Pollard Oil Co. v. Christensen

• Decision Date: 07 May 1982
• Docket Number: No. 13343,13343
• Citation: 645 P.2d 344,103 Idaho 110
• Parties: , 1982-2 Trade Cases P 64,779 POLLARD OIL COMPANY, Plaintiff-Respondent, v. Val CHRISTENSEN and Naomi Christensen, His Wife, Defendants-Appellants.
• Court: Idaho Supreme Court

Page 344

645 P.2d 344

103 Idaho 110, 1982-2 Trade Cases P 64,779

POLLARD OIL COMPANY, Plaintiff-Respondent, v. Val CHRISTENSEN and Naomi Christensen, His Wife, Defendants-Appellants.

No. 13343.

Supreme Court of Idaho.

May 7, 1982.

Brent J. Moss of Smith, Hancock & Moss, Rexburg, for defendants-appellants.

W. Brent Eames, Rexburg, for plaintiff-respondent.

McFADDEN, Justice.

The instant appeal arises from an action filed by Pollard Oil Company against Val and Naomi Christensen for payment of principal and accrued interest allegedly due and owing on two promissory notes executed by the Christensens. In their answer and counterclaim, the Christensens sought damages on two counts of breach of contract and treble damages on two counts of anti-trust violations. The district court entered judgment in favor of Pollard Oil Company, and declined to grant relief to the Christensens on their counterclaim. We affirm.

During the summer of 1971, Dean Pollard, as the agent for Pollard Oil Company, a corporation engaged in buying and selling petroleum products, became interested in establishing a dealership in the Teton Basin area. He was referred to Val Christensen who, along with his wife, owned property adjacent to the main street running through Driggs, Idaho. Pollard visited the Christensens and discussed with them the possibility of locating a service station on their property.

The Christensens accepted Pollard's offer, and on June 23, 1971, the parties entered into a contract. Under this agreement, the Christensens agreed to lease their property to Pollard Oil Company, with the understanding that the Christensens would operate a self-service gasoline station to be constructed on the property. The agreement also was to serve as security for repayment of money loaned by Pollard Oil Company to the Christensens for the construction of the self service station and the purchase of necessary equipment. Contained in paragraph four of this agreement was a promissory note which stated,

"For Value Received, I, we or either os (sic) promise to pay to the order of Pollard Oil, Inc., a corporation of Rexburg, Idaho, the principal sum of Six Thousand (6,000.00) Dollars, current and lawful money of the United States of America, with interest thereon at the rate of 81/2 per cent per annum, calculated upon the unpaid balances from time to time, as payments are made during the year; said payments to cover both principal and interest, and are applicable when paid, to the payment: first, of interest then accrued and unpaid, second, of unpaid principal, so as to satisfy the following scheduled specified principal installments: $400.00 to be paid on or before December 31, 1971, $1,000.00 to be paid on or before December 31, 1972, $1,000.00 to be paid on or before December 31, 1973; $1,000.00 on or before December 31, 1974; $1,000.00 on or before December 31, 1975; $1,000.00 on or before December 31, 1976; and $600.00 on or before August 1, 1977, together with accrued interest thereon."

Following the recital of the promissory note, and immediately preceding the next paragraph is the provision that "(o)ne (c)ent per gallon in addition to purchase price should be paid."

The agreement further provided that Pollard Oil Company would supply gasoline and petroleum products for resale by the Christensens. In this context, the parties stipulated to the following in paragraph five of the agreement:

"It is stipulated that the Parties of the First Part shall pay the principal and accrued interest as set forth above, by purchasing bulk gasoline and other petroleum products from the Party of the Second Part, and the equivalent of one cent per gallon of gasoline purchased shall be applied to said indebtedness in the manner as specified in the note; provided, that truck and trailer bulk deliveries made to the station at Driggs, shall be paid for as a cash transaction, and provided, further, the sale price shall be three cents below the tank wagon rate received at Rexburg, Idaho."

The agreement provided for an accounting to be made on or before the 31st of December of each year to determine "if the one cent per gallon applied to payment of said note" had satisfied the annual principal payment and accrued interest. If a deficit remained on the installment due, provision was made for payment of the deficit.

Thereafter, the parties decided that an extra building was needed. In order to pay for the construction of the building, the Christensens executed another promissory note to Pollard Oil Company in the amount of $2,084.65.

Pollard Oil Company began delivering gasoline and petroleum products to the Christensens in September of 1971. The annual amount of gasoline delivered was as follows: 32,600 gallons in 1971; 157,846 gallons in 1972; 145,700 gallons in 1973; and 16,100 gallons in 1974. Pollard Oil Company's charges for the gasoline delivered averaged only one and one-half cent per gallon below the tank wagon rate. The Christensens paid for the gasoline as it was delivered on a cash basis. Each year the parties had a settlement. Pursuant to the settlement, Pollard Oil Company charged and collected from the Christensens the accrued interest on the two promissory notes. However, the Christensens never made any payments on the principal owing on the notes and Pollard Oil Company never applied the equivalent of one cent per gallon of gasoline purchased to the retirement of the indebtedness. Moreover, the Christensens never paid an additional one cent per gallon on the gasoline they purchased nor did Pollard Oil Company ever request the Christensens to so act.

In 1974, the Christensens discontinued operation of the self service station. Thereafter, Pollard Oil Company filed the instant action seeking the principal of $8,084.65 and accrued interest due and owing on the two promissory notes, costs and reasonable attorney fees. Shortly after the initial complaint was filed, the Christensens offered to pay Pollard Oil Company $10,000.00 in full settlement of all claims. The offer was refused. Subsequently, the Christensens filed an answer and counterclaim. By way of the counterclaim, the Christensens sought damages for breach of contract and treble damages for unlawful monopoly and trade practices.

The district court, sitting as the trier of fact, heard the evidence and thereafter issued a memorandum opinion, containing findings of fact, finding inter alia,

"7. Pollard's bills to Christensen for gasoline were never three cents lower than such tank wagon rate. In fact, they averaged about one and one half cents per gallon below the tank wagon rate.

8. Christensen paid for the gasoline as it was delivered in accord with bills presented to him by Pollard. Those bills averaged about one and one half cents per gallon more than Pollard had agreed to charge, unless he included in the bill a charge to be applied to payment of the notes.

9. Pollard did not credit Christensen with any payment on the notes, but has filed this suit to collect the full amount of the notes. Pollard charged and collected from Christensen each year interest on the full amount of the notes without making any allowance for payments made.

10. The gasoline delivered to Christensen in 1971 was 32,600 gallons; in 1972: 157,846 gallons; in 1973: 145,700 gallons; in 1974: 16,100 gallons. At one and one half cents per gallon Pollard overcharged in 1971, $489.00; in 1972, $2,367.69; in 1973, $2,185.50; in 1974, $241.50. This amounts to a total overcharge of $5,283.69.

11. Under his contract with Christensen Pollard was entitled to charge one cent per gallon over the agreed rate. This amount should have been credited in each year against the principal sums named in the notes. Since Pollard actually overcharged an additional one half cent per gallon Christensen is entitled to have the whole amount credited against the amount of the notes."

Pursuant to these findings, the district court concluded that Pollard Oil Company was entitled to judgment, and entered judgment in the amount of $2,800.00 principal plus interest, $750.00 attorney fees, and one-third of the lawsuit costs. The Christensens' motion to amend the findings was denied, and from entry of judgment, they perfected the instant appeal.

At the outset, the appellants have claimed that the respondent's actions were in contravention of the Idaho Anti-trust Law (I.C. § 48-101 et seq.) and the Idaho Anti-Price Discrimination Act (I.C. § 48-201 et seq.) The district court ruled against the appellants on these claims, and we find no error in this regard. Suffice it to say that the appellants' arguments as to the legal concepts of restraint of trade and price discrimination failed to establish how the actions of the respondent come under condemnation of law. Simply stated, the appellants failed below to prove by a preponderance of the evidence that the agreement between the parties was an illegal tying arrangement or that the agreement substantially lessened competition or tended to create a monopoly in favor of the respondent.

The appellants next contend that the district court erred in not specifically finding that the respondent's failure to sell gasoline to the appellants at three cents below the tank wagon rate received at Rexburg constituted a breach of the agreement between the parties, by which breach the appellants sustained damages recoverable at law.

It is evident from the record that the district court did not make a specific finding of fact on this issue; an issue which was raised by the pleadings. Ordinarily, where the trial court has failed to make findings of fact upon each and all of the material issues raised by the pleadings, the judgment will be reversed and the cause remanded for additional findings. American Mining Co. v. Trask, 28 Idaho 642, 156 P. 1136 (1915). However, this general rule of law is inapplicable when the error is harmless. See Clark v. Gneiting, 95 Idaho 10, 501 P.2d 278 (1972); Nab v....