Whitehurst v. FCX Fruit & Vegetable Service

• Decision Date: 22 November 1944
• Docket Number: 239
• Citation: 32 S.E.2d 34,224 N.C. 628
• Parties: WHITEHURST et al. v. FCX FRUIT & VEGETABLE SERVICE, Inc., et al.
• Court: North Carolina Supreme Court

32 S.E.2d 34

224 N.C. 628

WHITEHURST et al. v. FCX FRUIT & VEGETABLE SERVICE, Inc., et al.

No. 239

Supreme Court of North Carolina

November 22, 1944

Civil action to recover a balance of $39,424.04 alleged to be due under contract.

Before the trial below, a voluntary nonsuit was taken as to the defendant, N. C. Cotton Growers Cooperative Association.

J. J Whitehurst, one of the plaintiffs, on May 30, 1941, executed a Marketing Agreement, as follows:

'Marketing Agreement for FCX Fruit and Vegetable Service, Inc.

'The undersigned grower, hereinafter referred to as the Grower agrees to deliver to FCX Fruit & Vegetable Service, Inc. hereinafter referred to as the Cooperative, the Irish potatoes produced by the Grower for sale during the five year period 1940-1944 inclusive, subject to cancellation any year by written notice to the Cooperative during the month of January of such year.

'Annual cancellation privileges are applicable to both the Grower and the Cooperative.

'The Irish potatoes delivered by the Grower to the Cooperative are to be handled in accordance with the By-Laws of the Cooperative and other rules and regulations established by the Cooperative. If the Grower is not already a member of the Cooperative, he agrees to pay $2.00 as membership fee in the Cooperative. If, at the time the potatoes are ready for marketing, the Grower can sell same at a price greater than the amount that it appears he can obtain for the same through the Cooperative, the Grower can sell his potatoes to or through other persons, provided he pays to the Cooperative an amount equal to one cent per bag or one and onehalf cents per barrel for all potatoes sold by the Grower to or through persons other than the Cooperative; and the Grower hereby agrees to make such payment to the Cooperative for all potatoes sold to or through other persons in order to help pay the expenses that might be incurred by the Cooperative in arranging for the services provided in this and similar agreements with other growers, said payment to be made by the undersigned Grower immediately upon his selling any Irish potatoes to or through any person other than the Cooperative.

'This instrument contains all of the conditions and terms of the agreement between the parties hereto and cannot be amended or changed except by a paper writing signed by both parties.

'The Grower, upon request of the Cooperative agrees to furnish the Cooperative with the actual number of acres planted in Irish potatoes each year that this contract is in effect.

'Read and signed by the Grower on 30 day of May, 1941.

'J. J. Whitehurst (Seal), Grower,

'P. O. Address--Mt. Olive, N. C.

'Witness: C. C. Hilton.

'Executed by the Cooperative on--day of ---- 19--.

'FCX FRUIT & VEGETABLE

SERVICE, INC., by M. G.

Mann, (s) Secretary.'

During the seasons of 1941 and 1942, Whitehurst marketed potatoes under the above agreement.

On or about 16 April, 1943, J. J. Whitehurst executed the following contract:

'Marketing Sales Agreement.

'The undersigned Grower, hereinafter referred to as the Grower, and the FCX Fruit & Vegetable Service, Inc., hereinafter referred to as the Cooperative, enter into the following sales Agreement:

'The Grower agrees to deliver to the Cooperative the first 50 cars of U. S. No. 1 Irish Cobbler Potatoes grown or handled by him during the 1943 marketing season. The potatoes to be Federal and State inspected with inspection certificate reading fairly clean, grade defects within tolerance, and showing not over 1/2 of 1% decay. The potatoes to be packed in new burlap, cotton, or mesh bags, branded or properly tagged, and to be loaded and stacked with the proper care in refrigerator cars containing 300 bags to the car on or before June 20, 1943.

'Upon delivery of the inspection certificate and bill of lading to the Cooperative, in accordance with the above conditions, the Cooperative agrees to pay the Grower on an f.o.b. acceptance basis the Eastern North Carolina OPA established ceiling price of 2.40 cents per bag that has been established for U. S. No. 1 Cobbler potatoes, less the Cooperative's marketing service charge of .05 cents per bag, payment to be made by check from the Cooperative's office at Washington, North Carolina.

'In event the ceiling price of U. S. No. 1 Cobbler potatoes is raised or lowered, the Cooperative will pay the Grower the ceiling price in effect at time of shipment with the Cooperative's marketing service charge remaining at .05 cents per bag.

'The Grower agrees to furnish the Cooperative with the car numbers and dates that each car is ready for shipment immediately upon completion of the loading and inspection thereof, and further agrees to make shipment to any destination requested by the Cooperative.

'This agreement entered into under seal on this 16th day of April, 1943.

'(Signed) FCX Fruit & Veg.

Service (Seal)

By--C. C. Hilton.

'Signed:

'J. J. Whitehurst (Seal).'

It is alleged that in the execution of the foregoing agreement, J. J. Whitehurst was acting for himself and his co-plaintiff, James H. Reaves.

The plaintiffs alleged that the FCX Fruit & Vegetable Service, Inc., in the execution of the contract, dated April 16, 1943, was acting as agent for itself and its co-defendant, and that the defendants are jointly liable to the plaintiff for the contract price of said potatoes.

The plaintiffs allege they shipped 86 carloads of potatoes, pursuant to the 1943 agreement, and allege that the defendants purchased 83 cars of said potatoes at $2.84 per bag and 3 cars at $2.40 per bag, less a deduction of $15.00 per car by the defendants for handling charges.

The defendants allege that only three cars of potatoes were delivered under the 1943 agreement, on or before June 20, 1943, and that all the potatoes handled by the defendant, FCX Fruit & Vegetable Service, inc., for J. J. Whitehurst, over and above the aforesaid three cars, were handled in strict compliance with the Marketing Agreement executed in 1941.

The defendants further allege that the FCX Fruit & Vegetable Service, Inc., is a separate and distinct corporation from the defendants Farmers Cooperative Exchange, and was organized for the specific purpose of aiding and assisting growers of Eastern North Carolina in the marketing of their Irish potatoes, and that its co-defendant is in no way connected with the defendant, FCX Fruit & Vegetable Service, Inc.

The pertinent part of the testimony, is as follows:

1. That after Whitehurst received the proposed agreement, dated April 16, 1943, and before the execution thereof, Whitehurst and Reaves entered into a partnership agreement to handle potatoes during the 1943 season.

2. That the potato crop in 1943 was late, on account of a freeze which occurred about the April 20, and because of the lateness of the crop, the plaintiffs, Whitehurst and Reaves, on or about June 8, 1943, made a trip to Washington, North Carolina, to see C. C. Hilton, Director-Manager of the FCX Fruit & Vegetable Service, Inc., about the delivery of potatoes under their contract. Whitehurst testified: 'We discussed the lateness of the crop with Mr. Hilton and he told us the potato crop was late in general over the belt and he didn't see as that would make much difference, that he had to take care of his customers, especially last year when it was seller's market instead of buyer's market, said 'We might need him later on another year.' Mr. Reaves asked him before we left about the size and grade of the potatoes and the extent they would take Victory grade, and maybe a car or two of Victory grade had moved from the Mt. Olive section, and his answer was that others took them and they would have to do likewise.'

Mr Reaves testified: 'About 8th June, before any potatoes were purchased by us or any potatoes were delivered to FCX, Mr. Whitehurst and myself went to Washington, North Carolina, to Mr. Hilton's office. The sole purpose of our visit was to find out how we stood on the contract. Since there had been a frost, we knew we could not fill the contract by the date limit, and we talked to Mr. Hilton, and during the conversation we told him there was no way we could fill the contract by 20th June, and wanted to know just where we stood on it, and Mr. Hilton's answer to that was that he wanted the potatoes, and it would be no penalty to them to have them late, as the whole section was late, and he wanted every potato that we would let him have, and that his Board of Directors had authorized and directed him to get potatoes to protect their trade during 1943; that it was the seller's year, and if he let the trade get away from him, when it got to be the buyer's year again, that they would go to the same place they got them in 1943, and that he would reduce the charge from five cents to four cents per bag on the potatoes we shipped him, making them net $2.80 per bag. * * * I told Mr. Hilton that they were loading potatoes in Mt. Olive under what they called the Victory grade, and Victory grade is field run. I told him I had 135 bags planted myself, and was seriously considering digging them right away while I could move my potatoes under the Victory grade and asked him if he wanted them if I did and he said 'Yes'. He said, 'Since others were taking them em if I did and he said 'Yes'. He sated to us that he would give $2.84 at way he would take them.' He stpotatoes. ' The plaintiff Reaves further ss his charge for Victory grade and Whitehurst had previously dealt with stified to the effect that he ers Cooperative Exchange; that they had . Hilton, as Manager of Farmpotatoes the Spring before, and Mr. Whitehurst ught a truck load of seed m of $294.25, payable to Farmers Cooperative sued his check in the sueaves) delivered the check...