Burks v. Sinclair Refining Co.

• Decision Date: 27 July 1950
• Docket Number: No. 10122.,10122.
• Citation: 183 F.2d 239
• Parties: BURKS v. SINCLAIR REFINING CO.
• Court: U.S. Court of Appeals — Third Circuit

183 F.2d 239 (1950)

BURKS v. SINCLAIR REFINING CO.

No. 10122.

United States Court of Appeals Third Circuit.

Argued March 24, 1950.

Decided July 27, 1950.

Harry E. Sprogell, Philadelphia, Pa. (Saul, Ewing, Remick & Saul, Philadelphia, Pa., on the brief), for appellant.

Isidor Ostroff, Philadelphia, Pa., for appellee.

Before BIGGS, Chief Judge, and MARIS and McLAUGHLIN, Circuit Judges.

McLAUGHLIN, Circuit Judge.

This is a diversity action. In his complaint appellee sued appellant (1) upon an alleged oral agreement between them whereby appellee was to erect on his own land a gasoline service station and appellant was to deliver to the station all necessary equipment for the handling of petroleum products; (2) upon an alleged written agreement between them entered into July 11, 1947, whereby appellant agreed to sell and appellee to buy gasoline and other petroleum products for one year from August 15, 1947 to August 15, 1948 (copy of agreement attached to complaint); (3) upon an alleged written agreement between them (called Equipment Rental Agreement) entered into August 15, 1947, whereby appellant agreed to deliver to appellee all necessary equipment for the handling of petroleum products and appellee agreed to pay $1 a year rental for same (copy of this agreement also attached to the complaint). Appellee said he erected the gas station and fulfilled the requirements of the written agreements but that appellant refused to deliver the station equipment or the petroleum products. He sought damages from appellant for loss of profits he otherwise would have derived from conducting the station and for his losses for the construction and erection of the station.

Appellee is a totally disabled veteran. His wife had conducted most of the negotiations in the matter for him. It was stipulated that she testify in his place, appellant having the same right of cross examination as if appellee were the witness. Mrs. Burks said that prior to their purchase of a site for their gas station, about December of 1945, she talked with the Sinclair Company, speaking with George Kane, then a Sinclair salaried agent. As said agent, Kane controlled Sinclair's marketing operations in his territory, which apparently included the site the Burks had chosen for their station. According to Mrs. Burks, Kane told them how to build the building and gave them suggestions as to its size. After that, Burks signed a gasoline agreement with Sinclair dated July 11, 1947, which provided that Sinclair sell and appellee buy not less than 36,000 gallons of Sinclair gasoline nor more than 43,200 gallons during the year beginning August 15, 1947. This was executed for appellant. The latter also executed a dealer's permit whereby Sinclair, to whom appellee had leased his property, agreed that the latter was to operate a gasoline station there for the year beginning August 15, 1947, and pay Sinclair $3 a month rent. Sinclair also executed a rental of gasoline station equipment to appellee. This is dated August 15, 1947. There is in evidence a letter from appellant dated October 31, 1947, signed by its area manager, Keeler, returning to Burks "your copy of contract(s) as follows: 2072-R the gasoline agreement 731-D the agreement for appellee to operate the station. We are confident your relationship with our company will prove satisfactory and profitable to you and we assure you of our cooperation in the furtherance of our mutual interests." Keeler testified that the lease with appellee had been referred to the Sinclair New York office for legal approval and that the oil contract had not been signed for Sinclair through oversight or misdirection of papers. Other than in those "details", he agreed that Burks had been engaged to be a Sinclair dealer "under the terms of the contract." Burks completed his station building but Sinclair never did furnish him the equipment. In March, 1948, Sinclair, through a branch manager, advised Burks that it was not going to install the equipment.

The minimum and maximum amounts in the gasoline agreement were Kane's estimate of the quantity of gasoline that he, for Sinclair, thought Burks would sell in one year. Keeler agreed with those figures. The testimony is that the mark up was to be 4½¢ a gallon on the gasoline and 100% a gallon on the oil. The oil contract provided for Sinclair to furnish Burks a minimum of 250 gallons and a maximum of 500 gallons of oil, grease and lubricants for one year beginning August 15, 1947. There is testimony that Sinclair employees told Burks that Sinclair would supply all the grease, kerosene and coal oil he needed. There was no written agreement on this. Burks expected to do minor repairs and lubrication, sell accessories and "ice cream and candy and such little things as you see most gasoline stations have." Burks and his wife intended to work at the station. He had previous station experience, and they expected to obtain whatever other help they needed from Mrs. Burks' family.

Evidence in behalf of appellee tended to show that he had expended at least $595.56 especially for the purpose of making his building fit for use as a service station. After Sinclair had notified him that it did not intend to equip the station appellee "tried to have the building revised and changed into living quarters in order to rent it." He proved $290 expense in reconverting the premises.

The Trial Judge charged the jury that it must first decide whether there was a contract, and if there was, what, if any, was the damage suffered by Burks. The gasoline contract, with its figures as to total gallonage, was called to the jury's attention. The jury was told that there was no evidence to show the amount of profit on the oil or grease nor of the quantities likely to be sold. The luncheonette to be conducted in the station was mentioned in this connection and with the same inference. With reference to the testimony regarding the oil, grease and luncheonette, the Court said: "I will let you consider it for what bearing it might have on your over-all judgment as to the complete value of the contract."

The Court charged appellant's request reading: "If you find that the defendant is liable to the plaintiff in damages and if you are able to compute the profits which the plaintiff would have realized from operating a gasoline service station at this location during a period of one year from August 15, 1947, you must deduct from the gross amounts which you believe the plaintiff would have received for the sale of gasoline and other products all amounts which you believe the plaintiff would have had to expend in the operation of the service station such as wages, utility bills, repairs, depreciation of equipment and other similar items."

With reference to the expenses of converting into a service station and thereafter reconverting into a dwelling, the Court charged appellant's request as follows: "If you find that ...