Shriver Oil Co. v. Interocean Oil Co.

Sloan, J., delivered the opinion of the Court. This is an appeal from a judgment rendered in favor of the plaintiff (appellee) against the defendant (appellant). There are eight exceptions in the record, the first seven to rulings on the evidence and one, the eighth, to the granting of the plaintiff’s (appellee’s) first prayer, the overruling of the defendant’s (appellant’s) exceptions to the granting of the plaintiff’s first prayer, and the refusal of the defendant’s first and third prayers. ³⁴³ On December 20th, 1923, an agreement was entered into between tbe Interocean Oil Company, appellee, and the Shriver Oil Company, appellant, whereby the former agreed to sell to the latter for the period of ten years the appellant’s entire requirements of the appellee’s various brands of gasoline and motor fuels, lubricating oils, and miscellaneous petroleum, products, at a price for gasoline and motor fuels five cents per gallon under tbe current tank wagon price in Baltimore at the time of delivery; the prices of other products to be adjusted from time to time by mutual agreement of the parties, the gasoline and petroleum products to be sold by the appellant ^‘exclusively in the name of and as the products of” the Interocean Company. There was a provision that the books, etc., of tbe appellant should be kept by the appellee, for which it was to receive one-half cent per gallon for all gasoline sold the appellant, but this provision was never observed by either party.

The agreement also contained a provision as follows: “All settlements between tbe parties hereto to be made on tbe first Monday of each succeeding month.” And it is the non-observance by the appellant and the alleged indulgence of the appellee of this provision on which the decision in this case must largely rest. At the trial of the case the appellant offered evidence to the effect that, shortly after the written contract was made, it was agreed that the appellant should receive a commission of one cent per gallon for securing tank wagon customers for the appellee, and contended that this was an oral alteration or amendment of the written agreement. It was a separate and distinct transaction, and in our opinion was not a part of the original contract and was independent of it. By letters of the Shriver Company of March 27th, 1924, and of the Interocean Company of March 3'lst, the Inter-ocean Company allowed the Shriver Company an additional half cent for tank wagon deliveries to the Shriver Company’s Baltimore stations, making a total differential of 5% cents per gallon, in consideration of the Shriver Company furnishing at its expense all pumps, tanks, and other installations at its service stations, including sign boards and electric signs,, ³⁴⁴ the increase not to apply to tank car deliveries, the Interocean letter concluding, “All other provisions of our contract with you to remain in full force and effect.” According to the testimony it was orally agreed that the Shriver Company should receive an additional half cent per gallon in the Westminster territory.

There was no dispute about this. There appears to have been no other' alteration in the agreement and understanding of the parties until January 30th, 1925, when the Shriver Company wrote the Interocean Company as follows: “With further reference to the matter under discussion, we beg to submit herewith the following proposition for your acceptance: “We propose to continue to buy Interocean gasoline from you in accordance with the terms of our contract and its supplements and to take a minimum of 5,000 gallons per month; and such additional amounts as our requirements may demand from time to time. “You to store approximately 50,000 gallons of benzol free and to mix without cost to us in accordance with our specifications. “Deliveries of motor fuels and gasoline to our service stations to be made as heretofore under contract, and for deliveries to our tank wagon customers we will agree to pay you 1% cents per gallon over our contract price for such deliveries. Deliveries to be made and marketed under our trade name. All pumps and tanks to be furnished and installed by us. “We ask you to write us that this agreement shall be considered as an amplification of the existing contract dated May 20th, 1923, and to be supplemental to it.” It was agreed at the trial that “May 20th, 1923” should read “December 20th, 1923,” the date of the original contract.

This was answered by the Interocean Company in a letter dated Eebruary 2nd, 1925, suggesting some other terms and conditions, which was answered by a letter of the Shriver. ³⁴⁵ Company dated February 4th, putting up an argument for the acceptance of its proposition, and by letter dated February 5th, 1925, the Interocean Company wrote the Shriver Company a letter as follows: “We are in receipt of your letter of February 4th and note that you object to contributing in any way towards the expense of delivering your proposed new benzol blend motor fuel to your service stations. We now refer to your proposal of January 30th, 1925, which is hereby accepted.” the receipt of which was acknowledged by a letter from the Shriver Company dated February 10th, 1925. The next step in their transactions was a letter from O. E. Thurber, vice-president of the Interocean Company, to the Shriver Company, dated March 16th, 1925, as follows: “notwithstanding that you have broken your contract with us, we are prepared temporarily to furnish you with straight gasoline at your stations at the same price as stated in the contract, but these deliveries are not to be considered as deliveries under the contract and are without prejudice to our claim that your contract with us has been broken. In case you want deliveries as aforesaid, please notify Mr. Brown what your requirements are.” Two letters tvere written the next day by the Shriver Company to the Interocean Company, which expressed the shock of the appellant and recalled a very pleasant visit of one of the Shrivers to the home of the vice-president of the Inter-ocean Company the Sunday before, at which time there was no note of dissatisfaction.

Under date of March 20th, C. A. Kelly, auditor of the Interocean Company, wrote the Shriver Company: “We beg to hand you herewith statement of your overdue account. It will be necessary to make prompt payment of the overdue bills to enable me to approve further deliveries to your stations.” ³⁴⁶ On March 24th the ’ Shriver Company remitted for the accounts of December, 1924, and January, 1925, and the account for February, 1925, was paid on March 26th. During the fifteen months the parties had done business this was the first complaint made by the Interocean Company of delay in payment by the Shriver Company. The original agreement provided for settlements on the first Monday of each month for bills of the preceding month, but it had not been observed and settlements were nearly all from two to four weeks late and were made, as to appellant’s service stations and its tank wagon customers, after the bookkeeper of the Interocean Company had checked the previous month’s account.

Tank car lots were billed by the appellee from its New York office and were paid within thirty days after receipt of monthly statements. The appellant’s reason for failure to pay the December, 1924, and January, 1925, accounts was its inability to get the appellee’s bookkeeper to check the accounts for those months, and later on it gave the same reason for the delay in payment of its September and October, 1925, accounts. The appellee’s bookkeeper testified that duplicate delivery tickets, showing by dates the gallons of oil and gasoline delivered to the Shriver Company in September and October, 1925, the accounts sued on, were delivered to the appellant and were followed the next day by invoices showing deliveries and prices. The Interocean Company continued to furnish the Shriver Company its requirements of straight gasoline, benzol, and other products, and to render the service covered by the contract, until August 15th, 1925, when it wrote the Shriver Company as follows: “On and after August 15, 1925, we will discontinue furnishing you with gasoline and gasoline for motor fuels for delivery to your tank wagon customers.

This confirms conversation with your Mr. Marston today.” By letter of August 13th, 1925, the Shriver Company had written the Interocean Company: “We are in receipt of a notice from your local representative and agent to the effect that after August ³⁴⁷ 15tli next you will make no further deliveries to our tank wagon customers. “As you must know, failure to make such deliveriós constitutes a breach on your part of the contract between us; it will involve a very heavy loss to us. “We deny your right to discontinue the deliveries and insist upon full compliance by you with the terms of our agreement: for all loss that we may sustain we intend to hold you responsible.” Erom the 15th day of August the deliveries only included straight gasoline and lubricating oils, the storage and delivery of benzol having ceased on that day, and that is the day from which the appellant’s claim of set-off began. The delays in payment of monthly bills prior to March 16th, 1925, continued to the month of October, 1925, when deliveries ceased. In its letter of March 16th the Interocean Company had not specified the breaches or violations of the agreement of December, 1923, and the supplements thereto, and, after the Shriver Company had twice written for information in this respect, the Interocean Company on April 6th, 1925, wrote as follows: “We are in receipt of your favor of the 3rd instant making inquiry as to wherein you had broken your contract. Our notice to you of breach of contract was based on two considerations: Eirst, the removal by you of the word ‘interocean’ from your advertising.

Second, your failure to pay your account.” This was answered and argued by the Shriver Company, and the next step in the correspondence was a letter from Mr. J. Cookman Boyd, attorney for the Interocean Company, to the Shriver Company, dated October 19th, 1925, which is as follows: “In the spring of 1925 you were notified by the Interocean Oil Company that you had breached the contract existing between you and the said Interocean Oil Company by reason of the failure to pay the amounts due as per the terms of the contract, as well as your failure to carry out one of the main reasons ³⁴⁸ for entering into the contract, to wit, the clause with reference to the sale of Interocean products only under the name of the Interocean Oil Company and the advertising of the same at your respective stations. “Notwithstanding this breach on your part, however, the Interocean Oil Company, without prejudice to itself, continued to carry out its contract with you as though the same had not been breached by you. “Some time since I spoke to your Mr. William and your Mr. Eobert Shriver about the advertising feature of the contract and stated that the Interocean Oil Company would carry on the terms of its contract with you providing you lived up to your agreement, to wit: the prompt payment as per the terms of the contract, of the amounts due when they became due, and the selling of the products under the name of the Interocean Oil Company. Thus far, neither one of these things has been done by you. “Your September invoice, amounting to $5,512.02, should have been but was not, paid on the 5th of this month. Also, there is due for pumps and tanks the sum of $1,725.00, one-half of which was due October 2nd and the other half November 2nd. . “In addition, nothing has been done by you in the matter of the sale of the products under the name of the Inter ocean Oil Company. “I am writing to state that the question of the continuance of this contract rests entirely with you, upon the sole condition that you carry out the terms of your contract, both as to payment and trade name, and that unless same is done forthwith and hereafter, the Interocean Oil Company will consider the contract definitely .and purposely breached by you and will act accordingly.” Mr. Boyd wrote the Shriver Company again on October 31st, 1925, and after repeating his letter of the 19th, said: “You have paid no attention whatsoever to the above, your invoices have not been paid, you have taken no steps to comply with the terms of your contract, and your action leads the Interoeean Oil Company to the ³⁴⁹ inevitable conclusion that the contract has been definitely and purposely breached by you. “I am, therefore, writing on behalf of the Inter-ocean 'Oil Company to notify you that after this date there will he no further deliveries to yon of gasoline or blended gasoline, nor will there he any further blending of mixtures for you by the Interocean Oil Company, and all business relations will cease with you as from this date.” It is apparent that the Interocean Company strongly relied on the elimination of its trade name from the gasoline stations as the ground for cancelling the contract, but the trial court held that this was agreed to by the Interocean Company when, on February 5th, it accepted the Shriver Company’s proposal of January 30th, which contained the sentence, “Deliveries to be made and marketed under our trade name,” and the court so instructed the jury, and with that instruction we agree. The remaining question, that is, the failure of the Shriver Company to pay its bill in accordance with the agreement on the first Monday of March, 1925, came up on a proffer of the appellant to show that payments for thirty-one tank car purchases were billed from the New York office of the appellee, the bill heads containing the words “thirty days net” at the price fixed by the contract, and that all were paid within thirty days of the bill elates except invoices for November 3rd and oth, 1924, which were paid December 6 th, and the invoice of November 4th, wbieb was not paid until January 9th, 1925.

It does not appear whether the'terms “thirty days net” were printed on the billheads, but if printed thereon, with no evidence that the appellee intended to enlarge the provision for payment on the first Monday of the month, that alone would not have the effect of extending the time stated in the contract, though remittances to New York for tank car shipments were customarily made and received within thirty days from invoices, and in any event were not payable before bills for the same were received by the appellant. ³⁵⁰ There was evidence that none of the bills for any month were paid by the first Monday of the succeeding month, and that the Shriver Company never paid according to the contract and that the Interocean Company never demanded payment until it sent the letter of March 16th, 1925, whereby it undertook to summarily cancel the contract; and this reason was not assigned until the letter of April 6th was written by the Interocean Company. To the proffer, the court ruled on the whole question of the construction of the contract as of February 5th, 1925, and the effect of the waivers of prompt payment preceding March 16th, 1925, as follows: “The aforegoing tender of evidence is