Drager v. Carlson Hybrid Corn Co.

Hays, J.

This is the second appeal in this case. See Drager v. Carlson Hybrid Corn Co., Inc., 244 Iowa 78, 56 N.W.2d 18. Since the facts are set forth at length therein, a brief statement here will be sufficient.

Plaintiffs are experienced growers of hybrid seed corn. The defendant has been for years engaged in the business of processing and selling hybrid seed corn for seed purposes. Plaintiffs allege that in 1948, by oral agreement, they agreed to sell and defendant agreed to buy all seed corn raised by plaintiffs during that year, at the price of $3.50 per bushel; that 3290 bushels were delivered to defendant for which they have received $2000. Judgment is asked for $9515 with interest. The defendant’s answer, filed in February 1950, was in effect a general denial. By amendment, filed in May 1950, by way of a counterclaim, the making of an oral contract for corn and the receipt of 3290 bushels is admitted and that the agreed price was $3.50 per bushel. Defendant however alleges that the plaintiffs under an implied warranty agreed that the corn would be fit for sale as seed corn; that 1410 bushels were unfit for that use, and asks damages against plaintiffs.

At the close of all of the testimony, the court directed the jury to return a verdict for plaintiffs for the amount asked in the petition, and submitted to the jury defendant’s counterclaim. There was a verdict for the plaintiffs on the counterclaim. From the judgment thus entered the defendant has appealed.

Two errors, in substance, are assigned: (1) The contract, being oral and in dispute as to the terms thereof, presented a jury question and directing a verdict for the plaintiffs was error; (2) incorrect instruction as to the counterclaim.

I. On the original trial the court at the close of all of the testimony directed a verdict for the plaintiffs on their cause of action and also as to the defendant’s counterclaim. This was held to- be error and the case was reversed. The opinion states at page 85 of 244 Iowa: “If there was an implied warranty * * * (and that was a question for the jury), there is substantial evidence much of it [corn] did not comply with the warranty. Defendant had the right to set up against plaintiffs the breach of warranty by way of recoupment in diminution of the price.” At page 88 we said: “It ivas error to direct a verdict for plaintiffs for the full amount of their claim.” In other words it was held on the former appeal that defendant' was entitled to have the jury pass upon the terms and meaning of the oral contract and, if found to be as claimed by defendant, to be entitled to a determination of the amount of recoupment it was entitled to receive.

On the trial of the instant case the court in effect held that plaintiffs were entitled to the full contract price of $3.50 per bushel (admitted by defendant) for the 3290 bushels received by defendant (also admitted by defendant) unless, due to an "implied warranty as claimed by defendant, plaintiffs had not performed their contract in full. In this event there might be a recoupment. This is what was held on the former appeal. The real question, under this assignment, goes to the method adopted by the trial court. Assuming, for the moment, the correctness of the instructions, was this procedure prejudicial to the defendant? We think not.

Kelly v. Emary, 242 Iowa 683, 45 N.W.2d 866, is very like the instant case except that there the contract was. written and here it is oral — a distinction that we deem inconsequential, under the peculiar facts of this case, or at least nonprejudicial. In the Kelly case the answer was¡ in two divisions: (1) while admitting the giving of the cheek, pleaded a warranty and breach thereof; (2) was a counterclaim based upon the existence of a warranty and breach thereof. The court directed a verdict for plaintiff upon the check at the close of all of the testimony and before the submission of the counterclaim to the jury. Such procedure was held to be proper. Here, as the court held there, every question raised either as a defense or way of recoupment ivas submitted to the jury. It, of necessity, involved the meaning of the oral contract. What is said at page 692 of 242 Iowa, we think applies here:

“Defendant feels that in some improper, way the jury was given an impression adverse to his counterclaim thereby. It occurs to us that it could as reasonably be argued that the jury, knowing that plaintiff was to recover the full amount of his claim, if convinced of the justice of defendant’s cause would thereby be stimulated to increase the allowance on the counterclaim.”

The burden was upon the defendant to plead and prove the warranty and breach thereof. Hoffman v. Independent District of Hampton, 96 Iowa 319, 65 N.W. 322. That burden was not appreciably increased, if any, by the procedure adopted by the trial court. We find no error under this assignment.

II. Appellant further assigns as error the giving of Instruction No. 8. In this instruction the court told the jury an implied warranty depended upon two facts: (1) Knowledge by the seller that the article was to be used for a particular purpose; (2) reliance by the buyer on the seller’s special skill and judgment. It then said: “In regard to the first of these, the evidence is undisputed that the plaintiffs knew the particular use to which the corn was to be put by the defendant. In regard to the second of these, the evidence is in dispute. You are instructed that if you find that the defendant-corporation did not rely on the skill or judgment of the plaintiffs, then the defendant is not entitled to recover.” The objection to the instruction is that the record shows without dispute that the defendant did so rely. No objection is made to it as an abstract legal proposition.

As to the first fact the record clearly shows that the plaintiff Drager admitted such knowledge and there is not a word or circumstance that tends to disprove this admission. As to the second fact the record is different. True, Elmer Carlson, who made the oral contract upon the part of the defendant, states that he relied thereon; this is clearly a self-serving statement, and though proper it is not as conclusive as is an admission against interest. Furthermore, the record contains many circumstances and statements tending to show otherwise. There was clearly a dispute of fact upon this question and it was for the jury to decide. See Drager v. Carlson Hybrid Corn Co., Inc., supra, 244 Iowa 78, 56 N.W.2d 18.

While the procedure adopted here is somewhat unusual, we fail to find wherein it violates any statutory requirements or whereby defendant has been deprived of a full and fair consideration by the jury of its alleged implied warranty, its only defense asserted.

Finding no error, the judgment is affirmed. — Affirmed.

Wennerstrum, C. J., and Smith, Mttlroney, Thompson, and Larson, JJ., concur. Garfield, Bliss and Oliver, JJ., dissent.