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Anderson v. Farmers Hybrid Cos.





APPEAL from the Circuit Court of Bureau County; the Hon. JAMES J. WIMBISCUS, Judge, presiding.


Plaintiffs, Lawrence and Richard Anderson, appeal from the judgment of the Circuit Court of Bureau County granting the motions of defendants, Farmers Hybrid Companies and Monsanto Agricultural Products Companies (hereinafter Farmers Hybrid), to dismiss and strike plaintiffs' seven-count complaint. The complaint sought recovery of damages from Farmers Hybrid as a result of its sale to the Andersons of allegedly defective gilts. (Gilts are unbred female pigs used for breeding purposes.)

In 1972 the Andersons purchased 11 gilts from Farmers Hybrid. Shortly after receiving the gilts, according to the allegations of the complaint, the Andersons discovered that the gilts had a contagious and infectious disease called "bloody dysentery." As a result of contact with the diseased gilts, the Andersons' own swine herd suffered considerable damage and the Andersons were put to the expense of treatments for the disease. They brought this action to recover for the damages suffered.

Count I of the complaint sounded in strict tort liability; counts II and III were based upon implied sales warranties; counts IV and V were based upon statutory liability (Ill. Rev. Stat. 1971, ch. 8, par. 191); counts VI and VII were premised upon negligence and willful and wanton misconduct. The trial court, on the defense motions to dismiss and strike the complaint, dismissed plaintiffs' action. In so acting, the court concluded that strict products liability had not been extended to living things, such as the gilts. The court also found that the warranties had been disclaimed in the contract, and it held that the plaintiffs were not in the class of persons for which the statutory protection was intended to apply. The negligence counts were dismissed on the basis of the court's finding that the plaintiffs had failed to plead compliance with a condition precedent in the contract, i.e., to give notice of claims within 30 days from delivery of the gilts. The court also held that the failure to plead the condition precedent, written notice of claim within 30 days, would also bar all the other claims asserted, even if they were otherwise applicable. From the judgment dismissing the complaint and from the rulings on each count, the Andersons appeal.

The record in the instant case reveals the following facts, as found in the allegations of the plaintiffs' complaint, which for purposes of the motion to dismiss are to be taken as true. On September 11, 1972, Lawrence and Richard Anderson ordered, by telephone, 11 gilts from Farmers Hybrid. Shortly thereafter the Andersons received from Farmers Hybrid an "order confirmation slip." The 4- by 7-inch slip of paper contained on its front side information confirming the name of the purchaser, his address and directions to the farm. It also specified the breeding date and the delivery date, along with the amount of deposit, and it was signed by company officials. It confirmed the order made by telephone. It also contained, in small print, a statement that "This order is subject to conditions on reverse side hereof and subject to acceptance by the Company." The reverse side of the slip contained the following paragraph:


Farmers Hybrid warrants title and that all gilts delivered by it have met Federal and State cholera regulations, have been vaccinated for erysipelas and three forms of leptospirosis (Pomona, icterohemorrhagica and Canicola), have reacted negatively to tests for brucelosis, are basically structurally sound animals with 12 functional nipples and are open gilts. Subject to the preceding sentence, Farmers Hybrid MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, AS TO MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE OR ANY OTHER MATTER WITH RESPECT TO THE GILTS. All claims with respect to gilts shall be deemed waived unless made in writing and received by Farmers Hybrid within 30 days after delivery. Buyer's exclusive remedy for any clause shall be for damage subject however, to Buyer's agreement that for any and all losses or damages resulting from any cause whatsoever, Sellers liability shall in no event exceed the purchase price of the gilt or gilts with respect to which damages are alleged. In no event shall Seller be liable for incidental or consequential damages."

On October 6, 1972, Farmers Hybrid delivered the 11 gilts to the Andersons' farm. At the time of delivery some or all of the gilts, according to the complaint, had a contagious and infectious disease called bloody dysentery. Twelve days after delivery of the gilts, the Andersons contacted Farmers Hybrid by telephone and informed the company of the diseased condition of the gilts. In response to the Andersons' call and the problem with the gilts, a veterinarian hired by Farmers Hybrid gave the Andersons advice on how to cure the disease, and he had a fecal sample taken for laboratory analysis. On the 20th of October, the veterinarian, on behalf of Farmers Hybrid, sent the Andersons a letter in which he outlined steps to be taken to control the "gilt problem" and in which he discussed the possible cause of the bloody dysentery. He also informed the Andersons that a fecal sample was being sent to the lab and that a report would be sent to them and to Farmers Hybrid. He closed the letter with: "If we can be of any further service to you, please feel free to call Farmers Hybrid."

According to the allegations in the complaint, as a result of the diseased condition of the gilts, a number of other pigs owned by the Andersons contracted the disease and died as a result. The Andersons filed suit in October 1976, seeking damages for the loss of their swine herd and for the time and expense put into the treatment of the diseased pigs. A seven-count amended complaint was thereafter filed in September 1977, including counts based on strict tort liability, upon breach of implied warranties, upon statutory liability, and upon negligence and willful and wanton conduct. The defense motions to dismiss the various counts were granted by the trial court. From that dismissal of all counts of their complaint, the plaintiffs appeal.

The first issue we address concerns the application and validity of the condition precedent, which the court found to bar any recovery from Farmers Hybrid by the Andersons. As already noted, the reverse side of the order confirming slip contained a clause providing that all claims with respect to the gilts "shall be deemed waived unless made in writing within 30 days of delivery." No written claims were made to Farmers Hybrid within the 30-day period, and the Andersons did not plead compliance with the condition precedent under any of their theories of recovery. The trial court held that the condition precedent, acting as a limitation of liability, was valid and that plaintiffs' failure to plead compliance therewith barred all of their claims, whether sounding in contract, tort, strict liability or statutory liability. The Andersons alleged in their complaint, and again argue to this court, that Farmers Hybrid waived strict compliance with the terms of the condition precedent by their actions in responding to plaintiffs' complaints about the diseased gilts. We agree.

• 1, 2 It is established that a person, by his actions and conduct, can waive strict compliance with the terms of a contract by the other contracting party. (See Bartels v. Denler (1975), 30 Ill. App.3d 499, 333 N.E.2d 640.) Whether such a waiver has occurred must be judged by the facts and circumstances involved in the individual case. In the case at bar the Andersons, within 12 days of delivery of the gilts, telephoned Farmers Hybrid about the diseased condition of the gilts. It is noted that the Andersons' initial order was also by telephone. Through that telephone call, Farmers Hybrid, within the 30-day period set in the contract, had notice that there was a problem with the gilts they had delivered and that the Andersons were looking to them, as suppliers, to rectify the problem. Thus, a basic purpose of the short notice requirement, which by itself is understandable with live animals, was thereby satisfied.

Farmers Hybrid was promptly apprised of a problem with the gilts and the nature of the problem. Farmers Hybrid's response was not to request that the Andersons send a written confirmation note about the problem, nor was it to ask that they otherwise give written notice. Instead they responded by offering their assistance in dealing with the problem. A veterinarian hired by Farmers Hybrid looked into the matter. He offered specific advice to the Andersons on how to address the problem and took samples for laboratory analysis. This was done on behalf of Farmers Hybrid in response to the Andersons' complaint. In addition, the veterinarian, within the 30-day period after delivery, wrote to the Andersons about their "gilt problem" and gave his advice for treatment. He also offered his further services on behalf of Farmers Hybrid. We find that these actions by Farmers Hybrid, in acknowledging the existence of the problem, in providing veterinary services for the Andersons, and in offering further assistance with the problem, operated to waive strict compliance with the 30-day written notice provision of the contract. The Andersons were fully justified in believing that no further claim or notice was required of them. They had promptly informed the company of the problem, and the company, by its response, had acknowledged the existence of the problem, and by implication, at least from the Andersons' perspective, had also acknowledged some responsibility and an intention to work out a solution of the problem. A written claim, as per the contract, would not have given the company any more information than what it had already received and what was available to it. In light of Farmers Hybrid's active response to the Andersons' complaint, any further notice could easily have been viewed as unnecessary by the Andersons. We conclude that Farmers Hybrid waived strict compliance with the 30-day condition precedent in the contract by its conduct in responding to the plaintiffs' oral complaint, which was made within the 30-day period.

This case must be distinguished from Willis v. West Kentucky Feeder Pig Co. (1971), 132 Ill. App.2d 266, 265 N.E.2d 899, relied upon by Farmers Hybrid and discussed by the trial court. In Willis, the contract required that if the hogs became ill, a veterinarian must be contacted within seven days of delivery before the defendant would make settlement for the loss of the pigs. The plaintiff in that case did not comply at all with the condition precedent. No notice was received by the defendant company as would have been if the condition precedent had been complied with by the plaintiffs. However, subsequently the defendant seller did have its veterinarian examine the pigs and he did consult with the plaintiffs about the problems. The court found no evidence of waiver, noting and emphasizing that at the time of the proffered aid by the defendants, the plaintiffs had already failed to comply with the condition precedent. Since it was under no obligation to help, and since its liability was cut off by the failure of the plaintiffs to comply with the condition precedent, the court found that the defendants' cooperation could be attributed to customer relations and good will. (132 Ill. App.2d 266, 272.) In the instant case, notice was given within the specified time period, albeit oral rather than written. Also, in the instant case, the time period for making claims and giving notice had not expired when the defendants responded with their aid and cooperation. Therefore, since their liability even under the strict terms of the contract was still extant, such actions in offering assistance can not be merely dismissed as maintenance of customer relations and good will but manifested a desire to solve the problem. The Willis case is not controlling on these facts.

Having concluded that the Andersons' failure to plead compliance with the condition precedent did not warrant dismissal of the actions, we must now turn our attention to the other grounds upon ...

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