Ralston Purina Company v. Parsons Feed and Farm Supply

• Decision Date: 02 August 1966
• Docket Number: No. 17987.,17987.
• Citation: 364 F.2d 57
• Parties: RALSTON PURINA COMPANY, Appellant, v. PARSONS FEED AND FARM SUPPLY, Inc., Thurman Parsons, Inez Parsons, Glenn Parsons and Alma Parsons, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

364 F.2d 57 (1966)

RALSTON PURINA COMPANY, Appellant, v. PARSONS FEED AND FARM SUPPLY, Inc., Thurman Parsons, Inez Parsons, Glenn Parsons and Alma Parsons, Appellees.

No. 17987.

United States Court of Appeals Eighth Circuit.

August 2, 1966.

James R. Hale, Fayetteville, Ark., for appellant. John A. Fraser and F. W. Schwarz, St. Louis, Mo., were on the brief.

W. B. Putman, Fayetteville, Ark., for appellees and filed brief.

Before VAN OOSTERHOUT and MEHAFFY, Circuit Judges, and MEREDITH, District Judge.

MEHAFFY, Circuit Judge.

Appellant, Ralston Purina Company (Purina) brought suit in the United States District Court against appellees, Parson Feed and Farm Supply, Inc., Thurman Parsons, Inez Parsons, Glenn Parsons Feed and Farm Supply, Inc., two feed accounts totaling $116,471.60.¹ Parsons counterclaimed alleging that Purina breached an alleged oral contract to purchase from it hatching eggs and chicks causing Parsons damage in the sum of $64,429.47; and also breached an agreement to allow discounts on bulk feed purchases to Parsons' damage in the sum of $16,295.00.

During pretrial proceedings, Purina's feed accounts were not disputed and the District Court therefore found Parsons liable to Purina in the sum of $116,471.60, and set the case for trial to a jury on the issues contained in the counterclaim. Upon trial the jury found for Parsons on the alleged purchase contract in the sum of $64,429.47, but found against Parsons on the discount issue. The trial court entered judgment setting off the amount of the jury award against the amount Parsons owed Purina, leaving Purina with a judgment in the sum of $52,042.13.

Purina appeals from the judgment allowing the setoff. Diversity of citizenship and the amount in controversy establish jurisdiction. The substantive law of Arkansas controls.

We reverse on account of the trial court's refusal to permit Purina to introduce evidence that its district sales representative, Hagan, lacked authority to enter into the contract and for failure to give a requested instruction on burden of proof as to an agent's authority to act for his principal. Since a remand is called for, we find it in order to briefly discuss other issues as well.

Purina first assigns as error the court's refusal to grant its motion for directed verdict and motion for judgment n. o. v. because (a) there is no substantial evidence to support the jury's verdict on the counterclaim and (b) the alleged oral contract relied upon by Parsons was voidable under the Arkansas statute of frauds.

Glenn Parsons is the president and chief operating officer of Parsons and his father, Thurman Parsons, although inactive in the company's operations, was an officer and stockholder and was informed on important matters concerning the company's activities. Both Glenn and his father testified that Parsons entered into an oral agreement with Purina through its district sales manager, Hagan, whereby Parsons agreed to build chicken houses, costing between three and four hundred thousand dollars, and fill them with laying flocks upon Purina's agreement to take the entire production of eggs or chicks at a specified price. They further testified that shortly after the first delivery under the contract the agreed price was not thereafter paid, and the difference in what was paid and what should have been paid under the oral contract amounted to the sum of $64,429.47.

Two written documents were introduced into evidence, both being contracts between Parsons and Jack White's Hatcheries, Inc. Purina was not a party to the written contracts. Parsons' evidence, however, is to the effect that it had entered into an oral contract with Purina prior to these written documents and that Purina had subsequently brought Jack White's Hatcheries into the picture for the purpose of accepting delivery of the eggs and making the payments therefor. In other words, it was Parsons' contention that these contracts were merely evidence of the terms of their prior oral contract with Purina; and they were looking solely to Purina to comply with the contract; and that Hagan assented therein and advised that the written contracts were merely "memoranda."

The existence of the oral contract was denied by Purina, who offered evidence tending to prove that Purina had never heard of such a contract until Parsons was presented with a demand for payment of the feed bills. Regardless of this or other evidence, the jury had the right to believe the version of the two Parsons witnesses that an oral contract was entered into and breached. Our function as a reviewing court is to consider the evidence in the light most favorable to the prevailing party and we must assume that all conflicts in evidence were resolved by the jury in favor of the prevailing party. Figge Auto Co. v. Taylor, 325 F.2d 899, 901 (8th Cir. 1964); Kelly v. Layton, 309 F.2d 611, 613 (8th Cir. 1962) and cases cited. There was ample evidence to submit this factual issue to the jury and the trial court properly refused the motion to direct a verdict for insufficiency of evidence.

On the day before trial, Purina amended its reply to the counterclaim by pleading the Arkansas statute of frauds. Its motion for directed verdict, however, did not specify this ground and neither was there any suggestion in trial evidence that Purina relied on this assignment. Furthermore, it was not called to the trial court's attention in any of the proffered instructions. Neither was there any objection made to the court's charge by reason of failing to include this issue. It was not until the motion for judgment n. o. v. that this was called to the trial court's attention. Fed.R.Civ.P. 50(a) provides inter alia that "a motion for a directed verdict shall state the specific grounds therefor"; and Rule 50(b) provides for the filing of a motion for judgment n. o. v. to have judgment entered "in accordance with his motion for a directed verdict." The purpose of requiring that specific grounds be stated in the motion is to apprise the trial court of the movant's position. Randolph v. Employers Mut. Liability Ins. Co., 260 F.2d 461, 465 (8th Cir. 1958). Nowhere in the course of the trial did Purina give any indication of reliance on the statute of frauds defense. Insofar as it would appear to the trial court, this defense might well have been abandoned. This court ruled in Jones Truck Line v. Argo, 237 F.2d 649, 653 (8th Cir. 1956):

"Finally, defendant charges error in denying its motion for judgment notwithstanding the verdict. As a condition precedent to the right of a party to interpose such a motion he must have made a proper motion for a directed verdict. * * *

"Here there was no proper motion for a directed verdict, there being no specific grounds stated therein. The motion for judgment notwithstanding the verdict must stand or fall on the sufficiency of the motion for a directed verdict. No error can be predicated on denying the motion for judgment notwithstanding the verdict in the instant case."

We are not unmindful of rulings such as Quint v. Kallaos, 161 F.2d 605 (8th Cir. 1947) and Cox v. City of Freeman, Missouri, 321 F.2d 887, 891 (8th Cir. 1963), holding that when a motion is granted the adverse party who did not object to failure of the motion to state specific grounds therefor cannot raise such an objection in the appellate court. We are dealing here with a situation where the motion was not granted and Quint and Cox, therefore, are distinguishable and inapposite.

It is not the function of this court to canvass the record and pick out fragments of evidence to determine if the Arkansas statute of frauds has any application here. We do not try cases de novo. Unless the legal issues are properly raised below, we will not be concerned except in extraordinary cases, and then only to avoid a clear miscarriage of justice. This is not such a case. The court properly overruled the motion for judgment n. o. v.

In our opinion, the trial court erred in sustaining an objection to the testimony of Purina's agent, Hagan, which halted the witness' testimony concerning his lack of authority to make the contract upon which the counterclaim was based.

The counterclaim did not specifically allege that Parsons was relying on an oral contract or one that was made for Purina by its agent, Hagan. The pleading merely alleged the existence of a contract between Purina and Parsons and Purina's reply thereto was a denial of the existence of any such contract. It developed upon discovery depositions, however, that a written contract existed between Jack White's Hatcheries, Inc., and Parsons, but Purina was not a signatory thereto. Apparently Purina was of the impression that this was the contract Parsons relied upon in its...