White v. Production Credit Association Of Alma

256 N.W.2d 436 (1977)

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Nature of the Case

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Facts

P was a cattle farmer who required financing to cover basic operating expenses and the purchase of cattle. D was a federally chartered lending institution. A representative of D told P that D could and would provide exclusive financing assistance to P. P accepted this offer and submitted a financial statement and a loan application for $128,000. The loan was approved within two days. The 1970-year was very poor for P because of drought and D suggested an irrigation system. D agreed to finance this system for P and P claims that D also agreed to finance the balance of P’s operations including the purchase of cattle each year for a period of 7-10 years, the time period anticipated to pay off the irrigation equipment. P agreed to maintain a herd of 500 head each year, and as security, P agreed to deliver mortgages and security agreements to D covering all the farm’s assets, crops both present and future, all livestock on hand and to be acquired and all machinery and equipment including the irrigation system. D advanced the loan for the project, and P executed the security agreements. Within five months and even before the first payment was due, D changed its mind and wrote P requesting that P refinance with another company. P was unable to do so because of all the security pledged to D. D then refused to loan P money to finance the purchase of cattle in 1972 and 1973. P finally got FHA financing in March 1974, and the obligation to D was paid in full with over $25,000 in interest as well. P claims that because he was unable to get financing, he lost $85,304 in 1972 and $34,445 in 1973. P sued D and the jury returned the verdict to P for $100,000. At the close of opening statements during trial, D moved for a summary judgment in that the alleged oral contract could not be performed within one year and was thus violative of the statute of frauds. P argued that the statute did not apply because P relied on the oral promises to his detriment. The judge refused to grant that motion. D appealed the verdict.