Kaiser Investments, Inc. v. Linn Agriprises, Inc., 57967

• Decision Date: 11 January 1989
• Docket Number: No. 57967,57967
• Citation: 538 So.2d 409
• Parties: KAISER INVESTMENTS, INC. v. LINN AGRIPRISES, INC.
• Court: Mississippi Supreme Court

Page 409

538 So.2d 409

KAISER INVESTMENTS, INC. v. LINN AGRIPRISES, INC.

No. 57967.

Supreme Court of Mississippi.

Jan. 11, 1989.

Rehearing Dismissed Feb. 9, 1989.

James E. Upshaw, Tommie G. Williams, and Lonnie D. Bailey, Upshaw, Williams, Biggers, Page & Kruger, Greenwood, for appellant.

Ralph Chapman, Chapman & Heaton, Clarksdale, for appellee.

EN BANC.

ROY NOBLE LEE, Chief Justice, for the Court:

Kaiser Investments, Inc. (Kaiser) brought suit in the Chancery Court of Sunflower County against Linn Agriprises, Inc. (Linn) for the outstanding balance due on a note given by Linn to Kaiser in consideration for Kaiser's financing Linn's farming operations. The chancellor granted Linn's motion to transfer the action to the Circuit Court of Sunflower County, since the matter could be "easily handled by a jury." Linn answered and counterclaimed for lost profits and other damages arising from Kaiser's alleged breach of an agreement to rent land to Linn and extend further crop

financing. The jury returned a verdict for forty-five thousand dollars ($45,000) in favor of Kaiser and for one hundred fifty thousand dollars ($150,000) on Linn's counterclaim. Kaiser moved alternatively for additur of its verdict and for remittitur of Linn's verdict, or for a new trial. Motion for additur was denied, and the court ordered a remittitur of fifty thousand dollars ($50,000) on Linn's verdict or a new trial. Linn declined to accept the remittitur, and at the new trial on the counterclaim, the jury returned a verdict of one hundred fifty-six thousand dollars ($156,000) for Linn. Kaiser made the same post-trial motions as before, and all were overruled. Kaiser has appealed from the judgments in both trials and assigns eight (8) errors in the trials below.

FACTS

Kaiser, a Mississippi corporation, owns some fourteen hundred (1,400) acres of farmland in Sunflower County known as the Halstead Place. In 1981 this land was leased to William G. "Chubby" Jefcoat, a farmer from the Linn community, about six miles southwest of Ruleville. This land was leased on a crop-share basis, i.e., entitling the lessor to a stated percentage of the crop proceeds in lieu of cash rent. Jefcoat planted cotton, soybeans, rice, and wheat and realized a net loss of around $20,000 on his 1981 farming operations.

The lease was renewed in 1982. Before the expiration of the 1982 term, the lease was mutually rescinded, and a new lease was entered into between lessor Kaiser and lessee Linn, a Mississippi corporation formed by Jefcoat. As in the previous year, the lease was on a crop-share basis. Kaiser financed Linn's 1982 farming operation in the amount of $253,000 evidenced by promissory notes given by Linn and by Jefcoat personally. Linn's 1982 harvests were sufficient to allow repayment of $208,000 of the Kaiser loan, leaving an outstanding principal balance of $45,000 owing to Kaiser for the 1982 crop financing.

On November 1, 1982, Kaiser advanced $20,000 to Linn for the 1983 crop which was again to be comprised of cotton, soybeans, rice and wheat. At this point, the parties had not renewed the lease on the Halstead Place for 1983. Linn used a portion of this $20,000 advance to plant 160 acres of wheat for harvest in 1983.

On February 9, 1983, Kaiser decided that it would be imprudent to loan Linn any further funds due to Linn's record of losing money on the two previous crops. One of the chief considerations in Kaiser's decision was the fact that, while 1982 had been a record year for cotton in Sunflower County, Linn averaged only 529 pounds of cotton per acre against a county-wide average of 786 pounds per acre. Kaiser advised Linn that it could remain on the Halstead Place and that the lease would be renewed for 1983 if Linn could obtain crop financing elsewhere within ten days. Linn was unable to do so, and on March 21, 1983, Kaiser filed suit in the Chancery Court of Sunflower County to eject Linn from the Halstead Place, for discovery and accounting of Linn's financial status, cancellation of any purported lease for 1983, and for judgment against Linn for the unpaid balance of the notes. Kaiser subsequently leased the Halstead Place to other farmers. The wheat planted by Linn had come to a stand, but it was disced up by the new tenant.

In July of 1983, Chubby Jefcoat and his wife filed their petition for bankruptcy. As a result, Jefcoat lost all the farming equipment used on the Halstead Place. This equipment was owned personally by Jefcoat but used exclusively by Linn. The right to the exclusive use of this equipment was apparently Linn's only asset; thus Jefcoat's personal bankruptcy left Linn basically worthless.

Kaiser showed that at the time of trial the outstanding balance on Linn's notes, including interest and attorney's fees calculated according to the terms of the notes, was $98,072.34. Chubby Jefcoat testified for Linn as to his detailed plans for farming cotton, soybeans, rice, and wheat on the Halstead Place on 1983, and the profits he projected for that year. These projections took into account two variables, yield per The Sunflower County Agent testified that Jefcoat's projections were reasonable. To the contrary, the State Cotton Specialist for the Mississippi Cooperative Extension Service testified for Kaiser that Jefcoat's projections were improbable. He further testified that he was in a better position to review crop projections than was the county agent. The head of the Mississippi Cooperative Extension Service Agricultural Economics Department testified that based upon Extension Service statistics, Linn's 1983 crop plan would have resulted in a substantial net loss.

acre and market price. Jefcoat projected a gross income for Linn of $284,532 and a net profit of $29,491.

Kenneth Mallette, one of the tenants who farmed the Halstead Place in 1983, testified for Kaiser that Linn's 1983 plan for cotton was too ambitious and that although he (Mallette) made a $14,000 profit on cotton in 1983, he would have made less if he had farmed according to Linn's plan. Another 1983 tenant of the Halstead Place, Jimmy Michael Hammers, testified that he lost $20,000 on his soybean crop that year.

An additional element of damages alleged by Linn in its counterclaim was loss of certain government benefits. Neither the record nor the briefs develop this point very clearly, but the benefits in question were apparently the Federal price support payments provided by 7 U.S.C. Sec. 1421, et seq. The program referred to in the record and briefs as "Payment in Kind" (PIK) and "Diversion" compensate farmers for agreeing to let designated acreage lie fallow instead of farming it. The program referred to as "Deficiency" pays farmers the difference between a preset or "target" market price and the price actually realized by farmers if less than the target price. Jefcoat did not take these price supports into consideration when calculating the projected 1983 profits for Linn. There was testimony that Kaiser received $39,296 in PIK benefits in 1983. The amount of deficiency and diversion payments claimed by Linn appears to be $14,563.09. All of these price supports were paid by the federal government directly to Kaiser. The executive director of the Sunflower County Agriculture Stabilization and Conservation Service testified that under the facts of this case, Linn would not have been entitled to any price support payments for 1983 because it did not conduct any farming operations that year.

LAW

I.

THE LOWER COURT ERRED IN DENYING KAISER'S MOTIONS FOR JUDGMENT NOTWITHSTANDING THE VERDICT OR AN ADDITUR ON KAISER'S CLAIM AGAINST LINN FOR THE UNPAID BALANCE OF THE 1982 CROP LOAN.

The evidence was uncontradicted that Linn and Jefcoat signed three (3) notes in favor of Kaiser in the amount of two hundred fifty-three thousand dollars ($253,000) for financing on the 1982 crop; that Linn paid two hundred eight thousand dollars ($208,000) on those notes; and that on the date of trial Kaiser's claim, which included the balance of the notes, interest and attorney's fees, was ninety-eight thousand seventy-two dollars thirty-four cents ($98,072.34). Kaiser contends that the lower court should have granted its motion for judgment notwithstanding the verdict, or, in the alternative, an additur to increase the verdict to $98,072.34. Linn contends that the $45,000 verdict represents a jury setoff of price support benefits against the unpaid balance of the notes, i.e., $98,072.34, less $53,859.09. However, the jury was not instructed to set off any damages against Linn's debt on the notes, and the issue of Linn's entitlement to price support benefits was confined by the instructions to Linn's counterclaim. The jury was instructed to return two verdicts, one on Kaiser's direct claim and another on Linn's counterclaim. Further, it is doubtful that the evidence would have supported a setoff had the jury made one.

Where the evidence clearly shows that the maker is indebted to the payee on a note, but the jury returns a verdict for the defendant, such verdict is erroneous Since the uncontradicted evidence showed that Linn signed the notes totalling $253,000; that $208,000 of this principal was repaid; and that the remaining unpaid balance, including interest and attorney's fees calculated according to the terms of the notes, was $98,072.34, we are of the opinion that Kaiser was entitled to judgment for the full amount of the unpaid balance proven and that the jury should have been peremptorily instructed accordingly. Salitan v. Ford, 231 Miss. 616, 97 So.2d 232 (1957).

and must be set aside. Dobbs-Maynard Company, Inc. v. Jumper, 388 So.2d 879 (Miss.1980). Likewise, where the maker's indebtedness on a note is clearly shown by the evidence, any verdict for the defendant less than the proven amount is erroneous. Campbell v. Kelley, 719 S.W.2d 769 (Mo.1986).

The lower court erred in overruling Kaiser's motion for judgment notwithstanding the verdict and the...