Gano v. Delmas

• Citation: 140 Miss. 323,105 So. 535
• Decision Date: 19 October 1925
• Docket Number: 25035
• Court: United States State Supreme Court of Mississippi
• Parties: GANO v. DELMAS. [*]

105 So. 535

140 Miss. 323

GANO v. DELMAS. ^[*]

No. 25035

Supreme Court of Mississippi

October 19, 1925

Division B

APPEAL from circuit court of Jackson county, HON. D. M. GRAHAM Judge.

Action by Claude Delmas against S. A. Gano. Judgment for plaintiff and defendant appeals. Affirmed.

Affirmed.

Denny &amp Heidelberg and Harry Gamble, for appellant.

The question raised is whether the contract as sued on was "In violation of the provisions of chapter 88 and chapter 119 of the Laws of Mississippi, 1908, on trusts and combines, and particularly in violation of sections 3281-3283, Hemingway's Code as contrary to the public policy of the state of Mississippi."

I. The appellant's contention is that the contract here sued on is in violation of the provisions of the Anti-Trust Statutes, as shown by the terms of said contract, and expressed in the following language: "The quantity of 'Royal Cement' mentioned on the reverse side hereof is sold and delivered for use in the work described, and if buyer shall sell or otherwise dispose of any portion of said cement, or use any portion thereof in any work other than that described, or assign this contract or any part thereof, or fail to comply with the terms of payment, or any of the conditions and limitations of this contract, or if the buyer's credit becomes impaired, then in any such event or events, seller may, at his option, decline to make further deliveries hereunder, buyer remaining liable for all unpaid accounts."

If such a contract as this is not in restraint of trade; if it does not hinder and prevent the selling and exchanging of personal property, or an article or commodity of trade that is in every day use, and in this day a necessary and indispensable article of commerce, we are at a loss to understand what kind of an agreement or contract would be in restraint of trade. If said contract, we submit in candor and frankness, is not for the fixing, maintaining and restricting of prices unlawfully and arbitrarily, we cannot conceive of one that would be. 24 R. C. L., sec. 655, page 364; McCall v. Pearson-May-Pberschmidt Co., 107 Miss. 865, 66 So. 274; McCall v. Hughes, 102 Miss. 375, 59 So. 794, 42 L. R. A. (N. S.) 63.

So far as we have been able to find there is an unbroken line of decisions from Coke, cited above, to this day, both in England and this country, that any attempted restriction as to the use of personal property bought and paid for, will not be recognized by the court, unless it be with reference to some particular item or article of personal property of which the intrinsic value thereof is not the real consideration, but refers specifically to heirlooms and articles akin to them. Elijah & Winne v. Mottinger, 142 N.W. 1030, 161 Iowa 361; Brown v. Staple Cotton Co-Op. Association, 96 So. 849; Kosciusko Oil Mill Co. v. Wilson Cotton Oil Co., 43 So. 435; Y. & M. V. R. R. Co. v. Scales, 85 Miss. 528, 37 So. 942.

Under the common law and the expressed terms of the statute and under the decisions cited above, as to the construction and applicability, it is manifest that the contract here sued on is within the rule as announced by the common law, and in violation of the anti-trust statute. It is in violation of each of the sub-divisions of the statute enumerated in the demurrer. It is in restraint of trade in that it requires the public work to be constructed with but one specified brand of cement, furnished by a specified person and from a specified manufacturer, and prohibits the appellant from procuring cement of equal quality from other sources than through the buyer, the appellee herein, even though the shipper, the Dixie-Portland Cement Company, could not supply same according to the requirements of appellant, whereby the public work would suffer and the business of the county and the appellant. As further authorities on this point, see Universal Film Co. v. Copperman, 218 F. 577, and Waltham Watch Co. v. Keene, 212 F. 225.

II. It is stipulated in the contract that the cement should be furnished by the Dixie Portland Cement Company, subject to contingencies of manufacturing and shipping and other causes beyond control of shipper and seller, and cement to be delivered as nearly as practicable to meet the necessities of the work upon reasonable notice of time for deliveries; and that shipments are to be at "the market price of Royal cement at the date of shipment." "But not higher than the price named therein;" that prices quoted are "based on freight rates in effect on date of quotation and are subject to revision if freight rates are changed."

In Hart v. Gardner, 74 Miss. 153, 20 So. 877, it is stated that the purpose of all rules of construction is to effect the intention of the parties to the instrument. In Wall v. DeJet, 76 Miss. 104, 23 So. 437, it is held that it is the duty of the court in construing a contract to place itself in the situation of the parties at the time the contract was made, and to ascertain their intention from the contract, in the light of the situation and looking also to the subject-matter. See also Pratt v. Canton Cotton Oil Co., 51 Miss. 470; Tufts v. Greenwald, 66 Miss. 360, 6 So. 156.

Manifestly the intention of the parties was that the market price of the cement to be shipped under the contract would be such as would prevail at the plant of the Dixie Portland Cement Company, the point of shipment, plus freight to the point of delivery. It is in the testimony and undisputed that the price of Royal Cement in New Orleans, La., at the time that appellant refused to accept cement from the appellee, was two dollars and eighty-two cents per barrel, and that said cement was shipped from the point of manufacture, a point near Chattanooga, Tenn., to New Orleans, by way of the Louisville & Nashville R. R. Co., through the very points or by the very stations where three dollars and thirty cents and later three dollars and twenty cents per barrel was demanded.

It is further shown by the undisputed testimony of the appellant that he did go into the open market and buy cement of a quality and grade equal to the Royal Cement for the price of two dollars and eighty-two cents per barrel, delivered at the points called for in the contract, and that the price of two dollars and eighty-two cents which the appellant paid for the cement delivered to him at points mentioned in the contract here sued on was the same price that prevailed at New Orleans, for the cement. 16 Cyc. 1143. See Paxton v. Myer, Weis & Company, 58 Miss. 445.

If, however, we should be in error in our contention that "market price" in this case is price at the manufactory plus freight to the point of delivery, then we earnestly beg to submit that the determination of "market price" of Royal Cement at points of delivery is not to be settled by the arbitrary fiat of the Dixie Portland Cement Company to its exclusive dealer, Delmas, but by what was its market value. That is to say, when "market price" is not discoverable by proof of free sales of the commodity in the open market, then its "market value," if discoverable, becomes its "market price." See especially McGarry v. Superior Portland Cement Company, et al. (1917), 95 Wash. 412, 163 P. 928, American and English Annotated Cases, Vo. 1918A, p. 578 and note. This case holds that justice can be done only by interpreting the phrase. in this contract, "market price," by its true meaning, which is "market value," the facts of the case considered.

It is our contention, therefore, that the term "market price" used in the Delmas-Gano contract was not in the intention of the parties and cannot be held in law, a price such as the manufacturers chose to maintain at the points mentioned in the contract, under a contract already made by his exclusive dealer, and with which the manufacturer was familiar; but was intended by the parties, and will be held in law, to be the price such as that quality of cement could actually be purchased and delivered for. This view is fully sustained by a note to the foregoing case, in Ann. Cas. 1918 A at 575.

We now sum up our contentions, as follows: The demurrer should have been sustained, holding that the contract was in restraint of trade in violation of the statutes of Mississippi and the Sherman Anti-Trust Law; or the contract had been breached by the plaintiff in that he refused to reduce the price of Royal Cement to keep pace with the reduction of cements of similar quality. Wherefore, we submit that the judgment of the lower court should be reversed, and this case dismissed.

White & Ford, for appellee.

The question presented is whether Delmas is entitled to recover profits he would have made had the contract been carried out. The proof fixed it at ten cents per barrel. The authorities generally hold that profits may be recovered where definite. Delta, etc., v. Yazoo, etc., 105 Miss. 861; Ice Company v. Holliday, 106 Miss. 714; Stevenson v. Morris, 69 Miss. 234.

While our friends on the other side have cited no case holding or tending to hold that Delmas' contract with Gano would have been met by his furnishing cement other than Royal, yet that was one of the principal contentions in the court below, and out of an abundance of precaution, we cite a few cases showing the fallacy of this contention. Shackelford v. Sloss Iron & Steel Co., 36 So. 1005, 140 Ala. 329; Daggy v. Cox, 19 Ind. 142; Hiatt v. Harris, 28 Ind. 379; King v. City of Rochester, 38 A. 256, 67 N.H. 310; Lowry v. Cooper, 21 Ind. 269; Clark v. Wright, 5 Phila. 432.

Looking at the contract to get the intention of the parties as to what market price was contemplated, manifestly market price at points of delivery was intended. There is nothing whatever in the contract to warrant the conclusion that New Orleans price was...