The Refining Firm Shipped 47 Automobiles

HENRY H. CROSS CO.
v.
TEXHOMA OIL & REFINING CO. et al.[*]

No. 8433.

Circuit Court of Appeals, Eighth Circuit.

April 9, 1929.

A. A. Davidson, of Independence, Kan. (Louis L. Dent, of Chicago, Ailing., Preston C. West, of Tulsa, Okl., Dent, Dobyns & Freeman, of Chicago, In poor health., and West, Gibson, Sherman, Davidson & Hull, of Tulsa, Okl., on the brief), for appellant.

T. R. Boone, of Wichita Falls, Tex. (John B. King, of Chicago, Sick., and G. R. Pate and Bullington, Boone, Humphrey & King, all of Wichita Falls, Tex., on the brief), for appellee Texhoma Oil & Refining Co.

Tarlton Morrow, of Wichita Falls, Tex. (Weeks, Morrow, Francis & Hankerson, of Wichita Falls, Tex., on the transient), for appellee Grey.

Earlier than LEWIS and VAN VALKENBURGH, Circuit Judges, and SYMES, District Decide.

VAN VALKENBURGH, Circuit Decide.

December 22, 1924, the Henry H. Cross Firm, appellant herein, entered right into a contract with the Griswold Oil Company of Electra, Tex., which contract was in the words and figures following:

*443 “Contract of Sale.

“1. Seller: Griswold Oil Corporation, Electra, Texas.

“2. Buyer: Henry H. Cross Firm.

“Three. Destination:

“4. Goods bought: 5,500,000 gallons strictly 24-26 gravity straight decreased fuel oil, sulphur not over ½ of 1%, cold take a look at.

“5 Amount: 5,500,000 gallons.

“6. High quality:

“7. Value: 70% 38 crude as posted by Prairie Oil & Gasoline Firm for North Texas, date of shipment vendor’s automobiles f. o. b. Electra, Texas. Oil purchased to move over Orient Railroad.

“8. Level of delivery: Vendor’s cars Electra, Texas.

“9. With allowance:

“10. Interval of delivery: For shipment over interval of 12 months beginning Jan. 1st, 1925, at rate of roughly 500,000 gallons per thirty days, 10% more or less.

“Delivery apportioned:

“12. Phrases of cost: 1% 10 days or sight draft, ideally 10 days from date of shipment.

“Thirteen. Special circumstances:

“The above is a right statement of the phrases and circumstances of a sale negotiated this date between the events hereto, which are hereby agreed to, subject to the terms and circumstances printed on the again hereof, which are hereby made a part of this contract.

“This contract shall be efficient only when executed by the properly authorized representatives of the events hereto which execution shall be completed not later than Jany. 1, 1926.

The circumstances printed on the again, to which reference is made, so far as pertinent here, are the next:

“Within the occasion the purchaser doesn’t furnish the seller transport instructions on or before the last day of any installment interval of this contract for the quantity of products contracted to be purchased during such installment period, the seller shall have the appropriate at his choice to cancel contract and cost the buyer with any damage he has sustained on account of such failure of the buyer to give such instruction, without any obligation on a part of vendor to tender all or any part of such unshipped portion.

“This contract shall be construed as a divisible contract and time is of the essence thereof.

“This agreement shall inure to the advantage of and be binding on heirs, executors, administrators, successors, and assigns, of the respective parties hereto.”

On the identical date the Cross Company entered right into a contract an identical in terms with the Wichita Refining Firm of Wichita Falls, Tex. The Texhoma Oil & Refining Company of Wichita Falls, Tex., as assignee of those contracts, brings suit, in the District Court for the Western District of Oklahoma, against appellant to get better damages for breaches thereof. The Griswold Oil Company is now a bankrupt; its trustee in bankruptcy, D. G. Gray, Esq., has intervened in said trigger to recover damages for alleged breach of the Griswold Oil Corporation contract occurring prior to the bankruptcy.

Mr. Cross, president of the appellant company, testifies that, prior to the execution of the contract, in conversation with Mr. Griswold, president of the Griswold Oil Company and the Wichita Firm, he wished it to be understood that the shipments below the contracts could be evenly distributed over the month. There appears within the report a telegram from the Griswold Company to Cross, of date December 30, 1924, stating amongst other things, that “all shipments beneath contract will likely be unfold evenly over the months.” There is a dispute within the testimony as to the significance of the language used. The declare of appellant is that shipments had been to be made at the rate of an average of 1 2/3 vehicles per day. Upon this level the written contract, wherein all prior negotiations between the parties had been merged, is silent. The court finds that no change was made within the phrases of the contracts, however that the parties tried to spread the shipments evenly over the months. The contracts took impact January 1, 1925. In the course of the month of January the Griswold Oil Company shipped forty three cars, with a gallonage of 381,942 gallons appreciably lower than the 500,000 gallons, 10 per cent. more or less, required by the contract. On January 9th appellant complained that oil had not been shipped as quick as instructions therefor had been given. The Griswold Firm stated in reply that they would ship the cars requested and would protect the defendant on the price accordingly. This was completed by February 2, 1925, and the oil thus billed was accepted by appellant and at the *444 February 2d value, which was lower than that prevailing in January. This voluntary reduction on the part of the Griswold Company was an evidence of its good religion and of its function to perform the contract considerably in accordance with its phrases.

On February 10, 1925, appellant despatched to the Griswold Oil Corporation the next telegram:

“Bills of lading and delivery papers disclose the truth that cars C Y C X two naught five 4 and that i M R X 5 two six and i M R X 5 two one and C Y C X two naught four six have been shipped from Ardmore which is a violation of your contract with us and labratory test of those automobiles exhibits that the oil incorporates multiple p.c sulphur and has a gravity of twenty decimal eight which are additional violations of this contract Cease We’ve got refused cost on draft covering these vehicles and are holding them subject to your order Stop These violations of the contract have prompted us substantial damage and on account of them we can not settle for further shipments.”

On February twelfth the Cross Firm despatched to the Griswold Company this additional telegram:

“Confirming our telegram of tenth on the spot we refuse to take any further shipments underneath this contract Stop Your conduct in this contract has satisfied us that we cannot have any assurance of the long run faithful performance of it by you Stop You’ve got persistently violated shipping instructions from the start and currently attempted to palm off on us the four Ardmore automobiles which had been rejected by somebody though you knew that you were not complying with contract specifications Cease Taking all this stuff together we are firmly of the opinion that you don’t faithfully imply to perform your contract and we therefore refuse to take any further shipments Stop Our buyer refuses to hold automobiles any additional and are turning them again to Chicago West Pullman and Southern Railroad at South Chicago and we repeat that these vehicles have been and are at your personal order and danger.”

The Griswold Firm responded, offering to make all amends in the way of damage, claiming that the shipment from Ardmore had been diverted to appellant with out its knowledge, and promising, upon investigation, to rectify matters. It also protested against the cancellation of the contract, for the rationale that the act complained of was inadvertent and a mere incident; that the contract was divisible, and that no cancellation was warranted upon the bottom said. The Cross Company, however, peremptorily refused to go on with the contract, and gave no further shipping orders thereunder, although requested so to do. The courtroom finds that at all times thereafter the Griswold Company was able and able to furnish oil beneath the phrases of the contract, if shipping orders had been given, and appellant had been ready to just accept it.

In January directions were given by appellant to the Wichita Refining Firm for sixty two vehicles of oil. The Refining Firm shipped 47 automobiles, with a gallonage of 431,194, appreciably less than the quantity known as for by the directions and under the terms of the contract. Nonetheless, no steps had been taken by appellant to cancel the contract upon this or another ground; but, on the contrary, dealings continued between the Wichita Company and the Cross Company till on or about Could 22, 1925. During this interval the phrases of the contract, with respect to the volume of shipments, had been neither met nor exacted. It seems, nevertheless, that the Wichita Firm was always in a position and ready to ship oil in accordance with the terms of the contract; also, it appears that appellant was not prepared to receive the oil in such quantities, though earnestly urged to give the required delivery orders. This appears from telegrams passing between the parties, of which the next are specimens:

“We will need to have shipping instructions on gasoline oil covered by your contract for the stability due in February additionally a number of directions for March. Advise us what we might expect.

“Wichita Refining Co., Wichita Falls Tex.

“Please bear with us few days and we’ll ship transport instructions on fuel oil.

Might 22, 1925, both the Griswold Oil Corporation and the Wichita Refining Firm assigned their respective contracts to appellee Texhoma Oil & Refining Firm, along with the correct, claim, and title of the Griswold Oil Corporation to all and every sort and character of injury rising out of and resulting from appellant failing and refusing to comply with the Griswold contract prior to the date the same was assigned to the Texhoma Company. The assignee immediately made demand upon appellant for efficiency of the contracts and for *445 transport orders thereunder. Appellant refused to recognize the assignment and the title of the Texhoma Firm, and declined to present shipping orders and to have any relations with the Texhoma Company under the contracts assigned.

Upon trial in the District Courtroom a jury was waived in writing and the courtroom found the issues for the plaintiff for all damages accruing on each contracts from the date of the assignments to it, and in favor of the intervener for damages due to breach of the Griswold contract from January 10, 1925, to Might 22, 1925, the date of the project to the Texhoma Company. Appellant made requests for findings of info, which were refused. The court, however, made particular findings. The appellant additionally requested several declarations of legislation, but did not move for judgment. No error can be assigned to the motion of the court in refusing the findings of reality requested, because, the place a jury is waived by written stipulation, the making of special findings is solely discretionary with the court docket. Sections 649, seven hundred, Rev. Stat. U. S.; 28 USCA §§ 773, 875. The discovering, whether or not common or particular, has the identical effect as the verdict of a jury. Mercantile Mut. Insurance coverage Co. v. Folsom, 18 Wall. 237-249, 21 L. Ed. 827; United States v. A., T. & S. F. Ry. Co. (C. C. A.) 270 F. 1-four; Denver Live Stock Commission Co. v. Lee (C. C. A. Eight) 18 F.(2d) eleven-16.

In the absence of a request made to the trial court before the shut of the trial to search out the problems in favor of the requesting get together on the bottom that the proof will sustain no other conclusion, we can’t evaluation the sufficiency of the evidence to sustain the finding and judgment. Wear v. Imperial Window Glass Co. (C. C. A. 8) 224 F. 60; Allen, Collector, v. Cartan & Jeffrey Co. (C. C. A. Eight) 7 F.(2d) 21; Pennok Oil Co. v. Roxana Petroleum Co. (C. C. A. Eight) 289 F. 416; Denver Reside Inventory Commission Co. v. Lee (C. C. A. Eight) 20 F.(2d) 531.

For the reason that court made special findings, our assessment may lengthen to a willpower of the sufficiency of the details discovered to support the judgment. Fleischmann Const. Co. v. United States, 270 U.S. 349, 46 S. Ct. 284, 70 L. Ed. 624. The questions of legislation involved are introduced by the points relied upon by counsel for appellant of their transient. They are:

“(1) That the several completely different writings between the parties constituted their contract, or that not less than the telegrams between the parties exchanged contemporaneously with the execution of the contract, and earlier than the purchaser had affixed his signature thereto, constituted a binding collateral settlement beneath which the month-to-month installments of gasoline have been to be made evenly over the month.

“(2) That the obligation of the vendor to perform the contracts was not made dependent upon the purchaser’s transport directions as a condition of such efficiency.

“(Three) That the purported task of the contracts to Texhoma Oil & Refining Firm was without authorized effect and so as to confer upon it the correct to demand efficiency of their terms.

“(Four) That the plaintiff was not entitled to get well damages for the alleged breach of the contracts in evidence for the rationale that sellers dedicated the first substantial breach in the performance of stated contract.

“(5) That because of the failure of Griswold Oil Corporation to ship the minimum monthly quantity of fuel oil for January, 1925, and to ship the identical evenly over the month, and to ship the particular commodity contracted for from the designated level of shipment, appellant, the purchaser, had the precise to rescind the contract, and did so rescind the same, with discover thereof to the seller; that the same was not waived below the information and circumstances proven of report, and that the seller, in actual fact, acquiesced in such rescission.

“(6) That the Griswold Oil Corporation, denying the purchaser’s proper to rescind, and denying that the contract was rescinded or abandoned, and insisting upon such contract, was bound to perform, or to tender performance upon its half, and having didn’t show its allegation that it made such supply and tender of performance can’t get better.

“(7) That the measure of damages for breach of the contracts in evidence is the difference between the contract price of the fuel oil and what it will have price to provide the same prepared for supply to the buyer, and that the court docket erred in denying appellant’s request to so declare the regulation to be.”

These factors might be taken up of their order.

1. It is admitted by counsel for appellant that the varied writings between the events, upon which reliance is placed to show breaches on the a part of the Griswold and Wichita Corporations in failing to distribute the installments of oil evenly over each month, passed prior to signing of the contracts, which have been left unchanged. Nevertheless, appellant’s contention, if indulged, can not have an effect on the difficulty. The failure of the Griswold Corporation to ship the contract gallonage in *446 January was absolutely condoned by acceptance early in February of shipments charged at a lower worth than may have been exacted for January shipments. The contract by its phrases was divisible, and the breaches complained of may give rise to say for compensation, or motion for damages, however to not proper of rescission. The conduct of the Griswold Company manifested no intention of repudiating or abandoning the contract. Illinois Uniform Gross sales Act, § 45; article 10021 (48) Callaghan’s Illinois Regulation 1913-1916; Howe Grain & Mercantile Co. v. Taylor (Tex. Civ. App.) 147 S.W. 658.

The January default had been remedied to the advantage of appellant in the matter of worth. The court docket found that shipping directions were given by defendant to both companies on February 2, “after having knowledge of the derelictions of the respective companies on account of the shipments made prior thereto.” Quick motion was indispensable to appellant’s release from subsequent legal responsibility to perform. McDonald et al. v. Kansas Metropolis Bolt & Nut Co. (C. C. A. 8) 149 F. 360, 8 L. R. A. (N. S.) 1110. Moreover, the bottom assigned for the attempted cancellation was not the failure of the vendor to ship evenly over the month, but reasonably the shipment from Ardmore of 4 cars of oil, mentioned to include more than 1 per cent. of sulphur, which, it was claimed, appellant’s buyer had refused to accept. A subsequent telegram talked about violation of transport instructions by way of aggravation, but the gravamen of the complaint was the shipment of the 4 Ardmore cars. On this point the courtroom found as follows:

“As to the automobiles diverted and originally shipped from Ardmore, Okl., the proof reveals that same weren’t rejected by the International Harvester Firm, but, quite the opposite, met with its specs as to sulphur contents, were accepted, used, and paid for by said harvester company. No harm resulted from the use thereof and defendant made no effort to prove any damage akin to said in his telegram of February 10, 1925. On February 10, 1925, the market value of fuel oil was decrease than the contract value, and the contract worth once more advanced on February 12, 1925.”

With respect to the Wichita Company, no attempt was made by appellant to declare a breach because of violation of contract obligations as to shipments. Quite the opposite, dealings between the Wichita Company and appellant continued with out interruption, and with out observance of contract specifications, particularly on the a part of appellant, till the task to the Texhoma Firm. We see no merit on this contention.

2. The contracts in phrases supplied for shipping directions, in default of which the sellers had the choice to cancel, and charge the buyer with any injury sustained on account of the failure of the buyer to provide such instructions, with none obligation on the part of the seller to tender all or any a part of the unshipped portion. Examination of the file discloses that not only have been such shipping instructions anticipated by the events to be given and received, but additionally that it might have been impracticable for the sellers to carry out, without express directions as to the desired locations of the oil. The court docket finds that each firms were able and keen to perform, if permitted so to do. In the face of optimistic repudiation by appellant, they weren’t called upon to make a futile gesture of tender on the close of every installment interval.

Three. The contracts have been assignable by their terms. Both had been of the nature generally made and assigned in the same old course of business of oil corporations. Both were made in the name of the company assignors. That of the Griswold Corporation was executed by E. F. Griswold, its president; that of the Wichita Company by Griswold and Dawson, its president and vice president. E. F. Griswold, as president, had direct superintendence of the affairs of each companies, and was evidently intrusted with the administration and management of the corporate business of each. The Wichita Firm was owned by three individuals, Griswold, Dawson, and Parker. No objection to this project has proceeded from anybody having an curiosity within the property, whether as stockholder or creditor. It does not seem that there are creditors. The Griswold Company is in bankruptcy. Natural Gas Refining Equipment The trustee, representing both the estate and its creditors, has ratified and authorized the assignment by that firm. The contracts were to be performed and the assignments had been made within the state of Texas, and are topic to its laws. Of the latter the Supreme Courtroom of Texas says:

“When each one who has an interest within the property, though that interest may, as long because the company exists, be oblique, consents that the officer appointed by the regulation to convey the belongings of the corporation, when duly authorized to take action, shall convey, and it’s accordingly so conveyed, we are of opinion that the conveyance must be held good.” Aransas Pass Harbor Co. v. Manning, 94 Tex. 558, sixty three S.W. 627.

Appellant relies upon Arkansas Valley *447 Smelting Co. v. Belden Mining Co., 127 U.S. 379, eight S. Ct. 1308, 32 L. Ed. 246. The gist of that call may be summed up in the next citation from the opinion:

“At the current day, little question, an settlement to pay money, or to ship items, could also be assigned by the person to whom the cash is to be paid or the goods are to be delivered, if there may be nothing within the terms of the contract, whether or not by requiring something to be afterwards executed by him, or by some other stipulation, which manifests the intention of the events that it shall not be assignable. * * * The contract right here sued on was one by which the defendant agreed to ship 10,000 tons of lead ore from its mines to Billing and Eilers at their smelting works. The ore was to be delivered at the speed of 50 tons a day, and it was expressly agreed that it should develop into the property of Billing and Eilers as quickly as delivered. The value was not fixed by the contract, or payable upon the delivery of the ore. But, as typically as 100 tons of ore had been delivered, the ore was to be assayed by the parties or one among them, and, in the event that they couldn’t agree, by an umpire; and it was only in spite of everything this had been accomplished, and based on the result of the assay, and the proportions of lead, silver, silica and iron, thereby proved to be within the ore, that the price was to be ascertained and paid. During the time that should elapse between the delivery of the ore, and the ascertainment and cost of the price, the defendant had no security for its payment, except within the character and solvency of Billing and Eilers. The defendant, due to this fact, could not be compelled to simply accept the legal responsibility of every other person or company in its place for the legal responsibility of these with whom it had contracted.”

Here neither private service nor monetary duty are concerned. The case is readily distinguishable from that simply quoted. In re Niagara Radiator Co. (D. C.) 164 F. 102. “As a general rule, all contracts are assignable, unless an task is forbidden by statute or by the terms of the contract itself. Contracts involving relations of non-public confidence and contracts for private service type an exception to the rule.” Panhandle Lumber Co. v. Mackay, 21 F.(2d) 916 (C. C. A. 9).

As to the choses in motion which had accrued the right of assignment is undoubted. 14a C. J. pars. 2267, 2298, pp. 418, 444. Third events, corresponding to appellant, may not complain of informalities in assignments of contracts, not involving relations of private confidence, and never for personal service, the place no complaint is made by either get together to the assignment or their creditors. The contracts earlier than us should not of the excepted nature. There is no provision that the oil to be bought have to be the product of the sellers. The Texhoma Firm is found to be prepared, able, and prepared to perform in accordance with the phrases of the contract. This point accordingly is ruled towards appellant.

Four and 5. These factors are found to be without advantage, and are ruled towards appellant on account of the conclusion reached upon level one, supra.

6. This level is disposed of adversely to appellant upon the reasoning employed above in contemplating point 2.

7. Because the oil was not required to be the product of the sellers, and for the reason that court docket discovered that there existed an open market for fuel oil equivalent to was covered by the contract, and that the document showed the state of affairs respecting the market price sometimes throughout the interval coated by the contract, the measure of damages was accurately applied by the court docket. This result also follows constantly from the conclusion reached under level 3.

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