Boillin-Harrison Co. v. Lewis & Co.

• Court: Tennessee Supreme Court
• Writing for the Court: PER CURIAM.
• Citation: Boillin-Harrison Co. v. Lewis & Co., 187 S.W.2d 17, 182 Tenn. 342 (Tenn. 1945)
• Decision Date: 05 March 1945
• Parties: BOILLIN-HARRISON CO. v. LEWIS & CO.

187 S.W.2d 17

182 Tenn. 342

BOILLIN-HARRISON CO. v. LEWIS & CO.

Supreme Court of Tennessee.

March 5, 1945

Rehearing Denied May 5, 1945.

Appeal from Chancery Court, Davidson County; Thomas A. Shriver Chancellor.

Suit by Boillin-Harrison Company against Lewis & Company for the difference between $4.40 per bag of sugar and what complainant paid for sugar and money which complainant had paid to another because of defendant's failure to carry out contract as agreed, wherein the chancellor dismissed complainant's bill, and complainant appealed to the Court of Appeals, which entered judgment for complainant against the defendant for $13,807.59, and the defendant brings certiorari.

Writ denied.

PER CURIAM.

A petition for certiorari, filed by Lewis & Company, complains of a decree of the Court of Appeals awarding a recovery against it in favor of Boillin-Harrison Company in the sum of $13,807.59 for breach of contract. The Chancellor had dismissed the bill.

After a thorough checking of the record and examination of authorities, we concur in both the conclusions and reasoning of the Court of Appeals, as set forth in an opinion by Presiding Judge Felts of that Court. The case is so fully and clearly stated in that opinion that this Court adopts and incorporates it in this opinion for publication. We quote:

'Boillin-Harrison Company was a wholesale dealer in groceries at Clarksville. Lewis & Company was a Kentucky corporation selling groceries as a broker and also to some extent for its own account, having offices in New York, Chicago, Louisville Nashville and several other cities. In December, 1936 defendant, represented by B. M. Moore, Jr., its manager of its Nashville office, brought to complainant a written offer by Sterling Sugar Sales Corporation, of Louisiana, to sell 15,000 bags of sugar for future deliveries during the first half of 1937, and a like offer of Olavarria & Company, of New York, to sell 10,000 bags of sugar for deliveries from March through August 1937. The price in both offers was $4.75 per bag plus freight. This quantity, 25,000 bags, 2,500,000 pounds, was in excess of the needs of complainant, and it was unwilling to accept the offers.

'To induce complainant to accept them, defendant's agent Moore told complainant's representatives that defendant had contracted for great quantities of sugar for future deliveries to be spread through 1937 so that, by hedging on the New York Sugar Exchange to protect itself against price fluctuations during 1937, it could make the 25,000 bags of sugar in these two offers cost complainant only $4.40 per bag plus freight; that the rules of the exchange required defendant to use the names of its customers in doing the hedging, which was not a speculation but a 'perfect hedge' only to insure the price of $4.40 against fluctuations; and that if complainant would accept these offers and authorize the use of its name by defendant in doing the hedging, defendant would reduce the price of the 25,000 bags of sugar from $4.75 to $4.40 by reimbursing complainant for the difference, 35 cents per bag. He also stated that Olavarria & Company was the same as Lobo & Company, through whom defendant would carry on the hedging, and that defendant would make the reimbursement to complainant through Lobo & Company.

'Complainant accepted this proposal of defendant and signed the two written offers, and defendant gave complainant a letter that day, December 28, 1936, which, omitting the letterhead of Lewis & Company, was as follows:

"December 28, 1936

"Boillin-Harrison Company,

"Clarksville, Tenn.

"Attention--Mr. Jos. A. Boillin

"Dear Mr. Boillin:

"It is understood and agreed that we are to reduce the contract price of 25,000 bags of sugar bought on contract for delivery during 1937 and which contracts are executed by Olavarria & Company and Sterling Sugars Sales, and that we are to reduce the contract price of your sugar to $4.40 net basis FOB refinery plus the actual rate to Clarksville, through the use of the Sugar Exchange and that you are to be reimbursed by Lobo & Company for the difference between your contract price and the price that the sugar is actually billed at. We are to have the privilege of using the Exchange in your own name for the reduction of these contracts.

"Yours very truly,

"Lewis & Company

'(Signed) B. M. Moore, Jr.

"B. M. Moore, Jr.'

'Complainant received and paid for the 25,000 bags of sugar at $4.75 per bag plus carrying charges and certain overcharges for substitutions made by the sellers. Though the deliveries were to be spread from January through August, 1937, they were actually made between March 5 and April 5, 1937. When complainant received the invoices it asked that the refunds be made, but Moore explained that complainant would have to pay the full amount of the invoices and would be later reimbursed by defendant through Lobo & Company. He called at complainant's office on April 9, 1937, and asked it to give defendant written authority to use its name in the hedging, to buy or sell on the exchange not exceeding '25 lots,' a lot according to the usage of the exchange meaning 50 tons. Complainant handed him a letter which was as follows:

"April 9, 1937.

"Lewis and Company,

"Nashville, Tennessee

"Sirs:

"This is your authority to buy or sell for our account on the New York Sugar Exchange not to exceed 25 lots.

"It is agreed that you are to advise us upon all such transactions as you make them.

"Yours truly,

"Boillin-Harrison Company.'

'After Moore left with this letter complainant's president, Mr. Joseph A. Boillin, and his son, reflecting that the letter did not express the contract, which was that the hedging would be at defendant's risk, rewrote the letter exactly as above quoted and added these words: 'and that any losses that may be incurred in these transactions are to be absorbed by Lewis & Company and not charged to us.' Next morning before defendant's office opened complainant's president delivered this letter, as rewritten, to Moore and requested him to substitute it for the first letter as authority for the hedging. Moore agreed to do this but, unknown to complainant, sent the first letter to the New York office of Lewis & Company where it was received and stamped 'Received Apr 14 1937 Lewis & Company 120 Wall Street N.Y.O.' (see Ex. 9, dep. Joseph A. Boillin).

'From defendant's New York office this letter was delivered to Lobo & Company, a partnership whose members were members of the New York Sugar Exchange and also the officers and directors of Olavarria & Company, a New York Corporation. Lobo & Company 'received an order on April 20, through Lewis & Company to purchase 25 lots of September 1937 sugar for the account' of complainant, based on the authority of the first letter above quoted. This transaction was made by Lobo & Company as well as several other transactions on the exchange during the period from April 20 to September 23, 1937. It seems that the instructions to Lobo & Company for making these transactions were given by B. M. Moore, Jr., manager of defendant's Nashville office. As each transaction was made Lobo & Company sent the usual broker's notice to complainant.

'Understanding that these transactions were being made on the authority of its second letter, complainant forwarded these notices to defendant at its Nashville office for the attention of Moore, stating complainant's understanding that defendant was to look after the transactions and calling on defendant to begin making the reimbursements. Moore put off complainant on one pretext after another. The account was closed September 1937 showing an indebtedness of complainant to Lobo & Company for $4211.84. Lobo & Company later sued complainant and obtained a decree for that amount, which complainant paid. By this suit complainant seeks to recover of defendant this $4211.84 and $9,595.55, the difference between $4.40 per bag and what complainant paid for the sugar, totaling $13,807.39.

'The defendant's answer averred these defenses: (1) Defendant's agent Moore was without authority to make the contract sued on; (2) the contract was without consideration; (3) it did not bind defendant to reimburse complainant but stated a third party, Lobo & Company, would do so; (4) the contract was conditional, the condition being that complainant's reimbursements would depend upon whether there was a profitable speculation on the sugar exchange; (5) the contract was illegal as contemplating a speculative or gambling transaction; and (6) it was also illegal as contemplating a discriminatory rebate in violation of the Acts of Congress, the Clayton Act and the Robinson-Patman Act (sec. 13, title 15, U.S.C.A.), denouncing discriminations which lessen competition in interstate commerce.

'A large amount of proof was taken, most of which was directed to the issue of the agent's authority. The Chancellor filed a written opinion sustaining the defenses: (1) that the agent acted without authority, (2) that the contract was without consideration, and (3) that it violated the Clayton and Robinson-Patman Acts; and he accordingly dismissed the bill.

'Complainant appealed and has filed assignments of error challenging these conclusions of the Chancellor; and the defendant has also assigned errors upon the matters pretermitted by the Chancellor, insisting that he should have sustained these defenses.

'Thus the questions made before us are: (1) Whether the agent had authority to make the contract; (2) whether the contract was supported by sufficient consideration; (3) whether by its terms it bound defendant to reduce the price to $4.40 by reimbursing complainant for the difference; (4) whether it was an unconditional promise by defendant or was conditioned upon there...