Hertz Driv-Ur-Self Stations, Inc. v. Schenley Distilleries Corp., DRIV-UR-SELF

• Decision Date: 18 August 1953
• Docket Number: DRIV-UR-SELF
• Citation: 119 Cal.App.2d 754,260 P.2d 93
• Court: California Court of Appeals Court of Appeals
• Parties: HERTZSTATIONS, Inc. v. SCHENLEY DISTILLERIES CORPORATION. Civ. 15505.

Page 93

260 P.2d 93

119 Cal.App.2d 754

HERTZ DRIV-UR-SELF STATIONS, Inc. v. SCHENLEY DISTILLERIES CORPORATION.

Civ. 15505.

District Court of Appeal, First District, Division 1, California.

Aug. 18, 1953.

Hearing Denied Oct. 15, 1953.

Bronson, Bronson & McKinnon, San Francisco, for appellant.

J. Joseph Sullivan, San Francisco, for respondent.

BRAY, Justice.

From a judgment in favor of plaintiff in the sum of $11,379.80, defendant appeals.

Questions Presented.

1. By the 1945 and subsequent schedules, was the requirement of purchase by defendant abrogated?

2. Was there an anticipatory breach of the contract by plaintiff?

Facts.

In 1941 the parties entered into a written agreement by which plaintiff leased to defendant over a period of years, trucks, tractors and trailers 'described in Schedule A, attached hereto, together with any additional Schedule A's attached hereto, which are made a part hereof by reference thereto the same as if rewritten at length herein. * * * Customer agrees to pay to Hertz the rental stipulated herein, and upon the terms and conditions in the said Schedule A, together with any other Schedule A's attached hereto, and upon the additional terms and conditions in this instrument contained.' Schedules were to be added from time to time. Schedule A was to provide the fixed rental charge plus a mileage charge. Expressly recognizing that the cost of gasoline, license fees or taxes might fluctuate during the life of the agreement, it provided that if the average cost thereof during any month decreased or increased 20 per cent or more from the present cost, the amount of such increase would be charged defendant as increased rental while the amount of decrease would be credited defendant. Either party on notice could cancel the agreement on any anniversary date. If defendant cancelled then it agreed to purchase the vehicles then covered by the agreement upon the basis set forth. If plaintiff cancelled, defendant had the right to purchase.

The first Schedule A, executed on the same date as the agreement listed only one vehicle and provided: 'In the event customer shall elect to cancel this agreement with respect to the above listed vehicle, the customer shall not be required, but shall have the right to purchase the vehicle listed above. * * *' (Emphasis added.) February 2, 1943, a new schedule was added 'in addition to' the first, and referred to two vehicles different from the one in the first. February 6, 1945, there was added the schedule upon which defendant relies. It provided that it 'shall supersede any previous Schedule A' and described four vehicles (three of which were those described in the first two schedules) and provided: 'With respect to the above listed vehicles' that in the event of cancellation as provided in the agreement 'Customer shall not have the right to purchase said vehicles, except by consent of Hertz. * * *' (Emphasis added.) March 18, 1946, another Schedule A referring to two vehicles (one of which was included in the previous schedule) was signed 'in addition to' any previous schedule. October 23, 1946, with the same notation, another schedule was signed listing an additional vehicle. January 13, 1947, appears another schedule also 'in addition to any previous Schedule.' This lists six vehicles, none of which appear on any previous schedule. It is these six vehicles plus one listed in the schedule of March, 1946, which defendant was still using and which the court found defendant was required to buy. All schedules provided that insurance premiums and gasoline prices shall be as stated in the schedule rather than as stated in the contract.

In August, 1948, Jordan, plaintiff's San Francisco manager, presented defendant with a new schedule A to become effective September 1, 1948. This schedule added two trucks, increased the fixed weekly rental charge and the mileage rate for the six vehicles listed in the previous schedule. It also increased the 'gasoline price including tax.' Thereafter, defendant cancelled the contract and refused to purchase. The circumstances upon which defendant based its contention of an anticipatory breach of the contract by plaintiff will be discussed later.

1. Effect of Schedules.

The court found that the purchase clause of the agreement was not modified by the schedule of February 6, 1945, as to the vehicles listed in the schedules of March 18, 1946, and January 13, 1947.

The first schedule merely purports to modify the purchase clause of the contract as to 'the above listed vehicle.' While the next schedule is 'in addition to' the first, it does not include the vehicles therein listed within that modification. Again, the modification in the 1945 schedule which supersedes the preceding schedules applies 'to the above listed vehicles.' The three following 'in addition' schedules make no effort to include the additional vehicles in this modification. The contract requires purchase at cancellation of 'the vehicles then covered by this agreement.' None of the vehicles at this time was included in 'the above listed vehicles' in the exception to the contract provided by the 1945 schedule. Defendant contends that by an additional schedule, as distinguished from a superseding schedule, the vehicles therein are made subject to the release provision of the 1945 schedule. But the release provision is explicit in its terms, referring to the 'above listed vehicles.' Moreover, the later schedules do not provide that the vehicles are to be added to those in the preceding schedule but that the particular schedule is to be added to any previous schedule. Thus, the most reasonable interpretation is that it applies only to those vehicles and that had the parties intended it to apply to the additional vehicles in the later schedules they would have said so in those schedules. Nor is the reasonableness of this interpretation affected by the facts that the release clauses in the 1941 and 1945 schedules are typewritten while the purchase clause in the agreement is printed, and that since plaintiff prepared the contract, ambiguities, if any exist, are to be construed most strongly against it under the rule of Reid v. Johnson, 85 Cal.App.2d 112, 192 P.2d 106. The agreement provides that the parties are to be governed by the provisions of the main agreement and those of the schedules thereafter attached. Thus, they are to be construed together. Valley Const. Co. v. City of Calistoga, 72 Cal.App.2d 839, 165 P.2d 521. In so doing there is no repugnancy between the main agreement and the schedule, nor is their language unclear. Taken as a whole they provide simply and clearly that on cancellation defendant is required to purchase those vehicles then in use except those listed in the 1945 schedule.

2. Anticipatory Breach.

Defendant contends that plaintiff demanded that defendant either sign the proposed 1948 schedule which it says increased rates higher than required by the agreement, or plaintiff would cancel, and that thereby plaintiff committed an anticipatory breach. Horowitz, defendant's assistant traffic manager, testified that Phillips, plaintiff's vice president, told him that plaintiff would have to increase its rates on mileage and fixed rental or place its equipment where they could get better revenue for it. Phillips denied giving this ultimatum, stating that he was merely endeavoring to negotiate for increases, explaining to Horowitz that costs had gone up and defendant was giving the vehicles but limited operation. Phillips further explained that defendant had not operated for about 3 1/2 months, due to the warehouse strike, that Phillips had gone over the increased expense items with other customers and they, without a...