Terry v. International Cotton Co.

• Decision Date: 20 September 1912
• Citation: 75 S.E. 1044,138 Ga. 656
• Parties: TERRY v. INTERNATIONAL COTTON CO.
• Court: Georgia Supreme Court

75 S.E. 1044

138 Ga. 656

TERRY v. INTERNATIONAL COTTON CO.

Supreme Court of Georgia

September 20, 1912

Syllabus by the Court.

There was evidence sufficient to authorize the court to submit to the jury the question whether the person claimed to be the agent of the plaintiff in fact acted as such or not.

It being in issue whether a person was bound by the acts of another claimed to have been his agent, either under original authority or by reason of ratification, there was no error in explaining to the jury the rule of law as to the extent of an agent's authority.

Authority to a special agent to obtain the signature of a seller to a prepared written contract for the sale of a certain amount of cotton, without more, does not include within itself authority to make a parol agreement that the cotton shall not in fact be delivered, but that the parties shall settle on the basis of the difference between the agreed price and the market price at the time for delivery.

If one desiring to buy cotton to be delivered at a future time sent to a special agent a written contract already signed by him for the purpose of obtaining the signature of the intended seller, and the seller refused to sign the contract, except on the understanding that no cotton was to be delivered, but that the parties would settle on the basis of the difference between the agreed price and the market price at the time for delivery (an agreement prohibited by law), and thereupon the agent made such agreement in parol, and the contract was signed and transmitted to his principal, the bringing of a suit by the buyer against the seller for the nondelivery of the cotton did not of itself operate to ratify the parol agreement of the agent; there being no authority in the agent to make such a contract, no evidence of knowledge by the principal, and no act of ratification other than the bringing of the suit.

Error from Superior Court, Randolph County; Frank Park, Judge.

Action by the International Cotton Company against W. R. Terry. Judgment for plaintiff, and defendant brings error. Affirmed.

The International Cotton Company brought suit against W. R. Terry for a breach of a written contract dated July 12, 1909 whereby the plaintiff agreed to purchase and the defendant to sell 50,000 pounds of cotton at 12 cents per pound, to be delivered in merchantable bales at any warehouse in Shellman Ga., during the month of October. It was alleged that the plaintiff was engaged in the business of buying cotton from producers and selling it to various cotton mills, and this was known to the defendant, and that he was engaged in farming, raising annually approximately 100 bales of cotton. The defendant admitted a prima facie case, and claimed the right to open and conclude the case before the jury. He pleaded that the contract really entered into between him and the plaintiff was a wagering contract, which was illegal contrary to public policy, and unenforceable; that the written contract attached to the plaintiff's petition was a mere cloak to cover up and conceal the illegality of the transaction between the parties; and that the real understanding and agreement entered into between them was that no cotton was to be delivered under the contract, but that it was to be a mere speculation in "futures."

On the trial the evidence for the defendant, so far as it need be stated, was as follows: He first saw the paper which he signed in the office of J. M. Wooten, at the warehouse of the latter in Shellman. Defendant was passing Wooten's warehouse, and Wooten called him in and told him that he (defendant) could sell some cotton at 12 cents per pound, and that Wooten had a contract ready that the defendant could sign. Defendant told Wooten that he would not sign anything but a "future" contract; that he did not expect to deliver any cotton to anybody. Wooten said that it would be all right; he did not expect any cotton. Defendant then signed the contract. He received from Wooten the dollar recited as a consideration of the contract. About the middle of October the defendant saw Dunn, the manager of the plaintiff. Defendant made an offer to settle the matter by paying a certain amount; but Dunn demanded more, on the ground that the market price was higher, and no settlement was effected. At the time when the question of settlement in money was discussed, Dunn did not say anything about preferring to receive cotton. He did not say anything about wanting cotton. On cross-examination defendant testified: "My idea in making a contract and not delivering the cotton was to hedge, like I have done before. *** Yes; Mr. Wooten runs a warehouse there, and he and I are good friends. I keep cotton at his warehouse sometimes. I did in 1909. I don't hold any spot cotton. I give him authority to sell it as it comes in. *** I have been doing business with him that way a long time. We were in the fertilizer business together. I had him hired for wages that year, my recollection is. I don't know whether we were connected, or whether he was hired for wages." One Mizell testified that he was in the warehouse and heard defendant say to Wooten, "I don't expect to deliver any cotton on the contract, but we will settle on the difference, one way or the other," and that the witness walked out and did not hear the reply of Wooten. On cross-examination he testified that he heard Wooten tell the defendant, "I have got the contract here for Mr. Dunn," and "I have sold your cotton and got the contract here," and also mentioned that there were others.

On behalf of the plaintiff, in addition to introducing the written contract on which the suit was based, Dunn, the manager of the agency of the plaintiff at Cuthbert testified, among other things, as follows: He employed the employés for that territory with the approval of the home office. Any extra help he needed, he decided for himself. He never employed Wooten to represent him or the company. Wooten called him up by telephone during the month of July, prior to the date of the contract, and asked him if he could handle some cotton "over there" at 12 cents per pound. On that day Dunn did not have the price limit from the Albany office that would justify him in paying that price, and answered Wooten in the negative, but said he would see if he could get it later on. The next day he obtained a price by which he could handle the cotton at 12 cents. He called up Wooten, and asked the latter who were the parties that wanted to sell, and Wooten gave him a list of three or four, including defendant, and said he could buy so many bales from each of the parties. Dunn replied that the plaintiff would take the cotton. Dunn prepared the contracts complete, signed them for the plaintiff, and sent them to Wooten. "I had no intention whatever to sell on differences based on the market price, rather than the acceptance of the delivered cotton. At the time the purchase was made, my intention was to get the cotton. That's what they told me from the house--to buy from parties that would deliver the cotton. I never mentioned to a soul about settling on differences until Dr. Terry approached me over there one day when I was shipping cotton. Mr. Wooten had no authority whatever to represent me or the company. *** Yes; I did make a request of Dr. Terry to deliver me that cotton. When he offered to make the settlement there, I told him and Wooten both that I preferred to have the cotton. That was before this contract was due. *** When I sent that contract for Dr. Terry's signature, it was not my idea to make a settlement of that kind, based on the cash value. I expected to get the cotton." He...