Bunge Corp. v. Biglane

• Decision Date: 17 June 1976
• Docket Number: Civ. A. No. W75-21(N).
• Parties: BUNGE CORPORATION, Plaintiff, v. D. A. BIGLANE, d/b/a Scotland Plantation, Defendant.
• Court: U.S. District Court — Southern District of Mississippi

418 F. Supp. 1159

BUNGE CORPORATION, Plaintiff, v. D. A. BIGLANE, d/b/a Scotland Plantation, Defendant.

Civ. A. No. W75-21(N).

United States District Court, S. D. Mississippi, W. D.

June 17, 1976.

Jerome C. Hafter, Charles S. Tindall, III, Greenville, Miss., for plaintiff.

John T. Green, Natchez, Miss., for defendants.

MEMORANDUM OPINION

NIXON, District Judge.

This diversity suit was filed by Bunge against D. A. Biglane, d/b/a Scotland Plantation, for damages in the amount of $15,100.00 which the plaintiff claims it suffered as a result of the breach of an alleged oral contract entered into between the plaintiff and the defendant on July 2, 1974 for the future delivery of 10,000 bushels of No. 1 yellow soybeans at $5.70 per bushel to be delivered at the plaintiff's grain elevator in Jonesville, Louisiana. The defendant has denied entering into a contract with Bunge.

The defendant's Motion for Summary Judgment was overruled by this Court on August 13, 1975, and a Pretrial Order was filed herein on August 18, 1975. This case was submitted to the Court on the Pretrial Order, a Stipulation entered into between the parties. the testimony taken in this matter by agreement on August 28, 1975 by way of depositions (the depositions of several witnesses bound in one volume and entitled "Depositions in Proceedings in Above Cause") and the deposition of D. A. Biglane taken on August 21, 1975. At the conclusion of the deposition testimony on behalf of the plaintiff, the defendant moved for a Judgment Pursuant to Rule 50(a) F.R. Civ.P., which is hereby denied pursuant to the teachings of Boeing Co. v. Shipman, 411 F.2d 365 (5th Cir. 1969), and its progeny.

THE ISSUES

The issues before this Court are: (1) Whether under the Mississippi Conflict of Laws Rule, the law of the State of Mississippi or of Louisiana is to be applied in determining the ultimate issue before this Court, and (2) the legal rights and obligations of the parties under the applicable state law.

THE FACTS

The plaintiff, Bunge Corporation (Bunge), is a New York corporation qualified to do business in the states of Mississippi and Louisiana and engaged in the buying, selling, storing and transporting of grain commodities, including soybeans. It has various regional offices, one of which is located in Greenville, Mississippi, under which it operates approximately nine elevators, one of which is the Bunge elevator located in Jonesville, Louisiana, through which it allegedly contracted with the defendant, through his employee, Mrs. Gay West, on July 2, 1974 for the purchase and fall delivery of soybeans. The defendant, D. A. Biglane, is an adult resident citizen of Natchez, Mississippi where he maintains his office, which is the headquarters for his primary occupation, the exploration for and production of oil and gas as an independent operator through various corporations owned by himself and his children.

The defendant also conducted a farming operation, i. e., raising cattle and growing cotton and soybeans, as well as some wheat and corn, on Scotland Plantation, which was owned by his children and leased by him from them. Scotland Plantation, which is located in Vidalia, Concordia Parish, Louisiana, consists of 3200 acres, approximately 2300 of which are suitable for cultivation, and is operated by Mr. Biglane's farm manager, a Mr. Vestal, who supervises the work of other employees ranging in number from 4 or 5 during the winter months to 9 to 12 during the summer. One of these other employees who worked under Vestal, who was in charge of the overall operation including the growing of crops, was Mrs. Gay West, an office employee who began working part time for the defendant in 1968, initially keeping cattle production and related records at his main office in Natchez, and subsequently in 1970 began working at the farm office in Vidalia. In 1972, Mrs. West began keeping all records of crops grown and sold, at Scotland.

Biglane owns farm equipment and capital improvements at his Louisiana farm which have an original cost value in excess of $700,000, including grain bins capable of storing 16,000 to 20,000 bushels of soybeans. All of the crops grown at Scotland, including the soybeans, were sold by Biglane to commercial buyers within the state of Louisiana. During the five-year period commencing 1970 through 1974 the defendant has received income from the sale of agricultural commodities grown on his Louisiana farm, ranging from a low of $180,946.35 to a high of $509,927.48. His annual income from the sale of soybeans alone ranged from a low of $21,455.02 to a five-year high of $163,188.43 in 1974, the year of this contract dispute. Biglane's income from the sale of soybeans represented between 2% and 12% of his total gross income for the above five years.

During the years 1972 through 1974, and particularly in 1974, one of Mrs. West's responsibilities was to call various grain elevators within the state of Louisiana to determine from them the market price of soybeans, which information she would relay to Mr. Biglane, who would decide whether to sell and if so, in what quantity. Prior to and during 1974 she would regularly check several times a week with United Elevator and Tensus Grain Elevator as well as with Cargo in Louisiana, and she began checking prices with Bunge in May, 1974.

During the first part of June, 1974 on several occasions Mrs. West called Bunge's Jonesville, Louisiana elevator manager, Jack Bonner, to check soybean prices, and following a telephone call which she made to him on June 18, 1974, pursuant to the instructions of Biglane, she ascertained the price of soybeans to be $5.43 per bushel, which information she relayed to her employer who, in turn, instructed her to call Bonner and tell him that Biglane wished to sell 5,000 bushels at that prevailing price. Bonner asked her where she wished the contract to be sent and she in turn told him that Mr. Biglane signed all the contracts and was the only one who could do so, and that it would have to be sent to him at Box 966 in Natchez for his signature. Pursuant to that telephone conversation Bunge sent a contract or confirmation document to Biglane who, in turn, signed it and returned it to Bunge at its Jonesville, Louisiana elevator on June 24. After the final delivery of the 5,000 bushels on June 28, an additional 881 bushels were delivered to Bunge for which it paid Biglane the then current market price of $5.51 since these additional bushels were considered a "spot" sale. Biglane was paid the proceeds of those sales by Bunge from which the soybean tax was deducted in accordance with § 69-9-5, Miss. Code of 1972.

Subsequent to the above transaction Mrs. West continued to frequently and regularly call various grain elevators, including Bunge in Louisiana, to obtain daily prices which they were offering for soybeans based on the market price in Chicago, and on July 2, 1974 she talked to Bonner of Bunge who quoted the price of soybeans at $5.70 per bushel. She in turn relayed this information to Mr. Biglane and pursuant to his instructions called Bonner again informing him that Biglane wished to sell 10,000 bushels of soybeans to Bunge to be delivered in October-November and asked him to send Biglane a contract. In answer to Bonner's question, she told him to send the contract to the same place that he had sent the previous one on June 18. Pursuant to the instructions of Biglane Mrs. West again called Bonner on July 2 to ask about moisture limitation and was told that the moisture limitations were 16%, that is, Bunge had the right to reject any beans with moisture in excess thereof. The testimony of West and Bonner is in agreement that no other specifics or terms or conditions of the proposed agreement were discussed between them. Mrs. West heard nothing further concerning the proposed sale of the 10,000 bushels of soybeans until she received a telephone call from Mr. Willingham, Bonner's assistant, who, because Bonner was on vacation, called her on July 15 to ask why Biglane had not signed and returned the contract or confirmation of the sale of the 10,000 bushels which had been sent to him at his Natchez address on July 2 and was admittedly received by him on July 5.

The defendant's refusal to sign the above contract or confirmation and deliver 10,000 bushels of soybeans pursuant thereto because of his alleged objection to certain terms and provisions of the proposed contract spawned this suit inasmuch as on July 2, 1974, relying upon what it contends to have been a valid oral contract entered into between Bunge and Biglane through Bonner and West, Bunge, through its assistant district manager of Greenville, Mississippi district, John Everitt, on July 2 sold the 10,000 bushels of October-November soybeans through its St. Louis office for "$6.015 delivered Destrahan, Louisiana November shipment", and on July 19 had to purchase 10,000 bushels elsewhere at the then increased current market price of $7.21 per bushel for delivery to its purchaser, resulting in a loss to Bunge of $15,100.00.

THE LAW

The Choice of Law

The first legal question which must be decided in this diversity case is whether the substantive law of Mississippi or of Louisiana applies in determining the rights and obligations of the parties under the alleged July 2, 1974 oral telephonic contract which the plaintiff in its pleadings and post-trial brief relies upon as the basis for its claim against the defendant. Under the Erie-Klaxon¹ doctrine, a Federal Court sitting as a diversity court must apply the conflicts of law rules of the forum state, in this case, the conflicts of law rules of the State of Mississippi. Whitaker v. Harvell-Kilgore Corp., 418 F.2d 1010, 1015 (5th Cir. 1969); Mid-Continent Tel. Corp. v. Home Tel. Co., 319 F.Supp. 1176, 1187 (N.D.Miss. 1970). In its search for the answer to this question, it is the duty of the United States District Court to ascertain what the state law is,...