Heidenheimer v. Cleveland

• Decision Date: 10 November 1891
• Parties: HEIDENHEIMER v. CLEVELAND <I>et al.</I>
• Court: Texas Supreme Court

17 S.W. 524

HEIDENHEIMER v. CLEVELAND et al.

Supreme Court of Texas.

November 10, 1891.

Commissioners' decision. Section A. Appeal from district court, McLennan county; EUGENE WILLIAMS, Judge.

Action by Isaac Heidenheimer against Cleveland & Cameron for breach of contract. The court directed a verdict in defendants favor, and plaintiff appeals. Reversed.

McLemore & Campbell, for appellant. Clark, Dyer & Bolinger, for appellees.

MARR, J.

The present action was brought by the appellant against the appellees to recover damages of them on account of an alleged breach of contract for the sale of 200,000 pounds of bacon between the parties. The appellant contracted for the sale of the bacon to the appellees, and in August, 1883, tendered the bacon, but the latter refused to receive the same. The appellees pleaded a repudiation and non-performance of the contract upon the part of the appellant, but, as the case was decided entirely upon the supposed illegality of the agreement, it is unnecessary to consider any other issue. In fact, all of the assignments of error refer to that question. The contract was in writing, and executed on the 1st day of February, 1885. It is as follows: "State of Texas, county of McLennan: Know all men by these presents that I, Isaac Heidenheimer, of Galveston county, Texas, for and in consideration of one dollar, to me in hand paid, the receipt whereof is hereby acknowledged, have this day sold to Messrs. Cleveland & Cameron, of Waco, McLennan county, Texas, two hundred thousand (200,000) pounds of Fowler Brothers' make and packing of short, clear, smoked bacon sides, packed in their regular style of packing, same to be sound, sweet, merchantable bacon of the kind named; Cleveland & Cameron to pay for same on receipt of bill of lading and invoice; the price to be ten dollars and eighty-five cents per hundred pounds, (or 10.85c per pound;) said meat to be delivered to Cleveland & Cameron's order, at any time during the month of August, 1883, they paying freight on same from Kansas City, Missouri. This contract is made on a basis of $10.10 per one hundred pounds, or 10.10c. per pound, which means that, in event the price of the kind of bacon herein named exceeds the sum of 10.10, then, in that event, Isaac Heidenheimer pays to Cleveland & Cameron the sum of such excess, based on the quantity of two hundred thousand (200,000) pounds, and said Cleveland & Cameron are authorized to make their sight draft on said Heidenheimer for such excess, and, should the price shrink or decline below the basis rate of 10.10, then, under such circumstances, Isaac Heidenheimer can draw on said Cleveland & Cameron for such decline below the price 10.10, and on the quantity as herein named. [Signed] I. HEIDENHEIMER. CLEVELAND & CAMERON. Witness: J. HARRIS. C. H. JONES."

It will be observed that the stipulation in reference to drawing drafts according to the fluctuations of the market price of the bacon contained in the latter portion of the contract does not necessarily refer to the final execution of the contract, if that in fact was contemplated by the parties. The time for drawing such drafts is not specified, and the basis, 10.10, does not coincide with the price, 10.85, (in addition to freight,) to be paid for the meat by the appellees in August, 1883, which is the time agreed upon in the preceding part of the contract for the delivery of the bacon. The appellant's counsel now contend, as they contended in the court below, that the contract was of doubtful import, and its proper construction uncertain, looking alone to its terms; and that, therefore, extrinsic evidence was admissible to explain it, and a resort could be had to the practical construction, which the parties by their own acts put upon it, in order to enable the jury to determine its true intent and meaning. In support of this view, the appellant was allowed to introduce a mass of testimony without objection, so far as the record discloses. He testified himself that the contract was made in good faith, and that an actual delivery of the bacon was contemplated and intended by the parties to the contract; that neither he nor his firm dealt in "futures;" that the drawing of the drafts mentioned in the contract was intended to secure its performance. R. B. Hawley, the partner of the appellant, and who became interested in the contract shortly after it was made, with the consent of the appellant, testified for the plaintiff, and gave a fuller explanation of the latter portion of the contract. He says: "What is meant by paying differences according to the fluctuation of the market price is that the given per cent. on amount of money is required to be paid or put up by one party or the other, buyer or seller, in order to secure or make certain the ultimate performance of the contract where the article dealt in is agreed to be delivered at some future time. The amount is intended as a security in case of rise or decline in the market. The contract of February, 1883, was so understood, as the correspondence shows, and there was no understanding to the contrary, and the meat was ordered out by the telegram of August 18, 1883, as it had been agreed it might be done. The meat was accordingly shipped as soon as it could be after receipt of the telegram" (from appellees.) Again he says: "It is not true that our firm dealt largely or otherwise in bacon future contracts. We did not sell any bacon that was not to be delivered. When the letter of March 26th was written the price of meat [Fowler Bros.] was not in our favor, and it did not commence to decline until May." He also states that this letter explains the reasons why the draft for $1,800, drawn by appellees, was not honored. Further: "The parties to the contract had a right to call on each other for margins, from time to time, after the date of the contract, until the date of its fulfillment." He also explains that the proposition to make a new contract was not on account of any supposed illegality of the old one, but to protect the firm by allowing the substitution of another brand of meat in the event Fowler Bros. should go out of business, or raise the price of their meat, and "force Heidenheimer to pay more than its market value." That "they had made no specific arrangements with Fowler Bros. for the meat by August 3d, as that was deemed unnecessary, as they could fill the order for 10 car-loads for Cleveland & Cameron at any time after reasonable notice," etc. Other proof clearly shows that the requisite amount of bacon was shipped at the instance of appellant to Waco, in the name of R. B. Hawley & Co., and arrived there on the 27th of August, and was tendered to the appellees. Appellee Cleveland, in his testimony, in effect admits that this was done. His objection to receiving the meat was that it had been consigned to Hawley & Co. Elsewhere he says: "The meat did not come up to my order. I ordered the meat as telegraphed for, and meant what I said. Was advised meat was shipped August 22, '83. Don't remember if I replied. The bill of lading was indorsed `R. B. Hawley,' and draft drawn by Hawley was the condition of the paper. I did not have any idea of taking the meat. Would not have taken it on that kind of paper." On the 18th of August, by telegram, Cleveland & Cameron, finding that appellant had not secured the meat with Fowler Bros., and bacon having gone down in price, by telegram designated the 21st day of August as the ultimate date at which they would receive the bacon. Notwithstanding they had pleaded non-fulfillment of the contract upon the part of appellant, Mr. Cleveland, in his testimony, makes some astonishing statements in this connection as to his modus operandi of preventing the delivery of the bacon. He says, upon cross-examination: "After I found that Heidenheimer never had any meat, I fixed it so he could not get any, and closed the contract. To use a common expression, I `cornered' the market, and then ordered. I cornered it for about 3 days." (Evidently from the 18th to the 21st of August, inclusive of the last date.) Nowhere, so far as we can discover, does either of appellees in their testimony say that the original contract did not contemplate the delivery of the bacon. We shall now insert the chief portions of the correspondence between the parties upon the issue of whether an actual delivery of the bacon was contemplated or intended by the contract.

"Galveston, Feb'y 17, '83. Mess. Cleveland & Cameron, Waco — Gents: I inclose herewith a new contract for the meat sold you, which please sign in place of old one. My reason for asking you to do this is that the other contract stated that the meat should be Fowler's, and, as I am going away this summer, and may not have that brand, and want to leave all matters in such shape as to avoid any failure on my part to fulfill my contract, I substitute this one, which will do as well, as the meat must be standard and merchantable. When you sign it, please date it at same time. Meat is worth to-day 11c. in Kansas City. Awaiting your early reply by return mail, I am, yours, truly, [Signed] ISAAC HEIDENHEIMER. F."

"Galveston, Feb'y 21, '83. Mess. Cleveland & Cameron, Waco — Gents: Yours of ____ date received and noted. I now inclose another contract for you to sign before witnesses, which you can send down to any party here, and I will sign before witnesses. This contract, when signed, can be deposited at any bank, say at Ball, Hutchings & Co., here, or at Shepperd's Bank in Houston. You may designate the place. I ask this for the reason that the other contract reads: `Fowler Bros.' meat to be delivered;' and, in case they should burn out, and I should not be able then to get it, you could hold me to the brand, while this contract gives me the option to furnish as good an article under brand of Plankinton and Armour's in case I should be unable, from some cause out of my power, to furnish Fowler Bros.' meat. As I intend...