Hogue-Kellogg Co. v. GL Webster Canning Co.

• Citation: 22 F.2d 384
• Decision Date: 18 October 1927
• Docket Number: No. 2631.,2631.
• Parties: HOGUE-KELLOGG CO., Inc., v. G. L. WEBSTER CANNING CO., Inc.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

22 F.2d 384 (1927)

HOGUE-KELLOGG CO., Inc., v. G. L. WEBSTER CANNING CO., Inc.

No. 2631.

Circuit Court of Appeals, Fourth Circuit.

October 18, 1927.

Vivian L. Page and Ivor A. Page, both of Norfolk, Va. (Ivor A. Page, Jr., of Norfolk, Va., on the brief), for plaintiff in error.

James E. Heath, of Norfolk, Va., for defendant in error.

Before PARKER and NORTHCOTT, Circuit Judges, and ERNEST F. COCHRAN, District Judge.

PARKER, Circuit Judge.

The Hogue-Kellogg Company, a corporation of California, was plaintiff in this action in the court below, and the G. L. Webster Canning Company, a corporation of Virginia, was defendant, and for convenience they will be so designated in this opinion. The action was instituted to recover on a contract for the sale and purchase of a shipment of beans, and the defense was that the beans were not of the quality called for in the contract, and also that the contract itself was not enforceable, because parts of it were not printed in the size type required by the statute of Virginia. The case was heard by the judge on a written waiver of jury trial. He held that the contract was not enforceable because of the statute relied on, and on this ground alone entered judgment for the defendant.

The contract upon which action was instituted was dated February 26, 1925. It was on a printed form furnished by the plaintiff to the defendant, and stated that defendant had bought, and plaintiff had sold, 60,000 pounds of Henderson bush Lima beans f. o. b. port, on the terms and conditions stated on the reverse side of the contract. These terms and conditions provided that the beans should be shipped to seller's order with draft against bill of lading, which was to be held for arrival and inspection of shipment; that goods should be at risk of buyer from and after delivery to carrier, buyer assuming responsibility as to shortage, loss, delay, or damage in transit upon issuance by carrier of clear bill of lading or shipping receipt; that the contract, to be binding upon the seller, must be confirmed in writing by it; and that seller was not to be responsible for performance, unless both original and duplicate, properly signed by buyer, should be delivered to seller within 15 days for final execution. It is admitted that all of the terms and conditions were plainly printed, but in type smaller than what is known as "10 point."

The contract was signed by defendant and sent to plaintiff in Ventura, Cal., and there signed by plaintiff. The finding of the District Judge with respect to its execution was as follows:

"The contract in question was obtained as the result of tenders sent out from time to time by the seller to the customer of the trade as the result of which bids were obtained which, when accepted, were confirmed by written contract; the contract being prepared by the seller, sent to the buyer, signed by the latter and returned to the seller, signed by it and confirmation forwarded to the buyer. * * * The contract was undoubtedly made in California, for it was sent by the buyer to the seller in California and signed there by the seller and did not become a binding contract until it was so signed."

The court below held that the plain intent of the parties was that the contract was to be performed in Virginia, that for this reason the validity of the contract was to be determined by the law of that state, and that under the statute, section 5562a of the Virginia Code (Michie's Code 1924) the contract was not enforceable. That section is as follows:

"Sec. 5562a. Size of type in contracts. — No contract in writing entered into between a citizen of this state and any person, firm, company or corporation, domestic or foreign, doing business in this state, for the sale and future delivery of any goods or chattels, machinery or mechanical devices, or personal property of any kind or sort whatsoever, shall be binding upon the purchaser, where the form is printed and furnished by the person, firm, company or corporation, unless all of the provisions of such contract are clearly and plainly printed or written; and, where printed, such provisions and covenants and all stipulations as to the rights of the vendor shall be in type of not less than the size known as 10 point; and, wherever in such contract, printed upon a form furnished by the vendor, it is stipulated that said vendor is not to be bound by any verbal agreement or modification of the terms of such printed contract, then such stipulation shall be printed as a separate paragraph or paragraphs and in type not smaller than pica. Should any of said contract, including the special stipulation hereinbefore mentioned, be printed in less than the size of type hereby prescribed, and the agent or salesman of such person, firm, company or corporation enter into any verbal or written collateral agreement with the vendee, on the part of the person, firm, company or corporation, modifying or changing said printed agreement or the parts of said contract which are printed, then the vendee may, in any action instituted to enforce such contract, or the payment of any sum of money agreed to be paid under said contract, be allowed to introduce such collateral agreement, or contract in modification thereof, or any verbal statement made by said agent or salesman in modification thereof, in evidence in such action, and the same, if proved, shall be considered by the court or jury trying the case as a part of such printed contract."

Two questions are presented in the case: (1) Whether the contract was rendered invalid by the statute because parts of it were not printed in the size of type required; and (2) whether recovery should not be denied on the theory that the statute, like the fourth section of the statute of frauds, relates to the remedy and prevents the maintenance of an action on a contract which does not meet its requirements. We think that both of these questions must be answered in the negative.

For the reasons hereinafter pointed out, we do not think that the purpose of the statute was to invalidate absolutely a contract not printed in the size of type required, nor do we think that such is its reasonable interpretation; but quite apart from this, we are satisfied that the statute cannot affect the validity of the contract in question for the reason that with respect to matters affecting the formalities of execution it is not governed by the law of Virginia, even if it be assumed that it was to be performed in that state. The learned District Judge correctly held that it was executed in California. It did not become a binding contract until signed by the plaintiff in California, and the rule applies that a contract is deemed to be executed in the state where the final act is done which is necessary to make it binding. Bell v. Lamborn (C. C. A. 4th) 2 F.(2d) 205; Tilden v. Blair, 21 Wall. 241, 22 L. Ed. 632; Equitable Life Society v. Clements, 140 U. S. 226, 11 S. Ct. 822, 35 L. Ed. 497; Milliken v. Pratt, 125 Mass. 374, 28 Am. Rep. 241; Williston on Contracts, Vol. 1, Sec. 97; Minor on Conflict of Laws, Sec. 157. And, as the contract was executed in California, its formal validity — i. e., its validity with respect to such matters as the formalities of execution, requirements as to writing, etc., — is to be determined by the law of California The rule with respect thereto is well stated by Prof. Minor in his work on Conflict of Laws, § 172, pp. 410, 411, as follows:

"By the formal validity of a contract is meant the necessary compliance with the forms and ceremonies prescribed by law upon entering into certain contracts. It is evident that if the forms and ceremonies thus prescribed by the law of a state are essential to the validity of the contract, if entered into in that state, there can never have been any contract if those forms are wanting. Such matters relate to the making of the contract, and are therefore to be governed by the law of the situs of the making (the lex celebrationis). On the other hand, if the contract is entered into with all the forms required by the lex celebrationis, it is equally obvious that the omission of some of the forms demanded by the law of the place of performance of the contract is immaterial. The law of the latter place manifestly only applies to contracts made there; to hold otherwise would be to suppose its Legislature intent upon usurping the authority of other states over acts...