120 F.2d 714 | D.C. Cir. | 1941
The All States Service Station, Inc., defendant below, appeals from the judgment of the District Court dismissing its counterclaim.
The Standard Oil Company of New Jersey (the Standard Company) brought an action against the All States Service Station, Inc., (the Service Station) charging indebtedness of some three thousand odd dollars for goods sold and delivered. The Service Station admitted that it owed the debt, but filed a counterclaim asking $10,000 for an alleged violation of a restrictive area provision in a motor fuel sales contract. The contract also provided that the “Seller [the Standard Company] may cancel this contract at any time on giving Buyer ten (10) days’ written notice of intention so to do.” The sole question for decision is whether the following letter written by the Standard Company on September 26, 1936, and received the next day, constituted an effective notice:
“Our motor fuel sales contract with you dated June 6, 1935, grants to us the right to terminate the agreement by giving you ten days’ written notice.
“In view of certain conditions, we find it necessary to exercise our right to terminate the agreement, such termination to be effective ten days from the date of this letter.
“In the meantime, our representative will call upon you regarding a new motor fuel contract.”
The District Court concluded that this letter was a substantial compliance by the Standard Company with its right to cancel the contract, and that the cancellation became effective on the tenth day from the receipt. Since there was no evidence tendered to indicate a breach within that period, nor any to show damage, the Court dismissed the counterclaim. It reached the correct result.
The Service Station relies heavily upon the case of Oldfield v. Chevrolet Motor Co.
The Service Station also relies upon two Maryland cases.
The only case particularly pertinent in this jurisdiction that has been called to our attention is Lyon v. Pollard.
Affirmed.
35 A.L.R. 893, 904-912 ; 32 C.J. 1249-50; compare Black v. Travelers Ins. Co., 231 Ala. 415, 165 So. 221.
198 Iowa 20, 199 N.W. 161, 35 A.L.R. 889.
“The attempted cancellation was less than two weeks prior to the date on which the appellant would be entitled, if the contract were then in force, to nearly $3,000 of additional discount on purchases [profit] made under it during the year preceding. This situation presents no persuasive reasons for relaxing established rules of construction as to either the contract or notice in aid of so harsh a proceeding.” Ibid at pages 162, 163 of 199 N.W.
Harrington v. Bremer Counts Farmers’ Mut. Fire Ins. Ass’n, 203 Iowa 282, 211 N.W. 383, 384. “In the view we take of the case, it is unnecessary to consider * * * [appellants’] contention that [the notice] was ineffectual to cancel the policy because it purported to do so two days after its date, while the statute * * * required five days’ notice.
“We take occasion to say, however, that the case of Oldfield v. Chevrolet Motor Co. * * * relied upon [sic] the appellants to sustain the latter contention, is clearly to be distinguished upon the facts and, we think, upon principle as well.
“In that case, * * * [inter alia] the effect.of the termination of the contract by notice was to deprive the other party to it of substantial, subsisting rights under it, which only the lapse of a short time and the continuation of the contract were required to mature. $ sfc
“Here, * * * The only effect of the cancellation is to relieve the insurer from a future liability and to put the insured to the necessity of procuring other insurance, if he so desires. In sueh case, it has been repeatedly held that a notice by the insurer of the cancellation of a policy of insurance which is otherwise sufficient, is effective to cancel the policy at the expiration of the time required for such notice by the terms of the policy or a statutory provision, although the notice itself may say the cancellation will be effective at an earlier date [citing cases]. * * * ”
German Union Fire Ins. Co. v. Clarke Co., 116 Md. 622, 82 A. 974, 39 L.R.A.,N.S., 829, Ann.Cas.1913D, 488; American Fire Ins. Co. v. Brooks, 83 Md. 22, 34 A. 373. But see Seaboard Mut. Casualty Co. v. Profit, 4 Cir., 108. F.2d 597, 126 A.L.R. 1105.
The brief of the Service Station quotes the following language from the American Fire Ins. Oo. v. Brooks case. “The act of cancellation was therefore made one day after the receipt of the notice by Barton. This was not within the right reserved in the policy, and was an utterly void act. Had the attempt to cancel been made later on, another question would have arisen, upon which we have now no occasion to comment. No other attempt was made; and what was done, for the reasons given, was nugatory and void.” 34 A. 373, 376. In this case the receivers for a manufacturing company brought suit to collect upon a policy which provided that the insurer could cancel upon five days’ notice. The company took out the policy through a broker. At renewal time it paid the broker a premium for another year’s coverage. The broker failed to remit to the insurance firm. Later the firm sent a letter to the manufacturing concern stating that it had renewed the policy but unless the premium was paid on a certain date no further liability would be recognized. This letter came into the-hands of Barton, who can be assumed to represent the manufacturing company, the day before the purported deadline. Barton, in a letter, expressed surprise that the payment had not reached the insurance firm, and stated that he would write again-when-he had heard from the broker. The insurance firm cancelled the policy on its books, probably on the day set, and a fire occurred quite some time later. The trial court found that the broker was an agent of the insurance firm. On this issue the Maryland Court of Appeals found no error. Thus the premium had been paid. Nonetheless the question remained whether the insurer had properly cancelled the policy. The Court said that it would pass the hypothetical character of the notice, but such a notice, based upon the non-payment of a premium, when in fact it had been paid, did not ipso facto work a cancellation. Some other act was needed. An entry of cancellation on the books of the insurer was not such an act. The holding of the Court, then, is bottomed more upon the nature of the notice, which assumed, contrary to fact, that the premium had not been paid, than upon the deficiency of time.
In the Clarke case, the Maryland Court of Appeals, after stating that the notice was deficient because it was shorter than the contract required, relying upon the Brooks case, and because it was an expression of future intention, said, “There remains to be considered that which is probably the most important question in the case, to wit, whether a return or tender of the pro rata part of the premium was a prerequisite to any valid cancellation of the policy.” 82 A. 974, 975. After a survey of the law on this point, the Court adopted what it stated was the majority rule: that a tender of the money is a condition precedent. Thus, in the Clarke case the Maryland Court states a rule opposed to the one we adopt, but in so doing it relied -upon the Brooks case, a reliance which is very questionable, and moreover, the issue was of secondary importance in the Clarke case.
87 U.S. 403, 20 Wall. 403, 22 L.Ed. 361. In Merritt v. Thompson, 53 App.D.C. 233, 289 F. 631, a monthly tenancy was involved. Inasmuch as the statute provided that the notice was to expire on the day of the month from which the tenancy ran (D.C.Code, Tit. 25, § 312), the situation is quite different from here where the contract could cease at any time after ten days’ notice.
20 Wall. 403, 87 U.S. 403, 406, 407, 22 L.Ed. 361.
Similarly other courts have held that if one terminates a contract immediately, he is only liable for the damages over the period the notice would have had to run. Freiburger v. Texas Co., 216 Wis. 546, 257 N.W. 592; Chevrolet Motor Co. v. McCullough Motor Co., 9 Cir., 6 F.2d 212, 35 A.L.R. 893.