Virginia-Carolina Chemical Co. v. Ruffin

Holden, J., delivered the opinion of the court. The main question presented on this appeal is whether or not the contract entered into between the appellant, Chemical Company, and the appellee, Ruffin, was a contract of sale or one of consignment. The suit is one in debt to recover five hundred twenty eight dollars for fertilizers delivered by appellant to appellee under the contract hereinafter set out. The appellee, Ruffin, received the goods individually and stored them in a warehouse of the Ruffin Mercantile Company, which company went into bankruptcy, and the goods were taken by the trustee for the creditors by judgment of the federal court, under our state “sign statute” (Code 1906, section '4784), whereupon this suit was filed to recover against Ruffin, under the contract, as purchaser. Ruffin contended, and was sustained by the lower court, that he was not liable because the contract was one of — 89 — consignment wherein he was merely the agent, and not the purchaser, and that he stored the goods according to the directions of the agent of the Chemical Company, and was not liable for their value when taken by the trustee in bankruptcy. The contract between Ruffin and the Chemical Company is here set out in full: “Agreement this 24th day of January, 1917, between Virginia-Carolina Chemical Company of Delaware, hereinafter called ‘the company,’ and.L. W. Ruffin, a company composed of-......, of Ellisville P. O., Jones county, Miss., hereinafter called ‘the customer.’ “(1) The company agrees to furnish to the customer, on or before May 1, 1919, from such of its factories as it may select, for sale by the customer during the ensuing season, the following specifically named amounts and kinds of fertilizers, to be taken by and charged to the customer at the prices following, and payable at the dates stated below: “Customer agrees that the fertilizer taken under this contract will be sold only for cash and weekly remittances will be made covering all sales. Should time sales be considered it must be with consent of the company. “ (2) To make delivery at these prices in not less than carload lots (less than carload lots are subject to drayage and extra freight) at Ellisville, sacked and tagged as required by law, and shipped for consignment and delivery to the customer, or his duly authorized agent, as he shall in due time, as hereinafter prescribed notify and direct the company-to ship the same. On shipments ordered to a river landing direct by boat, or partly by rail and partly by — 90 — boat, or to flag station or a no-agent station on a railroad, it is agreed, when the goods are loaded f. o. b. boat ór f. o. b. cars (as the case may be) at the point of original shipment and covered by bill of lading taken therefor, that it is a delivery to the customer, and that the company is thereby released from further responsibility or liability on such shipments. The company has the right to ship the goods by any route it may select. ■ / “(3) That the customer shall sell all fertilizers at such advance, over the prices hereinbefore stipulated as he may see fit, and the same shall constitute .his entire compensation and commission hereunder. “(1) The customer agrees that the company shall not be held liable for any delays in transportation by railroads or otherwise, but that he will receive for sale during the continuance of this contract all shipments of said fertilizers, and that he will take the same and pay therefor the said prices hereinbefore, mentioned, and that any advance over and above such prices at which he may sell the same shall constitute his entire compensation and commission so far as the company is concerned. “(5) That any grade or quantity of fertilizers that he may order with the consent of the company which is not mentioned specifically in- this contract shall be considered to be embraced herein, subject to tie same terms and conditions, if not otherwise’specified, as if same were specifically mentioned, and any change of prices mutually agreed upon on any of the fertilizers embraced in this- agreement shall not affect its other conditions and terms, but be subject to same. All shipments made shall-be received, cared ,for, insured, stored, and protected free of expense to the company. “(6) That, until sold or settled for by the customer, the fertilizers contracted for under this agreement shall remain the property of the company, and when sold, all the proceeds of the sale of such fertilizers, including cash, notes, liens, bills of sale, open accounts, and collections therefrom, whenever in possession of the customer, shall be kept — 91 — separate and he held by the customer for the use and benefit of the company and subject to its order, and the same, together with any unsold fertilizers taken under this .agreement, shall be the property of the company until the entire indebtedness of the customer arising under this agreement has been paid. “(7) The company reserves the right to cancel the whole or any unfilled part of this contract in case of destruction of its works, in whole or in part, by fire, flood, cyclone, or other agency, or in case of strikes, or inability to obtain foreign or.domestic materials or any unavoidable contingency beyond the control of the company. “(8) That any failure on the part of the customer to fulfill his obligation arising under this agreement shall cause the debt hereunder to become immediately due and payable to the company, and any report or occurrence unfavorable to his credit shall terminate this agreement at the ¿ption of the company. “(9) No person (other than an officer'of this company) has authority to waive, alter, or enlarge the. printed terms of this contract, and, when done by an officer, it must be in writing and attached to or indorsed hereon; nor is there any agreement, verbal or otherwise, than specified herein. “(11) That all shipments under this agreement shall be made by or before May 1,1917, and that payment for same is guaranteed in full by the customer to the company, at the prices and upon the" terms stated in this agreement, and that settlement when final statement is rendered by the company for such shipments will be promptly made in accordance therewith by cash, or by negotiable notes of the customer, maturing--payable at- Bank of-. “If customer pays before May 1st next, a discount will be allowed at the rate of eight per cent, per annum from date of payment to that date. “(12) In the absence of any other written agreement in effect between the parties hereto, it is agreed, in case any orders for goods have been shipped prior to the date of this agreement or are shipped subsequent to the expiration date thereof, that the prices, terms, and conditions of this — 92 — agreement shall apply thereto, and that settlement will be made accordingly by the customer when statement for same is rendered by the company. “(13) That this agreement shall be signed in triplicate, and be operative only after being approved in writing by the company’s manager. “(14) It is expressly agreed between the parties hereto that the customer absolutely and unconditionally guarantees the accounts and notes for which said fertilizer may be sold, and that the same will be collected to the extent of his debt to the company, and agrees that the company shall have the right to enforce the collection of the notes of the customer given in settlement for said fertilizer upon maturity of the same for all unsatisfied balances thereon, notwithstanding there may be any outstanding and unpaid accounts or notes held by either party for the sale of said • fertilizers made by the customer, and does further agree to hold subject to the order of the company any fertilizers remaining unsold on May 1st, and that any renewals given of said notes due under this agreement, or other forbearances or indulgence of any kind extended to the customer, or to the maker or indorser of any notes given by any party purchasing from the customer the fertilizers agreed to be furnished hereunder, shall'not affect its terms and stipulations. “(15) The customer agrees to look exclusively for all the expenses, insurance, commissions, charges, and profits to such advanced price as he may sell said fertilizers for, and that the company shall be at no cost, expense, or charges whatever in the collection of notes and obligations of purchasers of said fertilizer delivered to or held for the company by the customer, but all the same shall be borne by the customer. “(16) That the customer Avill pay over to the company all the cash proceeds or sales made for cash, when sold, and on or before the 1st day of May, 1917, will send to the company a complete list.of his time, sales for which he will require, and take notes or other evidence of indebtedness and indorse and surrender to the company all i otes, liens, — 93 — bills of sale, or any other evidence of debt received by him from the purchasers of said fertilizers, which evidences of indebtedness are to be returned by the company to him, if no contrary reason arises, for the purpose only of collection and remittance to the company until hié debt to it has been fully paid as aforesaid. It is mutually agreed that the terms, conditions, and prices stated herein are in no way to be affected by any other contract customer or company may make.” It will be observed that the contract embodies provisions peculiar to both contracts of sale and of consignment, which malees it a difficult matter to determine whether it is one of sale or of agency. ' It seems to have .been ingeniously drawn for the advantage of claiming under it either as one of agency or one of sale; and, as said in one authority, “the result is a hybrid contract.” The terms involve essential elements both of sale and consignment, which must be used as tests to determine its character. In construing this kind of contract its meaning is to be gathered from a consideration of all of its controlling parts, and its true purpose is to be ascertained from the whole instrument. Following this guide,' after careful consideration, we have reached the conclusion that the contract in this case is one of consignment or agency, and not one of sale. We shall not undertake to point out in detail the different essential provisions which lead us to this decision, but shall be content to say that, taking the contract as a whole, it reasonably appears that the Chemical Company, the principal, furnished the goods to Ruffin, the agent, to be sold by him for the Chemical Company, and he to account for the goods and the proceeds arising from the sale of them, all of which was under the control of the Chemical Company. Ruffin was to receive a commission on the sales as his compensation, at the same time he agreed to hold and return the goods, or guaranteed payment therefor if sold by him; and, taking all of the provisions together, some of — 94 — which appeal to he in conflict, we do not think the contract was intended to he one of purchase. The contract bears many earmarks of both sale and consignment, but the essentials indicating a consignment predominate and are plain enough to overcome the theory of- a sale, and leads us.to conclude, from the light afforded by a reading of the entire agreement, that it is not a contract of sale. L. E. A. 1917B, 626. Complaint is made by the appellant that the lower court erred in permitting oral testimony showing that the goods were stored in a wareroom by the direction of the agent of the appellant, contending that this testimony is inadmissible as varying the written contract. There is no merit in the point for two reasons, viz.; The oral testimony did not vary or contradict the written contract because no provision as to where the goods were to be kept is made by the written contract; and, second, the suit is one in debt for the purchase of the goods, and, that being true, it would be immaterial as to where the debtor stored the goods. The judgment of the lower court is affirmed. Affirmed.