*1 524 P.2d TERREL, Tree Little
William E. d/b/a Company, Lumber Plaintiff- Appellant, Cross COMPANY, INC., a DUKE CITY LUMBER Grevey, corporation, Joe Jack New Mexico Liberman, Defendants-Ap Grevey and Ira pellants, TERRELL, Third-Party Jo Dell Defendant- Appellant. Cross
No. 878. Appeals of New Mexico. Court
May 1974. July 11, 1974. Certiorari Granted Hernandez, specially J., concurred opinion. filed Sutin, of mo- J., dissented from denial opinion. to remand and filed tion *3 Snead, Ortega, E. Al-
William Arturo G. buquerque, plaintiff-cross-appellant. for Reynolds, Albuquerque, Charles P. David Kase, III, Douglas, Eldon Edmund H. So- corro, defendant-cross-ap- third-party for pellant. Harris, Cooney, George R. T. Jr., John
Modrall, Sisk, Sperling, Roehl, Harris & Albuquerque, defendants-appellants. for
OPINION
HENDLEY, Judge. jury against a
The
returned
de-
verdict
fendant,
City,
sum
$635,458.50,
theory
on
of breach of
compulsion. The
contract and economic
granted Judgment
trial court
N. O. V.
$175,607.00.
sum of
previously
granted
had
been
summary judgment
promissory
on certain
“
* *
$344,174.19,
*4
$533,178.81.
$63,804.33
the total assets
Of
has not been
in this re
Sauter
followed
assets, $699,200.00
were current
were fixed
Winks,
gard.
597,
Hockett v.
82 N.M.
$35,780.00
assets and
other
assets.
Paddock,
P.2d
v.
(1971); McLean
City operated
Duke
a lumber wholesale
234,
v.
(1967);
N.M.
sion. Subsequently, Hockett 1968 the on October City Duke and contract between briefly as possible We summarize signed. that contract Duke Under 5,933 facts page record contained $160,000.00, City agreed loan Terrel to legion and the exhibits. Briefs —617 directly pay $127,000.00 went of which pages. $33,000.00 and existing Terrel’s debts agreed Terrel back pay Terrel himself. FACTS: interest plus percent twen- the debt ten History Negotiations and twenty-five percent months, paying ty-four rough green lumber de- family The Terrel had been all in the saw- value of January mill Magdalena, City through business livered to Duke New Mexi- 4Q9 die[d], “f. If reason se- Terrel As percent thereafter. fifty City encumbered note Duke curity for “g. security agree- If the said note and rolling manufacturing and all Terrel’s not paid according ment [were] some lien on taking a second equipment, tenor.” their place Terrel had also items. had an contract acceleration clause. Mill and covering Magdelena the leases right On sale the mill contracts, then timber all Forest Service of first an option refusal and terminate in escrow. On acquired, operative after buy- the contract or continue the new right to fore- had the default er. take equipment Terrel’s upon close Finally in- right had the contracts his timber over his leases spect production all Terrel’s sales and prepaid depos- in the latter were (included representa- records and have a “resident accruals, camps.) its, roads and Magdalena tive” at the mill. ship to Duke promised to Terrel also plus the contract term of City, Beginning Operations under Contract “ rough green all of years, three Plaintiff did not start shipping lumber to [grades shop better Pine Ponderosa Duke City until the early part Decem- ”* * * his mill developed from timber] ber, 1968. He stated his reason for this as tally grade under City’s on Duke follows: Prod- Wood Western rules [WWPA] “I logger. had contacted a contract In by Duke price paid Association. The ucts fact, August shortly I contacted him in Lengths Report *5 to Random City was tied agreed after it had been all concerned Conditions,” ad- infra) and (See “Market that time, we make could a deal. At this buy, City would also quarterly. Duke justed his loggers work, were ready go to to prices, 100 wholesale market prevailing at time, and at this this is of the rea- one and percent all dimension other common sons I was anxious get to contract species whatever (lower grades), lumber signed get money and to to I where during the term produced by Terrel put could them in the and com- woods a five to receive City contract. Duke building get- mence roads and commence and a two percent wholesale commission ting logging skidding logs days ten percent discount cash working general when I was able to. invoice. date of people These took on short con- another they tract were for me to waiting was to be in default: while Terrel keep obtain them funds to where I could any in three successive “a. If at time working, working. start Aft- or them to production sawmill months contract, er them signed the called I I MBF below 500 [thousand [was] them, they said and told ‘Let’s And go.’ month; per board feet] that before they would be or so week per- If Terrel “b. defaulted] they they up could clean this deal the terms any of formance ^pf can on. be there as we will as soon ‘We contract; conditions [the] get Conse- operation up.’ cleaned insolvent Terrel If “c. [became] quently, Novem- it was in the middle bankrupt; begin they up ber when did show his maintain If Terrel “d. fail[ed] logging.” insurance, or real estate leases good contracts service forest Capital Working standing'; inventory attempted fi- Terrel to secure else- capital purposes Mag- nancing working from the If Terrel “e. remove[d] provide it company agreed to personal where. One any of dalena Mill agree guarantee the City if Duke would ‘A’ with- Exhibit property listed on Duke; informed Duke earlier financing. approval prior written out guarantee, shipped to Duke as soon as it was plaintiff it would make the make a however, part January, latter sawed in a sufficient amount “ * * * they would 1969 it said load. they guar- be unable or would ” Planing Mill * * * antee lenders work- outside begin operating Plaintiff did his ing capital agreements they and that de- “ * * * planing April, mill until The reasons 1969. they would City] cided [Duke First, delay for the were: due wet win- necessary working go supply ahead and ter it was before conditions March time, capital. Up Duke to this sufficiently lumber had air-dried to sur- capital working had advances of made face, and, second, plain- Liberman advised $60,000.00 $75,000.00and had taken a se- inventory tiff to build a substantial curity agreement present all future drying yard starting before inventory. City log lumber and begin mill. Before could continu- twenty-five percent been crediting operation planer per- ous of the he had to price upper grade shipped lumber days form three on it. or four of work original it on the indebtedness and the bal- is not after the Such maintenance unusual seventy-five ance percent was credited equipment has been idle several capital working toward the After advances. months. City agreed working capi- to furnish funds, ship- tal Terrel After had made several ceased to look for outside approval City. with the ments of surfaced common and dimension of Duke Liberman, lumber, City, plaintiff he would through stated told to Terrel repairs to long that as have produced, Terrel the work- to make considerable capital planer. Plaintiff stated: would be available. only thing that was money The amount of advanced for slight it had a wrong it was that working capital strictly determined ripple, washboard, or a slight wave inventory. the value of the Plaintiff re- not severe very slight. It was but was payment ceived no direct on lumber other I enough downgrade lumber. working capital. than the advances of *6 already I had wrong knew what was promissory Terrel executed a series of steps taken to correct it.” working capital *7 primarily by contract with the United to rough green condition lumber in the Forest These “sales” .were States Service. them. “ by competitive bidding. obtained Some I re- point this whenever At rate, M.B.F., per the sales were at a flat case, ‘Well, said, you if they in this fused provi- while others contained an escalation through. co-operate We won’t we are computed by sion a mathematical formula money or you any more won’t advance part market A from a current index. anything any more lumber or else’ take contract, every in sales addition pretty said, got a and I we have ‘Well cost, building stumpage is the cost (log) inventory go- there and it is good down up logged logging roads and clean of the everybody ing quite a loss to con- area. weeks, I you give me two cerned. If will logging Slaughter Plaintiff started yard and I my drying will reconstruct November, February, In sale in 1968. put shape you at time if will it and prohibited plaintiff’s the Forest Service agree good any- this is as as don’t heavily logging amounting loaded to six and one-half or because seven logging up the tearing roads made million board feet. trucks January, muddy by In late warm weather. Sep- Market 1968 to Conditions —October plaintiff, anticipating the Forest tember 1969 shutdown, stopped log cutters Service publication Lengths The1 Random is a sale moved them to Slaughter on weekly report prices on lumber and mar Baney of Rocks sale and Lower the Point keting. recognized good It is as a source sale. information of the lumber market of Rocks sale was at a flat Point publica West Coast area. From provision without an escalation rate tion prepared graph purport contained two million board feet of about ing to show market conditions New per at M.B.F. Prior to timber $7.20 Janu- Mexico. To benefit reader the follow ary, sale Houghton held the only purpose index is shown for the feet) at a rate (2,200,000 tentative hoard showing reported dollar market trend per M.B.F. This sale was to ex- of $9.75 reported by Lengths during Random pire plaintiff had December 1968 and period this of time. “ * cut the timber a lack due to To show this market trend a 1 x 12 working capital deal with Duke three, board of number four and five being put together all was so late grades, pine, dried ponderosa will be used. money did not in time for me start come Dollar amounts per are M.B.F. The fol- operating consequently, on it 1968 and lowing attempt index does portray required an extension on it.” The Forest grades all and sizes of lumber. granted an through Service extension June 30, 1969 with the tentative rate increased approximately per M.B.F. Feb- $26.95 ruary, (with cutting ap- hauling,
proximately per M.B.F.). Plaintiff $50.00 sales,
had other some with an escalation rate clause and at some a flat rate. told that it would not pay any stumpage payments except
Houghton sale he because would have to
pay for it whether he cut it or not. Plain-
tiff then logging moved the operation Houghton completed sale and the sale by the June, last of 1969. following is a list of sales held
plaintiff and their distance from his saw- mill in Magdalena. Baney, miles;
Lower fifty sixty Dur- Unit, twenty-five fee miles; commenting graph similar to In on a Point Rocks, thirty-five miles; above, New Canyon, North a witness who “ * * thirty thirty-five miles; business Slaughter, nine- Mexico lumber stated: miles; ty these Houghton, ninety have the decline of did not miles. *8 [W]e show, they pricewise, dur- products which Plaintiff stated it would cost more $10.00 particular period of time. Other ing this per M.B.F. to Houghton haul from than it part of produced in this items which were would Point of Rocks. industry defi- country in the lumber September, During
After plaintiff like that.” nitely held not decline did four sale April, contracts with the from Forest Service of time period
Aig contract, help plaintiff was a 16th September, October through “[t]here resistance; pay a operation. how- his Plaintiff was to buying amount of certain City a Duke ever, building portion wages still volume his they were houses, houses, and what-have- apartment balance. price buying lumber. you; they were plaintiff noticed During this time “[he] been, material but the it had not what was grade had lumber in more common [his] problems.” had no moving. still We
was pre- upper grade than lumber [he] a although there was stated that Plaintiff viously After the man had been on had.” between March price decline June premises plaintiff for about a week “ * * * it was still best a City he did not want him as told Duke seen still price had ever I June prem- on the grader. The man remained in in- stated the lumber He also [1969].” performed longer ises services but no and that a ventory still marketable grader. plaintiff as a the lumber would time to move reasonable the grading the October contract Under “ day two after a have been procedures to the according was to be done ship.” ready to it was by the Wood Products established Western lum- these when Association. Under rules Log Scaling and Overrun by (to quality) downgraded is a lower ber log scaling is the measurement of a Log is buyer, reinspection a available rule to determine using a calibrated scale days ten Association within seller from the feet of lumber. the amount of board kept is unloading. The to be lumber feet the extra amount board Overrun thirty days after longer than intact for no has scaled. log from a which been received complaint. scaling This is a factor in the built-in way City plaintiff by informed Duke cut, (saw- dependent the first kerf on regrading had that a a corrected invoice log process in the dust) taken from the shipments and the one of his been done on lumber, uniformity saw- cutting it into fifty per- forty to be lumber was found log taper ing, damage, amount to be at grade. Plaintiff was told cent off imperfections log log. in the day yard the next City’s Albuquerque Duke that, Plaintiff stated as to overrun plaintiff arrived reinspection. When years leading up several “[t]en did not receive Plaintiff he found no one. percent always the factor [was] [he had] kept day nor was lumber the ten notice used and found to be conservative” with (cid:127) required by the thirty days as intact for ponderosa pine, principal his regard rules. of logs. source Slowdown Work Plaintiff’s testified that accountant Duke City rough green employees shorted on all of his and various Plaintiff shipped, by paying only according lumber City’s employees, that Duke testified request, adding City’s to the Forest scale and not Service at Duke plaintiff’s premises City pro- overrun. intentionally slowing contended down by twenty Forest had overscaled There was plaintiff. Service efforts of duction percent, wiping thus the built-in over- restricted testimony out also by requiring capital Plaintiff and the Forest working run. Service the use only slight payments checked and over- equipment discovered stall plaintiff to scaling subsequently adjusted by which repairs. equipment essential the Forest production Service. plaintiff’s down also slowed planer and his rework forcing him Grading requir- shortly thereafter yard, and drying green all lumber “Grading” ship is determining quality ing him to City. Duke produced. lumber to Duke directly grader sent a state sell- down plaintiff’s February, mill in slowed pursuant to further *9 way. on for no This went there was inventory planed lumber large ing the length a possibly an hour or certain though buyers plaintiff’s yard in stacked an hour Anyway, I would estimate Capital, time. (see Working su- were available half, and just discussing it back and pra). hit his desk Ira Liberman forth. Finally, City kept demanding more said, asking ‘I’m not pointed at me and away the sawmill. plaintiff’s time you. going are to you, telling I’m You daily became almost “a occur- gradually It My re- sign you’re this or in trouble.’ rence.” mean, was, you ‘What the hell do sponse trouble,’ said, and he ‘You’re I’m Background Supplemental Contract you’re overdrawn at the bank large in- By June, 1969 because you going get penny to another until out, ventory City ship that Duke would not said, And I sign agreement.’ this ‘What Capi- plaintiff (see “Working was broke you at do mean I’m overdrawn tal”, fifty percent of At this time supra). said, put pay- out bank?’ And he ‘You proceeds being credited to was twenty in the amount of some thou- roll fifty percent being original note and was cover it and I sand dollars and I didn’t credited to the advance account. going going am not You are not to to. On informed June penny you sign this get another until plaintiff ship that it his to- wanted him to go I told him to to hell agreement.’ And form, production, tal in green to them. my and took wife and walked out. plaintiff’s This action would shut down Terrel, “Q. Now, planer up point, drying yard. Plaintiff stated it to this Mr. you ability $23,000 would his tre- had known that profit-making reduce your mendously, profit deposited had not been ac- margin as the real was plaintiff you surfaced count as Liberman told it gave lumber. Liberman Mr. had would no.” went $23,000.00, they on his total was told checks before he left on the logger ing for California for his father-in-law’s funeral. Plaintiff then asked “ discuss business * discuss “ * * * At Plaintiff copy at Duke been * * would cover the production City. discuss return. payment, had deposit trying Albuquerque not to me was not this City’s returned four so described the meet- Plaintiff always the Supplemental Agreement bringing Up agreement worry in a green condition and would be made and * * * ”, office as follows: totalling approximately get plaintiff to this time Duke told Duke point they began payroll at in, about a could state of mind to days sending when trip. as he and contract request thing later and sign Plaintiff plaintiff ship leav- “hell they my his if “A. She “A. We “A. “Q. ‡ And I had no it at least would hurt other any way sued checks and That I had written money your gambling with. There break other refuse it.’ cover these checks.’ stop hell I room, can’t do that.’ And I is no out? kind of like would be? What No, ^ got And pointed I had no idea. way in and think. This isn’t can’t. did to sign with other outside and into the ante- she you my people, getting You out that said, ‘Yeah, you just this because would do wife right world I when just people’s money. hit in the face. said, checks and might heard I could not It was you no said, gamble ‘Bill, you you way people. walked me do break, your ‘The just can is-
rough green output total mill pick up. only way them I rough green Again state. I money told them by selling lumber, made
415 Supplemental Agreement will this First un- sell lumber couldn’t and I with Para- be handled accordance 16th this of October der the terms graph Original Agreement the until her agreed I agreement. And inventory back all hand is I on exhausted. right, so went she. City personnel told Duke and inventory applies Except as it “3. sign would in there that I that was hand, Original Paragraph agreement. hereby Agreement amended for the Supplemental Agree- term this First basis, would I mean what “Q. On what ment as sign follows: you to do for they have agreement ? Terrel will deliver to Duke all “a. production rough in the I Terrel’s time, I said. that’s all At “A. green All Ponderosa condition. like said, sign it. I don’t feel I’ll shop fine, better shall han- Pine and be I’ll Ira said signing it now. pursuant Paragraph dled 2 of the it bring it and I’ll check over Original Agreement and all other you sign it there. and Magdalena priced according shall lumber be left. And I the following formula: Terrel, it that Now, Mr. what “Q. “(i) sample periodic Duke will take you you sign say would
made volumes of lumber de- say you Terrel’s and Why you agreement. did an average termine therefrom board ? sign agreement would per layer by grade, foot width and hot out I checks fact that “A. The separation thickness for each which I real- cover them. way no n Terrel makes width and thick- probably break it would ized ness. per- break the my logger. It would “(ii) pay for lumber re- will most of knew cashed son that we weekly Albuquer- ceived at Duke’s And it my I knew payroll checks. que plant prices on the basis of stat- say least would would —to ed in Lengths Random for position. bad put in a real him Thursday following the week de- my loss just felt like it was And I livery. will Prices be shown theirs, way I those or proper Random So, Lengths due should have been. felt it applicable species, width, thickness reasons, had to I felt like I to these and grade less wholesale dis- sign it.” 5% count. In event Random payments whenever After June gives prices, price two Lengths on behalf were made in parentheses will control for the Tree they marked “Little item. did (plaintiff) Little Tree sawmill.” new price, “(iii) The as determined City. have a mill nor did new Lengths, from Random will be ad- Contracts Supplemental justed by deducting following agree- supplemental second The first and per (1) items: MBF for $6.79 signed on were both ments freight, per (2) June MBF for $17.00 and were as follows: drying, surfacing shipping costs, (3) cash discount. AGREE- “FIRST SUPPLEMENTAL 2% per adjustment freight MBF $6.79 MENT << will not made for timber saw- and Beaver Lyon milled from “1. [Definitions] Head sales. inventory “2. All Terrel’s surfaced inventory drying process per Terrel will “b. receive MBF $15.00 re-manufacturing, date weekly shipment as of the each of lumber foregoing remanufacturing, as of the according drying priced Supplemental Agree- formula, remainder of date of the First and the *11 ment, and by will be Terrel the formula will finished price derived from outstanding immediately shipped bal- Duke’s will be to applied be storage. obligations Albuquerque plant for on the Duke ance due paid fully are obligations until protect “B. will the said lum- Duke off. protects its own ber the same as it days (3) lumber. three within shall “Terrel payment from any receipt of paid price to be Terrel for “C. any writing of notify Duke Duke prevailing said lumber shall be the so ob- to Failure thereto. objection price market at the time or- v/holesale any waive permanently shall ject placed by ders are with Duke Duke’s objec- including objectiohs all and customers, less wholesale commis- 5% determination to Duke’s tions days and cash ten sion discount 2% width, thick- volume, species, grade, from the date of invoice. price. and ness trucks, Mag- will be “Prices F.O.B. trucks, Mag- be F.O.B. will “c. Prices dalena, on all transactions. dalena, transactions. all agrees protect Terrel to Duke “D. any objections from all or claims accept- by is understood “4. It volume, grade, tally quality of to or rough lumber shipments shipped lumber customers to Duke’s with in accordance condition green accordance with W.W.P.A. rules Agreement Duke Supplemental First regulations. any default thereby waiving by existing remedy granted right “2. In shall elect the event Duke security agreements notes, or agreements, Supplemental the First terminate Duke, its sole at parties. performance between Agreement require and to this First terminate may elect to option, by original Terrel in accordance with the require Agreement Supplemental op- Agreement, Duke shall have the sole in accordance delivery of all lumber fin- tion to elect whether to store the earlier Unless Agreement. Original Albuquerque ished lumber in or at Ter- Supplemen- by Duke this First terminated Magdalena, mill in New Mexico. rel’s in effect remain Agreement shall tal All provisions “3. and conditions con- unpaid obligations remain long so as original Agreement in the and the tained part. or in in whole Supplemental Agreement shall be First con- provisions All and conditions “5. in full and effect ex- and remain force above Original Agreement tained in the cept hereby supplemented.” as in full referred shall be and remain hereby supple- as except
force and effect Production Costs of mented and amended.” was stated his cost Plaintiff “SECOND SUPPLEMENTAL AGREE- opposed to the per M.B.F. as $17.00 $6.00 MENT Agree- Supplemental him in the charged to “ * Also, surfacing plaintiff’s was most ment. Paragraph “1. original 3 of operation. Finally, approximate- profitable Agreement dated October plain- ly seventy seventy-five percent of Supplemental amended the First in the production tiff’s common Agreement day dated the by the dimension lumber and loss June 1969, hereby amended as follows: plaintiff opportunity to surface this lumber making any lost all chance of All of Terrel’s surfaced inven- “A.. money.” tory process inventory contractors and Inventory' taxes. After June City required plaintiff to submit large had a in- By May, 1969 payees paid. list of all and amounts ventory planed lumber but would select the list what June, moving By was not it. checks be written and then inventory large was broke because deposit plaintiff’s would make ac- though being moved Duke even only count with directions to the bank to wanting buy. there were lumber brokers honor specified checks. of move- Plaintiff stated lack “ September 6, * * set 1969 as the put ment of him *12 lumber advances, cut-off date for further but position every penny a where received [he] agreed preced- to cover the checks of the advance, in was the form of an loan. I Plaintiff, ing week. in accordance with money. any had I not control of no could that agreement, $1,700.- submitted a list of my expenses. all I lost control. I could $1,800.00 00 or of worth checks which my respect.” manage any in business City pay. Duke did not Plaintiff was left Also “I stated: could [make September overdrawn at the bank on any equipment payments]. I could not amount of these checks. my utility payments. make I could not my make payments. tax I make couldn’t Value Business of payments. operating I made the net Plaintiff September stated that on expenses, and that was all. Had I been trailers, rolling (trucks, he had stock able to move this lumber and receive the tractors, bulldozers, approx- etc.) valued at proper it, price for I would have been imately $300,000.00with an indebtedness of making profit.” a $70,000.00 $80,000.00 to on the first mort- 21, 1969, days On after two June gage. Subsequently, equipment re- signing Supplemental of the Agreements, possessed by equipment various lenders and City Duke sent a contract trucker with dealers. eighteen a total of or nineteen One witness stated that the business was trucks and two three of them made two $400,000.00 worth going operation as a but * * *” trips inventory to remove the if liquidated had to be it would sawmill of surfaced lumber. Plaintiff was told the $75,000.00 $80,000.00. be worth to moving .reason for it was so that Duke ap- Another witness stated he City “protect could it.” The trucks hauled proached plaintiff April in March or both rough green surfaced and lumber. per- buying fifty-one 1969 with the view of “ * * * He stated: actually We hauled plaintiff’s quality cent of He liked the mill. some of the day lumber that that came off stat- the timber and lumber sawed. He chain, the rough green. $300,000 ed : negotiating “We were After 1969 Duke took the June * * *” fifty-one percent interest lumber produced.” “as fast as it was $300,000 price the time the “[a]t visit, my Control my first Working Capital was established on adequate, my opinion interest Duke did not restrict the use of operation to the evaluation of the entire working capital up funds February, until encourage me to come was sufficient to except require them to be used in- further back on three more occasions to pay capital working expenses. Beginning I vestigate whether or not to determine May, 1969, however, City began willing g[o] ahead with that would be substantively restricting working the use of by the purchase.” trip The last type of capital. During that time City post- July, was in plaintiff’s sawmill witness poned repair, authorization for fork-lift an 1969. expense op- Terrel felt was essential to the closing after eration of testified his mill. Duke re- Plaintiff also attempted to quired he put payment September, Terrel off the down damage $14,000.- him and Terrel’s the amount of City closed down reopen but Duke Para- This claim asserts breach of salvage his 00. except for value business graph 3 contract. was worthless. 16, 1968, and “(B) Between October Testimony City and Liberman’s 8, 1969, City downgraded September
and Exhibits grade Terrel’s surfaced common lumber word, testimony was al- In a the defense $3,100.- damage Terrel’s in the amount of opposed to that diametrically most of Para- 00. claim asserts a breach This plaintiff’s such a nature to or was of graph 10 of the contract. parts Those
opposition plaintiff’s claims. proving “Plaintiff has the burden testimony appeal to this relevant these of the contract and claimed breaches only in the discussion will be referred to damages the claimed breaches of appeal. of the issues.on the contract. “Duke denies each of claimed Motions Relevant contract, breaches denies the dam- the trial court motion defendants’ On ages asserted Plaintiff connection *13 sepa- a third-party claim for severed the with the breaches of the contract. claimed rate trial. City “Duke defenses to affirmative plaintiff’s case defend- At the close claims, the breach of asserts that contract verdict on ants moved for directed any if it did on breach the contract breach fraud, compulsion, claims of economic part by prior its is excused Terrel’s or con- contract and conversion. breach of breach, any or that current such breach on granted trial the motion conver- court by has been waived Terrel. sion; as to granted the motion on fraud City proving “Duke has the burden of its Grevey; denied defendants Joe Jack affirmative defenses. limit- on of contract but the motion breach you proved “If find that has Plaintiff spe- jury ed its to the to certain submission one or more of the claimed breaches items; as to cific and denied the motion contract, proved damages and has in con- compulsion by Duke the claim of economic breach, any you nection with and if such City, having against no claims been made City proved any find that Duke has not defendants. individual defenses, your one of its affirmative then case, At the close of defendants’ defend- verdict should be for the Plaintiff as to de- ants’ motion for directed verdict was any proved. breach of contract remaining nied claims. “If, hand, you on the other find that only the contract of October hereafter in these instructions when I October Plaintiff fer to Relevant Instructions “The breach of contract claim “INSTRUCTION NO. 2 to Duke ‘contract’, 16, 1968). That the contends City I mean the contract of Lumber to the 16, 1968, (and City Jury breaches Company. breached applies re- not been none of the claimed breaches of contract have been breach Duke contract claim. should be for Duke firmative «* City you [*] proved defenses, proved, has find to have proved any in connection with or that then occurred, on the breach of one of damages your or that verdict its have any af- damages and the to Plaintiff re- contract “INSTRUCTION NO.
sulting each breach are: “Plaintiff’s second claim concerns eco- 16, 1968,
“(A) compulsion. compulsion Between and nomic . October Economic September failed to means involuntary action in which one place compelled orders for against Terrel’s surfaced common to act his will in such a time, grade lumber within a reasonable to manner that he suffers business loss. definition, “(d) com paid Lyon economic The amount to this Pursuant Sale, by $13,100.00; conduct ont pulsion intentional Timber means tends to overcome person only which “(e) Overcharged planing cost under the actually but ac- person, the will of another Supplemental $10,460.- Agreements, Thus, there to 00; complishes this result. compulsion, there must be an be economic “(f) Loss of saw mill mill deprival of actual freedom choose. $600,000.00; in the amount of “(g) stock, $68,538.00. Loss of rolling “INSTRUCTION NO. “Plaintiff compulsion may proving be accom- has burden of “Economic by compulsion any threats conduct claimed plished by economic conduct damages resulting to act compels another therefrom. one which compul- economic against his will. Since any “Duke denies Terrel took action, may not compelled sion involves compulsion action as a result of economic al- if time of the accomplished at the part, on its and denies that Terrel suffered leged compulsion a reasonable economic any damage from compulsion. economic per- of action was available choice addition, City affirmatively In as- compulsion, nor claiming the economic son serts : accomplished may compulsion be economic “(a) Terrel became insolvent after exe- com- if the conduct or threats of conduct cution the contract, actions right of a is in the exercise plained of were taken in connec- legal to do. right person which the had a tion with this insolvency. “(b) If there has “INSTRUCTION NO. been economic *14 compulsion by City, Duke Terrel compul- economic “Plaintiff’s claim of any damages right waived to claim City Lumber applies only to Duke sion it, for and ratified alleged eco- that as a result Company. The claim is compulsion by City. nomic Duke compulsion part of Duke on economic City prov- Duke has the burden of City, Terrel ing its affirmative defenses. unnecessary repair work “(a) Performed mill; you “If proved his find that Plaintiff on has one or more of his claims of economic Unnecessarily drying “(b) reworked his compulsion, and proved damages has yard; claim, connection with such you and if find Houghton, “(c) on the the timber Cut City that proved Duke has not its affirma- Sale; Beaverhead, or Timber defenses, tive your then verdict should be Sale; Lyon Timber “(d) Bid on the for any the Plaintiff as to economic com- pulsion proved. Executed the First and Second “(e) Agreements Supplemental “If, hand, on the other none of the contract. claims compulsion of economic been have proved, or that damages have been not damaged he claims “Plaintiff that proved in any connection with economic compulsion as a result of this economic compulsion you occurred, that find to have follows: or that proved Duke any has one of “(a) repair yard Planer and drying its defenses, your affirmative then verdict $1,127.50; work the amount of should be Duke City for on the economic “(b) Houghton Extra in processing cost compulsion. $112,607.00; in the amount of “INSTRUCTION NO. 14 Inability process timber “(c) other processing Houghton, sales general while “The rule concerning'‘burden of $63,000.00; proof’ which I you have stated to in con- and that Duke promise, this in reliance on claim of contract with the breach nection deposit to cover City failed to make the compulsion apply to economic does not this failure He that these checks. contends claim. Terrel, City forced part of Duke on compulsion proof establish economic “To will, Supplemental against his enter convincing. It must be must be clear and Damage Agreements to the contract. preponderance of the evi- than a more of Instruction (e), (g) claims (f) re- Plaintiff will have met dence. theory. based are on proof one or quired burden compulsion that claims of economic more “INSTRUCTION NO. convincing are established clear City’s is that no theory “Duke economic evidence. compulsion It contends that occurred. convincing as to is clear and “Evidence time of execut- insolvent at the Terrel was you compulsion if have an economic claim contract; ing the that Duke executed conviction such a claim abiding an that upon the contract Terrel’s assurance that convincing is not true. clear Evidence capital; working obtain he would evenly bal- you if find evidence to upon working obtain Terrel’s failure to Plaintiff, if anced, barely favor money capital, loaned Terrel your question leaves a evidence inven- log the basis Terrel’s and lumber compul- alleged mind as to economic repay- tory; delinquent Terrel sion. loans; ing the escalation in that due to requirement of “The clear and convinc- costs, logs by stumpage mis-scaling of the compul- evidence establish economic Service, the Forest market conditions and apply does not the affirmative de- sion mismanagement, City’s Terrel’s secu- City. fenses of Duke As those affirma- rity endangered; for the loans was general applies. defenses rule tive City sought and obtained execution Thus, af- an establish protect Supplemental Agreements compul- firmative defense to an economic security, its and as fore- an alternative to claim, prove sion must that defense closing against at the time of Terrel preponderance of the evidence. Agreements. the Supplemental execution of IS “INSTRUCTION NO. *15 “INSTRUCTION NO. has “Plaintiff two distinct theories of “Two of the in issues involved eco- compulsion. economic First: contends He compulsion nomic previously claim have City promised that provide him been in They defined these instructions. working capital; that in reliance on insolvency are and An issue un- waiver. promise, Terrel did seek to obtain der this claim is that ratification. A working capital sources; from outside that person ratify may agreement. an Ratifica- did, City fact, provide in him with if, tion knowing occurs the terms and con- capital, working by and then use of threats agreement ditions person acts provide to refuse to him with further pursuant agreement, accepts and working capital, against it forced Terrel agreement for a benefits considera- perform his repair will to work on the length ble time op- after has had the he planing yard; mill and the drying cut portunity avoid repudiate. Sale, the timber on the Houghton Timber and Lyon to bid on the Damage Sale. “INSTRUCTION NO. 18 (c), (a), (b), (g) claims and (d), (f) theory. Instruction 13 are based on this may damages any “You award one compulsion or more economic claims which City He “Second: contends that Duke n proven. been promised have The amount payroll logger cover and ex- 1969; pense June, damages in that he issued checks must proximately have been compulsion by proven standing the except caused economic Verdict part claim claims. that off the motion which [sic] dealt with damages the items of found ‘proximate damages “The cause’ jury Special in B Claims and C In- in a natural and se- which continuous terrogatory 2No. and as to quence produces damages, and without those two claims set aside the verdict of damages which the would not have oc- jury in $175,607.00. the amount of cause, only curred. It need be the nor the last or nearest the same it, if it does occurs with some time, fact cause the which in combination with cause. other damages.” It is cause sufficient acting at the verdict as follows: The trial Judgment on the Verdict << [*] court then entered [*] judgment ORDERED, “1. IT IS HEREBY Jury Interrogatories and Verdict AND DECREED that ADJUDGED jury by interrogatory found n Plaintiff have and do recover from the City breached the October City Defendant Duke Lumber Company plaintiff contract and under in- found for $459,851.50 the sum of reduced and off- pursuant (a) claim struction No. by $344,174.19, set the amount of the sum- amount, $14,000.00 pursuant and to claim mary judgment heretofore entered in fa- $3,100.00. (b) in the amount of vor of the City Defendant Duke Lumber It also found Duke liable for eco- Company, summary which judgment, compulsion following nomic having offset, thus been is hereby fully amounts: paid satisfied, and that a net and fi- be, judgment is, nal hereby thus (a) (Planer— repair "CLAIM against awarded to the Plaintiff the De- work) drying 1,127.50 yard $ (b) (Extra cost proc- "CLAIM — fendant Duke Company Lumber Houghton essing sale) timber $115,677.31, plus sum of costs as- $112,607.00 (c) (Inability sessed in against favor of the Plaintiff "CLAIM Ctlo process — other while timber sales Defendant Duke Company Lumber Houghton) processing 63,000.00 $ (d) (The— plus interest at the rate per of six cent amount paid "CLAIM sale) Lyon timber $ per (6%) annum entry date of -0- (e) (Overcharged planing "CLAIM — paid hereof until full. costs under Supple- Agreements) 10,460.00 mental $ ORDERED, IT“2. IS FURTHER (ft (Loss of saw mill and "CLAIM — mill) AND DECREED that $367,000.00 ADJUDGED stock) (g) (Loss rolling 64,164.00" “CLAIM — $ Plaintiff nothing complaint take their against in this cause Defendants Ira Lib- jury by special interrogatories its erman, Grevey Grevey Joe Jack found that neither Duke nor Liber- be, is, judgment hereby entered man defrauded or acted malicious- against in favor of said Defendants and ly as to or with a reckless disre- *16 Plaintiff, together with assessed in costs gard plaintiff’s rights. for against favor these Defendants jury The then returned a for verdict Plaintiff.” plaintiff against and awarded $635,458.50. damages in the amount of DISCUSSION: Post Rulings Trial Motions and point Defendant’s first for reversal is: Subsequently filed alternative “THE ECONOMIC COMPULSION N.O.V., Judgment motions for New Trial $367,000.00 CLAIM FOR DAMAGE and Remittitur. ‘LOSS OF AND PLAN- SAWMILL MILL’
The trial court denied the motion for a ING WAS ERRONEOUSLY Trial, JURY, Remittitur and New and denied SUBMITTED AND TO THE City’s Judgment THE motion Notwith- COURT ERRED IN DENYING 422 Supreme Court, upholding in DI- Our FOR
DUKE CITY’S MOTIONS
judgment
plaintiff,
trial court’s
said:
AND FOR
RECTED VERDICT
“* * *
of a
on breach
contract
NOTWITHSTANDING
JUDGMENT
money,
special
loan
where
circumstances
SUCH
VERDICT
CONCERNING
parties, as in
case
CLAIM,
were known to both
THE FOL-
FOR
DAMAGE
us, and from
have
before
which must
REASONS:
LOWING
apparent
special damages
been
that
LAW,
MATTER
A
OF
“A. AS
a
ful
would be suffered from failure to
CONSEQUENTIAL
DAMAGES
special damages
fill
obligation,
such
FOR
MAY NOT BE RECOVERED
may
recovered, provided
damages
such
COMPULSION.
ECONOMIC
speculative
are not
Am.
or remote.
69,
103;
Damages
“B. THE CLAIMED DAMAGE
at
Price v.
§
Jur.2d
Lint,
TO BE THE
PROVEN
WAS NOT
Van
46 N.M.
403
type
The
party
avoid a severe
latter
by
causation occurs when
ed
the other
“ ‘* * *
relationship
loss,
consequences
is not
the
and the
economic
were or
unequal
should
been
origin
contemplated
have
reciprocal.
might
The
”
* * *
power
be irrelevant.
have been
bargaining
should
foreseen.’
Valdez v.
Gonzales,
281,
position is
superior bargaining
the
50 N.M.
Once
bargaining (control of cre- man, 400, 59 N.M. 285 (1955); P.2d 507 duty party weaker ated the offer the Rice, Bank New Mexico v. reasonable choice alternatives. (1967).; Kelly Montoya, P.2d 368 N.M. P.2d As (Ct.App.1970). Duty b.Breach of L.Rev., supra: stated in 53 Iowa the funds The threat to withhold agree- the was a clear violation of “The issue of in duress Pecos causation cases proceeded. complicated is necessity Pecos Un- ment under which the for deter- theory mining accepting it is the victim’s reason for der tort duty party superior bargaining in a The adequate contract. criteria of legal alternatives, position gravity refrain from economic threats of the threat- justi- injury, could not be ened if the threatened action fairness of the resulting * * * bargain, refus- fied and ratification of the contract [an unreasonable] provide independent al meet contractual demand related but means to ” * * * by party. In order to if the other (cid:127)decide the victim would have ac- “ * * quiesced must in wrongful threat we wrongful find a absence of * * * relationship on the between threats. Recognition focus that cau- de- threatened and the contractual is a analy- action sation central issue the tort mand, places proper determination sis perspec- and reduce crucial these tests in a reasonable- analysis to an of commercial tive.” L.Rev., supra. ness. 53 Iowa implicitly applied The Pecos court Higginbotham, 20 N.M. Cadwell v. See upholding “causation” factor in the dam- (1915). 151 315 P. ages awarded that case. readily sus- foregoing Pecos Under the d.Damages lender’s alternative analysis. tains already reasonable; bargain was not theory Recovery under the tort prac- been been struck. It would have supe wrongful based on the conduct anything to have done ticable for Pecos compen is to be party rior victim price. To pay the additional other than damages are suf all which sated for actual delayed have have otherwise would done to fulfill the failure fered as a result'of further, re- the start of construction damages are obligation long as the so the commit- during which the time duced Pecos, supra. speculative or remote. funds was for the advancement ment of economic differently, in a claim Stated force. which damages suffered compulsion all c.Causation by the economic proximately caused “proximate term general This con compulsion are recoverable. fact both causation encompasses cause” the trial court charge of sistent with the as a limitation causation proximate under set forth instruction No. 18 responsibility. placed on the tort-feasor’s Jury.” heading “Instructions to Torts, 1971). Ed. (4th Prosser on § *18 424 Rice, supra, Lint, Housing Authority of v. Price v. Van 46 N.M.
As stated 58, Hubbell, However, (1941). 120 P.2d 325 880 611 the of Dallas v. S.W.2d consequential damages damages must be (Tex.Civ.App.1959): reasonably that were or should have been It often arises is a tort. “Duress contemplated by parties. the Bank of New contract, but breach of with connection Rice, supra. Mexico v. tort, it is not a nevertheless is should have been necessary that there policy We think this of substan parties the as between privity of contract tially merging the damages measure a action. such tort prerequisite a for tort is and contract cases consistent with result of damage as a who sustains One fully compensating modern trend a may sue as subjected to duress being injury. any object victim for his wrongdoer. ‘Eco- plaintiff against the awarding damages rule for is to afford coercion’, of Lewis’ cause the basis nomic just compensation injuries for the received. action, a form generally considered is 440, James, Rutherford v. 33 N.M. 270 P. of duress. (1928). grounds 794 on other Overruled Styron, 262, in Reed v. 69 N.M. 365 P.2d is wor- it is said ‘It “In 52 Am.Jur. 912 (1961). may a tort involve thy of notice Cruces, a breach of Bettini v. of Las also constitute N.M. acts which contract, 633, same facts will 485 P.2d does not (1971) and that reach contrary There, plaintiff or ex result. ex delicto only an action sustain either return, contractu, sought paid. delicto an action ex funds No claim so that lie, notwithstanding damages act com- was made. will an ground for plained would also be B. Proximate cause. rule, this contractu. Under ex action position It is defendant’s under accompanying ev- it has been held heading consequen- that even if duty law ery there is a common contract recoverable, tial damages properly are Ter- skill, care, reasonable perform with rel prove failed to that the ‘loss’ of his thing expedience, faithfulness by any sawmill was caused conduct of fail- done, negligent and the agreed to be City.” any these conditions ure to observe As proof of the above contention de- tort, as a breach of contract. is a as well fendant following: asserts circumstances, Plaintiff’s general Under such prior financial condition was so bad may elect which rule that the October 1968 contract he had to pursue.’ get either financing or sell the mill. instruction set forth The trial court’s damages delay contract for unreasonable damages under awarding standard for placing illegal orders regrading oc- theory. tort This was consistent Supplemental Agree- curred before the Pecos, supra. ments and were not' claimed under recovery Contract in New Mexico theory causing as the loss of sawmill essentially Allen Allen Ti same. and planing planer mill. The re- cost Company, tle 77 N.M. P.2d 673 pair yard only and drying rework consisted Newton, (1967) and Brown v. payroll of small The lumber market losses. 282 P.2d (1955). relying Allen in dropped significantly during the contract “* * * purpose Brown stated: period, increasing the likelihood of an un- allowing damages in profitable a breach of contract operation. Finally, sign- before injured case is the restoration to the Supplemental Agreements Terrel’s breach, what he has lost and what indebtedness Duke exceeded the in- reasonably expected he gain could have ventory being security and he was used breach, if (citations there had been delinquent no payments. in his then omitted).” Accord, Bank of New Mexico had right to declare a default and ac- *19 Loss,” at to supra). The trial court refused Damages awardable payments. celerate enough damages jury the submit those to because not have been that time would Also, speculative. the amount was the ex- pay less off the delinquency, the cure much causes, istence other such as Terrel’s total indebtedness. prior declining lum- financial state and the compulsion Two theories of economic market, City ber does not exonerate Duke 15. were set instruction No. Un- forth supports when the evidence a conclusion City’s theory threat der the first Duke concurrently its Ter- that actions caused working capi- its furnish promise to breach Ortega Mex- rel’s loss. v. Texas-New See set in in- damages tal as out caused the P. Railway Company, ico (a), (b), (c), struction 13 under claims No. ; Montoya, supra. Kelly v. (1962) 2d 201 theory the (f) (g). second (d), and Under promised City’s de- failure to make the instant we believe the case In logger posit payroll and ex- the cover in and the reasonable evidence set forth penses Terrel and forced June, 1969 establish therefrom ferences that flow sign Supplemental Agreements caused the part the pattern conduct on of consistent set in instruction No. 13 damages the out goal of City towards the of Duke directed Except for (g). (e), (f) under claims and of subse financially ruining and by interrogatory No. special the (d) jury g. Little acquiring (e. his assets quently (f) and plaintiff. Under claims found viewing the evi sawmill). In Tree new rolling (g) stock) ei- (loss sawmill and set the rules we have hereto dence under Claim theory applicable. be would ther was clear hold that evidence forth we only theory (e) and (a) the first relates support and convincing in of the claim theory. only relates to the second say law that as we cannot that a matter instantly the scales appeal (but not did not tilt purpose this the evidence For jury’s mind court affirmative so that cross-appeal) assume trial we abiding that motion left with an conviction granting was was correct defendant’s charges each element true. (b) as to claims Judgment N.O.V. Winks, Lumpkins v. supra; Hockett v. (c). McPhee, supra. argument of the Defendant makes much us City further have hold and economic would that combined contract by jury influenced compulsion damages Judgment after that N.O.V., (claims (c)) of the sawmill Houghton damages (b) aside from the loss stock, only $28,587.50. held these dam- rolling totals and since the trial court plaintiff’s improper us the consideration of ages Defendant would have believe damage improperly argument damage is to the effect that claims influenced position. De- jury. accept his business. that caused to lose cannot We “ *** strong con- The evidence here so fendant concludes [t]his claim, Houghton Terrel’s which in view of preposterous tention is withdrawal far not have liability largely damages, for sums would to Duke related to admitted proximate damage jury’s judgment he any possible affected the excess of have suffered. cause. claimed to “ * Finally in this established asserts Causation case was the saw- loss to the awarded dam- could have foreseen factors in addition [not] * * * ”, items of and there- ages. mill and mill The evidence showed proximate formally prayed charged for nonethe- not damage fore could “Grading,” re- helped (See loss causation of the loss. The evidence less cause the Slowdown,” convincingly appeal clearly of Produc- “Costs viewed on “Work only he fore- tion,” that Duke supra). Terrel establishes established loss, diligently Sup- pro- shortages saw the but worked damaged under plemental “Shortage Agreements (See duce it. Exchange Henderson, damage.
C. Proof of
82 Ariz.
P.2d 404
(1957).
nothing
This
more
sub-point
Under this
contends
than a “before” and “after”
rule and
value
proof
damages
is no
there
*20
partially
part
is
consistent with that
of de-
$367,000.00
the amount
loss
of
for
of
requested
fendant’s
instruction
1 enti-
No.
plaintiff’s
sawmill
and
mill.
”
*
**
tled “Statement of the Case” which states:
sub-point really
This
involves
arguments:
proof
two
is
of
(a) there
no
“(6)
[plain-
The loss market value of
”
past
necessary
profits
for an award for
*
equipment.
mill and
tiff’s]
business;
damage
(b) even
to Terrel’s
where the
We can conceive of situations
simply
if
permissible
prove
it is
the “be-
“before”
“after”
be the
rule would
business,
fore and after” value of a
only
compensation
just
manner
which
equal
salvage
“after” value should not
a
has
could be awarded. Where
business
value.
fire,
destroyed by
example,
been
for
lost
damages
a. Duke
asserts the rule of
profits
unjust damage
be
mea
would
an
applicable here as set forth in De Palma &
a
Similarly,
sure.
with the destruction of
Barnett,
68,
Ruppe
v. Weinman &
going business as in this case the “before”
*
“* *
proof of
(1909)
not in fact lost the equity an value rolling stock had [i]f from The to this follows mill. answer by Terrel, his failure such as claimed The “after” value C(b) above. answer to dispose of the efforts to make reasonable value, salvage without the mill was a at market constitutes equipment its value operate purchase timber. capital to it or to ”* * * mitigate damages. failure to plaintiff could not There evidence that on miti- requested instruction Defendant’s planing mill with- operate the sawmill and will gation damages was refused. We must by its verdict capital. jury out proper. is mitigation assume a discussion testimony. have believed a second mort Defendant argument conjunction In with stock, rolling but Terrel’s gage on all of mill, loss sawmill and that that it released refers us to evidence in this court pre-submission filed a motion equip piece of mortgage on one second to reconsider the trial court to remand to showing there is not a ment. Nonetheless damage award. In conformance overage fact received time, opinion the decision at equipment or what the sale of here- is attached from that motion resulted no evidence that equipment There is was. to. equipment released would have defendant overage. evi an Such there was on which point reversal is: Defendant’s second instruction on an dence does not warrant IN ERRED TRIAL “THE COURT only enti party A mitigate. duty FOR THE CLAIM SUBMITTING on correct le instructed jury tled to have UPON STOCK OF ROLLING LOSS by sub supported are gal theories which AWARDED THE WHICH JURY Stewart, Barge v. La stantial evidence. DUKE DENYING $64,164.00, AND IN (Ct.App.1972). 501P.2d N.M. DIRECTED FOR MOTIONS CITY’S is: reversal point for Defendant’s third NOT- AND VERDICT JUDGMENT ERRED IN “THE TRIAL COURT ON VERDICT WITHSTANDING ECONOMIC THE CLAIM, THE FOLLOW- SUBMITTING FOR SUCH CLAIM CONCERN- COMPULSION ING REASONS: Agreements ING PLANER REPAIR Background” AND is clear and con- YARD supports DRYING AND IN DE- vincing jury’s WORK verdict and DUKE NYING CITY’S MOTIONS award damages. FOR DIRECTED AND VERDICT B. Agreement Oral to Provide Work- MOTIONS FOR NOT- JUDGMENT ing Capital. VERDICT,
WITHSTANDING NEW 1. Insufficient convincing clear and TRIAL, REMITTITUR, OR FOR THE evidence. FOLLOWING REASONS: point evidence under this
“A. TERREL FAILED TO ES- set “Working Capital.” forth under BY TABLISH CLEAR AND CON- City contends that the was insuf evidence THE VINCING EVIDENCE THAT clearly ficient convincingly establish PLANER REPAIR AND DRYING an agreement provide oral working capi YARD WORK WERE CAUSED BY theory tal. Plaintiff’s first of economic DUKE CITY’S ECONOMIC COM- compulsion in instruction No. states PULSION. part: “B. THE CLAIM IS FOUNDED [Plaintiff UPON AN contends] ALLEGED ORAL City promised provide him with AGREEMENT BY DUKE CITY TO working capital; that in on this reliance *22 PROVIDE WORKING CAPITAL: promise, Terrel did not seek to obtain AS A MATTER OF LAW NO sources; working capital from outside BE SUCH AGREEMENT COULD City did, fact, that provide Duke him ESTABLISHED, THE FOR FOL- working capital, by with and then use of LOWING REASONS: provide threats to to him refuse with “1. THE ORAL CAPI- WORKING working capital, further it forced Terrel TAL AGREEMENT WAS NOT ES- against perform repair his will the BY TABLISHED CLEAR AND work the mill drying on and the EVIDENCE; CONVINCING yard; Houghton to cut the timber on “2. THE ORAL WORKING CAPI- Sale, Lyon Timber and to bid on the TAL AGREEMENT VIOLATED Damage Sale. (a), (b), (d), claims (c), FRAUDS; THE STATUTE OF (f) and of Instruction 13 are based (g) PROVEN, “3. EVEN IF THE theory.” on this ORAL CAPITAL WORKING To find under this in- INDEFI- AGREEMENT WAS TOO struction, they did, as jury had to find ENFORCE; NITE TO parties that the established a contract to “4. THE ORAL WORKING CAPI- provide working capital by their “course TAL AGREEMENT VIOLATED evidence, conduct.” There is as set forth THE PAROL EVIDENCE RULE.” above, was entitled Repair A. Planer Drying Yard giving of the instruction. not be- We do Work. lieve, believe, as Duke us would have promissory series of notes evi- point Under this Duke re denced a series of individual loans. This evidence, views the regard not with nothing present did than more a factual standard set forth herein but most favor jury issue for the A to resolve. review of ably to itself. After doing so supports jury the evidence determina- states convincing there was no clear and tion. planer repairs evidence that the drying yard rework by were caused economic next working contends that a compulsion practiced by City upon capital agreement supported cannot be cutting capital. the threat of working off theory. “course of conduct” It The evidence set “Planing City’s position forth under ‘[c]ourse Mill”, Yard”, “Drying and “Supplemental of conduct’ has require not been used to
429
per-
year.
Pierce Secu-
money,
Reinhart
Rauscher
loaning
or the
v.
the further
supra.
acts,
prior
Corp.,
simply
rities
because
forming of
performed and
may have been
transactions
Capital
Working
3.Indefiniteness
an addi-
wants
enter
parties
of the
one
Agreement.
tional contract.
“course
conduct”
has no cases
Although
Mexico
New
parties
only the existence
established not
money it has
loaning of
dealing
with
contract,
of a
but the terms as well. Tru
rule.
the “course of conduct”
followed
Chavez,
Meister,
jillo
supra; Hillis
v.
v.
Company,
Title
77
New Mexico
v.
Gordon
supra. The amount
loaned was de
217,
(1966) (setting
N.M.
P.2d
by
working capital
termined
amount
“
cus
[unquestionably,
rule that
forth the
rate
needed. The interest
was shown on
rise
may give
of conduct
tom course
promissory
agree
notes. The October
in fact
implied
”).
a contract
inventory
ment
later
appraisals
estab
Chavez,
417 P.2d
N.M.
Trujillo v.
inventory, machinery
lished that
and roll
to establish
of conduct
(1966) (course
security
stock
to be
loan.
passenger). Hillis
agreement
to status of
as
Discussions
parties
between the
indicate
Meister,
P.2d 1314
v
82 N.M.
.
long
as
contract would last
Terrel
(course
conduct
estab
(Ct.App.1971)
produced.
conduct,
The parties,
their
regula
obligation to
rules and
lish
follow
specificity
“wrote” the contract. No more
procedures even
relating to dismissal
tions
Freeland,
is required. Compare
Sanders
though
teacher’s con
not mentioned
(1958).
business. This INDICATE THAT THE JURY Construction, supra, in Pecos where that IN THE MEA- WAS MISTAKEN performance is the by the Defendant DAMAGES, ACTED SURE OR OF do Plain- only performance that will AND FROM PASSION PREJU- De- any good only tiff Pecos —in DICE, BIAS OR SYMPATHY.” company mortgage investment fendant necessary to had the FHA commitment A. New Trial. * * *” begin project. housing point City asserts- Under this ad- argument This is Terrel irrelevant. judgment even if it is not in its entitled dependence mits his on financial favor the claims of loss of sawmill and City. The issue this case whether mill, rolling the loss of stock “ * * * dependence manipulated certainly in event the then Ter- through compulsion to cause economic require a new trial errors are sufficient to damage. jury’s finding rel that re- gard supported by convincing clear and adverse- have decided all issues Since we evidence. upon are errors ly to there no assuming analysis Even defendant’s grant which to a new trial. Pecos, supra, City by its is correct Duke City’s Requested B. Duke Instruction. placed plaintiff in the course of conduct *25 up position giving it in relying of and paragraph instruction No. The third working capital seeking outside funds. 14 states: Thus, Terrel, only one rea- like Pecos had convincing “Evidence is clear and as sonable alternative. you if compulsion to an economic claim point is: Defendant’s fifth for reversal abiding have an that such a conviction and IF claim is true. Evidence not clear “EVEN THIS COURT SHOULD you convincing if find the evidence to be CONCLUDE THAT DUKE CITY IS balanced, evenly barely favor or in NOT ENTITLED TO ENTRY OF Plaintiff, if a the evidence leaves IN ITS FAVOR ON JUDGMENT alleged your as to the C. Excessive Verdict. question mind compulsion.” economic that the size of asserts the sawmill Hockett, supra, jury’s the test of clear verdict for loss of stated the $367,000.00'— convincing as follows: evidence mill— “ * * * entire either that the indicates “ * * * con- Evidence is clear and passion preju- was the result of verdict ele- support the essential vincing in this item of dam- dice or verdict as to instantly tilts only it ments of deceit if sup- ages truly is excessive that it on each ele- the scales the affirmative ported the evidence and indicates ment, the evidence weighed against when mistaken in the measure of jury finder’s mind opposition, and the fact City is en- damages, accordingly abiding an conviction that is left with titled either a new trial on issue each element are true. charges as to proper damages or a remittitur in the ” * * * (Emphasis Ours) ” * * * amount. in its The trial court stated discussion testimony the val- disagree. The We “ * * * it de- the instructions that going operation as ue of the sawmill a description liberately omitted $250,000.00 $800,000.00. ranged from ‘immediately concerning New Mexico cases $367,000.00placed by jury value affirmative,’ tilting the scales to think- certainly permissible range. within the inappropriate that that is an visual ex- say matter of Accordingly, we cannot as a however, ample, have I chosen the word law that the award was excessive. ‘abiding conviction’ because I do think that point Defendant’s sixth for reversal is: conveys meaning to the term clear and “THE ERRED IN COURT DENYING objected convincing.” Defendant AND AT- DUKE CITY INTEREST “descriptive omission of the factor” be- “ * * * FEES ON ITS COUN- TORNEYS’ cause is less than what was TERCLAIM.” there, supra Lumpkins, said [referring Visic, supra].” point Under complain long does not of this action as as City’s position phrase It is Duke that the judgment in favor of Terrel exceeds “instantly tilt the scales in the affirmative” City. judgment favor of Duke important “abiding is as conviction” and ” * * * Accordingly, prior our determi- they things. mean different nation renders this point moot. “ ** City asserts this left out of the Defendant has advanced various other convincing definition of clear and evidence sub-arguments points. its within basic We one of * significant the most elements. » sub-arguments have considered these consider them to be without merit. Assuming purpose of this THE CROSS-APPEAL: opinion “instantly tilting the scales in point the affirmative” is an Plaintiff’s first cross-appeal essential element on point is: prop of law the issue was still not erly preserved appeal. 51(1) (i) Rule “THE TRIAL IN COURT ERRED (51) (1) 21-1-1 (i), (Repl. N.M.S.A.1953 [§ THE GRANTING MOTION OF DE- “* * * 1970)] Vol. states that in case FENDANT DUKE CITY FOR JUDG- any point failure to instruct on of MENT NOTWITHSTANDING THE law, a correct instruction must be tendered. VERDICT THAT AS TO PART OF The record does not contain THE VERDICT FOR DAMAGES requested such a instruction. Panhandle FOUND BY THE IN CLAIMS JURY Bates, Irrigation. Inc. v. (b) (c) AND OF SPECIAL INTER- *26 P.2d 705 (1968). 2 ROGATORY AND NO. ERRED IN
433 supra). Contracts”, pired. (See “Timber THE UPON ENTERING JUDGMENT that he had to show prove this claim AFTER To VERDICT REDUCED Houghton processing losses from THE MOTION.” GRANTING from than the losses greater would be interrogatory No. special (b) of Claim sales, profits less. or the processing other processing in costs for the extra not he prove did not show this could If he contract. sales Houghton timber processing caused Houghton that inability proc- (c) was for Claim prove he paralysis. How could financial processing sales while ess other timber be the profit loss would if the causation Houghton timber contract. same, processed? he sale whichever as- argument of this we purpose For the composite of activities While com- (see exercised economic de- may sume this loss have caused pulsion compulsion and that that point, on Terrel Terrel did B) first fendant’s Houghton sale process Terrel to caused make that contention.
against his will. prove Terrel did not As shown above his losses profits his were smaller or Nevertheless, prove Terrel did not He processing Houghton. greater in damages. proving He had the burden of Houghton prove the did not therefore profits processing sales the additional process inability his processing caused Houghton. He also had to other than sales. the other processing in other show costs incurred proc sales which would not be incurred point cross-ap- on the Plaintiff’s second essing Houghton. he had the Specifically, peal is: proving damages the amount
burden
IN
ERRED
“THE TRIAL COURT
the Forest Service would have assessed
THE
OF
TESTIMONY
EXCLUDING
he
Houghton
when
breached the
sale
or
TO
ACCOUNTANT
PLAINTIFF’S
process
profitable
der to
the more
sales.
FOR
ESTABLISH LOST PROFITS
Allen,
McDonald,
Heaton &
Inc. v. Castle
PLAIN-
INABILITY TO OPERATE
Co.,
Farm Amusement
St.
Ohio
THE
PLANER DURING
TIFF’S
782,
Since we do not reverse we in two and months at the one-half end of point. need not answer this the eleven month Again contract term. the court refused admit the evidence. cross-appeal point Plaintiff’s third is: Finally, proposed Terrel to use price average of common lumber dur- “THE ERRED IN TRIAL COURT ing period of time from nine- TESTIMONY OF EXCLUDING June * monetary teenth to show the TO PLAINTIFF’S ACCOUNTANT during loss the contract term. The court THE DIFFERENT ESTABLISH refused that tender. AND PERCENTAGES OF GRADES IN SIZES OF LUMBER INCLUDED rulings by will not these We disturb SHORTAGES, * * i. e. THE DIFFER- * patent trial court absent a abuse “ ENCE BETWEEN LUMBER SENT or manifest error in the exercise of [his] TO DUKE CITY AND LUMBER AC- Hanberry Fitzgerald, discretion.” THEM, BY THE COUNTED FOR (1963). N.M. 384 P.2d PERCENTAGES BEING BASED damage proven need amount not be ACTUAL EXPERIENCE AND UPON certainty. But in actions for breach of “ * * PREREQUISITE A THE BEING TO allowed contract the amount INTRODUCTION OF EVIDENCE subject must be to reasonable ascertain- FOR DAMAGES ESTABLISHING Con., Lyster, ment.” Louis Gen. Inc. v. THE SHORTAGE.” Vegas, Town of Las 405 P.2d N.M. (1965).
Terrel introduced evidence show prices greatly Market for lumber varied fo\ that Duke failed to account period during the contract contract scaling the “built-in” Forest Service over price varied with the market. The time tally (see run in grade their “Over alleged shortages when the occurred would run,” However, him supra). since Terrel substantially affect of dam- amount tally rough grade self did not ages. Terrel’s first three tenders assumed green (see leaving lumber his mill “Con uniformly shortages dur- tract,” occurred supra) attempted he to estimate the tender, period. ing the contract His fourth price amount shorted lumber of hand, sixty-three on the shows that other grade figure. each at damage to arrive months, percent occurred the last three He tendered evidence under three theories prices were the lowest. Terrel’s evi- when to show the amount of of each of lumber dence on the element when crucial general grades, the two and common. upper Any shortages in conflict. occurred was essentially The first two theories were specu- resolution that conflict would be They same'. were derived from the Duke lative. green of rough accounts lumber re during from Terrel ceived the eleven first to show attempts Terrel’s two theory period. month contract The third up- split rough green percentage between was based run performed on mill studies pers produced dif- entirely and commons during at Terrel’s mill figures attempt. This ferent than his third period. percentages contract under Grade specula- added another element conflict theory this significantly differed from tion. those under the other theories. Also, shorted applying price The trial rejected court all the theories proposed to use lumber Terrel speculative. given One reason for this price.” There is no tendered evi- “average ruling was that the theories did not show “weight” indicating that he would dence when shortages occurred. sold average by the amount of lumber showing price.
Terrel
then tendered
the market was
evidence
at each
Because
491,228
flux,
yet
board
added
another
shortage,
ap-
feet of
such
omission
proximately sixty-three percent,
speculation.
occurred
element of
*28
may
speculative
reasonably
have
elements
been foreseen. Valdez v.
these
While
Gonzales,
fatal,
supra.
individually
they have com
The
of
be
actions
beyond City were
push
proof
case
the
willful.
this
to
bined
ascertainment. We
limit
reasonable
the
of
deny recovery
Many courts do
under
v. Elk
distinguish this case from Bokum
compulsion
economic
the victim
because
324,
ins,
(1960);
P.2d 137
355
adequate
remedy
had
legal
prin-
an
on the
Goode,
263, 335
N.M.
P.2d
v.
65
Hubbard
ciple
stability
maintaining
the
con-
Rudolph
Guy, 61 N.M.
(1959);
v.
1063
my opinion
position
the
tracts.
In
the
284,
Pendergrass v.
(1956);
462
299 P.2d
compulsion
victim economic
and the vic-
661,
(1953)
Lovelace,
Baruch v. Beech Aircraft I I believe the dissent. motion re- (10th 1949). F.2d 445 Cir. mand should tabled. specifically for a motion sion made 15, 1972, filed their May defendants On appeal. pending remand decision May On without appellants. in chief
brief my opinion, is in- In remand motion remand filed a motion rules if is directed to cluded the above allowing defendants purpose of for the substantially affect may a matter pursuant to which trial a motion file in the court disposition of the case. (b) (6), N.M. 21-1-1(60) 60(b)(6) Rule [§ pro- rule This (Repl.Vol. 4)]. S.A.1953 [§21-2-1(17), Rule 17 N.M.S.A.1953 part: vides provides disposition for (Repl.Vol. 4)] are terms as upon such motion On record, cause. examine the We must party just, may relieve the court alone, we therein contained facts * * * judgment from a final trial, must new reverse or affirm award a * * following reasons: court, judgment give the district [******] (6) any other reason justifying relief deemed such other judgment as to us shall be *30 agreeable to law. judgment. operation the the of (52) (B) (a) 21-1-1 (a) Rule 52(B) (7) [§ added], [Emphasis 4)], which (7), (Repl.Vol. N.M.S.A. 1953 only City sought pertains allow the fact is ref- findings Duke a remand to of opera- pro- grant relief from erence remand our statutes. It trial court part: it judgment insofar as awarded vides tion of * * alleged loss
damages to
for an
of
*,
jus-
where
ends
[B]ut
of
and
mill.
the sawmill
may
require
tice
the cause
remanded
be
making
to the
district court for
ruling
a
and directed
This court reserved
filing
findings
proper
of
of fact and
Rule
the movant to file its motion under
[Emphasis
conclusions of law.
added].
supra,
trial court re-
(b) (6),
60
expression
opinion whether
an
questing
jury
This
a
trial
Rule
was
entertain a
under
it would
motion
Rule
supra,
inapplicable,
is
52(B)(a)(7),
but
supra.
was filed
60(b)(6),
The motion
rule sets a
us
tone for
to hear on motions
30, 1972,
argument
made. On
jury
June
to remand
decision in
trials.
without
expressed
opinion
it
trial court
its
justice”
controlling
The
is
“ends of
not entertain a motion under Rule
would
determining
grant
issue
or denial
judge is the
60(b)(6). The trial
Chief
jus-
a motion
For
to remand.
“ends of
Judge
this court.
tice,”
South,
312, 283
see Smith v.
20, 1972,
rehearing
July
upon
of the
On
Munoz,
P.2d 1073
ATMA
(1955);
v.
remand,
City orally re-
motion to
Duke
Prater v.
(1944);
N.M.
May
year
judgment
over
after
A
one
rule
adopted
should be
which will
rendered, plaintiff’s
sawmill
defi-
justice
serve the ends of
in the future.
notes
the sum
however,
may
subject,
any
sums which
”
* * *
trial
plaintiff.
be
awarded
at-
any
court denied Duke
interest
torneys’
fees
on
sum
summary
money
judgment
for
which
* * *
entered.
cross-ap-
appeals
plaintiff
Defendant
judgments
rul-
peals from the various
ings
trial court.
affirm.
We
charge
compul
of economic
sion,
fraud,
easily
like
one
made. See
137,
Roberts, 51
P.2d
Frear v.
N.M.
179
proven
must
(1947).
It
therefore
998
convincing
evidence. See
clear
179,
Seattle,
198 Wash.
Chatfield
582,
(1939);
P.2d
121
Car
88
A.L.R. 1279
215,
Notes
notes the for advances of they paid but as they grader were off were never the same lumber Plaintiff had cancelled. no him 1963 and had working since for buyer by a lumber turned down surfaced working capital amount of was grader during period of time. plaintiff’s inventory logs based on in the was slight washboard also stated that woods, logs yard in the and lumber bundles downgrade the lum- enough to not serious 1,700 figured per bundle. at board feet ber. City agreed working After Duke to furnish “ capital fac- plaintiff established a that unless he re- Liberman told per purposes they tor bundle, planing of 1500 feet for would not worked the mill plain- inventory Subsequently, any lumber or advance count.” take more surfaced money. Shortly sign- tiff any increased the size of the bundles before more forty-two high Supplemental Agreements Duke high from inches to as ing of “ * * * plain- fifty fifty-five supervisor as inches City planing sent its high.” planer the com- shutdown for These bundles were tiff’s mill and the was by re- days. mon and fifteen Plaintiff stated that dimension lumber stacked (to bearings, had drying yard placing con- two which reduce moisture $60.00 ordered, tent) he have eliminated the prior processing planing in the been could than surfaced). effect with no more one (where mill washboard boards were time, pro- day’s have shutdown could inventory No was made Terrel of during the fifteen upper rough it was duced surfaced lumber grade lumber because anybodys trams runners bodys [sic], During the shutdown day period. I dry.’ are not able to where the bundles stacked employees were planing mill ‘OK’, they said any surfaced lumber. asked for two weeks produce work or supervisor [Grevey] made and Ira Also, City’s planing [Grevey], Joe Jack give you two which were said will ‘We substantial modifications [Liberman] weeks, if it is end this time and at the necessary. operate acceptable you go can ahead during plaintiff’s occurred The shutdown not, way If it is the lumber we are. Shortly after the period. production best rough green state.’ comes plaintiff mill planing repair work on rough now, your his lumber shipping “Q. Alright all of in so far as was need for the state, obviating the green yard thus before drying was concerned Agreement “Supplemental any changes repairs. (See you made of these infra). Background”, requiring, you were hav- they were your with problem fact for being shutdown Prior to operation? drying mill was repairs plaintiff’s planing mill day per fifty M.B.F. processing forty to really, not as far as was con- “A. Not I sawmill, a com- lumber. The surfaced same I It was the method cerned. producing pletely separate operation, large for a number had followed per thirty-five M.B.F. thirty and between years.” day. spent Plaintiff then the next two weeks using many as ten men to rework one as Yard Drying drying yard. After the re- area of working drying yard, during the lat- plaintiff period of time same During the part May early part June, ter losing a City that he was was told up “I stated: wound and di- percentage of his common large very except thing same I these trams logs the time the between lumber mension supports] together. nailed were [wood surfaced sawed and the lumber was were I using The trams that shipping. Duke and stacked bundles together.” got never nailed Plaintiff plaintiff was study showed said a mill yard he was drying the rebuilt use 100,000 every out of board feet losing stopped a deal that forced into 300,000. keeping lumber on [his] [him] losing been stated he had not Plaintiff yard.” (See Supplemental Agreement breakage, percent on than one to two more Background, infra). op- part his profitable and that the most Timber Contracts lumber. was in eration surfaced logs his Plaintiff secured sawmill his ship all insisted