Union Oil Co. of Cal. v. Lull

Citation220 Or. 412,349 P.2d 243
PartiesUNION OIL COMPANY OF CALIFORNIA, a corporation, Appellant, v. Lawrence M. LULL, Respondent
Decision Date03 February 1960
CourtSupreme Court of Oregon

David R. Williams, Portland, argued the cause for appellant. With him on the brief were Williams & Alley, Portland.

William L. Jackson, Baker, argued the cause for respondent. With him on the brief were Jackson & Johnson, Baker.

Before McALLISTER, C. J., and PERRY, SLOAN, O'CONNELL, REDDING and KING, JJ.

O'CONNELL, Justice.

This is an action to recover the value of gasoline and certain automobile accessories, including tires, sold by plaintiff's retail outlets and by associated corporations with whom plaintiff had made arrangements for the use of its credit cards. The purchases were made through the unauthorized use of a credit card issued by plaintiff to defendant. This action is brought on the theory that defendant is liable for such purchases under the terms of a contract which were printed on the credit card issued to the defendant.

The case was submitted to the jury which returned a verdict for the defendant. Plaintiff appeals from the judgment entered in conformity with the verdict.

The credit card which is relied upon by plaintiff as the basis for defendant's liability contained the following conditions, which were printed on the back of the card:

'Form 786A

Conditions

'This card entitles customer to purchase on credit petroleum products, up to five new Firestone or United States tires (passenger size), and other merchandise and services as authorized by Union Oil Company of California at company stations and authorized dealers in California, Oregon, Washington, Idaho, Nevada, Arizona, Utah, Montana, Wyoming, Alaska and Hawaiian Islands, also to purchase petroleum products, up to five new tires (passenger size), battery, lubrication and battery service and tire repairs at stations and dealers of the companies named below:

'Gulf Oil Corporation and Gulf Refining Co. [Trademark Insignia] Eastern, Midwest, Central & Southern States

'Continental Oil Company [Trademark Insignia] Midwest, Central & Southern States

'The British American Oil Company [Trademark Insignia] Canada

'Royalite Oil Co., Ltd. [Trademark Insignia] Western Canada

'Deliveries of oil and gasoline shall not exceed the fuel tank and crankcase capacity of the vehicle served. Tires must be mounted on and battery attached to vehicle at time of sale. Deliveries may be made to any vehicle including airplanes (limited to petroleum products only) and pleasure boats.

'The customer to whom this card is issued guarantees payment within 10 days of receipt of statement, of price of products delivered or services rendered to anyone presenting this card, guarantee to continue until card is surrendered or written notice is received by the company that it is lost or stolen. Credit extended hereunder shall be at the option of the dealer involved. Deliveries may be refused or privilege cancelled at any time without previous notice, and customer agrees upon demand to surrender this card.

'Union Oil Company of California'

The card is used in the following manner. The customer, upon making a purchase, presents the card to the dealer who makes an invoice described as a credit card delivery ticket. In preparing the delivery ticket most filling stations use an imprinter which transfers from the credit card to the delivery ticket the credit card number, the name and address of the card owner, and the expiration date. The imprinter also prints on the ticket the name and address of the dealer making the sale and the date of the sale. The nature of the goods or services sold, the price and the car license number including the name of the licensing state, are added to the ticket in handwriting. The customer signs his name to the ticket after it has been prepared as described above. One copy of the ticket is given to the customer and one copy is sent by the dealer to the plaintiff's credit card accounting center. There the tickets are key punched and processed through a machine which sorts them by account number from which data the cardholder is billed and the dealer credited each month. More than two million credit tickets are processed by plaintiff each month. Through an exchange agreement with other oil companies plaintiff's cards are honored outside of its marketing area.

The credit card in question bearing the number 593-53-722 had an expiration date of June 30, 1958. The unauthorized purchases were made between April 26, 1958 and May 26, 1958 by a person who was driving a car bearing an Idaho license plate. The car had been stolen. Fifty-five separate unauthorized purchases totalling $1,454.25 were made during this period through the use of defendant's card. The card was used along the course of the wrongdoer's route extending from Oregon through the southwestern states, thence up through the midwest to Chicago, Illinois. Defendant had made a purchase of gasoline with the same card in Halfway, Oregon on April 24, 1958. He made purchases of Union Oil Company's products in May, 1958 through the use of another credit card issued to him by the plaintiff. This latter card, which bore the expiration date September 30, 1958, was intended as a renewal of the card previously issued, although under the rules adopted by the plaintiff company the use of both cards by defendant would have been proper until the expiration date of the earlier card.

Defendant was not aware of the fact that unauthorized purchases had been made through the use of his card until May 26, 1958, when he received the bill for these purchases together with copies of the credit tickets evidencing the sales. Defendant immediately instructed the plaintiff by telegram to cancel credit card No. 593-53-722.

Defendant testified that he did not know that card No. 593-53-722 was lost or stolen until he received the billing on May 26, 1958. The renewal card replacing card No. 593-53-722 was not mailed by plaintiff company until May 2nd. If defendant had had need for a credit card between the date his earlier card disappeared and the date he received the renewal card, it is probable that he would have noticed that his card was missing. He testified, however, that he had no need for gas during that period. There was some evidence that defendant may have known as early as the first week in May that the card in question was missing.

Defendant argues that he is not subjected to liability by the provisions appearing on the back of the card, relying upon the cases which hold that a person is not bound by the terms of a written agreement if he has no knowledge of such terms and if, because of the manner in which they are embodied in the instrument, a reasonable person would not be led to suspect that the terms were a part of the contract. May Hosiery Mills v. G. C. Hall & Son, 1926, 77 Cal.App. 291, 246 P. 332; Allen v. Southern Pac. Co., 1950, 117 Utah 171, 213 P.2d 667. See also: Capitol Automatic Music Co., Inc. v. Jones, Mun.Ct.1952, 114 N.Y.S.2d 185; Hamilton v. Baggage & Omnibus Transfer Co., 1920, 97 Or. 620, 192 P. 1058; Cutler Corp. v. Latshaw, 1953, 374 Pa. 1, 97 A.2d 234; Lefebvre v. Autoist Mut. Ins. Co., 1931, 205 Wis. 115, 236 N.W. 684; Wussow v. Badger State Bank, 1931, 204 Wis. 467, 472, 234 N.W. 720, 236 N.W. 687. In this connection it is pointed out that when the plaintiff invited defendant to make application for a credit card the application form contained no reference to the cardholder's liability for the unauthorized use of the card by another person. Further, it is shown that the conditions limiting the use of the card (which have been set out above) are printed in very small print on the back of a card which is approximately 1 3/4 by 3 1/4 inches in size. Had the issue been properly raised, the foregoing circumstances, together with proof that defendant was not aware of the conditions, would have presented a jury question as to whether the printed conditions constituted a part of the contract. Application of Eimco Corporation, 1957, 6 Misc.2d 422, 163 N.Y.S.2d 273; Arthur Philip Export Corp. v. Leathertone, Inc., 1949, 275 App.Div. 102, 87 N.Y.S.2d 665; Kinsman v. Kershaw, 1875, 119 Mass. 140. But the issue was not raised in the pleadings and defendant's evidence did not establish that he was not aware of the conditions printed on the card. Note 63 Harv.L.Rev. 494; 3 Corbin on Contracts 422, § 607. See also Hanes v. Mitchell, 1951, 78 N.D. 341, 49 N.W.2d 606. In the absence of proof that the terms of the contract were put in deceptive form which would mislead a reasonable person, and that defendant was so misled, he is bound by the conditions of the contract whether or not he read them. 1 Restatement, Contracts, § 70; 1 Williston on Contracts (3d ed.) § 90A.

It is contended by defendant that if plaintiff intended to hold defendant liable for purchases made by unauthorized persons, the fact should have been brought forcibly to defendant's attention. Plaintiff had no such duty. If we assume, as we must in the absence of evidence to the contrary, that defendant read the contract into which he entered, he is bound by its terms. The sole question is whether the contract is to be interpreted to impose liability upon defendant under the circumstances presented in this case.

The contract clearly states that the customer guarantees payment for products delivered or services rendered 'to anyone presenting this card' and that this guaranty is to continue 'until card is surrendered or written notice is received by the company that it is lost or stolen.' Defendant would have us recast the terms of the contract by limiting the cardholder's liability to cases in which he had authorized the use of the card or where, through his fault, the card was used by one not authorized to do so. There is nothing in the transaction between the plaintiff and defendant which would justify this...

To continue reading

Request your trial
14 cases
  • Kane v. Standard Oil Co. of Ky., 40338
    • United States
    • Georgia Court of Appeals
    • 1 Noviembre 1963
    ...or judicial decision in Georgia. The foreign authorities are not unquestionably persuasive or harmonious. See Union Oil Co. v. Lull, 220 Or. 412, 349 P.2d 243; Gulf Refining Co. v. Williams, 208 Ark. 362, 186 S.W.2d 790, 158 A.L.R. 754; Magnolia Petroleum Co. v. McMillan, Tex.Civ.App., 168 ......
  • Goldstein v. Rhode Island Hospital Trust Nat. Bank
    • United States
    • Rhode Island Supreme Court
    • 26 Septiembre 1972
    ...company. Texaco, Inc. v. Goldstein, 34 Misc.2d 751, 229 N.Y.S.2d 51, aff'd, 39 Misc.2d 552, 241 N.Y.S.2d 495 (1963); Union Oil Co. v. Lull, 220 Or. 412, 349 P.2d 243 (1960); Magnolia Petroleum Co. v. McMillan, 168 S.W.2d 881 Although we do not quarrel with the law as cited by the trial just......
  • Duke v. Sears, Roebuck & Co., 354
    • United States
    • Texas Court of Appeals
    • 17 Octubre 1968
    ...1167 (1911). A similar contention to so construe the conditions attached to a credit card was rejected in Union Oil Company of California v. Lull, 220 Or. 412, 349 P.2d 243 (1960), where the court '* * * Defendant would have us recast the terms of the contract by limiting the cardholder's l......
  • Lechmere Tire & Sales Co. v. Burwick
    • United States
    • United States State Supreme Judicial Court of Massachusetts Supreme Court
    • 4 Enero 1972
    ...790 (card marked, 'Good for Truck Only,' negligently disregarded by sales of items for a passenger automobile). Union Oil Co. of Cal. v. Lull, 220 Or. 412, 430--437, 349 P.2d 243 (imposing the burden of proving that reasonable inquiry as to identity has been made on the person extending cre......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT