American Linseed Co. v. Eberson

104 S.W. 121, 126 Mo. App. 426, 1907 Mo. App. LEXIS 418

• Court: Missouri Court of Appeals
• Decided: June 25, 1907
• Status: Published

Opinions

GOODE, J.

This is an action for the balance due on the purchase price of linseed oil sold and delivered by plaintiff to defendant. The contract was for one thous- and barrels of oil, of which it is alleged the defendant paid for nine hundred and twenty barrels and owes for the remaining eighty, the sum of $1,834.90. The first paragraph of the contract under which the oil in controversy was sold, will be quoted for the purpose of comparing it with the other contracts which are in controversy. Said paragraph reads as follows:

“St. Louis, Mo., Sept. 12, 1902.

“A. A. Eberson & Go., City.

“Dear Sirs: This will confirm sale made you Sept. 12th of 1,000 barrels Linseed Oil for delivery during the period from November 1, 1902, to August 1, 1903, it being understood that you are to take not less than 75 barrels per month and not over 180 in any one month.”

Following that paragraph are statements of the price of raw oil at the different dates between November 1, 1902, and August 1, 1903, and other paragraphs stating variations in the prices of boiled oil and bleached oil. Then follow these paragraphs:

“You have the option of taking such amounts as you desire in bulk, the price to be 2c per gal. less.

“Terms, 30 days net, or 1 per cent for cash paid within ten days of date of invoice.”

The petition is in the usual form for a balance due on merchandise sold and delivered. The answer is a general denial and three counterclaims for damages alleged to have been sustained by the defendants in consequence of plaintiff having refused to deliver to him the oil as called for in three distinct contracts of purchase, which are in no way connected with the contract on which plaintiff sues, they having been made in 1901 and prior to the date of the contract in suit. The first counterclaim is based on the following written contract :

. “AMERICAN LINSEED COMPANY, ST. LOUIS.

G. W. Blow, Manager.

“St. Louis, Mo., 5-28-1901.

“Messrs. A. A. Eberson & Co., City.

“Gentlemen: We beg to confirm sale made you yesterday of 800 bbls. of Linseed Oil at 44c basis Raw for each 7% lbs.

“lc advance for Boiled and 3c for Bleached.

“Bulk shipments at 2c less.

“Terms 60 days from date of each invoice or 1 per cent for cash in 10 days.

“The oil to be taken by you at your option during the months of October, November and December, 1901.

“Thanking you and awaiting your counter-confirmation, beg to remain,

“Yours very truly,

“C. W. Blow, Mgr.”

After pleading the substance of said contract, defendant alleges that on September 26, 1901, he notified and required plaintiff to deliver on the first day of October, 1901, the oil called for by the contract; that in response to this request, plaintiff delivered on said date, twenty barrels and no more; that on October 1, 2, 3, and 4, defendant made other demands for the delivery of the oil, but plaintiff refused to comply and instead of delivering all of said oil as demanded, delivered it as follows: October 1, 1901, twenty barrels; October 2, 1901, seven barrels; October 3, 1901, eighteen barrels; October 4, 1901, five barrels; October 7, 1901, sixteen barrels; October 14, 1901, two barrels; October 15, 1901, two and one-half barrels; October 17, 1901, thirty-four barrels; October 22, 1901, sixty-five barrels; October 23, 1901, five barrels; October 25,1901, five barrels; October 29, 1901, five barrels; November 4, 1901, fifteen barrels; November 5, 1901, one barrel; November 11, 1901, fifteen barrels; November 15, 1901, fifteen barrels; November 18, 1901, twenty barrels; November 21, 1901, seven barrels; December 20, 1901, three barrels; December 26, 1901, five barrels; January 3, 1902, 31% barrels. It is further alleged that the market value of the oil on October 1, 1901, was sixty-five cents for each seven and one-half pounds, that is, one gallon, and that on the various days when the oil was delivered, the price had sunk to different sums each less than what oil was worth on October 1, in consequence of which the defendant suffered a loss of $1,612, for which he prays judgment.

The second counterclaim is based on the following contract:

“AMERICAN LINSEED COMPANY, ST. LOUIS.

“O. W. Blow, Manager.

“St. Louis, Mo., Sept. 7, 1901.

“A. A. Eberson & Co., City.

“Gentlemen: We beg to acknowledge receipt of your esteemed order for 120 bbls. of Linseed Oil for delivery at your option between Oct. 1, 1901 and Jan. 30, 1902.

“Raw at ..................40c for each 7%lbs.

“Boiled, at................41c for each 7% lbs.

“Bleached, at..............44c for each 7% lbs.

“Terms, 30 days or 1 per cent for cash in 10 days.

“Please issue counter-confirmation.

“We thank you for favoring' us.

“Yours very truly,

“O. W. Blow, Mgr.

“Correct this, please, to read June 30th.

“The delivery on above is Oct. 1, 1901, to June 30, 1902.

“C. W. Blow, Mgr.”

Defendant alleges that on September 26, 1901, he notified and requested plaintiff to deliver the oil called for by the contract last aforesaid, which defendant refused to do. Other demands for delivery of the oil are also averred, with the further averment that the demands were not complied with and that instead of compliance, plaintiff delivered sixty barrels of the oil on October 15, and sixty barrels on October 1 and the days of its delivery, plaintiff sustained a loss of $811.20 for which he prays judgment.

The third counterclaim is based on the following contract:

“AMERICAN LINSEED COMPANY, ST. LOUIS.

O. W. Blow, Manager.

“St. Louis, Mo., 9-12-1901.

“Messrs. A. A. Eberson & Co., City.

“Gentlemen: Beg to confirm sale made you on the 9th for 120 bbls. of Linseed Oil for delivery at your option during the period from October 1,1901, to June 30, 1902, at 40c for each 7% lbs. of Raw Oil; 41c for each 7ló lbs. of Boiled Oil; 44c for each 7% lbs. Bleached Oil delivered.

“Terms, 30 days or 1 per-cent for cash in 10 days from date of each invoice.

“Kindly favor us with your counter-confirmation by return mail and oblige,

“Yours very truly,

“0. W. Blow, Mgr.”

It is alleged that on September 26, defendant requested the delivery of the oil called for by the last stated contract, and made subsequently other requests for its delivery, all of which plaintiff refused to comply with; that instead, he delivered sixty barrels of oil on October 16 and sixty on October 17; that in consequence of the lower price of oil on those dates, as compared with its price on October 1, the defendant sustained a loss of $811.20, for which he prays judgment.

A replication was filed in which the allegations of the three counter claims are denied, and it is also further alleged that defendant is not entitled to recover on the counterclaims because plaintiff was not bound to deliver all the oil mentioned under the contracts at any one time or on any of the days on which defendant alleges he demanded delivery. It is further averred in the reply that plaintiff delivered all the oil mentioned in the counter claims and defendant received and accepted the same as performance of the terms of the several contracts, paid the purchase price of the oil, and that by an agreement and understanding between plaintiff and defendant, the latter waived any right “he may have had for the delivery of all of said oil at any one time, or at any time prior to the actual delivery thereof.” The several contracts on which the counter claims are based were introduced in evidence, with testimony to prove defendant demanded delivery of all the oil called for by the three contracts (540 barrels) October 1, 1901. This demand was in writing, and dated September 26. There were also subsequent oral demands. Plaintiff’s manager in St. Louis refused to make delivery on October 1, contending that defendant was not entitled to full delivery of the oil called for by any one contract on a single day; but on the contrary, that plaintiff was entitled to make delivery from time to time during the period mentioned in each contract. The evidence also showed that instead of making the deliveries as contemplated by defendant, the plaintiff delivered on the days and in the quantities stated in the answer. Defendant protested against this mode of delivery and asserted that he was entitled to delivery of all the oil called for by each of the contracts entered into in 1901, on October 1, in accordance with his demand, and that he would hold plaintiff liable for the loss sustained in consequence of its refusal thus to deliver. On October 1, 1901, linseed oil was worth sixty-five cents per gallon; that is, for seven and one-half pounds; and hence, if defendant had received, on that date, all the oil called for by his purchases, he would have made a profit of twenty-one cents a gallon by reselling it. There is evidence tending to show linseed oil was scarce on October 1, 1901, in St. Louis and hardly obtainable; but evidence, too, that plaintiff had enough on hands to fill its contracts with the 'defendant, but was distributing it over the United States to other dealers with whom it had contracts. The contention between the parties was as to the construction of the contracts declared on in the counter claims; that is to say, whether they gave defendant the right to call for all the oil on a certain day, or only to call for it at intervals throughout the period mentioned in the respective contracts. The defendant insisted he had the right to call for all of it on any day he chose; whereas plaintiff insisted he had no such right, but was bound to take it in installments, in reasonable quantities, and at intervals. The trial court adopted plaintiff’s theory as to the first and third contracts; that is to say, those shown in exhibits. A and C, and defendant’s theory as to the second contract, shown in exhibit B. The different interpretations given to the contracts were due to the fact that in the first memorandum, it appeared the oil was to be taken at defendant’s option “during” a certain period, to-wit: during the months of October, November and December, 1901; and in the third contract ‘ ‘ during the period from October 1, 1901, to June 30, 1902;” whereas in the second contract, the oil was to be delivered at defendant’s option “between October 1 and June 30, 1902.” The court held further, that the evidence did not show any separate demand had been made by defendant for the delivery of the oil purchased under the second contract, as he only demanded delivery on October 1, 1901, of the entire five hundred and forty barrels covered by the three contracts. Hence the court ruled that plaintiff had not breached either of the three contracts and defendant was entitled to no damages on his counterclaims. The jury was instructed to return a verdict for plaintiff for the amount sued for and against the defendant on each of the counter claims, and a verdict and judgment having been given in accordance with this instruction, defendant appealed. In order to arrive at a correct interpretation of the three contracts sued on by the defendant, the court admitted evidence over defendant’s objection as to the previous course of dealing between the parties. .To the admission of this evidence, the defendant saved an exception. The evidence showed defendant conducted a paint factory in the city of St. Louis and, in addition to that business, sold1 at wholesale, linseed oil and turpentine and other painting materials. He had been purchasing linseed oil from the plaintiff for from three to five years and the business done during that time amounted to between one hundred and two hundred thousand dollars. Sometimes defendant gave an order for as much as one thousand barrels of linseed oil. Occasionally, instead of delivering directly to defendant, plaintiff would deliver the oil defendant had bought, to customers of defendant to whom he had made sales. Hence the plaintiff knew defendant was buying oil to sell as well as for use in his factory, and so the court found. This being true, whenever he could sell at a profit, he would be likely to ask for a delivery of the oil purchased by any particular contract giving .him an option as to deliveries. It also appeared in evidence that under previous contracts1, plaintiff had made deliveries pursuant to requests of defendant, for as much as seventy or eighty barrels at a time and had always filled defendant’s orders for deliveries; but it did not appear that he had ever ordered all the oil due under one agreement to be delivered at one time. One of the previous contracts introduced in' evidence, of date November 3, 1899, was for one thousand barrels of oil. Some five hundred barrels of that oil had not been taken by defendant at the expiration of the time for delivery, and he was forced by plaintiff to accept the five hundred barrels at the end of the delivery period, although the price of oil had declined in the meantime and in consequence, defendant suffered a heavy loss. This happened on some other occasions. The three salient facts which stand out from the oral testimony regarding the previous course of dealing between the parties are,, that defendant had never before called for the entire quantity of oil at one time bought under any contract; that plaintiff had always filled his orders, and no dispute had arisen between them as to the quantity he was entitled to order, and that sometimes the quantity he might order for any one delivery was expressly stipulated. This was done in the contract of November 3, 1899, which prescribed that the minimum quantity defendant might order delivered was ninety barrels a month; and it will be observed that the contract on which plaintiff sues in the present case, fixes the minimum delivery at seventy-five barrels per month and the maximum at one hundred and eighty barrels. It should be stated that the previous contracts were not produced and hence their exact terms cannot be known. Besides the oil purchased under written contracts, it was further shown defendant purchased oil from plaintiff in the open market.

An exception was taken by defendant to the admission of evidence regarding the previous course of delivery of oil, but we do not perceive that the evidence established a course of dealing inconsistent with his contention regarding the meaning of the contracts on which the counterclaims are based. In fact, it rather favors his contention, in showing that in some instances, when it was desired to limit his option as to when he would take oil under a given contract, the limitation was expressly stipulated by the parties. This fact encourages the view that when nothing was said about a minimum or maximum quantity to be ordered by defendant, his option to take the oil throughout a specified period was unrestricted and he might take it in any quantity and at any time he desired. But leaving out of view the extraneous evidence, we think that is the true interpretation of the contract before us. Much importance was attached to the use of the word “during” in the first and third contracts; the idea being that the word prevented the defendant from ordering all the oil called for by the purchase in either of the three months specified in the first memorandum or at any one time in the period from October 1, 1901, to June 30, 1902, specified in the third memorandum. The utter indefiniteness of such a requirement is apparent at a glance. It amounts to this; that defendant might order any number of barrels less than the whole amount during a month but could not order it all. The trial court said:

“They could not force you to take it all at one time except on the last day when the contract expires. You' didn’t need to order any in October; that was your option, under that contract. You didn’t need to order any until the last day of November. That was your option; but you could not call for it all during one month. Only on one day out of the entire period would they have a right to force you to take all the oil. Out of the balance of the entire period you had the option to call for the oil during the months as specified in the contract.”

It is obvious that this interpretation of the contract is vague to the last degree. But it is contended the defendant might order only reasonable quantities during the three months, distributing the entire order over them. Such a view is inconsistent with the language used and simply fixes the rights of the parties by a new contract instead of the one they made. Moreover, the third contract, which is admitted to stand on the same footing as the first, does not specify the months, but says: “during the period from October 1,1901, to June 30, 1902.” Hence the reasoning on which the lower court concluded there was to be a distribution of. the oil throughout the months, is not applicable to the third contract. In all three of the writings the words “at your option” are employed, and those are the decisive words in ascertaining the intention of the parties; although the first and third contracts provided for delivery at his option “during” specified periods and the second one, for delivery at his option “between” specified dates. But there is not the least ground for believing the parties meant to provide differently in their different contracts, or used the word “during” to express an intention regarding the delivery of the oil in the writings wherein that word appears, different from their intention regarding delivery under the contract in which the word “between” occurs. Indeed, it is not contended there was a different intention. The purpose, in every instance, was to give defendant an option regarding the delivery of the oil, and to bind plaintiff to deliver at his option. Now if we attend to the testimony, it is apparent that instead of the oil being delivered at the defendant’s option, it was, in fact, delivered at the plaintiff’s and against defendant’s express wish. He was granted no right whatever in the matter except to take the oil in installments which suited the plaintiff, and this was treated by the lower court as a compliance with the first and third contracts. We have no doubt the purpose of the parties was as stated.

Plaintiff may not have expected all the oil to he called for at one time, but nevertheless the contracts gave defendant the right to call for it at his pleasure within a specified period; to call for any quantity or all at once. To hold otherwise would be to disregard the option feature of the contract, which was an integral part of it and a stipulation in defendant’s1 favor. It is true the word ‘-during” has one meaning which is not inconsistent with the idea of continuous delivery throughout a given period, but it has another meaning compatible with total delivery on any date within the period. It is defined as follows: “In or within the time of; at some period in; or throughout the course, action existence or continuance of; as fit happened during the war;’ fit continued during the night.’ [Standard Dictionary.] A fair interpretation of the instruments in suit shows that whether there should be a continuous delivery or a total delivery at one time, was made dependent on the will of the defendant. [Johnston v. Trippe, 33 Fed. 530; Posey v. Scales, 55 Ind. 282; Dodge v. Kiene, 28 Neb. 216; Cleveland v. Sterrett, 70 Pa. St. 204; Pickering v. Demerritt, 100 Mass. 416; Levy v. Rothe, 17 N. Y. Misc. 402.] But it is said the memoranda provide for payment within sixty days “from date of each invoice,” thereby showing several deliveries were contemplated. These words merely show it was contemplated that several deliveries might occur; not that they necessarily would occur. In other words, it was meant that the defendant might demand the oil in different invoices or might not. The very essence of the contracts was deliveries at his option; that is, at such times and in such quantities as lie chose to call for the oil. If we say plaintiff was only hound to make deliveries in reasonable .quantities at different times, then defendant had no option, but was controlled by what, under the law, would be reasonable conduct in respect of deliveries. On the other hand, if we say, as the lower court did, that he might call for any quantity less than the whole in a certain month, we manifestly create a contract the parties never had in mind and one with a limitation useful to neither party. We think it is apparent that the stipulation for deliveries at defendant’s option, g-ave him the right to call for the whole or any part of the oil mentioned in the contracts when he chose, within the dates named.

Neither do we accede to the view that no demand was made for the delivery of the oil called for by the second contract. On September 26, defendant demanded delivery of the entire five hundred and forty barrels of oil, for which he had contracts. This covered the oil due under the second contract as well as the others, and if the plaintiff was bound to deliver all the oil called for in said second contract on demand, it was sufficiently notified that defendant asked for delivery. The judgment is reversed and the cause remanded.

Nortoni, J., concurs. Bland, P. J., dissents.