Mt. Holly Min. & Mfg. Co. v. Caraleigh Phosphate & Fertilizer Works

• Decision Date: 04 February 1896
• Docket Number: 140.
• Citation: 72 F. 244
• Parties: MT. HOLLY MINING & MANUFACTURING CO. v. CARALEIGH PHOSPHATE & FERTILIZER WORKS.
• Court: U.S. Court of Appeals — Fourth Circuit

72 F. 244

MT. HOLLY MINING & MANUFACTURING CO. v. CARALEIGH PHOSPHATE & FERTILIZER WORKS.

No. 140.

United States Court of Appeals, Fourth Circuit.

February 4, 1896

John W Hinsdale, for plaintiff in error.

R. O Burton, for defendant in error.

Before GOFF and SIMONTON, Circuit Judges, and BRAWLEY, District Judge.

BRAWLEY District Judge.

The Mt Holly Mining & Manufacturing Company, a corporation in South Carolina, engaged in the mining of phosphate rock, on June 23, 1891, entered into an agreement in writing with the Caraleigh Phosphate & Fertilizer Works, a corporation organized in North Carolina to carry on the business of manufacturing phosphates, whereby the first-named company sold to the last-named 3,000 tons of phosphate rock at $7.25 a ton, free on board the cars at the seller's mines in Berkeley county, S.C.; shipments to begin in September or October, 1891, and to continue at the rate of 500 tons per month, until the contract was performed. Owing to delays in the completion of the works of the Caraleigh Company, the rock was not called for as stipulated, and at the request of said company and by mutual consent there was a postponement of the delivery from time to time, so that but 284 tons had been delivered before April 1, 1892. Meantime the price of phosphate rock had greatly fallen in the market, and about the end of March the Mt. Holly Company sent its bookkeeper, one W. H. Tucker, to Raleigh, to confer with the Caraleigh Company about the outstanding contract of June 23, 1891, and on the evening of March 28th he was invited to a meeting of its board of directors for that purpose, and at that meeting stated that he was authorized to make two propositions for a settlement,-- either to extend the time of the delivery of the rock to January 1, 1893, if the Caraleigh Company would give its notes indorsed by the board, or to cancel the contract if said company would pay $1.75 a ton for the undelivered rock; this being something less than the difference between the contract price and the then market price. A long discussion followed, and the board decided not to accept this proposition, but to make a counter proposition, which, being submitted to Tucker the next morning, was not accepted by him, and on the same day he returned to his home in Charleston. After informing the president and other officers of his company of the nonsuccess of his mission, he was sent back to Raleigh, with directions to waive so much of his former instructions as required the indorsement of the notes by the board, but to insist upon the payment of $1.75 per ton for a cancellation of the whole contract. Upon his return to Raleigh he had an interview with the president and some of the directors of the Caraleigh Company on April 1st, and after considerable discussion the president made a proposition for a settlement, and the following telegrams passed between Tucker and his company:

'Raleigh, April 1, 1892.

'Berkeley Phosphate Co., Charleston, S.C.: Caraleigh offer to cancel 1,500 tons, paying one dollar and a half; settle by note, sixty days, interest six per cent., fifteen hundred tons; three notes, payable January, April, June 1st, ninety-three. Best can do. Answer promptly. William H. Tucker.'

To this telegram, the following reply was received:

'Charleston, S.C., April 1, 1892.

'William H. Tucker: Close. Presume notes indorsed by board. Try to get notes payable within present year. President out of city.

'Berkeley Phosphate Co.'

The Berkeley Company and the Mt. Holly Company are substantially the same corporation, and the reply of the Berkeley Company was sent by its secretary, the president being absent. Upon the receipt of this telegram, which, as will be seen, did not in terms authorize the acceptance of the proposition as made, Tucker, after some further discussion, agreed to settle, and proposed that a written agreement be drawn up, and notes executed in accordance therewith, and offered to cancel the agreement of June 23, 1891; but as he was not in possession of the agreement held by the Mt. Holly Company, the president of the Caraleigh Company would not accept the cancellation of his copy, and so the agreement was not then consummated. Tucker returned to Charleston, and, after acquainting his principals with the terms of settlement upon which he had agreed, and urging the acceptance thereof, a contract was drawn up in accordance therewith; a statement of the account was made up, and notes prepared and forwarded by mail to the Caraleigh Company; also the original contract. Three notes, similar in terms, of one of which the following is a copy, were sent on April 4th:

'$3,044.11.

Charleston, S.C., April 1, 1892.

'On November 1 after date we promise to pay to the order of the Mt. Holly Mining and Manufacturing Company three thousand and forty-four and 11-100 dollars at the People's National Bank, Charleston, S.C. Value received.

'Due November 1-4, 1892.'

The plaintiff likewise inclosed the old contract of June 23, 1891, seller's copy, to be canceled when and after the proposed new contract should be duly accepted in writing, and the notes should be executed by the defendant. The defendant, on April 7th, wrote to the plaintiff the following letter:

'Raleigh, N.C., April 7, 1892.

'Mt. Holly Mining and Manufacturing Co., Charleston, S.C.-- Dear Sir: Your favor to hand yesterday, with notes, new contract, etc. We tried to secure a conference with our attorney to-day, but he was so occupied with a business engagement that he would not confer to-day, but a conference has been set with him for ten o'clock in the morning. The results shall be promptly written you. We deem it not amiss to say in advance of the conference that he advised us in a brief conversation on the street to-day that he thought we would be guilty of business imprudence to give negotiable notes for rock undelivered. We said this much to Mr. Tucker. However, we will write you again tomorrow.

Yours, truly.'

And on April 9th defendant wrote the following letter:

'Raleigh, N.C., April 9, 1892.

'Mt. Holly Mining and Manufacturing Co., Charleston, S.C.-- Dear Sir: We beg leave to return herewith the five notes and new contract duly signed. The old contract we will destroy. Under the advice of our attorney, we have added to the three notes given for undelivered material the following: 'As per contract hereto attached and made a part hereof.' We feel sure you will appreciate that, while we have no idea that we should be sufferers in any way should this have been left off, still that is a piece of business prudence and precaution that it is proper for us to take under the advice cited, and not to incur any liability for criticism either at the hands of our directors or stockholders.

'Very truly yours, Caraleigh Phosphate and Fertilizer Works.

'Per F. B. Dancy, Secretary, Treasurer and General Manager.'

Immediately upon the receipt of this letter with its inclosures the plaintiff sent the following telegram:

'Charleston, April 11th, 1892.

'J. J. Thomas, President Caraleigh Phosphate & Fertilizer Works, Raleigh, N.C.: Letter received. Notes unsatisfactory. We notify you not to destroy contract. Tucker leaves to-night for Raleigh.

'(Signed)

Mt. Holly Mining and Manufacturing Co.'

Tucker returned to Raleigh, and the minutes of the regular meeting of the defendant company, held on April 12th, contains the following:

'Subject brought up was the question of the settlement of the company's contract for phosphate rock with the Mt. Holly Mining and Manufacturing Co. Mr. Smith moved that the

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