Continental Oil Co. v. Ideal Truck Lines, Inc.
| Decision Date | 31 December 1981 |
| Docket Number | No. 52399,52399 |
| Citation | 638 P.2d 954,7 Kan.App.2d 153 |
| Parties | CONTINENTAL OIL COMPANY, Appellant, v. IDEAL TRUCK LINES, INC., Appellee. |
| Court | Kansas Court of Appeals |
Syllabus by the Court
1. A contract for the sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.
2. A showing of mutual mistake in the performance of a contract will support equitable relief.
3. A person who has been unjustly enriched at the expense of another is required to make restitution to the other.
4. A person has conferred a benefit upon another if he satisfies a debt or duty of the other.
5. A person is presumed to have seen what he could have seen had he looked.
R. Douglas Sebelius, of Sebelius Law Office, Norton, for appellant.
Bruce W. Kent, of Ryan, Kent, Wichman, Walter & McClymont, Chartered, Hays, for appellee.
Before HERD, Justice Presiding, SWINEHART, J., and LEWIS L. McLAUGHLIN, District Judge Retired, Assigned.
HERD, Justice Presiding:
This is an appeal by Continental Oil Company (Conoco) from a judgment in favor of Ideal Truck Lines, Incorporated, holding Ideal did not owe Conoco $22,782.04 in federal excise taxes paid for Ideal by Conoco.
The facts are for the most part uncontroverted. Conoco is a major oil corporation operating out of Ponca City, Oklahoma. Ideal is a common carrier truck line operating out of Norton, Kansas. Ideal had been a direct retail sale consumer of diesel fuel from Conoco for a number of years. The time frame involved in this appeal is 1974 to 1978. In June 1974 the parties executed the following document:
"Ideal Truck Lines, Inc. June 19, 1974
----------------------- -------------
P.O. Box 330
-----------------------
Norton, Kansas 67654 3520 West 75th Street
----------------------- ---------------------
Prairie Village, Kansas
-----------------------
66208
We are pleased to quote you as follows, subject to the conditions on the
reverse side of this form and your acceptance within ___ days after the above
date
Conoco Type of Delivery
Quantity Product and/or Package Size Price
--------- ------- ------------------- -----
187,000 gal. Conoco #2 Diesel Fuel Transport 26.35 cents/Gal
The volumes set out below are the maximum monthly quantities
and are subject to change at any time in accordance with
Conintental's product allocation program. Any product
not taken during the month specified will be deleted from
the total allocation and will not be delivered at a later
date
July 1974 38,500 gal. October 1974 39,500 gal
August 1974 39,500 gal. November 1974 34,500 gal
September 1974 36,500 gal. December 1974 32,500 gal.
Delivery Period: From July 1, 1974 to December 31, 1974
--------------------------------------
Price Escalation: Price will escalate with CONOCO's normal
consumer basing value price for CONOCO
No. 2 Diesel Fuel which is 25.61 cents/gal. on
June 19, 1974.
Taxes: Unless otherwise stated herein, all prices are
exclusive of taxes and such prices will be increased to
the extent of any applicable tax or governmental charge
now or hereafter imposed.
Shipment: Per above schedule
Terms of Payment: NET, 30 days.
If this offer is acceptable to you, please sign and return
duplicate copy.
Accepted June 21, 1974
------------------------- Continental Oil Company
Ideal Truck Lines, Inc. (CONOCO)
-------------------------
Buyer By /s/ J. S. Bergin
--------------------------------------
By /s/ Lester W. Long Division Product Pricing
--------------------------------------- Assistant"
Conoco delivered diesel fuel to Ideal pursuant to the foregoing document, billing Ideal for the fuel plus federal tax on an invoice with a two line description: "Conoco No. 2 Diesel Fuel ... Fed tax ...."
Commencing January 1, 1974, and continuing through 1975, 1976, 1977 and 1978 Ideal sent letters authorizing Conoco to collect four cents per gallon excise tax on all diesel fuel it sold Ideal. The letters were written in the following form:
"January 1, 1974
Continental Oil Company
Drawer 471
Ponca City, Oklahoma
Gentlemen:
Please consider this letter your authorization to charge us the federal excise tax of 4 cents per gallon on all diesel and other special motor fuels purchased for highway use. This fuel will be delivered into storage facilities properly marked "tax paid fuel-for highway use" at the following location(s) :
912 North State
In the event diesel or other special motor fuels are also purchased for non-highway use, separate storage facilities properly marked for non-highway use will be maintained for this fuel. If special fuel(s) delivered into storage facilities for non-highway use is subsequently used over the highway, we will report and pay the applicable federal excise tax directly to the Internal Revenue Service.
Yours very truly,
/s/ Fred L. Gilhousen
Ideal Truck Lines, Inc.
Norton, Kansas."
Conoco complied with Ideal's request for the year 1974 and until July 15, 1975. Thereafter until June 1978 Conoco failed to bill and collect the excise taxes from Ideal. Its statement rendered July 15, 1975, had a one line description: "Conoco No. 2 Diesel Fuel ... $2,301.17." This invoice was totaled out at $2,301.17.
Ideal paid Conoco the amount it was billed for. The excise taxes on diesel fuel sold to Ideal from July 15, 1975, to May 18, 1978, were neither collected nor paid by Conoco. Ideal assumed the taxes were included in the billing. Conoco sent Ideal price quotations from time to time on a printed quotation form which stated on the last line: "Prices in cents per gallon excluding Federal, State, and Local taxes."
In June 1978, Conoco discovered it had failed to collect and pay Ideal's excise tax for the three year period amounting to $22,782.04. Upon this discovery, Conoco immediately made payment for the amount owed to the Internal Revenue Service and sent Ideal a statement on June 19, 1978, for reimbursement.
Ideal refused to reimburse Conoco for the taxes and this suit followed. The trial court found for Ideal on the theory there was no contract between the parties and since the mistake was unilateral, uncoupled with fraud or undue influence a court of equity could not grant relief. This appeal followed.
For its first issue Conoco maintains that the invoices and letters constitute an agreement for the sale of diesel fuel and obligate Ideal to pay Conoco for the fuel plus four cents per gallon excise tax. Ideal denies a contract existed. Let us first examine the applicable statutes. K.S.A. 84-2-101 et seq. governs sales transactions such as this. K.S.A. 84-2-204 provides:
The trial court's finding there was no contract is not supported by the evidence. Here the parties executed a written document dated June 19, 1974, providing for the sale of diesel fuel to Ideal. The agreement established the price and the maximum quantity of diesel fuel allocated to Ideal. It also quoted a current price and provided "price will escalate with Conoco's normal consumer basing value price for Conoco No. 2 diesel fuel which is 25.61 cents per gallon on June 19, 1974." It also provides a delivery period, place of delivery, terms and shipment schedule and states that unless otherwise stated all prices are exclusive of taxes. We hold the instrument is a valid contract between the parties. Thereafter the parties continued a course of dealing similar to that contracted for in 1974. Conoco would quote Ideal a price on No. 1 and No. 2 diesel fuel and Ideal would order what it needed at the quoted price for delivery in Norton. Conoco would then bill Ideal for the fuel and, as a separate item on the statement, for the excise taxes as authorized by its letters. We hold there was a valid contract entered into obligating Conoco to collect and pay the excise taxes on the fuel sold to Ideal. In consideration for Conoco's obligation Ideal agreed to reimburse Conoco for the taxes.
The course of dealing continued on those terms until July 15, 1975, when Conoco mistakenly failed to bill Ideal for the taxes. Ideal paid the statements as submitted, never calling to Conoco's attention the omission of the taxes. Ideal maintains it was unaware of the omission and misled by Conoco's mistake. Let us review the history of the transactions between the parties. The original contract stated, "unless otherwise stated herein, all prices are exclusive of taxes ...." The statements rendered thereunder by Conoco contained a separate line item for taxes. The price quotations from Conoco to Ideal stated they excluded taxes. The price of fuel recited in the pertinent billing statements from Conoco coincided with the price quotations previously made from which Ideal ordered its fuel. And finally, the billing statements did not contain a...
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