Quinlivan v. Brown Oil Co., 7181.

• Docket Nº: No. 7181.
• Citation: 96 Mont. 147
• Case Date: January 25, 1934
• Court: United States State Supreme Court of Montana

96 Mont. 147

QUINLIVAN
v.
BROWN OIL CO. et al.

No. 7181.

Supreme Court of Montana.

Jan. 25, 1934.

Appeal from District Court, Yellowstone County; Robert C. Stong, Judge.

Action by John R. Quinlivan against Brown Oil Company and another. From an adverse judgment, plaintiff appeals.

Affirmed.

W. L. Smith, of Billings, for appellant.

Wood & Cooke, of Billings, for respondents.

STEWART, Justice.

The defendant, Brown Oil Company, a corporation, was engaged in the business of wholesale and retail handling and selling of gasoline and lubricating oils at Billings, Mont., where, as owner or lessee, it controlled a number of service stations. The defendant C. H. Brown, as president and manager, had direct charge of the business.

In the spring of 1931, the above-named company leased one of its service stations in Billings to Harold Sayer. The lease provided that the lessor Brown Oil Company should sell the gasoline that passed through the station to the lessee Sayer at a price equal to 1 cent per gallon less than the normal tank wagon price in effect at Billings at the time of delivery. It also contained the following provision: “It is further understood and agreed by the second party [Sayer] that he will maintain the established price for gasoline of the Brown Oil Company at their other service stations in Billings, Mont., and that any attempt to evade this clause shall be just cause for cancelling this agreement and that the first party does reserve the right to cancel this agreement by giving the second party 10 days written notice of their intention of doing so.”

Soon after entering into this lease, Sayer entered into a contract with one C. H. Cooke and John R. Quinlivan, doing business under the name of C. & Q. Business Builders. In this contract, C. & Q. Business Builders agreed to sell, and Sayer agreed to redeem, coupon books containing coupons which, upon the making of certain purchases at Sayers' service station, would entitle the purchaser to one gallon of gasoline and/or a lubricating job free, depending upon the type and amount of the purchase made. It was agreed that Sayer would redeem not to exceed 500 of these coupon books.

Upon learning of this agreement, defendants protested to Sayer that such practice tended to reduce the regular retail price of gasoline, and consequently violated that provision of his lease which bound him to maintain “the established price for gasoline of the Brown Oil Company at their other service stations in Billings.” Sayer then notified C. & Q. Business Builders of the situation and of the objections interposed by defendants, and directed them not to sell any more of the coupon books. He also had a notice published in the local newspaper, stating that he would no longer redeem the coupons. At that time C. & Q. Business Builders had sold 170 of the coupon books, but thereafter were unable to sell any more of them.

Upon this state of facts, plaintiff, as assignee of C. & Q. Business Builders, brought this action against Brown Oil Company and C. H. Brown personally for their alleged interference with the contractual relations between plaintiff's assignor and Sayer. The cause was tried to the court with a jury, and, at the close of the evidence for both sides, the court granted the defendants' motion for a directed verdict. Plaintiff has appealed from the judgment.

Though plaintiff asserts seven specifications of error, it will not be necessary to discuss all of them. All the questions raised can be disposed of upon a determination of whether or not the court erred in sustaining defendants' motion for a directed verdict.

As we view the case, the principal legal point involved in deciding the above question is whether the defendants were legally justified in inducing Sayer to breach his contract with C. & Q. Business Builders. Before passing to a treatment of this subject, however,it will be necessary to dispose of three other questions raised by plaintiff in his specifications of error, viz.: (1) Did defendants' failure to affirmatively plead justification deprive them of the right to assert such a defense at the trial? (2) Was the lease between defendants and Sayer void as in violation of section 10901...