Bearden Mercantile Co. v. Madison Oil Co.

58 S.E. 200, 128 Ga. 695, 1907 Ga. LEXIS 190

• Court: Supreme Court of Georgia
• Decided: July 12, 1907
• Status: Published

Opinion

Cobb, P. J.

(After stating .the facts.)

1. The contract involved in the present case is not a contract for the sale of goods. There were no particular articles identified by the contract, and it lacked this essential element of a sale. It 'is an executory agreement for the sale of goods to be delivered at a future date. As such it is valid and binding; and this is true notwithstanding the seller had not the goods in his possession, had not contracted to purchase them, and had no expectation of acquiring them other than by purchase or manufacture at some time before the date of delivery. Forsyth Manufacturing Co. v. Castlen, 112 Ga. 199. The contract did not provide for the sale of a single article, but for articles of a given class; and there were two separate and distinct classes of articles referred to therein. It is therefore to be determined whether the contract was entire or whether it was severable in its nature; that is, whether it contained one contract for the sale of hulls and meal, or whether the paper contained two contracts, one an agreement to sell hulls and the other an agreement to sell meal. If the contract is entire, the-whole must stand or fall together. If it is severable, the failure of a distinct part does not void the remainder. The character of the contract, as to whether it was severable or entire, is to be determined by the intention of the parties, as indicated by the terms of the agreement. Civil Code, §3643. And if the contract is upon one consideration, this fact is a strong, and, in some cases, a controlling circumstance in determining the character of the contract, and that-it was the intention of the parties that it should be entire. ' This contract, however, is not based upon a single consideration. The amount to be paid was dependent upon the quantity of the articles that were ordered from time to time. The payments were to be made at specified times after delivery, that is, at the end of the month. The contract deals first with the subject of hulls, and stipulates the price, time, place, and manner of' delivery, as well as other matters connected therewith. After having concluded with this matter the contract, in a distinct paragraph, approaches the subject of meal with the significant language, “We have also sold you,” etc. This paragraph of the contract provides for the price, place, and manner of delivery, and also other matters in reference to this subject-matter. The parties in the paper have dealt with the two subject-matters separately, and there must have been some reason for this in the minds of the contracting parties. There was an intention to separate, and this intention the law will allow to prevail. The paper contains two separate and distinct contracts independent of each other. If time was of the essence as to that portion of the contract relating to hulls, and time was not of the essence as to that portion of the contract relating to meal, it would be possible for the defendants to have lost their right to demand the delivery of the hulls and still be in a position to demand the delivery of the meal. But if time was not of the essence as to either of the subject-matters of the contract, and the defendants had a reasonable time, without reference to the date stated, to call for a performance, it might be that, under the circumstances of the case, a reasonable time would elapse as to one of the articles before it would expire as to the-other. But it is said that the last paragraph in the contract, in which the plaintiffs guarantee local prices for meal at a given figure “for the balance of this season,” etc., indicates that it was the intention of the parties to make the transaction in reference to both subject-matters concurrent as to time as well as in other particulars. It does not appear, from the terms of the contract, what was the season. Whether it expired on the first day of January following the execution of the contract, or at some other time, we c-an not tell. There is no averment in the pleadings which can be looked to to resolve this ambiguity in the contract. Whatever may have been the season for the sale of the articles, the contract provides that this guaranty shall be operative; but we do not think that this guaranty has the effect to change the character of the contract and render it entire when it would otherwise be divisible. When the contract is construed as a whole, we think it a reasonable interpretation that it was the intention of the parties that it should lie divisible as to the two classes of articles referred to therein.

2. At common law time was always of the essence of the contract, but in equity it was otherwise unless it was the manifest intention of the parties to make time of the essence. This intention might be either expressed or implied. Clark on Contracts (2d ed.), 408; Hammon on Contracts, 881. Our code has adopted the more liberal rule of the equity courts, and declares, “Time is not generally of the essence of the contract; but by 'express stipulation or reasonable construction it may become so.” Civil Code, §3675, par. 8. Interpreting the contract, therefore, under this rule, we must not stop merely at finding the time for the performance specified, and hold the parties strictly to performance within that time, but must go farther and determine whether, under the terms of the contract, this time is expressly declared to be of the essence of the undertaking, or whether, if not so expressly declared, a reasonable construction of the provisions of the contract would necessarily lead to that conclusion. Applying this rule, we have little difficulty in reaching the conclusion that it was undoubtedly the intention of the parties that time should be of the essence of the contract in the present case, so far as it related to the sale of hulls. The contract says, “We have this day sold you,” etc., describing the articles and the price, “same to be delivered to you” in a given way “between now and January 1st, 1904.” No other interpretation can be properly placed upon this language than that it was the intention of the parties that at least a demand for the hulls should be made before the first day of January, 1904. A strict construction might require that the demand should be made in time for the delivery before that date; but certainly the contract bears the interpretation that the demand should be made before that date, even though it might be followed by a delivery thereafter. The right to demand a delivery of the articles terminated, so far as the hulls were concerned, on the first day of January, 1904. In reference to the meal the time for the delivery does not appear in the paragraph of the contract dealing with that subject. This, may have been an oversight, or it may have been the result of deliberation. Keeping in mind the rule above referred to, that in order for time to be of the essence there must be an express stipulation, or terms demanding a reasonable construction to that end, wo can not say, where a contract is entirely silent in reference to. a particular article which is dealt with in a distinct paragraph, that a reasonable construction requires that time shall be of the essence of the contract. If we were to attempt to do so, what time would we fix? The parties havé omitted to specify any time. Must we look to an entirely distinct paragraph of the contract, dealing with an entirely different subject of sale, and fix that as the time? We do not know judicially that hulls and meal are so intimately connected with each other, so far as the purposes of commerce and trade are concerned, that the time in the contract for the sale of one would be appropriate in a contract for the sale of the other. Of course we know that cottonseed oil and cottonseed meal are the products of cottonseed, and are the products, or manufactured from, the same thing, because this is a' matter of such common knowledge that every person knows it; but our judicial knowledge in reference to the uses of trade in reference to the two articles is not so broad,as it is as to the fact that both articles are produced from the same thing and at the same time. But it is said, the last paragraph of the contract, in reference to guaranteeing the local price during a given season, might be looked to to determine this. As stated above, we do not know what is the season for the sale of either of these articles. There is nothing in the contract to indicate that the season for the sale closed on January 1, 1904, as to the meal; and in fact nothing to indicate that the season closed at that time in reference to hulls. And on the question as to what is the season for the sale of these articles we are in ignorance, both judicially and individually. It may have been the purpose of the contracting parties to make time of the essence as to the meal. But they have failed to provide any such •express stipulation; and a reasonable construction of the contract •does not call for such an interpretation.

3. When a contract fixes no time for performance, the contract is to be construed as allowing a reasonable time for that purpose. Clark on Contracts (2d ed.), 408; Hammon on .Contracts, 881. Where a party to a contract undertakes to do a particular act, the performance of which depends entirely upon himself, and the contract is silent as to the time of performance, the law implies an engagement that it shall be executed within a reasonable time. 9 Cyc. 613. Of course it was not intended by the parties that this executory agreement should continue for all time. The parties had definitely agreed that the agreement should not be in existence ■after January 1, 1904, so far as the hulls were concerned. The plaintiff had agreed to sell to the defendants meal. Whether they were entitled to receive the hulls depended upon whether they demanded the delivery prior to January 1, 1904. Whether they should be entitled to demand the meal depended upon whether the delivery was called for within a reasonable time after the execution of the contract. The plaintiff was under no obligation to tender •either the hulls or the meal. It was under obligation to deliver in the one instance in the time provided in the contract, and in the other in the time authorized by law. What was a reasonable time in which to call for a delivery of the meal under the contract is a question of fact to be determined by a jury under all of the •circumstances of the case. The answer alleges that the defendants demanded full performance on February 3, 1905. Full performance would have meant the delivery of all. of the articles that the defendants were entitled to demand under the contract and had not been delivered prior to that time. This was a sufficient allegation of a demand for delivery, and whether this demand was made within a reasonable time is to be determined as above indicated. This case is to be distinguished from the ease of Electric Railway Co. v. Tennessee Co., 98 Ga. 189, in that the contract there under •consideration was an executory agreement for the sale of a given quantity of articles to be delivered daily for a period not specified. It was held that the contracting party who was to furnish the articles could not terminate the contract without notice, but that it could be terminated by giving notice. In the present ease the articles were not to be delivered daily, but they were to be delivered when called for; the time in which they were to be called for not being fixed by the parties, the law implies that it was the intention of the parties that a reasonable time should be allowed for this purpose. In addition to this, that case did not deal with the question as to when notice of discontinuance should be given. There is nothing in that case to indicate that even a contract of the character there involved can be discontinued by notice without allowing the parties a reasonable time to make other arrangements in reference to the subject-matter of the undertaking. The ease rested upon the principle stated in Clark on Contracts, in this language: “If a continuous contract-fixes no time during which it is to last, and no time is fixed by law or by usage, it may be determined at the will of either party by notice.” Clark on Contracts (2d ed.), 430.

4. It is said, though, that it appears that the defendant did not comply with the contract in reference to payment at the end of each month, and therefore this was sufficient reason for the plaintiff to refuse to make further deliveries. Under the averments of the answer it is evident, so far as the time of payment was concerned, that the course of dealing between the parties had been such as to nullify this stipulation of the contract. The contract provided for statements to be rendered at given times, which were not rendered, although demanded, and payment was received at other times without objection. It is said, too, that the stipulation as to time in that portion of the contract providing for the sale of hulls has also been waived. There are in the pleadings averments that by mutual agreement and tacit consent, or similar words, certain things had been done. No express agreement changing the time is set up in the pleadings. The facts relied upon to'show such agreement are set forth, and the words above referred to seem to be merely the conclusion of the pleader from the facts alleged, and the presiding judge, in an opinion which appears in the record, states that it was admitted in the argument before him that these words were to be given no more effect than mere conclusions from the facts pleaded. It appears that there were hulls delivered after the first day of January. This might constitute a waiver as to the demand being made before that date, so far as these hulls were concerned. But would this waiver go any further than the particular transaction? While a distinct stipulation in a contract may be waived by the conduct of the parties, it must appear that it was the intention of the parties to treat such stipulations as no longer binding. The mere fact that one party so intended would not bring about this result. It must appear that it was the mutual intention; that is, the circumstances must be such as, in law, to make practically a new agreement as to the stipulations contained in the original contract. And construing the answer most strictty against the pleader, we can not say that the averments are sufficient to show that there was such a course of dealing as to show a mutual intention to do away with the stipulations in the original contract as to the time when the hulls were to be delivered.

5. It is contended by counsel for plaintiffs in error that under the contract the oil company was bound to store a certain quantity of hulls on the first day of January, 1904, for delivery thereafter. The contract was to deliver, when called for a given quantity of hulls. If all were not delivered prior to January 1, 1904, and the quantity undelivered was equal to or less than the quantity in the provision in reference to storing, then the plaintiff was, on application, to store for the benefit of the defendants; but we do not think that it was the intention of the parties that this quantity should be stored without reference to a request on the part of the defendants. A reasonable interpretation of the contract was that ’ if the defendants, in their business, could not use the entire quantity before the first day of January, 1904, the plaintiff would keep stored not exceeding a certain quantity for delivery thereafter. But there was no positive duty imposed upon the plaintiff by the terms of the contract to hold or store this amount for the benefit of the defendants. There is no allegation that there was any request on the part of the defendants, prior to January 1, 1904, to store this quantity. The right of the defendants to demand delivery, as well as to demand storage, terminated on the date provided in the contract. The answer, and the amendment thereto, so far as each related to that portion of the contract providing for the sale of hulls, set forth no defense; but those portions of the answer and the amendment thereto relating to the contract for the sale of meal set forth a cause of action.

Judgment reversed.

All the Justices concur.