Court Opinion

ID: 9766144
Source: CourtListenerOpinion
Date Created: 2023-08-29 04:34:24.866778+00
Date Added: 2024-06-11T07:30:19.719900
License: Public Domain

On Motion for Rehearing.
In a strong motion, appellant points out that appellee’s own confirmation of purchase was conditioned upon “Rules of Texas Cotton Association to govern, except on light weight and heavy weight bales;” later, by written stipulation, the parties providing that the measure of damages “shall be determined in accordance with the rules of the Texas Cotton Association * * * ”; the effect of which was to make mandatory the remedies set forth in such rules; i. e., limiting the buyer to the remedy therein provided. In third *246point, appellant proceeds to demonstrate that under the wording of these rules, construed as a whole, the buyer’s remedy was limited to a purchase in the open market in case of breach by the seller; not permitting a resort to common law, notwithstanding use of the term “option” in such connection.
Association Rule 2, Clause 1 includes the remedy available to the seller on buyer’s failure to receive the cotton tendered, which provision was not viewed in original opinion in full perspective. Said seller’s remedy should again be quoted:
“Likewise, if the buyer, after being notified by the seller of the time and place of delivery, shall fail to receive the cotton tendered him, as per the terms of the contract, on or before the delivery date specified in the contract, then the seller shall notify the buyer, by telegram, of his intention to resell the cotton, and shall extend the time for taking up the cotton 48 hours (Sundays and Holidays excepted) after dispatching such telegram. At the expiration of 48 hours, if the cotton has not been taken up, then the seller must, within three days thereafter, exercise his right to resell the cotton in the open market and shall charge or credit the buyer with the difference between the price received by him in the open market and the original contract price in addition to any expenses or other losses incurred, and when this is done the contract shall be considered fulfilled.” (Emphasis ours.)
Clause 1-A then states “In each case the party in default shall pay to the party not in default $1.50 per bale”, followed by a procedure under which the latter penalty may be avoided.
Here, as appellant points out, the word “option” is not used in a recitation of the seller’s remedy, while the emphasized words “must”, and “shall” make mandatory the remedy available to him. Magnolia Provision Co. v. Coleman, Tex.Com.App., 3 S.W.2d 412. In original opinion we have-held that the word “option” has made permissive the remedy available to the buyer,, though followed by the adverb “likewise”,, meaning in like manner. We now conclude that undue significance has been heretofore accorded the word “option”, viewing Clause 1 in its entirety.
“The contract must be construed' as a whole. It cannot be paragraphed and the paragraphs construed in severalty without reference to each other, it being apparent that they are corelated and interdependent.” Davenport v. Sparkman, Tex.Com.App., 208 S.W. 658, 659 (Sup.Ct. Adopted). “It is axiomatic that, ‘an agreement should be interpreted as a whole and the meaning gathered from the entire context and not from particular words, phrases, or clauses. In fact the entire agreement is to be considered to determine the meaning of each part. All "provisions should,, if possible, be so interpreted as to harmonize with each other.’ 12 Am.Jur. 112,. Contracts § 241.” Alderman v. Alderman, Tex.Civ.App., 296 S.W.2d 312, 315. Under-the foregoing rules of construction, if the-seller must exercise his right to resell the cotton in the open market, likewise (in like manner) the buyer must exercise his option or right to purchase in the open market; “option” to be given its accepted’ meaning in the law of sales as “an agreement by which one party confers a privilege or right upon the other, in reference ■ to a contract to sell or a sale of personal' property, which the latter may exercise- or not, at his discretion. For example,, “an option may be given to buy chattels, * * 37-A Tex.Jur. (Sales) § 130, p. 289. So defined, the only right conferred, upon the buyer under the rules in question,. in case of seller’s default, was that of filling such purchase in the open market and', charging or crediting seller with the difference between the price paid in the open market and original contract price, or take no action at all; the provisions of 2A. being made available in such event to- the-party not in default.
*247Appellee argues that “nowhere did the rules of the Texas Cotton Association provide that if the buyer failed to go into the open market in the exercise of his option, then the contract should be terminated and the dealing of the parties come to an end.” But such result must logically follow from the mandatory nature of the rules. On the other hand, without making a new contract for the parties, we cannot engraft onto these rules the additional remedy of recourse to common law in case of appellee’s failure for any reason to purchase on the open market the kind and quality of linters contracted for.
Above conclusions, reached upon rehearing, require that appellant’s said motion be sustained, the cause reversed and here rendered so as to limit appellee’s recovery to Clause 1(a) of $1.50 per bale, and attorney’s fees, or a total amount of $79.20.
In any event we are now of the opinion that, even in absence of the rules, the trial court has mistakenly made lost profits the measure of damages for this breach of contract. The Court did not find that lint cleaner waste of the grade and quality called for in the appellee’s contract was not being bought and sold in the open' market in November and December, 1955; on the contrary, finding that such commodity of various grades and qualities were bought and sold during the named months and year. The cotton was sold FOB cars, Idalou, Texas to be shipped to Dallas, with no part of the purchase price paid in advance. Appellee offered no evidence showing market value of the contract cotton either in Dallas or Idalou for the mentioned months and season. By exhibit attached to brief, appellant shows the prices at which lint cleaner waste was bought and sold on the market (1955 crop) as revealed by all the evidence in the case; the highest price paid being 11.75 cents per pound.
Appellee’s measure of damages, (even if permittedly allowed under the contract to prosecute his common law remedy) would be based on the long established rule for breach of contracts of sale, i. e., the difference between the contract price and the market price at the time when and the place where delivery of the linters should have been made. 37-B, Tex.Jur. (Sales) p. 76. In consequence the cause should at least be reversed and remanded for another trial.
However on grounds hereinabove stated the cause is reversed and judgment of the trial court set aside. Judgment is here rendered for appellee in the sum of $79.20 as prayed in brief of appellant.