Red-E-Gas Co. v. Meadows
| Decision Date | 10 September 1962 |
| Docket Number | RED-E-GAS,No. 8045,8045 |
| Citation | 360 S.W.2d 236 |
| Parties | COMPANY, a corporation, Plaintiff-Appellant, v. Harold E. MEADOWS, Defendant-Respondent. |
| Court | Missouri Court of Appeals |
James B. Harrison, Sullivan, for plaintiff-appellant.
Paul L. Bell, Steelville, for defendant-respondent.
Red-E-Gas Company (hereinafter referred to as plaintiff), a Missouri corporation with its principal place of business in St. Louis County, Missouri, sued Harold E. Meadows (hereinafter referred to as defendant) of Leasburg, Missouri, on a running account for bottled propane gas and for supplies (such as stands, hoods, bases, regulators, tubing and fittings) needed in initiating bottled gas service and in installing tanks for bulk gas service; and, upon trial, the jury returned a verdict agaisnt defendant for $2,364.73, the principal sum sought in plaintiff's petition. Since defendant did not appeal, the judgment entered on that verdict stands unimpugned and unassailed; and, the scope and purpose of our appellate review being to determine whether 'error was committed by the trial court against the appellant' [Rule 83.13(b), V.A.M.R.; V.A.M.S. Sec. 512.160(2)], we are not concerned as to the propriety of that judgment. Russell Co. v. Spurgeon, Mo.App., 258 S.W. 10, 11. See also Prentice v. Williams, Mo.App., 324 S.W.2d 466, 467(1), and Missouri-Kansas-Texas R. Co. v. Freer, Mo.App., 321 S.W.2d 731, 741.
However, defendant filed a counterclaim in which he alleged (1) a breach by plaintiff of a written contract captioned 'Dealers Agreement' and executed on September 15, 1952, which pertained to the supplying of bottled gas and equipment to defendant for use in serving customers to be solicited by defendant in Leasburg and 'the community adjacent thereto,' and (2) two separate breaches by plaintiff of an oral agreement entered into 'shortly thereafter' (the counterclaim alleged about March 1, 1953) which pertained to the supplying of bulk gas to customers to be solicited by defendant in the same area. The jury returned a verdict for $3,364.73 against plaintiff on the counterclaim, thus fixing defendant's damages at precisely $1,000 more than the sum awarded plaintiff on its petition. Our present review is upon plaintiff's appeal from that judgment.
By the written contract of September 15, 1952, plaintiff (referred to in the contract as Company) granted to defendant (referred to as Dealer) 'the only authorized Red-E-Gas dealership for the domestic application of Red-E-Gas and the use of the Red-E-Gas trademark' in Leasburg and the adjacent community, and plaintiff agreed, among other things, that 'Company will maintain at all times a supply of Red-E-Gas, in cylinders, at its plant and will supply Dealer * * * in Company owned standard I. C. C. cylinders as hereinafter provided with the consumer requirements of all Red-E-Gas for all Dealer's customers obtaining gas service from or through the Dealer.' Among the contractual obligations imposed upon defendant were (a) that 'Dealer will not, directly or indirectly, engage in or be connected or concerned with the business of selling or distributing any liquified petroleum gas other than Red-E-Gas obtained from Company' and (b) that 'Dealer will not permit the use of Red-E-Gas equipment and cylinders for any purpose other than the utilization of Red-E-Gas, and will exercise every precaution to insure that same is done by each and every consumer that Dealer serves.' By its terms, the written contract was to continue in force for one year, unless sooner terminated by defendant upon thirty days' written notice, and thereafter until terminated by either party upon thirty days' written notice.
Defendant entered upon his dealership under the written contract with 10 of plaintiff's cylinders filled with propane. When a cylinder was placed in service on the premises of a customer solicited by defendant, the customer signed a contract (copy of which is not in the record) which in due course was delivered by defendant to plaintiff's office in St. Louis County; and, for each filled cylinder thus placed in service under a customer contract, plaintiff permitted defendant to take another filled cylinder. Of course, defendant paid for the propane but not for the cylinder, which remained the property of plaintiff. The breach of the written contract charged in defendant's counterclaim was that on or about January 11, 1957, plaintiff refused to deliver additional cylinders to defendant unless he purchased the cylinders themselves as well as the propane therein. Upon trial, defendant was unable to fix the date of this alleged breach more definitely than that it was 'probably '56' or between three and four years prior to termination of the written contract in 1960. Plaintiff's evidence indicates that the date probably was in October 1956, when the unpaid balance on defendant's open account had reached $2,364.73 (the principal sum for which this suit subsequently was instituted) and defendant was denied further credit. Whatever the precise date may have been, it appears that defendant's 'cylinder float' (i. e., the number of plaintiff's cylinders in service with defendant's customers) then had risen to 326 cylinders.
Plaintiff's officers did not deny that, at this stage of defendant's dealership, they had refused to deliver additional cylinders to him; but their testimony suggests (and we use that verb advisedly for there is much in the transcript which simply smacks of suggestion) that such refusal to deliver additional cylinders was motivated not only by the state of defendant's open account but also by the compelling consideration that, although defendant's 'cylinder float' continued to increase sharply, the 'turnover' in those cylinders (i. e., the usage of propane supplied by plaintiff as manifested by the refilling of empty cylinders and the exchange of filled cylinders for empty ones) declined steadily during 1955 and 1956. As plaintiff's treasurer put it, 'they (the cylinders) had to be filled somewhere, they were not being filled by us.' Thus, plaintiff concluded that defendant was violating the hereinbefore-quoted contractual obligations imposed upon him. However, until the written contract was terminated in 1960, plaintiff continued to do business with defendant on a cash basis and continued to refill empty cylinders and to exchange filled cylinders for empty ones, so that the full extent of plaintiff's alleged breach of the written contract was its refusal to deliver additional cylinders to defendant which would have resulted in further increase of his then 'cylinder float' of 326 cylinders.
By the oral agreement entered into about March 1, 1953, defendant was to solicit customers in the same area for bulk gas service to be supplied by plaintiff's periodic deliveries of propane from a tank truck into large tanks on the customers' premises. Defendant's solicitation was to include not only prospective customers who already owned suitable tanks but also those to whom plaintiff's tanks might be leased or sold. Under this oral agreement, defendant was to install plaintiff's tanks, was to receive from plaintiff $5 for each 500-gallon tank and $10 for each 100-gallon tank thus leased or sold, and was to be paid by plaintiff one cent per gallon for all propane delivered to bulk gas customers obtained by defendant. These customers were to be billed by, and were to make all payments directly to, plaintiff. In this bulk gas agency or dealership, defendant obtained some 60 to 65 bulk gas customers for plaintiff. Of these, 21 were served initially in tanks leased from plaintiff (again we note that the form of lease agreement is not before us), but 7 of those 21 customers subsequently purchased the tanks so that, at the time of plaintiff's alleged breaches of the oral agreement, only 14 customers were being served in leased tanks.
The first breach of the oral agreement, as alleged in defendant's counterclaim, was that on or about January 28, 1955, plaintiff notified defendant that it would make no more deliveries of bulk gas to customers in the Leasburg area but that, if defendant desired to make such deliveries, plaintiff would supply a tank truck to him without charge. According to defendant, 'I told them (plaintiff's officers) at the time I couldn't make deliveries for that price, one cent a gallon, and I asked them for two cents,' but 'the only thing they would do was to pay the one cent a gallon, that is all.' So, 'it was either me (defendant) not delivering the gas or accept their offer.' Feeling an obligation to service 'my customers,' defendant took plaintiff's truck and made bulk gas deliveries until September 1955, when plaintiff resumed such deliveries.
The second breach of the oral agreement, as charged by defendant, was that on or about June 22, 1956 (the evidence indicates that the date actually was August 1, 1956), plaintiff again refused to deliver bulk gas to customers in the Leasburg area, sold to Hausgas, Inc., the 14 tanks owned by plaintiff but leased to customers in that area, and also gave to Hausgas 'the names and addresses of all the defendant's customers.' The parties agreed that on or about June 22, 1956, plaintiff had offered to sell the 14 leased tanks to defendant for $4,000 but that defendant then had refused to pay that much for them. Plaintiff's evidence was that, when defendant did not accept the $4,000 offer or make a counteroffer within a reasonable time, the tanks were sold to Hausgas on August 1, 1956, for $3,575, so that defendant's subsequent offer of $3,500 was simply another instance of 'too little too late.' Defendant's version was that his $3,500 counteroffer had been made over the telephone later on the same day he had rejected plaintiff's original offer, that plaintiff's president then had said that he would 'think it over' and would 'let you (defendant) know before I do anything about the tanks,' but that defendant had heard...
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