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G & M Ranches Inc. v. Pacific Gamble Robinson Co.

December 29, 1972

G & M RANCHES, INC. ET AL, RESPONDENTS,
v.
PACIFIC GAMBLE ROBINSON CO., APPELLANT



Appeal from Circuit Court, Crook County. John M. Copenhaver, Judge.

Douglas A. Shepard, Madras, argued the cause and filed the briefs for appellant.

James F. Larson, Prineville, argued the cause for respondents. With him on the brief were Bodie & Minturn, Prineville.

In Banc. McAllister, J., concurs in the result.

Per Curiam

This is an action for breach of a contract to purchase potatoes. Defendant appeals from a judgment for $21,310 entered in favor of plaintiffs and assigns as error the refusal of the trial court to grant its motion for a nonsuit and a directed verdict.

The defendant, Pacific Gamble Robinson Co., is a Delaware corporation doing business in Oregon as Pacific Fruit and Produce Company. Defendant operates a branch plant in Prineville where it stores, grades, and markets potatoes grown in that area. Plaintiffs are engaged in raising potatoes.

In February 1970 the defendant orally agreed to purchase plaintiffs' 1969 crop which was being stored in defendant's plant at the time. The parties were aware that plaintiffs' potatoes were infested to some extent with a disease commonly known as leaf roll or internal browning, which affects the interior of the potatoes.

The contract between the parties called for plaintiffs to be paid the net market price at the time of grading for No. 1 and No. 2 potatoes. Potatoes which grade less than No. 2 are sold as culls for cattle feed. When potatoes are sold on a net price, the buyer bears all expenses, and the price granted to the grower is net to the grower. The potatoes must be inspected by employees of the U.S. Department of Agriculture and are required to meet certain grading standards before they can be shipped.

Some of plaintiffs' potatoes were "run" (sorted and graded) by defendant on May 6 and 7, 1970. The inspectors would not initially certify the potatoes because samples tested did not meet the required standards. At first the defendant refused to grade any more of the plaintiffs' potatoes. However, the defendant subsequently agreed to run more of the remaining potatoes, using a method whereby the larger potatoes (which generally are more affected by browning) are not included in the grading. Additional potatoes were graded on May 26 and 27, and again the inspectors initially refused to certify them. Thereafter, defendant refused to run any more of plaintiffs' potatoes and the remaining 2,687,040 pounds were sold as culls for cattle feed. Plaintiff received $2,687.04 for the culls.

The defendant contends that the agreement between the parties did not require defendant "to run

all of plaintiffs' potatoes over the grader, but only the potatoes that were marketable." Therefore, according to defendant, when the inspectors rejected some of the potatoes because they did not meet tolerance limitations, the defendant was justified in refusing to grade the balance. The issue is one of fact, and the evidence clearly supports the action of the trial court in denying the motions for a nonsuit and a directed verdict.

There was substantial evidence that defendant agreed to grade all, not a portion, of the potatoes purchased from plaintiffs. At the time of the agreement between the parties, the defendant was going to be picketed by the National Farm Organization, which was protesting the prices paid by processors to the growers. According to plaintiff Bill McPhetridge, the defendant's manager told him that if he "would stay out of the NFO holding action" defendant would purchase the potatoes and "run every damn one of them"; also that "he would run my spuds in spite of hell and high water." The deposition of the defendant's manager was read into the record, and he stated:

"'Q Going back to this evening in February, about the 22nd or 23rd, in there, when Bill's sister-in-law was down, you said that you told him you would process his ...


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