Barnsdall Refining Corporation v. Birnamwood Oil Co., 6273.
| Citation | 92 F.2d 817 |
| Decision Date | 30 November 1937 |
| Docket Number | No. 6273.,6273. |
| Parties | BARNSDALL REFINING CORPORATION v. BIRNAMWOOD OIL CO. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
Francis E. McGovern, of Milwaukee, Wis. (Harry L. Potter, of Madison, Wis., and McGovern, Curtis & Devos, of Milwaukee, Wis., of counsel), for appellant.
M. D. Kirk, of Tulsa, Okl., and Clark M. Robertson and Howard R. Johnson, both of Milwaukee, Wis., for appellee.
Before EVANS and SPARKS, Circuit Judges, and LINDLEY, District Judge.
Defendant appeals from a judgment in plaintiff's favor for the balance due for gasoline and oil purchased by defendant from plaintiff and asserts error in the order sustaining a demurrer to the answer and counterclaim of defendant.
Plaintiff sued upon a contract for the purchase of gasoline and oil covering a period of five years, alleged a balance unpaid in excess of $6,000 and sought recovery of the same. The second amended answer of defendant averred that the agents of plaintiff's assignor (who, for the purpose of this appeal, is the same as plaintiff) approached defendant and procured the contract by fraudulent inducements, namely, false representations that the prices fixed in the contract were equally as low as those in any other contract between plaintiff and other jobbers of gasoline in Wisconsin and that the "marginal protection" provided therein was as advantageous as in any other such contract; that the agents were acting within the scope of their apparent authority; that the representations were false in that at the time they were made plaintiff had a contract with another jobber, selling gasoline to it at one-half cent per gallon less than the price fixed in the contract sued on and containing a provision for marginal protection much more favorable to the jobber than that in the contract here involved; that, by agreement between plaintiff and the said jobber, these discriminating prices and provisions were to be kept secret by both parties; that plaintiff authorized and directed its agents to solicit and negotiate the contract with defendant and others similar thereto and to state to the parties from whom contracts were to be solicited that the prices in all contracts were exactly the same as those in defendant's contract and that no discrimination in prices or terms had been made to any jobber of its product in Wisconsin; that the aforesaid fraudulent misrepresentations of the agents were made pursuant to directions given by plaintiff to its agents; that in approving and signing the contract plaintiff well knew that its agents, in inducing and negotiating the contract with the defendant, had made the statements hereinbefore set forth; that plaintiff approved of and accepted the benefits of said contract with full knowledge of all the facts and of the statements of its agents so made inducing and resulting in the execution of the contract; that defendant relied upon the misrepresentations and in reliance thereon was induced to and did execute the contract and that defendant did not discover the fraud until after the delivery of all the oil and gasoline purchased. These facts, set out in great detail, were pleaded in bar of the action for the balance due and as a counterclaim for the recovery of damages resulting from the fraudulent statements in a sum exceeding $20,000.
The court sustained the demurrer thereto on the ground that the pleading showed upon its face that the agents had no authority to execute the contract or to make any representations concerning the same, because of certain provisions of the contract as follows: ...
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