Merchants Gro. Co. v. Shawnee Milling Co.

Full title: MERCHANTS GROCERY COMPANY v. SHAWNEE MILLING COMPANY

Court: Court of Appeals of Georgia

Date published: Sep 26, 1952

72 S.E.2d 797 (Ga. Ct. App. 1952)

72 S.E.2d 797

Opinion

34126.

DECIDED SEPTEMBER 26, 1952.

Complaint; from Dodge Superior Court — Judge Graham. April 14, 1952.

Will Ed Smith, for plaintiff in error.

Hal M. Smith, contra.

1. The defendant could not complain that the plaintiff, as assignee of the contract sued upon, was not entitled to proceed in its own name in an action against it on said contract for a breach thereof, where it affirmatively appeared that the defendant, after the alleged transfer of the contract to the plaintiff, had dealt with the plaintiff as it had with the assignor under the contract.

2. In an action by an assignee of a contract to purchase from the defendant a designated amount of flour at a certain price per cwt., wherein the plaintiff claims that the defendant refused to ship the amount of flour called for in the contract at the price therein provided for and that it was, therefore, entitled to recover damages from the defendant for a breach of this contract, where it appears that the defendant milling company not only did not refuse to ship the flour at the original contract price per cwt., but made such flour available to the plaintiff by storing it and agreeing that the plaintiff could withdraw the designated amount of flour from storage paying the original contract price per cwt., and it appears that the plaintiff actually under this agreement or arrangement withdrew a small amount of such flour, paying therefor the contract price per cwt., it affirmatively appears that the plaintiff is not entitled to recover of the defendant for a breach of the contract by reason of the failure of the defendant to deliver the amount of flour provided for in the contract at the price per cwt., as provided for therein, and the trial court properly sustained the general demurrers of the defendant and dismissed the action.

DECIDED SEPTEMBER 26, 1952.

On March 16, 1948, Merchants Grocery Company, claiming that Shawnee Milling Company, a non-resident corporation, was indebted to it in the sum of $1826.98, sued out before a justice of the peace in Dodge County, Georgia, against said Shawnee Milling Company, an attachment returnable to the superior court of said county, which attachment was levied upon certain flour and grits, as the property of the defendant. The defendant company executed its replevy bond in the sum of $3653.96. Thereafter, the plaintiff filed its declaration in attachment and set up that on July 16, 1947, the defendant company entered into a contract with J. A. Ross Company Inc., whereby it agreed to sell and deliver to the latter company 2000 cwts. of Okeene's Best Colored Self-Rising Flour at $6.92 1/2 per cwt. on the basis of twenty-five pound packages. The defendant made two shipments of flour under this agreement to said J. A. Ross Company Inc. On September 29, 1947, J. A. Ross Company Inc. transferred the contract to the plaintiff. Copies of both the contract and the transfer are attached as exhibits to the declaration as amended. After said transfer, the defendant made three shipments of flour under said agreement to the plaintiff company, one being for 125 cwts. On October 22, 1947, one for 130 cwts. on November 10, 1947, and the other for 99 cwts. On December 23, 1947, such shipments totaling 500 cwts. of flour delivered under said contract to said J. A. Ross Company Inc. and to the plaintiff. The declaration as amended was in two counts. On January 2, 1948, the plaintiff company was advised by letter from the defendant company that the contract required delivery of only 500 cwts. of flour rather than 2000 cwts. at such price. The defendant contended that this contract called for only 2000 twenty-five pound bags of flour, which would be 500 cwts. Around January 31, 1948, the defendant company shipped to the plaintiff the flour stipulated to be purchased as specified in said contract, but at a price in excess of that provided for in the contract, which was $6.92 1/2 per cwt. On February 14, 1948, the plaintiff company notified the defendant company by registered mail of its intention to cancel or terminate the contract. On "the ---- day of February, 1948," an agent of the company advised the plaintiff that the shipment of flour would be stored at Eastman, Georgia, by the defendant, and that the plaintiff could draw from storage flour as required by it at the contract price, and the plaintiff "withdrew 30 cwts. of flour from storage under this procedure." Notwithstanding this agreement that plaintiff could withdraw this flour from storage at $6.92 1/2 per cwt., the defendant proceeded to sell and dispose of same to other parties, without the plaintiff's knowledge and consent, and when it thus became apparent to the plaintiff that this contract would not be fulfilled and that further negotiations were useless, the plaintiff sued out said attachment. Said contract provides that in case of default the buyer (the plaintiff) is entitled to recover of the defendant as liquidated damages "1% of the cwt. contract price herein named multiplied by the number of cwts. remaining unshipped, plus the amount of rise, if any, per bushel in the average market price of cash wheat . . in carload lots at seller's mill or basing point, between date of contract and date of termination multiplied by two and thirty-five hundredths (2.35) times the number of cwts. remaining unshipped." The defendant company defaulted in shipping to the plaintiff in the amount of 1470 cwts. of flour. The rise per bushel in the average market price of cash wheat at the defendant's mill between the date of the contract and the date of its termination was not less than 50 per bushel. Applying the above formula as liquidated damages to the facts alleged, the defendant is indebted to the plaintiff in the sum of $1826.98 principal, with interest at 7 percent, from February 21, 1948.

In count two of said declaration, added by amendment, it is alleged further that on January 9, 1948, the defendant refused to deliver the remaining 1500 cwts. of the flour or any part thereof, and that on that date the market price of the flour contracted to be sold was $8.35 per cwt., or a difference of $1.42 1/2 per cwt. between the market price and the contract price, or a total damage to the plaintiff of $2137.50.

It appears that a difference between counts one and two of the declaration is that count one seeks to recover damages for the breach of the contract on the basis of the damages as provided in said contract, and count two seeks to recover of the defendant damages for the breach of said contract on the common-law basis, namely the difference in the market value of the flour and the contract price on the date of the breach. The second count also differs from the first count in that it is unequivocally charged therein that the defendant refused to perform the contract on January 9, 1948, and no reference is therein set out as to the dealings between the plaintiff and the defendant subsequently thereto.

The defendant company demurred generally and specially to the declaration in attachment, and upon amendment thereof the defendant renewed its original grounds of demurrer to the declaration as amended and also demurred generally to the amendment. The trial court, after consideration, sustained the general demurrers and dismissed the declaration in attachment as amended, and to this judgment the plaintiff company excepted to this court.

GARDNER, P. J.

This case is in this court upon exception by the plaintiff in attachment to the sustaining by the trial judge of a general demurrer to its declaration in attachment, as amended, and the consequent dismissal of the case.

It is urged that the plaintiff is not a proper party to bring this action to recover for an alleged breach of the contract for the sale of flour between the defendant company and J. A. Ross Company Inc. The contract sued on provides: "This contract constitutes the complete agreement between the parties hereto and cannot be changed in any manner except in writing by buyer and seller or their duly authorized officers." An action brought by the assignee of a written contract in its own name must affirmatively show that the transfer or assignment was in writing in order to withstand a proper demurrer. See Alropa Corp. v. Richardson, 58 Ga. App. 656, 657 ( 199 S.E. 666), and citations. It appeared by amendment that there was a written assignment of the contract by J. A. Ross Company Inc. to the plaintiff. This transfer is not assented to in writing by the defendant company. However, it is urged by the defendant company that, while there was a transfer of the interest of the buyer (J. A. Ross Company Inc.) by this writing the same constituted a change in the contract, the substitution of a new buyer, and that, therefore, in order to bind the defendant company such assignment and transfer would have to be in writing by both the seller and the buyer through their authorized officers. However, as we view the matter, there is no merit in this contention. Regardless of whether or not there had to be a transfer in writing signed by the duly authorized officials of the defendant company and J. A. Ross Company Inc. in order to effect a valid assignment of this contract as to the defendant company, it appears from the declaration as amended that the defendant company recognized the plaintiff company as the assignee and the person to whom the flour was to be shipped under the contract and accordingly shipped flour to the plaintiff company after the date of the alleged assignment under the contract, dealing with it as it would have dealt with J. A. Ross Company Inc. and as it did deal prior to the date of the transfer. This being so, regardless of whether there had been a proper assignment of the contract to the plaintiff company, such as would legally bind the defendant company, and would entitle the plaintiff company to proceed with an action in its own name for an alleged breach of this contract, the defendant will not now be heard to complain of the legality of this assignment and to question the right of the plaintiff company to proceed thereunder. under against it. It dealt with the plaintiff company as having properly acquired this contract. It considered the plaintiff as the buyer named in the contract by shipping to it flour thereunder. The defendant is therefore now estopped from raising the question. It dealt with the plaintiff as if the transfer to it was sufficient. By dealing with the plaintiff as the proper person to ship the flour to under said contract, the defendant will not now be heard to say that the plaintiff was not the proper person because the transfer of the contract to the plaintiff had not been properly assented to by it in writing.

However, there is a much more serious question raised by the pleadings here. It does not appear that there has been such a breach of this contract as to entitle the plaintiff, under the situation as it existed at the time it sued out the attachment, to recover now for the amount of the flour which it claims it was entitled to receive at the original contract price of $6.92 1/2 per cwt. which was a balance of 1470 cwts. of flour. This is conceding that the construction placed by the plaintiff on the contract as calling for 2000 cwts. of flour in twenty-five pound packages, instead of as the defendant claims, which was that the contract called for 2000 twenty-five pound packages of flour, amounting to 500 cwts., is the correct construction to be placed on the contract. Under the view which we take of this case there had been no breach of the contract by the refusal of the defendant to deliver to the plaintiff sufficient cwts. of flour at the original contract price of $6.92 1/2 per cwt. to amount to 2000 cwts. of flour, the amount the plaintiff contends that the contract sued upon provided for. This is the view taken by the trial judge in dismissing the plaintiff's case on general demurrer, as appears from an able and clear-cut opinion accompanying his judgment sustaining the defendant's general demurrers to the plaintiff's declaration as amended.

The defendant company did not actually refuse to ship to the plaintiff the amount of flour claimed by the plaintiff at $6.92 1/2 per cwt. It appeared that while the defendant did write to the plaintiff under date of January 9, 1948, that "you will refer to the actual contract and you will notice it is a booking for 2000/25 pound bags, which makes a total of 500 cwts.," and that the shipments made in accordance with the contract to the plaintiff amounted to 500 cwts., the defendant in fact did not terminate the contract but actually informed the plaintiff that it had shipped to Eastman and stored there certain flour which the plaintiff could draw at the contract price, and that the plaintiff withdrew from this lot of flour 30 cwts. and paid therefor $6.92 1/2 per cwt. It is alleged in the original declaration that around January 31, 1948, "the defendant shipped to your petitioner Okeene's Best Flour, as specified in the aforesaid contract, at a price in excess of the contract price. . . Thereupon on the 14th day of February, 1948, your petitioner gave the defendant by registered mail, written notice of its intention to cancel or terminate the contract. . . Whereupon one Cartwright, a duly authorized agent of the defendant, orally advised your petitioner, on the ____ day of February, 1948, that the contents of the car referred to above would be stored at Eastman, Georgia, by the defendant, and that your petitioner could draw from storage flour as required by petitioner at the aforesaid contract price. [Italics ours.] Petitioner withdrew 30 cwts. of flour from storage under this procedure." While it is further set out that "notwithstanding the agreement that petitioner could withdraw flour from storage at the contract price as aforesaid, the defendant proceeded to attempt to sell and dispose of the flour to other parties, without petitioner's knowledge and consent," it does not appear that the defendant disposed of any of the same to other parties prior to the time the plaintiff, on March 16, 1948, sued out said attachment and had the same levied upon certain flour and grits of the defendant. This action is predicated upon the failure and refusal of the defendant to comply with the contract and deliver to the plaintiff 2000 cwts. of flour at $6.92 1/2 per cwt., there being undelivered under the contract at the time the action was brought 1470 cwts. of flour. It does not appear that the defendant failed to deliver the flour, but on the contrary it affirmatively appears that the defendant made this flour available to the plaintiff at the contract price and that the plaintiff took advantage thereof and accepted 30 cwts. thereof at the contract price. It does not appear but that the plaintiff could have obtained the entire remainder of 1470 cwts. of flour by simply paying the original contract price and withdrawing the same from storage where the defendant had placed it. This the plaintiff did not undertake to do. It affirmatively appears from the declaration as amended that there was, at the time the attachment was sued out, no such breach of the contract as entitled the plaintiff to recover the damages sought.

The situation as it appears from the plaintiff's declaration, as amended, is clearly and concisely outlined by the trial judge in dismissing the case on general demurrer as follows: "It appears plaintiff and defendant were in dispute as to the quantity of flour defendant agreed to sell J. S. Ross Company in a contract acquired by plaintiff. Plaintiff attaches a letter dated January 9, 1948, to its declaration from defendant in which defendant sets out its contention, claims to have complied with the contract, but does not expressly refuse to ship any more flour under the contract. Later plaintiff ordered flour from the defendant which defendant shipped but under a higher price than that stipulated in the contract. Plaintiff refused to accept the flour at the price. Thereafter defendant on ---- day of February, 1948, agreed with plaintiff to store the flour and to let plaintiff withdraw the flour from the storage at the price stipulated in the original contract. Accordingly defendant stored the flour. The contract required plaintiff to pay for the flour before delivery. Plaintiff thereupon withdrew a portion of the flour and could have withdrawn, by paying for same, all of it at the price contended for by plaintiff. Instead, plaintiff did not do so but delayed until March 16, 1948, and then sued out the attachment and had the flour seized thereunder. It does not seem plaintiff is entitled to recover."

It follows that the trial judge properly sustained the general demurrers of the defendant to the plaintiff's declaration in attachment as amended and did not err in dismissing the case.

Judgment affirmed. Townsend and Carlisle, JJ., concur.