Weathersby v. Gore

556 F.2d 1247 (1977)

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Nature of the Case

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Facts

D was approached about selling his future crop of cotton at a predetermined price. D insisted that any future purchaser provide a performance bond ensuring D against loss in the event of a breach. P and D negotiated a price of 30 cents per pound. Throughout the subsequent months the price rose, until at the time performance was due the price had soared to 80 cents per pound. It was determined that a performance bond of $25,000 was a suitable amount as a fair estimate of D's potential damages in case of a breach. D signed the document wherein P was named as purchaser. Pursuant to the understanding each party would furnish a $25,000 performance bond in favor of the other; a clause requiring 'mutual bonds' was placed in the prepared form. As soon as these contracts had been made, P sold this cotton for 70 cents per pound to Starke Taylor & Son, Inc., a cotton merchant firm in Dallas, Texas. After the contract was signed, D continually requested P's performance bond. Another party stated he would guarantee P's performance. This was unacceptable to D. D provided his $25,000 bond on April 6 and was told that P was in Europe but would soon procure a bond. Eventually, on May 3, D through his attorney wrote that the contract was canceled. P sent his bond 11 days later. Another bond with a correction was mailed on May 25. Fieldcrest Mills, Inc. purchased the contract from Starke Taylor for 34.8 cents per pound. Fieldcrest had knowledge of D's May 3 notice of cancellation. From May 3 and before the commencement of suit on September 28, 1973, no attempt was made by P, Starke Taylor, or Fieldcrest to effect cover. It was stipulated at trial that cotton was available on the open market. P sued D for breach of contract seeking specific performance. P got the judgment and D appealed.