Taylor Cotton Oil Co. v. Early-Foster Co.
Taylor Cotton Oil Co. v. Early-Foster Co.
Opinion of the Court
Findings of Fact.
Appellant and appellee entered into a contract whereby the appellant agreed, to sell to appellee from 850 to 950 bales of linters, the estimated output of appellant company for the year 1915-16, at a stated price, subject to the rules of the Texas Cotton Seed Crushers’- Association. Only a part of such linters were delivered. Appel-lee brought suit for the difference in the price agreed upon and the market price for such linters July 31, 1916, which, according to the rules of said association, was the end of the season of 1915-16, and was therefore the date on which appellant breached its contract. Judgment was rendered for appellee for the difference in the market price in the number of bales to be delivered according to said contract, less 15 per cent, thereof, and the number which were delivered.
Opinion.
Appellant’s first assignment is to the effect that the contract was ultra vires, in this: Its entire output of linters for the season of 1915-16 was 338 bales, all of which it delivered to appellee, and that it had no authority under its charter to contract for the sale of more bales of linters than it produced during the season.
Appellant is a corporation chartered for the purpose of doing a cotton oil business. A part of this business is shown to be to produce linters from cotton seed in the process of making cotton seed oil.
We do not think that appellant had the power, under its charter, to enter into the business of buying and selling linters on speculation; but, as it undoubtedly had the right to sell such linters as it manufactured, we think it had the power to estimate its output for a year, where such estimation is reasonable and made in good faith, and to contract to sell its output on such estimate, and in such event that it wotfLd be bound to deliver the number of bales estimated.
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The contract provides for the sale of “850 to 950 bales (output) clean mill runs linters”; and further provides: “This contract is made subject to the rules of the Texas Cotton Seed Crushers’ Association (rule 23, section 3 omitted).” The evidence shows that rule 23, section 3, related to the sale of oil', and not to linters; and that the rule- relating to the sale of linters is rule-15, section 3, of said association. The secretary and president of appellant testified that they had conversation with Mr. Foster, of appel-lee company, over the phone, in which they agreed to sell linters to appellee at a price then agreed upon; that thereafter they received the written contract, and in reading it over discovered that rule 23, section 3, of the Cotton Seed Crushers’ Association referred to the shipment of oil, and that they thereupon supposed that the party drafting the contract had made a mistake and intended to insert “rule 15, section 3 omitted,” instead of rule 23. They did not, however, call appellee’s attention to the supposed mistake, but signed the contract as it was written. This does not tend to show any mistake upon the part of appellee. Ap-pellee testified that the contract was written upon a printed form intended to be used in the purchase of oil, and that there was no mistake on its part in inserting therein “rule 23, section 3 omitted.” However, as rule 23, section 3, has no application to linters, the contract must be read as if this statement had been omitted therefrom, unless rule 15, section 3, should be inserted in lieu thereof.
“When a sale is made of season’s or a balance of season’s output of linters, the seller must ship, and the buyer must receive, all of the linters seller makes to the end of'the season; provided, that when estimated number of bales is stated in contract, or any confirmation of sale or purchase, the buyer may demand, and the seller must ship-, or make shipment whether demanded or not, 15 per cent, in excess of estimated quantity, if he makes a sufficient number of bales to enable him to do so, and buyer must receive and pay for same at contract price. Bhoxild seller not make the quantity estimated, he shall deliver the number of bales made. A shipment of 85 per cent, of the estimated quantity shall be deemed a fulfillment <jf the contract.”
The contract sued upon is subject to the rules of the Cotton Seed Crushers’ Association or it is not. If by reason of the fact that the rule with reference to oil was inserted, .when the rule with reference to lin-ters should have been inserted, the entire reference to the rules of the Cotton Seed Crushers’ Association should be eliminated, then the contract is one absolutely to deliver the minimum of 850 bales. If the court had so construed it, it would have been more onerous on appellant than as construed. If only that part with reference to the Cotton Seed Crushers’ Association referring to rule 23, section 3, be stricken from the contract, then appellant would not have been entitled to the 15 per cent, reduction which the court gave it by applying said rule.
The court peremptorily instructed the jury to return a verdict for appellee, and in this there was no error.
For the reasons stated, the judgment of the trial court is affirmed.
Affirmed.
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