Pioneer Hi-Bred Intern., Inc. v. Talley

• Decision Date: 09 April 1973
• Docket Number: No. 8342,HI-BRED,8342
• Parties: PIONEERINTERNATIONAL, INC. et al., Appellants, v. Calvin R. TALLEY, Appellee.
• Court: Texas Court of Appeals

Page 602

493 S.W.2d 602

PIONEER HI-BRED INTERNATIONAL, INC. et al., Appellants, v. Calvin R. TALLEY, Appellee.

No. 8342.

Court of Civil Appeals of Texas,

Amarillo.

April 9, 1973.

Morehead, Sharp & Tisdel, Charles G. White, Plainview, for appellants.

Witherspoon, Aikin, Langley, Woods, Kendrick & Gulley, D. Wesley Gulley, Hereford, for appellee.

ELLIS, Chief Justice.

This is an appeal from an order overruling a plea of privilege in a suit for damages in a products liability case. Reversed and rendered.

The plaintiff-appellee, Calvin R. Talley, brought an action in the district court of Parmer County, Texas, against Pioneer Sorghum Company, Pioneer Hi-Bred Company and Pioneer Hi-Bred International, Inc., defendants, seeking to recover damages arising out of the purchase and use of allegedly defective corn seed which had been produced by Pioneer Sorghum Company. Pioneer Sorghum Company has been renamed Pioneer Hi-Bred Company, and at all pertinent times has been an unincorporated division of Hi-Bred International, Inc., an Iowa corporation with a permit to do business in Texas. The defendants will sometimes be herein referred to as 'Pioneer Hi-Bred Company,' 'Pioneer,' or 'appellant.' Pioneer filed a plea of privilege seeking a transfer of the case to Hale County, Texas, its principal place of business and legal residence. Talley filed a controverting affidavit to the plea of privilege alleging that he was entitled to retain venue in Parmer County, Texas, the county of his residence, under the exceptions provided in subdivisions 7, 9a and 27 of Article 1995, Vernon's Ann.Civ.St.

The venue question was heard by the court without a jury, and judgment was entered overruling the plea of privilege. From such judgment Pioneer has brought this appeal. No findings of fact or conclusions of law were requested or made by the trial court.

The record discloses that Talley was engaged in farming operations in Parmer County, Texas. Under an exchange transaction, he acquired certain corn seed, designated as Pioneer Brand '9178,' from Mike Chaney, a retail dealer in Parmer County, operating his business under the name of Western Ammonia Company. The '9178' seed, purportedly highly recommended for purposes of growing corn for ensilage, had been produced by Pioneer and purchased by the dealer from Pioneer. The primary business of Mike Chaney, operating as Western Ammonia Company, related to fertilizer, although he retailed seeds produced, not only by Pioneer, but by various other seed companies. The record indicates that Mike Chaney had entered into contracts with Pioneer whereunder he purchased Pioneer brand seeds for resale. There is no evidence showing that Pioneer sold seed in Parmer County other than to dealers such as Western Ammonia Company.

There is testimony to the effect that Talley observed that all of the bags of Pioneer '9178' corn seed which he acquired from Western Ammonia Company were labeled 'medium round,' but that some of the bags contained 'flat' instead of round seed. After he had planted only one bag of the seed, he contacted Mike Chaney concerning the difference in the seeds. Chaney examined the seed and then contacted Pioneer from whom he had purchased the '9178' seed. He stated that he was advised by Pioneer that the 'flats' were higher priced seeds than the rounds and that there was no basis for concern about the difference in the seeds. Chaney then advised Talley to go ahead and plant the seed. The seeds planted well, came up to a good stand and the corn grew until it was approximately 'knee-high.' The plants then turned yellow and did not thereafter grow as uniformly, or as tall as, or produce the amount of ensilage which Talley had expected.

The evidence indicates that Talley never had any discussions concerning the seed with Pioneer, and that he had never read or relied upon any advertisement or brochures published by Pioneer regarding the seed prior to the time he planted the seed acquired from Chaney. Chaney testified that he had read and distributed Pioneer advertisements, attended a dealer's meeting and had obtained information that Pioneer '9178' would produce up to 25 tons of ensilage per acre. Talley testified that the crop here involved produced 11 1/2 tons per acre. Also, there was evidence to the effect Talley farmed as well or better than the average farmer in Parmer County. Talley stated that he cared for this crop as he normally cared for such crops; that he normally raised 'from twenty to twenty-two and three tons per acre'; and that he considered twenty tons per acre a good yield. In his suit Talley seeks damages equal to the difference in the value of 25 tons per acre and 11 1/2 tons per acre upon a total of 75 acres.

In controverting the appellant's plea of privilege, Talley asserts that he is entitled to maintain venue in Parmer County by reason of the following venue exceptions set out in art. 1995, V.A.C.S.:

Subdivision 27, providing that foreign corporations doing business in this state may be sued in any county where the cause of action, or a part thereof, accrued, or in any county where such company may have an agency or representative;

Subdivision 9a, providing that a suit based on negligence may be brought in the county where the act or omission of negligence occurred; and

Subdivision 7, providing that in cases of fraud, suit may be brought in the county in which the fraud was committed.

In this appeal from the judgment overruling the plea of privilege, the appellant has asserted twelve points of error. In its first point of error, Pioneer contends that no cause of action or part thereof arose in Parmer County within the meaning of subdivision 27. In its second and third points, Pioneer asserts no evidence and insufficient evidence, respectively, to support a finding that the seed produced by the appellant was the proximate cause of the damage suffered, or that the seed was defective when acquired by the appellee. In the fourth point, appellant urges that the law of strict liability does not apply to mere economic loss and that such cause of action cannot come within the exceptions of subdivision 9a, based on negligence or subdivision 27, insofar as it relates to the establishment of a cause of action or part thereof which arose in such county. In its fifth point, Pioneer insists that privity of contract is required in actions where damages for economic loss only are sought. In the sixth point, it is contended that no act of negligence occurred in Parmer County within the meaning of subdivision 9a. Points seven and eight relate to appellant's contentions that appellee's cause of action was based upon fraud occurring in Parmer County, and that in the absence of privity of contract between appellant and appellee, no cause of action based upon fraud was established within the meaning of subdivision 7. In points nine and ten, it is asserted that there is no evidence and insufficient evidence, respectively, to support a finding that the appellant had committed fraudulent acts or made fraudulent representations in Parmer County. In the eleventh and twelfth points, appellant contends that appellee failed to establish that appellant had an agent or representative in Parmer County within the meaning of subdivision 7, or that a principal-agency relationship existed between such parties.

According to the plaintiff's first amended petition, Talley bases his cause of action against Pioneer on strict liability in tort, breach of warranty, negligence and fraud and misrepresentation. In order to prevail against Pioneer's plea of privilege, the plaintiff is required to prove that his pleaded cause of action falls within one or more of the venue exceptions above set out.

At the outset, it appears that a basic matter for determination is whether the appellant had an agent or representative in Parmer County. After considering the evidence submitted, we have concluded that the retailer, Mike Chaney, operating as Western Ammonia Company, was an independent dealer with no authority to bind Pioneer Hi-Bred Company. From our examination of the contracts and consideration of the testimony of Mike Chaney, it appears that the contracts related to the purchase of seeds by the dealer on open account. Also, the evidence demonstrates a vendor-vendee relationship between Pioneer, as producer of the seed, and Mike Chaney, as the retail dealer, who, in turn, sells the seed to various retail customers, including the appellee. It has been held that generally, a retailer or wholesaler is not such an agent or representative of a manufacturer (producer) as to bind him contractually. Gehl Bros. Manufacturing Co. v. Price's Producers, Inc., 319 S.W.2d 955 (Tex.Civ.App.--El Paso 1958, no writ). From this record, we have concluded that a contractual relationship existed between Pioneer and Mike Chaney, the dealer only, and the retail customer, Talley, had no contractual relationship with Pioneer.

In support of its position that an agency or representative relationship existed between Pioneer and Talley, the appellee has cited the cases of Allis-Chalmers Mfg. Co. et al. v. Coplin, 445 S.W.2d 627 (Tex.Civ.App.--Texarkana 1969, no writ), and Milligan et al. v. Southern Express, Inc., 151 Tex. 315, 250 S.W.2d 194 (1952). In the Allis-Chalmers case, the manufacturer specifically required that the Allis-Chalmers form containing the warranty of the product be used by the dealer in connection with a sale to a customer or consumer. Under the facts and circumstances of that case, an intent was manifested that the Allis-Chalmers express warranty run directly to the consumer and that the dealer was authorized to make the sale and bind the manufacturer on such warranty. In Milligan, the evidence showed that the local agency, Northeast Texas Motor Line, actually made contracts in behalf of Southern Express, Inc. and when a contract was negotiated in behalf of Southern, there was a continuing duty on the...