The opinion of the court was delivered by: John E. Miller, District Judge.
This is an action by the plaintiff, Albers Milling Company, to
recover the sum of $8,761.10 allegedly due it by defendants for
poultry feed purchased by defendants at various times from April
17, 1956, through January 31, 1957.
In their answer defendants deny being indebted to plaintiff,
and by way of counterclaim allege that they are entitled to
recover the sum of $6,868.56 from plaintiff. Defendants'
counterclaim is based upon two contentions:
First, defendants allege that one of the flocks of turkeys
involved in this action was, in fact, owned by the plaintiff, and
the plaintiff was obligated to pay for the turkey poults, feed,
and medication, and in addition to pay 20 cents per poult to
defendants for furnishing the brooder house, feeders, waterers,
and labor necessary to brood the poults ready for range.
Defendants allege that the plaintiff did not comply with its
Second, defendants allege that the plaintiff financed a second
flock of turkeys and furnished defendants moldy feed, which
caused the turkeys to be sick and inferior and prevented
plaintiff from making a profit on the sale of said turkeys.
The plaintiff filed a reply to defendants' counterclaim denying
the allegations contained therein, and upon the issues as made by
the pleadings the case was tried to the Court without a jury on
September 12, 1957. At the conclusion of the trial the Court took
the case under advisement pending receipt of briefs from the
parties in support of their respective contentions. The briefs
have been received and the Court, having considered the
pleadings, evidence, and briefs of the parties, now makes and
files herein its Findings of Fact and Conclusions of Law,
The plaintiff is a Delaware corporation authorized to do, and
doing, business in the State of Arkansas. The defendants are
husband and wife, and are citizens and residents of Green Forest,
Carroll County, Arkansas. The amount in controversy, exclusive of
interest and costs, exceeds the sum of $3,000.
Prior to 1956 the defendant, J.P. Donaldson, had been engaged
in the poultry business and more particularly in the raising of
turkeys. In early January, 1956, Donaldson was contacted by
Everett Farney, a field representative and salesman for
plaintiff, and by Clyde Johnson, an authorized feed dealer of
plaintiff in Green Forest, Arkansas. As a result of this meeting,
Donaldson and his wife, Gwen Donaldson, on January 12, 1956,
executed an "Application for Turkey Financing to Albers Milling
Company". This application contained detailed information about
Donaldson, including a financial statement. The application
indicated that Donaldson contemplated purchasing 8,000 "large
whites" on March 15, 1956, and 8,000 "B.B. bronze" on May 12,
1956. Among other things the application provided:
"As security for his account the grower will give
Albers Milling Company a First Lien Chattel Mortgage
covering all turkeys owned.
"All monies received from sale of turkeys will be
paid to Albers Milling Company immediately until
account is paid in full. Checks received from sale of
turkeys to be made out jointly by buyer to Albers
Milling Company and grower.
"The relationship between applicant and Albers
Milling Company shall be that of debtor and creditor.
Applicant to have the sole responsibility for the
raising and sale of birds. Albers Milling Company not
to have any interest in profits of applicant and is
not to share any losses sustained.
"This application when accepted by Albers Milling
Company and Chattel Mortgage executed by applicant,
shall constitute the entire agreement of the parties
hereto, and no agent of either party hereto has
authority to alter or change the terms hereof and
neither party is or shall be bound by any statement
or representation not in conformity herewith.
"This financial information and application for
Turkey Feed Financing is given for the purpose of
obtaining merchandise from Albers Milling Company on
credit, it being intended that the seller shall be
entitled to rely on said financial statement in
extending credit to the buyer."
On February 13, 1956, Robert A. Nichols, plaintiff's credit
manager, wrote defendants as follows:
"Dear Mr. & Mrs. Donaldson:
"We are very happy to advise that we have today
approved your application for turkey financing for
the 1956 season.
"Our acceptance is based on the putting in of 8,000
Broad Whites to be sold as broilers at 14 to 16
weeks. A second group of 8,000 Bronze will be grown
to maturity. We would appreciate from you for our
files a written confirmation from the processor
stipulating that he will take the Broad Whites by the
14th to 16th weeks.
"In the event you are unable to get a guaranteed
market for the early Whites, it is our understanding
that you propose to feed one flock of 10,000 Bronze
"We appreciate the opportunity of working with you
in '56 and sincerely trust that this season will be
very successful for you."
On March 30, 1956, defendants executed a chattel mortgage to
plaintiff upon "7,000 Thompson Broad White turkeys" which had
been hatched on the previous day. The chattel mortgage covered
the 7,000 white turkeys and "all future replacements, increase,
products, and proceeds thereof". The mortgage further provides
that it is security for any and all future advances made by the
mortgagee to the mortgagor before June 30, 1957.
In any event, a buyer was not found for the white turkeys at
that time, and subsequently the white turkeys were sold on
September 10 and September 12, 1956, for the total sum of
$19,715.40. This money was paid to plaintiff and credited on
On June 15, 1956, Donaldson purchased 8,000 bronze poults. In
raising these bronze turkeys Donaldson encountered considerable
difficulty with disease at various stages of growth of the
turkeys. He sent some of the turkeys to a veterinarian in
Springfield, Missouri, for posting (autopsy) and diagnosis. On
July 12, 1956, the veterinarian was of the opinion that the
turkeys had mycosis and enteritis. On August 10 he was of the
opinion that some mold infection was still present. On September
2, 1956, he found no mold infection in the turkeys but was of the
opinion that they were not uniform in size and that some were
stunted. Enteritis can be a primary disease and the cause of
enteritis is not known. Mycosis is a type of disease which can be
caused by mold, stagnant water, litter, etc. The most common
cause of mycosis is litter around the water troughs. The type of
mold found by the veterinarian was the type that grows on the
ground, in water, or the air. The mold may be present in the
During the time Donaldson was raising the bronze turkeys some
of the feed purchased by Donaldson from plaintiff's dealer, Clyde
Johnson, was found to be caked and appeared to be moldy. It was
not clear from the evidence how much of the feed was affected in
that manner. The fact that feed is caked does not mean that mold
There was evidence that some of the feed handled by Johnson was
stored on a moist concrete floor, and it is possible that ...