National Commodity Corp. v. American Fruit Growers, Inc.

70 A.2d 28, 45 Del. 169, 6 Terry 169, 1949 Del. Super. LEXIS 73
CourtSuperior Court of Delaware
DecidedDecember 12, 1949
Docket974
StatusPublished
Cited by2 cases

This text of 70 A.2d 28 (National Commodity Corp. v. American Fruit Growers, Inc.) is published on Counsel Stack Legal Research, covering Superior Court of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Commodity Corp. v. American Fruit Growers, Inc., 70 A.2d 28, 45 Del. 169, 6 Terry 169, 1949 Del. Super. LEXIS 73 (Del. Ct. App. 1949).

Opinion

Pearion, Judge.

*172 In October 1947, the plaintiff as buyer and the defendant as seller entered into a series of contracts for the sale of a total of seven million pounds of dry, edible peas for future delivery. 3-480,000 pounds were delivered by defendant to plaintiff under certain of the contracts. 3,520,000 pounds were not delivered. In this action, plaintiff asserts that defendant breached its contracts (relating to 3,520,000 pounds) by failing to deliver this quantity of peas to plaintiff; and further asserts that defendant made certain overcharges, which plaintiff paid, with respect to the peas that were delivered. Plaintiff claims damages in the amount of $43,328.33, with interest. Defendant denies any breach of contract on its part and denies that it made any overcharges. By counterclaim, defendant asserts that plaintiff breached its contracts by-failing to take delivery of and to pay for the 3,520,000 pounds pursuant to the terms of the contracts, and claims damages in the amount of $8538.71, with interest.

In the fall of 1947, defendant had available for sale a large quantity of edible dried peas. Although in the contracts with plaintiff, defendant contracted as a seller, it was actually a selling agent for a cooperative association, the members of which were pea growers in a considerable area of eastern Washington and northern Idaho. The peas were stored in bulk, as they were brought in from harvesting, for the most part in elevators owned or rented^ by the cooperative. Before delivery of peas which had been sold as of any particular grade, it was necessary that they be “processed” to clean and segregate peas of the desired grade.

The total crop grown in the United States in 1947 exceeded 650,000,000 pounds.

For domestic consumption only about 100,000,000 were required. Most of the excess over the domestic consumption volume was ultimately purchased by the United States Army or Department of Agriculture for export. The extent of purchases by the Army or by the Department of Agriculture and the price they paid from time to time, had a highly significant effect upon the price realizable for substantial quantities of peas (one million pounds or more). For example, in the fall and early winter of 1947, the Army or the Department purchased large quantities, and the price rose from under six to over eight dollars per hundred pounds. From late January until May, only one purchase was *173 made by either the Army or the Department in substantial quantity. The price in actual sales declined, and there was relatively little activity in marketing peas. Most of the price quotations referred to in the evidence either were based on dealings in small quantities or were guesses of what would be paid if large quantities were sold.

The plaintiff buyer and defendant seller were brought to- ' gether by a broker. They entered into separate contracts, each relating to quantities of either one or two million pounds of peas. The price per hundredweight was not the same in each contract, but was one of the three amounts: $5.85, $6.00, or $6.15. At the trial and in the first briefs, the parties were in dispute with respect to the precise language of the terms of the contracts between them. Plaintiff urged that certain “Confirmations of Sale” signed by defendant’s Sales Manager embodied the terms. Defendant insisted that the terms were those set forth in “confirmations” prepared on forms of the brokerage firm which initiated the dealings between the parties. From a later brief on behalf of plaintiff, I understand that plaintiff no longer asserts that the differences in the two sets of confirmations are important for the purpose of this case. 1 I agree with this position and, accordingly, shall discuss only the brokerage confirmations. The following excerpts from one of them may be taken as typical of the terms of each contract (bearing in mind the quantity and price differences indicated above, and the additional difference that in one of the six confirmations the shipment period is “December-January” instead of “January, February, March”):

“Article Alaska Peas US Ones.

Quantity 1,000,000 lbs.

Shipment January, February, March, buyer’s call. Buyer to notify seller in sufficient time to make shipment.

*174 ■ Weights Packed 100s 10 oz;

Price $6.15 f.o.b. cars shipping* point.

Payment Arrival draft against documents.

Remarks Seller to allow W. B. & Co. 10c per 100 commission.”

Toward the end of December 1947, plaintiff notified defendant to ship two million pounds “to the Army at Seattle” during January 1948. Later, definite shipping instructions were sent, and defendant processed, bagged and shipped the quantity as directed. The instructions included special marking of bags, billing, etc., required for shipments to the Army. Defendant received no notification for any further shipments until March 6, when plaintiff requested one million pounds (later changed to 1,480,000 pounds) to be shipped to the Army. Final shipping instructions for these were furnished defendant on March 22. Meanwhile, on March 18 plaintiff’s president, Dyke Cullum, called at defendant’s office and discussed with Wayne J. Chastain, Assistant Sales Manager, the remaining quantity of peas (3,520,000 pounds) for which no shipment had been ordered. Mr. Cullum requested an extension of time for shipment to include April. Mr. Chastain replied that he was not authorized to grant such an extension. He arranged for defendant’s Sales Manager to be available so Mr. Cullum might discuss the matter with him. Mr. Cullum did discuss the subject with the Sales Manager, Frank G. Hough, on March 22, and requested that the contracts be extended through April. Mr. Hough told Mr. Cullum that defendant had for a long time held itself in readiness to make delivery of the quantity of peas called for under the contracts. Further, in effect, that defendant was not agreeable to extending the time under the contracts for the shipment of the 3,520,000 pounds beyond March 31; but that if Mr. Cullum would give defendant shipping instructions at that time, defendant would ship what it could to the extent of its capacity up to and through March 31. Neither Mr. Cullum nor anyone on plaintiff's behalf gave defendant on that day any shipping instructions or notification to ship or deliver any of the 3,-520,000 pounds.

Mr. Culium consulted an attorney and they together prepared a letter to defendant, dated March 24 and received by defendant on the following day. Referring to the March 22 discussion, the letter states, among other things:

*175 “* * * Mr. Cullum, without being required to do so by contracts and without waiving his rights thereunder, made you three alternative offers as follows:
“1. Offer that American Fruit Growérs may extend the delivery date, for the balance of three million five hundred twenty thousand (3,520,000) pounds, thirty (30) days through the month of April, or
“2.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Untitled Texas Attorney General Opinion
Texas Attorney General Reports, 1940

Cite This Page — Counsel Stack

Bluebook (online)
70 A.2d 28, 45 Del. 169, 6 Terry 169, 1949 Del. Super. LEXIS 73, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-commodity-corp-v-american-fruit-growers-inc-delsuperct-1949.