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Meason v. Ralston Purina Co.

Supreme Court of Arizona

November 18, 1940

DR. J. M. MEASON, Appellant,
RALSTON PURINA COMPANY, a Corporation, and M. B. VAUGHT, Its Agent, Appellees

APPEAL from a judgment of the Superior Court of the County of Maricopa. Arthur T. LaPrade, Judge. Judgment reversed and cause remanded.

Mr. Frank W. Beer, Mr. William G. Christy and Mr. Richard P. Meason, for Appellant.

Mr. Henry H. Miller, Mr. Laurens L. Henderson and Mr. Phil J. Munch, for Appellees.


Page 225

[56 Ariz. 292] McALISTER, J.

The Ralston Purina Company recovered judgment against Dr. J. M. Meason on three promissory notes executed by him in its favor and, from that judgment and an order denying his motion for a new trial, he appeals. The parties will be referred to throughout as plaintiff and defendant.

The facts out of which the action arose are substantially these: On May 1, 1936, the plaintiff, the Ralston Purina Company of St. Louis, Missouri, manufacturer and the defendant, Dr. J.M. Meason, of Chandler, Arizona, grower, entered into an agreement, termed a "turkey chow contract," by which the former agreed [56 Ariz. 293] to sell the latter turkey feed in the sum of $2,254 for approximately 2,000 turkeys being grown by him on a ranch about fifteen miles from Chandler, Arizona, and the latter agreed to purchase the feed and give his note bearing 6 per cent. interest for each lot received and secure the same with a first mortgage on all his turkeys and turkey equipment. The agreement provided that the grower would not move the turkeys from the ranch without manufacturer's permission, would use Purina products exclusively, be responsible for the cost of hauling the feed from manufacturer's warehouse in Phoenix to the ranch and pay the notes when due; that the liability of the grower was not dependent upon the sale of the turkeys but that the date for payment of the notes, in part or in full, should be advanced by any sale of turkeys and that if they were sold at various times the defendant would pay the plaintiff not less than two-thirds of the sale price received on those sold prior to the Thanksgiving market; that "Payments on the note shall be made out of the Thanksgiving and subsequent sales in such proportion as will insure that the notes will be paid in full when the last large lot of birds are sold, or on December 30, 1936, whichever event occurs first. Should the Grower sell any turkeys without making the required payment on account, the Manufacturer shall have the sale, and apply the proceeds, so far as they are needed, towards payment of the Grower's notes, and any balance remaining due the Manufacturer shall become payable immediately"; that the grower would allow the manufacturer, its agent or salesman, to inspect the turkeys at all reasonable times and furnish it reports as requested showing: (1) number and kind of turkeys on the ranch; (2) the condition, age and approximate weight of birds; (3) sales during month and price obtained; (4) losses during the month, and cause.

[56 Ariz. 294] In fulfillment of this agreement, the plaintiff delivered to Dr. Meason on May 21, 1936, five hundred and forty-eight sacks of turkey feed and received from him his promissory note in its favor for $1,453.20, bearing that date and 6 per cent. interest, the same being payable on December 31, 1936, at the Ralston Purina Company's office in St. Louis. The only difference between this note and the other two was the date of execution and the amount due, the first of these two being for $1,292 and dated July 25, 1936, and the other for $984 and bearing date of November 5, 1936.

Page 226

A chattel mortgage on the turkeys and turkey equipment securing the payment of the three notes was executed by Meason on July 8, 1936, and recorded on September 26 thereafter. The turkeys had been disposed of many months before this action was filed.

In addition to the foregoing facts the complaint alleges that a large number of turkeys were sold in November and December, 1936, and that the notes, totaling $3,729.20, became due and payable on December 31, 1936, under both the contract and their own terms, but that no part of this sum, except $950, had been paid, thus leaving due a balance of $2,779.20 in principal, interest, and an attorney's fee of 10 per cent. of the sum of found due.

The answer admits the contract, the receipt of the feed, the execution of the notes and the chattel mortgage, but denies the sale of a large number of turkeys in November and December, 1936, that the notes became due on December 31, 1936, in the sum of $3,729.20, or any other sum, that there is in fact any balance whatever due thereon, or that defendant is liable at all on the notes for the following reason: In November, 1936, he owned 1,660 turkeys subject to the chattel mortgage held thereon by plaintiff; that when the mortgage was executed and at all times thereafter [56 Ariz. 295] the parties understood and agreed that, notwithstanding the mortgage, the turkeys could be sold and marketed by defendant for the Thanksgiving and Christmas holiday seasons in 1936; that shortly prior to November 26, 1936, the defendant entered into a contract with the Phoenix Poultry & Egg Company whereby he agreed to deliver to that company the 1,660 turkeys on foot at his ranch, and in consideration thereof the company agreed to pay him an average of 19" per pound therefor, delivery to be made in time for the 1936 Thanksgiving market; that both parties were fully prepared to carry out this contract and would have done so, except for the fact that a few days after the Phoenix Poultry & Egg Company had, pursuant thereto, taken delivery of a portion of said turkeys, it sent to the defendant's ranch a large truck to pick up an additional portion thereof but that the plaintiff, through its agent, M.B. Vaught, with knowledge of the sale to which it had theretofore consented, maliciously, wilfully, intentionally, unlawfully and without right, just provocation or excuse, prevented "the consummation of said sale and the delivery and acceptance of the remaining portion of said turkeys thereunder, by wrongfully claiming title to said turkeys, and by wrongfully claiming the right to refuse permission to sell or remove said turkeys at said time, and by refusing to permit the removal or delivery of said turkeys, and by refusing to permit the said Phoenix Poultry & Egg Company to take delivery of said remaining turkeys, or any part of them."

The answer alleges further that at the price the Phoenix Poultry & Egg Company agreed to pay for the 1,660 turkeys they were worth the reasonable sum of $6,533.60 but that immediately after Thanksgiving the market price for turkeys dropped and, although defendant made a diligent effort to dispose of them at a fair price, he could not do so and was only able [56 Ariz. 296] to sell some of them in small allotments; that he was forced to have them dressed and placed in cold storage, as a result of which many of them became so spoiled and unfit for human consumption that he realized only $610.94, for all remaining unsold after Thanksgiving; that as a direct and proximate result of the aforesaid malicious, wilful, intentional, unlawful and unwarranted interference with the beneficial sale of the turkeys, defendant was forced to and did expend an additional sum of $501.50 for feed and storage for the turkeys and suffered actual damages in the sum of $6,444.15.

The defendant filed a cross-complaint against the plaintiff and its agent, M.B. Vaught, in which he set up the same facts alleged in the answer, and prayed for ...

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