Miravalle Supply Co. v. El Campo Rice Milling Co.

Decision Date09 May 1950
Docket NumberNo. 14003.,14003.
Citation181 F.2d 679
PartiesMIRAVALLE SUPPLY CO., Inc. v. EL CAMPO RICE MILLING CO.
CourtU.S. Court of Appeals — Eighth Circuit

COPYRIGHT MATERIAL OMITTED

Walter H. Pollman, St. Louis, Mo. (Charles A. Neumann, St. Louis, Mo., on the brief), for appellant.

Joseph L. Badaracco, St. Louis, Mo. (John S. Leahy and Roberts P. Elam, St. Louis, Mo., on the brief), for appellee.

Before SANBORN, WOODROUGH and THOMAS, Circuit Judges.

THOMAS, Circuit Judge.

The El Campo Rice Milling Company, a Texas corporation of the city of El Campo, Texas, hereinafter called plaintiff, sued the Miravalle Supply Company, Inc., a Missouri corporation of the city of St. Louis, Missouri, hereinafter called defendant, demanding judgment for $11,958.15 for rice admittedly sold the defendant on account on April 5, 1947, and for interest and costs. The defendant admitted the amount of the claim subject to right of set-offs for five counterclaims: (1) for $560; (2) for $2,640; (3) for $805; (4) for $2,223.07; and (5) for $1,210.37, or a total of $7,438.44, with interest.

The case was tried to the court without a jury. The court found for defendant on its first counterclaim for $560 and interest, denied recovery on the other four counterclaims, and entered judgment for plaintiff on October 18, 1948, for a balance of $12,435.89 including interest, and for costs. Defendant appeals.

Plaintiff's cause of action and defendant's counterclaims all grow out of the performance of a contract entered into between the parties as of October 5, 1946, by the terms of which plaintiff sold to defendant 22,000 pockets of rice. The contract prepared by plaintiff at its home office in El Campo, Texas, was accepted by defendant at St. Louis, Missouri, on October 16, 1946.

A rice millers' regular printed form of contract was used which recited that "the buyer Miravalle Supply Company has purchased from the seller El Campo Milling Company certain commodities in the amount of, and for the price and under the terms and conditions hereinafter set forth, to wit:". The blank spaces of the printed contract under the designated headings were filled in by plaintiff on the typewriter and are set out in italics as follows:

"Quantity 22,000 pockets

"Description 96% Whole Grain Texas Patna to grade average season's quality of the rice that we pack in cartons.

"Price ceiling price at time of shipment fob El Campo

"Time of Shipment 2,000 pkts. October, 1946, 5,000 pkts. each November, December, 1946 January, February, 1947

"Shipping instructions to be furnished by buyer."

Then followed the other terms of the contract in print:

"(1) Shipping Instructions: The buyer agrees to furnish in writing complete shipping instructions to the seller at least five full business days before the date each shipment is required to be made. In the event that the buyer should not furnish instructions, the seller may then, at his option, and upon notifying the buyer, cancel this agreement, or sell the merchandise for the account of the buyer, or extend the time of shipment on terms mutually agreed upon in writing.

"(2) Routing: Seller shall recognize delivering transportation line when requested by buyer, but all other routing shall be at the option of the seller.

"(3) Separability: This agreement is separable; any breach, waiver, or change as to any lot or partial delivery herein stipulated, shall not alter the obligations of the parties as to any other lot, portion or partial delivery herein agreed upon.

"(4) Delivery: The buyer agrees that in every case, delivery to the transportation company shall constitute delivery to him, and in the event that the buyer shall require that the goods be shipped to his order and/or freight prepaid or allowed, he especially agrees that after delivery of the goods to the carrier, the seller shall be acting for his account and accommodation.

"(5) Liability: The seller shall not be liable for damages arising from his failure to make delivery caused by fire, flood, strikes, riots, car shortage, embargoes on freight, postponement or suspension in sailing of steamers, loss of merchandise in transit, Acts of God, or any circumstances or accident beyond his control.

"(6) Marine Insurance: Seller is authorized to take out the necessary marine insurance for an amount ten per cent in excess of the invoice value, and buyer agrees to pay at current rates said expense in addition to and at the time of payment of contract price.

"(7) Examination: Buyer shall have the right to examine the goods upon arrival and within three business days after such arrival he must give notice to the seller by telegraph, confirmed by mail, any claim for damages on account of condition, quality or grade, and specify the basis of his claim in detail. Failure of the buyer to comply with these rules shall constitute irrevocable acceptance of the goods and bind him to pay the price thereof.

"(8) Terms of Payment: Draft with order notify Bill of Lading attached, seller's order notify buyer. One per cent discount to be allowed for payment of draft within ten days of its date, otherwise net cash."

The word "Patna" is the trade name of a quality or type of rice. A "pocket" of rice weighs 100 pounds, a "bale" 60 pounds and a "case" 50 pounds, "packed in cartons."

During all of the time involved in the controversy the "ceiling price" at which rice could be sold at wholesale was prescribed by the federal Office of Price Administration (OPA).

Before November 18, 1946, the ceiling price of Texas Patna Milled Rice was $9.90 per hundred pounds; after November 18, 1946, it was $10.60. Before November 18, 1946, the ceiling price of Early Prolific Milled Rice was $7.80 per hundred pounds and thereafter $8.65 per hundred pounds.

At all times material to the controversy the price of containers was as follows: Per 100 pounds in Kraft bags containing 3 pounds of rice each, $0.90; per 100 pounds in bags containing 1 pound of rice each, $1.50.

As indicated above, defendant's first counterclaim for $560 was sustained by the court. Since no appeal was taken therefrom it is not in controversy here.

Defendant's second counterclaim for $2,640 is for alleged overcharges for rice shipped as follows:

                  November 25, 1946, invoice $1,134.00
                  November 29, 1946,    "       567.00
                  November 30, 1946,    "       680.00
                  December 3, 1946,     "       259.00
                    (370 pockets only considered)
                                             _________
                               Total,        $2,640.00
                

The controversy involves only the proper interpretation of the contract. The facts are not in dispute. On October 26, 1946, defendant sent to plaintiff the following telegram:

"El Campo Milling Co.

"Ship 5000 Patna in Pockets Against Contract between November 1st and November 7th Stop Acknowledge This Instruction. Please Have Sold This Lot.

"Miravalle Supply Co."

The contract, it will be observed called for shipment of 2,000 pockets of rice in October, 1946, and 5,000 pockets each in November and December, 1946, and in January and February, 1947. 1,800 pockets only had been shipped in October, 1946, leaving 200 pockets of the quota for that month which added to the November quota made a total of 5,200 pockets for shipment in November. The seller did not ship the rice according to the shipping instructions contained in the telegram of October 26, 1946, but made the shipments on which overcharges are claimed in November and December, 1946, as shown above. The OPA ceiling price rose on November 18, 1946, from $9.90 per pocket to $10.60 per pocket, and all shipments made after November 18th were billed at the ceiling price in effect on the date of shipment, resulting in the alleged overcharge claimed. The shipments were made in accordance with paragraph (8) of the contract, that is, with "Draft with order notify Bill of Lading attached", and were paid by defendant under protest. It is defendant's contention that the contract means that shipments in November should have been made promptly five days after shipping instructions were furnished to plaintiff.

The court found that each shipment or delivery of rice by the seller to the purchaser under the contract constituted a separate purchase and that the invoice prices charged on each and all shipments after November 18, 1946, were at the OPA ceiling prices at the time of shipment and delivery. And the court held in Conclusion of Law paragraph 4: "Clause (1) of the printed contract form is a clause inserted for the protection of the seller and does not contemplate a limitation on the delivery specified in the typewritten portions of said contract, and there is no obligation on the seller to make shipments other than as set out in the typewritten portions of said contract."

Thus it is clear that only a question of law is involved in the counterclaim of defendant now under consideration, namely, the proper construction of the contract. The parties agree that the contract and its execution are governed by Missouri law. The question of law is whether the court erred in holding that clause (1) of the printed portion of the contract is solely for the protection of the seller with no obligation to make shipments other than as set out in the typewritten portion of the contract.

The elementary rules governing the interpretation of written contracts in the Missouri courts do not differ substantially from the rules applied in other courts. The object of construction generally is to determine the intention of the parties to the contract in question. In Missouri the rule is that a contract must be construed so as to give effect to the intention of the parties as collected from the whole instrument, if possible, and conflicting provisions must be reconciled if reconciliation can be effected by any reasonable interpretation. Mathews v. Modern Woodmen, 236 Mo. 326, 342, 139 S.W. 151, Ann.Cas. 1912D, 483; South St. Joseph Live...

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