Ingalls Steel Products Co. v. Foster & Creighton Co., 6 Div. 96.

Decision Date26 May 1932
Docket Number6 Div. 96.
Citation145 So. 464,226 Ala. 122
CourtAlabama Supreme Court

Rehearing Granted Dec. 15, 1932.

Rehearing Denied Jan. 27, 1933.

Appeal from Circuit Court, Jefferson County; Roger Snyder, Judge.

Action for breach of contract by the Foster & Creighton Company against the Ingalls Steel Products Company. From a judgment for plaintiff, defendant appeals.

Transferred from Court of Appeals under section 7326, Code of 1923.

Reversed and remanded on rehearing.

THOMAS and KNIGHT, JJ., dissenting.

J. D Rucker, L. B. Bewley, and Bradley, Baldwin, All & White, all of Birmingham, for appellant.

Lange Simpson & Brantley, of Birmingham, for appellee.


The case was submitted to the jury on counts 3 and 5 of the complaint as last amended.

Count 5 does not state a cause of action, either ex contractu or ex delicto. It merely avers, in substance, that defendant, acting through its sales agent, Ryan Sales Company, represented that it would furnish certain steel products to the plaintiff for use in a building for a specified price; that, relying upon said representations, the plaintiff bid for the construction of said building, basing its bid in part on the representation of the defendant, and was awarded the contract, and thereafter the defendant refused to furnish said steel to plaintiff at said price, and plaintiff had to buy the steel elsewhere at a greater price. These averments fall short of showing that defendant contracted to furnish such steel, or that the plaintiff had any legal right to rely on defendant's said representations in making said bid, or that plaintiff was under any legal obligation to accept said steel if defendant had furnished the same. The averments of this count show, at most, a mere invitation on the part of the defendant to plaintiff to enter into negotiation, and such invitation, without more, cannot be made the basis of a legal cause of action. 6 R. C. L. p. 600, § 23; Benton v. Springfield Young Men's Christian Ass'n, 170 Mass. 534, 49 N.E. 928, 64 Am. St. Rep. 320; Anderson v. Public School, 122 Mo. 61, 27 S.W. 610, 26 L. R. A. 707; Cherokee Tanning Extract Co. v. Western Union Tel. Co., 143 N.C. 376, 55 S.E. 777, 118 Am. St. Rep. 806.

The concluding averment in said count, "and plaintiff claims that the conduct of the defendant constitutes a legal fraud," is but a bald conclusion of the pleader, unsupported by the facts averred, and adds nothing to the count. To state a cause of action ex delicto for breach of duty growing out of a contract, the averments of the count must needs show a valid contract supported by a consideration. Newton et al. v. Brook, 134 Ala. 269, 32 So. 722.

Count 3 undertakes to state a cause of action of special assumpsit for breach of contract, by setting out in hæc verba the evidence upon which plaintiff relies to establish the contract. This violates the rules of good pleading, and is not to be commended, and should not be encouraged by the trial court.

The negotiation for the supposed contract originated in a written offer submitted on May 11, 1928, by the defendant through its sales agent, Ryan Sales Company, acting through one Holt, the offer stipulating in accordance with the limited authority of the agent: "This proposal when accepted by the buyer, and approved in writing by an officer of the seller at Birmingham, Alabama, becomes a contract in full force and building on both parties." This offer is signed: "Ingalls Steel Products Company, Ryan Sales Company, By E. F. Holt," and immediately under this signature is the following: "Approved at Birmingham, Alabama, By _____, Title _____," and at the left of the written offer is written: "Accepted Foster & Creighton Co., By N. F. Creighton, Pres. *** Date May 12, 1928." (Italics supplied.)

It is familiar law that "the offerer has a right to prescribe in his offer any conditions as to time, place, quantity, mode of acceptance, or other matters which it may please him to insert in and make a part thereof, and the acceptance, to conclude the agreement, must in every respect meet and correspond with the offer, neither falling short or going beyond the terms proposed, but exactly meeting them at all points and closing with them just as they stand." 13 C.J. p. 279, § 82; Paterson & Edey Lumber Co. v. Carolina-Portland Cement Co., 215 Ala. 621, 112 So. 245.

It is likewise well settled that, when such offer is made through an agent, the principal may expressly reserve the right to approve the offer and acceptance, and the mode of their approval. Paterson & Edey Lumber Co. v. Carolina-Portland Cement Co., supra.

The offer made through Ryan Sales Company clearly shows that it was contemplated that the offer and acceptance was not to close the transaction, until the offer and acceptance were approved "by an officer of" Ingalls Steel Products Company "at Birmingham, Alabama," by affixing his signature to the contract.

Count 3 does not aver that the offer and acceptance were so approved, or that the contract was executed by the parties thereto, but undertakes to supply this necessary element to the cause of action by setting out in hæc verba a letter of date May 15, 1928, to which was attached a memorandum, showing specifications, price, and shipping directions, on which was written: "Please Note-This is an acknowledgment of your order as we understand it and we will ship accordingly." This was signed: "Yours very truly, The Ingalls Steel Products Company." To quote the letter of the same date, "Attached is formal acknowledgment of your order given to Ryan Sales Company for the above mentioned job. As soon as we receive architectural plans, we will make up shop drawings and forward for approval. Shipment can be made rather promptly after approval of shop drawings. Your very truly, The Ingalls Steel Products Company, By Thomas A. Lucy, Chief Engineer." (Italics supplied.)

Taking this letter and the memorandum as meeting the requirements of approval of the offer and acceptance by an officer of the defendant corporation, the pleader assumes the completion of the contract by the further averment, "Plaintiff avers that upon the execution of the contract, between plaintiff and defendant, plaintiff contracted for a fixed sum to erect the building," etc. Construing these averments most strongly against the pleader, they are clearly open to inference that the letter of May 15, 1928, signed by Lucy, was not intended as an approval as contemplated by the offer, but as a mere acknowledgment of the order pending receipt of the architectural plans to be furnished by the offeree and the making up of shop drawings for its approval. It also leaves to mere inference that Lucy was such officer of the Ingalls Company as could approve the offer and acceptance.

The demurrer interposed to said counts 3 and 5 specifically points out their insufficiency, and the court erred in overruling the demurrer. It is insisted, however, that the ruling was rendered harmless for two reasons: First, that the execution of the contract was not put in issue by a plea of non est factum, duly sworn to, and the due execution of the contract must be taken as confessed upon the record.

The answer to this contention is that the burden was on the plaintiff to prove prima facie the existence of the contract and its breach. 13 C.J. 756-7, §§ 927, 928; Hood v. Disston & Sons, 90 Ala. 377, 7 So. 732.

The general rule is that, where a written contract is the foundation of the suit and the complaint alleges its execution by the defendant, in the absence of a sworn plea denying its execution, the plea of the general issue confesses of record the execution of the contract and relieves the plaintiff of proving its execution. Carter et al. v. Long Bros., 125 Ala. 280, 28 So. 74, 77; Longstreet & Sedgwick v. Rea & Co., 52 Ala. 195; Oil Well Supply Co. v. West Huntsville C. M. Co., 198 Ala. 501, 73 So. 899.

In Carter et al. v. Long Bros., supra, it was observed: "The case of Ledbetter v. Vinton, supra [108 Ala. 644, 18 So. 692], is directly in point, both as to the sufficiency of a complaint upon a note averring the defendant's execution thereof by his indorsement, and as to the necessity for a sworn plea to meet such averments. With the exception of Flowers v. Bitting, 45 Ala. 448, which was overruled in Wimberly v. Dallas, 52 Ala. 196, our decisions have been uniform in holding that section 1801 [Code of 1896; § 7663, Code of 1923] *** construed with other statutes, requires a denial by a verified plea to put in issue the defendant's execution of a written instrument the foundation of a suit, whenever such execution is averred in the complaint, whether it is purported by the instrument itself or not." (Italics supplied.)

And in Wimberly v. Dallas, supra: "This section of the Code is a substantial re-enactment of the territorial statute of 1811, (Clay's Dig. 340,§ 152), and must receive the construction given to that statute, in obedience to the rule on which this court has uniformly proceeded, that in the adoption of the Code, the legislature is presumed to have known the judicial construction former statutes had received, and therefore the re-enactment in the Code of provisions substantially the same as those contained in the former statutes, is a legislative adoption of their known judicial construction. *** The construction of the statute of 1811 was, that the allegation of the execution of the instrument sued on was mere matter of description, and if the instrument produced conformed to the description, no proof of execution was necessary, in the absence of a verified plea. *** Pursuing these decisions, this court construing the present statute, in the case of Ala. Coal Mining Co....

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