Capital Fertilizer Co. v. Ashcraft-Wilkinson Co.

• Decision Date: 06 June 1918
• Docket Number: 8 Div. 45
• Citation: 79 So. 484,202 Ala. 92
• Parties: CAPITAL FERTILIZER CO. v. ASHCRAFT-WILKINSON CO.
• Court: Alabama Supreme Court

79 So. 484

202 Ala. 92

CAPITAL FERTILIZER CO. v. ASHCRAFT-WILKINSON CO.

8 Div. 45

Supreme Court of Alabama

June 6, 1918

Appeal from Circuit Court, Lauderdale County; C.P. Almon, Judge.

Action by the Capital Fertilizer Company against the Ashcraft-Wilkinson Company, for breach of contract. From a nonsuit rendered on overruling demurrers to defendant's plea, plaintiff appeals. Reversed and remanded.

Anderson C.J., and Mayfield and Sayre, JJ., dissenting in part.

Rushton Williams & Crenshaw, of Montgomery, and C.P. Hatcher, of Columbus, Tenn., for appellant.

Ashcraft & Bradshaw and Mitchell & Hughston, all of Florence, for appellee.

GARDNER J.

It is insisted by counsel for appellant that, under the terms of the contract here in question, the defendant could only cancel the same in the event of war which proximately prevented it from performing its contract--citing the following authorities: Ducas Co. v. Bayer Co. (Sup.) 163 N.Y.S. 32; Smokeless Fuel Co. v. Seaton, 105 Va 170, 52 S.E. 829; Milliken v. Keppler, 4 A.D. 42, 38. N.Y.S. 738; Lima Locomotive Co. v. Nat. Co., 155 F. 77, 83 C.C.A. 593, 11 L.R.A. (N.S.) 713; Standard Silk, etc., Co. v. Roessler Chem. Co. (D.C.) 244 F. 250; Bache Co. v. Coppes, etc., Co., 35 Ind.App. 351, 74 N.E, 41, 111 Am.St.Rep. 171; Cottrell v. Smokeless Fuel Co., 148 F. 594, 78 C.C.A. 366, 9 L.R.A. (N.S.) 1187--and that to construe the contract as giving the absolute right of cancellation in the event of war anywhere, without regard to its effect upon the ability of the seller to comply with the terms of the contract, would be both unusual and unreasonable.

The argument to the contrary is that the parties have, by the language used, created an absolute option to cancel the contract upon the happening of certain specified contingencies, one of them being "in case of war," and that the parties "meant what they said and said what they meant" when they placed this absolute option in the contract; that it means war--any war, anywhere; that in using the language plain and unambiguous, the parties have exercised the constitutional freedom of the contract, and they had the right to specify the event of any war anywhere as a signal for a right to cancel on the part of the seller. The following authorities are cited by appellee as bearing upon this phase of the question: Black on Rescission & Cancellation, § 517; Barney v. Delta & Pine Land Co., 105 Miss.

320, 62 So. 355; J.I. Case Threshing Mach. Co. v. Nickley, 72 Kan. 372, 83 P. 970; Hypse v. Avery Mfg. Co., 32 Tex.Civ.App. 409, 74 S.W. 812; Lyons v. Stils, 97 Tenn. 514, 37 S.W. 280; Thaddeus Davids Co. v. Hoffman La Roche Co., 97 Misc.Rep. 33, 160 N.Y.S. 973; Herrmann v. Bower Chem. Mfg. Co., 242 F. 59, 155 C.C.A. 3; Aldine Press v. Estes, 75 Mich. 100, 42 N.W. 677; Foster v. Henderson, 29 Or. 210, 45 P. 899.

While the argument of counsel for appellee most strenuously insists that the plain and unambiguous language of the absolute option given the seller in the contract here in question must be taken for its full value, and is not open to construction, it is further urged that, if open to construction at all, it would only be to the extent of ascertaining from the terms of the contract, if sufficient for that purpose, what war was in contemplation by the parties at the time of the execution of the contract. It is further insisted that the furthest point in construction to which the court would be authorized to go would be that the parties contemplated, by the language used, a war either in this country or in Germany--the country from which the products were to be obtained.

The cancellation clause here in question contains several alternatives, but, omitting for the present those with which we are not here concerned, we confine ourselves to the following clause set up in the plea:

"It is understood that in case of war, *** then the seller has permission to cancel this contract."

It is clear from the provisions of the entire contract that the products (potash, manure salts, and kainit), the subject of this sale, were to be imported from a foreign country, and, further, that by reference to that country in the contract, and to the foreign mines from which such products were to be obtained, in connection with the judicial notice of the scientific facts of the location of the mines producing potash, it can very reasonably be inferred that the products were to be obtained from the country of Germany. The contract provides for a differential duty or charge imposed by the United States or German government, and that the foreign analyses furnished by the mines producing the potash shall be binding. The cancellation clause refers to rebellions, or any interference by either the American or foreign government. Reference is also made to loss from wear and tear of bags during the voyage, and that the goods are to be taken by the buyer "ex-vessel, when ready to discharge, without expense to seller for wharfage or covering on same."

We are of the opinion that this part of the cancellation clause here in question is properly construed as having reference to a war either in this country or in Germany, from which latter country it sufficiently appears the products were to be obtained. Having reached this conclusion, therefore the next question for consideration is that urged by counsel for appellant that the war, within the meaning of the words in the cancellation clause, must be such a war as proximately prevented the seller from performing the terms of the contract.

We have very carefully examined the authorities for the appellant, above cited, but will attempt no review of them here. It is to be noted, however, that the language used in the contracts there under consideration was very different from that in the instant case. In those cases the language used clearly indicated that the contracts were made either subject to or contingent upon strikes, accidents, or contingencies beyond the seller's control, and necessarily required construction to ascertain the meaning. The language above quoted gives the seller the absolute option to cancel the contract in case of war. The parties were capable of making their own contract, and thereby creating their own law by which they were to be governed. The authorities cited by counsel for appellee tend very strongly to sustain the binding force and effect of this clause as an absolute option, and as having precluded inquiry as to its effect upon the ability of the seller to deliver the goods sold. The following excerpt from Black on Rescission & Cancellation, § 517, also sustains this view:

"When a right to rescind, reserved to one of the parties in a contract, is made to depend upon the happening of a certain event or contingency, it can be exercised only in the case provided for, not arbitrarily nor on the mere will of the party, nor for any other reason than that specified in the contract. *** But on the other hand, if the particular event occurs, it is immaterial how little relation it may appear to have to the substance of the contract, or how unreasonable it may seem to be to make the continued existence of the contract depend upon it. If the case arises in which the right to rescind was reserved, that right may be exercised, the parties having so contracted."

In Hypse v. Avery Mfg. Co., supra, the plaintiff gave a written order to defendant for an engine, agreeing to pay therefor some cash, and another engine. The order contained the clause giving the defendant the right to cancel it at any time before the shipment of the engine without liability for damages. The order was accepted by the defendant, and plaintiff prepared the engine he was to give in exchange for shipment, but the defendant refused to fill the order. The plaintiff had gone to the expense of moving the engine to the shipping point, and was prepared to make the cash payment. The court held that the cancellation clause was not against public policy, but was a stipulation which the parties might lawfully make; that it was plain and unmistakable and could not be disregarded, and therefore the defendant was not liable. In the case of Barney & Hines v. Delta & Pine Land Co., supra, the contract for the sale of land provided:

"In case any stockholder of the party of the first part, not having already consented thereto, shall bring suit against the party of the first part, or its officers or directors, to prevent the carrying out of the provisions of this contract, *** then the said party of the first part, or the officers or directors, may declare this contract void."

Before the consummation of the contract a stockholder of the first party brought suit and enjoined the sale, and the contract was thereupon declared to be void. The Supreme Court of Mississippi in this connection said:

"After filing his bill and obtaining service of process thereon, this stockholder proceeded no further with the prosecution of his suit, and there was some evidence introduced tending to show that it has since been dismissed by the court for want of prosecution. The failure to prosecute this suit is immaterial. The right of appellee to decline to execute the contract depended, not upon the successful prosecution of such a suit, but only upon the bringing thereof; the language of this clause of the contract being, 'In case any stockholder *** shall bring suit,' etc. The merit or want of merit of this stockholder's suit is also immaterial; it being the clear intention of the parties that appellee should not be required to execute the contract in event any of its stockholders should be dissatisfied

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