Weil Brothers-Cotton, Inc. v. T.E.A., Inc., BROTHERS-COTTO
| Decision Date | 21 November 1986 |
| Docket Number | BROTHERS-COTTO,Nos. 73055,INC,73056,s. 73055 |
| Citation | 351 S.E.2d 670,181 Ga.App. 122 |
| Parties | WEILv. T.E.A., INC. WEILv. J.R. CURRY FARMS, INC |
| Court | Georgia Court of Appeals |
C. Richard Langley, Albany, for appellant.
Jesse G. Bowles III, Cuthbert, for appellees.
Plaintiff Weil Brothers-Cotton, Inc. brought separate lawsuits against T.E.A., Inc. and J.R. Curry Farms, Inc. in the Superior Court of Randolph County. In each lawsuit, plaintiff alleged that the respective defendant was liable to plaintiff for the breach of a contract of sale. Specifically, it was alleged that under the provisions of the contracts, each defendant agreed to sell and deliver to plaintiff the total number of pounds of cotton allocated to the defendant pursuant to the United States Department of Agriculture Payment-In-Kind Program of 1983/1984; that each defendant failed to deliver all of the cotton which was allocated to it under their Payment-In-Kind contracts with the Commodity Credit Corporation ("CCC"); that it was necessary for plaintiff to replace the cotton which each defendant failed to deliver; that the replacement cost to plaintiff was 72.02 cents per pound; that the replacement cost was 17.2 cents per pound over and above the contract price of 55.00 cents per pound; that defendant T.E.A., Inc. failed to deliver 15,502 pounds of cotton, making it liable to plaintiff in the amount of $2,638.44; and that defendant J.R. Curry Farms, Inc. failed to deliver 22,418 pounds of cotton, making it liable to plaintiff in the amount of $3,815.54.
The respective defendants answered the complaints and denied the material allegations set forth therein. Additionally, each defendant asserted that its contract should be reformed in equity because of a mutual mistake of the parties.
Following discovery, the cases proceeded to trial. In the interest of judicial economy, the cases were tried together. The evidence adduced in the trial court demonstrates the following facts:
On February 16, 1983, plaintiff authorized Dorothy Hill to act as its purchasing agent for the purchase of cotton under the Payment-In-Kind program of 1983/1984. According to Austin Wade, one of plaintiff's representatives, Ms. Hill was not authorized to negotiate the terms and conditions of the cotton contracts; she was only authorized to solicit the sale of Payment-In-Kind (PIK) cotton.
The Payment-In-Kind program was authorized by the Agricultural Act of 1949 and the Commodity Credit Corporation Charter Act. Tom Hilton, a representative of the United States Department of Agriculture Agricultural Stabilization and Conservation Service (ASCS), explained that the PIK program was designed to improve the cotton market by decreasing the supply of surplus cotton held in CCC warehouses. The surplus cotton consisted of cotton which had been forfeited to the government in prior years pursuant to non-recourse loans. Under the PIK program, farmers could sign up to receive surplus cotton if they agreed to divert a portion of their land to conservation use. The amount of cotton which a farmer was to receive depended upon the amount of land diverted to such use and the farmer's proven yield.
Plaintiff, by and through its agent Dorothy Hill, contracted with each defendant for the purchase and sale of cotton which each was allocated pursuant to the PIK program. Representatives of the respective defendants testified it was the defendants' intention to sell to plaintiff the surplus cotton which defendants were to be allocated. Each defendant's representative averred defendants did not intend to sell their 1983 cotton to plaintiff, and that that was discussed with Dorothy Hill. Dorothy Hill concurred. She testified that the PIK program was designed to eliminate the surplus cotton stored in government warehouses; that the price for the surplus cotton was cheaper than the cotton prices which prevailed at the time; that she did not intend to include 1983 cotton in the contract; and that that was the mutual intention of the parties.
Plaintiff's vice-president disagreed with Dorothy Hill's assessment. He testified that the possibility existed from the outset that farmers would be required to place their 1983 cotton crop into the PIK program; and that plaintiff did not intend to exclude that cotton from the contract.
Each contract between plaintiff and the respective defendants provided as follows: (Emphasis supplied.)
The contracts were signed by representatives of each defendant. Dorothy C. Hill signed the contracts on behalf of plaintiff. At the time of the execution of the contracts, neither one of the defendants had entered into a PIK contract with the CCC. That was to happen several weeks later, on March 7, 1983.
The PIK contracts provided for the allocation of cotton to each defendant. Pursuant to its contract with the CCC, T.E.A., Inc. was to receive 38,901 pounds of cotton. The contract between the CCC and J.R. Curry Farms, Inc. called for that defendant to receive 63,573 pounds of cotton. The PIK contracts contained the following provision: "The operator and each producer on the farm and CCC agree to comply with the terms and conditions specified in the Appendix to this contract." Paragraph 9 (C) of the Appendix reads as follows: "[P]roducers may be required, at CCC's option, to pledge as collateral for a price support loan, in accordance with the regulations found as 7 CFR Part 1421 or 7 CFR Part 1427, an eligible quantity of the crop produced in the 1983 crop year ... Producers shall agree, at CCC's option, to redeem such quantity from price support loan, sell such quantity to CCC, and receive like quantities from CCC ..." (Emphasis supplied.)
The PIK program was very popular with the nation's farmers. In fact, the program was so popular that the CCC did not have enough surplus cotton on hand to meet its contractual obligations. Thus, it became necessary for the farmers to "harvest for PIK." In other words, the farmers were called upon to place their 1983 cotton into the PIK program. Thus, on June 24, 1983, the ASCS sent each defendant a letter which read:
Between June and September 1983 the government learned the precise extent of the shortfall. It was determined that there was only enough surplus cotton to meet 60% of the farmers' PIK allocation. Thus, 40% of the farmers' PIK allocation had to be derived from their 1983 cotton crop.
In the meantime, T.E. Allen, president of T.E.A., Inc., wrote the following to "Mrs. Dorothy C. Hill": ...
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