Henry H. Cross Co. v. Texhoma Oil & Refining Co.
| Decision Date | 09 April 1929 |
| Docket Number | No. 8433.,8433. |
| Citation | 32 F.2d 442 |
| Parties | HENRY H. CROSS CO. v. TEXHOMA OIL & REFINING CO. et al. |
| Court | U.S. Court of Appeals — Eighth Circuit |
A. A. Davidson, of Independence, Kan. (Louis L. Dent, of Chicago, Ill., Preston C. West, of Tulsa, Okl., Dent, Dobyns & Freeman, of Chicago, Ill., and West, Gibson, Sherman, Davidson & Hull, of Tulsa, Okl., on the brief), for appellant.
T. R. Boone, of Wichita Falls, Tex. (John B. King, of Chicago, Ill., and G. R. Pate and Bullington, Boone, Humphrey & King, all of Wichita Falls, Tex., on the brief), for appellee Texhoma Oil & Refining Co.
Tarlton Morrow, of Wichita Falls, Tex. (Weeks, Morrow, Francis & Hankerson, of Wichita Falls, Tex., on the brief), for appellee Gray.
Before LEWIS and VAN VALKENBURGH, Circuit Judges, and SYMES, District Judge.
December 22, 1924, the Henry H. Cross Company, appellant herein, entered into a contract with the Griswold Oil Corporation of Electra, Tex., which contract was in the words and figures following:
The conditions printed on the back, to which reference is made, so far as pertinent here, are the following:
On the same date the Cross Company entered into a contract identical in terms with the Wichita Refining Company of Wichita Falls, Tex. The Texhoma Oil & Refining Company of Wichita Falls, Tex., as assignee of these contracts, brings suit, in the District Court for the Western District of Oklahoma, against appellant to recover damages for breaches thereof. The Griswold Oil Corporation is now a bankrupt; its trustee in bankruptcy, D. G. Gray, Esq., has intervened in said cause to recover damages for alleged breach of the Griswold Oil Corporation contract occurring prior to the bankruptcy.
Mr. Cross, president of the appellant company, testifies that, prior to the execution of the contract, in conversation with Mr. Griswold, president of the Griswold Oil Corporation and the Wichita Company, he wished it to be understood that the shipments under the contracts would be evenly distributed over the month. There appears in the record a telegram from the Griswold Corporation to Cross, of date December 30, 1924, stating among other things, that "all shipments under contract will be spread evenly over the months." There is a dispute in the testimony as to the significance of the language used. The claim of appellant is that shipments were to be made at the rate of an average of 1 2/3 cars per day. Upon this point the written contract, in which all prior negotiations between the parties were merged, is silent. The court finds that no change was made in the terms of the contracts, but that the parties attempted to spread the shipments evenly over the months. The contracts took effect January 1, 1925. During the month of January the Griswold Oil Corporation shipped 43 cars, with a gallonage of 381,942 gallons — appreciably less than the 500,000 gallons, 10 per cent. more or less, required by the contract. On January 9th appellant complained that oil had not been shipped as fast as instructions therefor had been given. The Griswold Company stated in reply that they would ship the cars requested and would protect the defendant on the price accordingly. This was accomplished by February 2, 1925, and the oil thus billed was accepted by appellant and at the February 2d price, which was lower than that prevailing in January. This voluntary reduction on the part of the Griswold Company was an evidence of its good faith and of its purpose to perform the contract substantially in accordance with its terms.
On February 10, 1925, appellant sent to the Griswold Oil Corporation the following telegram:
"Bills of lading and shipping papers disclose the fact that cars C Y C X two naught five four and I M R X five two six and I M R X five two one and C Y C X two naught four six were shipped from Ardmore which is a violation of your contract with us and labratory test of these cars shows that the oil contains more than one percent sulphur and has a gravity of twenty decimal eight which are further violations of this contract Stop We have refused payment on draft covering these cars and are holding them subject to your order Stop These violations of the contract have caused us substantial damage and on account of them we cannot accept further shipments."
On February 12th the Cross Company sent to the Griswold Company this further telegram:
"Confirming our telegram of tenth instant we refuse to take any further shipments under this contract Stop Your conduct in this contract has convinced us that we cannot have any assurance of the future faithful performance of it by you Stop You have persistently violated shipping instructions from the beginning and lately attempted to palm off on us the four Ardmore cars which had been rejected by somebody although you knew that you were not complying with contract specifications Stop Taking all these things together we are firmly of the opinion that you do not faithfully mean to carry out your contract and we therefore refuse to take any further shipments Stop Our customer refuses to hold cars any further and are turning them back to Chicago West Pullman and Southern Railroad at South Chicago and we repeat that these cars have been and are at your own order and risk."
The Griswold Company responded, offering to make all amends in the way of damage, claiming that the shipment from Ardmore had been diverted to appellant without its knowledge, and promising, upon investigation, to rectify matters. It also protested against the cancellation of the contract, for the reason that the act complained of was inadvertent and a mere incident; that the contract was divisible, and that no cancellation was warranted upon the ground stated. The Cross Company, however, peremptorily refused to go on with the contract, and gave no further shipping orders thereunder, although requested so to do. The court finds that at all times thereafter the Griswold Corporation was able and ready to furnish oil under the terms of the contract, if shipping orders had been given, and appellant had been ready to accept it.
In January instructions were given by appellant to the Wichita Refining Company for 62 cars of oil. The Refining Company shipped 47 cars, with a gallonage of 431,194, appreciably less than the amount called for by the instructions and under the terms of the contract. However, no steps were taken by appellant to cancel the contract upon this or any other ground; but, on the contrary, dealings continued between the Wichita Company and the Cross Company until on or about May 22, 1925. During this period the terms of the contract, with respect to the volume of shipments, were neither met nor exacted. It appears, however, that the Wichita Company was at all times able and ready to ship oil in accordance with the terms of the contract; also, it appears that appellant was not prepared to receive the oil in such quantities, although earnestly urged to give the necessary shipping orders. This appears from telegrams passing between the parties, of which the following are specimens:
May 22, 1925, both the Griswold Oil Corporation and the Wichita Refining Company assigned their respective contracts to appellee Texhoma Oil & Refining Company, together with the right,...
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