Case Name: RANKIN v. MITCHEM
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1906-05-08
Citations: 141 N.C. 277
Docket Number: 
Parties: RANKIN v. MITCHEM.
Judges: 
Reporter: North Carolina Reports
Volume: 141
Pages: 277–284

Head Matter:
RANKIN v. MITCHEM.
(Filed May 8, 1906).
Contracts — Agreements to be Reduced to Writing — Question for Jury — Sales—Delivery—Gambling Contract — Futures - — Mutuality.
1. Where at the time defendant proposed to draw up the contract, a complete verbal agreement had been made between the parties, and the contract was reduced to writing and signed by plaintiff Kankin and the defendant, the fact that plaintiff’s partner did not sign it does not invalidate either the oral or written contract.
2. Where the parties orally agree upon the terms of a contract and there is complete assent thereto, the suggestion to put it in writing at a subsequent time is not of itself sufficient to show that they did not mean the parol contract to be complete and binding without being put in writing. The question is largely one of intention.
3. In an action for damages for breach of contract by defendant in the’ purchase of 160 bales of cotton to be delivered by plaintiff on a fixed date, evidence that on the date fixed, plaintiffs notified defendant that they had the cotton at L. and were ready to deliver according to contract and that defendant asked for extension of time for the delivery, and that plaintiff made two other tenders, is amply sufficient to support the finding that plaintiffs were ready, able and willing.
4. Where the plaintiffs agreed to sell to defendant 100 bales of cotton at a fixed price to be delivered on February 20, and the defendant agreed to pay for the same, and there was a further clause in the contract that plaintiffs “agreed to take the cotton off the hands of .defendant at the market price on February 20,” this last clause is a unilateral promise not binding, or intended to bind, the defendant, and only intended to bind the plaintiffs, and the contract is not a gambling one on its face.
5. Where the contract was not a gambling one on its face, the court properly left to the jury to ascertain the underlying intention of the parties to the contract — whether it was the intention that there should not be an actual delivery of the cotton, but that the contract should be settled by the payment of the difference between the contract price of the cotton and the price of the same quality and grade of cotton at the time named for the delivery.
ActioN by J. O. Rankin against D. W. Mitchem, lieard by Judge O. M. Goolce and a jury, at tbe September Term, 1905, of tbe Superior Court of Gaston.
This was an action to recover damages for an alleged breach of contract on tbe part of tbe defendant in tbe purchase of one hundred bales of cotton.
Tbe following issues were submitted:
1. Did plaintiffs contract with tbe defendant to sell and deliver him 100 bales of strict middling cotton at Lowell, N. C., on February 20, 1905, for tbe price of 9% cents per pound? Answer: Yes.
2. Was tbe time for tbe delivery of said cotton extended by mutual consent of tbe parties until April 10, 1905 ? Answer: Yes.
3. Were the plaintiffs ready, able and willing to deliver said cotton to -the defendant at the time agreed upon for the delivery? Answer: Tes.
4. Did defendant refuse to receive and accept said cotton ? Answer: Yes.
5. What damage have plaintiffs sustained by reason of defendant’s refusal to receive said cotton ? Answer: $949.55.
Prom the judgment rendered, defendant appealed.
O. F. Mason and Burwell & Gansier for the plaintiffs.
A. G. Mangum and Tillett & Guthrie for the defendant.

Opinion:
Brown, J.
The controversy in this case as presented involves the consideration of the following contentions: Was the contract between the parties completed ? Were the plaintiffs able, ready and willing to deliver the cotton according to agreement? Was the contract a wagering contract?
1. The evidence for the plaintiffs is clear that a parol contract was entered into by plaintiffs on the one part and defendant on the other part, whereby plaintiffs contracted to sell and deliver to defendant at Lowell on February 20, 1905, 100 bales of cotton at 9% cents per pound, and equally clear that defendant contracted to take and pay for the same. The proposition to sell seems to have been made by Kankin, who took Eobinson in as a copartner in the transaction, with the consent of the defendant. At the time that defendant proposed to draw up the contract, a complete verbal agreement had been made between the parties, and the contract was reduced to writing and signed by plaintiff Eankin and the defendant. The fact that Eobinson did not sign it does not invalidate either the oral or written contract. The contract had been fully completed between the parties, and the reducing it to writing was not to make a new or different contract, but evidently to preserve the written evidence of what had already been assented to. The plaintiff Eobinson affirmed wbat bis copartner had done, for, according to Rankin's evidence, Robinson was en route to Charlotte and left Rankin to fix up the writing, and told Rankin after he "got it fixed up to phone him at Charlotte and he would buy the cotton." It seems to be generally held that a binding contract may be made between parties although there is an understanding that it is to be reduced to writing, which writing is not completed by the signatures of all the parties. In the case of Sanders v. Fruit Company, 144 N. Y., 209, the Court of Appeals of New York said: "Letters and telegrams which constitute an offer and acceptance of a proposition, complete in its terms, may constitute a binding contract, although there is an understanding that the agreement must be expressed in a formal writing, and one of the parties after-wards refuses to sign such agreement without material modification." Where the parties orally agree upon the terms of a contract and there is complete assent thereto, the suggestion to put it in writing at a subsequent time is not of itself sufficient to show that they did not mean the parol contract to be complete and binding without being put in writing. The question is largely one of intention. From the plaintiff's evidence it is plain the parties intended to contract and did contract before the written evidence of it was drawn up, and that defendant afterwards recognized the contract by asking an extension of time. The subject is fully discussed in 29 L. R. A., 431, note. The court very properly left it to the jury to determine whether the contract was made between the parties as alleged.
2. It is further contended by the defendant that the evidence is insufficient to warrant the finding of the jury in response to the second and third issues. .The plaintiffs' evidence, if believed to be true, establishes facts amply sufficient to support those findings. Rankin testified that on September 20 he personally notified defendant that they had the cotton at Lowell and were ready to deliver it according to contract, and that defendant asked for an extension of time for the delivery and payment of the cotton. The plaintiff further testified that again on March 20 he tendered the cotton; that he had it at Lowell and offered to deliver it there or at Charlotte or Gastonia. Defendant asked plaintiff to carry it longer. At request of defendant plaintiffs carried it until April 10, when the cotton was again tendered and defendant refused to take it and pay for it. According to Eankin's testimony, he then had the cotton at Lowell ready to deliver. The jury appear to have accepted Eankin's evidence as true, and, having done so, they could do nothing less than find the second and third issues for the plaintiffs as their evidence proves three tenders and two extensions at defendant's request.
3. The defendant contends that the contract is, in any view of the evidence, a wagering contract and void. Among other issues, defendant tendered the following: "Was the said contract illegal and void?" We think it would have been better had His Honor submitted the issue. It would have called the jury's attention more pointedly to the principal controversy in the case. But, under the instruction given on the first issue, the defendant, so far as it was a matter for the jury, was given the full benefit of this defence, as appears by the following extract from the charge: "And if the jury shall find that the said contract was entered into by the defendant, but they shall further find that it was the understanding, agreement and intention of the parties that there should not be an actual delivery of the cotton, but that the contract should be settled by the payment of the difference between the contract price of the cotton and the price of the same quantity and grade of cotton at the time named for the delivery, by and to the one side or the other, according as the difference might be, they will answer the first issue 'no.' "
The contention that the contract is void on its face is based upon the written contract as follows: "This contract and agreement, made and entered into this tbe 1st day of December, 1904, by and between D. W. Mitcbem, of tbe first part, and S. M. Robinson and J. 0. Rankin, of tbe second part, all of Lowell, N. C., witnessetb: That tbe said S. M. Robinson and J. G. Rankin agree to sell to D. W. Mitcbem 100 bales of strict middling cotton, average weight 500 pounds, tbe price to be 9% cents per pound. This cotton to be delivered on February 20, 1905, at Lowell, N. C. Tbe said D. W. Mitcbem, in consideration thereof, agrees to pay to tbe said S. M. Robinson and J. C. Rankin 9% cents per pound, landed at Lowell, N. C. In witness whereof, both parties have signed, this 1st day of December, 1904. S. M. Robinson and J. C. Rankin agree to take tbe cotton off tbe bands of D. W. Mitcbem at tbe market price on February 20, 1905. (Signed) D. W. Mitchem, Jno. C. Rankin." It is tbe last clause which tbe defendant contends vitiates tbe contract and discloses per se a gambling purpose. We admit that tbe contract does look suspicious and if tbe clause referred to compelled defendant to let plaintiff take tbe cotton off bis bands at market price on February 20, as well as compelled plaintiffs to do so, it would be plainly a gambling contract and void on its face. Tbe plaintiffs alone were bound by this clause of tbe contract, if anybody was bound by it, while both parties were bound by tbe first and second clauses. A reading of tbe instrument plainly indicates that it was tbe intention of tbe parties that both should be bound by tbe first two clauses, but only tbe plaintiffs by tbe last. There is no mutuality in this last clause and consequently no consideration to support it. It is very similar to tbe contract in Quick v. Wheeler, 78 N. Y., 300. There tbe plaintiff and defendant entered into a written contract, tbe first clause of which provided for tbe sale and delivery by tbe plaintiff to' tbe defendant of certain timber, which was fully performed. Tbe contract then provided as follows: "And I, said Wheeler, also agree to pay said Quick 4½ cents per foot for from 6,000' to 15,000 feet of same kind and quality of tie timber, as aforesaid, and delivered at tbe place aforesaid during tbe winter, to be paid on tbe first day of June, 1814." Tbe contract was signed by both parties, but there was no agreement on tbe part of tbe plaintiff to deliver tbe last quantity of timber, and, although tbe plaintiff subsequently undertook to make deliveries in accordance with said clause of tbe contract tbe court said: "This contract when made was not binding, as it was based upon no consideration. Tbe plaintiff parted with nothing and there was no mutuality. There was not that consideration which mutual promises give a contract. Tbe plaintiff did not bind himself to sell and deliver tbe tie timber. Hence this contract can be treated only as a written offer on tbe part of tbe defendant to take and pay for tbe timber upon tbe terms stated. Story on Sales, section 126; Chitty on Cont., 15; 1 Parsons on Cont. (5 Ed.), 475; Tuttle v. Love, 7 Johns. (N. Y.), 470. This written offer could be revoked at any time before performance or a binding acceptance by tbe plaintiff." See also Oil Co. v. Kirk, 68 Fed. Rep., 791; R. R. v. Dane, 43 N. Y., 240; Campbell v. Lambert, 51 Am. Rep., 1; Cherry v. Smith, 39 Am. Dec., 150.
Under this interpretation of tbe contract tbe last clause therein is a unilateral promise not binding, or intended to bind, tbe defendant, and only intended to bind tbe plaintiffs, and it does not purport to obligate tbe defendant to do anything. In order to make an agreement valid and binding, tbe promises must be mutual; or, if unilateral, then there must be other sufficient consideration moving from tbe one party to tbe other. Tbe insertion of the last clause cannot be said to be conclusive evidence of the intention of both parties that tbe contract should be discharged only by a payment of the difference between tbe contract price and the market price of the cotton on the day fixed for delivery. That being so, the matter is to be settled by ascertaining the real underlying in tention of the parties to the contract. Was it the intention of both parties to the contract that the cotton should not be delivered ? Was it their purpose to conceal in the terms of a fair contract a gambling deal, in which the parties contemplate no real transaction as to the article to be delivered? This purpose and underlying intent His Honor properly left to the jury, the contract hot being a gambling one on its face. State v. Clayton, 138 N. C., 733. There are no exceptions to the evidence, and those to the charge are without merit.
No Error.