Court Opinion

ID: 8167993
Source: CourtListenerOpinion
Date Created: 2022-09-09 21:05:03.398939+00
Date Added: 2024-06-11T16:39:41.811775
License: Public Domain

CROCKETT, Justice
(dissenting).
I dissent:
At the outset, it is worthy of comment that it was after the bank had sued the defendants for $32,000 which it had advanced to them that they asserted a claim against the bank for $200,000 for alleged breach of contract for failing to lend them more pion-ey. This is, of course, not controlling as to their rights, but it would seem to cast some light upon the character of the counterclaim. The main opinion very properly and fairly concedes that “it was contemplated that papers, notes and mortgages would be prepared and signed, and title to securities investigated.” Obviously this was to be done before the arrangement to advance $300,000 for the proposed operation was completed. It is usually held that where parties are negotiating about a matter intending that their agreement will be reduced to writing, the fact that this was not accomplished strongly suggests that the contract was never finally agreed upon. See Building Service Employees Interntl. Union, Lodge No. 6, et al. v. Seattle. Hospital Council, et al., 18 Wash.2d 186, 138 P.*3942d 891; H. J. Wagner v. Rainier Mfg. Co., 230 Or. 531, 371 P.2d 74. However, I concede this does not completely foreclose the possibility of proving such an agreement where the defendants claim that the bank had so agreed and contend that $37,000 which had been advanced, was loaned under such agreement.
Conceding for the sake of argument that the evidence might support a finding that the alleged agreement was made, it is nevertheless my opinion that the trial court was correct in ruling that the defendants did not show a proper basis for recovery of damages upon their counterclaim. Under the fact as recited in the main opinion, even in the light most favorable to the defendants, it is plainly apparent that any recovery would have to rest upon a hypothesis of anticipated profits which are conjectural, and are therefore uniformly held not to be recoverable. See State by and through Road Commission v. Noble, 6 Utah 2d 40, 305 P.2d 495 ; Weber Basin, etc. Dist. v. Braegger, 8 Utah 2d 346, 334 P.2d 758; State v. Tedesco, 4 Utah 2d 248, 291 P.2d 1028; and Van Zyverden v. Farrar, et al., 15 Utah 2d 367, 393 P.2d 468. And in this instance not one, but two businesses would have to operate' at a profit before defendants could recover on the counterclaim.
McFarland, Inc., who had already gone broke, had a proposal for a “custom-kill” to slaughter and process sheep for another company. It was proposed that in conjunction with this the defendants would also supply cattle for them to slaughter and process. For this defendants would pay i/í4 per pound plus hide and by-products, which it was expected, would result in a profit. As shown in the opinion, in order to carry on the proposed operation, McFarland would have to process enough sheep and hogs, together with sufficient cattle from the defendants, so that McFarland would make a profit; and in addition thereto, the defendants themselves would have to be making a profit in this operation as the basis for the recovery of any damages. They allege their profit would be about $11 per head more than if they had to have their animals processed elsewhere and sell them on the open market. A minor point here is that to say that it would cost $11 per head more to process the animals elsewhere and market them would itself seem to rest upon some uncertainty.
But the consideration of major importance is the contingency which necessarily exists between the mere proposal and the successful carrying out of the entire enterprise so that both companies would be making a profit. It requires no special resourcefulness of mind to perceive numerous uncertainties in such a situation which render the expectation of profits so speculative *395that there is no sound foundation for an award of damages. Among them are: the availability of sheep, hogs and cattle for processing; which in turn depends to some extent upon the seasonal weather; the scarcity or abundance of feeds; the consequent instability of prices of both the feeds and the animals; the varying costs of operations, including labor and other expenses; and the efficiency of management and of operation of both McFarland and the defendants in carrying on their respective businesses. Because of the vagaries of these and other factors, I am not persuaded that the trial court was in error in ruling that defendants’ anticipated profits could not constitute a proper basis for recovery on their counterclaim. Accordingly, I would affirm the judgment.
Inasmuch as the case>is remanded for trial, I think it further appropriate to make this comment on the reference made to the statute of frauds: The main opinion states that this alleged oral agreement is not within the statute of frauds because it could have been fully performed within one year. It seems to me that if this be the view of the court, and the case is remanded for trial, it should be indicated that the defendants are limited to recover the anticipated profits for animals expected to be processed only within the one-year period and not beyond, which by no stretch of the imagination could reach the $200,000 for which defendants counterclaim.