STAPLE COTTON COOPERATIVE ASS'N v. Pickett

313 So. 2d 612
CourtLouisiana Court of Appeal
DecidedSeptember 25, 1975
Docket4888
StatusPublished
Cited by5 cases

This text of 313 So. 2d 612 (STAPLE COTTON COOPERATIVE ASS'N v. Pickett) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
STAPLE COTTON COOPERATIVE ASS'N v. Pickett, 313 So. 2d 612 (La. Ct. App. 1975).

Opinion

313 So.2d 612 (1975)

STAPLE COTTON COOPERATIVE ASSN., Plaintiff-Appellee,
v.
J. A. PICKETT, Sr., Defendant-Appellant.

No. 4888.

Court of Appeal of Louisiana, Third Circuit.

April 21, 1975.
Rehearing Denied June 18, 1975.
Writ Granted September 25, 1975.

*613 Felix A. DeJean, III, and Patrick C. Morrow, Opelousas, for defendant-appellant.

Voelker, Ragland & Brackin by Frank Voelker, Jr., Lake Providence, for plaintiff-appellee.

Before FRUGÉ, HOOD, MILLER, DOMENGEAUX, and WATSON, JJ.

WATSON, Judge.

This is an appeal from a judgment ordering delivery of cotton as specific performance of a set of contracts entered into by Staple Cotton Cooperative Association, plaintiff and defendant-in-reconvention, and J. A. Pickett, Sr., defendant and plaintiff-in-reconvention. Staple Cotton is a cooperative which usually acts as agent in selling cotton on behalf of its members at an advantageous price, but which here claims it was the purchaser of defendant's 1973 crop; and Pickett is a farmer who contends that his contracts with Staple Cotton are void or, in the alternative, that his liability is limited to liquidated damages of 5¢ per pound.

We find the decisive issues to be whether the contract between the parties was ambiguous, and if so, what are the resulting rights of the parties?

The facts are not overly complicated. Pickett has twelve relatively small farms in St. Landry Parish on which at least part of his crop consists of cotton. Staple Cotton Cooperative Association is a cooperative based in Greenwood, Mississippi which is principally engaged in the business of acting as agent for its farmer-members in selling their cotton to cotton buyers, both in this country and abroad. According to the witnesses for Staple Cotton, they are able to obtain a better price for their members by joint selling in some form or other than could the individual farmers selling cotton on their own behalf.

In 1972 Pickett was a member of Staple Cotton, and he entered a marketing agreement with Staple Cotton. He had agreed to a "forward sales contract"[1] with a buyer obtained by Staple Cotton, the buyer being W. B. Dunavant & Company, who is not a party to this proceeding. In the 1972 transaction, Staple Cotton acted as agent on behalf of Pickett. The 1972 forms are very similar to the 1973 forms, but Dunavant was clearly indicated as buyer; Pickett as seller; and Staple Cotton as agent.

In 1973, in the month of March, Staple Cotton sent two sets of documents to Pickett. These were forms prepared and printed by Staple Cotton. Because Pickett had 12 farms, these documents were executed in several copies, there being 12 of the membership and marketing agreements and two of the sale and purchase agreements. Although the two sets of instruments bore different dates, the record reflects *614 that they were executed at the same time, as part of one transaction.[2]

Since the documents were executed between the same parties, (Pickett and Staple Cotton) on the same date, and concerned the same object (Pickett's 1973 cotton crop) we hold that they are one contract and must be construed together.

We will not reproduce the instruments in their entirety, but we will summarize them, referring to them in the singular even though there were two of the sale and purchase agreements and 12 of the other instruments. In the preamble the sale and purchase agreement states that it is entered into by Pickett "as producer and seller" and Staple Cotton Cooperative Association "as buyer". The instrument states that seller agrees to sell to buyer his cotton produced in 1973 from the certain identified farms. Various other terms of the sale are included as well as certain prices, the high being 30¢ per pound, depending on grade and delivery date. In paragraph 3, Staple Cotton Cooperative Association is referred to as "agent". Two other paragraphs make reference to Staple Cotton's capacity. These are as follows:

"6. Seller and Buyer expressly agree that all cotton covered by this contract shall be marketed through Staple Cotton Cooperative Association of Greenwood, Mississippi, under its usual marketing agreement where applicable, with all records to be maintained by them for both Producer and Seller's and Buyer's accounts in the usual manner.
"8. We, the Producer and Seller and the Buyer, with Staple Cotton Cooperative Association acting as agent only, have carefully read and fully understand the terms and provisions of the foregoing contract, which represents the entire agreement between the parties, and understand further that there may be no modification of this agreement except in writing." (Emphasis added)

Significantly, paragraph 6 points out that the cotton shall be marketed through Staple Cotton "under its usual marketing agreement" which we will examine below and in paragraph 8 Staple Cotton is stated to be "acting as agent only" which contradicts the preamble.

The other document is the "application for membership and marketing agreement" which reflects that Pickett applied for membership in the Staple Cotton Cooperative Association, and after reciting the advantages of membership in Staple Cotton, the instrument undertakes to describe the rights and duties of the member. (Staple Cotton is sometimes referred to in the documents as the "Association").

*615 In paragraph 2(a) the Association agrees to buy and the Grower agrees to sell to Staple Cotton, all of his cotton produced during the current year and all subsequent years. However, paragraph 5(a) makes clear that the Association is buying the cotton as agent to sell on behalf of the member with the member to receive the net price. Paragraph 5(a) will be quoted in pertinent part:

"The Association agrees to sell such cotton at the best price obtainable by it under prevailing market conditions by one of the methods hereinafter set forth in paragraphs 6(a) and 6(b) to be selected by the grower, and to pay the grower as settlement in full therefor the net amount received therefrom, less freight, insurance, storage and interest, . . ."

The methods of sale referred to are the "pool option" and the "factor option" which are methods through which the grower's cotton is sold to his advantage.

When these terms of the membership and marketing agreement are considered along with the terms of the sale and purchase agreement where Staple Cotton is identified in both variously as agent and buyer, the contract becomes ambiguous.

The legal relationship between Pickett and Staple Cotton cannot be, as the contract confected by Staple Cotton purported to establish, both vendor-vendee and principal-agent as to Pickett's 1973 crop. The utmost good faith is exacted in all dealings of an agent touching the interest of his principal. Forshay v. Lewis, La.App., 81 So.2d 114. We do not suggest that Staple Cotton was lacking good faith; merely that the "utmost good faith" is not a quality consistent with the vendor-vendee relationship which Staple Cotton now urges. Staple Cotton could not wear two hats (agent's and buyer's) at the same time or switch them at will.

In other words, Staple Cotton is not clearly identified as an independent buyer of the cotton in these instruments, as now contended in this legal proceeding. The burden of establishing the validity or enforceability of a contract of sale rests upon the party who seeks to establish it. Hebert v. Briley, 295 So.2d 607 (La.App. 3 Cir. 1974), writ refused, La., 300 So.2d 181.

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

Related

Danna v. Barq's, Inc.
612 So. 2d 253 (Louisiana Court of Appeal, 1992)
Associate Marine Divers, Inc. v. Lecler
338 So. 2d 959 (Louisiana Court of Appeal, 1976)
STAPLE COTTON COOPERATIVE ASSOCIATION v. Pickett
326 So. 2d 337 (Supreme Court of Louisiana, 1976)
Staple Cotton Cooperative Ass'n v. Pickett
319 So. 2d 439 (Supreme Court of Louisiana, 1975)
Fleming v. Maturin
314 So. 2d 356 (Louisiana Court of Appeal, 1975)

Cite This Page — Counsel Stack

Bluebook (online)
313 So. 2d 612, Counsel Stack Legal Research, https://law.counselstack.com/opinion/staple-cotton-cooperative-assn-v-pickett-lactapp-1975.