South Carolina Cotton Growers' Co-op. Ass'n v. Weil

• Citation: 220 Ala. 568,126 So. 637
• Decision Date: 19 December 1929
• Docket Number: 3 Div. 833.
• Parties: SOUTH CAROLINA COTTON GROWERS' CO-OP. ASS'N v. WEIL ET AL.
• Court: Supreme Court of Alabama

126 So. 637

220 Ala. 568

SOUTH CAROLINA COTTON GROWERS' CO-OP. ASS'N v. WEIL ET AL.

3 Div. 833.

Supreme Court of Alabama

December 19, 1929

Rehearing Denied March 20, 1930.

Appeal from Circuit Court, Montgomery County; Leon McCord, Judge.

Action of assumpsit by the South Carolina Cotton Growers' Co-operative Association against Isadore Weil and others partners doing business as Weil Bros. From a judgment for defendants, plaintiff appeals.

Affirmed.

McDonald & McDonald, of Winnsboro, S. C., and Elliott & McLain, of Columbia, S. C., and Ball & Ball, of Montgomery, for appellant.

Well Stakely & Cater and Hill, HIll, Whiting, Thomas & Rives, all of Montgomery, for appellees.

BROWN J.

This action is assumpsit by appellant against appellees to recover an amount alleged to be due on the purchase price of a large quantity of cotton, purchased by the defendants from the plaintiff in five separate transactions or contracts.

The complaint consists of the common counts, and special counts relating to each of the several transactions. The pleas were the general issue, payment, and accord and satisfaction.

The record is voluminous, consisting of approximately two thousand pages, and on this record appellant has made three hundred and forty assignments of error.

Our examination of the case, however, has been rendered less burdensome by the able argument and briefs of the parties, limiting consideration to questions of law arising from the refusal of special charges requested by the appellant, and the giving of the affirmative charge for the defendants.

The plaintiff is a corporation organized and existing under the Act of the General Assembly of the State of South Carolina, approved March 29th, 1921, entitled "An Act to Promote and Further Co-operative Marketing." Acts 1921, No. 203 (32 St. at Large, p. 339).

Section 6 of the act provides:

" Powers of Incorporated Associations.-Each association incorporated under this Act shall have the following powers:

"(a) To engage in any activity in connection with the marketing, selling, harvesting, preserving, drying, processing, canning, packing, storing, handling or utilization of any agricultural products produced or delivered to it by its members; or the manufacturing or marketing of the by-products thereof; or in connection with the purchase, hiring or use by its members of supplies, machinery or equipment; or in the financing of any such activities, or in any one or more of the activities specified in this section. No association, however, shall handle the agricultural products of any non-member, except by special rules and regulations.

"(b) To borrow money and to make advances to members.

"(c) To act as agent or representative of any member or members in any of the above mentioned activities.

"(d) To purchase or otherwise acquire, and to hold, own, and exercise all rights of ownership in, and to sell, transfer, or pledge shares of the capital stock or bonds of any corporation or association engaged in any related activity or in the handling or marketing of any of the products handled by the association.

"(e) To establish reserves and to invest the funds thereof in bonds or such other property as may be provided in the by-laws.

"(f) To buy, hold and exercise all privileges of ownership, over such real or personal property as may be necessary or convenient for the conducting and operation of any of the business of the association or incidental thereto.

"(g) To do each and everything necessary, suitable or proper for the accomplishment of any one of the purposes or the attainment of any one or more of the objects herein enumerated; or conducive to or expedient for the interest or benefit of the association; and to contract accordingly; and in addition to exercise and possess all powers, rights and privileges necessary or incidental to the purposes for which the association is organized or to the activities in which it is engaged; and in addition, any other rights, powers and privileges granted by the laws of this State to ordinary corporations, except such as are inconsistent with the express provisions of this Act; and to do any such thing anywhere."

The stated purposes for which the incorporation is formed, among others, are:

"(a) To promote, foster and encourage the business of marketing cotton and cotton seed cooperatively; to minimize speculation and waste in the production and marketing of cotton and cotton seed and their products; to stabilize cotton markets; to handle cooperatively and collectively the problems of cotton growers;

"(b) To engage in any activity in connection with the grading, handling, processing, treating, storing, shipping, warehousing and marketing of cotton and cotton products of the association and of its members; and in the financing of any of said operations;

"(c) To purchase and sell any cotton or cotton products of its members," etc. ***

"(k) To do each and everything necessary, suitable or proper, in the judgment of the Directors of this Association, anywhere throughout the world, for the accomplishment of any of the purposes or attainment of any one or more of the objects herein enumerated, or which shall at any time appear conducive to or expedient for the interests or benefit of the Association and the members thereof and to contract accordingly. ***"

"( l) The operations and activities of this Association shall be limited to activities arising out of the processing, treating, grading, manufacturing, shipping, storing, warehousing, handling and marketing of cotton or cotton products, or cotton seed or cotton seed products, of the Association and of its members only and to the financing of any of the said operations;

"The Association shall not be permitted to buy or sell cotton or cotton seed except from and for its members only and on a standard cooperative basis. It shall not buy or handle any cotton or cotton seed whatsoever from non members; or to be permitted to go in the open market to buy cotton or any cotton products, or cotton seed or cotton seed products whatsoever;

"(m) The Association shall be expressly forbidden to do anything with the intent or effect of lessening the production or use or consumption of cotton or cotton seed; but this Association shall do everything within its power to prevent speculation in the handling of cotton and cotton products and cotton seed and cotton seed products and to secure for its members a fair price for their cotton or cotton products in the market of world; and do everything reasonable within its power to stabilize to a fair level downward the prices to be paid by the ultimate consumers; to increase the sale, use and consumption of cotton and cotton products by all possible commercial and merchandising methods; and to use every possible means to improve the supply and to extend and increase the demand for cotton and cotton products and cotton seed and cotton seed products;

"(n) This Association shall have and exercise all powers, privileges and rights authorized by the laws of this State and all powers and rights incident thereto."

The corporation is managed by a board of not less than five directors, "elected by the members or stockholders from their own members," and this board is authorized to "elect from their members a president, one or more vice presidents and a secretary and treasurer."

The defendants are cotton merchants engaged extensively in buying and selling spot cotton, with their principal office and place of business in Montgomery, Ala., and maintain offices and warehouses in Columbus and Savannah Ga., and an office in New York.

The several different contracts of sale, out of which the controversy between the plaintiff and defendants arose, are similar in import and legal effect, and the statement of one of the transactions is deemed sufficient to develop the principles of law applicable.

The record shows that the board of directors of the plaintiff consists of eleven members, and what is referred to in the proceedings of the board as "the management" consists of the sales manager, his assistants, and the office manager. By resolution of the board of directors, adopted April 9, 1923, "the management" was given "carte blanche authority to sell cotton."

On May 15, 1923, Arthur Mazyck was re-elected sales manager, and James L. Respess was elected office manager. On September 12, 1923, a resolution was adopted by the board of directors authorizing the management "to sell cotton from time to time as it sees fit, with power to sell on call."

After negotiations conducted by the plaintiff's sales manager, by wire in its name, the defendants mailed to the plaintiff the following:

"Purchase and Sales Memorandum from Weil Brothers.

"Duplicate.

"October 16, 1923.

"South Carolina Cotton Growers' Cooperative Association., Columbia, S. C.

"Dear Sir: We beg to confirm purchase today, as follows:

Number bales, 2,000 b/c (Two Thousand Bales)

Grade, 1,000 b/c Strict Mid., 1000 b/c Good Middling.

Growth and Staple, 7/8" to 1".

Price Per Pound, (St. Middling at 60 points on Dec. N.Y. on call.

(Gd. Middling at 100 points on Dec. N.Y. on call.

Freight paid to, Shipside, high density Savannah.

Shipment Time, First half of November.

Reimbursement, Payment against documents.

Terms, Seller's call on or before shipment.

"Remarks, Grades, weight, and staple to be determined in Savannah. We to patch in Columbia and to deduct amount of patching from reweight at Savannah. When ready to fix price sell Decembers for our account thru our New York office, (Weil Brothers, Cotton Exchange Bldg. New York, N. Y.) Advise when ready to ship and we will send instructions."

This confirmation was signed by the defendant and "a...