RN Kelly Cotton Merchant, Inc. v. York, 73-3838 Summary Calendar.

• Decision Date: 20 May 1974
• Docket Number: No. 73-3838 Summary Calendar.,73-3838 Summary Calendar.
• Parties: R. N. KELLY COTTON MERCHANT, INC., Plaintiff-Appellee, v. Kenneth YORK, L. M. York, Hugh D. McLane and Charles Cheek, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

494 F.2d 41 (1974)

R. N. KELLY COTTON MERCHANT, INC., Plaintiff-Appellee, v. Kenneth YORK, L. M. York, Hugh D. McLane and Charles Cheek, Defendants-Appellants.

No. 73-3838 Summary Calendar.^*

United States Court of Appeals, Fifth Circuit.

May 20, 1974.

E. Freeman Leverett, Elberton, Ga., for defendants-appellants.

Eugene A. Epting, Athens, Ga., for plaintiff-appellee.

Before BELL, SIMPSON and MORGAN, Circuit Judges.

PER CURIAM:

Appellee is a cotton merchant who brought this diversity action to obtain specific performance of contracts for the sale of cotton by appellant cotton farmers. The contracts were executed in March, 1973, at a price fair at the time but much lower than that prevailing during the fall when delivery was due. The district court granted the relief sought, finding that by virtue of appellee's own contractual commitments to textile mills, to deliver cotton at prices far below then-current market prices, appellee would suffer irreparable injury if appellants failed to perform.

Appellants' principal contention is that these contracts, being for future delivery of cotton and not having been executed through a recognized commodity change, are invalid under Ga. Code Section 20-602.¹ This statute invalidates commodity futures contracts where no actual future delivery is contemplated, see Fenner & Beane v. Calhoun, 1937, 56 Ga.App. 823, 194 S.E. 51, but these are clearly not such contracts. Section 20-602 also prescribes one circumstance in which contracts for future delivery are valid despite the former prohibition on margin dealing in commodity futures.² However, we do not interpret this provision as being the exclusive method by which enforceable contracts for future delivery may be executed, and to so interpret it would place this statute in conflict with both the subsequently-enacted Uniform Commercial Code³ and also commercial practices which, as shown by this record, are widely accepted in the cotton trade.

Appellants' other contentions are without merit and need not be discussed.

Affirmed.

* Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir., 1970, 431 F.2d 409.

1 Ga.Code Ann. § 20-602 (1965):

"Future delivery contracts of sale, when valid. — All contracts of sale for future delivery of cotton, grain, stocks, or other commodities, (1) made in accordance with the rules of any board of trade, exchange, or similar institution, and (2) actually executed on the floor of such board of trade, exchange, or similar institution, and performed or discharged according to the rules thereof, and (3) when such contracts of sale are placed with or through a regular member in good standing of a cotton exchange, grain exchange, board of trade, or similar institution, organized under the laws of this State or any other State, shall be valid and enforceable in the courts according to their terms: Provided, that contracts of sale for future delivery of cotton, in order to be valid and enforceable as provided herein, must not only conform to the requirements of clauses (1) and (2) of this section, but...