McLure v. Wilson

• Decision Date: 03 July 1923
• Docket Number: 2102.
• Citation: 292 F. 109
• Parties: McLURE et al. v. WILSON et al.
• Court: U.S. Court of Appeals — Fourth Circuit

292 F. 109

McLURE et al. v. WILSON et al.

No. 2102.

United States Court of Appeals, Fourth Circuit.

July 3, 1923

J Gordon Hughes and P. D. Barron, both of Union, S.C., for plaintiffs in error.

H. J Haynsworth and C. F. Haynsworth, both of Greenville, S.C. for defendants in error.

Before WOODS and WADDILL, Circuit Judges, and GRONER, District Judge.

WOODS Circuit Judge.

In this action by the seller against the buyer for damages for breach of a contract for the purchase of cotton, the defense was that the contract was void under the South Carolina statute because the seller did not own the cotton at the time of the sale, and it was not intended that actual cotton should be delivered by the seller and received by the buyer. The evidence is mainly documentary and there is little dispute as to the facts.

The plaintiffs, S. B. Wilson & Co., are cotton merchants in Memphis, Tenn., and Clarksdale, Miss. The defendants were not individually in the cotton business, one of them being a dealer in real estate and the other in dry goods in Union, S.C. But both were interested in the Union Cotton Company, which was engaged in buying and selling cotton; and defendants negotiated the purchase through that company.

On October 7, 1920, Union Cotton Company wrote plaintiffs:

'We beg now to confirm our wires of to-day. * * * Also, have sold to W. S. McLure and J. F. McLure, one hundred and fifty bales as follows: 75 bales type 'Wick' Strict Mid. at forty-seven cents (47 cts.) landed during January. 75 bales type 'Troy' strict. Mid. at twenty-nine and one-half cents (29 1/2 cts.) landed during Dec. * * * The present intention of the parties who have bought the above cotton is to have it shipped to Union, S.C., where they will store it. However, they will instruct as to this later. Send us your contracts and we will have same properly signed.'

Under the same date a contract was signed by the defendants confirming the sale, describing the cotton, specifying delivery in December and January, 'freight paid to Group 'B' points' (meaning any point in Piedmont region of South Carolina or North Carolina), 'bill lading attached, documents to Union, S.C.' Afterwards, on November 23, 1920, by request in writing of defendants the deliveries were put forward from December and January to March and April. On December 1st defendants reaffirmed their letter of November 23d, setting out change in delivery to March and April.

On March 4th and 9th by letters and on March 11th by telegram, plaintiffs asked defendants for shipping instructions. Defendants not having replied, plaintiffs, on March 15th telegraphed them that they would be held for all damages and loss for failure to carry out the contract. On the same day defendants answered by wire, denying their obligation and refusing to accept cotton.

Thus it appears that the written contract and every letter and telegram expressed in the clearest manner that both parties intended and understood from first to last that actual cotton of the kind described was to be delivered. In addition, the plaintiff S. B. Wilson testified that when offer to deliver cotton was made plaintiffs had it on hand ready for delivery; and that they made all sales to customers with the intention to deliver the cotton contracted for.

The letter from Union Cotton Company to plaintiffs was competent because the defendant W. S. McLure testified he made the contract through that company. But if incompetent its admission was not material because it contained nothing that was not expressed in the contract signed by defendants. Advice of the plaintiffs to defendants as to the rise or fall of cotton could not affect the issue, and cross-examination on that subject was properly rejected.

Section 3421, South Carolina Code of 1912, provides:

'Every contract, bargain or agreement, whether verbal or in writing, * * * for the sale or transfer at any future time of any cotton, grain, meats, or any other animal, mineral or vegetable product of any and every kind, shall be void unless the party contracting, bargaining or agreeing to sell or transfer the same is * * * or unless it is the bona fide intention of both the parties to the said contract, bargain or agreement, at the time of making the same, that the said certificate, bond or other evidence of debt, cotton, grain, meats or other animal, mineral or vegetable product so agreed to be sold and transferred shall be actually delivered in kind by the party contracting to sell and deliver the same, and shall be actually received in kind by the party contracting to receive the same at the period in the future mentioned and specified in the said contract, bargain or agreement for the transfer and delivery of the same.'

Section 3422 puts the burden of proving that in the making of such contract both parties bona fide intended that the property should be actually delivered and received in kind at the future period mentioned in the contract.

Effect has been given to the provision of the statute that both parties must intend actual delivery to make the contract...