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1. Appeal and Error_preservation of charge objection_objection not repeated
Defendant's objection at the charge conference preserved for appeal the question of
whether proper instructions were given even though he did not object again after the instructions
were given.
2. Bailments_instructions_perishable agricultural commodities
The trial court did not err by instructing on the Perishable Agricultural Commodities Act
(PACA) in plaintiff's bailment and contract action arising from storage of his sweet potatoes.
The trial court instructed the jury fully and completely on defendant's obligations to plaintiff
under both federal law and the oral contract between the parties. In the context of the entire
charge, the court's instruction on the requirements of PACA did not mislead the jury.
3. Contracts_storage of sweet potatoes_oral agreement_directed verdict
The trial court did not err by denying defendant's motion for a directed verdict on a
breach of contract claim arising from the defendant's storage and disposal of plaintiff's sweet
potatoes where the evidence created an issue of fact concerning the terms of the contract and the
marketability of plaintiff's crop.
4. Appeal and Error_lack of supporting authority_argument abandoned
Defendant's argument concerning a set-off in an agricultural contract case was deemed
abandoned for failure to cite supporting statutory or case law.
5. Damages_sweet potato storage and disposal_USDA payments and verdict for
negligence_collateral source rule_not applicable
The trial court erred in an action arising from defendant's storage and disposal of
plaintiff's sweet potatoes by granting a set-off for amounts plaintiff received from the USDA
Quality Assurance Program. The USDA payments and the jury's verdict were for different
losses, and the collateral source rule does not apply.
6. Bailment_storage and disposal of sweet potatoes_consignment and bailment
The trial court erred by dismissing plaintiff's bailment claim arising from the storage of
his sweet potatoes where plaintiff had left the crop with defendant for sorting and selling under
an oral agreement, and defendant disposed of the crop as not marketable. While a consignment
relationship may have existed, the relationship was also that of a bailment.
JACKSON, Judge.
Paul Bryan Wilson (plaintiff) is a sweet potato farmer in
Richmond County, North Carolina. Beginning in 1996 or 1997,
plaintiff entered into an agreement with Burch Farms, Inc.
(defendant), under the terms of which plaintiff would harvest his
crop of sweet potatoes, and bring the crop to defendant.
Thereafter, defendant would store the sweet potatoes for plaintiff,
and many other farmers, and then run them through a process known
as grading and packing. This process separates the potatoes based
on type and quality, after which defendant would then sell the
potatoes to various grocery store chains or other customers. After
defendant sold what it could of plaintiff's crop, it would account
to plaintiff with the proceeds from the sale, minus the
administrative costs of storing and processing the produce.
In the fall of 2000, plaintiff farmed fifty acres of sweet
potatoes, and entered into an agreement with defendant as he had in
prior years. In November 2000, plaintiff delivered ten thousand
two hundred (10,200) bushels of sweet potatoes, which defendant
stored at a leased facility in Smithfield. Plaintiff stated at
trial that all of these potatoes were of good quality and were
freshly harvested at the time of shipment to defendant.
Defendant's primary packing and storing facility is located inFaison, North Carolina, and at the time of plaintiff's shipment to
defendant, the Faison facility was full. In May 2001, plaintiff
shipped an additional three thousand three hundred (3,300) bushels
of sweet potatoes to defendant's Faison facility. Both parties
agreed upon inspection of the May 2001 shipment, that this shipment
was not of marketable quality and was of no use to either party.
This shipment was then dumped by defendant with plaintiff's
consent.
As defendant ran plaintiff's and other farmer's sweet potatoes
through the grading and packing process, unmarketable and rotten
potatoes were removed from the bushels and discarded, or dumped.
Defendant regularly dumped plaintiff's and other farmer's produce
if it began to rot or sprout roots while in storage, and before it
could be graded and packed. Both plaintiff and Ted Burch
(Burch), supervisor of defendant's packing house, testified that
it was common practice in the industry for the broker, or defendant
in this case, to notify the farmer if something was wrong with his
crop, so that the farmer could come and look at the crop and
retrieve it if he wanted to do so, prior to the broker's dumping
the crop. During plaintiff's and defendant's previous dealings,
defendant regularly dumped unmarketable and rotten bushels of
plaintiff's sweet potato crops, with plaintiff's consent and
without prior notification to plaintiff. At no time during the
parties' dealings together had defendant ever had to dump
plaintiff's entire sweet potato crop. During the summer of 2001, defendant transported plaintiff's
sweet potatoes being stored in Smithfield, to the Faison facility.
Upon arrival of the potatoes, Burch testified that he immediately
saw problems with the crop. Plaintiff testified that defendant
informed him that the sweet potatoes would be processed shortly
after their arrival at the Faison facility. In September 2001,
plaintiff contacted defendant for an accounting of the ten thousand
two hundred bushels of potatoes that originally had been stored in
Smithfield. At this time, plaintiff was informed that defendant
had dumped all of plaintiff's sweet potatoes approximately one
month prior, due to the potatoes' being unmarketable and of poor
quality. At no time prior to defendant's dumping plaintiff's
potatoes was plaintiff notified that there was a problem with his
crop.
Defendant provided a letter to plaintiff stating that
plaintiff's crop of sweet potatoes for the year 2000 was of poor
quality as a result of weather conditions, and therefore
plaintiff's potatoes were unmarketable and were dumped by
defendant. With this letter, plaintiff submitted an application to
the U.S. Department of Agriculture (USDA), for compensation
through the Quality Loss Program, which was designed to compensate
farmers for cases in which their crop yield was low or
unmarketable. Plaintiff received twenty-three thousand four
hundred and eighty-four dollars ($23,484.00) in compensation from
the USDA, representing compensation for only a portion ofplaintiff's entire 2000 sweet potato crop, at only a fraction of
the usual market price.
On 30 August 2002, plaintiff filed a complaint in Richmond
County Superior Court alleging various claims against defendant.
Plaintiff's complaint alleged claims for breach of contract and
negligence on the part of a bailee. At trial, both parties
testified along with several other farmers and employees of
defendant. At the close of plaintiff's evidence, defendant made a
motion for directed verdict on both of plaintiff's claims. The
trial court denied defendant's motion as to the breach of contract
claim, and granted the motion on the bailment claim, thereby
dismissing plaintiff's bailment claim. The jury returned a verdict
finding that defendant had breached its oral contract with
plaintiff, and awarded plaintiff damages in the amount of fifty
thousand dollars ($50,000.00). The trial court then made findings
of fact regarding the compensation plaintiff received from the
federal government, and proceeded to grant defendant a set-off
against plaintiff's damages award in the total amount of twenty-one
thousand six hundred fifteen dollars and thirty cents ($21,615.30).
From the jury verdict and award of damages to the plaintiff,
defendant appeals. Plaintiff cross appeals on the trial court's
dismissal of the bailment claim and the reduction of the damages
awarded.
[1] Defendant's first assignment of error concerns the trial
court's instructions to the jury regarding the requirements of the
Perishable Agricultural Commodities Act (PACA) for dumpingperishable agricultural commodities. Defendant contends the
instruction on PACA's requirements constituted reversible error in
that PACA was not applicable in the present case, as plaintiff's
case was one in state court for a breach of contract claim.
The record demonstrates that before the trial court instructed
the jury, a charge conference was held with the attorneys
representing both parties. At the charge conference, the court
advised the attorneys as to how and what it was going to instruct
the jury on the issue of PACA and dumping. Defendant objected to
the proposed instruction on PACA's requirements, and his objection
was denied. After the jury was instructed, the trial court asked
both parties, outside the presence of the jury, if either of them
had any objections or requests for additional instructions.
Neither party objected to the instructions as they were given.
'Rule 10(b)(2) of our Rules of Appellate Procedure requiring
objection to the charge before the jury retires is mandatory and
not merely directory.' Wachovia Bank v. Guthrie, 67 N.C. App.
622, 626, 313 S.E.2d 603, 606 (1984) (quoting State v. Fennell, 307
N.C. 258, 263, 297 S.E.2d 393, 396 (1982)). [W]here a party fails
to object to jury instructions, 'it is conclusively presumed that
the instructions conformed to the issues submitted and were without
legal error.' Madden v. Carolina Door Controls, 117 N.C. App. 56,
62, 449 S.E.2d 769, 773 (1994) (quoting Dailey v. Integon General
Ins. Corp., 75 N.C. App. 387, 399, 331 S.E.2d 148, 156, disc.
review denied, 314 N.C. 664, 336 S.E.2d 399 (1985)). On appeal,
plaintiff now contends that defendant failed to preserve his rightto appeal on the instructions to the jury, as defendant failed to
object to the instructions before the jury retired to deliberate.
Our Supreme Court has held, and we reiterate, that when a party has
objected to proposed jury instructions during a charge conference,
and the trial court has considered and denied the request, that the
party need not repeat its objections after the jury charge is
given. Wall v. Stout, 310 N.C. 184, 188-89, 311 S.E.2d 571, 574
(1984). Therefore, by objecting to the proposed instruction on
PACA at the charge conference and receiving a ruling on his
objection, defendant has properly preserved this issue for appeal.
[2] As defendant has properly preserved its right to appeal on
the jury instruction regarding PACA, we review the trial court's
instruction to determine whether it was proper. On appeal, this
Court reviews a jury charge contextually and in its entirety, and
the charge will be considered to be sufficient if 'it presents the
law of the case in such manner as to leave no reasonable cause to
believe the jury was misled or misinformed . . . .' Bass v.
Johnson, 149 N.C. App. 152, 160, 560 S.E.2d 841, 847 (2002)
(quoting Jones v. Development Co., 16 N.C. App. 80, 86-87, 191
S.E.2d 435, 439-40, cert. denied, 282 N.C. 304, 192 S.E.2d 194
(1972)). As defendant now asserts there was error in the
instruction, defendant bears the burden of showing that the jury
was misled or that the verdict was affected by an omitted
instruction. Id. (citing Robinson v. Seaboard System Railroad, 87
N.C. App. 512, 524, 361 S.E.2d 909, 917 (1987), disc. review
denied, 321 N.C. 474, 364 S.E.2d 924 (1988)). 'Under such astandard of review, it is not enough for the appealing party to
show that error occurred in the jury instructions; rather, it must
be demonstrated that such error was likely, in light of the entire
charge, to mislead the jury.' Id. (quoting Robinson, 87 N.C. App.
at 524, 361 S.E.2d at 917).
The jury instruction to which defendant assigns error
consisted of the following:
COURT: Members of the jury, it is unlawful
for any broker to discard, dump, or
destroy, without reasonable cause,
any perishable agricultural
commodity received by such broker in
interstate commerce. Reasonable
cause for destroying any produce
exists when it has no commercial
value.
A clear and complete record shall be
maintained showing justification for
dumping of produce received on
consignment if any portion of such
produce cannot be sold due to poor
condition.
In addition to the foregoing, if
five percent or more of a shipment
is dumped, an official certificate
or other adequate evidence shall be
obtained to prove the produce is
actually without commercial value,
unless there is a specific agreement
to the contrary between the parties.
The language used in the trial court's instruction was taken
directly from PACA regulations found at 7 U.S.C. § 499b(3) (2005),
7 C.F.R. 46.22 (2005), and 7 C.F.R. 46.23 (2005). At trial,
defendant testified that he was required to abide by the
regulations and requirements of PACA, and that he was a licensed
and bonded broker. During the charge conference, the trial courtstated that it recognized that the requirements of PACA essentially
were accounting procedures, however, the trial court confirmed that
defendant still had obligations to plaintiff through PACA in that
7 U.S.C. § 499e of PACA states that [i]f any broker violates any
provision of section 2 [of 7 U.S.C. § 499b regarding unfair conduct
and unreasonable rejection of the perishable agricultural
commodity], he shall be liable to the person thereby injured for
the full amount of damages. See 7 U.S.C. § 499b(a) (2005). Based
on this section of PACA, the trial court determined that the jury
was entitled to be instructed on defendant's obligations under the
federal law.
In reviewing the jury instruction in its entirety, we can see
that the trial court instructed the jury fully and completely on
defendant's obligations to plaintiff under both the federal law and
the oral contract between the parties. The trial court instructed
the jury not only on the requirements of PACA, but also on the
issues of course of performance and course of dealings between the
parties. The court instructed the jury that the parties had
stipulated to the fact that an oral contract existed between the
parties, and the court also fully instructed the jury regarding
what constitutes a breach of a contract. It was therefore properly
left to the jury to determine whether defendant satisfied its
contractual duties with plaintiff.
Therefore, we hold the trial court's instruction on the
requirements of PACA, when considered in the context of the entire
jury charge, did not serve to mislead the jury, and was a properexplanation of the applicable law. There was sufficient evidence
presented to support the jury's finding that defendant breached its
contract with plaintiff, and thus the trial court's instruction did
not adversely affect the jury's verdict or mislead the jury.
[3] Defendant next contends the trial court erred in denying
defendant's motion for directed verdict on plaintiff's breach of
contract claim.
On appeal, the standard of review on a motion for directed
verdict is whether, 'upon examination of all the evidence in the
light most favorable to the nonmoving party, and that party being
given the benefit of every reasonable inference drawn therefrom,
the evidence is sufficient to be submitted to the jury.' Stamm v.
Salomon, 144 N.C. App. 672, 679, 551 S.E.2d 152, 157 (2001)
(quoting Fulk v. Piedmont Music Ctr., 138 N.C. App. 425, 429, 531
S.E.2d 476, 479 (2000)). The party moving for a directed verdict
bears a heavy burden in North Carolina. Edwards v. West, 128 N.C.
App. 570, 573, 495 S.E.2d 920, 923 (1998). A motion for directed
verdict should be denied where 'there is more than a scintilla of
evidence supporting each element of the plaintiff's case.' Stamm,
144 N.C. App. at 679, 551 S.E.2d at 157 (quoting Little v.
Matthewson, 114 N.C. App. 562, 565, 442 S.E.2d 567, 569 (1994),
aff'd, 340 N.C. 102, 455 S.E.2d 160 (1995)). In addition, when the
decision to grant a motion for directed verdict is a close one,
the better practice is for the trial judge to reserve his decision
on the motion and submit the case to the jury. Edwards, 128 N.C.
App. at 573, 495 S.E.2d at 923. In the instant case, plaintiff does not contend defendant
breached the contract by failing to pack and sell all of
plaintiff's sweet potatoes. Instead, plaintiff's breach of
contract claim is based upon defendant's failure to notify and
account to plaintiff prior to dumping plaintiff's entire sweet
potato crop, and denying plaintiff the opportunity to retrieve his
crop and mitigate his damages.
Viewing the evidence in a light most favorable to the
plaintiff, we hold there was sufficient evidence to take
plaintiff's breach of contract claim to the jury. The testimony
and evidence presented at trial showed that plaintiff delivered
three thousand three hundred (3,300) bushels of sweet potatoes to
defendant, which both parties agreed were unmarketable. Plaintiff
also delivered an additional ten thousand two hundred (10,200)
bushels which plaintiff testified were marketable at the time of
delivery to defendant. These ten thousand two hundred bushels were
dumped by defendant, without notice or an accounting to plaintiff
prior to the dumping. Both plaintiff and Ted Burch, supervisor of
defendant's warehouse and packing process, testified concerning the
oral agreement between the parties. Both testified that the oral
agreement was that defendant would provide storage for plaintiff's
sweet potato crop, and would pack and sell the potatoes that were
of marketable quality. Both parties also testified that the
standard procedure in the industry was that a pack house, such as
defendant, would notify the farmer if there was something wrong
with their produce, giving the farmer the opportunity to come andretrieve his produce before it was dumped. Both parties also
testified that in their past course of dealing, defendant would
dump plaintiff's unmarketable produce without first notifying
plaintiff and with plaintiff's consent. However, never before had
defendant had to dump plaintiff's entire sweet potato crop. There
was conflicting testimony from plaintiff's and defendant's
witnesses regarding the quality of plaintiff's sweet potatoes at
the time they were delivered to defendant's storage facilities.
The evidence presented by both parties creates an issue of
fact concerning the terms of the parties' contract and the
marketability of plaintiff's crop, which are questions properly
left for the jury to determine. See Goeckel v. Stokely, 236 N.C.
604, 607, 73 S.E.2d 618, 620 (1952) (issues of fact concerning
terms of a contract are for the jury to consider). Any conflicts
in the evidence should be resolved in plaintiff's favor, and he
'must be given the benefit of every inference reasonably to be
drawn in his favor.' Arndt v. First Union Nat'l Bank, 170 N.C.
App. 518, 523, 613 S.E.2d 274, 278 (2005) (citation omitted). As
there is more than a scintilla of evidence that under the parties'
agreement defendant had a duty to notify plaintiff prior to dumping
his crop and that a breach of contract occurred, this issue was
properly submitted to the jury for resolution of the conflicts.
Thus, the trial court acted properly in denying defendant's motion
for directed verdict on plaintiff's breach of contract claim, and
this assignment of error is overruled. [4] In his final assignment of error, defendant contends the
trial court erred in failing to credit defendant with the entire
amount of the quality loss/disaster proceeds recovered by
plaintiff. We do not reach the merits of defendant's arguments, as
defendant has failed to comply with the North Carolina Rules of
Appellate Procedure. Therefore we dismiss defendant's final
assignment of error.
The Rules of Appellate Procedure are mandatory, and must be
consistently applied; otherwise, the Rules become meaningless, and
an appellee is left without notice of the basis upon which an
appellate court might rule. Viar v. N.C. DOT, 359 N.C. 400, 402,
610 S.E.2d 360, 361, reh'g denied, 359 N.C. 643, 617 S.E.2d 662
(2005). '[F]ailure to follow these rules will subject an appeal
to dismissal.' Consol. Elec. Distribs., Inc. v. Dorsey, 170 N.C.
App. 684, 686, 613 S.E.2d 518, 520 (2005) (quoting Steingress v.
Steingress, 350 N.C. 64, 65, 511 S.E.2d 298, 299 (1999)).
Rule 28(b)(6) of our Rules of Appellate Procedure, as written
at the time defendant submitted its brief to this Court, required
an appellant's brief to contain an argument section that included:
the contentions of the appellant with respect
to each question presented. Each question
shall be separately stated. Immediately
following each question shall be a reference
to the assignments of error pertinent to the
question, identified by their numbers and by
the pages at which they appear in the printed
record on appeal. Assignments of error not
set out in the appellant's brief, or in
support of which no reason or argument is
stated or authority cited, will be taken as
abandoned.
The body of the argument shall contain
citations of the authorities upon which the
appellant relies.
N.C. R. App. P. 28(b)(6), 2005 Ann. R. (N.C.) 175, 303 (emphasis
added). In the argument section of defendant's brief are set forth
three questions for our review. However, the body of defendant's
final argument fails to contain citations of the authorities upon
which the appellant relies. Id. Defendant fails to cite to any
statutory or case law authority in support of its argument that the
trial court should have credited it with the full amount of
plaintiff's quality/loss disaster proceeds. Therefore, as
defendant has failed to cite any legal authority to support its
argument, this assignment of error is deemed abandoned.
[5] In plaintiff's cross-appeal, he first argues the trial
court erred in allowing defendant a set-off against the jury
verdict for a portion of the proceeds which plaintiff received
under the USDA 2000 Quality Loss Program. Plaintiff contends the
collateral source rule should have prohibited evidence of this
payment, and that this rule should have prevented the set-off.
Defendant contends the trial court acted properly, in that had
defendant not been granted a set-off, plaintiff would have double
recovered for his lost crop.
The trial court granted defendant a set-off against
plaintiff's judgment in the amount of eighteen thousand, one
hundred eighty one dollars and eight cents ($18,181.08), plus
interest, for a total set-off of twenty one thousand, six hundred
fifteen dollars and thirty cents ($21,615.30). The purpose of the collateral source rule is to 'exclude[]
evidence of payments made to the plaintiff by sources other than
the defendant when this evidence is offered for the purpose of
diminishing the defendant tortfeasor's liability to the injured
plaintiff.' Kaminsky v. Sebile, 140 N.C. App. 71, 77, 535 S.E.2d
109, 113 (2000) (quoting Badgett v. Davis, 104 N.C. App. 760, 764,
411 S.E.2d 200, 203 (1991)). The policy behind the rule is to
prevent a tortfeasor from 'reduc[ing] his own liability for damages
by the amount of compensation the injured party receives from an
independent source.' Id. (quoting Fisher v. Thompson, 50 N.C.
App. 724, 731, 275 S.E.2d 507, 513 (1981)). This rule is punitive
in nature, and is intended to prevent the tortfeasor from a
windfall when a portion of the plaintiff's damages have been paid
by a collateral source. In this State, and many others, the
collateral source rule typically is applied only in actions arising
under tort law.
Plaintiff's compensation through the Quality Loss Program was
for the damage done to his crop and his lost yield, as a result of
the drought, while his claim against defendant was for the
destruction of his potatoes. The USDA Quality Loss Program was
enacted with the purpose of compensating farmers who suffered yield
or quality loss due to weather-related disasters. Since the USDA
payments and the jury's verdict were compensation for different
losses suffered by plaintiff, we hold the collateral source rule is
inapplicable in the instant case, and the trial court should not
have allowed a set-off from the damages plaintiff was awarded. Thepayment plaintiff received from the Quality Loss Program
compensated plaintiff for an entirely different loss.
Plaintiff alleged defendant dumped plaintiff's sweet potatoes
without notifying him, in breach of their contract. After hearing
evidence, over plaintiff's objection, of the Quality Loss payment
to plaintiff, the jury agreed that defendant breached the contract
and awarded plaintiff fifty thousand dollars ($50,000.00). As the
compensation provided to plaintiff under the Quality Loss Program
was compensation for a different loss than that found by the jury,
we hold the trial court erred when it granted defendant a set-off
for the compensation plaintiff received from the USDA Quality Loss
Program. Our holding in the instant case is limited to the unique
facts presented by this case, and therefore we decline to address
the issue of whether the collateral source rule should apply
generally to a breach of contract situation.
[6] Finally, plaintiff contends the trial court erred in
granting defendant's motion for directed verdict and dismissing
plaintiff's bailment claim.
Our Supreme Court has held that
[t]he standard of review for a motion for
directed verdict is whether the evidence,
considered in a light most favorable to the
non-moving party, is sufficient to be
submitted to the jury. A motion for directed
verdict should be denied if more than a
scintilla of evidence supports each element of
the non-moving party's claim. [An appellate
court] reviews a trial court's grant of a
motion for directed verdict de novo.
Herring v. Food Lion, Inc., 175 N.C. 22, 26, 623 S.E.2d 281, 284
(2005) (internal citations omitted). When a defendant has moved
for a directed verdict on one of the plaintiff's claims,
plaintiff's evidence must be taken as true and
viewed in the light most favorable to the
plaintiff. . . . This question should not be
resolved against the plaintiff unless it
appears, as a matter of law, that the
plaintiff cannot recover upon any view of the
facts that the evidence reasonably tends to
establish.
U.S. Helicopters, Inc. v. Black, 318 N.C. 268, 270, 347 S.E.2d 431,
432 (1986) (internal citations omitted).
'A bailment is created when a third person accepts the sole
custody of some property given from another.' Barnes v. Erie Ins.
Exch., 156 N.C. App. 270, 273, 576 S.E.2d 681, 683 (2003) (quoting
Bramlett v. Overnite Transport, 102 N.C. App. 77, 82, 401 S.E.2d
410, 413 (1991)). The possession of the property by the bailee
must be such that it is to the exclusion of the owner and all other
persons, and that the bailee has complete control of the property.
Electric Co. v. Dennis, 255 N.C. 64, 72, 120 S.E.2d 533, 539
(1961). The burden of establishing that a bailor-bailee
relationship in fact exists rests with the bailor. Barnes, 156
N.C. App. at 273, 576 S.E.2d at 683. When a bailment is created
for the benefit of both the bailor and bailee, the bailee is
required to exercise ordinary care to protect the subject of the
bailment from negligent loss, damage, or destruction. Id. at 273-
74, 576 S.E.2d at 683-84 (citing Strang v. Hollowell, 97 N.C. App.
316, 387 S.E.2d 664 (1990)). 'A prima facie case of actionable
negligence . . . is made when the bailor offers evidence tending toshow or it is admitted that the property was delivered to the
bailee; that the bailee accepted it and thereafter had possession
and control of it; and that the bailee failed to return the
property or returned it in a damaged condition.' Id. at 274, 576
S.E.2d at 684 (quoting McKissick v. Jewelers, Inc., 41 N.C. App.
152, 155, 254 S.E.2d 211, 213 (1979)).
Plaintiff contends that a bailment relationship existed
between the parties by virtue of their oral agreement. Plaintiff
argues that he delivered his crop of sweet potatoes to defendant,
who then took exclusive possession and control over the crop, and
defendant was then obligated to provide plaintiff with an
accounting for the potatoes. Plaintiff argues that defendant was
negligent in failing to notify plaintiff prior to dumping the sweet
potatoes, and in failing to allow plaintiff an opportunity to
mitigate his damages. We agree. We hold the trial court erred in
granting defendant's motion for directed verdict on the bailment
claim, at the close of plaintiff's evidence.
The evidence presented during plaintiff's case in chief
indicated that plaintiff was free to come and look at the potatoes
and to remove them from defendant's storage facilities. At no
point was plaintiff notified prior to defendant's total disposal of
his bailed property, and plaintiff was not provided with an
opportunity to retrieve his potatoes before they were dumped.
Further, defendant failed to provide plaintiff with any accounting
for the potatoes it held for plaintiff. Defendant does not dispute the fact that it disposed of
plaintiff's potatoes without providing plaintiff prior notice, and
it does not dispute the fact that it failed to provide plaintiff
with an accounting. However, defendant contends that the
arrangement between the parties could not have been a bailment, as
plaintiff did not expect to have the specific property of the
bailment, the sweet potatoes, returned to him. Defendant contends
that plaintiff expected an accounting of the sweet potatoes, or the
proceeds from their sale, and thus the specific property was not to
be returned to plaintiff. Defendant argues that for a bailment to
exist, the specific property that is the subject of the bailment
must be returned to the bailor. See, Perry v. R.R., 171 N.C. 158,
164, 88 S.E. 156, 160 (1916) (the obligation to redeliver or
deliver over the property at the termination of the bailment on
demand is an essential part of every bailment contract.).
Defendant's argument that the relationship between the parties
could not have been that of a bailment is misguided.
A consignment exists where an consignor leaves his property
with a consignee who is substantially engaged in selling the goods
of others, and will work to sell the goods on behalf of the
consignor. After selling the goods, the consignee must account to
the consignor with the proceeds from the sale. See, Nasco
Equipment Co. v. Mason, 291 N.C. 145, 154, 229 S.E.2d 278, 285
(1976). While the consignee may or may not receive the specific
property of the consignment back, depending on if it is sold, this
Court has recognized that a consignment creates a bailment betweenthe parties. See, Strang v. Hollowell, 97 N.C. App. 316, 387
S.E.2d 664 (1990); see also, 8 C.J.S. Bailments § 11, at 384 (2005)
(The rule that where a person receiving property is not bound to
return the identical thing received, but may account therefor in
money or other property, or thing of value, the transaction is a
sale, is not applicable to bailments or consignments for sale. . .
. A consignment is a type of bailment where the goods are
entrusted for sale . . . .); Black's Law Dictionary 152 (8th ed.
2004) (definition of bailment for sale is [a] bailment in which
the bailee agrees to sell the goods on behalf of the bailor; a
consignment.). Thus, where a consignment relationship may have
existed between plaintiff and defendant, the relationship was also
that of a bailment.
We hold plaintiff has shown sufficient evidence, taken in the
light most favorable to it, to establish the existence of a
bailment with defendant as bailee. U.S. Helicopters, Inc., 318
N.C. at 275, 347 S.E.2d at 435. The total loss of plaintiff's crop
was due to defendant's dumping of the potatoes without prior notice
to plaintiff, after no objections as to marketability were raised
at the time of delivery, and defendant assured plaintiff that the
potatoes would be processed and graded by defendant.
We therefore hold the trial court erred in dismissing
plaintiff's bailment claim, and thus plaintiff is entitled to a new
trial on this issue alone.
Reversed and remanded.
Judges TYSON and JOHN concur.
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