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Anchor Grain Co. v. Kail

NOVEMBER 24, 1964.

ANCHOR GRAIN COMPANY, AN ILLINOIS CORPORATION, PLAINTIFF-APPELLANT,

v.

JESS KAIL AND MARION D. KAIL, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of McLean County; the Hon. R. BURNELL PHILLIPS, and the Hon. LELAND SIMKINS, Judges, presiding. Reversed with judgment here.

SPIVEY, J.

Rehearing denied February 2, 1965.

The plaintiff below appeals from a judgment entered on a jury verdict in the Circuit Court of McLean County, Illinois, in favor of the defendants in an action arising under a contract.

On September 2, 1959, the plaintiff, Anchor Grain Company, entered into a contract of purchase with the defendants, Jess Kail and Marion D. Kail, then doing business as McLean County Feed, Seed and Grain Company.

By that agreement the plaintiff purchased the entire business of the defendants consisting of, inter alia, real estate, buildings, furniture and fixtures for the sum of $87,500. Possession was delivered to plaintiff on October 1, 1959, after payment of $30,000.

There were three grain storage bins upon the premises, containing corn on which warehouse receipts had been issued to the Commodity Credit Corporation.

In their agreement it was provided by Paragraph 10: "Vendor further agrees that he will assign unto the Vendee all of his rights in Commodity Credit Corporation grain storage agreements and that effective October 1, 1959 all storage income by reason of said agreements shall become the property of the Vendee and Vendor further agrees that in the event the corn in Commodity Credit Corporation storage as represented by warehouse receipts delivers out with a shrink of greater than 1 1/2% of the amounts contracted with Commodity Credit Corporation, then Vendor will reimburse said Vendee for such amounts as Vendee expends to purchase corn to bring said shrink within 1 1/2%. Vendee agrees to notify the Vendor in writing at least two days prior to the date of emptying said bins."

There is no disagreement between the parties that the warehouse receipts issued represented the storage of 100,225.77 bushels in the East Pole Bin, 95,043 bushels in the Metal Star Bin, and 103,333.17 bushels in the North Pole Bin.

Between March 28, 1960, and April 15, 1960, the East Pole Bin was emptied, delivering out 96,070.38 bushels, representing 4,155.39 bushels less than was represented to be contained in that bin.

On May 1, 1960, the parties entered into another agreement wherein it was recited that at the instance of the defendants the plaintiff agreed to pay the sum of $50,000 (then not due) on its note to the defendants in the amount of $57,500.

In this latter agreement, in dealing with the 4,155.39 bushel shortage in the East Pole Bin, credit was given in the amount of $2,577.13 on plaintiff's note to defendants. This amount was arrived at by crediting defendants with the 1 1/2% allowance provided in Paragraph 10 of the agreement plus 351.01 bushels found to be moldy, rotten corn and dirt swept up out of the bin. After these allowances there remained a shortage of 2,301 bushels at $1.12 per bushel, being the $2,577.13 credited to plaintiff's note.

This latter agreement provided, among other things, that Paragraph 10 of the original purchase contract would remain in full force and effect. It further provided by Paragraph 3: "It is further agreed that Second Party is entitled to an immediate credit on said note of $9,344.90 of the sum of $2,577.13 and that said credit has been endorsed on said note effective May 1, 1960. It is further agreed that any further adjustments concerning the matter of grain shortage or grain overrun shall be immediately adjusted between the parties as soon as determined and the remaining bins are emptied by credit being given on said note to Second Party in the event of shortage and payment being made by Second Party to First Parties in the event of overrun."

Between April 20, 1960, and May 24, 1960, the Metal Star Bin was emptied, delivering out 94,029.63 bushels representing 1,013.37 bushels less than was represented to be contained in that bin.

Between June 1, 1961, and June 28, 1961, the North Pole Bin was emptied, delivering out 89,446.07 bushels, representing 13,887.10 bushels less than was represented to be contained in that bin. After an allowance to the defendants of 380.71 bushels for moldy and rotten corn and ...


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