Searl v. Shell Oil Co.

• Decision Date: 19 April 1933
• Docket Number: 24231.
• Court: Washington Supreme Court
• Parties: SEARL et al. v. SHELL OIL CO.

21 P.2d 249

172 Wash. 621

SEARL et al. v. SHELL OIL CO.

No. 24231.

Supreme Court of Washington

April 19, 1933

Department 2.

Appeal from Superior Court, Cowlitz County; Homer Kirby, Judge.

Action by C. B. Searl and another against the Shell Oil Company wherein the defendant filed a cross-complaint. From a judgment in favor of the defendant dismissing the complaint and awarding recovery on its cross-complaint, the plaintiffs appeal.

Affirmed.

W. H Sibbald, of Kelso (Jean E. Sibbald, of Kelso, on the brief) for appellants.

Hyland Elvidge & Alvord, of Seattle, and Charles H. Paul, of Longview, for respondent.

STEINERT Judge.

The complaint herein seeks recovery upon two causes of action: (1) For an amount representing rebates or loss of profits alleged to have been earned on the purchase of certain quantities of gasoline, and (2) for rentals alleged to be due and owing under a lease of a gasoline station. By its cross-complaint, defendant seeks recovery of a small balance owing for gasoline sold and delivered. Issues having been joined between the parties, the action was tried Before the court, sitting without a jury, and resulted in findings and conclusions favorable to defendant, upon which judgment was entered dismissing the complaint and awarding defendant recovery upon its cross-complaint. Plaintiffs have appealed.

A summary of the facts is as follows: On March 5, 1929, appellants leased to respondent certain land, together with their service station equipment thereon, for a period of five years. The lease contained the following provision with reference to rental: 'Rental: The rental for said premises shall be a sum equivalent to three (3) cents per gallon for each gallon of Shell Gasoline purchased by the Lessor from the Lessee herein, during the term of this agreement; the Lessor to be credited on each month's merchandise statement for the previous month's purchases.'

Coincident with the execution of the lease, respondent, in turn, sublet, by written sublease, the same premises back to appellants for the same period of time. Under the terms of the sublease appellants were to maintain and conduct an automobile supply or service station on the premises and to handle exclusively respondent's petroleum products, including gasoline. The sublease contained the following provision with reference to the sale and delivery of gasoline by respondent to appellants: 'As a further consideration for this covenant and agreement, the sublessor promises and agrees at all times while this agreement shall be and remain in full force and effect to sell and deliver to the sublessee for resale from the demised premises gasoline at a price to sublessee not greater than the tank wagon price for commercial gasoline effective date of sale at Castle Rock, wash., said tank wagon price being no cents per gallon less [than] the sublessor's tank wagon price for commercial gasoline as determined and posted at sublessor's depot at Kelso, Wash., including Wash. State Motor Vehicle Tax.'

Taking the lease and the sublease together as forming the contract between the parties, it will be seen that appellants were to receive as rental for their premises an amount represented by 3 cents per gallon of gasoline purchased by them, and were to pay to the respondent for the gasoline so purchased the tank wagon price posted by the latter at its depot in Kelso, Wash. Abbreviating the contract still further, according to its effect, appellants were to receive the gasoline at 3 cents per gallon less than the tank wagon price posted at Kelso.

Pursuant to the agreement thus entered into, deliveries of gasoline were made to appellants from March 9, 1929, until shortly Before this action was commenced. As each delivery was made by the respondent's truck driver, appellants were given an invoice which showed on its face that it was on the basis of the posted tank wagon price. Receipt of delivery was acknowledged by the appellants by signing the invoice. It is admitted that respondent regularly posted its tank wagon price at its depot in Kelso, in accordance with the 'refined oil price sheets' sent out from headquarters.

Although the lease provided that the payment of rental to appellants by the respondent was to be made by monthly credits on the preceding month's merchandise statement, this was in fact never done. Whether the rental was paid in some other manner, or at all, is the principal fact in dispute. For the period of time up to and including March 9, 1929, appellants were given a credit memorandum in the sum of $30.30 representing 3 cents per gallon on 1,010 gallons. After that date, respondent claims that it made the deduction for rent on each invoice as the gasoline was delivered. These invoices with the memoranda thereon, and the interpretation placed upon them by the parties, furnish the crux of the dispute in this case. The invoices were on the company's printed forms. With one or two exceptions, evidently occasioned by mistake or oversight, they all had stamped upon their faces the words 'posted tank wagon price.' Opposite the stamp mark was written in the number of gallons delivered, and following that, on the same line, the price per gallon with the total amount extended. At this point the difficulty begins. It seems that from March 9, 1929, to about November 1st of the same year, the truck driver, in making up the respective invoices on deliveries of gasoline, would first insert the price per gallon with the extended total, and then immediately draw a line through those figures and place beneath them a reduced price and amount. Sometimes, even, he would reduce the figures several times by the same process, leaving a final computation without the line drawn through it. The total deduction, however, always equalled, or was in excess of, 3 cents per gallon. As a regular rule after November 1, 1929, and at times, even, Before that date, the original entry of price and amount on the invoices was left unchanged, but beneath it appeared the deduction of certain credits indicated variously by the words 'less,' 'less discount allowance,' 'less contract,' and 'less verbal agreement.' These credits, wherever single, were in the sum of 4 cents per gallon; where double or treble, they totaled 6 cents per gallon. It is admitted by both parties that from time to time the respondent voluntarily allowed certain deductions from the posted tank wagon price to meet competition. The appellants contend that the entire deductions on the invoices were of that nature. Respondent contends that the deductions to the extent of 3 cents per gallon were in payment of rent, and that only the excess above 3 cents per gallon was accorded to meet competitive prices. Upon each delivery of gasoline, accompanied by an invoice, made out as above explained, appellants would pay to the truck driver, in cash, the net amount shown on the invoice.

A short time Before the commencement of this action appellants, claiming that they had not received their rent, made demand upon respondent for the accumulated rental based on a total purchase of approximately 80,000 gallons of gasoline, or an amount of $2,400. Appellants also demanded the sum of $390 for expenditures made by them for heat, water, and electric current used by them in operating the station, which, under the original lease to respondent, it agreed to pay. Respondent refused to pay the rent demanded, on the ground that it had already been paid under the method just outlined. It also refused to pay the heat, water, and electricity bills, for the reason that, in the sublease, these were obligations reassumed by the appellants. This suit then followed.

Upon the first cause of action, which is the claim for rebates, or loss of profits, little need be said. In concluding their brief with a reference to the rental feature, counsel for appellants use these words: 'For the purpose of getting a final decision in this count, we offer to waive the claim of lost profits and to take a judgment for the 3¢ a gallon rental, reserving the right to claim lost profits should the case be tried again.'

Since under our conclusion, the cause will not be tried again, the matter of loss of profits appears to be out of the case. Aside from that, however, we think that the appellants are not entitled to a recovery upon this item. Appellants' assignments of error upon this phase of the case go to the exclusion of testimony touching representations claimed to have been made by respondent to appellants that the gasoline would be sold and delivered to appellants at such a price as would enable them to make a profit of 4 cents per gallon. The writings evidencing the contract between the parties are plain, definite, and unambiguous as to price. The testimony offered would have had the effect of modifying the terms of a written contract by parol evidence. It is fundamental that this cannot be done. Fairbanks Steam Shovel Co. v. Holt & Jeffery, 79 Wash. 361, 140 P. 394, L. R. A. 1915B, 477; Kanaskat Lbr. & Shingle Co. v....