Continental Gin Company v. Freeman, GC6415.

• Decision Date: 30 December 1964
• Docket Number: No. GC6415.,GC6415.
• Citation: 237 F. Supp. 240
• Parties: CONTINENTAL GIN COMPANY, Plaintiff, v. John H. FREEMAN, Jr., d/b/a Freeman Electric Gin Company, Defendant.
• Court: U.S. District Court — Northern District of Mississippi

237 F. Supp. 240

CONTINENTAL GIN COMPANY, Plaintiff, v. John H. FREEMAN, Jr., d/b/a Freeman Electric Gin Company, Defendant.

No. GC6415.

United States District Court N. D. Mississippi, Greenville Division.

December 30, 1964.

Charles Clark, Cox, Dunn & Clark, Jackson, Miss., Cohen, Kohler & Barnwell, Atlanta, Ga., for plaintiffs.

John C. Satterfield, Yazoo City, Miss., Norman Brewer, Jr., Greenwood, Miss., Dudley Buford, Jackson, Miss., for defendant.

CLAYTON, District Judge.

This diversity suit¹ is before the court on a complaint in two counts, answer and counterclaim, plaintiff's motion for judgment on the pleadings, or, in the alternative for summary judgment, defendant's motion for summary judgment, certain affidavits, discovery deposition of John H. Freeman and briefs of the parties. Since matters outside the pleadings, which affect disposition of all motions, have been considered, all the motions will be considered as motions for summary judgment. Rule 12(c), Federal Rules of Civil Procedure.

I.

Count I of the complaint is on a written contract to recover the unpaid purchase price for certain cotton ginning machinery and related equipment bought by defendant from plaintiff. Material facts with respect to this contract are not in dispute. After conferences between representatives of plaintiff and John H. Freeman, he signed a printed form contract on July 4,² 1962. It was filled out before signing except for the list of the property being sold by plaintiff and bought by defendant and the list of property being "traded in" thereon by defendant. A list of the property being bought had been previously prepared and was examined by plaintiff's representatives and by Freeman at the place where he signed the contract. Everyone there understood that this list showed the property which was being purchased by defendant and which was the subject of the contract which was signed by Freeman. This contract was sent to plaintiff, the list of property being purchased by defendant was inserted therein³ and the contract was formally accepted July 26, 1962, with modifications shown by plaintiff's letter of that date to defendant by which defendant's copy of the contract was returned.

Substantially all of the property listed in the contract was delivered by plaintiff to defendant between July 31 and August 24, 1962, but some miscellaneous items were not received by defendant until September 1962.

By mutual agreement a change order dated August 10, 1962, was issued by plaintiff which added one additional piece of equipment to defendant's purchase at a price of $850, making the revised net purchase price amount to $87,909 and making minor revisions in the due dates of defendant's notes to cover payment and the amounts thereof. Added to this are the amounts of $879.09 for Mississippi sales (use) tax and $220 for freight, making the total basic debt amount to $89,008.09.

In essence, the defense offered by the answer and in defendant's brief is that there was a collateral oral agreement by which plaintiff contracted to prepare engineering drawings and to install the machinery, except for the cost of labor, and that plaintiff breached these contracts with late delivery, furnishing faulty machinery which was improperly designed, improper order of delivery, improper installation, failure of the machinery as installed to operate properly, and failure of plaintiff to remedy defects.

It is beyond question that all of the discussions upon which defendant relies to establish the collateral agreement or contract took place before the printed form contract was signed by John H. Freeman on July 4, 1962. Clearly the terms and conditions of that agreement as they are contended for by defendant are inconsistent with the plain, unambiguous language of the printed form contract and other writings aforementioned. The printed form contract clearly provides only for the purchase by defendant and sale by plaintiff of certain cotton ginning machinery and the shipment by plaintiff to defendant between July 20 and August 1, 1962, or as soon thereafter as possible. By its terms, the price was fixed F.O.B. factories and defendant undertook to receive the property promptly on arrival and pay the freight and charges on same.

It is proper also to note, with respect to erection or installation of the machinery, the printed form contract provided as follows:

It is understood that if the purchaser desires to employ a contractor to superintend the erection of said machinery, the seller will see to it that the purchaser is offered an opportunity to employ a contractor for a sum of not to exceed $4.00 per manhour. The purchaser agrees to pay the contractor for time from starting point to the place of erection and return, and also to pay all traveling and other expenses of contractor or contractor's employees from starting point to place of erection and return. Purchaser agrees to furnish contractor with any help contractor may need and to furnish any additional materials needed and not covered by the terms of this contract so as to complete the erection of the machinery with dispatch. Should the purchaser employ a contractor recommended by the seller it is expressly understood and agreed that the contractor is an independent contractor and not an agent or employee of the seller, and the seller shall not be liable under any circumstances to the purchaser for the work of the contractor nor shall the seller be liable to the purchaser if seller is not able to find a contractor to recommend to the purchaser.

With respect to any delay in shipment of any of this property by plaintiff, the contract provided as follows:

It is understood that the seller is not to be responsible for any delay in shipping said machinery or articles that may be due to strikes, accidents or any other cause whatsoever, except that resulting from its own or employee's negligence, and in case of delay on account of such negligence, the reasonable rental value of the machinery or articles for the time of such delay shall be liquidated damages therefor. (Emphasis added.)

A paragraph of the printed form contract also negatives the existence of any collateral oral agreement and refers to the warranty obligations of plaintiff as being printed on the back of that contract. This paragraph reads:

When this order is accepted by the seller, it is understood and agreed that same, together with the warranty on the back hereof, which the purchaser expressly declares that he has read and understands, shall be and constitute the entire contract between the purchaser and the seller, and that no agreement, verbal or otherwise, other than as set forth herein, forms any part of this contract. (Emphasis added.)

In the printed contract form dealing with warranty, the provision is as follows:

Seller's obligation under this warranty and purchaser's rights and remedies thereunder are, however, conditioned and limited as follows:

There are then three following paragraphs designated "(a)", "(b)", and "(c)", providing for the return of any parts claimed to be defective in workmanship or material and for the repair or replacement of the part if the same is found to be defective. An alternative remedy is provided whereby the purchaser may give notice of a claimed defect in property subject to this warranty and the seller may send an agent to examine the claimed defect, and if it is found defective, to remedy the defect. It appears without conflict that defendant called on plaintiff under these terms of this contract and that plaintiff complied with all of its duties with respect thereto.

It is also without conflict that defendant never asserted any claim against plaintiff under this contract for any delay in the shipment of any of this property before this suit was filed. As aforementioned, any such claim would necessarily have to be predicated on negligence on the part of plaintiff and the contract liquidated damages for any such delay would be "the reasonable rental value of the machinery or articles for the time of such delay."

It also is without dispute that none of the remaining purchase price of $89,008.09 has been paid by defendant to plaintiff.

Defendant did not call on plaintiff to put defendant in touch with an erector as provided by the contract, although in plaintiff's letter of July 26, 1962, defendant was specifically asked to contact plaintiff's Memphis office in the event the services of an erector would be required to superintend the installation of this machinery, in accordance with the clause in the contract pertaining to erectors.

In these circumstances, defendant's reliance on such authorities as New York Life Insurance Co. v. O'Dom, 100 Miss. 219, 56 So. 379 (1911); Valley Mills Div. of Merchants Co. v. Southeastern Hatcheries of Mississippi, Inc., 254 Miss. 71, 145 So.2d 698 (1962); Chism v. Omlie, 239 Miss. 576, 124 So.2d 286 (1960); Producers Gin Ass'n (AAL) v. Beck, 215 Miss. 263, 60 So.2d 642 (1952); Goldberg v. L. H. Realty Corp., 227 Miss. 345, 86 So.2d 326 (1956); and Dale v. Case, 217 Miss. 298, 64 So.2d 344, 37 A.L.R.2d 811 (1953) and on the other authorities cited is misplaced. The exceptions to the parol evidence rule and the conditions upon which a collateral or independent oral contract may be made by parties who have contracted in writing as illustrated by those cases and authorities simply do not exist here. The language of the contracting documents now before this court are clear and unambiguous. Hence, any discussions or negotiations leading up to their execution by the parties would be merged into and extinguished by them. And, any oral contract by these parties made after the execution of these written documents or collaterally thereto would necessarily have to be supported by a sufficient consideration and mutual advantages or obligations. It would have to be bilateral in benefit or burden. This is not the case here. Defendant does not claim or contend that...