McVay v. Deschutes Valley Potato Co.

620 P.2d 930, 49 Or. App. 629, 30 U.C.C. Rep. Serv. (West) 1541, 1980 Ore. App. LEXIS 3870
CourtCourt of Appeals of Oregon
DecidedDecember 8, 1980
Docket77-216L CA 15620, 77-217L CA 15621, 77-218L CA 15622, and 77-219L CA 15623
StatusPublished
Cited by2 cases

This text of 620 P.2d 930 (McVay v. Deschutes Valley Potato Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McVay v. Deschutes Valley Potato Co., 620 P.2d 930, 49 Or. App. 629, 30 U.C.C. Rep. Serv. (West) 1541, 1980 Ore. App. LEXIS 3870 (Or. Ct. App. 1980).

Opinions

[631]*631BUTTLER, J.

In these consolidated actions for breach of express and implied warranties under Oregon’s Commercial Code, plaintiffs appeal from a judgment entered on a jury verdict for the defendant. Plaintiffs assign as error the court’s failure to give a requested instruction, and the giving of certain portions of two instructions. We affirm.

Plaintiffs, commercial potato growers, purchased seed potatoes from defendant. These potatoes were delivered directly to the plaintiffs’ storage cellars in late March and early April, 1976, and were not inspected by any of them at that time. Approximately six weeks later, in May, 1976, the potatoes were cut into seed pieces for planting. During the cutting process, plaintiffs noticed that the potatoes were heavily infected with a fungal disease known as Tuber Rot, and they complained about this condition to defendant, but did not reject the seed. Existence of the Tuber Rot, which impedes or prevents germination of the seed pieces, was not apparent from examination of the potatoes’ exterior. This disease is caused by a fungus known as Fusarium, which is commonly present in soil and is often found in a small percentage of seed potatoes. Potatoes may contract the infection either from the soil or by being stored in a cellar where the organism is present and which has not been sprayed with a disease inhibitor.

Despite their discovery of Tuber Rot, plaintiffs neither rejected nor revoked acceptance of the potatoes. See generally, ORS 72.6010 through 72.6080. Plaintiffs testified that their decision to retain and plant the seed potatoes was influenced by the advent of planting season and the scarcity of adequate replacement seed. Plaintiffs further testified that they slowed their cutting process in order to separate out the infected pieces, and that they thought they had succeeded in removing most of the disease; however, many of the seeds failed to germinate. Notwithstanding that explanation of their acceptance of the seed, each of the plaintiffs did replant to some extent, and the cost of doing so, together with a claimed lower crop yield, comprise the damages they seek to recover.

[632]*632Other growers who purchased seed from the same lot as plaintiffs testified that they obtained good results. However, each of these growers had dusted the seed pieces with a fungicide (KAPTAN) prior to planting. The evidence indicated that use of a fungicide is considered appropriate where Fusarium tuber rot is suspected. Another fungicide, Polyram, is also effective in controlling Fusarium, but there was evidence that it was no longer commercially available. Plaintiffs testified that their previous use of KAPTAN had caused itching, irritation, nausea and nosebleeds among those coming in contact with it. Therefore, they did not apply KAPTAN, electing instead to apply only gypsum, a drying agent, and manually winnow out the infected pieces before planting.

Before discussing the assignments of error, it is necessary to review the issues formed by the pleadings and the evidence, and addressed in the instructions. We are concerned here only with the issue of liability. The complaint relies solely on a breach of warranty, either express or implied. Defendant’s answer simply denied both; no affirmative defenses were asserted. It is clear that there was no express warranty of freedom from the Fusarium tuber rot, so the only issue remaining is whether there was a breach of the implied warranty of merchantability. More pointedly, the issues boiled down to what constituted un-merchantability of potato seed, and whether the seed potatoes were unmerchantable at the time of delivery.

Defendant contended that there was no evidence that the seed potatoes contained rot at the time of delivery, but only that they contained rot after they were taken from the cellars. Defendant put on evidence that the infestation may develop in a storage cellar if it is not sprayed with a disinfectant or disease inhibitor prior to storage. Plaintiffs did not spray their cellars, and the Klamath County extension agent expressed the opinion that a farmer who uses seed not grown by him should spray prior to storage. The trial court instructed the jury, without objection, as follows:

"If you find by a preponderance of the evidence that the source of the Fusarium Tuber Rot cannot be determined or if you find that the infestation of the Fusarium Tuber Rot was a result of poor preventative farming practices on the [633]*633part of the plaintiffs as the sole cause of their loss, then you must find against the plaintiffs and in favor of the defendant.”

Defendant also contended that Fusarium was a common organism, that discovery of its existence was difficult and therefore seed certification requirements do not include standards for the existence or non-existence of the rot, and that when it is discovered in significant quantity the accepted agricultural practice is to treat the seed with a fungicide before planting. Further, the essence of defendant's contention is that if, notwithstanding the existence of rot, the seed may be grown successfully through the use of that accepted practice, it passes in the trade as merchantable seed.1 There was evidence to support this position, including evidence that five other farmers had purchased seed potatoes from the same lot involved here, observed rot, treated the seed pieces with a fungicide and produced healthy stands and good yields of potatoes.

Plaintiffs, on the other hand, contended that the potato seed contained a higher proportion of rot than was generally acceptable in the trade, and, although the evidence is not strong, there was a jury question presented as to what constituted merchantability in this context.

The two instructions to which plaintiffs assign error in their second assignment, although not models of [634]*634clarity, appear to be an attempt to incorporate the parties’ contentions into an instruction dealing with breach of warranty. The first instruction reads:

"Now, with regard to the implied warranty and in order to recover in an implied warranty, it is necessary that plaintiffs prove by a preponderance of evidence in each instance that there existed a contract of sale between the plaintiff and defendant, that the defendant seriously breached the implied warranty of merchantability by delivering goods to the plaintiff not meeting the standard of merchantability, and that the breach of that warranty by defendant was sole, direct and proximate cause of the damage to the plaintiffs in the extent of Fusarium Tuber Rot in the potato seed exceeds the merchantability standard when delivered to the plaintiff by defendant and to the extent that the failure of the seed to germinate and come up when planted due to the infestation of the seeds could not have been prevented by an appropriate preventive farming practice by the plaintiffs.”

The first part of the instruction (to which plaintiffs did not object) assumes that seed potatoes may possess some degree of rot and still be merchantable — plaintiffs’ contention. We construe the last portion of the instruction as incorporating defendant’s theory of the case, albeit inartfully.

Plaintiffs argue here that the instruction required plaintiffs to prove that they could not mitigate their loss by the use of accepted agricultural practices.

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Related

Vista St. Clair, Inc. v. Landry's Commercial Furnishings, Inc.
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McVay v. Deschutes Valley Potato Co.
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Bluebook (online)
620 P.2d 930, 49 Or. App. 629, 30 U.C.C. Rep. Serv. (West) 1541, 1980 Ore. App. LEXIS 3870, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcvay-v-deschutes-valley-potato-co-orctapp-1980.