Palmiero v. Spada Distributing Company

• Decision Date: 06 December 1954
• Docket Number: No. 14017.,14017.
• Citation: 217 F.2d 561
• Parties: Tony PALMIERO and Ruby Palmiero, husband and wife, Appellants, v. SPADA DISTRIBUTING COMPANY, Inc., a corporation, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

217 F.2d 561 (1954)

Tony PALMIERO and Ruby Palmiero, husband and wife, Appellants, v. SPADA DISTRIBUTING COMPANY, Inc., a corporation, Appellee.

No. 14017.

United States Court of Appeals Ninth Circuit.

December 6, 1954.

Stephen E. Chaffee, Sunnyside, Wash., Kenneth C. Hawkins, Yakima, Wash., for appellants.

Irving Korn, Portland, Or., Michael J. Kerley, Spokane, Wash., for appellees.

Before BONE, FEE and CHAMBERS, Circuit Judges.

BONE, Circuit Judge.

On March 27, 1952, Tony Palmiero,¹ a potato grower who had White Rose and Russet potatoes planted on fifty-seven acres on his farm, and Spada Distributing Company, Inc., a potato dealer, entered a written contract whereby Palmiero agreed to sell all of the potatoes grown by him on a certain piece of land to Spada, delivery to be in proper season, for the market price at the time of delivery, but without specification as to time of payment. Spada was given a security interest in the crop for loans and advances and a liquidated damage clause was included.

Spada contended that on May 28 it entered another oral contract with Palmiero, evidenced by its check to Palmiero for $1500.00, which he cashed, and by a voucher attached reading:

"advance on potatoes — 10 cars Russets US#1 @ $50.00 ton less sorting — 5 cars Longwhites US#1 @ $45.00 ton less sorting — delivery before Sept. 10th Prosser acct."

Palmiero denied there was an oral contract.

On July 31, 1952, Spada told Palmiero that on August 4 he would have to start making deliveries of potatoes to Spada on this claimed oral contract. To this Palmiero did not agree, and the evidence was conflicting as to whether he positively refused. In any event, he made deliveries to Spada on August 1, for which the prices agreed to by Spada and Palmiero were $80.00 a ton for No. 1s and $50.00 per ton for No. 2s, the market price at time of delivery, in accordance with the March written contract. On August 4, Palmiero made deliveries for which Spada credited him by slips delivered about August 6 $50.00 per ton for Russets and $45.00 for Longwhites, in accordance with the oral agreement. On August 5, Palmiero commenced making sales of the potatoes raised on this field to other persons, and thereafter delivered no potatoes to Spada.

Palmiero and Spada then engaged in litigation. In due course, in the District Court a pre-trial conference was held and a pre-trial order outlining the contentions of the parties entered. Spada claimed there was an oral contract of May 28, and that there was an anticipatory breach of this agreement by Palmiero. The latter contended that there was no oral contract as claimed, and there was a breach by Spada of whatever contract was in effect. There was also disagreement among the litigants as to whether the oral agreement was in modification of the original written agreement and, if so, how far the modification extended. There was emphatic disagreement as to measure of damages and as to whether the liquidated damages clause of the original agreement applied to deliveries under the oral contract.

The case was put on trial before a jury. A great deal of testimony was taken. The trial judge apparently on the morning of the final day of trial of his own motion decided "there were surprisingly few questions of fact * * * to be decided by the jury," and that he would not take a general verdict, but would "submit a special verdict to the jury in the form of interrogatories." Thereafter, only two interrogatories were submitted by the judge to the jury and answered.² Thus there were established as facts (1) that there was an oral contract as claimed, (2) that on July 31 Spada's representative had directed Palmiero to deliver on such contract on August 4. No general verdict was asked or received.

There were exceptions by the Palmieros, as the case went to the jury, to the giving of the interrogatory regarding the direction by Spada to Palmiero to deliver on the oral contract on August 4 on the ground it was immaterial and that further issues of fact were involved and to the failure of the court to give the interrogatory requested by Palmiero, reading:

"Did Tony Palmiero agree that the potatoes delivered on August 4, 1952, could be applied on the oral agreement, if any?"

The court thereafter entered a series of supplemental findings and conclusions, wherein over and above the facts decided by the jury the court determined either expressly or by implication (1) the terms of the oral contract, (2) that the oral contract modified the written contract in certain terms and not in others, (3) that there was a new oral contract whereby Palmiero was bound to deliver beginning on August 4, whereas the oral contract of May 28 allowed him to September 9 in the form Spada claims, (4) that Spada was willing to carry out the contracts and there was no breach of contract on the part of Spada, (5) that Palmiero breached both the written and the oral contracts.

The Palmieros object here to the findings in certain respects and to the failure of the court to submit interrogatories covering the issues raised by defendants' proposed instructions.

When this case came up on appeal, this Court was of the impression that a suit in equity for injunction was before the Court and that the trial court had called a jury as advisory. The truncated record before us heightened the impression. The complaint sets out a contract relating to the potato crop growing on Section 34, Township 10, Range 24, Benton County, Washington, and attaches the written contract and claims irreparable damage in case of breach. There is no allegation of specific damages. The relief asked is that defendants "be required specifically to perform all the terms of the crop growing and marketing agreement on their part to be kept and performed." A temporary restraining order is asked until hearing on an order to show cause. A preliminary injunction was also prayed "during the pendency of the cause." Finally, plaintiff Spada Distributing Company demands that "defendants Tony Palmiero and Ruby Palmiero be permanently enjoined and restrained" from selling the potato crop grown on the described land to anyone other than plaintiff.

There was an answer which set up affirmative defenses which raise essentially legal issues and prayed for damages. There was a pre-trial order which dealt with admissions and contentions but does not formulate issues. It then did not seem illogical that a jury was present, and the trial judge told them that "when you have ten of you agreed upon the answers to the questions, your foreman will sign it and you will notify the bailiff that you are ready to return your verdict." It was not a matter of surprise either, upon the assumption that the jury was advisory, that the court of its own motion determined that the cause should be submitted to the jury on special interrogatories. The determination is expressed as follows:

"The Court: In looking over the proposed instructions submitted by the parties here, it occurred to me that most of these questions that I think will be decisive of the lawsuit are questions of law, and that there were surprisingly few questions of fact, it seemed to me, to be decided by the jury as the arbiter of the facts. I was particularly impressed by the fact that if I gave the requested instructions of the defendant, it would be a useless gesture submitting the case to the jury, because they would decide the lawsuit.

"Now it seems to me, in view of the turn that the case has taken, that it would be the easiest, perhaps, and the best method to pursue here to submit a special verdict to the jury in the form of interrogatories to be answered by them.

"I might say that in view of the fact that the Court has had such a hard time making up its mind whether a special verdict or general verdict should be given, that I will not raise any objection to the form of your proposed instructions and will consider them as being worded to fit with the special verdict, and it won\'t be necessary for you to reword any of these. If there is anything in here that should apply, should be given under a special verdict, I will give it, even if it is necessary to rephrase it, and you will not be precluded from making any objection to any failure to submit any issue of law that is contained in your instructions because of the form of them, being put in the form of a general verdict. I think that is only fair in view of the fact that I have changed my mind at this late date.

"If there is no further comment then, you can bring in the jury."

Confusion arose, however, when it was discovered that, after the entry of the findings of fact, in answer to the two special interrogatories propounded, the learned judge made a whole series of determinations of fact questions which were decisive. These have been noticed above. After the submission to the jury of the two questions of fact which the jury answered and the court indicated would be...