal Aid Highway jobs, and by reason thereof, these defendants were, in fact, completely put out of business.
By reason of such unlawful and wrongful actions as hereinbefore set out on the part of plaintiff, these defendants were damaged in the amount of $15,000.00 by over charge upon said oil products, and were caused to lose their entire business, and presently have numerous judgments and liens filed against them, are unable to bond jobs, which is essential in their business operation, have lost all of their equipment and earnings, together with real estate, to their damage in the amount of $750,000.00, or a total actual damages to these defendants in the amount of $765,000.00, and therefore, under the provisions of Ark.Stats. 70--301 and following, and 70--310 in particular, these defendants are entitled to damages against plaintiff in the amount of three times the amount of the actual damages, or a total of $2,295,000.00.
WHEREFORE PREMISES CONSIDERED, the defendants, Jim Beam and Bill Beam, respectively pray that the plaintiff, Monsanto Company, Inc., a corporation, take nothing against them by reason of its complaint herein filed, and that they have judgment against said plaintiff, Monsanto Company, Inc., a corporation, in the amount of $2,295,000.00, the same being three times the amount of their actual damage of $765,000.00, and that they have all other just and legal relief to which they might be entitled.'
On January 3, 1972, Monsanto filed a reply and demurrer to the counterclaim. The reply denied the allegations set out in the counterclaim and for demurrer Monsanto alleged as follows:
'1. The counterclaim, styled cross-complaint, fails to state a cause of action under Ark.Stats. Section 70--301 through 70--307.
2. The relief sought in the counterclaim is barred by the appropriate statute of limitations, and particularly Ark.Stats. Section 37--204.'
On January 7, 1972, Beam Brothers filed a response to Monsanto's reply and demurrer in which they reasserted that Ark.Stat.Ann. §§ 70--303--70--313 were applicable to the case and under paragraph III of this instrument they stated as follows:
'Although these defendants, Beam, carefully studied and attempted to determine what prices were being charged, the plaintiff did fraudulently conceal its actions, and using all efforts available to them, to their knowledge and the exercise of diligence, these defendants were unable to determine or learn of the wrongful acts and concealment of plaintiff until on or about the 1st day of June, 1970, and therefore, the Statute of Limitations did not begin to run against them until that time, and this being a statutory right not otherwise provided for, the five year Statute of Limitations of Ark.Stats. 37--213 applies.'
On May 31, 1972, the trial court sustained the demurrer with leave to amend. On June 9, 1972, Beam Brothers filed their first amendment reciting substantially the same allegations as in their original counterclaim. Monsanto again demurred to the amended counterclaim and the demurrer was again sustained by the trial court with leave to amend. On September 10, 1973, Beam Brothers filed their second amendment to their counterclaim alleging in part as follows:
'Plaintiff, by and through its agents, servants, and employees, acting within the scope of their agency, service and employment, did represent to defendants, that plaintiff was selling to defendants, materials at the same price the same were being sold to other contractors in the same business, at the time knowing said representations to be false, expecting plaintiffs to rely thereon, to their detriment, which they reasonably did, and such false representations and facts being material, and contracts for various jobs, including Arkansas State Highway jobs, were bid on the basis of such representations as being a principal ratio and percentage of materials to be furnished, thereby intentionally causing defendants to overbid upon jobs in proportion to such overcharge for their materials, and fail...
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