Farmers Mutual Hail Ins. Co. of Iowa v. Fox Turkey Farms

• Decision Date: 23 May 1962
• Docket Number: No. 16702,16703.,16702
• Citation: 301 F.2d 697
• Parties: FARMERS MUTUAL HAIL INSURANCE COMPANY OF IOWA, Appellant, v. FOX TURKEY FARMS, INC., Appellee. FOX TURKEY FARMS, INC., Appellant, v. FARMERS MUTUAL HAIL INSURANCE COMPANY OF IOWA, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

301 F.2d 697 (1962)

FARMERS MUTUAL HAIL INSURANCE COMPANY OF IOWA, Appellant, v. FOX TURKEY FARMS, INC., Appellee.

FOX TURKEY FARMS, INC., Appellant, v. FARMERS MUTUAL HAIL INSURANCE COMPANY OF IOWA, Appellee.

Nos. 16702, 16703.

United States Court of Appeals Eighth Circuit.

April 27, 1962.

Rehearing Denied May 23, 1962.

Ellsworth E. Evans, of Davenport, Evans, Hurwitz & Smith, Sioux Falls, S. D., made argument for Farmers Mut. Hail Ins. Co.; Deming Smith and Robert C. Heege, of Davenport, Evans, Hurwitz & Smith, Sioux Falls, S. D., were with him on the brief.

Ross H. Oviatt, Watertown, S. D., and James L. Fox, Chicago, Ill., made argument and filed brief for Fox Turkey Farms, Inc.

Before JOHNSEN, Chief Judge, and WOODROUGH and MATTHES, Circuit Judges.

PER CURIAM.

In this diversity case, which was tried on the theory that South Dakota law controls, we have two appeals presented. In No. 16,702, Farmers Mutual Hail Insurance Company of Iowa has appealed from the judgment following verdict in favor of Fox Turkey Farms, Inc., on an alleged oral contract of insurance. Fox Farms filed a cross-appeal which presents the single question of whether it is entitled to interest on the amount of the judgment from the date of the loss of its property.

We conclude that a submissible case was not made by Fox Farms and that the court should have sustained motion of Farmers Mutual Hail Insurance Company for a directed verdict.¹ In view of this ruling consideration of appeal No. 16,703 is obviated. For the sake of brevity we will hereinafter refer to the parties as they were designated in the trial court.

At all times mentioned herein plaintiff was in the business of raising turkeys in large quantities. Defendant was in the business of insuring turkeys against death and destruction from various causes. Pursuant to oral negotiations in March or April, 1959, between Joseph Fox, Jr., president of plaintiff, and Clarence Grue, an agent of defendant, five policies of insurance were issued by the latter on April 21, 24, 28, May 1 and May 8, 1959. Each of the first four policies covered and insured 5,000 turkeys and the last or May 8 policy, insured 6,000 turkeys, or a total of 26,000.² Each policy was issued as a different lot of turkeys was placed on the premises of insured, thus accounting for the issuance of five policies; however, all policies expired and terminated on October 31, 1959, and none of them was renewed by written endorsement attached thereto. After the expiration date of the policies and on November 4 and 5, 1959, 8,686 turkeys of insured were killed or died as the result of the snowstorm and blizzard which struck the area where the turkeys were being kept and cared for. Although the coverage afforded by the policies had not been extended beyond October 31, 1959, plaintiff nevertheless made claim for the amount of its loss occurring on November 4 and 5 and eventually instituted this action to recover. The pleaded theory of plaintiff relied upon for recovery is:

"That on or about March 31, 1959, plaintiff applied to the said Clarence Grue, * * * for the insurance of certain turkeys which were the property of plaintiff, * * * against death as a direct result of or destruction made necessary by * * * blizzard, snow, * * *. That the Company, by its said agent, in consideration of the premium to be paid to it by plaintiff, then and there agreed to insure the said stock of turkeys * * * and to execute and deliver to the plaintiff policies of insurance, insuring said stock of turkeys against loss or damage, for a period from the date of said policies until the turkeys were taken off for dressing. That notwithstanding that the Company, * * * agreed as aforesaid, that said policies would insure said * * * turkeys against loss or damage for a period from the date thereof until turkeys were taken off for dressing, the insurance policies so delivered to plaintiff purported to provide that the term of said insurance would expire on October 31, 1959; that by reason of the fact that the stock of turkeys consisted mostly of sexed toms, and that such toms would be held longer than the usual growth period to heavy weights, and furthermore, due to the fact that they were hatched at diverse dates, as indicated by the dates of said policies, a termination of the insurance on October 31, 1959, would not provide full coverage; that the company\'s said agent agreed thereto, and agreed that, at or before the said expressed termination date, the company would extend the expiration date to provide the coverage agreed to as aforesaid as was and is the custom; * * *."

By answer defendant denied liability, alleging, inter alia, that its agent Grue was without authority to waive or change any part of the written contracts except by written endorsement issued by defendant and attached to the policies.

Over objection the court permitted Mr. Fox to testify at some length as to the negotiations which were antecedent to the issuance of the policies. The gist of this testimony which plaintiff relies upon as being sufficient to establish an oral contract of insurance, is summed up in this statement of the witness: "I told Mr. Grue that October 31st did not seem to be long enough and I, at that time, went over and reached for a calendar and proceeded to add 28 weeks from the time that I knew the approximate time the last birds would be on there, which would be the first week in May, and found these birds would not be ready for maturity until sometime in the end of November and one flock in the first part of December. * * * I then told Mr. Grue that I am not acquainted with the usual procedure on writing turkey insurance policies whereby you have an automatic October 31st date, but that Fox Turkey Farms is interested and wants the turkeys fully insured until the time that they leave the farm and are taken to the processing plant. Mr. Grue then stated `I will take care of this.'"

By the court's instructions, the jury was informed that the issues were (1) did plaintiff and defendant in the spring of 1959 enter into an oral contract for insurance under which the defendant undertook and agreed to insure the plaintiff against turkey losses from the date of the issuance of the policies until the turkeys were taken off for dressing; (2) did they intend the conversation early in the spring of 1959 only as a preliminary, as contended by defendant, to the five insurance policies which thereafter were issued? A verdict was authorized for plaintiff if the jury found (1) that plaintiff and defendant in the spring of 1959 entered into the alleged oral contract for insurance until the turkeys were off the farm and dressed; (2)...