Thompson v. Balke

245 F. 841, 158 C.C.A. 181, 1917 U.S. App. LEXIS 1550
CourtCourt of Appeals for the Sixth Circuit
DecidedNovember 6, 1917
DocketNo. 3058
StatusPublished
Cited by1 cases

This text of 245 F. 841 (Thompson v. Balke) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thompson v. Balke, 245 F. 841, 158 C.C.A. 181, 1917 U.S. App. LEXIS 1550 (6th Cir. 1917).

Opinion

KNAPPEN Circuit Judge.

Appeal from an order granting a preliminary injunction. The case-is this:

On December 21, 1908, appellant was the owner of the “Old Jordan” distillery, at Harrodsburg, Ky., where he then had on hand in bonded warehouse about 19,000 barrels of “Old Jordan” whisky of the crops of 1901, 1902, 1903, 1905, 1906, and 1907. On that date he made a contract with the corporation of which appellee was president (and to whose rights he has succeeded), whereby appellee (as we shall call the interest represented by him) agreed to procure for appellant a loan of $90,000 on the latter’s note, collateraled by warehouse receipts for whisky, and indorsed by appellee; also absolutely to buy a certain amount of appellant’s 1901, 1902, and 1903 crops at given prices. Pie was given the option of buying, also at given prices, whiskies of the crops of 1903, 1905, 1906, and 1907, on written notice prior to December 1 (later changed to November 1) of the years 1909, 1910, and 1911, respectively. He was given a further option generally of buying all of appellant’s future manufacture (at a certain minimum and maximum production) “during the life of the contract,” at certain prices based on the prices of grain from year to year, and, specifically, of buying the crops of 1909 and 1910 (there was no 1908 crop) on notice prior to November 1, 1912; the crops of 1911 and 1912 on notice prior to November 1, 1913; the crops of 1913 and 1914 on notice [843]*843prior to November 1, 1914 (as those option dates were later changed); and thereafter a series of separate annual options extending to January 1, 1935. He was given the exclusive right to use appellant’s business name, as well as the trade-name “Old Jordan,” during the life of the agreement.

The twenty-first clause of the contract provided that appellant was to bottle the whiskies for appellee on certain terms and prices named. By the thirteenth clause the contract was to “become null and void” in the event of appellee’s failure to exercise in due season any annual option provided for, with provision that if at the time of such termination there should remain in bond any whiskies previously purchased by appellee under the contract, appellant should remain under the obligation of clause 21, before referred to, to bottle the whisky under its terms and conditions; by the seventeenth clause, appellee was entitled to free storage for six months from the date of the entry in bond.

By a supplemental contract of April 14, 1909, appellant was relieved from the obligation of free storage, and in consideration thereof the provision for bottling by appellant was abrogated, and appellee was to do his own bottling at the “Old Jordan” distillery; appellant agreeing to deliver the bulk whisky to appellee at the bottling house as required. The original contract was otherwise undisturbed. By a still later contract of December 2, 1910, appellant agreed that in the event of the termination of the original contract, as provided for in its thirteenth clause, he would bottle in bond, at certain stated charges, all Old Jordan whiskies still in bond theretofore acquired by appellee and by him sold to his customers (or by his customers bought “off the market”), with appellee’s agreement to bottle. The contract was concededly carried out by appellee until November 1, 1914 (he meanwhile doing the bottling at his own expense under the agreement of April 14, 1909), and the options given him were exercised for all crops to and including those of 1909 and 1910. Appellee expressly disclaimed the right to take the crops of 1912, 1913, and 1914 (there was no crop of 1911); the crop of 1912 being treated, for the purposes of notice, as part of the 1913 crop.

On November 1, 1914, when appellee’s right to further purchases ended, appellee had a large amount of bulk whisky of the crops of 1909 and 1910, fully paid for, which he claimed the right to bottle in bond at appellant’s bottling house. Appellant, while denying the existence of this right after November 1, 1914 (and accordingly soon thereafter demanding possession of the works, and offering -and claiming the right to do appellee’s bottling on payment of charges therefor), suffered appellee to use the bottling house (appellant meanwhile bottling therein some of his own whisky) until about December. 6, 1916, when appellant caused the revenue officer to wholly exclude appellee. As under the revenue laws appellee’s remaining whisky (claimed to be about 7,000 barrels) could be bottled only at appellant’s distillery, appellee filed his bill for injunction against interference with his asserted right to bottle. A temporary injunction was ordered (on appellee’s giving bond for $25,000) restraining such interference [844]*844and directing the reinstatement of appellee in the bottling house for the purpose of such bottling, and the delivery to him of so much of his whisky as he should demand for the purpose. On motion for rehearing appellant represented that a considerable part of appellee’s whisky in bulk had been sold by him since November 1, 1914, under agreement for bottling' it in bond, and that by the contract of December 2, 1910, appellant was entitled to bottle it; that joint possession of the premises by appellant and appellee was impossible; and that appellant had of his own whisky about 12,000 barrels of the 1912 and 1913 crops ready and eligible for bottling. The answer to the bill had asserted the sale of appellant’s whiskies (crops of 1912 to 1914), with privilege of bottling at the distillery on appellee’s delivery of possession. The application to rehear was denied.

[1-3] This appeal brings up nothing but the propriety of granting the preliminary injunction. Louisville & Nashville R. R. Co. v. Western Union Telegraph Co. (C. C. A. 6) 207 Fed. 1, 4, 124 C. C. A. 573. The crucial question on the merits is whether the appellee’s rjght to bottle his bulk whiskies then on hand ended November 1, 1914, with the termination of his right to make further purchases. Appellant insists that this result is compelled by the express language of clause 13 of the original agreement, which makes the contract “null and void” on appellee’s refusal to exercise in due season any annual option.

We are unable to agree with this conclusion, for the provision just referred to is immediately followed by one equally express retaining appellant’s obligation under a later clause (21) to bottle “under the terms and conditions” of that clause all of appellee’s whiskies previously purchased and still remaining in bond. True, clause 21 obligates appellant to bottle “during the entire life” of the agreement, and this expression, as used exactly or in substance, in other places in the contract, means the period during which the right to exercise options existed. But to ascertain the intention of the parties the contract must be considered as a whole; and appellant’s construction cannot be accepted without nullifying the express agreement of clause 13, obviously designed to meet the very contingency which this case presents. This should not be done.

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Cite This Page — Counsel Stack

Bluebook (online)
245 F. 841, 158 C.C.A. 181, 1917 U.S. App. LEXIS 1550, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thompson-v-balke-ca6-1917.