Southern Cotton-Oil Co. v. Heflin

• Decision Date: 23 January 1900
• Docket Number: 843.
• Citation: 99 F. 339
• Parties: SOUTHERN COTTON-OIL CO. v. HEFLIN.
• Court: U.S. Court of Appeals — Fifth Circuit

99 F. 339

SOUTHERN COTTON-OIL CO. v. HEFLIN.

No. 843.

United States Court of Appeals, Fifth Circuit.

January 23, 1900

This suit was instituted in the district court of Waller county Tex., on April 31, 1895, from which it was removed to the United States circuit court for the Eastern district of Texas, sitting at Galveston, in August, 1895. The plaintiff in error was a corporation chartered in the state of New Jersey, and owning a cotton-seed oil mill situated at Houston, Tex., at which mill it made the produces of cotton seed from year to year. This was a suit instituted against the defendant in error upon the following contract:

'Philadelphia April 12, 1894.

'R L. Heflin, Esq.-- Dear Sir: We have this day sold you all the prime cotton-seed cake and meal made at our Houston (Texas) mill during the season commencing September 1, 1894, and ending March 31, 1895; we guarantying a minimum quantity of six thousand (6,000) tons, and you not being required to receive a maximum quantity of more than ten thousand (10,000) tons. Any excess of ten thousand tons to be at your option. All at the price of eighteen dollars ($18) per ton of two thousand pounds, free on board cars at our Houston (Texas) mill. Same to be packed in good, merchantable sacks, and marked or branded as ordered. Terms, sight draft bill of lading attached. Shipments as fast as made and ordered. It is distinctly understood that we are to have the privilege at all times during the season above stated of supplying our local demands for cattle feeding at Houston, Texas, and our jobbing trade for consumption at that and other Texas points. It is also a condition of this contract that, in case of accident to said mill by fire or act of God, such as may prevent our making the quantity guarantied by us during the season above stated, this contract shall be void as to any part unfilled in consequence of such accident. It is further agreed and made part of this contract that we shall not be required to furnish more than three-quarters of the total quantity delivered in meal, unless at our option.

'Yours Truly, The Southern Cotton-oil Company.

'By Henry C. Butcher, Prest.

'I hereby accept the above.

R. L. Heflin.'

When Heflin signed and returned the contract, he wrote, on April 15, 1894, to the president of the Southern Cotton-Oil Company as follows:

'Yours of the 12th inst., inclosing contracts, received. Same are in order except as to shipments. After the words, 'shipments as fast as made,' I have added, 'and ordered,' and I now here agree that the mill shall not be without shipping orders at any time longer than ten days maximum, and for any excess I will pay both interest and insurance to date I give such orders. This is only fair, for, without any such stipulation last year, this mill had shipping orders always ahead of its production, except twice, and then not a whole week was it without them. * * * '

The declaration alleges that the plaintiff, in pursuance of its contract, delivered 2,084 tons of meal in September, for which the defendant paid $15 a ton, leaving $3 a ton unpaid; and that the plaintiff tendered the balance, 6,012 tons, in pursuance of the terms of the contract, which the defendant refused to accept and pay for. This suit was brought to recover $5,712, being $3 a ton due on the 1,904 tons, with interest from October 31, 1894; and for $39,047.94, the difference between the market price, $11.50, at which the plaintiff was compelled to sell the 6,012 tons, and the contract price, $18, which the defendant refused to pay. These, together with some expenses for insurance and for storage and handling the meal, aggregating about $2,000, constituted the cause of action on the part of the plaintiff. The defendant defended on the ground that the 1,904 tons were not 'prime cotton-seed cake or meal'; that $15 was the full value thereof; and that the defendant was not compelled to justify by the failure of the plaintiff to deliver meal according to the standard of the contract, gave notice to the plaintiff that he revoked and canceled the contract, and would not abide by its terms any longer. The case was tried before the court and a jury at the March term of the circuit court at Galveston, and there was a verdict for the plaintiff, on March 7, 1899, for the sum of $5,712, being $3 a ton on 1,904 tons, with 6 per cent. interest from November 1, 1894. The following extract from the charge of the court recites the facts necessary to be stated, and also shows the material question of law in the case: 'This case was brought by the plaintiff, the Southern Cotton-Oil Company, against R. L. Heflin, charging, substantially, that in April, 1894, plaintiff and defendant entered into a contract by which defendant purchased from plaintiff its output of meal for the season of 1894-1895, commencing September 1, 1894, and ending March 31, 1895, for not less than 6,000 tons of meal, and not more than 10,000 tons, and any overplus of 10,000 tons being at the option of the defendant at the contract price of $18 per ton free on board cars at Houston. The defendant has alleged a specific agreement between himself and the plaintiff in regard to the quality of this meal and putting in these meshes. That should have been determined by your special findings against the defendant. Under the undisputed evidence in this case there are two thousand and eighty-four tons of the meal that were contracted for that were received and paid for by the defendant. It is true that some complaint was made by the defendant that it was found, after the meal had gone abroad, there was some complaint in regard to it, and it was settled for thereafter. That is out of this case. There were one thousand nine hundred and four tons of meal received by the defendant, who refused to receive it under the contract, at the contract price, because he said it was not the kind of meal contracted for. Thereupon the plaintiff and the defendant agreed that the defendant should take the meal and pay $15 a ton, which he did, and the question between them of the $3 a ton should be thereafter determined; and, if it was determined that the meal was up to the quality called for in the contract, which was prime cotton-seed meal, the defendant would owe them $3 a ton, and, if not up to the standard contracted for, he would not owe them $3 a ton. That was substantially the understanding between the parties. Thereafter, my recollection is that on October 31st, the defendant, Heflin, gave the plaintiff notice that he would not take any more of the meal; that it was not up to the standard, and could not be made up to ten thousand tons, and it sues for $3 a ton on one thousand and twelve tons, and sues for interest and insurance, basing it upon a contract or letter not embraced in the contract, but a letter written by Mr. Heflin, stating if the meal was not shipped out as fast as made on the 10-day clause about shipping orders, that he would pay the insurance and interest. Therefore the determining question in this case is the question of the measure of damages in the event the contract was breached. It is a very doubtful question, but my judgment of the matter is that the plaintiff in this action has mistaken his remedy on the measure of damages. The plaintiff sold this meal for $11.50 a ton, and charged the defendant with the difference between that and the contract price. A notice that he would not take any more of this meal would not comply with the contract. The defendant did not escape liability, provided the plaintiff, in its action, asserted the right measure of damages. But when it was notified by the defendant that he would not take any more of the meal, then, in that case, the subsequent making of the meal was a matter which the plaintiff was making for its own account,--had a right to sell it to whom it wanted. But at the expiration of March 31st it had a right to bring its action against the defendant for such profits as it would have made by the defendant complying with the contract and taking the meal at $18 a ton. But it does not assert any such measure of damages here. It claims the right to enforce the contract whether the defendant wants it enforced or not, and it claims the right to sell the article, charging the defendant with the different in price realized on the sale of the six thousand and twelve tons and the contract price. I do not think that is the measure of twelve tons and the contract price. I do not think that is the measure of damages. Therefore you will not regard the six thousand and twelve tons in this case, and all that is left for you to consider is the one thousand nine hundred and four tons.' The plaintiff duly excepts to that part of the charge relating to the 6,012 tons and the measure of damages, and also excepted to the refusal to give special charges presenting the theory contended for by the plaintiff, which is fully stated in the opinion. The jury rendered a verdict for the plaintiff for $5,712, with interest from November 1, 1894, and judgment was entered for that sum. The plaintiff brings the case to the court on writ of error. The material error assigned is that the circuit court erred in the charge as to the measure of damages.

J. C. Hutcheson (Hutcheson, Campbell & Meyer and Jas. B. & Chas. J. Stubbs, on the brief), for plaintiff in error.

F. Charles Hume, for defendant in error.

Before PARDEE, McCORMICK, and SHELBY, Circuit Judges.

SHELBY Circuit Judge, after stating the case as above, .

This is a suit for damages for breach of a contract. The material question in the case relates to the measure of damages. By the contract dated April 12, 1894, the Southern Cotton-Oil Company, the plaintiff in error, sold to R. L. Heflin, the defendant in error, all the prime...