Gasoline Products Co v. Champlin Refining Co

• Decision Date: 18 May 1931
• Docket Number: No. 362,362
• Citation: 75 L.Ed. 1188,51 S.Ct. 513,283 U.S. 494
• Parties: GASOLINE PRODUCTS CO., Inc., v. CHAMPLIN REFINING CO
• Court: U.S. Supreme Court

283 U.S. 494

51 S.Ct. 513

75 L.Ed. 1188

GASOLINE PRODUCTS CO., Inc.,

v CHAMPLIN REFINING CO.

No. 362.

Argued April 17, 1931.

Decided May 18, 1931.

Messrs. John B. Marsh, of New York City, and Robert

Hale, of Portland, Me., for petitioner.

Mr. Horace G. McKeever, of Enid, Okl., for respondent.

Mr. Justice STONE delivered the opinion of the Court.

Petitioner brought suit in the District Court for Maine, to recover royalties alleged to be due under a contract by which it licensed respondent to use two 'Cross cracking units,' structures adapted to the use of the 'Cross cracking process' for increasing the production of gasoline from crude oil. Respondent pleaded, by way of counterclaim, in two separate counts, a contract by petitioner to construct a 'Cross vapor treating tower' for treatment of gasoline, produced by the cracking units, necessary to make it marketable. The consideration for this contract was alleged to be the execution of the license contract already referred to and of two related contracts, one by a third party for the construction of the cracking units, and another by which petitioner guaranteed that they would work. Performance of these contracts is admitted.

Both counts of the counterclaim were based on the same seres o f transactions. The first alleged a contract arising from an oral proposal by petitioner's vice presi- dent in January, 1926, to construct for respondent a Cross vapor system treating tower, the cost of which was to be repaid by respondent to petitioner if the tower functioned in a satisfactory manner. This proposal was alleged to have been accepted by the execution of the other contracts. The second count alleged a written proposal of like tenor by petitioner to respondent, accepted by respondent on February 6, 1926, and confirmed by the later execution of the other contracts. Both counts charged that, by reason of petitioner's failure to construct the treating system, and pending the construction of a substitute system by respondent, the latter was compelled to store large quantities of the cracked gasoline awaiting treatment, resulting in four principal items of damage: 'The expenses of storage; depreciation of the gasoline by evaporation and other causes; the loss incident to shutting down respondent's plant because of the lack of treating apparatus; and the loss of anticipated profits from the sale of gasoline.

The jury returned a verdict on petitioner's cause of action, and a verdict for respondent on the counterclaim, leaving a balance in petitioner's favor for which the District Court gave judgment. The Court of Appeals for the First Circuit reversed because of errors in the charge of the trial court with respect to the measure of damages on the counterclaim; but, in directing a new trial, it restricted the issues to the determination of damages only, 39 F.(2d) 521, following in this respect its earlier decisions in Farrar v. Wheeler (C. C. A.) 145 F. 482; Calaf v. Fernandez (C. C. A.) 239 F. 795; Atteaux & Co. v. Pancreon Mfg. Corp. (C. C. A.) 22 F.(2d) 749. See, also, adopting the same practice, Original Sixteen to One Mine v. Twenty-One Mining Co. (D. C.) 254 F. 630; Thorpe v. National City Bank (C. C. A.) 274 F. 200; Chicago, R. I. & P. By. Co. v. Stephens (C. C. A.) 218 F. 535; Fentress Coal & Coke Co. v. Elmore (C. C. A.) 240 F. 328; Great Western Coal Co. v. Railway Co. (C. C. A.) 98 F. 274; Empire Fuel Co v. Lyons (C. C. A.) 257 F. 890, 897. This Court granted certiorari 282 U. S. 824, 51 S. Ct. 76, 75 L. Ed. —, October 20, 1930, to review the single question whether the court below erred in thus limiting the new trial, upon a petition setting up a conflict of the decision with that of the Court of Appeals for the Third Circuit in McKeon v. Central Stamping Co., 264 F. 385. See, also, Kean v. National City Bank (C. C. A.) 294 F. 214, 226.

Petitioner contends that the withdrawal from consideration of the jury, upon the new trial, of the issue of liability on the contract set up in the counterclaim, is a denial of its constitutional right to a trial by jury. The Seventh Amendment provides: 'In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.' It is argued that as, by the rules of the common law in force when the amendment was adopted, there could be no new trial of a part only of the issues of fact, a resubmission to the jury of the issue of damages alone is a denial of the trial by jury which the amendment guarantees.

It is true that at common law there was no practice of setting aside a verdict in part. If the verdict was erroneous with respect to any issue, a new trial was directed as to all.¹ This continued to be the rule in some states after the adoption of the Constitution;² but in many it has not been followed, notwithstanding the presence in their Constitutions of provisions preserving trial by jury. The Massachusetts courts early modified it to permit a new trial of less than all the issues of fact when they were clearly separable. Bicknell v. Dorion, 16 Pick. (Mass.) 478; see Simmons v. Fish, 210 Mass. 563, 565 97 N. E. 102, Ann. Cas. 1912D, 588. The rule as thus modified has been generally accepted in the New England States (see Zaleski v. Clark, 45 Conn. 397, 404; McKay v. New England Dredging Co., 93 Me. 201, 44 A. 614; Lisbon v. Lyman, 49 N. H. 553, 582 et seq.; Clark v. New York, N. H. & H. R. Co., 33 R. I. 83, 80 A. 406, Ann. Cas. 1913B, 356; Parizo v. Wilson, 101 Vt. 514, 144 A. 856), and consistently followed by the Court of Appeals for the First Circuit.

Lord Mansfield, in applying the common-law rule where the verdict, correct as to one issue, was erroneous as to another. said: '* * * For form's sake, we must set aside the whole verdict. * * *' Edie v. East India Co., 1 W. Bl. 295, 298. But we are not now concerned with the form of the ancient rule. It is the Constitution which we are to interpret; and the Constitution is concerned, not with form, but with substance. All of vital significance in trial by jury is that issues of fact be submitted for determination with such instructions and guidance by the court as will afford opportunity for that consideration by the jury which was secured by the rules governing trials at common law. See Herron v. Southern Pacific Co., 283 U. S. 91, 51 S. Ct. 383, 75 L. Ed. 857, decided April 13, 1931. Beyond this, the Seventh Amendment does not exact the retention of old forms of procedure. See Walker v. New Mexico & Southern Pacific R. Co., 165 U. S. 593, 596, 17 S. Ct. 421, 41 L. Ed. 837. It does not prohibit the introduction of new methods for ascertaining what facts are in issue (see Ex parte Peterson, 253 U. S. 300, 309, 40 S. Ct. 543, 64 L. Ed. 919), or require that an issue...