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10/10/89 Robert Veath, v. Specialty Grains

October 10, 1989

ROBERT VEATH, PLAINTIFF-APPELLANT

v.

SPECIALTY GRAINS, INC., DEFENDANT-APPELLEE



APPELLATE COURT OF ILLINOIS, FIFTH DISTRICT

546 N.E.2d 1005, 190 Ill. App. 3d 787, 137 Ill. Dec. 892 1989.IL.1613

Appeal from the Circuit Court of Jackson County; the Hon. Bill F. Green, Judge, presiding.

APPELLATE Judges:

JUSTICE CHAPMAN delivered the opinion of the court. WELCH and LEWIS, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE CHAPMAN

This appeal was brought by the plaintiff, Robert Veath, to contest the trial court's finding that plaintiff take nothing by his suit for breach of contract to which the plaintiff and defendant were parties.

On February 20, 1984, Robert Veath and Specialty Grains, Inc., entered into a written premium corn production contract whereby plaintiff agreed to plant no less than 200 acres of premium corn and to grow not less than 15,000 bushels of white waxy premium corn. Specialty Grains agreed to purchase all such bushels that plaintiff produced. It is plaintiff's contention that defendant is obligated under the contract to pay plaintiff for all corn delivered and accepted onto defendant's barge in an amount compensating plaintiff for the value of U.S. grade No. 2 quality corn. Plaintiff further contends that defendant is entitled to no recovery of loss as to the grain neither accepted nor delivered.

The contract provided that upon request by Specialty Grains, plaintiff was to deliver the shelled premium corn to the Bunge elevator at Grand Tower, Illinois, during dates and times specified by Specialty Grains. The agreement between the parties provided that "all grain delivered to SGI by Grower shall grade U.S. No.2 white corn."

During the bench trial in this cause, plaintiff testified that in 1984 he planted approximately 200 acres of white waxy corn pursuant to the terms of the premium corn production contract. Plaintiff completed harvesting the crop in January 1985. Plaintiff testified that in February 1985 Specialty Grains' agent Robert Trewaethe visited his farm and took grain samples from each of the four bins where the harvested crop was stored. Neither Specialty Grains nor Mr. Trewaethe advised the plaintiff of the results of the February 1985 grain sampling test.

Plaintiff further testified that on May 23 or 24, Robert Trewaethe of Specialty Grains once again visited the farm to gather grain samplings from the bins and advised the plaintiff that the quality of the grain did not appear to be good. Plaintiff, however, testified that at that time Specialty Grains did not contact him to advise him that the quality of the grain was not satisfactory.

On May 29, 1985, plaintiff delivered four trailer loads of the grain to the Bunge Corporation elevator at Grand Tower, Illinois. There Robert Trewaethe conducted a grain sampling test on the loads. Plaintiff described that sampling technique to the court. He stated that Mr. Trewaethe took a 15- to 20-foot brass probe and probed into the loads of grain. The grain which was probed was then put into a container and taken to the scale house, where it was tested to determine weight and moisture content. After inspection, plaintiff testified, Robert Trewaethe told him the grain was acceptable and that plaintiff should dump it. Plaintiff dumped the four loads. He observed the grain being loaded on a barge from a belt conveyor. Plaintiff then returned home to gather the other loads for hauling to the elevator. Altogether plaintiff delivered seven loads on May 29 and eight loads on May 30. Plaintiff testified that no one contacted him on May 29 with regard to the grain he delivered. On May 30 Robert Trewaethe telephoned plaintiff and told him that five of the eight loads delivered that day were rejected because the grain had "too high of a damage." Of those five loads, two were taken to an elevator at Con Agra, which agreed to purchase them. The other three loads were returned to plaintiff's farm.

Marvin Campbell testified on behalf of the plaintiff. Mr. Campbell assisted plaintiff in hauling his grain to the Bunge elevator on May 29 and 30. He testified that he personally observed Mr. Trewaethe conduct the grain sampling of two loads of plaintiff's grain which were rejected at the elevator. Mr. Campbell stated that Mr. Trewaethe told him at that time that the two loads would not be accepted because they were beyond the grade standards which they wished to put on the barge. Mr. Trewaethe did not explain what that grade standard was.

Mr. Campbell and the plaintiff both testified at trial as to their observation of the Specialty Grains agent Robert Trewaethe rejecting a farmer's grain at the Bunge elevator on May 29. Both Campbell and the plaintiff testified that when the corn of Mr. Van Endres was tested by Robert Trewaethe, Mr. Trewaethe telephoned someone and advised the party to whom he was speaking that the corn would not grade. Mr. Trewaethe then told Van Endres to move his truck out of line and not to dump the grain.

Marvin Campbell testified that he has been co-owner of Campbell Grain Company since its inception in 1979. He stated that during his employment at Campbell Grain, he did most of the grading during the harvest periods. He estimated that he has graded thousands of samples. Mr. Campbell testified that during his years at Campbell Grain, he has never attempted to reject a load of grain after it was dumped at his facility. On cross-examination Mr. Campbell acknowledged that he has not had experience with the grading of white waxy corn.

Richard Berlin, controller for Specialty Grains, was called as an adverse witness by the plaintiff. It was Mr. Berlin who sent a letter to Mr. Veath, dated June 14, 1985, describing the calculations as to the losses incurred by Specialty Grains and how Specialty Grains calculated the final amount due plaintiff under the contract. That letter showed the total loss to Specialty Grains to be deducted from plaintiff's final payment to be $17,115.16. Mr. Berlin testified that the 10 loads of grain which were dumped at the Bunge elevator on May 29 and 30 were not "accepted" by Specialty Grains, but were dumped to the account of Mr. Veath.

Mr. Berlin explained to the court that in preparing the settlement statement which shows what losses Specialty Grains incurred and what payment was due the plaintiff, he first reviewed the weight tickets from Grand Tower. The weight tickets establish the weight of the grain delivered to the elevator. Berlin testified that final settlement was not calculated until grade certificates or a report of grade was received from the Cairo Grain Inspection Agency. In determining the final settlement figures, Mr. Berlin testified that he also waited to see whether the grain loaded on the barge at Grand Tower was accepted by Specialty Grains' customer and what price Specialty Grains would receive for that grain.

Mr. Berlin outlined at trial how he calculated the amount owed to Veath under the terms of the contract. The settlement statement, attached to his letter of June 14, is comprised of three parts. Mr. Berlin explained that part 1 represents the actual saleable value of the corn accepted by Specialty Grains at Bunge and what would have been received if the corn had been of U.S. No. 2 grade. The second section of the settlement sheet refers to the two loads of grain which were sold at the Con Agra elevator. Calculations are made as to the difference between the price received for those loads compared to the value of what the loads would have been worth had they been of U.S. No. 2 grade. Section 3 of the settlement statement details the difference between what Specialty Grains would have received had Veath delivered the 14,500 bushels that were estimated would be produced instead of 11,494.76 bushels of corn actually delivered to the Bunge elevator.

We note that Robert Trewaethe was not called as a witness at trial; however, defendant did call Mr. John Trewaethe, a procurement manager for Specialty Grains, to testify. He explained that as outlined by the Federal grain standards, there are limitations for moisture, damage for material, test weight and other factors which are figured to determine grades of corn. Five percent damage is the maximum allowable limit for U.S. grade No. 2. He explained that corn grading more damage than 5% would receive a lower grade standard, such as No. 3 grade or No. 4 grade, or even sample grade, which is the lowest grade.

John Trewaethe testified that in the normal course of delivery, grain samples on each truckload of grain are obtained. Composite samples are taken at the site of delivery, and the actual grading procedure is done by a licensed State inspector. Trewaethe advised the court that the tests performed by that licensed State inspector are binding on both Specialty Grains and the grower. Exhibits admitted at trial included the grain certificates received from the Cairo Grain ...


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