Robert Johnson Grain Co. v. Chemical Interchange Co.

Decision Date07 September 1976
Docket NumberNo. 76-1043,76-1043
Citation541 F.2d 207
Parties20 UCC Rep.Serv. 40 ROBERT JOHNSON GRAIN COMPANY, Appellant, v. CHEMICAL INTERCHANGE COMPANY, Appellee.
CourtU.S. Court of Appeals — Eighth Circuit

John M. Lee, Fillmore, Camp & Lee, Fort Worth, Tex., for appellant; Stuart M. Haw, Jr., Anderson, Gilbert, Wolfort, Allen & Bierman, St. Louis, Mo., on brief.

Thomas C. Walsh, Bryan, Cave, McPheeters & McRoberts, St. Louis, Mo., for appellee; Robert M. Lucy and William F. Tracy II, St. Louis, Mo., on brief.

Before HEANEY and HENLEY, Circuit Judges, and SCHATZ, District Judge. *

HENLEY, Circuit Judge.

This is an appeal by Robert Johnson Grain Company, a Texas corporation and plaintiff below, from a summary judgment granted by the district court in favor of Chemical Interchange Company, a Missouri corporation and defendant below. Subject matter jurisdiction of the district court, which is established, was based on diversity of citizenship and the requisite amount in controversy. 28 U.S.C. § 1332(a).

Plaintiff brought its action in the district court alleging in substance that in January, 1975 following certain negotiations which began in December, 1974, plaintiff orally agreed to sell to the defendant and the defendant orally agreed to buy from the plaintiff 15,000 short tons of anhydrous ammonia a widely used chemical fertilizer, at a price of $370.00 per ton. Plaintiff alleged that after the oral contract was made on January 6, 1975 it obligated itself to purchase an amount of ammonia sufficient to fulfill its contract with the defendant; that in February, 1975 the defendant agreed to reduce the agreement to writing but refused to do so and repudiated its obligation in toto. 1

This suit was commenced in April, 1975 and plaintiff anticipated a defense based on the statute of frauds appearing as Article 2-201 of the Uniform Commercial Code which is in force in both Missouri and Texas. 2 Accordingly, the plaintiff alleged that by virtue of its reliance upon certain representations and statements made on behalf of the defendant, the defendant is estopped from relying on the statute as a defense. On that theory plaintiff sought damages for breach of the alleged contract in the sum of approximately $450,000.00. Alternatively, plaintiff alleged that should it be held that it is not entitled to recover on the contract, it is nevertheless entitled to recover on a theory of "promissory estoppel" the sum of not less than $300,000.00 as "reliance damages."

The defendant answered and denied liability. It denied that it had ever entered into a contract to purchase ammonia from the plaintiff, and asserted that if it did so contract, the contract was oral, and that enforcement of it is barred by the statute that has been mentioned. And the defendant denied that plaintiff is entitled to recover anything either for breach of contract or by way of "reliance damages."

As the case proceeded, the depositions of plaintiff's president, Robert Johnson, and of its manager, Charlie Robb, were taken and transcribed. Also taken and transcribed were the depositions of defendant's president, John S. Moore, Jr., and of defendant's vice president, W. O. Butler. In addition, the defendant propounded certain interrogatories to the plaintiff which were answered.

In due course the defendant moved for summary judgment under Fed.R.Civ.P. 56, and the motion was submitted to the district court on the pleadings, defendant's interrogatories and the answers thereto, the depositions that have been identified and exhibits to those depositions.

On November 19, 1975 the district court filed a very short memorandum opinion, denominated an "Order," granting the motion and entered a formal judgment dismissing in its entirety plaintiff's complaint as amended. This appeal followed.

While Rule 56 is a useful tool whereby needless trials may be avoided, nevertheless there are stringent limitations on its use. Recently, in Percival v. General Motors Corp., 539 F.2d 1126 (8th Cir. No. 75-1879 July 21, 1976), we cited with approval the earlier Eighth Circuit decision in Windsor v. Bethesda General Hospital, 523 F.2d 891 (8th Cir. 1975), wherein we noted (523 F.2d at 893, n. 5) that summary judgment is an extreme remedy, and one which is not to be granted unless the movant has established his right to a judgment with such clarity as to leave no room for controversy and that the other party is not entitled to recover under any discernible circumstances. In passing upon a motion for summary judgment the court is required to view the facts in the light most favorable to the party opposing the motion and to give to that party the benefit of reasonable inferences to be drawn from underlying facts. Adickes v. S. H. Kress & Co., 398 U.S. 144, 153-59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Percival v. General Motors Corp., supra.

As to the instant case, the district court noted at the outset of its opinion that there is a dispute between the parties as to whether their rights are governed by the law of Missouri or by the law of Texas. However, the district court was of the opinion that it made no difference which body of law was applied since plaintiff was not entitled to recover under the law of either Missouri or Texas.

The district court seems to have accepted plaintiff's premise that on or about January 6, 1975 the parties entered into an oral contract for the sale and purchase of anhydrous ammonia in the quantity and at the price alleged by plaintiff, and that the defendant had repudiated the contract. But, the district court also found that enforcement of the contract was barred by the statute of frauds, and that there was no basis for finding that the defendant is estopped from pleading the bar of the statute. Taking implicit note of certain conflicts in the deposition testimony, the district court concluded that there was no "genuine" issue as to any material fact, and that the defendant was entitled to judgment.

In its opinion the district court does not appear to have differentiated...

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