Texas Co. v. Pensacola Maritime Corporation

• Decision Date: 11 July 1923
• Docket Number: 4001.
• Citation: 292 F. 61
• Parties: TEXAS CO. v. PENSACOLA MARITIME CORPORATION.
• Court: U.S. Court of Appeals — Fifth Circuit

292 F. 61

TEXAS CO. v. PENSACOLA MARITIME CORPORATION.

No. 4001.

United States Court of Appeals, Fifth Circuit.

July 11, 1923

Harry T. Klein, of New York City, E. C. Maxwell, of Pensacola Fla., and Palmer Pillans, of Mobile, Ala., for plaintiff in error.

Francis B. Carter, of Pensacola, Fla. (Carter & Yonge, of Pensacola Fla., on the brief), for defendant in error.

Before WALKER, BRYAN, and KING, Circuit Judges.

KING Circuit Judge.

This is the second appearance of this case in this court. The opinion on the former hearing is reported in 279 F. 19. Briefly stated, the case is as follows:

On July 22, 1919, the Texas Company entered into a written contract with the Pensacola Maritime Corporation, by which it agreed to sell to said corporation from August 1, 1919, to September 30, 1920, and said corporation agreed to buy from it, all the bunker oil sold by said corporation for delivery to vessels in the port of Pensacola. The seller was not obligated to deliver more than 20,000 barrels in any calendar month except that the purchaser, by giving to the seller 10 days' written notice, might require a total delivery of 35,000 barrels per month, or by giving 30 days' written notice, might require the seller to furnish 50,000 barrels per month. On May 3, 1920, the Texas Company notified said corporation that it canceled said contract, and it refused to thereafter furnish to said corporation any more oil. Said corporation notified the Texas Company on May 4, 1920, that it would take the additional 30,000 barrels of oil, to wit, 35,000 barrels 10 days from the date of said notice, and 50,000 barrels 30 days from such date. This suit was brought to recover damages for the alleged breach of said contract, averring that said corporation would have sold all of the oil required to be furnished by said contract at a greatly increased price to that at which the Texas Company had agreed to furnish the same.

The Texas Company defended on the grounds: (1) That the contract was unilateral, and not binding; (2) that the oil business of the plaintiff was a new business; that no sales were made under said contract for 7 months after July, 1919, and therefore no basis existed for the recovery of prospective profits; (3) that the contract required payment to be made promptly on completion of each delivery of oil, and allowed a cancellation for failure to pay any amount when due, and provided that no forbearance, or course of dealing, should affect this right of the defendant; that prior to May 3d, when it gave said notice of cancellation, plaintiff had failed to pay, when due, an amount owed for oil previously ordered and delivered. To this last plea the plaintiff interposed two replications; one denying its truth, and the other alleging that before any notice of cancellation was given plaintiff had paid for all oil delivered, that defendant had never given any notice of insistence on payment at the time provided in said contract, or that it would terminate the contract as to future deliveries for failure to make payment promptly when due. No proof of the truth of said plea was offered under the replication denying the same, and on the trial it was stipulated that the facts stated in the second replication were true.

The decision rendered in this court on the former writ of error held that the contract was not unilateral, and was a binding agreement; that the plaintiff might recover for profits lost on sales of oil for delivery to ships at Pensacola, actually made, or on those which it proved it could have made, which profits were lost by reason of the breach of said contract by the defendant; and that the second replication to the plea of a failure to make prompt payment was sufficient. The case was reversed because of a failure of proof to show any loss of profits, and for error in the trial court in holding the proof then adduced sufficient, and that it showed a definite amount of lost profits. The plaintiff in error seeks to reopen the decision then made, upholding the validity of such contract and the sufficiency of said replication.

For a further statement of the facts, reference may be had to the former opinion in this case.

1. While this court may have the power, under special circumstances, to re-examine questions decided on a previous hearing of the same case (Messinger v. Anderson, 225 U.S. 436, 444, 32 Sup.Ct. 739, 56 L.Ed. 1152), as a general rule the decision on a first appeal, or writ of error, is thereafter the law of the case (Richardson v. Ainsa, 218 U.S. 289, 295, 31 Sup.Ct. 23, 54 L.Ed. 1044). We do not think that the rulings made on the former hearing should now be disturbed.

It may be added that, as to the cancellation of the contract for alleged failure to promptly pay for oil furnished during April, 1920, the former opinion called attention to the fact that two replications were filed to the plea alleging a failure to make prompt payment for oil furnished, one of which denied the truth of the plea, and that no proof in support of such plea was offered; the truth of the second replication being admitted. This is still the condition of the proof on the present record. Furthermore, the testimony in this record shows that on the day the notice of cancellation was delivered the Munsomo had been placed about 10 o'clock a.m. at the Texas Company's dock to receive oil; that the agent of said company promised to deliver the oil to said vessel, it being stated that the Texas Company's pump had broken down and would be started about 2 o'clock. At that hour the pump was reported to plaintiff by defendant's agent as still being broken, but that the Texas Company would start pumping oil into the Munsomo at 4 o'clock. At that hour it was stated the pumping would begin in a few minutes. Not until 5 p.m. was the letter attempting cancellation delivered. There is no suggestion that any sum during this entire period was due from, or unpaid by, plaintiff, or that any complaint had been made that the payments for oil previously furnished had not been satisfactorily made. Texas Co. v. Pensacola Maritime Corporation (C.C.A.) 279 F. 19.

2. At the request of plaintiff the court charged the jury as follows:

'The plaintiff is only required to prove its case, including its damages, by a preponderance of the evidence. The jury is not authorized to base its verdict on mere speculation or possibilities, but absolute certainties are not required; (that is, you are not required to be absolutely certain that plaintiff would have sold any particular quantity, or the whole amount, but if you can reasonably deduce, from the circumstances at the time and the condition of the market and the price of the oil that the Maritime Corporation could have delivered at, and it is a reasonable deduction and a strong probability that the Maritime Corporation could have sold it, then it would not require absolute certainty that it would sell it to make a case for the jury). If the evidence in the case is sufficient to convince the jury that plaintiff could have, during the unexpired period of the contract, sold the quantities of oil which it had a right to demand under the terms of the contract, or some definite portion thereof, and for the purposes stated in the contract, and the jury are convinced by the evidence that such sales could have been made at definite prices, then the plaintiff will be entitled to recover the profits, if any, it would have made from such sales.'

The portion of said charge in parenthesis was interpolated by the court. Under the above charge the jury was instructed that, if it could reasonably deduce from the circumstances at the time, and the condition of the market, and the price at which the Maritime Corporation could have delivered oil, and if it was a reasonable deduction and a strong probability that the Maritime Corporation could have sold it, then it would not require absolute certainty in order to make out the plaintiff's case.

Under this instruction the jury was permitted to find from the evidence of the general condition of the bunker oil business at Pensacola, and of the market prices shown then to exist, which were greatly in excess of the price of oil at which the Texas Company had agreed to deliver to the Pensacola Maritime Corporation, and from the genera statements of parties that they would have taken this oil from plaintiff, that the plaintiff could have sold the entire quantity of oil which it could demand from defendant on said contract. While there were other charges delivered by the court to the jury, which, if standing alone, might have confined the use of this testimony within proper limits, they were necessarily inconsistent with the above charge, and under the facts of this case the above charge was error, harmful to the defendant.

We think that the testimony in this case as to the demand for bunker oil at Pensacola on May 3d, and thereafter was admissible only for the purpose of showing the condition of the market for such oil and the likelihood that plaintiff's business during the remainder of the term of its contract would not have been less in amount than what it had previously reached. Except for this purpose, such testimony was not admissible. It was not evidence from which the jury could properly conclude that, if the plaintiff had had the oil in question, it could or would have sold it. This could only be properly deduced from evidence of the volume of plaintiff's business, existing at the time of the breach of the contract, or from proof of contracts in existence at the time of such breach, or offered to plaintiff subsequent thereto, and declined because of its inability to procure oil.

Giving to the testimony full weight for all admissible purposes, it does not show that the...