1. Contracts for the sale of sugar considered, and
held
free from the objection that they made delivery optional with the
seller, and therefore lacked mutuality. P.
267 U. S.
250.
2. In an action by the seller on an intrastate contract for the
sale and delivery of goods owned by the seller and title to which
passed to the buyer unrestricted under the contract, the buyer
cannot defend upon the ground that the seller was party to a
combination to manipulate interstate trade in goods of that kind in
violation of the Anti-Trust Act, and made the contract during the
life of the combination and in conformity with standards sanctioned
by it. It is only when the invalidity is inherent in the contract
itself that the Act may be interposed as a defense to it. P.
267 U. S.
251.
3. Defenses based on §§ 4, 5 and 6 of the Lever Act
held insufficient on grounds stated in
Small Co. v.
Am. Sugar Co., ante, 267 U. S. 233. P.
267 U. S.
252.
4. The duty of a seller of goods, in reselling on account of the
buyer, is to sell fairly in a reasonably diligent effort to obtain
a good price; the test is not whether he got the highest possible
price or as much as others got in particular instances. P.
267 U. S.
253.
5. Evidence of particular sales
held rightly rejected
in the circumstances.
Id.
6. Where the evidence is undisputed or of such conclusive
character that, if a verdict were returned for one party, whether
plaintiff or defendant, it would have to be set aside in the
exercise of a sound judicial discretion, a verdict should be
directed for the other party. P.
267 U. S.
254.
7. The view that a scintilla or modicum of conflicting evidence,
irrespective of the character and measure of that to which it is
opposed, necessarily requires a submission to the jury has met with
express disapproval by this Court and by many others.
Id.
Page 267 U. S. 249
8. Evidence
held to establish conclusively that reales
of goods, made by the vendor, were made fairly and within a
reasonable time. P.
267 U. S.
254.
Affirmed.
Error to a judgment of the district court in favor of the
plaintiff, Lamborn & Co., in an action brought to recover the
difference between the contract price of sugar sold by plaintiff to
defendant and the amount obtained by the plaintiff on resale, the
defendant having refused to accept delivery.
MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.
On April 30 and May 7, 1920, the parties to this case entered
into contracts for the sale by one and purchase by the other of 450
barrels of refined sugar, to be shipped by the seller from a
refinery at Port Wentworth, Georgia, to the buyer at Macon, in the
same state, between July 15 and October 1. Late in July, 150
barrels were shipped, accepted, and paid for. About that time, the
market price began to decline, and continued downward for the rest
of the year. Late in August, the seller shipped 150 barrels more,
but when it reached Macon, the buyer refused to accept it,
suggested that it be stored "for the benefit of whom it may
concern," which was done, and notified the seller that any further
shipment would be similarly refused. Correspondence followed in
which the seller sought to persuade the buyer to adhere to the
contracts. Late in September, before the expiration of the time for
completing delivery, the seller notified the buyer that, if
Page 267 U. S. 250
the refusal to conform to the contracts was continued, the
remaining 300 barrels, which included the 150 stored at Macon,
would be resold for the account of the buyer and the latter would
be held for the difference between the contract price and what was
realized on the resale. The buyer persisted in the refusal, and the
sugar was resold.
This action was brought by the seller to recover from the buyer
the difference between the contract price and the amount obtained
on the resale. In the district court, a verdict and judgment were
given to the seller, and the buyer brought the case here on direct
writ of error, a constitutional question being involved.
One defense interposed by the answer was that the contracts were
wanting in mutuality, and therefore void. A demurrer to the defense
was sustained, and this is assigned as error. Two clauses in the
contracts are cited as making delivery optional with the seller,
and therefore showing a want of mutuality. But, in our opinion, the
clauses are not open to that construction. The contracts, signed by
both parties, evidenced an agreement by the seller to deliver the
sugar within a designated period at a fixed price, as well as an
agreement by the buyer to take the sugar and to pay the price. They
contemplated that the buyer might be accorded the privilege of
calling for special deliveries, known as "withdrawals," during the
prescribed period, if the seller was in a position reasonably to
make them. And they contained alternative "terms" of payment --
"Cash before delivery less 2%, or cash in seven days less 2%." The
clauses in question then followed. One was "Terms and withdrawal
subject to the approval of the seller's credit department." Read in
the light of established practices in the sugar trade, this clause
meant that, when a shipment was made, the seller's credit
department was to elect which of the alternative terms of payment
should apply, and also that, if the buyer called for special
deliveries, known as "withdrawals,"
Page 267 U. S. 251
that department was to determine whether such deliveries
reasonably could be made, and was to approve or disapprove them
accordingly. The clause was essentially subsidiary, and entirely
consistent with the seller's definite agreement to make delivery
within the period prescribed. The other clause was to the effect
that, "if the supply of raw material of the refinery manufacturing
the sugar" should be interrupted by war conditions, embargoes,
strikes, or other like cause, and if delivery was thereby
prevented, the seller should "not be responsible." There is nothing
in this clause which affords any basis for saying that delivery was
to be optional with the seller. On the contrary, it recognizes that
he was obligating himself to make delivery. Its evident and only
purpose was to relieve him from liability in the event that
performance of the obligation was prevented by particular
circumstances in their nature beyond his control. It is idle to
suggest, as was done in argument, that the clause would permit him
to avoid delivery by merely selecting a refinery which, by reason
of war conditions, embargoes, or strikes, was already cut off from
a supply of raw material. That would not be within either the
letter or the spirit of the clause, but would be a palpable fraud,
and unavailing.
Slater v. Savannah Sugar Refining
Corporation, 28 Ga.App. 280, 284.
The answer set up a special defense based on the Anti-Trust Act
of July 2, 1890, c. 647, 26 Stat. 209, prohibiting restraints and
monopolies in interstate and foreign commerce. A demurrer to the
defense was sustained, and the ruling is assigned as error. But it
was plainly right. In the first place, the contracts pertained only
to intrastate commerce. They were negotiated in Georgia; the sugar
was to be delivered from a refinery at Port Wentworth and shipped
to Macon, both in Georgia, and no facts were alleged showing that
interstate or foreign commerce was
Page 267 U. S. 252
affected. In the next place, and independently of the character
of commerce involved, it was not shown that the contracts were, in
themselves, invalid under the Anti-Trust Act, but only that they
were collateral to a combination prohibited by it. In substance,
the defense was that the seller and others had entered into a
combination to manipulate interstate trade in refined sugar with a
view to increasing the price; that the contracts were made during
the life of the combination, and that the seller conformed the
terms of sale to standards sanctioned by the combination. There was
no allegation that it was not the owner of the sugar, nor any
allegation that the buyer was a party to the combination or other
than a stranger to it. The contracts disclosed the full transaction
between the seller and buyer, and contemplated that the sale should
pass the title without any restriction on the right of the buyer to
resell as it might choose. As has been pointed out in prior cases,
there is nothing in the Anti-Trust Act which invalidates such a
collateral contract or relieves the buyer from his obligation under
it.
Connolly v. Union Sewer Pipe Co., 184 U.
S. 540,
184 U. S.
550-552;
Continental Wall Paper Co. v. Voight,
212 U. S. 227,
212 U. S.
257-259;
Wilder Manufacturing Co. v. Corn Products
Co., 236 U. S. 165,
236 U. S. 177.
It is only where the invalidity is inherent in the contract that
the Act may be interposed as a defense. With that exception, the
remedies which the Act provides for violations of it are exclusive.
Wilder Manufacturing Co. v. Corn Products Co., supra,
236 U. S. 172,
236 U. S. 175;
Paine Lumber Co. v. Neal, 244 U.
S. 459,
244 U. S. 471;
Geddes v. Anaconda Mining Co., 254 U.
S. 590,
254 U. S.
593.
The answer also interposed a number of special defenses based on
sections 4, 5, and 6 of the Lever Act, c. 53, 40 Stat. 276; chapter
80, 41 Stat. 297, and no particular orders and regulations issued
under it. These defenses were held insufficient on demurrer, some
on the ground that a part of the Lever Act was in conflict with the
due
Page 267 U. S. 253
process of law clause of the Fifth Amendment. Some of the
defenses were like those considered and rejected in
Small Co.
v. American Sugar Refining Co., ante, p.
267 U. S. 233, and
what was said of them there suffices to dispose of them here. The
want of merit in the others is so obvious that they do not call for
special notice. While the ruling on them is assigned as error, no
attempt to support them is made in the brief.
The sugar which was resold by the seller for the account of the
buyer consisted of 105,000 pounds, the 52,500 pounds stored at
Macon and a like quantity remaining at the refinery. The market at
that time was unsettled. Wholesale dealers had an oversupply, and
retail dealers were buying cautiously, and in small quantities.
Nevertheless the prices realized on the resales equaled the full
market price for that general region for quantities such as were
resold. The 52,500 pounds stored at Macon was resold October 11th,
and that at the refinery November 3d. In both instances, the
defendant was advised of the price offered by the intending
purchaser, and was given an opportunity to secure a purchaser at a
better price, but none was brought in. A resale of the 52,500
pounds at the refinery was negotiated October 15th, but, through
some delay in transportation, it was not consummated. Another sale
was then negotiated, and was completed November 3d at a little
higher price.
The defendant offered to prove by wholesale dealers in Macon the
prices received by them on particular sales to retail dealers about
the time of the resales, but the testimony was rejected, and we are
asked to say that this was error. We think the ruling was right.
The particular sales were in relatively small quantities, many of
them under 300 pounds, and had no probative bearing on the fairness
of the resales. The real question, as stated in
Small Co. v.
American Sugar Refining Co., supra, was whether the resales
were fairly made in a reasonably
Page 267 U. S. 254
diligent effort to obtain a good price, and not whether the
plaintiff got the best possible price, or as much as others got in
particular instances. The unsettled state of the market and the
difference between selling small quantities to retail dealers to
satisfy immediate needs and selling large quantities to wholesale
dealers who had an oversupply made it necessary to confine the
evidence to the real question.
On the conclusion of the evidence, the court directed a verdict
for the plaintiff, and the remaining question is whether this was
error. The defendant insists that it was, because it took from the
jury the question whether the resales were made within a reasonable
time. The period for delivery under the contracts expired September
30th, and the court ruled that the duty to resell within a
reasonable time arose at that time, which was practically conceded.
One of the resales was made October 11th. Another was negotiated
October 15th, but fell through, and an effective one was made
November 3d.
The rule for testing the direction of a verdict, as often has
been held, is that, where the evidence is undisputed, or of such
conclusive character that, if a verdict were returned for one
party, whether plaintiff or defendant, it would have to be set
aside in the exercise of a sound judicial discretion, a verdict may
and should be directed for the other party. The view that a
scintilla or modicum of conflicting evidence, irrespective of the
character and measure of that to which it is opposed, necessarily
requires a submission to the jury has met with express disapproval
in this jurisdiction, as in many others.
Improvement Co. v.
Munson, 14 Wall. 442,
81 U. S. 448;
Pleasants v.
Fant, 22 Wall. 116,
89 U. S. 122;
Bowditch v. Boston, 101 U. S. 16,
101 U. S. 18;
Anderson County Commissioners v. Beal, 113 U.
S. 227,
113 U. S. 241;
Delaware, etc., R. Co. v. Converse, 139 U.
S. 469,
139 U. S.
472.
We are of opinion that the evidence as set forth in the record
conclusively established that the resales were
Page 267 U. S. 255
made within a reasonable time. The state of the market was such
that it was difficult to make any sales, and the quantities to be
sold enhanced that difficulty and also the need for care. The
witnesses for the plaintiff described with much detail the efforts
which were made, and the evidence as a whole reasonably admitted of
no other conclusion than that the efforts were timely, well
directed, and persistent. Many bids were received, but almost all
were so low that their acceptance would have meant a great
sacrifice. The defendant was notified of the purpose to resell, but
made no effort to advance it in point of time or to bring in a
purchaser at an acceptable price. Considering the state of the
market, the outcome appears to have justified both the time and
care taken by the plaintiff.
Judgment affirmed.