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John F. Clark & Co. v. Nelson

112 So. 819, 216 Ala. 199 (1927)

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John F. Clark & Co. v. Nelson

Alabama Supreme Court

112 So. 819, 216 Ala. 199 (1927)

Facts

Cotton broker S. R. Stewart owed one of his customers, C. B. Nelson (plaintiff), more than $2,000. Stewart contracted to have another cotton broker, John F. Clark & Co. (Clark) (defendant), pay off Stewart’s debt to Nelson in exchange for consideration provided by Stewart. However, shortly after Stewart and Clark made this agreement, they mutually agreed to rescind it, i.e., to undo the agreement as if it had never happened. Ignoring the rescission, Nelson pursued both Stewart and Clark for the unpaid debt. As part of these efforts, Nelson sued Clark, claiming a right to enforce Clark’s promised payment in the contract between Clark and Stewart. Clark asserted that it had never finalized a contract with Stewart and, even if it had, Clark and Stewart had mutually agreed to rescind any contract shortly after making it. Either way, no agreement existed for Nelson to enforce. Nelson argued that the contractual parties could not rescind a contract for his benefit without his consent. The trial court entered judgment for Nelson, and Clark appealed.

Rule of Law

Issue

Holding and Reasoning (Gardner, J.)

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