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John Deere Co. v. Metzler

SEPTEMBER 8, 1964.

JOHN DEERE COMPANY, A MISSOURI CORPORATION, PLAINTIFF-COUNTERDEFENDANT-APPELLANT,

v.

FRANKLIN METZLER AND ROBERT METZLER, PARTNERS, D/B/A METZLER BROTHERS, DEFENDANTS-COUNTERPLAINTIFFS-APPELLEES.



Appeal from the Circuit Court of Macoupin County; the Hon. CREEL DOUGLASS, Judge, presiding. Reversed with judgment here.

SPIVEY, J.

Plaintiff-Counterdefendant-Appellant, John Deere Company of St. Louis, a Missouri Corporation, appeals from a judgment entered by the Circuit Court of Macoupin County upon a jury verdict in favor of defendants-counterplaintiffs-appellees, Franklin Metzler and Robert Metzler, partners, d/b/a Metzler Brothers.

For clarity we shall hereafter refer to the plaintiff-counterdefendant-appellant as John Deere and defendants-counterplaintiffs-appellees as Metzler Brothers.

The action commenced on March 5, 1962, was a simple action in replevin filed by John Deere against Metzler Brothers.

In aid of its replevin action John Deere obtained a temporary injunction without notice and without bond restraining and enjoining Metzler Brothers from taking any action to sell, convey, pledge, transfer or mortgage, or in any way to encumber any of their real or personal property. John Deere filed the customary replevin bond in the amount of $147,000. Metzler Brothers on March 6 filed a forthcoming bond in the amount of $146,974.72 to the replevin action. On Metzler Brothers' motion the temporary injunction was dissolved on March 8, 1962.

Metzler Brothers filed a general denial to the replevin action and a counterclaim in two counts. Count One was an action for breach of the written dealer contract between the parties, and Count Two sounded in tort and charged John Deere with conspiring with its employees and other unnamed persons for the purpose of maliciously and intentionally injuring Metzler Brothers' business.

John Deere answered and denied the material allegations of the counterclaim and added a second count to its action in replevin for moneys owing to it for goods sold and delivered under the written dealer contract.

Prior to trial Metzler Brothers made an unconditional tender in open court to John Deere of most of the items claimed in the replevin action. John Deere accepted this tender and dismissed its replevin count.

Trial was had before a jury on John Deere's complaint for moneys owing to it for goods sold and delivered under the written dealer contract, and Metzler Brothers' counterclaim in two counts for breach of the written dealer contract between the parties and a conspiracy to maliciously and intentionally injure Metzler Brothers' business.

The jury returned a verdict in favor of John Deere on its claim for moneys due in the amount of $11,612.36; a verdict in favor of John Deere on Count One of Metzler Brothers' counterclaim for breach of contract; and a verdict in favor of Metzler Brothers in the amount of $75,000 on Count Two of the counterclaim charging a conspiracy to maliciously and intentionally injure Metzler Brothers' business. Appropriate judgments were entered on the jury's verdicts.

John Deere's post-trial motions for judgment notwithstanding the verdict and for a new trial on Count Two were denied.

This appeal involves only the judgment entered for Metzler Brothers against John Deere under Count Two of the counterclaim. No appeal from the judgments on the other two verdicts has been perfected, and at this time they are final.

Count One of Metzler Brothers' counterclaim alleges in effect that since 1922 Metzler Brothers and John Deere have operated under a general agricultural dealer's contract which has been renewed annually and has been in full force and effect up to and including August 31, 1961.

They further allege that they have fully performed all the terms and conditions of said agreement and that notwithstanding said performance on the part of Metzler Brothers, John Deere has failed and refused to perform the terms and conditions of said agreement in the following respects:

In the month of February, 1960, John Deere through its agent, R.J. Baldridge, refused to inspect defective parts which had been replaced by Metzler Brothers so that they could receive credit for replacements as provided in paragraph 24 of the agreement.

In the same month of February, 1960, and thereafter that John Deere failed and refused to carry out its agreement to sell Metzler Brothers agricultural machinery or equipment as provided by paragraph 3(a) of the agreement.

They further allege that as a result of said breaches of the agreement they suffered damage in the amount of $116,598.68.

In Count Two of the counterclaim, after alleging the contractual relationship between the parties, they state they had conducted a highly successful business in the City of Carlinville, Illinois, for the sale and resale of agricultural machinery and had enjoyed the respect and confidence of the farmers, merchants and citizens of the community.

They further allege that on or about December 16, 1959, and thereafter until the present time, John Deere "by, with, and through its agents, and servants, and by and with certain other persons unknown to counterplaintiffs has maliciously, wrongfully, and unlawfully conspired and formed the deliberate design and purpose of injuring and destroying counterplaintiffs' business as aforesaid, and to cause counterplaintiffs to discontinue their aforesaid business."

They continue by alleging that in furtherance of that design and purpose John Deere has maliciously, wrongfully and unlawfully committed overt acts, to wit: Changed its pattern of extending credit to counterplaintiffs; violation of paragraph 20 of the General Agricultural Dealer's Contract (as alleged in Count One); in attempting to coerce counterplaintiffs into using John Deere's plan and method of financing; violation of paragraph 3(a) of the General Agricultural Dealer's Contract (as alleged in Count One); unreasonably refused payment for a claim for damages to tractors damaged in transit, under a policy of insurance issued to counterplaintiffs by counterdefendant; unreasonably refused to give credit for or payment of volume discounts; counterdefendant's agent and servant, R.J. Baldridge, reported goods and merchandise "out of stock" when same were actually in stock causing them to be charged for goods not actually sold; On September 25, 1961, counterdefendant's agent, R.J. Baldridge, scheduled a local John Deere Day program, and after all arrangements were made John Deere cancelled the program to the embarrassment, disgrace, humiliation and loss of business of counterplaintiffs; on December 8, 1961, another of counterdefendant's dealers came to counterplaintiff's place of business to pick up a combine but were prevented from doing so when the counterdefendant's agent, R.J. Baldridge, refused to permit the transfer and urged the other dealer to obtain the item from another of counterdefendant's dealers; Attempted to replevy the combine referred to under subparagraph 9 and continues to do so; R.J. Baldridge interfered with the conduct of counterplaintiffs' business and harassed and embarrassed counterplaintiffs before customers in their place of business; Subjected counterplaintiffs to a suit in replevin; Subjected counterplaintiffs to a wrongful suit in replevin and for injunction which hampered and harassed counterplaintiffs in the conduct of their business so that they were unable to consummate certain sales contracts requiring their customers to make purchases from dealers other than themselves; Caused counterplaintiffs' customers and merchants and residents in and about the community to believe and suspect that they are going out of business, that they are to be discontinued as John Deere dealers, are to be replaced by another dealer, and has actively solicited other person or persons to replace them as its dealer; and has directed certain of counterplaintiffs' customers to take their business to other dealers.

They conclude by alleging that as a result of the aforesaid conspiracy and pursuant to the aforesaid acts that counterplaintiffs have been irreparably injured and damaged in their business in the amount of $200,000.

Metzler Brothers and John Deere had operated under a dealership agreement for a period of 42 years. Their contract was from year to year, the last contract having been entered into on November 18, 1960, for a period to and including August 31, 1961. Delay in entering into this 1960-1961 agreement was occasioned by credit problems between Metzler Brothers and John Deere.

The arrangement between John Deere and Metzler Brothers might well be described as an exceptionally complex commercial relationship. It involved the sale of and payment for hundreds of separate items including machinery, parts and attachments, as well as credits for repairs and replacements.

All items were furnished Metzler Brothers on a deferred payment basis. They were to be paid for at times provided by the terms of payment established by John Deere and in any event were due and payable immediately upon the sale of such items by Metzler Brothers, or upon their removal from Metzler Brothers' place of business, or upon personal use by Metzler Brothers.

Title to and ownership of all the goods delivered under the contract as well as used machines taken in trade by Metzler Brothers together with the proceeds of all sales due were lodged in John Deere.

All indebtedness of Metzler Brothers was considered as a lump sum indebtedness to John Deere.

Monthly inventory checks were made by agents of John Deere in verifying Metzler Brothers' report of inventory. All items accountable for by Metzler Brothers not found upon a physical check of the inventory were listed as out of stock and payment for the same due. Exceptions were made in the case of any item that was on demonstration.

John Deere's agent would also make a physical examination of alleged warranted defective parts for credit and the report of the same together with all labor charges forthcoming to Metzler Brothers. This report would be forwarded to John Deere's district office for processing and credit.

It was also customary for John Deere dealers to exchange and have transferred to and from their accounts machinery, accessories and repair parts.

The amount of the dealers indebtedness at any particular time was also affected by John Deere's financial plan, floor plan notes, transportation charges, advanced freight and handling charges, excise, sales, use and other similar taxes payable by Metzler Brothers to John Deere.

Among the many provisions of the General Agricultural Dealer's contract between the parties the following provisions are important to the decision in this case:

Clause 2.

The terms of this contract is from the effective date hereof to August 31, 1961, both inclusive, or to any earlier date on which this contract may be terminated in accordance with its provisions or by agreement of the parties or on which a subsequent General Agricultural Dealer's Contract covering the same type of goods is entered into between the parties, and on such date or on the occurrence of any such events, the term of this contract shall be deemed to have "expired" regardless of the reason for termination. Expiration of the term of this contract shall not affect obligations of either party arising out of and pertaining to goods delivered before such expiration or termination or to any goods delivered after such expiration or termination to which the terms of this contract specifically apply, nor shall it affect the company's title and rights to all such goods under Clauses 16, 17, 18, and 30.

Clause 3.

(a) Subject to and in accordance with the provisions of this contract, the Company agrees to sell and the Dealer agrees to buy the goods handled by the Company as agricultural machinery or equipment. . . .

(c) The Company is under no obligation to accept orders issued by the Dealer subsequent to the expiration of the term of this contract, and the acceptance of any such orders by the Company shall in no sense be deemed a renewal or extension of the term of this contract. However, if any goods are shipped pursuant to such orders they shall be governed by the provisions of this contract unless prior to the issuance of such orders a subsequent general dealer's contract covering that type of goods has been entered into between the parties.

Clause 10.

(a) All goods are ordered hereunder at the prices and on the terms of payment provided in the Company's Agricultural Price Lists and Agricultural Terms Schedule in effect on the date ordered. If, however, any such prices or terms shall be changed prior to the shipment of goods, such order shall be deemed amended to provide for the prices and terms in effect on the date of shipment. It is understood that prices and terms, or any of them, may be changed by the Company at any time and from time to time without notice to the Dealer. . . .

Clause 13.

(b) The Dealer shall pay the Company the invoice price of all goods promptly on the dates and at the times provided in the terms of payment established by the Company, it being understood that regardless of due dates stated in the Company's terms of payment the invoice price of all goods subject to complete machine terms is immediately due and payable upon the sale of such goods by the Dealer, or upon their removal from the Dealer's place of business, or upon personal use of such ...


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