Paterson & Edey Lumber Co. v. Carolina-Portland Cement Co. , 215 Ala. 621 ( 1927 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The suit is by appellant against the appellee seeking a recovery of damages for breach of contract. As last amended, the plaintiff stated his case in nine counts. Defendant's demurrer was sustained to each count, and on account of such adverse ruling on the pleadings, plaintiff took a nonsuit and prosecutes this appeal for a review thereof. J. E. Paterson is the assignee of this chose in action, the Paterson Lumber Company being the assignor, and the suit is properly brought in the name of the Paterson Lumber Company for the use and benefit of said assignee. Snead v. Bell, 142 Ala. 449, 38 So. 259; Spurgeon v. McCall, 204 Ala. 395, 85 So. 480.

The parties to the contract will, for convenience, be designated as the Paterson Company and the Carolina Company.

Counts AA, CC, DD, and EE rest for recovery upon breaches of a written contract made Exhibit A thereto. Negotiations with reference to this contract were carried on with one Brewer as representing the defendant company. These counts disclose that the written contract, Exhibit A, was agreed upon by the Paterson Company and said Brewer on May 15, 1920, subject to the approval of an executive officer of the Carolina Company. Two copies were duly signed by proper officers of the Paterson Company, and delivered to Brewer, duly authorized to receive them for the Carolina Company, and two copies retained by the Paterson Company. It was agreed that the written contract should "become effective if and when it was approved by an executive officer of said Carolina Company." The counts then allege that the contract was approved by an executive officer of the Carolina Company on August 6, 1920. The contract was "not signed by the Carolina Company or any one purporting to act for it in the premises," and it is insisted that, prima facie at least, from a consideration of the written contract in connection with the averments of the pleader in reference thereto, approval by signature was the intention of the parties, and that if approval otherwise was to be considered of binding force and effect, these counts should have so averred in more specific terms.

Appellant relies upon the well-recognized rule that the object of signature is to show mutuality and assent, which may be shown in other ways, and that unless a contract is required by statute or arbitrary rule to be in writing, it need not be signed, provided it is accepted and acted upon. 13 C. J. 305; Whatley v. Reese, 128 Ala. 500, 29 So. 606; Forthman v. Deters,206 Ill. 159, 69 N.E. 97, 99 Am. St. Rep. 145; Hard Wood Package Co. v. Courtney (C.C.A.) 253 F. 929; 1 Williston on Contracts, p. 157.

"But it is equally well settled that an unsigned contract cannot be enforced by either of the parties, however completely it may express their mutual agreement, if it was also agreed that the contract should not be binding until signed by both of them." Hard Wood Package Co. v. Courtney, supra.

This latter authority contains also the following excerpt from the opinion in the case of Miss. SS. Co. v. Swift, 86 Me. 248,29 A. 1063, 41 Am. St. Rep. 545, of interest in this connection:

"When parties enter into a general contract, and the understanding is that it is to be reduced to writing, or if it is already in a written form, that it is to be signed before it is to be acted on, or to take effect, it is not binding until it is so written or signed. * * * When correspondence indicates that a formal draft of a contract was in the minds of the parties, or at least in the mind of the party sought to be charged, as the only authoritative evidence of a contract, and that he did not have, nor signify, any intention to be bound until the written draft had been made and signed, he is not bound until such draft is duly made and signed. * * * The burden of proof is upon the party claiming the completion of the contract before the written draft thereof is signed."

Upon concluding a review of some of the leading authorities the Supreme Court of Maine in the Swift Case, supra, summed up the whole matter with the following observations:

"From these expressions of courts and jurists it is quite clear that after all the question is mainly one of intention. If the party sought to be charged intended to close a contract prior to the formal signing of a written draft, or if he signified such an intention to the other party, he will be bound by the contract actually made, though the signing of the written draft be omitted. If, on the other hand, such party neither had nor signified such an intention to close the contract until it was fully expressed in a written instrument and attested by signatures, then he will not be bound until the signatures are affixed. * * * In determining which view is entertained in any particular case several circumstances may be helpful, as: Whether the contract is of that class which are usually found to be in writing; whether it is of such nature as to need a formal writing for its full expression; whether it has few or many details; whether the amount involved is large or small; whether it is a common or unusual contract; whether the negotiations themselves indicate that a written draft is contemplated as a final conclusion of the negotiations. If a written draft is proposed, suggested, or referred to, during the negotiations, it is some evidence that the parties intended it to be the final closing of the contract."

It clearly appears from the averments of these counts and a consideration of the contract itself that it was one of great importance, containing many details and involving considerable sums of money, and as conclusive of all these matters was the act of the parties in having the agreement made by Paterson Company with the agent, Brewer, reduced to a formal and evidently skillfully prepared written contract, actually signed in duplicate by Paterson Company with blank space for the signature of the Carolina Company, and appropriate spaces for signatures of attesting witnesses for each of the contracting parties. The two copies signed by the Paterson Company were delivered to the agent for the Carolina Company.

We are of the opinion that the averments of these counts in connection with the contract suffice to raise the implication that the approval of the executive officer referred to therein was to be manifested in like manner as the Paterson Company, by signature to the instrument. Both reason and common sense so indicate, and, clearly, the contract and conduct of the parties is to be properly so construed as disclosing, prima facie at least, such an intention. To each of these counts (with the exception of DD where it is omitted), the telegram relied upon as evidencing the approval of the executive officers is referred to and made an exhibit thereto; but we are unable to see that it adds any weight to plaintiff's case. Its language, "mailing signed contract to you today," is rather confirmatory of the view that approval by signature was the intention and understanding of the parties. No signed contract is alleged or exhibited. Upon the face of these counts, therefore, we think it appears sufficiently, by implication at least, that the approval of the executive officer of the defendant company was to be manifested by signature to the contract.

These counts are to be construed most strongly against the plaintiff, and the burden was upon him to show a binding and enforceable contract. If, therefore, approval otherwise than by signature was agreed upon, or intended by the parties, the counts should have so averred. Failing therein, they were subject to the demurrer interposed, and the court committed no error in the ruling thereon.

Counsel for appellee further insist that the averments of these several counts are inconsistent and repugnant, in that defendant is sought to be held liable for conduct and agreements of an agent, and in the same counts disclosing the agent's lack of authority to bind the principal without the express approval of an executive officer thereof. The conclusion reached as to the insufficiency of these counts upon the ground above stated renders a consideration of this further insistence unnecessary.

But the same argument is carried forward into a consideration of counts FF, GG, HH, II, and JJ, which rest for recovery upon breaches of an oral contract. These counts make no reference whatever to counts AA, CC, DD, and EE, above discussed, nor is there any reference to the contract in writing made Exhibit A thereto. Under our system of pleading the several counts of the complaint are considered separate and distinct, and to be tested for their sufficiency by the averments thereof without reference to any other count, unless so adopted by the language thereof, which is often done in order to save repetition:

"The several counts of a declaration are regarded as its several parts, or sections; and it is not only permissible, but often very proper, to avoid unnecessary repetition and prolixity, that one should refer to another. If, however, there is not an express reference, the several counts are considered as distinct as if contained in separate declarations." Robinson v. Drummond, 24 Ala. 174.

These counts are therefore to be considered upon their averments without reference to the others. The oral contract which forms the foundation of these counts is alleged (with the exception of HH, hereinafter referred to) to have been entered into on defendant's part by one Brewer as its duly authorized agent. Reference is made to a written contract, but the only purpose of such reference is to fix the time, duration of the oral contract, that is, the time intervening between that date (May 15, 1920), and the time when such written contract should be approved by an executive officer of defendant company, or plaintiff should be notified that it would not be approved. Reference to the written contract was therefore only for a collateral purpose, and no necessity arose for a statement of its terms and conditions.

As previously noted, these counts expressly aver that Brewer, the agent, was duly authorized to act in the premises in behalf of his principal, and the averments of these counts in this respect clearly meet the requirements of our decisions. Morris v. Bynum, 207 Ala. 541, 93 So. 467; Hanover Fire Ins. Co. v. Wood, 209 Ala. 380, 96 So. 250; L. N. R. R. Co. v. Bartee,204 Ala. 539, 86 So. 394, 12 A.L.R. 251.

Nor do we intend to here indicate a view that, had express reference been made to Exhibit A of the other counts, appellee's point would have been well taken. The oral contract relied upon in these latter counts fixed the price of the sale of the lumber at $70 per thousand feet, while under the written contract the price was to be determined in a certain manner, and evidently dependent largely upon the market. The duration of the oral contract depended entirely upon the action of the defendant in reference to the written contract, and could, no doubt, if desired, have been terminated by such action in a few days. There are other differences which need not be further detailed. In any event, the authority of the agent is sufficiently averred, and the insistence to the contrary may be more appropriately addressed to the matter of proof rather than the sufficiency of the pleading.

The oral contract set up in these counts is definite as to the time it became effective, May 15, 1920, the timber covered thereby, and the time of its duration as above outlined. Its salient terms are made sufficiently to appear, and the averments of these counts show a compliance by the Paterson Company of all precedent obligations or conditions, and that said company was ready, willing, and able to meet all subsequent obligations. The several breaches of the contract relied upon are clearly stated in each of these counts, nor do we find that the pleader has in any of them offended the rule against assigning two breaches in the same count on one and the same stipulation. It is of course permissible to assign one breach of each of several stipulations in one count. Worthington v. Davis, 208 Ala. 600, 94 So. 806. The damages claimed are definitely stated, and are neither remote, uncertain nor speculative, but the averments show that they are such as naturally and proximately flow from the breaches of the contract relied upon for recovery.

The questions herein discussed appear to be the ones upon which stress is laid in argument, and to give to each count detailed treatment in connection with the numerous assignments of demurrer interposed thereto would unnecessarily extend this opinion to undue length. We think a careful reading and consideration of these counts resting upon breach of the oral contract will suffice to show they are not subject to demurrer.

As we gather from briefs of counsel, the trial court evidently ruled against these counts upon the theory of repugnancy heretofore discussed, but in that view we cannot concur. Count HH avers that the oral contract was entered into between plaintiff and defendant company, and makes no mention of an agent, and the point is taken that the count is defective in failing to state what authorized agent of defendant made the contract. The averment of the complaint in this respect is in accord with the generally accepted rule (2 C. J. 904), and we find nothing to the contrary in Hanover Fire Ins. Co. v. Wood,209 Ala. 380, 96 So. 250; May v. Kelly, 27 Ala. 497; South. States F. C. Co. v. Lunsford, 192 Ala. 76, 68 So. 273, cited by counsel for appellee.

For the error of the court in sustaining the demurrer to counts FF, GG, HH, II, and JJ, the judgment must be reversed and the cause remanded.

Reversed and remanded.

ANDERSON, C. J., and SAYRE and BOULDIN, JJ., concur.