D. L. Fair Tie Co. v. Warrell

• Decision Date: 11 April 1927
• Docket Number: 26368
• Citation: 147 Miss. 412,112 So. 24
• Court: Mississippi Supreme Court
• Parties: D. L. FAIR TIE CO. v. WARRELL. [*]

112 So. 24

147 Miss. 412

D. L. FAIR TIE CO. v. WARRELL. ^[*]

No. 26368

Supreme Court of Mississippi

April 11, 1927

Division B

1. COMPROMISE AND SETTUIMENT. Recovery for breach of contract based on alleged compromise or modified1 contract, cannot be had unless compromise contract is established.

Where fight to recover for breach of contract to purchase railroad ties was based on alleged compromise or modified contract whereby it was agreed that seller should stop producing ties and buyer would accept ties, then on hand in settlement of prior contract, recovery could not be had unless such compromise contract was established by a preponderance of the evidence.

2. COMPROMISE AND SETTLEMENT. Recovery could not be had on original contract, where right to recover for breach was based on alleged compromise or modified contract.

Where right to recover for breach of contract for sale of railroad ties was in complaint based on alleged compromise or modified agreement, Whereby seller agreed to stop producing ties and buyer agreed to accept ties then on hand, such compromise agreement could not, on the trial, be disregarded and recovery had on establishing original contract.

3. COMPKOMISE AND SETTLEMENT. Compromise or modified contract in settlement of bona-fide dispute as to doubtful claims constitutes binding agreement.

Where contract for sale of railroad ties was compromised or modified to extent that seller agreed to stop producing ties and buyer agreed to accept ties then on hand, in settlement of bona-fide dispute as to doubtful claims existing between parties, compromise or modified contract between the parties constituted a binding agreement.

4. COMPBOMISE AND SETTTLEMENT. Settlement of bona-fide dispute as to doubtful claims in good faith is sufficient consideration for compromise agreement.

The settlement of a bona-fide dispute as to doubtful claims-between parties, made fairly and in good faith, is a sufficient consideration for compromise agreement based thereon.

5 ESTOPPEL. Sellers basing right to recover on alleged compromise or modified contract will not be heard to contend there was no consideration therefor.

Where sellers in bringing action for breach of contract for sale of railroad ties based their right to recover on alleged compromise or modified contract, whereby they agreed to stop producing ties and buyer agreed to accept ties then on hand, they will not be heard to contend that there was no binding consideration for compromise agreement.

Hon. T. L. LAMB, Judge.

APPEAL from circuit court of Choctaw county, Second district HON. T. L. LAMB, Judge.

Action by the D. L. Fair Tie Company, a partnership composed of D. L. Fair and others, against Lon Warrell. Judgment for defendant, and plaintiffs appeal. Affirmed.

Affirmed.

Reporter's Note: Elaborate briefs, discussing fully the controverted question of fact upon which this case turns, were filed by J. B. Gully and Baskin, Wilbourn & Miller, for appellants, and J. Lem Seawright and W. W. Magruder, for appellee.

Argued orally by R. E. Wilbourn, for appellant and J. Lem Seawright, for appellee.

OPINION

ANDERSON, J.

Appellants, D. L. Fair Tie Company, a partnership composed of D. L. Fair, Claude Fair, and F. L. Fair, brought this action in the circuit court of Choctaw county against appellee, Lon Warrell, to recover the sum of eight thousand seven hundred eighty dollars and fifteen cents damages claimed to have been suffered by appellants because of an alleged breach by appellee of a contract between appellants and appellee, by the terms of which the latter agreed to purchase from the former forty thousand railroad cross-ties. There was a trial resulting in a jury and verdict and judgment for appellee, from which judgment appellant prosecutes this appeal.

The action was based on an alleged verbal contract between appellants and appellee, by the terms of which appellants sold appellee forty thousand railroad cross-ties, subject to the specifications and inspection of the Atchison, Topeka & Santa Fe Railroad Company, at agreed prices, about which prices there was no controversy. Appellants claimed that there were delivered to and accepted and paid for by appellee on the alleged contract twenty-six thousand five hundred seventeen ties, leaving a balance due by appellants to appellee under the alleged contract of thirteen thousand four hundred eighty-three ties, which appellants got out and tendered to appellee, and which appellee refused to accept; that these thirteen thousand four hundred eighty-three ties were then sold by appellants for account of appellee and the proceeds thereof credited to the appellee on their purchase price, leaving due by appellee to appellants the amount sued for.

Appellants were engaged in the railroad cross-tie business, with its principal place of business at Louisville in this state. Appellee was also engaged in that business, with its principal office or place of business at Ackerman, in this state. Appellee had a contract with the Atchison, Topeka & Santa Fe Railroad Company, made through the office of that company at Chicago, Ill., by the terms of which the railroad company agreed to take from appellee all the ties produced by him during the first three months of the year 1921. The specifications for the ties were to be furnished by the railroad company, and they were to be accepted subject to inspection of the railroad company. The prices to be paid appellee by the railroad company for the ties were agreed upon. There was no conflict in the evidence as to the terms of the contract in that respect. Appellants alleged in their declaration, and their testimony tended to establish, that soon after the making of that contract between the railroad company and appellee, the latter made a contract with appellants by the terms of which he agreed to take all the ties appellants might produce during the first three months of the year 1921, at ten cents less per tie than appellee was to receive from the railroad company, subject to the specifications and inspection of the railroad company. Appellee's contention was and the testimony in his behalf tended to establish his contention, that under the terms of the contract between appellants and appellee the former were to ship to the railroad company all ties produced by them during the three months' period referred to above, on appellee's contract with the railroad company, as long as the latter would accept the ties, the ties to be subject to the specifications and inspection of the railroad company, the price to be received by appellants ten cents less per tie than the appellee was receiving from the railroad company; and that the number of ties appellee should purchase from appellants was expressly conditioned upon the number that the railroad company would accept from appellee. Putting it differently, appellants' position was that at the prices agreed upon appellee agreed to take all the ties they could produce during the first three months of 1921, conditioned alone that they should meet the specifications and inspection of the railroad company; while appellee's position was, that he contracted to take at the agreed prices, subject to the specifications and inspection of the railroad company, only such ties as the latter would accept from him under his contract with the railroad company.

Appellants and others from whom appellee had purchased ties proceeded to produce and ship ties to the railroad company under appellee's contract with the railroad company and under their contracts with appellee until the early part of February, 1921, when this condition of affairs came about The effects of the financial crash of the summer of 1920 was not fully felt until the late winter and early spring of 1921. It seems that so far as the prices of railroad cross-ties were concerned, that the big decline took place in the early part of 1921, perhaps during the months of January and February. The railroad company found that it had on land something like six million ties, bought, perhaps, at the peak of prices, and, in order to avoid any further loss, determined to breach...