Baker v. Lehman, Weil & Co.

• Decision Date: 23 April 1914
• Docket Number: 454
• Citation: 65 So. 321,186 Ala. 493
• Parties: BAKER v. LEHMAN, WEIL & CO.
• Court: Alabama Supreme Court

65 So. 321

186 Ala. 493

BAKER v. LEHMAN, WEIL & CO.

No. 454

Supreme Court of Alabama

April 23, 1914

Rehearing Denied June 14, 1914

Appeal from Circuit Court, Coosa County; S.L. Brewer, Judge.

Action by Lehman, Weil & Co. against D.W. Baker for breach of contract to deliver 100 bales of cotton. From a judgment for plaintiff, defendant appeals. Affirmed.

The contract is as follows:

Terms of agreement entered into between D.A. Baker of Goodwater, Alabama, party of the first part, and Lehman, Weil & Company of Montgomery, Alabama, party of the second part witnesseth: That in consideration of the mutual promises hereinafter set forth, and the sum of one dollar cash to each of said parties paid by the other, the receipt of which is hereby acknowledged, the party of the first part hereby sells to the party of the second part 100 bales of cotton to be delivered in October and November 1909, and to average in weight not less than 490 pounds, nor more than 510 pounds per bale, basis fours, reweighed and free on board the cars at Goodwater; the difference for the grades above and below basis are to be settled at the prevailing differences at the time of the delivery, reweights and grades to be settled at Goodwater and cotton paid for at Goodwater upon delivery. In the event of difference of opinion between the parties hereto mentioned as to the grade, each party to this contract is to select one arbitrator, and in the event they cannot agree they are to select a third arbitrator, and both parties are bound by said arbitration. It is hereby understood and agreed that the said party shall deliver and accept the cotton according to the terms herein specified.

The complaint alleges the contract, plaintiffs' readiness ability, and willingness at all times to carry out the contract on their part, and the failure and refusal of defendant to carry out said contract upon his part, in that he failed and refused to deliver the cotton called for in the contract, or any part thereof.

Riddle Ellis, Riddle & Pruet, of Goodwater, for appellant.

Weil, Stakely & Vardaman, of Montgomery, R.B. Barnes, of Opelika, and Phares Coleman, of Birmingham, for appellee.

SOMERVILLE J.

The contract sued on is sufficiently certain as to all of its terms to constitute a valid and binding agreement, and the demurrer to the complaint was properly overruled. While the prices to be paid for the grades of cotton above and below 4's (shown by the evidence to mean "good middling") are not stated in figures, yet they are to be settled "at the prevailing differences at the time of delivery"; and, if there is any disagreement as to the proper grading of the bales as to quality, a practicable mode of settlement by arbitration is provided for. "Prevailing differences" obviously means differences in the market price, and whether or not there might be differences at a given time has no bearing on the ascertainable certainty of the price. If there were no differences, then the price would be 11 cents whatever the grade might be. But if, for example, "middling" cotton were delivered, the price would be 11 cents, less as many points as there were points of difference then prevailing between good middling and middling grades.

The case of Elmore & Co. v. Parrish Bros., 170 Ala. 499, 54 So. 203, pronounced upon the insufficiency of a provision in a contract for the sale of cotton that grades below "strict middling" (the price for which was specified) should be "at differences to be agreed upon at the time of the delivery" (italics ours). That case, which is cited and relied upon by appellant, clearly has no bearing on the sufficiency of the terms of the contract here involved.

We judicially know that cotton is a world staple, and that its price is approximately fixed everywhere by the daily market quotations furnished by the cotton exchanges in the world's great markets; that the staple is bought and sold at prices minutely graduated according to its classified quality as fixed by worldwide standards; that there is for every day in the year a specific and ascertainable market price for each of the designated grades; and that the slight variations in price for different localities are founded upon the varying cost of transportation to the centers of consumption and distribution.

In declaring upon a contract containing trade terms, though their significance is not of judicial cognizance, it is not necessary to expound their meaning in the complaint, however necessary it may be to do so in the evidence. An exception to this rule may perhaps be recognized where the terms are used technically and have also a common meaning, but the phrase "basis 4's" is not of that exceptional character.

By the terms of this contract the initiative rested upon the vendor. It was his duty to deliver 100 bales of cotton at any time during the months of October and November, and it was the duty of the vendee to have some one ready to receive and inspect it upon reasonable notice, and if possible to agree upon its classification, thereby determining the price to be paid. When these preliminaries were accomplished, it then devolved upon the vendee to tender the amount of the purchase price to the vendor.

Under such a contract, however, the vendee could not remain wholly inactive and claim a breach by the vendor's failure to perform. But it is enough if he demands performance at a proper time and place, being then able, ready, and willing to perform on his own part. The complaint alleges all that is necessary in this respect to show a right of action in plaintiff. Long v. Addix (Ala.) 63 So. 983; Moss v. King (Ala.) 65 So. 180; Tinney v. Ashley, 15 Pick. (Mass.) 546, 26 Am.Dec. 620; Hapgood v. Shaw, 105 Mass. 276; Guilford v. Mason, 22 R.I. 422, 48 A. 386.

The defendant interposed about 40 special pleas besides the general issue, to the most of which demurrers were sustained.

A plea which merely asserts that the contract sued on is in violation of a certain section of the Code, or that it is "of the kind commonly called futures" (as designated by section 3345 of the Code), states a mere conclusion of the pleader, and is deficient on apt demurrer. The elemental facts showing that the contract is within the inhibited class must be clearly averred. Continental Ins. Co. v. Parkes, 142 Ala. 650, 39 So. 204.

A plea to an action on a written contract set out in the complaint in full, which sets up plaintiff's breach of an extraneous agreement alleged to be part of the consideration of the contract sued on, is an attempt to vary and contradict the terms of a written contract complete in itself, and such a plea is subject to demurrer. This is so not only because the writing cannot be varied by a parol contemporaneous agreement, but also because all prior and contemporaneous stipulations, verbal or written, are conclusively presumed to be merged in the complete written memorial adopted by the parties. Leftkovitz v. First National Bank, 152 Ala. 521, 528, 44 So. 617.

It follows, of course, that if a guaranty by a third person that plaintiffs would carry out their contract was in fact indorsed upon the paper containing the principal contract, it was a mere gratuity, and neither its alteration nor cancellation could be any concern of defendants.

It follows, also, that plaintiffs might offer in evidence the principal contract without offering any collateral undertaking between plaintiffs and a third party, or between defendant and a third party, though it appeared on the same paper therewith.

It is the law that if one party to a written contract procures a third person to become a joint obligor therein, or makes any change on the face of the paper which varies its legal operation and effect, such alteration invalidates the contract in toto. But a collateral contract of guaranty does not affect the relations or obligations of the parties to the principal contract, nor in any way vary its effect. Hence the indorsement of such an undertaking on the writing, though without the consent of one of the parties, is without legal significance, or prejudicial effect.

It was not the duty of plaintiffs to inform defendant as to the extent of their cotton purchases about the time they bought from him; and the fact that they did not do so, and that unfavorable fluctuations in the market might have embarrassed them to such an extent as to render them unable to pay for defendant's cotton, does not show a fraud upon defendant with respect to his contract of sale.

Nor would the fact that plaintiffs represented themselves as being worth a million dollars, though in fact they were not, justify defendant in the rescission of the contract, unless plaintiffs were unable to make the purchase at the proper time; for only in that event could defendant have been injured. It is not alleged that defendant rescinded the contract on account of this alleged false inducement to him to make it; nor that he was in any way injured thereby. Deceit without injury neither gives a cause of action, nor furnishes a ground for rescission of a contract. Davis v. Betz, 66 Ala. 206; Bomar v. Rosser, 131 Ala. 215, 31 So. 430; 14 A. & E.Enc.Law, 137, 138; 9 Cyc. 431.

A contract...