# Transcript of Record — AB Small Co. v. Lamborn & Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386006_0170%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Transcript of Record - **Published:** January 1, 1925 - **Citation:** 267 U.S. 248 ## Text gga © +o Defendant's exceptions... ......-+--e+eseeeree reser erecees Wem oc cccccccccccccccncsccsnccncccsecscncsecaccosces BOABMORE 2. ccccccccccccccccesccccccccecsccccsocccnssees Petition for writ of error......--..+seee reser ee eseesteees Assignment of errors......--++-esseeesse seer sessesetsees Supersedeas bond.......-+++++++- (omitted in printing)... Bill of exceptions. .......-.cceeeeeeeseeccceeescerseecces Correspondence ......--.sseeesseeeereeterseeeseseees Testimony of O. H. Lamborn......-+-+++-++eereesres Exhibit to Lamborn’s Testimony—Extracts from Lamborn’s books showing resale of sugars BhApped ...ceceececsccccenceccersccccsecscsces 109 Testimony of John G. Ruan......---++++eeseeeeereeee 112 J. B. Wates.....ccccccccccccccccccccces 115 R. B. Small... .....ccccccescccccseccces 117 W. EB. Small........-ececcecees txaceunk ~ ae H. R. Alexander..........-eseeeeeeeeee 120 Exhibit in Evidence—Tabulation of refined sugar prices, July 1-November 30. ......0:0+++seeeeeeeeees 123 Order directing verdict for plaintiff........+--++++-+5 124 Order settling bill of exceptions... ....-.0-+eeseeeeeeeeres 126 Order allowing writ of error......-. 00s ee eeee ee eee reese 127 Wit Of CFTOP.... ccc cece cece cc ce sacccerecceerecesscsess 12 Preecipe for transcript of record........+++++++eeeeeeereee 130 Order extending time..........--eee cere seen eeeeeererenes 132 Clerk’s certificate... 0.0.0... cece cence eee eee nee eeeeneees 133 Writ Of EFTOF..... ccc cccceeccccece (omitted in printing).. 184 Citation and service..........++++- (omitted in printing)... 187 { fol. 1] IN THE DISTRICT COURT OF THE UNITED STATES FOR THE WESTERN DIVISION OF THE SOUTHERN DISTRICT OF GEORGIA LaMBoRN & Company, a Copartnership, Plaintiff, ~ vs. Tue A. B. SMALL Company, Defendant Peririon—Filed Sept. 12, 1921 To the Honorable the District Court of the United States for the Western Division of the Southern District of Georgia: The petition of A. H. Lamborn, G. P. Tameling, H. B. Hutchins, N. N. Keen, George H. Logan, Karl P. Lindgren, C. C. Riggs, C. G. Troup, W. V. Wood, B. W. Dyer, and Victor R. Hess, copartners using the firm name and style of Lamborn & Company, respectfully shows: First Count {fol.2] 1. That A. H. Lamborn is a citizen and a resident of the State of New Jersey; G. P. Tameling is a citizen and a resident of the State of New York: H. B. Hutchins is a citizen and a resident of the State of New Jersey; N. N. Keen is a citizen and a resident of the State of New Jersey; George H. Logan is a citizen and a resi- dent of the State of New Jersey; Karl P. Lindgren is a citizen and a resident of the State of Pennsylvania; C. C. Riggs is a citizen and a resident of the State of New Jersey; C. G. Troup is a citizen and a resident of the State of New Jersey; W. V. Wood is a citizen and a resident of the State of New Jersey; B. W. Dyer is a citizen and a resident of the State of New York; and Victor R. Hess is a citizen and a resident of the State of New York; and that petitioners are copartners under the firm name and style of Lamborn & Company. 2. That the A. B. Small Company, hereinafter called the defend- ant, is a corporation duly organized and existing under the laws of the State of Georgia, having its office and place of business in the City of Macon, County of Bibb and State of Georgia, and in the Western Division of the Southern District of Georgia; and for the purpose of jurisdiction is a citizen of the State of Georgia. 3. That this suit is between citizens of different States and the amount in controversy, exclusive of interest and costs, exceeds the sum of Three Thousand Dollars. 4. That under date of April 30, 1920, petitioners and defendant executed in duplicate, and each delivered to the other, a certain agree- ment, a copy of which is hereto attached, marked “Exhibit A” and made part hereof. 1—399 = peantonnerce . rE ORE OSES to 5. By the terms of said agreement your petitioners sold to defend- ant, and defendant bought from petitioners, one hundred and fifty (150) barrels of standard Fine Granulated sugar on the basis of 25.50 cents per pound f. o. b. Savannah Refinery, Port Wentworth, Georgia. [fol.3] 6. By the terms of said contract, shipment of said sugar was to be made by petitioners between July 15th and October 1, 1920; the particular date or dates of shipment within said period to be at seller’s option, subject to delay if any. 7. That under date of May 7, 1920, petitioners and defendant executed in duplicate, and each delivered to the other, a second cer- tain agreement, a copy of which is hereto attached, marked “Exhibit B” and made part hereof. 8. By the terms of said second contract, petitioners sold to defend- ant, and defendant bought from petitioners, three hundred (300) barrels of standard Fine Granulated sugar on the basis of 25.50 cents per pound f. o. b. Savannah Refinery, Port Wentworth, Georgia. 9. By the terms of said second contract, shipment of said sugar was to be made by petitioners in equal quantities monthly, beginning the last half of July and continuing through August and September, 1920, if possible; but at seller's option of shipping to suit seller's convenience during the period mentioned, subject to delay if any. 10. Under both of said contracts, the terms of payment for said sugars were to be cash before delivery less two (2) per cent, or cash in seven (7) days after delivery less two (2) per cent, according as the seller’s credit department might approve the one or the other mode of payment. 11. By the terms of both of said contracts, petitioners agreed to furnish said sugars packed in barrels or bags, but reserved the option of shipping no more than fifty per cent (50%) of contract in 100- pound bags; and agreeing but not guaranteeing to furnish 2, 5, 10, and 25-pound bags at the ruling differential above Fine Granulated basis if desired by the trade, provided said packages are obtainable. 12. Under the general custom and usage prevailing in the sugar trade under which said two above mentioned contracts were made, the [fol. 4] sugar which petitioners contracted to sell, and defendant contracted to buy, might be furnished either in barrels containing approximately 350 pounds net sugar, or in 100-pound bags, and when shipped in such bags was known and regarded as in bulk; and according to said general custom and usage said sugar might be packed in 2, 5, 10, or 25-pound bags or packages, which smaller packages would be enclosed in 100-pound bags, and when so packed the sugar would be listed and referred to so as to indicate the num- ber and weight of the several smaller packages. At the time of the performance of the two above mentioned contracts the ruling dif- ferential above Fine Granulated sugar, the basis named in the con- ' . ‘ 5 poe | File endorsement omitted. } [fol. 2814] Ly tHe Districr Court or THE UNITED STATES FOR THE WESTERN DiviIsION OF THE SOUTHERN DisTRICT OF GEORGIA [Title omitted } OrpDER OVERRULING DeMuRRER—Filed May 20, 1921 The demurrer filed by the defendant to the plaintiff's petition in the above stated case having come on regularly for hearing, and TT ee a ee 24 having been fully argued by counsel for plaintiffs and defendant, and the plaintiffs having amended their petition to meet the special de- murrer filed. It is considered, ordered and adjudged that said demurrer be, and the same is, hereby overruled. This the 19th day of May, 121. Beverly D. Evans, United States Judge. { File endorsement omitted. | [fol. 29] Ix rue District Court oF THE Uxrrep STATES FOR THE WESTERN DIVISION OF THE SOUTHERN Disreict OF GEORGIA | Title omitted | Answer—Filed April 30, 1921 Now comes the A. B, Small Company, in the above entitled cause, and answering the complaint of the plaintiff! in said action respect- fully shows: First Count 1. For want of sufficient information defendant can neither admit nor deny the allegations of the Ist paragraph of said petition. 2. Defendant admits the allegations of the 2nd paragraph of said petition. 3. Answering paragraph 3 of said petition, defendant admits that it is a citizen of the State of Georgia; for want of suflicient informe. tion defendant can neither admit nor deny the citizenship of the plaintiff; defendant denies that it is indebted to the plaintiff in any amount. 4. Answering paragraph 4, defendant admits the signing of a writing, Exhibit A pe wal to said petition, but denies that such writing constituted an enforceable contract or gave rise to any cause of action as claimed by the plaintiff. 5. Defendant denies the allegation contained in the oth para graph of said petition. No sule or purchase was made as therein alleged. The alleged contract is not a mutually binding contract, and for the reasons hereinafter pleaded, is not caleeochis against the defendant. 6. The defendant denies the allegation of the 6th paragraph of said petition. There never was any inding obligation on the plain- tiff to ship any sugar to defendant nor was there ever any binding [fol. 30] obligation on defendant to accept shipments of any suger from the said plaintiff. 7. Answering paragra sh 7 defendant admits the signing of the writing, Exhibit B attached to said petition, but demies that such FER APNE 6 SEI, 64: a : & hie iad writing ever constituted an cnfore-able contract or gave rise to any cause of action as claimed by the plaintiff. 8. Defendant denies the allegations contained in the Sth_para- graph of said petition. No sale or purchase was made as therein alleged. The said alleged contract is net a mutually binding con- tract, and for the reasons hereinafter pleaded is not enforeible against the defendant. %. Defendant denies the allegations of the 9th paragraph of said petition. There was never any binding obligation on the plaintiff to ship any sugar to defendant, ner was there ever any binding ob- ligation on defendant to accept shipments of any sugar from the said plaintilf, 10, Defendant denies the allegations of the 10th paragraph of said | petition, the terms of said alleged contracts distinetly providing that “Terms and withdrawals subject to the approval of the seller's credit department,” and defendant shows that the plaintiff has never as- sented to any approval of any such terms and withdrawals. Nor has plaintiff, so far as this defendant knows, ever accepted the el contract by approving the terms and withdrawals and plaintiff has never at any tine notified this defendant of its ac- ceptance of said contract by such approval. The failure so to accept in writing and to notify the defendant ther-of, prevents said writing from becoming a contract and leaves the plaintiff unbound there- under, said alleged contract being lacking in mutuality, without con- sideration, and violative of the statute of frauds. Defendant further shows that assent was necessary on the part of plaintiff and should have bees in writing signed by the plaintiff and the defendant or some one lawfully authorized by each of them, and that no approval was signed by plaintiff or by any one authorized by it, nor was any {fol. 81] writing accepting any such terms ever signed by defendant or any one by it authorized. 11. Defendant denies the allegations of the 11th paragraph of said petition. The “Terms and withdrawals” were both subject to the seller's credit department's approval, and defendant was for the rea- sons hereinbefore and hereinafter pleaded, never bound to designate any number of packages, barrels or bags, and never assented to any obligation to accept any sugar under the terms of said alleged agree- ment, nor have plaintiffs, so far as the defendant knows, ever ac- cepted the proposed contract by approving the terms and withdrawals and plaintiffs have never at any time notified the defendant of the plaintiffs’ acceptance of said coutract by such approval, The failure so to accept in writing and to notify defendant thereunder, prevents the said alleged contract from becoming a contract and leaves the plaintiff unbound thereunder, said alleged contract being lacking in —7. without consideration, and in violation of the statute of rauds, 12. Answering paragraph 12 of said petition defendant denies that said alleged contracts are mutually binding contracts, and says that for the reasons hereinafter pleaded said contracts are not enfore-able against the defendant. Defendant denies that plaintiff contracted to sell or that defendant contracted to buy any sugar under the al- leged contract. For want of sufficient information defendant can neither admit nor deny the general customs in the sugar Iusiness alleged in said paragraph, but denies that any such customs, if, any ever existed is binding on it. 13. Answering paragraph 13 of said petition, defendant denies that the two alleged contracts are mutually binding contracts and says said contracts are for the reasons hereinbefore and hereinafter pleaded not enfore-able against the defendant. Defendant denies that any sales were made or that any purchases were made as herein alleged, For want of sutlicient information de- fendant can neither admit nor deny the allegations of the petition relating to the freight rates from Port Wentworth to Macon, Ga. 14. Defendant denies the allegations contained in the [ith para [fol. 32] graph of said petition. The alleged contract is not a mutually binding contract and for the reasons hereinbefore and hereinafter pleaded is not enfore-able against the defendant. 15. Defendant denies the allegations contained in the loth para- graph of said petition. No shipping instructions under any valid contract were given by defendant, nor did defendant receive any sugar under any valid contract with the plaintiff. Said alleged con- tract did not create binding obligations on the plaintiff or defendant for the reasons already and hereinafter stated, which reasons were unknown to defendant when said sugar was taken and paid for. 16. Defendant denies the allegations contained in the 16th para- graph of said petition. No shipping instructions under any valid contract were requested by plaintiffs nor any furnished by defend- ant, but shipment was made over the protest of defendant, Said alleged contracts are not mutually binding contracts, and for the rea- sons herein pleaded, not enfore-able against the defendant, as fully appears from facts in this answer fully pleaded, and then unknown to defendant. 17. Defendant denies the allegations contained in the 17th para: graph of said petition. Defendant denies that there were any legal mutually binding con- tracts which obligated plaintiff to ship any sugar to defendant or which obligated defendant to furnish any shipping instructions to plaintiff. 18. Defendant admits that it refused to accept the sugar as stated in paragraph 18 of said petition, but denies that there was any bind- ing agreement on defendant to accept, receive or pay for any sugar, or any binding agreement on plaintiff to deliver any sugar. Said alleged contracts referred to herein are not mutually binding con- tracts for the reasons hereinafter pleaded, and not enfore-able against the defendant. 27 19. Answering paragraph 19 of said petition, defendant denies that it was under any binding agreement to accept and pay for any sugar under the alleged contracts and denies that it was under any [fol. 83] duty to give instructions or assortment for any sugar cov- ered by said alleged contracts, and denies that said alleged contracts are mutually binding, but says for the reasons herein pleaded said contracts are not enfore-able against the defendant. 20. Defendant denies the allegations of the 20th paragraph of said petition to the effect that the plaintiff requested shipping in- structions from the defendant during the period provided in the agreement, as the defendant denies that there ever was a contract be- tween the plaintiff and the defendant. The defendant states that the alleged agreements bear dates April 30th and May 7th, 1920, and that on or about August 25th, 1920 after sugar had declined in price below the price specitied in the said alleged agreements of April 30th and May 7th, the said plaintiff asked for assortments from de- fendant, but never informed the defendant that the seller’s credit department had ever approved of any terms or withdrawels, and that the delay from April 30th and May 7th to August 26th, 1920 was an unreasonable time for the said plaintiff to have waited before re- questing any instructions, and the said defendant was never under any obligation to furnish any instructions to the plaintiff in the premises, 21. Answering paragraph 21 of said petition defendant admits that sugar declined in price between the dates of April 30th and May 7th and September and October Ist, 1920, but deny that there was any binding agreement of defendant to aceept any sugar or any binding agreement on plaintiff to deliver any sugar, 22. Answering paragraph 22 of said petition, defendant denies “Notice within the contract time” being given to it, as defendant denies there ever was any binding contract. Defendant admits that on August 26th, 1920 the plaintiff wired asking for shipping instrue- tions and admits that the defendant did not give any instructions be- cause it Was not obligated to do so. The defendant on August 27, 1920 and on later dates notified plaintiff that the defendant was not under any obligation to purchase any sugar from the plaintiff, fol. 34] 238. Answering paragraph 23 of the petition defendant denies that they ever were bound to furnish any shipping instructions and admits that it failed to do so, Defendant denies that there Were any contracts or any liability thereunder by defendant. to plaintiff. 24. Answering paragraph 24 of said petition, defendant admits that it never furnished any shipping instructions and denies the alle- gations that there were contracts which required it to do so. On the contrary, there never were any mutually binding contracts between the plaintiff and the defendant for the reasons herein set forth. 25, Answering paragraph 25 of said petition, defendant denies the allegation “with reasonable promptness after October Ist, 1920, (aE eae SEERA 28 your petitioner re-sold the said 300 barrels of sugar for the account — of the said defendant”. Defendant admits receiving from plaintiff a letter on or about October 16th, 11/20 to the effect that plaintiff had wired on October 15th, 1920 that they would sell certain sugars un- less they received a better offer before 9 A. M., October 16th, 1920. Defendant for want of suflicient information ean neither admit nor deny that the plaintiff re-sold 300 barrels of sugar for the account of ein dpa ye ee CRED cad as vans ae Na ee ee eer: | | ie Pree J. F. Goodson & Co., Morristown, Tenn.... Direct ........ i ew Adams Brothers Co., Macon, Ga.......... Ruan (7?) ..... Feet McCord-Stewart Co., Atlanta, Ga.......... Raley ........ Tee Kelley-Brothers Co., Atlanta, Ga.......... Raley ........ ae Cone M. Maddox Co., Atlanta, Ga......... Raley [ (2027) |* eee Anniston Mere. Co., Anniston, Ala........ Crutchfield .... scutes J. H. Culbreth & Co., FayetteviHe, N.C..... Direct ........ ap er Kenny, Charlotte, _2 RRS Rae esate Kenny, Chattanooga, A ad tka tnd se lore ca. ese ee, SN, SAB os kk ec i bas) ee bb kes RS ae eR SO ae ene tea Se Oe re lt ree mr eas Kenny, Montgomery, Ala................ Dimeeb-........ ene a Se ee eer erry roe Shipp Grocery Co., Americus, Ga......... Direct ........ eee Cone M. Maddox Co., Atlanta, Ga......... Raley [(3495)]* anes Ragon Brothers, Evansville, Ind.......... Direct ........ tals Lexington Gro. Co., Lexington, N.C....... Direet ........ , cca 7 te ver adan Ws 5 TBR Surge en traiehep store ge + Pepi? Tifton Grocery Co., Fitzgerald, Ga........ LSPS PT Ge Pe tes ah cae a Oe SUKRA BSA EA ESAS ES be CG 6 2A 4 WS ES Be Se SR 6 aoe Wie aS an 6 6 es ee OO ged CRESCPAB AER ESD D Cece. es 2 ee Ceres © ee 2. ee coe eee © © oes as ewe oe eS Se 42.02 Oe ee 6 6 Oe'S ee Oa ee Se ee ee Se oe we ee ee at ek oe a a oe hk oe oo Date Oct. 8th ws 8th ” 6th = ie “13th “13th “« Tt “14th “ 15th “15th “15th “15th “ 15th “15th “ 165th so [fol. 111] “At the same time we were selling this resale sugar we were acting as brokers for the Savannah Sugar Refinery and made sales of sugar for that company during the fall of 1920. I do not recall how much we sold for the Savannah Sugar Refinery from September Ist to December 31, 1920. 1 do not recall when we first n offering the Savannah Sugar Refinery’s sugar after August 1920. This is a statement of the sale made for the Savannah Sugar Refining Corporation by Lamborn & Company as brokers. Lamborn & Company and the Savannah Sugar Refining Corporation had a joint credit department. Redirect examination. Mr. Park: “While we did not send out any letter we got in touch with Mr Ruan, our broker in Macon, prior to this general letter sent out to uite a number of brokers on October Lith, in an effort to get Mr uan to dispose of this sugar. It is a fact that there were quite a number of rejections of these contracts expiring on October Ist, or September 30th. That threw into our hands a large amount of sugar that had to be disposed of for the account of these various pur- chasers. If we had thrown all of that sugar on the market for the best price we could have gotten | think suger would have broken to five cents a pound; in fact we did have bids on some of this for five and cight cents a pound. We used our best judgment to get for these people for whose accounts we were selling sugar the best price obtainable. There was no discrimination in the Small case in held- ing this sugar. These sugars were sold among the first: I had a talk with Mr. Small and was apprised of his plan to get the whole- sale grocers together to repudiate, and we took special pains to get rid of his right at first. ——— = [fol. 112] Jonx G. Reax, sworn for plaintiff: Direct examination. Mr. Park: “Lam a member of the firm of Ruan & Company, doing busines in Macon. We have a brokerage business, and among other linc« sell sugar. That was truce in 1120. At that time I represented ax broker Lamborn & Company and the Savannah Sugar Refining Com- . During that year, particularly beginning with August and running through September and October, the condition of the sugar market was that wholesale grocers had taken in high priced A they had big stocks and there was no demand. It was very to sell sugar. There was no sufficient demand for sugar during the month of September and the early part of October. The amount that was hought was ordinarily just hand te mouth buving: a man ealy bought what he actually needed for a short period Leewuse the 76 price was going down. That condition existed during the month of October as well as during September. I handled the car of sugar shipped to A. B. Small Company that arrived here early in September for Lamborn & Company. That car was put into our warehouse on September 22nd; it was on track and rejected; we sold it on October 11th to Kingman & Everett. I got for the ear 11.36 cents per 100 pounds net Macon. “I think we were authorized to sell it the last of September or about the first of October and we tried very hard to sell it then; the first offer we could get was from Kingman & Everett on October 11th. It was the full market price; it was a good price. Sugar could be bought generally in the market for that price at that time. The full amount that I sold that car for is eredited on the statement sued on. “T have the original documents here in my hands. IT also had to do with the sale of the third car. We sold that car October 15th to | fol. 113] Kingman & Everett at 11 cents net Savannah, and it was to be shipped immediately ; it was not shipped in three days and Mr. Kingman wired or called up Savannah and cancelled the car, stating that he could buy it cheaper by 26 from the American. The car had been shipped however and was diverted to us and put in our warehouse; we sold that car on November 3rd to Kingman & Everett at 1114 cents net Savannah; he paid us a quarter of a eent more; sugar had gone up a little, or he could use it to better advantage. Both the first and second prices were the full market prices; we offered that sugar to every wholesale grocer here and that was the besi price we could get, and I believe they could have bought other sugar for the same price. I was familiar with the market at that time. I had trouble in selling the car. As I remember, we we au- thorized to sell it around October Ist, and we sold it on October 11th. The third car was sold to Kingman & Everett the first time on No- vember 15th; we were also authorized to sell that on November Ist. At that time one ear of sugar was a good deal of sugar in this market. “! am familiar with Willet & Gray's quotations. They are re- garded as high authority in sugar. The prices quoted in Willett & (iray’s Journal are regarded as standard prices. There is very little difference between the quotations made by Willett & Gray from New York and the prices obtained in Savannah, where the Savannah Sugar Refinery is located. There is sometimes a variation of ten points; ordinarily the New York refiners will name a price and Savannah mects it in a day or two, The New York price is regarded as the ruling or controlling price. There is no difference in standard [fol. 114] fine granulated sugar. The sugar made by the American and put up under the Domino Brand and the Savannah sugar called Dixie Crystal is all the same. Standard fine granulated sugar is identical, practically so.” ~3 ag Cross-examination. Mr. Watkins: “I did not sell any sugar in August 1920 that I recall, nor did 1 sell any in September, 1920. We don’t keep our records ordinaril that far back but I imagine they are in the office somewhere. could tell from our books what sugar we sold in August and Septem- ber, 1920. I don’t know that I could do it very easily; I don’t think we sold any. “I got these instructions to sell this sugar October Ist, but 1 have not the letter with me or telegram, giving the instructions to sell this sugar. I have those instructions somewhere—but I didn’t bring them up here; I have told the jury you retained this file. and these ure important parts of it; the instructions to sell this sugar. I didn’t know it was necessary; those instructions might come in a circular letter or over the phone or by wire. I haven't made any effort to find those instructions. I do not think the instructions to sell this particular sugar would come in a cireular letter, so 1 must have some instructions to sell this particular sugar. J am still the broker for Lamborn & Company and also for the Savannah Sugar Refinery. Through Lamborn & Company I recall that I sold in October 1930 these two cars only. I made these particular contracts that are sued on with Small.”’ Redirect examination. Mr. Park: “I said that this car was sold—both of these cars were sold—but they were stored for a time with Ruan & Company; the statement shows the correct storage and unloading and demurrage charges. They were paid by us and Lamborn & Company paid it back to us later. That is true of the storage and demurrage charges also.” {fol 115] The plaintiff closed its testimony at this point. Defend- ant then presented J. E. Yares, who testified on direct examination by Mr. Watkins as follows: “T live in Macon, Georgia, and I am in the wholesale grocery busi- ness and was in the wholesale grocery business in August and Sep- tember, 1920. In my business I sold sugar, and have been selling sugar for about eighteen years, and am still engaged in the business.” Counsel for the defendant then asked the witness questions as follows : Q. From your business of selling sugar in Macon in 1920, do you know what the market price of sugar sold by wholesale grocers was in September 1920? To this question plaintiff’s attorney, Mr. Park, objected as follows: “T object to the testimony as to what sugar was sold for in Macon PEG RAPP REI eas TY COB EEE a HET” 2h Ae Ope ep wets mw a ee ee 78 by wholesale grocers. This question is a question of refiner’s prices at the refinery and not what wholesalers may have sold for in another and entirely different market.” The Court then questioned the witness who stated that he wa familiar with sugar sold by wholesale grocers to retailers and to chain stores and knew the market price of such sales in Macon in August. September, October, November, and December, 1920. In answer to questions from the Court the witness stated that in former times the wholesalers in Macon sold at from one-fourth to one-half a cent per und above the price they paid the refiners, that from August to mber, 1920, the market was in a very unsettled condition and normal differences could not always be obtained. The witness said: “After the market broke in August and September, I got the best [fol. 116] price of could regardless of cost.” With the testimony in this form the Court sustained the objection saying: “I think it is the duty of the Court, unless there can be some connection, to tell the jury to reject it and if 1 am going to tell them that, then why admit it.” To the ruling of the Court in refusing to srmit the witness to testify his opinion as to the reasonable market price of sugar in Macon, Georgia, in August, September, October, November and De- cember 1920, the defendant then and there excepted, which ex- ception was allowed, and here now excepts and the same is allowed and ordered sealed. The same witness was then asked to state the sales made by him of sugar in September, 1920, The Court ruled that these sales were not admis-able and declined to permit the witness to testify ; a the witness would have testified that he made sales as follows: “Beginning on September 1, 1920, a sale of 100 pounds of sugar at a price of Ave per pound and thereafter sales during the month of September at prices ranging from 20¢ to 15.75¢ per pound and in amounts as high as 1,000 pounds, the latter amount fring sold on September 25th, at 15.75¢ per pound; the last sale in September was on the 30th and was of 100 pounds at 16¢ per pound.’ {fol 117] To the ruling of the Court in refusing to permit the witness J. E. Yates to testify to the sales shown in the foregoing statement defendant then and there excepted, which exception was allowed, and here now excepts which exceptions is allowed and ordered sealed. —_s —=_——— R. B. SMALL was then offered as a witness as to his — of the market value of sugar in Macon in August, Septem November, and December, 1920, and the same ruling was made and the same exceptions had as to the witness J. E. Yates. To the ruling of the Court in refusing to permit R. B. Small te 79 lestify, as set out under the circumstances shown in the exceptions with reference to J. E. Yates, the defendant then and there exce pted, and here now excepts, which exceptions are allowed and ordered sealed. The witness R. B. Small was then asked to testify as to the sales made by him in September, 1920. Objection was made that the stles did not indicate market price and the court sustained the objection. he witness, if permitted to testify, would have testified of sales as follows: “Beginning on September Ist, 1920, a sale of 100 pounds of sugar ata price of 19¢ per pound and thereafter sales made during the month of September at prices ranging from 20¢ to 15%¢ per — and in amounts as high as 2.030 pounds, the latter amount ing sold on September 28th, at 1544¢ per pound; the last sale in September was on the 29th, being a sale of 100 pounds at a price of 16¢ per pound. The majority of sales were in lots of less than 300 pounds.” (fol. 118} To the ruling of the court in refusing to permit such a hearing of the statements showing the market value, the testimony of R. B. Small showing his sales in September, 1920, defendant then and there excepted, which exception was allowed, and here now exeepts, which exception is allowed and ordered sealed, and this defendant assigns the ruling of the Court as error, W. E. Smtr was then offered as a witness, and was asked as to stles made by him of sugar in September and October, 1920. The witness testified that he was not personally in the sugar business ; that he had bought some sugar and resold it, some to manufacturers, some to wholesalers, and some to retailers; that he sold it to whom- sever he could, at the best prices obtainable. The witness testified that he made sales of sugar on the dates, to the parties, in the amounts, and at the prices stated on the state. ment reading: Date Price Imo Purchaser Quantity per lb. Amount Sept. 17. Britt-Wirick, Atlanta, Ga...... 50) sacks— 5,000 154¢ $7,750.00 [a = sa ” were re 70. °° 7.0002 154¢ 10,850.00 «m (|* “ “d Serer 500 5.0008 154¢ 7,750.00 154. Sears Sanitary Baker, Macon.. 10 “ 1,000% 154¢ 167.50 15. Hammock-Rich Co., Coleman, Ga. 10 “ 1,000 16 ¢ 160.00 14. C. D. Kenney, Macon, Georgia... 50 “ 5,0008 154¢ 775.00 23. Sears Sanitary Pakery, Macon.. 10 “ 1,000g 154¢ 155.00 23. L. W. Rogers Co., Macon, Ga... 100 * 10,0008 154¢ = 1,500.00 23. H. PD. Adams Co., Macon........ So.“ 5,000g 15 ¢ THO.) —- - ° oe ey ae pik yd 10,000g 15 ¢ 1,500.00 15. Dempsey Hotel, se Pee ee ae 1,000% 154¢ 155.00 17. Melts Sanitary Bakery, Macon... 10 “ 1,000 16 ¢ 160.00 ‘aly 2. HL A. Kennington, Macon....... ng 1,000 28 ¢ 280.00) Mug. 21. Peeples Mig. & Sup. Co., Timons- OE ES ye een ere _ = 2.5002 19 ¢ 475.00 ‘t. SO. Kingman & Everett, Macon..... 30 « 3.5008 14 ¢ 420.00 80 [fol. 119] Upon objection being made to the testimony that it did not show market value applicable to this case, the Court ruled that only sales by refiners could be admitted, and sustained the ob- jection to the testimony of W. KE. Small. To the ruling of the Court in sustaining such objection, defendant then and there ex- cepted, and here now excepts, which exception was then allowed and here now allowed and ordered sealed. The witness R. B. Small also offered to testify that he received two letters from Lamborn & Company, one dated April 23rd, and the other April 24th, 1920, that in the letter of April 23rd, it was stated that: “The Savannah Sugar Refinery is still withdrawn from the market and will probably remain so for the next two or three weeks. Dur- ing this time they can make no offerings at all either direetly to the trade or through their brokers. When do do re-enter the mar- ket it will probably be necessary for them to allocate any available sugars to their customers, giving each regular customer his proper percentage. We know of course, that no customer will get the amount of sugar desired but we feel this is the only fair way the Refinery can distribute their sugars and give satisfaction to all.” and in the letter of April 24th that: “The Savannah Refinery is withdrawn from the market at the present time, having no sugars to offer either for immediate or de ferred shipment. Should they have any sugars to offer in the near future, they will be allocated to their regular trade on a percentage basis. You may rest assured that our regular customers will re- ceive their proper portion as our one aim will be to seeure and equitable distribution.” The witness further testiiad, the jury being out at the time, that Mr. Ruan, broker for Lamborn & Company, told him that if he did not buy this sugar at the time he signed the contracts and signed the contracts, that he could-’t get any sugar from Lamborn. Witness says he might have bought sugar from others than Lam- born, but there was no sugar for immediate delivery offered, that because of the statement in the letter and of the statement of Lam- born’s broker, the witness was influenced to order sugar for future delivery, which was not the usual custom of the plaintiff selling sugar in Macon; that prior to the war sugars were allotted by Lam- born & Company and other refiners without contracts. The Court having heard the testimony of the witness Small while the jury was absent, ruled that the testimony was inadmissable, and sustained the objection thereto of plaintiff, to which ruling defend ant then and there excepted, which exception was allowed, and de- fendant here and now renews the exception, which exceptions i allowed and sealed. 81 [fol. 120] H. R. Avexanper sworn for defendant: Direct examination: Mr. Saussy : “T am a wholesale grocer in Savannah and was in 1920. I have a tabulation there showing at what prices I sold standard fine granu- [fol. 121] lated sugar in September and October, 1920, in quantities from one hundred pounds up to 1,000 and 2,000 pounds. I have the records of each sale. the original charge slips. I had known Lamborn & Company in Savannah in 1920. Their business was brokers in the trade. I never dealt with them as refiners of sugar. They were not refiners of sugar in 1920. Their chief status in the city of Savannah up to that time was brokers. The Savannah Sugar Refinery was closed down in September, 1920,—withdrawn from the market. The relation of our wholesale prices to the refiner’s prices was on a normal market one cent a pound. There was not a normal market existing on September 30, 1920, “There were two refiners—two New York refiners—represented in Savannah by local brokers. Those brokers were not active. I have never heard of them making a sale for four or five years. % Peeumnmnnmeresrscrere nr. 36 Union Pacific R. Co. v. Frank, 226 Fed. 906 ............ 21 United States v. L. Cohen Gro. Co., 255 U. S. 81, Hi I inact stcenscsensscesenenensnes 23, 34 Waskey v. Hammer, 223 U.S. 85, 56 L. ed. 359 ........ 38 Weeds, Inc., v. United States, 255 U. S. 109, 65 L. 2 a akicadnnsecinied asnnnaitntonsonctndoepennaninie 23 Wilder Mfg. Co. v. Corn Prod. Ref. Co., 236 U. S. 165, 177, 59 L. ed. 520, 527 ........-..------------ 19, 33 Williston on Sales 8661 (c) 2nd ed. ...........----.-..------ 11 Witherell & Dobbins v. United Shoe Machinery Co., WO Te, DID anna. scans conn nenssnnnecnscanascnanensaccnaconnehanasiion 15 Wolff Packing Co. v. Court of Industrial Rela- tions, 262 U. S. 522, 67 L. ed. 1103, 1109, 1110 32 IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1923 No. 399 THE A. B. SMALL COMPANY, Plaintiff in Error v LAMBORN & COMPANY. Defendant in Error In Error to the District Court. of the United States for the Southern District of Georgia BRIEF FOR DEFENDANT IN ERROR. STATEMENT OF THE CASE This is another of the many sugar cases which since the summer of 1920 the Courts of the country have been called upon to decide—due to the repudiation of their contracts by buyers of sugar. In April and May, 1920, while the price of sugar was very high, The A. B. Small Company, a wholesale grocer of Macon, Georgia, purchased from Lamborn & Company through their Savannah, Georgia, office, 450 barrels of sugar at 2514 cents per pound “‘f. o. b. Savannah Refinery, Port Wentworth, Georgia”. (1) 4 Shipments were to be made from July 15th to October 1st. The contracts were reduced to writing and were formally accepted by both buyer and seller. The Savannah Office of Lamborn & Company acted as brokers in negotiating the contract, which was accepted by Lamborn & Company, New York, N. Y., as the sellers. (Transcript pp. 9-11.) Except as to dates, quantities, and time of delivery the two contracts were indentical. For convenience of reference, the first contract dated April 30, 1920, is set out in full: “Contract No. 672. New York, N. Y., April 30, 1920. Sold by Lamborn & Company, New York, for the Account of Whom It May Concern Sold to A. B. Small Co., Macon, Ga., 150 barrels Standard Fine Granulated Sugar, on the basis of 25.50 cents per pound f. o. b. Savannah Re- finery, Port Wentworth, Ga., for Fine Granulated ‘Shipments to be made some time during the period between July 15th and October 1, 1920; but shipping is to be at sellers’ option,’ subject to delay, if any. Terms: Cash before delivery less 2%, or cash in seven days less 2%. Terms and withdrawals subject to the approval of the sellers’ Credit Department. Sellers to furnish sugars packed in barrels or bags, but sellers have option of shipping no more than 50% of contract in 100-lb. bags. Sellers will furnish 2, 5, 10 and 25 lb. bags at the ruling differential above Fine Granulated basis, if de- sired by the trade, provided these packages are obtainable, but do not guarantee to furnish said packages. Sellers will not be responsible under this con- tract if shipment is prevented or delayed by war (2) conditions, strikes, labor difficulties, accidents, embargoes, regulations or restrictions imposed by any Government or Governmental agencies, fire © or any other cause beyond the sellers’ control, or if the supply of raw material of the refinery manufacturing the sugar described in this agree- ment shall be interrupted by any such cause. Option of routing is reserved by sellers. De- livery will be considered complete on receipt of goods by carrier. This purchase to be invoiced and paid for at contract price. No allowances whatever for de- clines in market. If shipment is made freight pre- paid, the ruling prepaid freight basis to destina- tion in effect on date of shipment will govern. Assortments against contract must be furnished when called for by sellers. All additional import duties, excise or other taxes hereafter levied on the Raw or Refined Sugar necessary to fill this contract at buyer’s expense in addition to price specified. Kindly sign and return one copy confirming purchase. Lamborn & Company, Savannah, Ga., Brokers. This contract is accepted: Buyer— Signed: A. B. Small Co. This contract is accepted: Seller— Lamborn & Company, New York, N. Y., Signed by G. G. Bond.” (Transcript pp. 9, 10.) The second contract executed on May 7, 1920, was for 300 barrels and contained this clause with reference to delivery: “delivery of equal quantities monthly beginning the last half of July and continuing through August and September of 1920, if possible. Sellers’ option of shipping to suit sellers’ convenience during the period mentioned, subject to delay, if any.” (Transcript p. 10.) (3) A portion of the sugar covered by each contract was shipped, accepted and paid for by the buyer. The second installment was also shipped but the buyer repudiated the contracts, denied liability thereunder and refused to take the sugar. At its suggestion the sugar was stored at the point of delivery “for the account of whom it may concern.” The buyer re- fused to order out the third installment. At the time of the shipment of the second installment the sugar market was steadily declining and at that time the market price was already considerably below the contract price. The market continued to decline steadily and rapidly. (Petition and answer. Transcript pp. 3 and 26.) On September 27th, shortly before the delivery period expired, the sellers called on the buyer to fur- nish assortments and shipping directions within forty- eight hours, advising that on failure to do so they would treat the contracts as breached and would sell the sugar for the buyer’s account and hold it for the difference between the contract price and the amount realized on the resale. (Transcript p. 64.) The buyer continuing to repudiate the contracts, the sugar was sold for its account and this suit was brought to recover the damages sustained through the breach of the contracts. The complaint was in two counts which were identical save as to the admeasurement of the damages. In the first, recovery was sought for the difference be- tween the contract price and the price obtained on resale; in the second, for the difference between the contract price and the market price at the time and place of delivery. (4) The Defendant, by demurrer, attacked the validity of the contracts as being unilateral and not mutually binding. This was overruled. Certain special de- murrers calling for additional particulars, were met by amendment to the petition and were also over- ruled. The Defendant’s answer admitted the execution of the contracts, that a portion of the sugar sold had been delivered under each of them, and that the con- tracts had been repudiated. As a defense it was alleged in the answer that the contracts were unilateral and not binding for that reason. The Defendant also pleaded as a special defense that the Plaintiffs and others combined and conspired in violation of the Anti-Trust Acts of Congress for the purpose of re- stricting interstate trade and competition in the sale of sugar. By an amendment to the answer the Defend- ant also set up that the sales were in violation of the Food Control, or Lever Act of Congress. On demurrer the paragraphs of the answer alleging that the con- tracts were not mutually binding and all the affirmative defenses were stricken by the Court for insufficiency and as constituting no defense to the action. Upon the trial the contracts and the breach thereof being admitted, the resales with resulting damages were proved. Defendant offered certain testimony, which it claimed tended to establish that the market price was greater than that received by the Plaintiffs on the resale. This evidence the Court refused to admit. (Transcript pp. 77-80.) The Plaintiffs having proved their case as laid and there being no evidence to the contrary, the Court directed a verdict for the Plaintiffs for the amount (5) claimed in the first count, in which the damages were measured at the difference between the contract price and the amount realized on the sale of the sugar for the Defendant’s account. (Transcript p. 85.) This writ of error challenges the correctness of these rulings. ASSIGNMENTS OF ERROR The fourteen assignments of error may be divided into five groups: (1) That the contracts declared on were without mutuality of obligation and were therefore unenforceable. Assignments 5, 6, 7 and 8, (Transcript p. 57). (2) That the plea setting up violations of the Anti-Trust Act was improperly stricken. Assignments 3 and 4 (Transcript p. 56). (3) That the amended answer setting up alleged violations of the Lever Act and the regulations of the Food Administration were improperly stricken. Assignments 1 and 2 (Transcript p. 56). (4) That certain evidence offered by De- fendant was improperly excluded. Assignments 9, 10, 11 and 12 (Transcript p. 58). (5) That the case should have been sub- mitted to the jury and it was error to direct a verdict for the Plaintiffs. Assignment 13 (Transcript p. 58). (6) | BRIEF OF THE ARGUMENT | MUTUALITY OF THE CONTRACT Defendant demurred to the petition upon the | ground that the contracts upon which suit was entered were not mutually binding upon the parties, or in the vernacular of the profession in Georgia, were unilateral. The same contention was made in the answer. The Court overruled the demurrer to the petition and sustained Plaintiffs’ demurrer to the answer, striking the paragraphs thereof which set up this defense. The clauses in the contract which are relied upon by the Defendant were as follows: “Terms and withdrawals subject to the approval of the sellers’ credit department.” And “Seller will not be responsible under this con- tract if shipment is prevented or delayed by war conditions, strikes, labor difficulties, accidents, embargoes, regulations or restrictions imposed by any Government or Governmental agencies, fire or any other cause beyond the sellers’ control, or if the supply of raw material of the refinery manufacturing the sugar described in this agree- ment shall be interrupted by any such cause.”’ Contract (Transcript p. 9); Answer (Trans- script p. 25); Demurrer (Transcript p.p. 16, 17). The contracts purport to be completed sales for the delivery of a specific quantity of sugar at a definite price and are signed by both parties. Under the first contract : (7)