Eugene B. Smith & Co., Inc. v. Eloy Gin Corp.

Determination of the main question on this appeal requires a construction of a written contract. Appellant asserts that the contract expresses but a portion of the agreements involved and that a subsequently executed contract controlled other portions. Appellee, Eloy Gin Corporation, to whom we shall hereafter refer as Eloy, is engaged in the business of purchasing, producing, ginning and selling cotton. Its principal place of business is situate in Phoenix, Arizona. As cotton, at its plant, was ginned and baled, and the bales marked, *744 Eloy issued a gin-yard receipt for each bale. The cotton in question here was owned by Eloy before ginning and, therefore, the gin-yard receipts were issued by Eloy to Eloy.

Appellant, Eugene B. Smith & Company, Inc., hereinafter referred to as Smith, entered into a written contract with Eloy for the purchase of 1300 bales of cotton. The contract contained the following terms:

When lots of cotton of sufficient size were -accumulated Eloy endorsed the gin-yard receipts in blank, attached them to a bank draft and forwarded the receipts and draft to the bank care of Smith who, upon payment of the draft, was given possession of the receipts.…

(dissenting).

I think that when the endorsed gin-yard receipts were delivered by Eloy to Smith & Co., the relationship of the parties, which had theretofore been 'that of seller and buyer, became one of bailee and -bailor. The paragraph in the gin-yard receipts relating to insurance on the cotton must be construed to be an undertaking and promise of Eloy that the cotton was and would be insured against loss by fire. I think that this express promise added to the obligations of Eloy stated or implied in the original purchase contract. If there was any consideration for this new or additional undertaking or promise, I think it was valid and enforceable. There seems to be no question by either party that if this clause in the gin-yard receipts created such an obligation, Eloy would be liable to Smith & Co. for failure to claim and collect the insurance. Farney v. Hauser, 109 Kan. 75 , 198 P. 178 . It is shown that it had the insurance, for the Home Insurance policy was introduced in evidence and it would *747 seem to cover this cotton. 1 *Home Ins. Co. v. Balt. Warehouse Co., 93 U.S. 527 , 23 L.Ed. 868 .

As for the question of whether the promise was supported by a consideration,…

195 F.2d 743 EUGENE B. SMITH & CO., Inc. v. ELOY GIN CORP. et al. No. 13096. United States Court of Appeals Ninth Circuit. April 3, 1952. Rehearing Denied May 7, 1952. Fennemore, Craig, Allen & Bledsoe, Phoenix, Ariz. (Thompson, Knight, Wright, Weisberg & Simmons, Dallas, Tex., of counsel), for appellant. Evans, Hull, Kitchel & Jenckes, Jos. S. Jenckes, Jr., Phoenix, Ariz., for appellee, Eloy Gin Corp. Theodore G. McKesson, Robert H. Renaud, Phoenix, Ariz., for appellee Home Ins. Co. Before MATHEWS, ORR and POPE, Circuit Judges. ORR, Circuit Judge. 1 Determination of the main question on this appeal requires a construction of a written contract. Appellant asserts that the contract expresses but a portion of the agreements involved and that a subsequently executed contract controlled other portions. Appellee, Eloy Gin Corporation, to whom we shall hereafter refer as Eloy, is engaged in the business of purchasing, producing, ginning and selling cotton. Its principal place of business is situate in Phoenix, Arizona. As cotton, at its plant, was ginned and baled, and the bales marked, Eloy issued a gin-yard receipt for each bale. The cotton in question here was owned…