Century Refining Company v. Hall, 7080

• Decision Date: 14 March 1963
• Docket Number: No. 7080,7081.,7080
• Citation: 316 F.2d 15
• Parties: CENTURY REFINING COMPANY, Appellant, v. Charles T. HALL, Appellee. Charles T. HALL, Cross-Appellant, v. CENTURY REFINING COMPANY, Cross-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

316 F.2d 15 (1963)

CENTURY REFINING COMPANY, Appellant, v. Charles T. HALL, Appellee.

Charles T. HALL, Cross-Appellant, v. CENTURY REFINING COMPANY, Cross-Appellee.

Nos. 7080, 7081.

United States Court of Appeals Tenth Circuit.

March 14, 1963.

COPYRIGHT MATERIAL OMITTED

Robert H. Harry, Denver, Colo. (George E. Lohr and William S. Huff, Denver, Colo., were with him on brief), for Century Refining Co.

Richard B. Foley, Galligan & Foley, Denver, Colo., for Charles T. Hall.

Before MURRAH, Chief Judge, and PICKETT and LEWIS, Circuit Judges.

MURRAH, Chief Judge.

This appeal by Century Refining Company and cross-appeal by Charles T. Hall is from a judgment in an action by Hall against Century to recover money claimed to be due him under two contracts, and for damages in consequence of Century's alleged wrongful termination of one of them.

Hall was a wholesaler and distributor of petroleum products in the Denver, Colorado area. Century operated a refinery approximately 300 miles away near Garden City, Kansas. Early in 1958, Century entered into a sales contract with Hall whereby Hall was to purchase Century gasoline for distribution through his own retail outlets and to his wholesale customers in the Denver area.

The sales contract provided in presently material part that "if your gasoline purchases amount to six million (6,000,000) gallons or more during the twelve-month period from January 1, 1958 to January 1, 1959, you will receive one-fourth (¼) cents per gallon refund." It was further provided that "This contract shall continue for one year from the date hereof and thereafter shall renew and extend itself from year to year unless terminated by notice in writing of either party * * *."

During the year 1958, all of Hall's purchases were delivered to his storage facilities and redelivered to his own retail outlets and to his wholesale customers. His purchases for the year 1958 were not sufficient to entitle him to the ¼ cent per gallon refund provided in the contract. Neither party having notified the other of termination, the contract was automatically renewed for the year 1959. Early in 1959, and while the sales contract was in force, the parties orally agreed that Century would give Hall a stipulated per gallon credit on all products sold by Century to certain specified dealers in the Denver area, and the agreement was later confirmed in writing.¹ Hall's direct purchases of gasoline from Century during 1959 were not sufficient to entitle him to the ¼ cent per gallon refund provided in the original contract, but when added to the direct sales by Century to specified dealers, the aggregate exceeded the requisite amount. Nothing was said in the oral agreement as confirmed as to whether these direct sales by Century could be added to Hall's purchases in computing the requisite amount. Century formally terminated all of its contractual relations with Hall in November 1959. This suit followed. It was commenced in the Colorado state courts and removed to the federal court on requisite diversity.

The complaint is stated in three claims: (1) under the original contract for the ¼ cent refund based on the aggregated purchases by Hall and direct sales made by Century to the specified dealers during the year 1959 — agreed to be in excess of the requisite 6,000,000 gallons; (2) under the subsequent agreement for the specified per gallon credit on sales made by Century to the designated dealers, i. e., see Footnote 1; and (3) damages for the alleged wrongful termination by Century of the subsequent agreement.

Trial by jury on the first two claims resulted in a verdict for Hall, and judgment was entered thereon. The judgment on the second claim has been satisfied and is not involved in this appeal. The trial court directed a verdict and entered judgment for Century on the third claim and that judgment is the subject of Hall's cross-appeal.

As to the first claim, the trial court ruled as a matter of law that the original sales contract was automatically extended in its entirety for the year 1959, and that there was no dispute between the parties as to any transaction for the year 1958. It submitted to the jury the question whether during 1959 Hall purchased 6,000,000 gallons of gasoline or more within the meaning of the ¼ cent per gallon refund provision of the original contract. After clearly and succinctly stating the respective contentions of the parties with respect to this issue, the court then told the jury that as to the first claim, there was just one question of fact for it to determine, that is, whether "* * * it was the intention of the parties that in computing the 6,000,000 gallons of gasoline there should be included or excluded the gasoline delivered * * *" by Century to the specified dealers under the subsequent contract.

Century did not specifically object to this instruction, but moved for a directed verdict and for a judgment n. o. v. based on its contention throughout the trial of the case to the effect that Hall's rights under the first claim are limited to the four corners of the unambiguous original contract, according to which Hall's purchases admittedly did not amount to 6,000,000 gallons of gasoline; that the subsequent oral agreement, as confirmed, providing for the specified credits for sales to specified dealers, bore no relationship whatsoever to the original contract, and particularly to the provision with respect to the ¼ cent per gallon refund. The supportive argument is twofold. (1) Although the basic provisions of the original contract were automatically extended through the year 1959, the provisions with respect to the ¼ cent per gallon refund is strictly applicable to "your gasoline purchases * * * during the twelve (12) month period from January 1, 1958 to January 1, 1959 * * *." And, that the renewal did not operate to extend that provision beyond the period provided therein. (2) If the contract was renewed in its entirety, the words "your purchases" limits its coverage to Hall's direct purchases during 1959, and has no application to Century's direct sales to the specified dealers made under the subsequent contract.

The trial court ruled as a matter of law that "the extension of the sales contract included all of the terms of the contract, including its typewritten portion." We think the trial court was eminently correct. It is of course "well settled that where printed and written or typed provisions of a contract are in conflict and cannot be harmonized, the latter prevails over the former as being the language deliberately selected by the parties to express their considered intent." Broderick Wood Products Co. v. United States, 10 Cir., 195 F.2d 433. But, it also is a cardinal rule of construction that "written instruments must be so construed, if possible, as to give effect to all of the provisions thereof." Moyer v. Walker, 10 Cir., 276 F.2d 681. We think it would be wholly inadmissible to say that the parties intended to automatically renew only a part of the contract.

It is true, as Century suggests, that nothing was ever said either orally or in writing concerning the applicability of the refund provision in the original contract to direct sales to the specified dealers under the subsequent agreement. Indeed, the trial court took note of the conspicuous silence in that regard, and it was on that basis that it determined to submit to the jury the question of the intent of the parties in respect thereto in the light of all the surrounding circumstances, including the conduct of the parties.

It is pertinent to note, as did the trial court, that when the original contract was made, Hall was an established retail and wholesale dealer of petroleum products in the Denver area. He maintained a bulk station from whence he sold and delivered gasoline wholesale to retail outlets in the Denver area, including some, if not all, of the dealers specified in the Century contract. Century operated a refinery some 300 miles from Denver. It had never done any business in the Denver area, and its only business contact at the time was with Hall.

Hall was permitted to testify without objection that in the performance of the original contract during the year 1958, all of his purchases from Century were first delivered to his bulk station and redelivered to his own retail outlets and to his wholesale customers; that in order to avoid double handling and duplicate billing for the customer sales, it was orally agreed early in 1959 that these sales would be delivered and billed directly by Century to specified dealers; and the profit he had realized from his sales to these dealers in 1958 would be recognized by a stipulated per gallon credit. He testified that he called on these specified dealers, solicited their business, and arranged for the direct sales.

The Vice-President and General Manager of Century who confirmed the oral agreement was permitted to testify without objection that when the original contract was made, Century was unfamiliar with the Denver trade territory, and that they depended upon Hall to find a market for their products in that area; that they knew a part of Hall's purchases would go to his own retail outlets and a part to the other dealers; that Century was not interested in whether he purchased the gasoline, or whether he obtained people to purchase it, and that after the oral agreement was made early in 1959, Hall called on the specified dealers, as well as others, and kept Century informed concerning prospective purchasers and the estimated amount of their purchases.

Century insists that all of this testimony was admitted as relevant to the second and third claims under the subsequent agreement, and that it was not admitted to prove any issue under the first claim, which they contend is confined within the bounds of the original agreement. They take the position that the factual issue submitted to the jury was not disclosed by the pleadings or the...