Green v. American Cotton Co.

• Decision Date: 30 December 1901
• Citation: 112 F. 743
• Parties: GREEN et al. v. AMERICAN COTTON CO.
• Court: U.S. District Court — Western District of Tennessee

112 F. 743

GREEN et al. v. AMERICAN COTTON CO.

United States Circuit Court, W.D. Tennessee.

December 30, 1901

At Law. On demurrer to amended declaration.

Arbitration 9

McFarland & Neblett, for the demurrer.

Pierson & Ewing, opposed.

Damages for breach of two contracts. In the one plaintiffs agreed to use defendant's patented compress for making round lap cotton bales. In the other defendant agreed, at fixed graded prices, to buy all the cotton compressed by the plaintiffs. Among numerous stipulations carefully regulating these dealings was one for that classification of the cotton upon which the prices to be paid depended, and, if the parties disagreed about this classification, it was to be submitted to arbitration, as provided in the stipulation. There was no express provision that suit should not be brought until arbitration had, but the defendant demurred to the declaration, upon the ground that such a limitation necessarily was to be implied from the structure of the contract and its numerous provisions, so elaborately defining the dealings upon the basis of an arbitration if the prices were not agreed by the parties.

HAMMOND J.

after stating the facts). The averment in the amended declaration that the plaintiff offered to arbitrate as provided in the contract, and that the defendant company refused, is overlooked by the demurrer and the argument. That, of itself results in overruling it.

But apart from this, it should be overruled. It is conceded that the contract does not in terms prohibit the bringing of a suit until arbitration has been had or offered, but it is contended that such is the necessary implication from the contract. The argument in favor of such an implication is one which only shows that it would have been wise to insert that stipulation in such a contract as this, not that it has been done by the terms relating to the arbitration. The implication that is established by the law is that which necessarily results from the words of the contract, not one indicated as desirable merely by its other characteristics. It is always open to parties to 'imply' anything they may desire or that would seem advisable about their contracts, but the necessary implication of the law is that only which is so plain that a contrary intention cannot be supposed. It is tantamount to a direct expression only because nothing else is inferable. The law does not favor stipulations limiting the ordinary right to sue. While it permits them, if there be not otherwise a clear intention manifested to that end the absence of an express avowal of it is conclusive against the restrictive conception of the contract. A necessary implication is always quite as obvious from the terms of the contract as if the words expressed it in fact. 15 Enc. (2d Ed.) 1074. Rhode Island v Massachusetts, 12 Pet. 657, 723, 9 L.Ed. 1233, 1260, where the words are defined thus:

'Such is the sense in which the common expression is used in the books, ' express words or necessary implication,'-- such as arises on the words, taken in connection with other sources of construction, but not conjecture, supposition, or mere reasoning on the meaning or intention of the writing.'

Hudson Canal Co. v. Pennsylvania Coal Co., 8 Wall. 276, 288, 19 L.Ed. 349, 353, which thus explains the meaning of the words:

'Undoubtedly necessary implication is as much a part of an instrument as if that which is so implied was plainly expressed; but omissions or defects in written instruments cannot be supplied by virtue of that rule unless the implication results from the language employed in the instrument or is indispensable to carry the intention of the parties into effect.'

Again, that court says in Hawkins v. U.S., 96 U.S. 689, 697, 24 L.Ed. 607, 610, that:

'Implied promises or promises in law exist only when there is no express promise between the parties,-- 'Expressum facit cessare tacitum.' Hence, says Chitty, a party cannot be bound by an implied promise, when he has made an express contract as to the same subject-matter.'

Here we have a contract which...