Penn Oil Co. v. Triangle Petroleum & Gasoline Co.

Offutt, J., delivered the op,inion of the Court. The judgment from which the appeal in this case was taken was entered on a verdict in favor of the appellee, returned by the- Court, sitting as a jury in the Superior Court of Baltimore City, in an action in‘assumpsit- for the breach ■of several contracts! for the sale of gasoline to the appellant. The appellant is a corporation, having its: office and plant .at Roslyn, Virginia, near the City of Washington, and is. -engaged in the business of distributing gasoline. In the operation of its business it maintains, a number of tank wagons or filling stations in the City of Washington, and .also supplies gasoline to individuals and various public institutions and to departments of the United States Government.

The gasoline which thei appellant so distributes is delivered to it at its Roslyn plant, and there stored until drawn ■out for distribution. The appellee is an Oklahoma corporation engaged at Tulsa, Oklahoma, in the sale of petroleum products, including gaso line. As the railroad companies do not furnish ears for the ■shipment of gasoline, it is usually shipped in private tank cars furnished by the shippers. The appellee owned no tank •cars, but rented such as were needed for the transportation ■of the products sold by it.

On April 10, 1918, April 15, 1918, and May 3, 1918, respectively, the appellee sold the appellant three lots of gas ⁵⁶⁴ oline to be delivered at Roslyn, Virginia. Shortly after shipments under these contracts beg'an, differences arose between the parties to them, as to the terms of the contracts of sale-. The main points of difference were, the time at which shipments were to be- made, and when payment was to* be made for the gasoline shipped. In consequence of these differences, or for other reasons, there was a considerable delay on the part of the appellant in unloading some of the cars of gasoline shipped to it by the appellee; some it refused to accept or unload at all, and others were not even shipped because the appellant had refused to accept oars which had been shipped to it.

As a result of this conduct on the part of the appellant, the appellee claimed that it suffered substantial loss in several ways. One was that, because of the appellant’s unreasonable delay in unloading some of the cars, the appellee was required to pay more rent for them than would have been necessary had they been unloaded promptly; another was that when the appellant refused to accept and unload the cars shipped to it, the appellee was obliged to sell the gasoline contained in them at a, loss-, and was also subjected to the payment of demurrage and storage charges and expenses incident to such sale; and finally, that as the appellant had refused to accept a part of the gasoline shipped to it under one of the contracts, it thereby violated the contract and made any further shipments under it unnecessary, and became responsible for any loss which the appellee suffered because of such breach, which as to the cars not shipped consisted of the loss of certain profits which the appellee would have realized had the appellant taken the cars at the price agreed on. The appellee demanded that the appellant reimburse it- for these losses, and upon its refusal, this suit was brought. The declaration contains four counts, to each of which the appellant (defendant below) demurred.

The demurrer to the fourth count appears to have been abandoned, and the demurrers to each of the other counts were overruled, and the general issue plea filed by the defendant. The objections ⁵⁶⁵ urged to the declaration in the lower Court were not pressed here in the brief or the oral argument of counsel, and in disposing of them this Court deems it sufficient to say that no error was committed in overruling the demurrer to the declaration, and the respective counts thereof, because each contains a statement of facts which, if true, constitutes a valid cause of action, and nothing further is required. Art. 75, Code Pub. Gen.

Laws, Sec. 3. In the first count it is stated that the defendant, on April 10th, 1918, ordered from the plaintiff four tank cars of gasoline to be shipped from Oklahoma to Noslyn, Virginia, for which the defendant agreed to pay 21% cents per gallon, and that this gasoline was shipped the defendant in cars rented for the purpose, and that while it was received and accepted by the defendant, yet it permitted it to remain in the ears “for a long and unreasonable length'of time,” as a result of which the plaintiff was damaged. It further stated that the plaintiff was. required to pay $5.00 a day rental for these cars. This count does not gratify the technical rules of pleading, hut as a mere narrative of the complaint it states facts which, if true, warrant a recovery.

In the second count the plaintiff declares that, on April loth, 1918, the defendant ordered ten oars of gasoline to he shipped from Oklahoma to Noslyn, Virginia, for which it agreed to pay 21% cents, per gallon, and to unload the cars within forty eight hours after their arrival at Noslyn; that the ears arrived in accordance with the terms of the order in good condition, and that the defendant was notified of their arrival, but it without reasonable or just cause refused to accept the gasoline contained in six of them, in consequence whereof the plaintiff, as the agent of the defendant, and after due notice to it, resold the gasoline contained in these cars at the highest market price; which was less than the contract price, and that in making; this sale it incurred vario-us. expenses incident thereto.. It is further stated that because of the defendant’s refusal to accept the gasoline the plaintiff was compelled to pay demurrage and storage charges to the ⁵⁶⁶ railroad company, and also a rental of five dollar's per day for the use of the oars for each day they remained unloaded after the fourth day from the time of their arrival. In the third count the plaintiff says that, on May 3rd, 1918, it contracted -with the defendant to ship' to it at Roslyn, Virginia, from Oklahoma, “twenty (20) cars of gasoline over twenty (20) days” for which it was to pay 21% cents per gallon subject to tank wagon changes date of shipment, and that it had shipped seventeen of these cars when the defendant claimed that the cars had not been shipped in accordance with the agreement, but nevertheless agreed to accept them if the plaintiff would “draw a draft for each car,” which proposal the plaintiff accepted, and drew! the drafts accordingly, but upon arrival of the cars the defendant refused to accept them, although notified of their arrival, and that in consequence of this refusal the plaintiff, as defendant’s agent, after due notice to it, resold the gasoline in the seventeen cars at the highest market price, which was less than the contract price, and incurred various items of expense incident to the resale, and was compelled to pay storage and demurrage charges to1 the railroad company and also a rental of five dollars per day for each day the cars remained unloaded after the fourth day of their arrival. It is also stated that because of the defendant’s failure to carry out the contract, the plaintiff lost the profits it would otherwise have made on the remaining three cars of the twenty car shipment.

The claim, set up in the fourth count was eliminated by the granting of the defendants fifteenth prayer and is not before us on this appeal, and will not therefore be further noticed. The record contains four exceptions, three of which relate to the rulings on questions of evidence and one to the rulings on the prayers. Since the right of the plaintiff to recover under the pleadings on the contract sued on is raised by the prayers it becomes necessary to ascertain from the record what evidence there was to support- them. ⁵⁶⁷ The only question arising in connection witli the “four car shipment” is whether, under the contract relating to them, the defendant was obliged to unload them within a reasonable time after their arrival, and in the event of its failure to do so whether the plaintiff was entitled to recover the equivalent of the rental value of such ears, from the time the defendant permitted the gasoline1 to remain in them, after it had a reasonable opportunity under all the circumstances, of the case to unload them. J. W. Sherwood, president of the Penn Oil Company, is also engaged in a. similar business in Baltimore, Maryland, where he trades under the name of Sherwood Brothers.

The Penn. Oil Company, it is. stated, is a subsiduary to and owned by Sherwood Brothers, and both concerns appear to have offices in the Garrett building in Baltimore. On March 28, 1918, the appellee oponed the negotiations for the sale of gasoline hy offering Sherwood Brothers at Baltimore ten to twenty cars at 21% cents. On April 9th, the Penn Oil Company, apparently in connection with this offer, offered to pay 21 cents, whereupon the appellee, addressing Sherwood Brothers, telegraphed the appellant it could furnish four cars of gasoline delivered at Koslyn at 21% cents per gallon upon “thirty days trade, acceptance net.” Later it reduced this price to 21% cents and in reply to this offer, on April 11th, it received from the appellant a telegram reading in part “we accept four cars ship, one each third day * * and on the same day the appellee, in acknowledging the order, stated that a car was. to be shipped “every two or three days” and that the invoices with bills of lading attached were to go to the appellant’s bank at Baltimore.

On April 17th, appellee received from the appellant a requisition directing it to “ship, these four cars, at once.” Three of these cars arrived at Boslyn on May 9th, and one on May 10th, and remained there until the 11th of June, when they were unloaded by the appellant. T’pon shipment, of these cars, the appellee on April 12th drew four trade acceptances covering them and payable through the Merchants & Mechanics Bank of Baltimore. ⁵⁶⁸ These acceptances were at the instance of the appellant returned to the appellee with instructions tc drawl on it through the Arlington Trust Company, at Rosyln, Virginia- The appellee, after these four acceptances were returned, drew a single draft- covering the four cars on the appellant through the Arlington Trust Cbmpany instead of a “trade acceptance,” because the time for the “trade acceptance” had expired. In giving the numbers of these four ears the appellee sent the wrong number for one of them and about nineteen days later its attention was called to the error by the appellant, and the appellee on the following! day notified appellant the cars would he released upon payment of the draft for the four cars. The appellant offered two prayers, the twelfth and sixteenth, both of which were re-fused, based upon the theory that the evidence summarized was not sufficient to entitle the appellee to recover under the first count of the declaration.

In passing upon the question thus raised, we cannot consider either the amount of the verdict or the weight of. the testimony, hut only whether, assuming it to he true, it was sufficient in la.w to warrant a finding in favor of the appellee under the first count for any amount at all. Upon a careful consideration of this testimony, we are of the opinion that if the appellee’s contention that the appellant was bound to unload and release the cars within a reasonable time after it received them is sound, that there was evidence in the case legally sufficient to support it. Tbe question of blame or fault depending, as it did, not only upon the weight to be given to the testimony of the witnesses, but also' on the relative weight and effect to he given to the facts shown by this testimony, was peculiarly within the province of the jury or the O'ourt sitting in the place of a jury. Inasmuch as the only damage sought to he recovered under this count was for car rental, and as that element runs through the other counts, we will now; consider whether, as a matter of law, the consignee of merchandise shipped over a railroad in freight oars not owned by the railroad company is hound to unload and ⁵⁶⁹ release them within a reasonable time after their arrival at their destination, and whether in the event of his failure to do so the consignor is entitled to be paid the fair value of the use of such cars for the time he was deprived of such use because of such failure.

The right of a carrier by water to recover for loss suffered through the failure of a consignee to unload a vessel within a reasonable time after receiving notice of its arrival has been frequently recognized by the courts of this country. It is true that in England maritime demurrage has. been held allowable only when the contract of carriage provided for it, and that the decisions there have been followed' in several early cases in the United States. 22 L. R. A. 530, note. But the decided weight of authority appears to support the rule as stated in Hutchinson on Carriers, § 842 (3rd Ed.), that one chartering a vessel under a, contract which is silent as to the time of unloading and discharge “contracts, by implication that he will unload and discharge her within a reasonable time in view of all the existing facts and circumstances, ordinary and- extraordinary, bearing upon that question at the time of her arrival and discharge.” Eor the same reason, where the duty devolves upon the consignee of freight transported by rail to unload it, it. also becomes his duty to “'unload the goods within a reasonable time, and if he fails to do so the railroad company will be entitled as a matter of right, or in accordance with its published rules and regulations, to demand a reasonable compensation for the use of the cars., whether they belong to it or1 to another company.” Ibid. § 859. Such a charge is for the. “ase and occupation of the cars” and the obstruction of the tracks.

Norfolk & W. R. Co. v. Adams, Clement & Co., 90 Va. 393 , 22 L. R. A. 530. And its propriety isi generally recognized. Upon the same principles and for the same reasons, where one purchases, bulky freight knowing that it is. to be delivered to him in ears owned or rented for the purpose by the person selling the goods, and that such oars are, when unloaded, to be returned in order that they may be used in ⁵⁷⁰ the delivery of other shipments, and where the contract of sale is silent as to the time of unloading, he impliedly and as part of the contract undertakes to unload the cars within a reasonable time after receiving notice of their arrival at their destination. Any other rule would clearly be unfair and unjust. 'Such cars are valuable property, and are in constant demand, and the only return which the owners can receive on the capital invested in them is from renting them out in supplying this demand or in using them to transport their own products'.

Manifestly the consignee has no interest in them except the right to their use for the transportation of the merchandise they carry. That is the right and the only right secured under the contract of sale and delivery, and not the right to use them for storage purposes after they arrive at their destination. If he does, after the cars arrive at their destination, and after he could by the exercise of ordinary diligence have unloaded them, detain them, not as vehicles of transportation but as .places of storage, he undertakes thereby, upon principles universally recognized under the common law, to compensate the owner of them for their use and occupation during such period of wrongful detention. The appellee, however, contends that such compensation was not within the contemplation of the parties when the contract was made, but the cases cited in support of that contention do not so' decide.

What those cases decide is that, in the event of the breach of a contract, the only damages recoverable are such as are SO' clearly and naturally the result of the breach that the parties to the contract must have known when the contract was made that they might naturally occur. So in Globe Refining Co. v. Landa, etc., Co., 190 U. S. 540 , it was held that, in a contract for the purchase of oil, the vendor was not bound to know that the vendee would be obliged to send cars a long distance to get the oil, because it could have gotten the cars anywhere it pleased, and the fact that it sent them from one place rather than from another could not affect the vendor’s liability under the contract, ⁵⁷¹ when it had no control over the vendee’s action. And the principle is further illustrated in the cases of Webster v. Woolford, 81 Md. 329 , and Winslow Elevator Co. v. Hoffman, 107 Md. 621 , in tho first of which it was held that where the vendee in a, contract for the sale of land sold his fertilizer business in order to raise money to pay for the land, that loss resulting from such sale was not recoverable in an action against, the vendor1 for a breach of the contract; and in the Winslow Case it was held that, in an action for the breach of a contract to insta! a passenger elevator in an office building, where it was alleged that the elevator when completed was so defective and unsafe that the plaintiff lost rent through tenants removing from the building in consequence thereof, that such loss could not reasonably have been said to have been in the minds of the parties as a natura] result of a breach of the contract. These cases do not support the contention that one ean deprive- another of the use' of his property and use such property for his, own profit and purposes, without incurring any obligation to compensate the owner or the person entitled to the possession of such property for its use.

In the cases cited the respective defendants had no control over the matters; causing the loss. The oil company could not prescribe where the purchaser was to get the) cars in which to transport the oil it had bought; the vendor in Webster v. Woolford could not prevent the vendee from selling his business if he chose to do so; nor could he know* whether the vendee would lose or gain, thereby; nor could the contractor prevent tenants from leaving the office building because' they did not like the elevator he installed there. We are therefore of the1 opinion that the facts alleged in the declaration were sufficient, if true, to entitle the plaintiff to recover the fair value of the use- of the tank cars for the period during which it was deprived of their use because of the defendant’s failure to unload them, within, a reasonable time after it had been notified of their arrival at their destination, and that the evidence was legally sufficient to permit a recovery under that count. ⁵⁷² It follows, therefore^ that the defendant’» twelfth and sixteenth prayers, which submit the proposition that there was no evidence in the case legally sufficient to permit a recovery under the first count of the declaration, were properly refused and, for the same reason, the defendant’s tenth and eleventh prayers asserting the proposition that there was no evidence legally sufficient to permit a recovery at all under the declaration were properly refused. Nor .was there error in refusing the defendant’s first prayer, which is based on the theory that appellee could not recover for the use and occupation of such car's unless it knew of the rental agreement under which the appellee rented them, because the terms under which the appellee secured the cars in which the gasoline was shipped were not material to the determination of the fair1 value of their use and occupation, and whether .the appellant did or did not know of these terms was immaterial.

The measure of the compensation to which the appellee was entitled for the wrongful’ detention of the cars was the fair and reasonable value