Summary
In Gardner, a buyer defended against the enforcement of a contract for the sale of fertilizer on grounds that the seller, a commercial fertilizer dealer, had not complied with statutory registration, inspection, and notice requirements.
Summary of this case from Seymour v. EvansOpinion
No. 37166.
October 10, 1949.
1. Sales — cancellation of contract — refusal to perform.
A letter written by the contract purchaser of fertilizer, prior to the delivery date, requesting a cancellation of the order and stating that the purchaser was unable to use the fertilizer, amounted to a distinct and unequivocal refusal to perform, especially where the seller acted upon such refusal and promptly notified the purchaser that he was so doing.
2. Sales — tender of delivery — when not necessary.
The fact that the contract seller of fertilizer made no tender of delivery to the purchaser did not affect seller's right of action when it is clear that the tender if made would not have been accepted; nor was the seller obliged to make tender at less than the contract price.
3. Sales — commercial fertilizer — failure of seller to comply with statutory requirements.
A contract purchaser of commercial fertilizer who cancelled his order is not in a position to set up as a defense to an action for his breach of the contract that the seller had failed to comply with statutory provisions, when the seller was not required so to comply prior to the date of the purchaser's cancellation.
4. Sales — commercial fertilizer, a lawful commodity — absence of statute making contracts of sale unenforceable.
Commercial fertilizer is a lawful commodity, the sale of which is not malum in se. The statute which makes it a misdemeanor to sell or offer to sell commercial fertilizer without compliance with certain statutory provisions, is merely malum prohibitum, and since the statute contains no provision declaring such a sale to be void and unenforceable, noncompliance by the seller did not forfeit his right of action against purchaser for breach of contract of sale.
5. Statutes — sale of commodities — forfeitures.
When a statute contains no provision declaring a forfeiture for failure to comply with it none will be imposed.
6. Trial — damages — amount undisputed.
When on the trial of an action by a seller against the buyer for breach of a sales contract, the amount of the damages is undisputed, the court in rendering judgment on the issue of liability in favor of the seller will include in it judgment for undisputed amount of the damages.
Headnotes as approved by McGehee, C.J.
APPEAL from the circuit court of Humphrey County; ARTHUR JORDAN, Judge.
Forrest G. Cooper, for appellant.
A. The contract was for the sale of a legal commodity, and the parties did not contract to purchase and sell in an unlawful way.
B. Domestic by-product sulphate of ammonia is not a mixed fertilizer and is a standard product.
C. In the sale and delivery of this fertilizer in bulk, the statutes of Mississippi were substantially complied with except as to registration and notice.
D. But even if our statutes as to the sale of fertilizer had not been complied with, these statutes do not declare unlawful a contract for the sale of fertilizer which is fulfilled without the full compliance with such rules and regulations. The intention of the Legislature was not to make unenforceable such contracts.
Our fertilizer statutes: If a statute does not expressly or by necessary inference declare a contract void, the mere fact that such statutes require certain rules to be complied with and make violation of such rules a criminal offense does not render unenforceable such contracts. Levinson v. Cox, 127 Miss. 250, 90 So. 1; Collins v. Plant, 67 So. 80 (Fla.); Groves v. Slaughter, 15 Peters 449, 10 L.Ed. 800; Rowan v. Runnels, Fifth Howard 134, 12 L.Ed. 85; Hartford Fire Insurance Company v. Knight, 111 So. 748; Huddleston v. McMillan Bros., 72 So. 892; Simmons v. Calloway, 103 So. 350; 3 C.J.S., subject "Agriculture", Sections 22(a), 22(b).
We therefore submit:
(1) The contract sued on was a valid contract for the sale of a lawful product and contained no provision for an unlawful sale. It, therefore, on its face, was not in violation of any statute of Mississippi.
(2) There is no evidence of any contractual intent on the part of either the purchaser or the seller to buy and sell fertilizer in violation of the rules and regulations of the State.
(3) The record is clear that the seller had no intent to violate such laws as he was selling a standard product produced by the steel mills of America which had a standard content. He was a dealer in fertilizer and, as stated by him, he, like other dealers, relied on the requirements of registration, reports, stamps and analysis on the part of the manufacturer or the broker.
(4) This contract for the sale of fertilizer in bulk resulted in the delivery of the fertilizer which (a) Had the proper quantity of stamps cancelled; (b) Had the proper analysis attached thereto; (c) Had the proper information delivered with the cars which are required on tags when fertilizer is sold in bags. In other words, when the Delta Brokerage and Warehouse Company of Indianola received the fertilizer in bulk, they had the detailed information with the car and bill of lading, which ordinarily appears on the tags, and they had the name of the manufacturer, the address of the manufacturer, and the analysis of the chemist, all in full compliance with the sale of fertilizer in bulk. Certain technical requirements of registration were not complied with. But the registration is not a vital thing. Registration is designed primarily to cover mixed fertilizers under a brand where a manufacturer puts out a mixed fertilizer under his own brand and he registers this brand.
(5) It is important to note that this fertilizer was not of the mixed variety containing a variable percentage of nitrogen, phosphate and potash. But it was in the class of nitrate of soda, ammonium nitrate, anhydrous ammonia, and the like, none of which are mixed fertilizers.
(6) The legislative intent in providing rules and regulations for the sale of fertilizer was to insure that these fertilizers, principally mixed fertilizers, were of a quality and quantity which they were represented to be so as to prevent the farmers from being victimized, and machinery was set up to give the farmer this protection. It was not the legislative intent to declare contracts such as involved here to be void and unenforceable because nowhere in our statutes do we find such an intent expressed. It would have been so easy for the Legislature to have said that any dealer or manufacturer who attempted to sell or to deliver fertilizer in violation of these rules would be making a void contract, just as some other states have done. If such had been the legislative intent, the fertilizer laws were later amended in 1940 and again it would have been easy for them to have outlawed such contracts. But they did not do so. They merely provided that anyone who violated these rules was subject to be prosecuted and fined. Montgomery Varnado, and Harold Cox, for appellees.
Point I. Appellant failed to prove any breach of the contract by appellees. 46 Am. Jur. Sales, Sec. 203, page 386, Sec. 194, page 374; 12 Am. Jur. Contracts, Sec. 393, page 972; 17 C.J.S., Sec. 472 b (1) Contracts, page 976; Clark Co. v. Miller, 154 Miss. 233, 122 So. 475.
Point II. The contract was illegal and void. Secs. 4450, 4451, 4452, 4456, 4457, 4460, Code 1942; 17 C.J.S. Contracts, Sec. 206, page 559, Sec. 272, pages 656-659; 3 C.J.S. Agriculture, Sec. 18, page 405, Sec. 20, page 408, Sec. 21, page 409, Sec. 22, pages 410, 411, 413, 414; Ellis v. Batson, 177 Ala. 313, 58 So. 193; Greil Bros. C. v. McLain, 197 Ala. 136, 72 So. 410; Terre Haute Brewing Co. v. McGeever, 198 Ala. 474, 73 So. 889; Bowdoin v. Alabama Chemical Co., 201 Ala. 582, 79 So. 4; Furman Farm-Improvement Co. v. Long, 117 Ala. 581, 23 So. 527; Alabama Nat. Bank v. C.C. Parker Co., 153 Ala. 597, 45 So. 161; Decatur Fertilizer Co. v. Walls, 212 Ala. 226, 102 So. 32; Talladega Fertilizer Mfg. Co. v. Farmers' Union Warehouse Co., 2 Ala. App. 307, 56 So. 595; Whelchel v. Stennett, 192 Miss. 241, 5 So.2d 418; Weil v. Neary, 278 U.S. 160, 49 S.Ct. 144, 149-150; Chas. Weaver Co., Inc. v. Phares, 185 Miss. 224, 188 So. 12, 13; Lowenburg v. Klein, 125 Miss. 284, 87 So. 653, 655; American Mfg. Co. v. Crescent Drug Co., 113 Miss. 130, 73 So. 883; Green v. Brown, 159 Miss. 893, 133 So. 153; Chandler v. Cooke, 163 Miss. 147, 137 So. 496; Hartford Fire Ins. Co. v. Knight, 146 Miss. 862, 111 So. 748; Bellew v. Williams, 109 Miss. 74, 67 So. 849; Sec. 4468, Code 1942, as amended 1946; Mitchell v. Campbell, 111 Miss. 806, 72 So. 231; Independent Linen Service Co., Inc. v. Sennett, 194 Miss. 366, 12 So.2d 530; Woodson v. Hopkins, 85 Miss. 171, 37 So. 1000; Bohn v. Lowry, 77 Miss. 424, 27 So. 604; Deans v. McLendon, 30 Miss. 343; McWilliams v. Phillips, 51 Miss. 196; Capps v. Postal Telegraph Cable Co., 197 Miss. 118, 19 So.2d 491; Downing v. City of Jackson, 199 Miss. 464, 24 So.2d 661; Grapico Bottling Co. v. Ennis, 140 Miss. 502, 106 So. 97; Collins v. Plant, 67 So. 80 (Fla.); Groves v. Slaughter, 15 Peters 449, 10 L.Ed. 800; Rowan v. Runnels, 5th Howard 134, 12 L.Ed. 85; Simmons v. Calloway, 138 Miss. 669, 103 So. 350.
We therefore submit:
(1) That the contract sued on was a void contract. It was made in violation of sound public policy as expressed in our salutary statutes controlling fertilizers.
(2) That intention of the parties to violate is not necessary to render the contract unenforceable. "This does not mean that the parties must know of the statute and intend to violate it, for ignorance of or temporarily overlooking a statute will not excuse the doing of what the statute prohibited." Chandler v. Cooke, 163 Miss. 147, 137 So. 496.
(3) That the seller had no intent to violate the statutes does not help appellant. This does not excuse the doing of what the statute prohibited. See Chandler case, supra.
(4) That this contract for the sale of fertilizer in bulk resulted in shipping into Mississippi fertilizer which (a) No person, firm or corporation connected with it had ever filed a guaranteed analysis of, with the commissioner of agriculture and commerce. (b) Fertilizer material had never been approved as provided by Sec. 4460, Code 1942. (c) No person, firm or corporation had ever registered to sell, and no registration fee had ever been paid as required by Sec. 4456, Code 1942. (d) Shipments of fertilizer were not reported to the commissioner within 24 hours thereafter as required by Sec. 4462, Code 1942. (e) Had no stamps attached to it, and in connection with which no stamps were ever cancelled.
(5) That the statutes apply to and cover all fertilizer materials, and that whether it was a mixed fertilizer is immaterial. All fertilizers can be very easily adulterated by the addition thereto of inert, inferior, and even harmful substances.
(6) That the legislative intent in providing safeguards for the quality and effectiveness of fertilizer materials was to insure and prevent our farmers from being defrauded and victimized. That these laws express a clear and sound public policy and when our statutes provide that such sales shall be unlawful, — it makes such a sale an unlawful act subject to prosecution and fine.
All of our cases, — and there is a wide range of application in the various fields — hold that a contract made in violation of a statute evidencing public policy — a contract malum in se is absolutely unenforceable and void.
This is a suit for damages on account of the breach of a contract on the part of the defendants, Maurice T. Reed and others, doing business as the M.T. Reed Construction Company, for the purchase from the plaintiff, A.H. Gardner, of the 200 tons of sulphate of ammonia, a commercial fertilizer produced as a by-product of the steel mills of the United States, and bought for use in the farming operations of the defendants in Humphreys County, at the price of $82.75 per ton delivered, as per an agreement of sale entered into in writing between the seller and purchaser on April 4, 1947. The plaintiff found it necessary to resell the 200 tons of fertilizer at the best price obtainable, which resulted in a loss of profits to him of $1,750 thereon. There was a peremptory instruction in favor of the defendants at the close of the evidence, and hence this appeal was taken.
The defendants deny liability on two grounds, First, that there was no breach of the contract by them; and, Second that the plaintiff failed to comply with the requirements of Chapter IV of the Mississippi Code of 1942 as a seller of commercial fertilizer, and particularly the requirement for registration as a dealer therein, the purchase of stamps, the payment of inspection fees, and the giving of notice to the Commissioner of Agriculture of the shipments.
On the first ground of defense, the proof discloses that the plaintiff purchased the 200 tons of fertilizer during the month of March from Kinchen O'Keefe Company of Clarksdale, Mississippi, at $66 per ton, with the freight to be paid by the plaintiff from the point of origin at the steel mills to the point of destination, amounting to $7 per ton; that as such purchaser the plaintiff had contracted with his subsequent vendee, M.T. Reed Construction Company, that he would pay the freight on the shipments and sell the fertilizer to the latter at the said price of $82.75 per ton, as contracted for.
The contract provided for the shipment of 100 tons of the fertilizer to the defendants during the month of May 1947, and 100 tons during the first ten days of June 1947. But, on April 28, 1947, the defendants wrote to the plaintiff the following letter: "In regard to the 200 tons of fertilizer that we bought from you, which would be shipped sometime in May and June, this is your authority to please cancel this order as we find we are unable to use same." On the next day, the plaintiff replied and declined to accept the attempted rescission of the contract and notified the defendants that he would hold them responsible for damages on account of their breach thereof. The testimony on behalf of the defendants disclosed that in the meantime they had purchased an Anhydrous product instead for their use and at a considerable saving in cost, and on the alleged ground that the plaintiff had failed to keep the defendants advised as to just when they could expect shipment of the 200 tons of the by-product, sulphate ammonia, purchased from him.
The written contract did not provide that the plaintiff should keep the defendants so advised, and at any rate the defendants had notified the plaintiff by their said letter of April 28th that they did not intend to carry out the contract, which was prior to the time provided for either shipment to be made.
The defendants cite announcements by the text writers and court decisions to the effect that a refusal of a purchaser to perform a contract of sale "must be distinct, unequivocal and absolute." (Hn 1) We are of the opinion that the defendants' letter hereinbefore quoted amounted to such a refusal to perform, and especially where the seller acted upon such refusal and promptly advised the purchaser that he was so doing.
But, it is urged that the plaintiff did not ever tender the fertilizer to the defendants so as to put them in default on their contract of purchase. However, this Court has repeatedly held that (Hn 2) where it is clear that a tender will not be accepted, it need not be made. Byers v. McDonald, 99 Miss. 42, 54 So. 664; Sovereign Camp, W.O.W., v. McClure, 176 Miss. 536, 168 So. 611, 170 So. 293. And, this rule is likewise announced in 52 Am.Jur. 216, second paragraph of Section 4; and in 17 C.J.S., Contracts, § 481, p. 986. Moreover, if the seller had tendered this fertilizer to the railroad company at the point of origin for shipment to Humphreys County where it was to be delivered, the railroad would not have been in position to have rejected the shipment, and the plaintiff would have uselessly incurred an expense in that behalf, and with the result that he would have increased instead of diminished his damage. Then, too, he was under no obligation to make the tender at a price less than that contracted for by the defendants, and it is evident that the tender would have been refused, since the purchaser had notified the seller that it could not use the fertilizer.
On the second ground of defense, the provisions of the code chapter hereinbefore mentioned make it a misdemeanor for a seller of fertilizer to sell, or offer to sell, the same without compliance with the various statutory provisions. It does not provide for a forfeiture of the purchase price by the seller in the event of noncompliance. If we should read such a provision into the statute, it would render the same highly penal. For instance, if the failure to comply by the seller would prevent his recovery of the purchase price, then in the instant case the defendants could have received the fertilizer, used it, and declined to pay for the same. If the Legislature had intended to impose a penalty so drastic, it should have been declared so by statutory enactment.
There accompanied the shipments, when later made to the third parties, the proper analysis showing that the shipments were what they purported to be. In fact, this by-product was a standard type of fertilizer, and the purchaser did not discover the failure to comply with each of the several statutory requirements until after the suit was filed for damages on account of the breach of the contract. (Hn 3) Moreover, the purchaser is not in a position to set up as a defense the failure of the seller to comply with these statutory provisions, since the seller was not required to comply therewith prior to April 28, 1947, when the agreement for the purchase was cancelled by the defendants.
(Hn 4) The contract covered the purchase of a lawful commodity, and was not malum in se but merely malum prohibitum. Cf. Levinson v. Cox, 127 Miss. 250, 90 So. 1; Hartford Fire Insurance Company v. Knight, 146 Miss. 862, 111 So. 748; and Huddleston v. McMillan Brothers, 112 Miss. 168, 72 So. 892.
It is true that in the cases above mentioned the statutes involved were for the protection of the public revenue, whereas the statutes here involved are both for the raising of revenue to defray the expenses of the Department of Agriculture in connection with such shipments as well as for the protection of the farmers in their purchase of mixed fertilizers; but since the contract here involved was to cover the sale of a commodity, the sale of which is not prohibited by law, and there is no statutory provision declaring such a contract to be void and unenforceable for failure to comply with the provisions thereof, but makes such failure a criminal offense instead, (Hn 5) we are aligning ourselves with the decisions of other jurisdictions which hold that in the absence of a statutory provision declaring a forfeiture, none will be imposed. We follow the case of Niemeyer v. Wright, 75 Va. 239, 40 Am. Rep. 720, and other similar holdings, although there are cases in some jurisdictions holding to the contrary.
(Hn 6) Since the amount of the damages is clearly shown by the undisputed evidence, we are of the opinion that the plaintiff would have been entitled to have a peremptory instruction granted in his favor if one had not first been granted to defendants; and the plaintiff having died pending this appeal, and the cause having been revived in the name of the administratrix (Nell G. Allen) of his estate, a judgment will be rendered here accordingly in favor of the appellant in the sum of $1,750 and all costs.
Reversed and judgment here for the appellant.