Court Opinion

ID: 9596226
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:47:19.842359+00
Date Added: 2024-06-11T18:01:33.570918
License: Public Domain

Jim Hannah, Justice, dissenting. I must respectfully dissent. The majority misunderstands the unique nature of the contract in this case. This case involves a commercial contract between Tyson and professional swine producers. The finishing contracts involved in this case only comprise one phase of swine production for Tyson. Tyson has farrowing operations, feeder operations, and finishing operations. Throughout these operations, Tyson owns the swine and must see to their welfare. At issue is only the finishing operation. The offending language from the contract cannot be understood outside the realm of the particular method of swine production involved in the case before us. The contract places mutual obligations on both Tyson and the producer. The producer is to finish the hogs according to the stated requirements. Tyson pays for this service as well as provides the hogs, provides some materials, and transports the hogs when they reach market weight. Mutuality is discussed in Jones v. Abraham, 341 Ark. 66, 74, 15 S.W.3d 310 (2000), where this court quoted the following language from Townsend v. Standard Indus., Inc. 235 Ark. 951, 363 S.W.2d 535 (1962): A contract to be enforceable must impose mutual obligations on both of the parties thereto. The contract is based upon the mutual promises made by the parties; and if the promise made by either does not by its terms fix a real liability upon one party, then such promise does not form consideration for the promise of the other party. ‘ [M]utuality of contract means that an obligation must rest on each party to do or permit to be done something in consideration of the act or promise of the other; that is, neither party is bound unless both are bound’ [citation omitted], A contract, therefore, which leaves it entirely optional with one of the parties as to whether or not he will perform his promise would not be binding on the other. Townsend, 235 Ark. at 954-55. Mutual promises that constitute consideration for each other are the classic method of satisfying the doctrine of mutuality. Jones, supra; J.L. McEntire & Sons, Inc. v. Hart Cotton Co., 256 Ark. 937, 511 S.W.2d 179 (1974). There is mutuality of obligation in this case. The majority appears to conclude similar to the payday scheme cases, that under the contract, Tyson gets to go to court when it wants but the producer does not. This is not correct. Any dispute arising from an obligation under the contract must be arbitrated. Paragraph 11 could be more carefully drafted; however, the language in paragraph 11 is understandable. Paragraph 11 provides for protection of Tyson’s property, an obligation separate and apart from the duties of the producer. Paragraph 11 contains just the sort of language one would expect to find in a contract for commercial production of animals belonging to another. Paragraph 11 does not speak to the contract as a whole, or to the issues in this case, such as cancellation of the contract. The hog production contract in this case is an agreement between the owner of living animals and a producer who contracts to bring the animals to a finished state for processing. In hog production of the type involved here, a professional producer undertakes the care and feeding of swine belonging to Tyson. The investment Tyson has in the hogs is substantial even before the hogs are delivered to the producers, who in this case are under a duty to bring the hogs to a finished weight and condition for processing. Therefore, Tyson is not only worried about whether the producer will carry out his or her duties as agreed under the contract, which might well give rise to a disagreement submitted to arbitration, but Tyson is also rightly concerned about its investment in the hogs while claims subject to arbitration are resolved. Paragraph 11 provides: Remedies on Default of Producer: Upon default of breach of any of the Producer’s obligations under this Contract the Company may immediately cancel this contract by giving notice in writing, and the Company may, without further notice, delay or legal process, take possession of swine, feed or other property owned by the Company. The Company shall have the right to utilize the Producer’s swine facilities until the swine reaches marketable weight. The Company may also pursue any other remedies at law or equity. Paragraph 11 provides protection for Tyson’s property. It allows Tyson to step in to protect its property when the animals are in peril. The offending language is the reference to “other remedies at law or equity.” This language does not reach to disputes such as propriety of a cancelation, or any award of damages for breach of contract. This language is intended to alow Tyson to protect its property by injunction or such other court action as may be necessary, and which would be outside the realm of an arbitrator’s power. The swine belonged to Tyson before they were delivered. They belonged to Tyson during production, and they continued to belong to Tyson even after notice of cancelation was given. The complained of language does not violate the requirement of mutualty of obligation. For the foregoing reasons, I respectfuly dissent. Dickey, C.J., and Thornton, J., join this dissent.