6 P.2d 216 | Or. | 1932
In Banc. This is an action based upon alleged breaches by defendant of the terms of a written contract for the delivery by defendant to plaintiff of gasoline, lubricating oil and grease, and for the monthly payment by defendant of rent upon plaintiff's service station equipment.
The following is a copy of said contract:
"This agreement entered into this 28th day of May, 1928, by and between Shell Company of California, hereinafter called the lessee, and W.A. Moore of North Powder, Oregon, hereinafter called the lessor. *74
"1. The lessor is now selling and dispensing gasoline, lubricating oil and grease on the following described premises: Southwest corner of the intersection of Highway and Second Streets lot 4 5, block 25, North Powder, Oregon.
"2. In consideration of the monthly payments which the lessee hereafter agrees to make and of other good and sufficient considerations the receipt whereof is hereby acknowledged the lessor agrees to and does lease to the lessee for the period commencing on the first day of June, 1928, and ending on the 31st day of May, 1931, and from year to year thereafter on the same terms as hereinafter set forth unless either party hereto shall give to the other at least sixty days prior to the end of said term written notice of his or its desire and intent to terminate this agreement at the end of said term and unless such notice is given this agreement shall continue upon the terms and conditions then in force for such period of one year and so on from year to year until terminated by either party hereto giving to the other written notice at least sixty days prior to the expiration of the then current year, or his or its desire and intent to terminate this lease at the end of said year.
"(a) The gasoline, lubricating oil, and grease dispensing equipment (including as well all tanks storage containers for gasoline, lubricating oil and grease), now used or upon or which hereafter shall be used or upon said premises during the life of this agreement.
"(b) The exclusive right to paint, affix, maintain and otherwise use all surfaces of all buildings, fences, and other structures now erected or to be hereafter erected on the property herein described, or property adjacent thereto or in the vicinity thereof controlled by lessor, for advertising the name of the lessee and its products (said advertising matter may consist in merely using the lessee's colors without further wording), also the exclusive right to erect and maintain during said period fences, structures and movable signs *75 on the premises so long as they shall not interfere with ingress to or egress therefrom, or conflict with the laws of the state or ordinances of the municipality.
"(c) The exclusive right to the sub-surface of the property (including any premises adjacent thereto or in the vicinity thereof controlled by lessor) for the storage of gasoline or other motor fuel. This shall include use of tankage now thereon or which may be hereafter constructed, and also the exclusive right to the use of the surface of the said property for storage containers for gasoline or other motor fuel, either affixed to the land or movable, in so far as it may be permitted by the laws of the state or ordinances of the municipalities.
"3. The lessor shall be permitted to use said equipment without charge during the period hereof; on the condition, however, and the lessor promises and agrees:
"(a) That the lessor will use said equipment for no other purpose except in connection with the sale and dispensing of the lessees' products (provided, however, that the lessor may use the same for dispensing Eastern Oils other than the product of the lessee if the lessor carries a full line of Golden Shell oils).
"(b) That the lessor will purchase 100 per cent of his gasoline, Western Oils, and grease requirements from the lessee, and will stock a full line of Golden Shell Oils; and will not sell or permit to be sold upon said premises any other gasoline, lubricating oil or grease, other than the products of the lessee (except Eastern Oil).
"(c) That the lessor will in no way adulterate any of the products of the Shell Company.
"4. The price of gasoline purchased by the lessor, as hereinabove provided shall be four cents (4c) less than the Shell Co. of California's full market price in North Powder, Oregon, which full market price is understood to be No cents higher than Shell Co. of California's posted full market price at its bulk depot at Baker, Oregon. *76
"5. The lessor will not at any time during the term hereof exhibit or display on said premises or in close proximity thereto any sign fixing and/or offering gasoline for sale at a price less than Shell Co. of California full market price as described above.
"6. In the event that the lessor holds under lease for less than Three years, then this agreement shall continue during the term of such lease or any renewal or extension thereof, not exceeding a total of Three years. No damage or destruction of improvements shall in any way affect the lease.
"7. Deliveries are to be made in fairly equal monthly quantities at said place of business. Lessee reserves the right to refuse to deliver in any one month a greater quantity of gasoline than a monthly pro rata of the quantity set out below as the estimated maximum requirements of lessor for any twelve month period. The lessor's total requirements of gasoline during any twelve months period are estimated not to exceed 78,000 gallons.
"8. Terms net. Cash on delivery. In case credit shall be extended to lessor at any time, such extension shall not be a waiver of the cash requirement of this contract as to any subsequent deliveries.
"9. All deliveries to be made subject to federal, state, county, municipal or other government taxes, laws or regulations governing or applicable to production, manufacture, transportation, sale or delivery of gasoline and any additional cost to Lessee in producing, manufacturing, transporting, selling or delivering said gasoline because of such taxes, laws or regulations shall be borne and paid by Lessor.
"10. All orders shall be filed with reasonable promptness, but lessee shall not be held responsible for delay in filling orders or for any other default resulting from fire, riot, labor disturbances, earthquakes, war, acts of any government whether foreign or domestic, federal, state, county or municipal, accident, total or partial failure of transportation or delivery facilities, or any other cause beyond its control. Lessee intends *77 to make deliveries under this contract from the gasoline produced by it from its own wells and treated by it in its own refineries, and it has made and will make other contracts with other Lessors relying upon the same sources of supply. A shortage or failure of gasoline so produced in the possession or under the control of Lessee, resulting from any of the causes above enumerated shall excuse Lessee from nonperformance of this contract or for short delayed deliveries; or the Lessee may at its option procure elsewhere gasoline for delivery hereunder. In case of such shortage of gasoline in its possession or under its control Lessee shall have the right to apportion its available supply among its various buyers under this and other contracts in such manner as it may determine.
"It is understood and agreed that this is a bailment from the lessee to the lessor, and in using said equipment the lessor shall in no respect be considered the agent or employee of the lessee, and that the lessee is not responsible for the condition of the equipment and is not liable in any manner for any injury or damage to person or property caused by the condition of or the use of any said equipment.
"In consideration of the premises and as rental, the lessee agrees to credit the lessor's account, at the end of each calendar month in the amount of sixty-five dollars ($65.00) during the period commencing the first day of June, 1928, and ending the 31st day of May, 1931. It is understood and agreed, however, that the obligation of the lessee to make said monthly payments shall cease if the lessor discontinues selling or dispensing gasoline and/or oil and/or grease on said premises; but such discontinuance of selling or dispensing shall in no wise abrogate or affect the rights of the lessee hereunder.
"11. In the event that the Lessor fails to fulfill any of the conditions or agreements on his part to be fulfilled hereunder then in that event the Lessee shall have the right to cancel the bailment of the above described equipment held by the Lessor hereunder only *78 however upon the Lessee giving written notice to the Lessor for at least twenty-four hours, which written notice may be delivered in person to the Lessor or may be delivered by registered mail to the Lessor at the premises above described and if at the end of said period the said Lessor shall not have complied with the terms of said notice and shall continue to be in default then and in that event the Lessor shall forthwith deliver up possession of the said premises and the said equipment to the Lessee, and the Lessee shall have authority to enter thereon with or without the bringing of an action in any court and take possession of the said premises then and in that event any and all rights of the lessor shall be forfeited to the lessee as liquidated damages and his right shall be fully ended and terminated and time is made expressly of the essence of this agreement in all its particulars, and it is further agreed that this remedy shall not be exclusive but that the Lessee shall have any and all remedies which it may be entitled to under the law and thereupon the Lessee shall have the right to occupy the said premises and use the said equipment without being obligated to pay the lessor anything whatsoever for its use during the full terms of this agreement.
"12. This agreement shall be binding upon the successor and assigns of the parties hereto and shall bind all persons dispensing or selling gasoline and/or lubricating oil and/or grease upon the said premises. The Lessor may not, however, assign his rights hereunder without the written consent of the Lessee.
"W.A. Moore, lessor "Shell Company of California "By J.D. Valum."
The alleged breaches are failure and refusal of defendant to deliver gasoline to plaintiff and failure and refusal of defendant to pay the stipulated monthly rental.
From a judgment in favor of plaintiff, based upon the verdict of a jury, defendant appeals. *79 Twenty-three assignments of error are set forth in defendant's brief. The first assignment is, that the court erred in failing to grant defendant's motion for nonsuit. Seven reasons are advanced in support of such motion:
[1, 2.] 1. It is urged that plaintiff's failure to plead and prove his readiness and willingness to pay the contract price at the time and place of delivery is fatal to his right to recover. The amended complaint contains this allegation: That plaintiff "in all respects fully complied with his part of said contract and agreement in so far as he was allowed to do so by defendant." Upon issue joined, this is a sufficient allegation of waiver by defendant of performance by plaintiff: Durkee v. Carr,
[3.] 2. Defendant asserts that the contract does not contain a promise by defendant to sell and hence it is unenforceable. We note the following excerpts from said contract: "Lessee (defendant) intends to make deliveries under this contract," etc. "All orders shall be filled with reasonable promptness," etc. "Deliveries are to be made in fairly equal monthly quantities at said place of business." The writer is unable to concur in defendant's belated assertion, that it did not agree to sell the commodity mentioned.
[4, 5.] 3. Defendant particularly stresses the contention, that the price was not definitely fixed, and, for that reason, the contract is invalid. To constitute a sale, *80 the price need not be definitely fixed at the time the sale is effected, if the agreement contains express or implied provisions by which it may be rendered certain: 23 R.C.L. 1278. There could be no uncertainty as to defendant's market price at North Powder. The contract expressly provides that the price to plaintiff should be four cents per gallon less than that.
We cannot concur with defendant in his statement that there could not possibly be any proof of what the full posted market price might be at any time during the term of the contract, even if the defendant should in the most capricious manner, and without assigning any reason therefor, fix an outlandish price for its gasoline and post the same as the posted full market price at its Baker depot. Whatever may be said as to the right in any view of the case, of the defendant to do such a thing, certainly, nothing would prevent the parties, the court, or the public, from ascertaining definitely, certainly and exactly, what that price might be when so posted.
Weston Paper Manufacturing Co. v. Downing Box Co., 293 Fed. 725, is a case, cited by the defendant, wherein a contract is construed which involved 900 tons of standard corrugating strawboard. There, it was agreed that the "Price: Shall be fixed by the seller on or before December 15, 1920, for the first three months' shipments, beginning January 1, 1921. Seller shall give the buyer notice, in writing, on or before the fifteenth (15th) day of third month thereafter, of the price for the tons to be shipped the ensuing three months' period, which price shall be the seller's market price then existing under this the seller's standard form of quarterly price fixing contract."
The writer thinks that there is a distinction between that case and the case at bar in the fact that the posted *81 price of gasoline is necessarily strongly influenced, if not absolutely controlled, by the posted prices of competing producers; and in the further fact that the method of its distribution and sale is entirely dissimilar from that of corrugating strawboard. In the case cited, the court comments on the fact that no third party had any immediate influence upon plaintiff in determining the price of its strawboard. That certainly cannot be said of gasoline today, whether of the variety produced by defendant, or that of its competitors. Strawboard is not marketed to such numbers of people as to make it as common, and its price as well known, as that of wheat, potatoes or prunes. If, however, there is no distinction between this case and the one at bar, the writer is not in harmony with the doctrine of the case cited.
Jensen v. Turner Bros., 16 S.W.2d 742, also cited by defendant, is an action for the alleged conversion of a quantity of corn. The point here considered is presented by the comments of the court upon the failure of the testimony, in behalf of plaintiff, to support his allegations that there was a contract for a future sale to defendants. In this connection it is there said: "If it were a present sale for a price to be determined by future conditions or at a future date, this date must be designated or a time limit set, or a reasonable time understood." In the case at bar, the question of the date, when the defendant's market price less four cents per gallon would govern, is not in question. The parties to the contract have given a practical construction of the contract in that regard by operating thereunder, the defendant making delivery and the plaintiff making payment on the basis of defendant's posted market price at time of delivery. *82
Brooks v. Federal Surety Co.,
[6.] 4. Defendant urges that the contract in suit is void, because it leaves performance thereof to the will or wish of one of the parties. Tweedie Trading Co. v. Parlin Orendorff Co., 204 Fed. 50, also cited by defendant, holds that a contract of affreightment is unilateral which requires defendant to furnish for shipment from 150 to 200 carloads of farm implements within the ensuing year, and plaintiff to transport the same in its vessels from New York to certain South American ports at rates of freight specified therein, and provides that the "bulk" of the shipments shall be subject to plaintiff's call during a specified three *83 months of the year terminating ten days before its expiration. The reason assigned for this holding is that the contract leaves the defendant without the right to require the carriage of any definite quantity at any time during the year, unless within the last ten days.
In the case at bar, it will be noted that the contract expressly provides: "Deliveries are to be made in fairly equal monthly quantities at said place of business." It also contains a reservation, on the part of defendant, to refuse to deliver in any one month a greater quantity of gasoline than a monthly pro rata of the estimated maximum requirements of plaintiff for any twelve months period, which estimated maximum is fixed in the contract at 78,000 gallons.
Cold Blast Transportation Co. v. Kansas City Bolt Nut Co., 114 Fed. 77 (57 L.R.A. 696), also cited by defendant, construes a contract "to deliver manufactured articles in unnamed quantities" at certain specific prices. There was "no averment that either the plaintiff or the defendant paid any consideration or performed any act to induce the contract, except the remitting of the offer by the plaintiff, and the sending of its acceptance by the defendant." The plaintiff did not agree to deliver, nor did the defendant contract to receive, or pay, for any quantity or amount whatever of the articles named in the writings.
In the case at bar, it is expressly stipulated in the contract, "that the lessor (plaintiff) will purchase 100 per cent of his gasoline, Western Oils and grease requirements from the lessee (defendant), and will stock a full line of Golden Shell oils; and will not sell or permit to be sold upon said premises any other gasoline, lubricating oil or grease other than the products of the lessee (except Eastern Oil)." It is also *84 stipulated that plaintiff shall not display on said premises any sign, fixing or offering gasoline for sale at a price less than defendant's full market price. There are also provisions giving to defendant the exclusive right to use the surface of the buildings and fences for advertising and the surface and subsurface of the ground for storage of gasoline and other motor fuels.
International Shoe Co. v. Herndon,
"It will be observed that this alleged engagement is not only indefinite as to time, quantity, price and terms, but it is accompanied by no corresponding engagement on the part of the defendant; he binds himself to nothing; he could, under it, order one or a thousand pairs of shoes, or none at all; at a price unknown, not agreed upon, and upon indefinite terms."
Wickham Burton Coal Co. v. Farmers' Lumber Co.,
"In the last analysis the counterclaim is based on the allegation that plaintiff undertook to furnish defendant such described coal `as defendant would want to purchase from plaintiff.' The defendant never `accepted.' Indeed, it is its position that it gave orders, and that plaintiff did the accepting. But concede for argument's sake, that defendant did accept. What was the acceptance? At the utmost, it was a consent that *85 plaintiff might ship it such coal as defendant `would want to purchase from plaintiff.' What obligation did this fasten upon defendant? It did not bind itself to buy all it could sell. It did not bind itself to buy of plaintiff only."
In the case at bar, plaintiff did bind himself to buy all he could sell of gasoline and to buy of plaintiff only.
In Schlegel Mfg. Co. v. Peter Cooper's Glue Factory,
"The plaintiff at the time was engaged in no manufacturing business in which glue was used or required, nor was it then under contract to deliver glue to any third parties at a fixed price or otherwise. It was simply a jobber, selling, among other things, glue to such customers as might be obtained by sending out salesmen to solicit orders therefor. * * *
"Mutual promises or obligations of parties to a contract, either express or necessarily implied, may furnish the requisite consideration. The defect in the alleged contract here under consideration is that it contains no express consideration, nor are there any mutual promises of the parties to it from which such consideration can be fairly inferred. The plaintiff it will be observed, did not agree to do or refrain from doing anything. It was not obligated to sell a pound of defendant's glue or to make any effort in that direction. It did not agree not to sell other glue in competition with defendant's. The only obligation assumed by it was to pay 9 cents a pound for such glue as it might order." *86
This defect, which is so clearly and yet so concisely pointed out, does not appear in the case at bar. First, plaintiff was engaged in a business in which gasoline was required. Second, he was not simply a jobber. Third, in the contract in suit, there are mutual promises on the part of each of the parties to it. Fourth, the plaintiff did agree to sell defendant's products, and to refrain from selling any other gasoline. This clearly distinguishes the New York case last cited from the case at bar.
In the case of Cohen et al. v. Clayton Coal Co., 86 Col. 270 (
"The defendants, by remaining noncommittal with respect to the contract, put themselves in this position: If the price of coal advances and we see that it is advantageous for us to contend that a valid contract exists, we can do so, but if the price decreases, we will be at liberty to contend that there was no written acceptance and that the `contract' was merely a price list, and for the purpose only of determining the price of such coal as we have actually purchased and received."
In the case at bar, plaintiff was not noncommittal, and the practical interpretation of the parties was in conformity with plaintiff's construction of the contract.
In Halloway v. Mountain Grove Creamery Co.,
In the case at bar, we hold that a fair construction of the entire contract discloses that defendant agreed to deliver sufficient gasoline for plaintiff's trade, not in excess of 78,000 gallons, during any twelve-month period.
Somewhat similar contracts have been construed in the following cases: Memphis Furn. Mfg. Co. v. Wemyss Furn. Co.,
[7.] 5. The defendant contends that it can not be charged upon the contract in question, for the reason that the retention of possession of leased premises by the landlord releases the tenant from liability for rent. In support of this proposition, defendant cites: Obermeier v. Mortgage Co. Holland-America,
The Oregon case, first cited, deals with the rights of a tenant under a written lease where the landlord failed to put such tenant into possession.
The second Oregon case holds that the defendant, to whom leased premises were sold subject to the lease, was liable to the trustees of the original lessee for a deposit made by said lessee as security for the performance of the terms of a lease, the terms of which had been fully performed, because such defendant "assumed all the lessor's obligations thereunder, including *88 the obligation of the said George A. Housman, the original lessor, with reference to the repayment of the deposit in said lease provided for."
The rule is there declared that —
"When the relations of landlord and tenant are at an end and the lessee has surrendered the premises and the landlord accepted the same and thus put an end to the lease, so far as the rights of the parties to it are concerned all covenants therein, in favor of either party, are at once terminated when no cause of action has accrued or matured during the life of the lease."
In the case at bar, however, it is claimed that a cause of action accrued during the life of the lease.
The California case, above cited, holds that a lessor can not collect rent for the use of a chattel after he has repossessed himself thereof by reason of an alleged default in payment of an installment. No such course on plaintiff's part appears in the case at bar.
[8.] 6. Defendant supports his motion for nonsuit by saying that a contract of bailment imposes a duty upon the bailee to return the property, which is the subject of the bailment, to the bailor when the bailee can not comply with the contract.
The case of State v. Chew Muck You,
Neither that case nor the citation given of 6 C.J. 1085, announce the rule that, where the bailor breaches its contract with the bailee, and then defends on the ground that the contract is a nullity, the bailee is then *89 without a remedy upon such contract for damages, because of the bailor's breach thereof, unless and until the bailee restores the property to the bailor.
[9.] 7. As a further reason why its motion for nonsuit should have been sustained, the defendant says that a contract which contemplates the immediate return of the consideration to the promisor is nudum pactum.
The case of Velie Motor Car Co. v. Kopmeier Motor Car Co., 194 Fed. 324, is cited to this point. With reference to the above rule, it holds that a phrase in a contract which reads, "and of $1.00 each to the other paid," etc., imports no consideration for it may well mean the exchange of the same dollars. -Obviously, this case is not applicable to the case at bar. The contract in the case at bar does not contemplate the immediate revocation of the exclusive rights granted to defendant, the repudiation of plaintiff's promise to purchase of defendant all of the gasoline and other motor fuel needed by him, and not to permit the display of any competitive sign upon said premises.
[10.] Defendant's second, third, fourth, fifth, sixth and seventh assignments of error deal with the admissibility of testimony.
Defendant contends that loss of profits constitute special damages; that plaintiff's complaint does not contain any allegation of special damages, and for that reason any testimony in support of such damages was inadmissible.
In the early case of Wisner v. Barber,
"Actual damages include the direct and actual loss which a party sustains when hindered or prevented from completing his contract. The loss sustained includes *90 the loss of profits which would have been realized as the immediate and necessary result of the fulfillment of the contract. Such profits growing out of the contract itself as one of its direct and legitimate fruits, constitute a just and proper element of the damages to be recovered against the party whose breach of the contract has prevented such profits from being realized. They are a part and parcel of the contract, and are supposed to have entered into the contemplation of the parties when the contract was made, and to deny them would be to give the delinquent party the benefit and advantage of his own wrong."
In that early case, the plaintiff offered to prove the profits of which he was deprived by the termination of the contract by defendant. We quote further from the opinion in that case:
"And the damages in this case resulting necessarily from the breach of the contract upon the part of the defendant, it is not necessary that they should be specially stated in the complaint."
If it be said that the case just cited deals with profits which were not dependent upon the chances of trade, while in the case at bar, the profits sought to be recovered were so dependent, still the writer is of the opinion that the testimony in that regard was admissible because, at worst, plaintiff's complaint presents a defective allegation of special damages. Plaintiff alleges:
"That as a result of the failure of the defendant to comply with said contract, * * * the plaintiff was compelled to purchase gasoline for said filling stations from other sources less advertised and not so generally known or used and in lesser quantities, etc."
Bearing in mind that plaintiff was under contract to buy from defendant all of the gasoline he sold, the lesser amount purchased must represent a less amount *91 sold to plaintiff's trade. This allegation might be subject to a motion to make more definite and certain; but after issue joined, it suffices to present the question of a depreciation in plaintiff's sales of gasoline.
[11.] The following question was propounded to plaintiff on his direct examination to which, over objection, he made answer as follows:
"Q. What effect, if any, did the change over to Veltex gasoline have as to the quantity sold or dispensed with at your filling station, the filling station mentioned in this complaint?
"A. Why my gallonage fell off from twelve to fifteen hundred gallons per month."
We can not agree with defendant that his was a mere statement of opinion. We construe it to be a statement of the alleged fact that each month during the period in question, plaintiff sold to his trade from twelve to fifteen hundred gallons less than he had been selling in previous months. The required data for computing the loss on that item is supplied by the provision in the contract enabling him to sell gasoline for four cents per gallon more than he was to pay defendant for it.
We find no prejudicial error in the rulings of the trial court upon admission of testimony.
[12.] The contract provided for the payment of $65 per month rental. If any part of that rental could have been realized by plaintiff in mitigation of his damages, that fact could be shown under the general issue: Horn v. Elgin Warehouse Co.,
Assignments of error from eight to twenty-three, inclusive, are based principally upon the propositions of law invoked in support of those assignments which we have discussed. Assignments numbered from eight to eighteen challenge certain instructions which were given. The remaining five urge that error was committed by the trial court in refusing to give certain instructions requested by defendant. We find no prejudicial error.
It is ordered that the judgment of the circuit court be affirmed.
BEAN, C.J., BROWN, RAND and BELT, JJ., concur.
ROSSMAN and CAMPBELL, JJ., did not participate in this decision. *93
