Forsyth Mfg. Co. v. Castlen

Decision Date26 November 1900
Citation37 S.E. 485,112 Ga. 199
CourtGeorgia Supreme Court

Syllabus by the Court.

1. An executory agreement for the sale of goods to be delivered at a future day is valid, though at the time the seller has not the goods in his possession, has not contracted to purchase them, and has no expectation of acquiring them otherwise than by producing, manufacturing, or purchasing them at some time before the day of delivery.

2. Such a transaction is not rendered invalid by the provisions of section 3537 of the Civil Code, unless it is made to appear that neither of the parties contemplated an actual delivery of the goods, and that it was the intention of both that there should be no actual delivery, but that on the day fixed for delivery there should be a settlement of their differences based on the market value of the goods on that day. In that event, the transaction would be a pure speculation upon chances, but not otherwise.

3. When a contract is valid upon its face, or, when taken in the light of the circumstances surrounding the parties at the time it was entered into, appears to be valid, it is incumbent on him who attacks the contract to show its invalidity.

4. Although, at the time an executory agreement for the future delivery of goods was entered into, the seller intended to fulfill his contract by delivery of goods produced by him and this fact was known to the buyer, the seller would have a right to deliver, and the buyer would be bound to receive any goods of the character and quality stipulated in the contract, when it was not agreed that the goods delivered must be produced by the seller.

5. In determining whether an executory agreement for the future delivery of cotton was valid as one in which an actual delivery of cotton was contemplated, or whether the transaction was a pure speculation on chances, evidence that the seller was a producer of cotton, and had at the date of the agreement cotton planted and growing, was relevant.

6. When a contract appears to have been reduced to writing, before parol evidence can be admitted to show a collateral agreement it must appear, either from the contract itself or from the attendant circumstances, that the contract is incomplete, and that what is sought to be shown as a collateral agreement does not in any way conflict with or contradict what is contained in the writing.

7. An executory agreement for the future delivery of goods of a specified class and quality is, in legal effect, an agreement for the delivery of any goods of that class and quality, no matter where made or by whom produced; and, when such an agreement is reduced to writing, parol evidence is not admissible to show that there was a collateral agreement between the parties that the goods specified in the contract should be produced by the seller.

8. There was no error in overruling the demurrer to the petition. The rulings on evidence which were complained of were free from error. The evidence authorized the verdict and nothing appears in the record which warrants a reversal of the judgment refusing a new trial.

Error from superior court, Monroe county; E. J. Reagan, Judge.

Action by A. W. Castlen against the Forsyth Manufacturing Company. Judgment for plaintiff. Defendant brings error. Affirmed.

Stone & Williamson, Persons & Persons, Bloodworth & Rutherford, and Hardeman, Davis & Turner, for plaintiff in error.

R. L. Berner and Cabaniss & Willingham, for defendant in error.


Castlen brought suit against the Forsyth Manufacturing Company upon a contract of which the following is a copy: "This agreement, made and entered into this the 25th day of April, 1898, by and between the Forsyth Manufacturing Company, of the first part, and A. W. Castlen, of the second part, both of the county of Monroe and the state of Georgia, witnesseth: That the party of the first part hereby agrees to pay the party of the second part six cents per pound for one hundred and fifty bales of lint cotton, to be delivered at the warehouse of said Forsyth Manufacturing Company on the Central Railroad, just above Forsyth, in good merchantable order, at times below set forth. The party of the second part hereby agrees to deliver at the place above designated one hundred and fifty bales of lint cotton, said cotton to be delivered to the Forsyth Manufacturing Company as follows: Fifty bales in September, fifty bales in October, and fifty bales in November, 1898, at the place above set forth, and in good merchantable order, all bales to weigh more than 450 pounds each; and should the party of the second part fail or refuse to furnish the full amount of fifty bales each month, as above set forth, then the second party forfeits one-half cent per pound for each pound not delivered at end of each month of the fifty bales." This contract was signed by both parties therein mentioned. At the trial it appeared that Castlen was a cotton planter, that this fact was known to the president of the defendant company, and that at the date the contract was entered into Castlen had upon his land cotton planted and growing. It also appeared that Castlen had delivered to the defendant 100 bales of cotton, which were raised upon his place, and which were received by the defendant, and paid for under the contract. Six bales raised on the plaintiff's place were delivered, and received in due time, but have never been paid for. The plaintiff tendered to the defendant in November a sufficient number of bales to complete the contract, but the defendant company refused to receive and pay for these bales, on the ground that they were not raised upon the land of Castlen. This action is brought to recover for the six bales of cotton which were received and not paid for, and for damages on account of the failure to receive and pay for the number of bales tendered in November which were necessary to complete the contract. The jury, under the charge of the court, returned a verdict in favor of the plaintiff. The defendant made a motion for a new trial, which was overruled. The case is here upon a bill of exceptions assigning error upon the decision of the judge overruling a demurrer to the petition, and upon the judgment refusing to grant a new trial.

1. As a general rule, a person who owns property has the right to dispose of it to another. When the one who has the right of property is in actual possession, this right of disposition is subject to few restrictions. In order to make a complete sale of property whereby the title would pass from the seller to the buyer, it is necessary that the thing which is the subject of the sale should have an actual or potential existence at the date of the sale. It has been held that a mortgage upon a crop of cotton is valid, if at the date of the mortgage the cotton was planted and growing. Crine v Tifts, 65 Ga. 644; Stephens v. Tucker, 55 Ga. 543. See, also, Jones v. Richardson, 10 Metc. (Mass.) 488; Van Hoozer v. Cory, 34 Barb. 9. On the other hand, it has been held that a sale of a certain number of bales of cotton of a crop of a given year, made before the seed were planted, passed no title to the vendee, for the reason that nothing can be the subject of bargain and sale which has no actual or potential existence at the date of the sale, and until the crop is actually growing, or at least until the seed is planted, the crop cannot be said to have even a potential existence. Noyes v. Jenkins, 55 Ga. 586. See, also, Redd v. Burrus, 58 Ga. 574; Huntington v. Chisholm, 61 Ga. 270; Wheeler's Ex'rs v. Wheeler, 2 Metc. (Ky.) 474; Low v. Pew, 108 Mass. 347, 11 Am.Rep. 357. If a contract provides for the delivery by one party to another of that which is not only not in the possession of the person contracting to sell, but which has no existence, either actual or potential, while the contract cannot be upheld as a sale, the parties to the same may be bound by the terms thereof as constituting an executory agreement to sell. While there can be no sale of an article which is not in existence, it is legally possible for one to enter into an executory contract to sell such an article in the future, when it does come into existence. 2 Kent, Comm. (14th Ed.) pp. *468 et seq., *492, note. See, also, Newm. Sales, p. 93, § 68. The right to enter into a contract for the sale of a thing which was to come into existence in the future was recognized by the civil law. 1 Dom. Civ. Law (Cushing's Ed.) § 310; McKeldey, Roman Law, § 400. The rule of the civil law, that future things might be the subject of an obligation, was, however, subject to the exception which prohibited "dealers from buying corn or hay before the harvest, wool before the shearing," etc., and such contracts were declared to be void. 1 Poth. Obl. top page 170. The distinction between a contract for the sale of goods and an executory agreement for future delivery is clearly drawn in cases where the question arose as to whether contracts of the latter character were within the seventeenth section of the statute of frauds. It has been held that contracts for the sale of goods, wares, and merchandise are not excluded from the operation of this section of the statute, merely because they are executory; and also that contracts for the sale of goods not in esse at the time, and of a peculiar character, so as to be unsuited to the general market, to be made by the work and labor and with the material of the vendor, at the instance of the purchaser, are not within the section. Cason v. Cheely, 6 Ga. 554. See, also, Benj. Sales (7th Am. Ed.; Bennett's) § 92 et seq. The right of a person to enter into a contract to deliver property not in his possession, relying upon making a future purchase in time to fulfill his undertaking, was doubted...

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