Barnett v. Elwood Grain Co.

• Decision Date: 16 January 1911
• Citation: 153 Mo. App. 458,133 S.W. 856
• Parties: BARNETT et al. v. ELWOOD GRAIN CO.
• Court: Missouri Court of Appeals

133 S.W. 856

153 Mo. A. 458

BARNETT et al. v. ELWOOD GRAIN CO.

Kansas City Court of Appeals. Missouri.

January 16, 1911.

Rehearing Denied February 13, 1911.

1. ARBITRATION AND AWARD (§ 10)—EFFECT OF AGREEMENT.

An agreement for arbitration is no defense to suit until there is a binding award.

2. BILLS AND NOTES (§ 395)—PRESENTATION —NECESSITY.

The rule that demand drafts must be presented, and that notice that they are in the hands of a third person is not sufficient, is subject to modification by usage and custom.

3. BILLS AND NOTES (§ 395)—PRESENTATION —CUSTOM.

The rule that demand drafts must be presented was not modified as between a collecting bank and a customer, where sometimes payment was demanded personally and sometimes by mail or telephone.

4. SALES (§ 99)—RESCISSION BY SELLER— GROUNDS.

Though a seller did not know when it received the proceeds of drafts on the buyer that payment was delayed after notice and demand, the seller could rescind as to future deliveries if the circumstances otherwise warranted it.

5. SALES (§ 99)—RESCISSION BY SELLER— GROUNDS.

A buyer's slight delay in paying the seller's draft resulting only in small damage to the seller does not warrant rescission as to future deliveries.

6. SALES (§ 55) — BREACH OF CONTRACT— DAMAGES—ASCERTAINMENT.

Provision in a contract of sale that it shall be governed by the laws of the state of the seller controls any custom in ascertaining damages for a breach.

7. DAMAGES (§ 62)—DUTY TO MINIMIZE.

A party to a contract must use reasonable diligence to minimize damages caused by the other's breach.

8. SALES (§ 418)—BREACH BY SELLER—BUYER'S DAMAGE—MEASURE.

The buyer's measure of damages for breach of the seller's contract to sell corn was the difference between the agreed, and the market, price the day after notice of the breach, where consequential damages were not claimed, regardless of whether the buyer actually bought.

9. EVIDENCE (§ 423)—PAROL EVIDENCE—AFFECTING CONTRACT—ADMISSIBILITY.

Parol evidence was inadmissible to show that the buyers under a written contract for a sale of corn were in fact the seller's brokers, and as such not entitled to recover for breach of the contract, as contradicting the writing.

Appeal from Circuit Court, Buchanan County; C. A. Mosman, Judge.

Action by J. H. Barnett and another, partners as Barnett & O'Neil, against the Elwood Grain Company. Judgment for plaintiffs, and defendant appeals. Affirmed.

Adrain F. Sherman and Spencer & Landis, for appellant. Edmond C. Fletcher and Eugene Silverman, for respondents.

BROADDUS, P. J.

This is a suit for damages alleged to have been incurred by reason of the failure of the defendant to comply with the terms of the following contract: "Contract for Sale. Elwood Grain Company. Unless specially agreed otherwise, this contract is subject in all respects to the rules and regulations of the St. Joseph, Missouri, Board of Trade. St. Joseph, Mo., Dec. 26th, 1907. Barnett & O'Neil, Alexandria, La. Dear Sir: We hereby confirm sale to you per telegram of Dec. 24th, of 20,000 bushels No. 2 Mixed Corn, 62c Jany. Alexandria St. Joseph weights and St. Joseph grades to govern settlement. Shipment 5,000 bu. monthly during Feb., March, April and May. Demand drafts 62¾ for Feb. shipment and ¾c in addition for each month thereafter including May. All sales `by sample' are made conditional upon acceptance of car lots here by official St. Joseph Board of Trade Sampler, for account of buyer. Account draft when attached to bill of lading to be paid by you. In the event you fail to do so, you hereby promise and agree to pay us the difference between the contract price and the price realized for the grain, together with any and all expenses incurred in disposing of said grain. This contract in every respect subject to interpretation under the laws of the State of Missouri. This constitutes our contract and supersedes all prior negotiations between us on this subject; but if this is not in complete accordance with your understanding of our contract wire us immediately. Elwood Grain Company."

The defendant's amended answer set up a denial that it violated the contract, and, further, that plaintiff had not complied with the terms thereof, in that it neglected to pay demand drafts upon two car loads of corn shipped by defendant to apply on said contract, on account of which breach defendant had canceled the same. The answer further alleges that plaintiffs prior to the commencement of this suit agreed to submit this controversy to the regularly constituted Board of Arbitration of the Board of Trade of Kansas City, Mo., and that said matters had not yet been submitted in arbitration through no fault of defendant; that the said Board of Trade rates fixed the damage, if any, in such cases at the difference between the contract price and the market price of said commodity at the place of delivery the day following the announcement of the cancellation of said contract; that by the custom of the grain trade the measure of damages was the same as provided by said Board of Trade. The plaintiffs, after pleading a general denial, replied that they had fully complied with the terms of the contract, and that they had refused to accept the cancellation of the contract, and that they had no knowledge of such a custom as to the measure of damages pleaded by defendant.

The evidence is that: At the request of the plaintiffs, the defendant shipped two cars of corn containing 2,518 bushels to apply on said contract, and on January 29, 1908, attached the bills of lading to two separate demand drafts for the value of the two cars of corn and deposited them in the First National Bank of Buchanan county, at St. Joseph, Mo. The drafts were received by the First National Bank of Alexandria, La., on February 1, 1908, and the bank notified them on the same day either by mail or telephone that the drafts were there for collection. It was the custom of plaintiffs to pay all drafts at said bank. The defendant, not hearing from said drafts, caused the St. Joseph Bank to telegraph the Alexandria Bank on February the 4th or 5th to return all unpaid drafts drawn on the plaintiffs. The Bank of Alexandria thereupon protested the two drafts, but, after the bank had closed for the day, permitted plaintiffs to pay the drafts together with the protest fees, and on the following day remitted the proceeds to the bank at St. Joseph. Upon learning the fact that the drafts had been held, the defendant telegraphed the plaintiff as follows: "We find you are not paying drafts on demand as per contract. Consequently we are canceling the balance of your contract." To which plaintiffs replied: "You are wrong, our drafts were paid promptly, ship balance February contract at once. Will not accept cancellation." On March 18th, Barnett, representing the plaintiffs, and F. J. Delaney, representing the defendant, met in Kansas City, Mo., for the purpose of making a settlement of the differences, but, not being able to agree upon the amount of damages, negotiations were had looking to an...