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November 17, 1961


The opinion of the court was delivered by: John E. Miller, Chief Judge.

The parties have been unable to agree upon the terms and provisions of a judgment to be entered upon the mandate of the United States Court of Appeals for the Eighth Circuit, issued September 27, 1961, and filed herein on September 29, 1961.

The controversy between the parties was heard on November 6, 1961, and at the conclusion of the hearing, the court orally announced certain conclusions, but upon further consideration the court, on November 13, 1961, entered an order striking the oral statement and directions as to the terms and provisions of the judgment announced on November 6, 1961, at the conclusion of the hearing, and now, having fully considered the contentions of the parties and the applicable law, the court files herein this opinion setting forth the terms and provisions which should be included in the judgment to be rendered herein.

The case was originally tried to this court without the intervention of a jury, and on October 26, 1960, the court filed its opinion and entered judgment for the defendants in accordance with the opinion (D.C.W.D.Ark. 1960, 188 F. Supp. 277). As set forth in finding of fact No. 6 (188 F. Supp. 281), the trial court found that late in November of 1958, the plaintiff entered into a valid contract with the defendants, whereby the plaintiff agreed to finance the defendants during the turkey growing season of 1959, and the details of such contract are set forth in said finding.

The court also found that on March 13, 1959, the plaintiff definitely and completely terminated the agreement to finance the defendants in their turkey program for the year 1959, and as reflected by finding of fact No. 12 (188 F. Supp. 282-3), the defendants, upon receiving such information, "attempted to make other arrangements for financing the 1959 range turkey program, but to no avail. Commercial banks generally do not engage in such financing, and the other feed manufacturers operating in the area had already allocated their available funds for the 1959 turkey season, and therefore could not extend financing to Paull individually or to the Poor Boy Feed Company. It is the practice of the turkey feed manufacturing companies to allocate the funds available for financing turkey flocks prior to January 1 of each year. * * *

"At the time of the termination of plaintiff's feed financing program, R.C. Paull, Poor Boy Feed Company, and Paull's Hatchery, Inc., were ready, willing and able to perform the contract agreements."

The conclusions of law, following the findings of fact and the discussion thereof, appear beginning at page 288 of 188 F. Supp. In effect, the court held that the agreements entered into by the parties constituted and were valid contracts; that after allowing the plaintiff credit for the amount of the indebtedness due it from the Poor Boy Feed Company on account of the 1958 operations, that the defendant, R.C. Paull, as liquidating partner of said Poor Boy Feed Company, should recover $36,566.02; that R.C. Paull, individually, should recover $15,661.40, after allowing plaintiff credit for the indebtedness owed by Paull to it on the 1958 operations; and that Paull's Hatchery, Inc., was indebted to the plaintiff in the total sum of $18,151.47, which should be offset by $17,200 damages which the court adjudged Paull's Hatchery, Inc., had suffered by breach of the contract, thus leaving, after calculating interest and attorneys' fees, a net amount due the plaintiff from Paull's Hatchery, Inc., of $2,583.76.

An appeal was prosecuted from the judgment of the trial court (8 Cir., 1961, 293 F.2d 389). In its opinion beginning at page 389, the Court of Appeals states the questions involved in the appeal, and on page 391 of 293 F.2d quotes from finding of fact No. 2 of the trial court's opinion, appearing at page 279 of 188 F. Supp. At page 392 of 293 F.2d the Court of Appeals stated:

    "The controverted issues arose out of the
  counterclaims asserted by the defendants R.C. Paull
  and Paull's Hatchery, Inc. Those issues were: 1.
  Whether ADM had, in November 1958, entered into
  complete and binding oral contracts (a) to finance
  R.C. Paull during 1959 in the raising of 20,000 range
  turkeys, (b) to finance Poor Boy Feed Company in
  raising 40,000 range turkeys, and (c) to finance the
  purchase from Paull's Hatchery, Inc. of 90,000 turkey
  poults, as alleged in its counterclaim. 2. Whether,
  if such financing contracts were entered into, the
  failure of ADM to perform them entitled the
  counterclaimants to damages measured by the profits
  they might or would have made had the contracts been
  fully performed by ADM."

At page 393 of 293 F.2d the court said:

    "Had this case been tried to a jury, and had ADM
  moved for a directed verdict in its favor on the
  counterclaims at the close of the evidence, on the
  ground that it conclusively appeared that ADM had not
  entered into any such oral agreements as the court
  found ADM had made with the counterclaimants in
  November, 1958, for the raising of

  turkeys in 1959, we think the court would not have
  erred in denying the motion. In other words, under
  the evidence we regard the question of the existence
  or nonexistence of the alleged contracts as a
  doubtful question of fact for the trier of the facts,
  which in this case was the trial court. We cannot
  rule that its determination of this issue was clearly
  erroneous, even though the evidence would have
  sustained a contrary finding. * * *"

At page 395 of 293 F.2d the court said:

    "The vital question in this case is, we think,
  whether, under the evidence and the applicable
  substantive law of Arkansas, ADM can be held legally
  liable in damages for profits which the trial court
  found the defendants-counterclaimants would have
  earned had ADM carried out its contracts to finance
  their turkey-raising programs in 1959. * * *"

At page 397 of 293 F.2d the court said:

    "It is not conceivable to us that at the time the
  contracts asserted in the counterclaims were entered
  into the parties could have contemplated that there
  was any reasonable certainty that the fulfillment of
  the contracts would result in profits. * * *
    "Our conclusion is that there was not an adequate
  basis in the evidence for a determination by the
  trial court that at the time ADM agreed to finance
  the turkey-raising programs of the
  defendants-counterclaimants, the parties contemplated
  that profits were reasonably certain to result or
  that any anticipated profits were `certain both in
  their nature and in respect to the cause from which
  they' were to `proceed.' That 1959 turned out to be a
  profitable year in Arkansas generally for turkey
  raisers whose flocks came through in good condition
  and were marketed at the proper times, does not, in
  our opinion, justify or require the award of any such
  damages, for loss of profits, as were ...

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