Conzelmann v. Northwest Poultry & Dairy Products Co.

CourtSupreme Court of Oregon
Writing for the CourtBefore LUSK; TOOZE
Citation225 P.2d 757,190 Or. 332
Decision Date19 December 1950

Page 757

225 P.2d 757
190 Or. 332
SPATH et al.
Supreme Court of Oregon.
Argued Nov. 29, 1950.
Decided Dec. 19, 1950.

Page 758

[190 Or. 334] Arthur S. Vosburg, Portland, argued the cause for appellants. On the briefs were Flegel, Vosburg, Joss & Hedlund, of Portland.

Robert M. Kerr and Stuart W. Hill, Portland, argued the cause for respondents. On the brief were Kerr & Hill, of Portland.


TOOZE, Justice.

The above entitled causes are actions for deceit. In one, Erich F. Conzelmann and Elizabeth Conzelmann, doing business as Conzelmann and Conzelmann, are plaintiffs, and Northwest Poultry & Dairy Products Co., a corporation, and C. W. Norton are defendants;[190 Or. 335] in the other, Martha E. Spath, administratrix of the estate of Leonard W. Spath, and Martha E. Spath are plaintiffs, and the cause of action alleged is against the same defendants.

It is stated in appellants' opening brief that the two actions were consolidated for trial and also for hearing on appeal, because 'both cases arose out of substantially similar facts, and the determination in one case will be decisive of the other.' We shall, therefore, treat both cases in this one opinion.

In the lower court, a motion for a judgment of involuntary nonsuit was sustained in each case, and the actions were dismissed. From these judgments the plaintiffs appeal.

In testing the correctness of the lower court's rulings it is necessary that this court consider the testimony offered on the trial in the light most favorable to the plaintiffs. Several days were consumed on the trial, resulting in a mass of testimony, some relevant and some irrelevant to the real issues involved. We shall confine ourselves to an outline of the material facts.

Plaintiffs are turkey growers, having been engaged in that business for a number of years. Their farms are located in Clackamas county, not far from Oregon City. Mrs. Conzelmann and Mrs. Spath are sisters, and the two families live within a mile of each other. In 1945, the Conzelmanns and Spaths operated as partners, but in all other years, they carried on separately.

Defendant Northwest Poultry & Dairy Products Co., hereafter referred to as

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'Northwest Poultry,' is an Oregon corporation, chiefly engaged in buying and selling turkeys and in processing them for the growers. It has several plants in Oregon including plants at Portland[190 Or. 336] and Salem, and is the largest handler of turkeys in this state. It has no storage facilities in its Portland plant and after purchasing turkeys, it stores them with the Northwestern Ice and Cold Storage Co. in Portland. Defendant C. W. Norton, hereafter referred to as 'Norton,' is the president, general manager and in complete control of the operations of Northwest Poultry, and, in addition, owns approximately one-third of the capital stock of the corporation.

For several years continuously, immediately prior to the events leading up to the instant litigation, plaintiffs were customers of the Northwest Poultry; that is to say, each year Northwest Poultry had handled their turkeys either as purchaser or processor.

Turkeys are marketed by the growers selling them to produce houses such as Northwest Poultry, and the produce house then resells to retailers and other large buyers for its own account. The grower ordinarily has two choices in the way of marketing his turkeys. The most common practice is for him to sell to a produce house when the turkeys are ready for killing. If this method is adopted, the produce house provides the means to transport the turkeys from farm to processing plant and then processes the same, which means that the turkeys are killed, plucked, their craws washed out, and graded. The viscera are not removed. After grading is completed, the produce house pays the grower so much per pound for the turkeys, according to grade, and then places the turkeys in storage for its own account. The turkeys purchased from different growers are commingled. The amount paid is net to the grower, the produce house absorbing the costs of transportation and processing. Turkeys are customarily graded A, B, C, culls, and no-grade. The other alternative[190 Or. 337] the grower has in marketing his turkeys is to have them packed in standard boxes with so many to each box and placed in cold storage for his account, after the same have been processed and grades determined. The number and grade of the turkeys in each box are written on the box, as well as the name of the produce house grading the same. It is the usual practice to store only A, B, and C grades and to immediately sell the culls and no-grades to the produce house at an agreed price. No charge is made by the produce house for processing culls and no-grades. On the turkeys placed in storage, the produce house makes a charge for collecting, transporting, processing, and grading. In 1947, this charge of the Northwest Poultry was $3.75 per cwt.

In grading turkeys, different standards are followed. Each produce house grades according to its own specifications. On the other hand, the United States Department of Agriculture has adopted specifications for grading, this being known as the U. S. Grade. The grade of the produce house is known as a commercial grade. The Northwest Poultry set its own specifications and graded accordingly. These specifications for different grades are much less stringent than those established by the United States Department of Agriculture.

As turkeys are delivered to Northwest Poultry and processed, grade sheets are made out showing the number of birds delivered, the weight, and the grade, and copies of these grade sheets are delivered to the grower. When turkeys are placed in storage for the account of the grower, a warehouse receipt is issued him showing number, weight, and the grade of those stored.

[190 Or. 338] The turkeys marketed are from poults purchased by the grower usually when they are a day old. These poults are purchased from different sellers, depending upon what size finished turkeys are desired. Some sellers handle poults producing lightweight turkeys, while others sell poults producing those that are heavier. The choice of what type and strain of turkey a grower wishes to raise rests with him.

In 1947, the Conzelmanns purchased poults which would produce a lightweight turkey; those purchased by the Spaths produced a little heavier bird. The turkey poults purchased by both parties were approximately

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one-half toms and one-half hens. Hen turkeys mature earlier than the toms, and the Spath hens were received by Northwest Poultry on September 2, and 3, 1947, and those of the Conzelmanns on September 4 and 5.

Acting pursuant to directions of plaintiffs, Northwest Poultry processed these hen turkeys and then caused them to be placed in storage for the separate accounts of the plaintiffs. A, B, and C grades were stored, the culls and no-grades being purchased by Northwest Poultry, as was the custom. These hen turkeys were sold by the plaintiffs to Northwest Poultry in December, 1947, the Spath lot for 52 1/2 cents per pound for the A grade, and the Conzelmann lot for 53 cents per pound for the A grade. This was 1/2 cent bonus on the Conzelmann hens. There is usually a three cent difference in market price between the A and B grades and the B and C grades.

When turkeys are picked up and delivered to the plant of Northwest Poultry, they are processed immediately. The Northwest Poultry is equipped to handle approximately 2,000 turkeys a day at its Portland[190 Or. 339] plant. If the processed turkeys are to be immediately sold, they are sent to the eviscerating room where the viscera are removed; otherwise, to the cold storage plant.

Before any of the tom turkeys of plaintiffs were picked up by Northwest Poultry in September, 1947, the plaintiffs advised the defendants that they desired to have the tom turkeys handled in the same manner the hen turkeys had been handled; that is, placed in storage to their several accounts. The defendants deny that such instructions were given, but for the purposes of this case we must adopt the plaintiffs' version. At the time these tom turkeys were picked up, and for several months thereafter, there was a low market price. (At the time of delivery the price was 40 cents per pound for A grade.) Plaintiffs desired to hold their turkeys in the hopes that market conditions would improve.

Northwest Poultry picked up the Spath tom turkeys on September 22 and 23, and on September 26, commenced picking up the Conzelmann tom turkeys. By the 29th only two-thirds of the Conzelmann birds had been taken. The delay in picking up these turkeys caused the Conzelmanns considerable worry, and they complained to defendants. It was not until October 7 that the remaining Conzelmann turkeys were collected and taken to the Salem plant of Northwest Poultry for processing.

Instead of storing these original turkeys for the accounts of the plaintiffs, Northwest Poultry had them immediately eviscerated and used to fill an order. The Spaths discovered this on or about September 24, and the Conzelmanns, on or about September 29. When they discovered their turkeys had been sold, plaintiffs [190 Or. 340] complained to defendant Norton. At that time, the turkeys had been commingled with turkeys purchased from other growers. Norton then agreed, first with the Spaths, and then with the Conzelmanns that defendants would replace the original turkeys with other turkeys of like number, weight, and grade. To this the plaintiffs assented. We quote briefly from the testimony of Erich Conzelmann as follows:

'Q. When Mr. Norton told you that--you say he told you that they would store pound for pound, grade for grade, you were satisfied with that, weren't you? A. Yes sir, it...

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