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McGregor v. Crumley

November 4, 2009



The opinion of the court was delivered by: Gilbertson, Chief Justice


[¶1.] James McGregor sued Clint Crumley and Paige Crumley, husband and wife, for breach of contract for the sale and delivery of cows for a dairy operation.

The Complaint alleged both Clint and Paige had entered into the contract and were jointly and severally liable. At the bench trial, McGregor submitted evidence of Clint's conduct in entering into and breaching the contract. No evidence was submitted as to any conduct by Paige as it pertained to entering into the contract or being a partner in the dairy operation. Paige's attorney, who also represented Clint, argued after McGregor rested that McGregor failed to prove Paige had entered into the contract. McGregor argued during his closing argument that Paige was a partner in the cattle business and liable for the contract as such. The trial court found for McGregor, who was directed to submit findings of fact and conclusions of law. Paige objected to the finding of fact that she was a partner in the dairy operation. The trial court overruled her objection and a final judgment was entered against both Clint and Paige. Paige appeals.


[¶2.] Clint and Paige lived on a dairy farm in Hand County, South Dakota, which Clint managed on a day-to-day basis. Paige, hired hands, and, on at least one occasion, Paige's mother and father also worked with the cattle. McGregor operated a dairy and feedlot as well as a cattle buying business out of Salem, South Dakota. McGregor and Clint became acquainted through Steve Wilke who provided dairy nutrition services to both men.

[¶3.] In August 2007, McGregor showed Clint and Clint's father-in-law a herd of dairy cows while they toured McGregor's dairy and feedlot. A few days after the two men toured the operation, Clint telephoned McGregor and placed an order for a herd of dairy cows he saw on the tour. McGregor delivered the dairy cows to Clint's dairy farm. When McGregor delivered the cows, Paige handed McGregor a check for payment.*fn1 While at Clint's farm, McGregor observed Paige, Paige's mother and father, and two Hispanic farm hands, working with the dairy cows and on the farm.

[¶4.] During the first half of September 2007, McGregor and Clint engaged in a series of telephone calls concerning the purchase of between twenty and thirty dairy cows for Clint's milking operation. The calls were exclusively between McGregor and Clint. On September 13, 2007, McGregor and Clint entered into an oral contract for the purchase of dairy cows.

[¶5.] McGregor's agent delivered twenty-five dairy cows to Clint's milking operation and assisted Clint in unloading the cattle. No evidence was presented at trial that Paige was present at the time of delivery. The bill of lading prepared by McGregor's bookkeeper and entered as Exhibit 3 at trial listed the purchasers as Clint and Paige Crumley. McGregor's agent gave the bill of lading to Clint.

[¶6.] Clint contacted McGregor a few days later to complain about the condition of several of the dairy cows. McGregor sent a cattle truck to Clint's dairy farm and eight of the original twenty-five dairy cows were loaded and returned for credit against the bill. The second bill listed both Clint and Paige as the purchasers and was entered at trial as Exhibit 4. McGregor continued to attempt to collect the balance on the bill. Clint eventually offered to return the balance of the cattle via a letter from his attorney in an attempt to settle the suit filed by McGregor. McGregor refused the offer.

[¶7.] Trial on the matter was held on July 30, 2008. Clint and Paige were represented by the same attorney. Paige was not present at the trial, did not testify, and was not called as a witness by either McGregor or Clint.

[¶8.] McGregor testified at trial that he spoke with Clint several times concerning the outstanding bill. McGregor also testified that on one occasion he attempted to discuss the bill with Paige but was unable to get her to do so. McGregor testified that Clint became angry after finding out that McGregor had attempted to discuss the bill with Paige.

[¶9.] Clint testified at trial that he ran the dairy operation, and that he had gotten into the business on his own in March or April 2007 after moving to South Dakota from Georgia where he was in the dairy business and the poultry business. He further testified that Paige confronted him about the September 2007 purchase after McGregor tried to speak with her about the bill. Clint was not asked whether Paige was a partner in the operation with Clint. He testified that Paige handled the family's finances.

[¶10.] Clint also testified that, in the fall of 2007, he had signed over all the assets of the dairy farm to his father-in-law to avoid losing the farm. The financial arrangement also required Clint to sign over his share of a family poultry operation he had owned in Georgia before moving to South Dakota. Clint testified that Paige was a partner in her father's dairy operation. He also testified that, after the transfer of the dairy operation's assets to his father-in-law, both he and Paige milked the dairy cows he had previously owned and were paid a bi-weekly salary of $1,000.00 by his father-in-law's limited liability company that assumed ownership of the operation. On cross-examination concerning the dairy farm after it was transferred to Clint's father-in-law, Clint testified as follows:

Q: So you said you don't know anything and you kind of do the labor work out there?

A: I just manage the farm, yes, sir.

Q: Do you get a portion of the milk check?

A: My wife and I get a thousand every two weeks for living expenses.

Q: So your father-in-law is paying you and your wife a thousand every two weeks?

A: Basically, yes, she's -- my wife is getting our check basically.

Q: So you don't get any money?

A: To just -- no, no. I mean if I get some gas in the, some ...

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