Court File and Parties

DATE: 2001-07-31 DOCKET: C34819

COURT OF APPEAL FOR ONTARIO

RE: BETTY CROWLEY and JOHN CROWLEY (Respondents) –and– MURLAND FARMS LTD. (Appellant)

BEFORE: CATZMAN, FELDMAN and SHARPE JJ.A.

COUNSEL: Richard J.T. Shaheen, for the appellant A. Paul Parlee, for the respondent

HEARD: July 18, 2001

On appeal from the judgment of Justice Chester C. Misener dated July 13, 2000.

E N D O R S E M E N T

[1] The principal focus of the argument of this appeal was the legal effect to be given to the brief discussion between Mr. Crowley and Mr. Junker, to which Mr. Crowley testified in these terms:

... and then I said that we were going to be looking at some corn.

And he says, well, he says, I have got corn for sale too. ... and I said to him, I says, is it good corn. And he said yes, it is, he said he’d been – he had sold some to Tavistock, Yantzi Feeds, and he said they tested it, it’s good corn. I said okay.

[2] Misener J. found that the effect of this conversation, in the context of the parties’ intention, was to create a warranty that the corn sold by the appellant would be suitable for the purpose of feeding to the respondents’ pigs.

[3] In coming to that conclusion, he addressed the intention of both Mr. Junker and Mr. Crowley. He described Mr. Junker’s intention in these terms, in paragraph 71 of his reasons for judgment:

... there is no doubt but that Mr. Junker intended the warranty to mean that the corn was Grade #2 in appearance and weight and suitable for the purpose of feeding the plaintiffs’ pigs.

This finding accurately reflected Mr. Junker’s evidence at the trial.

[4] Mr. Crowley’s testimony was that the expression “good corn” in the industry meant “grade one, grade two, more closer to grade two corn, mold free and toxin free”. He modified the expressions “mold free” and “toxin free” on his cross-examination, but agreed with the trial judge’s encapsulation of his evidence that “all of these specific words, toxins and molds, generally speaking were not used, it was this all encompassing word or expression ‘no problem’”.

[5] From these expressions of the parties’ understanding of the meaning of “good corn”, Misener J. drew the conclusion that Mr. Junker, as vendor, was warranting to Mr. Crowley, as purchaser, that the corn would be suitable for the purpose of feeding to the respondents’ pigs. He went on to find that it was not suitable for that purpose and that the damage to the pigs was caused by toxic substances in the corn. He assessed the respondents’ damages at $36,500. These latter findings and assessment were not challenged by the appellant.

[6] In his able argument, counsel for the appellant also put the issue on the basis of risk allocation: as between two farmers, who ought to bear the risk that the corn would not be suitable for feeding to the respondent’s pigs?

[7] The trial judge found that Mr. Junker intended to make his affirmation that the corn was “good corn” a term of the contract. As noted above, both men essentially agreed that that phrase meant it was grade 2 corn and relatively free of toxins or molds such that it was suitable for feeding to pigs.

[8] The evidence was, however, that because corn is not normally lab-tested in order to make that determination, and usually contains some toxins and mold, farmers rely on the fact that corn from various suppliers is blended together at the supplier, which has the effect of diluting any toxins or mold, to make the blended corn suitable to feed to pigs. The feed suppliers then, in effect, field test the product by selling it and receiving reports as to its suitability. But that does not happen with the corn of a single farmer, which is not mixed or diluted. Such corn therefore cannot be said to be “good corn” in the sense understood in the industry without dilution or field testing, unless it has been fed to pigs. Mr. Junker knew the corn was not blended with other corn and had not been fed to his own pigs.

[9] However, Mr. Junker did not qualify his statement that the corn was “good corn”. The trial judge found that it was reasonable in these circumstances for Mr. Crowley to assume that, as Mr. Junker stated it was “good corn”, he must have tested the corn by feeding it to his own pigs. By stating that the corn was “good corn”, Mr. Junker assumed, in contractual terms, the risk that it would not be suitable to be fed to Mr. Crowley’s pigs.

[10] In our view, it was open to Misener J. on the evidence that was before him, referred to above, to draw the conclusion regarding warranty that he did and, notwithstanding Mr. Shaheen’s capable submissions, we are not persuaded that he erred in doing so.

[11] The appeal is dismissed with costs.

Signed: “M.A. Catzman J.A.”

“K. Feldman J.A.”

“Robert J. Sharpe J.A.”