R. L. Kimsey Cotton Co., Inc. v. Ferguson

• Decision Date: 17 March 1975
• Docket Number: Nos. 29541-29544,s. 29541-29544
• Citation: 233 Ga. 962,214 S.E.2d 360
• Court: Georgia Supreme Court
• Parties: , 16 UCC Rep.Serv. 1223 R. L. KIMSEY COTTON COMPANY, INC. v. J. D. FERGUSON et al. J. D. FERGUSON et al. v. R. L. KIMSEY COTTON COMPANY, INC. R. L. KIMSEY COTTON COMPANY, INC. v. Ivan EVANS et al. Ivan EVANS et al. v. R. L. KIMSEY COTTON COMPANY, INC., et al.

Page 360

214 S.E.2d 360

233 Ga. 962, 16 UCC Rep.Serv. 1223

R. L. KIMSEY COTTON COMPANY, INC. v. J. D. FERGUSON et al.

J. D. FERGUSON et al. v. R. L. KIMSEY COTTON COMPANY, INC.

R. L. KIMSEY COTTON COMPANY, INC. v. Ivan EVANS et al.

Ivan EVANS et al. v. R. L. KIMSEY COTTON COMPANY, INC., et al.

Nos. 29541-29544.

Supreme Court of Georgia.

March 17, 1975.

Rogers, Magruder & Hart, Dudley B. Magruder, Jr., Rome, King & Spalding, A. Felton Jenkins, Jr., Atlanta, for appellant.

Greene & Greene, William B. Greene, Cartersville, for appellees.

Syllabus Opinion by the Court

JORDAN, Justice.

This case involves the fundamental question of the validity and enforceability of certain contracts for the purchase of cotton entered into in March of 1973 between the parties to this appeal.

In Case No. 29541 the R. L. Kimsey Cotton Company, Inc. (hereinafter referred to as 'Kimsey') brought suit against four defendants (hereinafter called 'farmers') seeking specific performance of four cotton contracts attached to the complaint and injunctive relief to prevent the farmers from disposing of their cotton to anyone other than Kimsey.

In Case No. 29543 Kimsey and W. B. Dunavant & Co., to whom Kimsey had contracted to sell cotton, brought suit against five farmers seeking identical relief against them based on similar cotton contracts attached to the complaint.

Upon consideration of the pleadings, depositions and affidavits and after hearing argument thereon the trial court denied Kimsey's motion for summary judgment and its motion to strike certain defenses, at the same time denying the farmers' motion for judgment on the pleadings and denying the farmers' motion to dismiss for failure to state a claim. The trial court certified the cases for immediate review. Kimsey is the appellant in Case No. 29541 and Case No. 29543. The farmers' cross appeals are the subject of Cases Nos. 29542 and 29544.

Prior to this ruling by the trial court a temporary restraining order was issued and an interlocutory injunction enjoined the defendant farmers from violating their respective contracts; allowed the delivery and sale of the cotton, and required the posting of bonds by both parties to secure the payment of damages incurred by either party pending final judicial determination.

At the hearing in the trial court the parties stipulated that all of the contracts were duly executed by the respective parties; that the cotton in question was unique and injunctive relief was proper; and that all of the defendant farmers had repudiated their contracts.

While admitting the execution of the contracts, the farmers by their pleadings raised essentially four defenses, (1) that the contracts are vague and indefinite in that the subject matter of the contracts cannot be identified as to quantity with sufficient particularity; (2) that the contracts lack consideration and mutuality; (3) that the contracts are so unconscionable that they should not be enforced by the court through specific performance or otherwise, and (4) that there was fraud in the procurement of the contracts.

1. The contracts under consideration here are substantially similar to the contracts involved in the recent case of Harris v. Hine, 232 Ga. 183, 205 S.E.2d 847.

One of the contracts attached to the complaint (all others being identical except for the farmer's name, the price in some instances, the farm location and acreage) reads in part as follows:

'This contract made and entered into this day by and between J. D. Ferguson of Rt. 1, Taylorsville, Georgia hereinafter referred to as Producer and Seller and R. L. Kimsey Cotton Co., Inc., Rome, Georgia hereinafter referred to as Buyer. Witnesseth: 1. On the terms and conditions and at prices hereinafter stated, the Producer and Seller agrees to sell, and the Buyer agrees to buy, all and only the cotton produced by the Producer and Seller during the crop year 1973 on approximately 230 acres situated in Bartow County, Georgia and Polk County, Georgia.'

Paragraph 2 of the contract specified the price for all grades and staples at 30.00cents 'except all below grade cotton @ 24.50cents'; specified that the cotton must be hand or spindle picked and ginned and delivered by December 20, 1973; that no false packed or cotton picked up from the ground and no stripper cotton was eligible.

Paragraph 3 of the contract provided that the 'Producer and Seller agrees to practice normal, good farming methods in the production and harvesting of the crop'; to defoliate and gin as fast as practicable; and allowed the Buyer the privilege of 'controlling within reason the amount of heat and cleaning equipment to be used in ginning.'

Paragraph 4 was eliminated and paragraph 5 pertains only to furnishing samples.

Paragraph 6 listed the farms covered by A.S.C.S. numbers.

Paragraph 7 reads as follows: 'We, the Producer and Seller and Buyer, have carefully read and fully understand the terms and provisions of the foregoing contract which represents the entire agreement between the parties, and understand further that there may be no modification of this agreement except in writing.'

We unhesitatingly held in Harris v. Hine, 232 Ga. 183, 205 S.E.2d 847, supra, that such contracts were 'output' contracts for the sale of all of the farmers' cotton produced by them during the crop year 1973 as defined in Code Ann. § 109A-2-306(1) and are not vague and indefinite as to quantity and subject matter. We likewise hold these contracts to be valid as to quantity and subject matter and sufficient to satisfy the requirements of the Uniform Commercial Code Statute of Frauds. Code Ann. § 109A-2-201(1). See R. N. Kelly Cotton Merchant v. York, 494 F.2d 41 (5th Cir. 1974), where the circuit court upheld the validity of a similar contract for the future delivery of cotton against an attack based on Code § 20-602.

Specific performance of these contracts is available to the plaintiffs here since the parties stipulated that the cotton involved was unique. Code Ann. § 109A-2-716. Cf. Duval & Co. v. Malcom, 233 Ga. 784, 214 S.E.2d 356.

2. It is clear from an examination of the contracts that the farmer(s) obligated to sell and the buyer was obligated to buy 'all and only the cotton' produced by the seller for the crop year 1973. Under such circumstances the contracts are supported by good and sufficient consideration and are not lacking in mutuality. 'A promise of another is a good consideration for a promise.' Code § 20-304. The contracts contain mutual obligations equally binding on both parties to the contracts and were equally enforceable by each.

3. The farmers next contend that the contracts are unconscionable to the extent that they should not be enforced by a court of equity, citing and relying on Campbell Soup Company v. Wentz, 172 F.2d 80 (Third Cir. 1948) and Ga.Code Ann. § 109A-2-302. In Wentz, the court looking to all corners of that contract, concluded that 'we think it is too hard a bargain and too one-sided an agreement to entitle the plaintiff to relief in a court of conscience.' The paragraph found most objectionable by the court in Wentz excused Campbell from accepting carrots under certain circumstances and prevented the seller from selling them elsewhere unless Campbell agreed. That and other objectionable provisions are not present in these cotton contracts.

'The basic test is whether, in...