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Williams v. Pilgrim Turkey Packers Inc.

December 7, 1972


Appeal from the Circuit Court, Marion County. Thomas W. Hansen, Judge Pro Tempore.

Sam F. Speerstra, Salem, argued the cause for appellant. With him on the brief were Rhoten, Rhoten & Speerstra and Geo. A. Rhoten, Salem.

John S. Horton, Albany, argued the cause for respondent. With him on the brief were Weatherford, Thompson, Horton & Jordan, P.C., and James H. Jordan, Albany.

Tongue, Justice. McAllister, Presiding Justice, and Holman, Bryson, and Thornton, Justices.


This is an action for damages by an executive of a corporation against that corporation for breach of a contract under which he was to sell to it at least 20,000 turkeys per year, at a fixed price, over a period of three years. The case was tried before the court, without a jury. After over four days of testimony the trial court entered a judgment for defendant, based primarily

upon a finding that at the time of the contract a fiduciary relationship existed between plaintiff and defendant corporation. We affirm.

Plaintiff contends that the trial court erred in holding that the relationship between Williams as an employee and Pilgrim as employer was a fiduciary relationship because: (1) an employee is not, as such, in a fiduciary relation with his employer "as to matters in which he is not employed" and (2) even "as to matters of which he is employed" an agent may deal with his principal "provided the business is open, fair and honest." Plaintiff also contends that even if the agreement was voidable, it was subsequently ratified by Pilgrim.

It thus becomes necessary to review the evidence, bearing in mind that in doing so, particularly in instances of conflict in the testimony, the evidence must be viewed in the light most favorable to plaintiff and that the findings and decision of the trial court as the finder of the facts in an action at law must be affirmed if supported by substantial evidence.*fn1 Accordingly, for the purposes of this review we must include reference to such evidence as tends to support the findings and decision of the trial court, despite the fact that such testimony may have been given by witnesses whose credibility was impeached and despite the fact that considerable testimony to the contrary was offered by defendant.

Pilgrim was organized in August 1958. In January 1959, Williams became general manager of its plant in Salem and continued in that position until its acquisition in 1968 by Smoke-Craft, Inc., an Albany based corporation engaged in the sale of various food

products, including smoked turkey meat. During 1969 a new and enlarged plant was built in Salem for Pilgrim, based upon preliminary plans prepared by Williams. During that period Williams continued to act as general manager.

When the new plant was opened in January 1970 Dale Brown was installed as its general manager and Williams became sales manager. Williams, however, was the only executive in either Smoke-Craft or Pilgrim with experience in all of the major parts of Pilgrim business, including the procurement of turkeys from growers, the operation of the plant for the processing of turkeys, and the sale of such products. As such, Williams was included in a small management group of Smoke-Craft and Pilgrim executives which held weekly meetings in Albany and he was consulted and relied upon for advice on "all phases" of Pilgrim's operations, including the procurement of turkeys from growers.

Almost immediately after the new plant was opened, it appeared that Pilgrim was in serious financial difficulties and that it might be advisable to sell the new plant. These problems, including possible sale of the plant, were discussed with Williams as early as January 1970 and he assisted in efforts to find a purchaser, which continued during that spring, without success. He also helped secure needed bank financing. The possibility of closing the plant was then discussed, beginning as early as June 8, 1970, at a meeting attended by Williams.

During this same period, however, the same management group was also considering how to procure a large number of tom turkeys for processing at the Pilgrim plant in order to supply Smoke-Craft with

a large quantity of dark turkey meat. Williams was also consulted on this problem and submitted various forms of contracts with growers, based upon his experience. He also recommended that to accomplish that objective a contract should be offered to growers to purchase turkeys at a fixed price of 23 cents per pound (somewhat above competitive prices then being offered) for a period of three years, including a provision that 10% of such turkeys be produced for "off season" purchase and processing, so as to maintain "off season" plant operation and increase total production. Williams also prepared a draft of such a proposed contract for offering to turkey growers. Based largely upon his recommendation, a contract with these three features was then approved by the management group and was offered to various turkey growers, without success. At the meeting on June 8, 1970, the matter of getting growers to sign that contract was again discussed with Williams.

At the same time, Williams was raising over 25,000 turkeys on a farm purchased by him in 1969. His "original plan" was to sell all of the turkeys to Pilgrim and he knew that Pilgrim wanted all the turkeys it could get. As of June 1970, however, he had made no commitment whether to sell them to Pilgrim or to Acme, another large turkey purchaser.

On June 13, 1970, William Mikkleson, president of both Smoke-Craft and Pilgrim, went to Europe until July 15, leaving six signed contracts for Sydney Wells, the Pilgrim field man, to take to growers for acceptance. There was testimony that he did so at the suggestion of Williams. There was also ...

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