Stroud v. Loper

• Decision Date: 14 October 1940
• Docket Number: 34181
• Court: Mississippi Supreme Court
• Parties: STROUD et al. v. LOPER

198 So. 46

190 Miss. 168

STROUD et al. v. LOPER

No. 34181

Supreme Court of Mississippi

October 14, 1940

Suggestion Of Error Overruled, November 25, 1940.

APPEAL from the chancery court of Scott county, HON. ROBERT G GILLESPIE, Special Chancellor.

Action by Mrs. Nona B. Loper against W. Q. Stroud and wife for foreclosure of trust deed and collection of debt secured thereby, with interest and attorney's fees. From an adverse judgment, the defendants appeal. Affirmed.

Affirmed.

Colbert Dudley, of Forest, and A. B. Amis, Jr., of Newton, for appellants.

An agreement that price of cotton actually delivered should be fixed by New York cotton quotations during specified time was not illegal.

Burgson & Co. v. Williams, Smithwick & Co., 155 Miss. 351 121 So. 817.

The price may be left to be fixed in such manner as may be agreed upon the contract or sale, such as by the market price of the commodity or thing being sold, at a certain time and place or by any other method by which it can be determined or ascertained with reasonable certainty, and without further negotiations between the parties in relation thereto.

55 C. J. 70, 71.

In the case at bar, no future date was designated, nor was a time limit set, nor a reasonable time understood. This difference makes the agreement, as found by the chancellor to exist in the case at bar, fatally defective as a contract for the present sale of the cotton, the price to be determined at a future day.

Where there is a present sale for a price to be determined by future conditions or at a future date, this date must be designated, or a time limit be set, or a reasonable time be understood; and if the date or time of such determination is not designated or ascertainable the agreement, as a contract, is void for uncertainty, lack of mutuality and absence of consideration.

55 C. J. 71.

The provision of the agreement as found by the chancellor to have been the agreement between Stroud and the Loper Mercantile Company was utterly void in its provisions as to fixing of the price so that we have to deal with a contract of sale of cotton where there has been a delivery coupled with the intention of both parties to pass title, but with no valid nor enforceable agreement as to the price.

55 C. J. 224; Jensen v. Turner Brothers et al., 16 S.W. 743; Stout v. Carruthersville Hardware Co., 131 Mo.App. 520, 110 S.W. 619.

A sale "on call" is to be distinguished from a sale for future delivery in that the sale "on call" is made by one who is the owner of the cotton and the delivery is made upon the execution of the contract of sale; whereas in a contract for future delivery the seller may not even own any cotton and may have to go into the market and buy same before the day of delivery.

Baucum and Kimball v. Garrett Mercantile Co. (La.), 178 So. 259; Burgson & Co. v. Williams, Smithwick & Co. (Miss.), 121 So. 817.

It is the contention of the appellant that this was simply a wager or gambling device and no matter in what language it may be clothed or expressed to give it the semblance of legality that it was the plain intention and purpose of the parties to gamble on the future price of cotton and that the consideration for the notes and deed of trust, upon which this suit is brought, is based on these illegal transactions, making them wholly void.

Alamoris v. Clark (Miss.), 145 So. 893; Burgson & Co. v. Williams, Smithwick & Co. (Miss.), 121 So. 817; Faulk v. J. N. Alexander Mercantile Co., 138 Miss. 21, 102 So. 483; Cohn v. Brinson, 112 Miss. 348, 73 So. 59; Ascher & Baxter v. Moyse, 101 Miss. 36, 57 So. 298; Isaacs v. Silver Parry & Co., 87 Miss. 185, 39 So. 420; Campbell v. N. O. National Bank, 74 Miss. 526, 21 So. 400.

Appellee is not entitled to recover, even as a holder "for value" without notice of the illegal consideration for which this note and deed of trust was given.

Skinner Mfg. Co. v. Deposit Guaranty Bank (Miss.), 133 So. 660; Dixie Rubber Co. v. Catoe et al. (Miss.), 110 So. 670; Elkin Henson Grain Co. v. White, 134 Miss. 203, 98 So. 531; Gray v. Robinson, 95 Miss. 1, 48 So. 226; Montjoy v. Delta Bank, 76 Miss. 402, 24 So. 870.

The finding of facts of the chancellor was against the overwhelming weight of the evidence and was manifestly wrong. The first error made by the chancellor was not so much an error of facts as it was of law dealing with facts and with an agreement or contract which was absolutely void because of the failure to fix a reasonable time within which Stroud was to make the price certain, and for the further reason that it was a violation of the law of the State of Mississippi denouncing and out-lawing gambling and wagering contracts and dealing in cotton futures. The chancellor treated this agreement found by him to be the contract, as a valid, legal and binding agreement between Stroud and the Loper Mercantile Company. From this initial error the chancellor plainly, by deduction, arrived at his further conclusion of facts.

There was no settlement of the account between Stroud and the Loper Mercantile Company. There is no evidence to support this proposition or finding of facts by the chancellor. And if there had been such a settlement or compromise, it was error for the chancellor to have treated it as such when it was clearly apparent that the contract on which this settlement was based was an illegal and void contract.

O. B. Triplett, Jr., of Forest, for appellee.

The sales contract between Loper Mercantile Company and appellant Stroud was not a gambling contract.

Burgson & Co. v. Williams, Smithwick & Co., 155 Miss. 351, 121 So. 817, 818.

The cotton was actually delivered by appellants to appellee; the absolute title to the cotton passed from the appellants to the appellee; the only thing left open for future adjustment was the price. The price of a commodity sold need not be definitely fixed at the time of the sale, provided the contract of sale contains an express or implied provision by which the price may be rendered certain in the future.

23 R. C. L. 1277, 1278, sec. 94; Burgson & Co. v. Williams, Smithwick & Co., 155 Miss. 351, 121 So. 817, 818.

In the present case Stroud was the only party who had the right to call for the market price, and this privilege had no time limits placed thereupon; but insofar as the element of gambling is concerned, it would be no more of a gambling contract to grant the seller an unlimited period of time than it would be to permit the seller to have a limited period of time. The only question which could be raised by this distinction in the facts would be whether or not the grant by the buyer to the seller of an unlimited period of time would render the contract unenforceable.

The contract between Loper Mercantile Company and appellant, Stroud, was not void for uncertainty or indefiniteness.

Burgson & Co. v. Williams, Smithwick & Co., 155 Miss. 351, 121 So. 817.

While the price at which the cotton was sold or to be sold, as the proof shows, was not definitely fixed or named at the time of the sale, yet it is shown that the parties did, at the time the contract was made, settle upon a method by which the price was to be determined with certainty.

Jones Cotton Co. v. Snead et al., 169 Ala. 566, 53 So. 988; Mechem on Sales, sec. 210; McBride v. Silverthorn, 11 Up. Can. O. B. 545; McConnell v. Hughes, 29 Wis. 537; Shaw v. Smith, 45 Kan. 334, 25 P. 886, 11 L. R. A. 681; Ross on Vendors, 51; Ames v. Quimby, 96 U.S. 324, 21 L.Ed. 635.

There was no uncertainty or indefiniteness of the prices for the reason that this essential element in the contract was not left open for future agreement or adjustment, but was left for determination and fixation by Stroud and by Stroud alone. He could call for his money and fix the price of all the cotton delivered by him on any date by accepting the market price on the date of his demand.

The compromise agreement in 1931 was a final determination of the cotton contract and fixed appellant's future...