West Point-Pepperell, Inc. v. Bradshaw

• Decision Date: 22 April 1974
• Docket Number: Civ. A. No. 1033-E.
• Citation: 377 F. Supp. 154
• Parties: WEST POINT-PEPPERELL, INC., Plaintiff, v. O. W. BRADSHAW, Defendant.
• Court: U.S. District Court — Middle District of Alabama

377 F. Supp. 154

WEST POINT-PEPPERELL, INC., Plaintiff, v. O. W. BRADSHAW, Defendant.

Civ. A. No. 1033-E.

United States District Court, M. D. Alabama, E. D.

April 22, 1974.

COPYRIGHT MATERIAL OMITTED

Yetta G. Samford, Jr., Opelika, Ala., for plaintiff.

Ruth S. Sullivan, Dadeville, Ala., for defendant.

PARTIAL SUMMARY JUDGMENT

VARNER, District Judge.

This cause is submitted on Plaintiff's motion for summary judgment filed herein April 2, 1974. Plaintiff, a textile manufacturer, claims to have purchased in the spring of 1973 from the Defendant all cotton to be produced in the fall of 1973 on approximately 230 acres in Tallapoosa County, Alabama, such cotton to be delivered upon ginning thereof at the Montgomery Cotton Company in Opelika, Alabama, for 32 cents a pound. Said cotton was contracted for at 31 cents a pound by the late T. Penn Montgomery, Sr., doing business as the Montgomery Cotton Company, by virtue of a written contract admittedly signed by the Defendant. The Defendant had been allotted 222.5 acres of cotton in Tallapoosa County, Alabama, but the allotment was lifted, and he harvested 120 bales of cotton from about 300 acres in Tallapoosa County, Alabama, in 1973. The Defendant insists that the contract was signed in blank; that the parties contemplated the purchase of all cotton to be produced by the Defendant in both Tallapoosa and Chambers Counties for said period of time; but that the said T. Penn Montgomery, Sr., agreed to rescind the contract orally after it had been executed by the Defendant. The Plaintiff admits that it agreed to a price of 32 cents a pound for said cotton, and it is willing to execute the contract on its part at said price of 32 cents a pound.

RECISION. The Defendant contends, however, that, after discussion of the 32-cent-pound figure, the said T. Penn Montgomery, Sr., agreed to cancel the contract orally. The only evidence thereof is the oral testimony of Defendant, and Plaintiff contends that such testimony is barred by Code of Alabama, Title 7, § 433, and by the parol evidence rule, Code of Alabama, Title 7A, § 2-209 (2). Code of Alabama, Title 7, § 433, states: "* * * (N)o person having a pecuniary interest in the result of the suit * * * shall be allowed to testify against the party to whom his interest is opposed, as to any transaction with, or statement by, the deceased person * * * when such deceased person, at the time of such transaction or statement, acted in any representative * * * relation whatsoever to the party against whom such testimony is sought to be introduced, * * *." This statute applies to transactions with deceased agents of an opposing party. National Union Fire Ins. Co. v. Weatherwax & Gentry, 247 Ala. 143, 22 So.2d 733.

Code of Alabama, Title 7A, § 2-209(2), provides in pertinent part: "A signed agreement which excludes modification * * * except by a signed writing cannot be otherwise modified * * *." The original contract is enforceable at 31 cents a pound unless the subsequent agreement to pay 32 cents a pound is an admitted waiver thereof. "Although an attempt at modification * * * does not satisfy the requirements * * *, it can operate as a waiver." Code of Alabama, Title 7A, § 2-209(4). Plaintiff, in pleading an agreement to the 32-cent price, is effectively conceding having waived the lesser price.

UNCONSCIONABILITY. The Defendant further contends that the Plaintiff's alleged unconscionable restraint of trade bars specific performance of the Defendant's contract to sell the cotton because of the equitable principle that one who comes into equity must come with clean hands. The Defendant alleges that the contract for the purchase of cotton at 32 cents a pound at a time when the market price of cotton of like classification was 80-odd cents a pound is in violation of Code of Alabama, Title 7A, § 2-302, in that said contract allegedly was unconscionable and is, therefore, unenforceable. Apparently, the Defendant seeks to combine an allegedly unconscionable contract, because of a price differential developing between the date of execution and the date of performance of the contract for sale, with an alleged restraint of trade so as to form an equitable defense under the "clean hands" doctrine. The statute in question, in pertinent part, is as follows:

§ 2-302. "If the court as a matter of law finds the contract * * * to have been unconscionable at the time it was made the court may refuse to enforce the contract * * *."

The statute contemplates the court's determining, as a matter of law, upon consideration of the contract itself and the circumstances at the time such contract was made, whether or not such contract was unconscionable under the circumstances then in existence. The price for which the cotton was contracted was not alleged to have been substantially out of line with the market price of cotton at the time the contract was made, but it was alleged that Plaintiff and others had a peculiar knowledge that the price of cotton would spectacularly rise and that said persons sought to control the trade of cotton by publishing among all dealers in cotton in this area a computerized list of cotton purchase contracts outstanding for cotton to have been produced in 1973 and that, because his name was on the list, Defendant was delayed in selling his cotton. In the allegedly offensive publication ("Notice" on page 3 of the first "Exhibit B" attached to what appears to be a third-party proceeding filed on March 22, 1974, by Defendant), the following language appears:

"Persons utilizing this publication are cautioned that the proper and appropriate use of the contents contemplates that buyers and sellers listed herein be personally contacted, if any question should arise, to ascertain whether the information published is a reasonably accurate and contemporary statement concerning the status of that cotton."

Clearly the purpose of the publication, like the purpose of recording acts, was to provide a ready source of information from which, upon proper inquiry, fraud might be prevented. Persons are not prohibited from restraining trade reasonably in an effort to protect legal rights of their own. Code of Alabama, Title 7, § 124; Denton v. Alabama Cotton Ass'n., 30 Ala. 429, 7 So.2d 504. See also Maple Flooring, et al v. United States, 268 U.S. 563, 45 S.Ct. 578, 69 L. Ed. 1093; Cement Manufacturing Protective Ass'n. v. United States, 268 U.S. 588, 45 S.Ct. 586, 69 L.Ed. 1104.

The Defendant insists that the alleged contract with the Plaintiff was unconscionable at the time it was made. The Supreme Court of the United States in Hume v. United States, (1889) 132 U.S. 406, 10 S.Ct. 134, 33 L.Ed. 393, defined "unconscionable", in referring to an unconscionable contract, as being the following:

"Such as no man in his senses and not under delusion would make on the one hand, and as no honest and fair man would accept on the other."

In Williams v. Walker-Thomas Furniture Co., (1965) 121 App.D.C. 315, 350 F.2d 445, 18 A.L.R.3rd 1297, the Court, in discussing the fact that the element of unconscionability in order to justify unenforceability of the contract must be present at the time the contract is made, said, in substance, that unconscionability included:

"(A)n absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party."

The Court said further that:

"The presence of a meaningful choice can only be determined by consideration of all the circumstances surrounding the transaction, and

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