Citizens' & Southern Bank v. Union Warehouse & Compress Co.

• Court: Georgia Supreme Court
• Writing for the Court: HINES, J.
• Citation: Citizens' & Southern Bank v. Union Warehouse & Compress Co., 157 Ga. 434, 122 S.E. 327, 3650. (Ga. Feb 13, 1924)
• Docket Number: 3650.
• Decision Date: 13 February 1924
• Parties: CITIZENS' & SOUTHERN BANK v. UNION WAREHOUSE & COMPRESS CO.

122 S.E. 327

157 Ga. 434

CITIZENS' & SOUTHERN BANK v. UNION WAREHOUSE & COMPRESS CO.

No. 3650.

Supreme Court of Georgia

February 13, 1924

Syllabus by the Court.

To make a usage and custom of trade binding, it must be known certain, uniform, reasonable, and not contrary to law.

(a) An alleged usage or custom of trade which leaves some material element to the discretion of the individual is void for uncertainty, as the office of custom or usage is to interpret the otherwise indeterminate intention of the parties.

(b) In interpreting a usage or custom the same rules apply as pertain to the interpretation or construction of other writings and documents.

(c) A custom in the cotton trade that bales of cotton should average "around" or "about" or "in the neighborhood of 500 pounds per bale" is not void for uncertainty.

While it is unnecessary to determine whether the above averments of such custom or usage are superseded by other allegations in the petition which in effect allege that the articles by the custom should be of the definite weight stated, the pleading should be construed as a whole, and, so construing it, such subsequent averments clarify the meaning of the former allegations on this subject, and strengthen the construction placed upon the alleged usage or custom. Duplicity arising from these different allegations, if any, could only be reached by special demurrer, as such lack of clearness would not render the petition subject to general demurrer.

Where a warehouseman, for cotton stored with him, issues to the owner his negotiable warehouse receipts in which the commodity is described only as so many bales, and neither the weight nor grade of cotton is stated or indicated, but at the time there is a universal, definite, and valid usage and custom in the trade in the locality of the transaction, known to the warehouseman, that bales of cotton should be of a given grade and weight, and if the bales of cotton for which such receipts are issued are below such customary weight and grade, and if the owner, for value received, assign such receipts to one who takes the same relying upon such custom and without any notice of the actual weight and grade of such cotton, when the warehouseman at the time of issuing such receipts knew or "by the most casual inspection and in the exercise of the slightest ordinary care could and should have known" of the actual weight and grade thereof, the warehouseman, in an action brought against him by the assignee, in which the above facts are alleged, will be liable for the difference between the actual value of the identical cotton stored and the value of the same if of the customary weight and grade, although the warehouseman tendered to the assignee the identical bales of cotton for which the receipts were issued.

(a) A universal, definite, and valid custom or commercial usage which defines and fixes the weight and grade of bales of cotton, is to be read into and made a part of receipts given by the warehouseman for their storage.

(b) Where warehouse receipts are issued for bales of cotton without stating their weight or grade, parol evidence is admissible to prove the meaning of bales of cotton in the cotton trade or business, and to prove that a bale of cotton according to the custom of the cotton trade, means a bale of a given weight and grade.

(c) Warehouse receipts should be construed in accordance with the rules applicable to the construction of contracts in general, and especially in accordance with commercial usage.

(d) Representations in warehouse receipts, when expressly embraced therein or read into them by custom or usage, should usually be confined to those of which the warehouseman may ordinarily be presumed to have knowledge, or of which he ought to know.

(e) Where a warehouseman issued receipts for bales of cotton without expressly stating or indicating their weight or grade, but where by custom or commercial usage such bales of cotton must be of a given weight and grade, and the warehouseman can, by the most casual inspection and in the exercise of the slightest ordinary care, know of their weight and grade, such warehouseman will be liable to a bona fide assignee of the warehouse receipts given for the storage of bales of cotton of the customary weight and grade.

(f) The issuing of such receipts gives to the holder thereof a false credit, if the bales of cotton do not come up to such customary weight and grade, and the warehouseman will be estopped to deny, as against a bona fide assignee of such receipts, that the bales are not of such weight and grade.

Where a warehouseman issued his negotiable receipts for so many bales of cotton, neither the weight nor grade being indicated in the receipts, and where by the exercise of the slightest ordinary care he could have known the actual weight and grade of such bales, and at the time of issuing such receipts he knew that an assignee thereof would, independently of any custom or usage of trade, accept such receipts, and believe the articles would be of a certain weight and grade, and where the assignee took assignments of the receipts for value under such expectation and belief, and where it afterwards appeared that the actual weight, grade, and value of such articles were far below the weight, grade, and value which the assignee expected at the time of taking such assignments, whereby he sustained loss, the warehouseman will not be estopped, in an action brought against him by an assignee to recover the difference between the value of such articles actually received and the value they would have had if they had conformed to the weight and grade the assignee expected, from showing that the identical articles were not of the weight and grade which the assignee expected, the warehouseman not having done or said anything to the assignee to create such belief and expectation, and not having remained silent when, under the circumstances, it was his duty to speak.

(a) The principle that, when the parties differ among themselves as to the meaning of a contract, the meaning placed upon it by one of the parties, and known to be thus understood by the other party at the time, should be held to be the true meaning, applies only to the immediate parties to the contract, and has no application to the assignee of such contract, although one of the parties thereto, who is sought to be bound by such understanding, knew at the time of its execution that such assignee would take the assignment of the contract under the belief and expectation that it had a meaning different from that put upon it by such party.

(b) Nor would such estoppel arise upon the theory that the warehouseman had put it in the power of the bailor to injure third persons, and that, when one of two innocent persons must suffer, the person who put it in the power of another to inflict injury must bear the brunt.

(c) No estoppel by conduct or silence would arise under the facts stated in this question.

Where the tender by a warehouseman of the identical articles stored with him and for which he had issued receipts was accepted by the assignee of such receipts under protest and notice to the warehouseman at the time that the assignee, in accepting such articles, did not waive any right or claim he might have against him by reason of such receipts, such acceptance did not amount to an extinguishment of any right or claim which the assignee might have against the warehouseman by reason of his failure to comply with the terms of such receipts, it not appearing whether or not the warehouseman agreed that such acceptance might be made without such waiver, and it being assumed that the action is one ex contractu.

(a) While the acceptance under protest of the tender of a given amount made in full settlement of a liability extinguishes such liability, the acceptance of such tender upon condition that it shall not extinguish such liability does not work an extinguishment thereof.

If a petition sets forth a cause of action, either ex contractu or ex delicto, it will withstand a general demurrer; and it is not the duty of the appellate court, in passing upon an exception to a judgment sustaining a general demurrer, to decide whether the action is one ex contractu or one ex delicto.

If it is doubtful whether an action is based on tort or on contract, such doubt furnishes a ground for special demurrer, and, if such special demurrer is sustained, the plaintiff may amend so as to clearly show why he is suing for a tort or for breach of contract.

(a) Where no special demurrer is filed to such action on the ground of duplicity in the petition, the plaintiff can elect upon which cause of action he will rely, if his petition sets out a cause of action which is good either as one for a tort or one for a breach of contract.

(b) A reviewing court, in dealing with an exception to a judgment sustaining a general demurrer to a petition, should adopt that construction which will sustain the petition and reject that construction which will defeat it.

Where a complaint for fraud and deceit alleges in several paragraphs that the defendant knew, or by the exercise of the slightest ordinary care could and should have known, a fact material to the maintenance of the action, and where the plaintiff, by amendment to a specific paragraph of the complaint, alleges actual knowledge by the defendant of such fact, but there is no amendment changing such alternative allegations in the other paragraphs, the appellate court, in passing upon an exception to a judgment sustaining a general demurrer to the petition, should construe the amendment as applicable to the whole suit.

(a) The petition thus amended might be subject to the special demurrer on the ground that the paragraphs...