Texaco, Inc. v. Goldstein

• Decision Date: 18 June 1962
• Parties: TEXACO, INC., Plaintiff, v. Bernhard GOLDSTEIN, Defendant.
• Court: New York City Municipal Court

Page 51

229 N.Y.S.2d 51

34 Misc.2d 751

TEXACO, INC., Plaintiff, v. Bernhard GOLDSTEIN, Defendant.

Municipal Court of City of New York, Borough of Manhattan,

Fourth District.

June 18, 1962.

Northrop & Jessop, New York City, for plaintiff (by Harry L. Jessop, New York City).

Lehmann & Glenn, New York City, for defendant (by Arnold B. Glenn, New York City).

MAURICE WAHL, Justice.

The plaintiff seeks to recover a judgment against the defendant predicated upon purchases made pursuant to the terms and conditions of a credit card issued by the plaintiff to the defendant on or about June 11, 1959.

The plaintiff is a major oil company engaged in the production and distribution of petroleum and related products throughout the United States. Dealers operating gas stations and engaged in private enterprise, retail the petroleum products of the plaintiff in the operation of their stations and by means of dealer agreements with the plaintiff are authorized to vend products of the plaintiff.

Texaco, Inc., as a device to stimulate sales, issued a credit card enabling the holder to purchase its products at any authorized Texaco station. The practice is that the party to whom the card issues thereafter receives a monthly statement covering all purchases made in prior months.

The credit card issued by the plaintiff is made of plastic and measures 3 3/8th inches by 2 1/3 inches. Plaintiff's name appears conspicuously upon the face of the card and the name of the customer appears embossed on the face of the card in prominent raised letters .

The face of the card also contains a signature block in which the customer is to sign his name. Directly above the customer's signature block, the words 'Issued subject to conditions on reverse side, Texaco, Inc.' are inscribed.

On the reverse side of the card the agreement between the customer and the company is contained and the relevant portion appears as follows:

'This credit card confirms the authorization of credit during the period shown, to the person, corporation or firm whose name is embossed on the reverse side thereof. Such person, corporation or firm assumes full responsibility for all purchases made hereunder by any one through the use of this credit card prior to surrendering it to the company or to giving the company notice in writing that the card has been lost or stolen. Retention of this card or use thereof constitutes acceptance of all the terms and conditions thereof.'

Upon the defendant's application, a card was issued to him by the plaintiff, bearing a certain number with an expiration date of the last day of May, 1961.

Thereafter the defendant was deprived of the card by theft, but failed to report the loss to the plaintiff. A dealer marketing plaintiff's products picked up the card on or about December 23, 1960 at Chicago, Illinois, where it had been tendered by an illicit possessor, for the purpose of purchase of petroleum products. The dealer then notified the plaintiff that the card had been reclaimed, and plaintiff in turn notified the defendant that his card was being used by another in the Chicago area. The plaintiff then confirmed a telephone conversation with the defendant by a letter dated January 23, 1961.

Written communications were received by plaintiff from defendant in connection with the loss of the credit card, but all of said communications were subsequent to the last charge made upon the credit card.

From the date the card was missing to the date of the telephone notification by plaintiff to defendant of its recovery, some $569.98 in charges were made with the said credit card, which charges constitute the subject of this action.

The issues raised here are whether the defendant is liable pursuant to the terms and conditions as set forth on the reverse side of the credit card, for the unauthorized purchases made by another person, prior to notification to the plaintiff by the defendant of the loss of the credit card.

The defendant bases his defense primarily upon the cases: Application of Eimco Corporation, 6 Misc.2d 422, 163 N.Y.S.2d 273, and Union Oil Company of California v. Lull, 220 Or. 412, 349 P.2d 243.

In the case of Eimco Corp., supra, the Court there referred to the holding in Arthur Philip Export Corp. v. Leathertone, Inc., 275 App.Div. 102, 87 N.Y.S.2d 665, which held that a party should not be bound by clauses printed on the reverse side of a document unless it be established that such matter was properly called to its attention and that it assented to the provisions there stated, but in the same case the Court recognized the fact that whether the intent of the parties was to have the matters on the face of the contract include the matters on the reverse side is a question to be decided on the trial.

Further, in the Eimco case the sale and purchase were not pursuant to any formal contracts jointly executed by the parties, but were initiated by written orders on its printed form by Eimco and accepted by Derring on its printed form. The procedure followed is not the same or even similar to the procedure followed in the case at issue. In the case at bar, the defendant submitted an application to plaintiff requesting the issuance to him of a credit card. The application contained none of the terms of the agreement between the parties but amounted to a mere invitation to do business . At this point, neither the plaintiff nor the defendant were bound by any contractual agreement. The contractual agreement followed later when the plaintiff issued its credit card to the defendant to be accepted by him in accordance with the terms and conditions therein set forth, or at his option to be rejected by him. Such rejection need take the form of returning the card, or simply its nonuse. The issuance of the card to the defendant amounted to a mere offer on plaintiff's part, and the contract became entire when defendant retained the card and thereafter made use of it. The card itself then constituted a formal and binding contract. In the Eimco case there was a question of fact as to whether such a formal contract was ever entered into.

The questions raised in the case now at issue were discussed at great length in the case of Union Oil v. Lull (supra, p. 416 of 220 Or., 349 P.2d p. 245). In that case, the words 'The customer * * *...