Gulf Refining Co. v. Charlotte Construction Co.

Hoke, J., after stating the case: As the Court understands the facts, there has been no charge made against defendant for the price of oil that was shipped to other parties by mistake of the railroad company and its agents. The defendant bases its counterclaim on the fact there was a failure to deliver the two-ear-loads of oil at the time and place specified; that this failure was in breach of the contract between the parties, and the consequences are properly chargeable to plaintiff, and this by reason of certain clauses in the agreement, as follows: “That plaintiff sold and agreed to deliver to defendant for use in defendant’s plant at Charlotte, N. C., maximum 225,000, minimum 175,000 gallons Solar Gas Oil at 5% cents per gallon, [280] f. o. b. Charlotte, N. 0., by tank car, at tank located at Charlotte, N. C., in. lots of not less than 160 barrels nor more than 320 barrels, unless otherwise agreed upon. . . . “Five days written notice to be given representative of party of first part (plaintiff) at 916 Harrison Building, Philadelphia, Pa., before each delivery is required. . . . “Liability of first party (plaintiff) ceases when shipment is delivered to railroad company.” The position being that the last clause, “Liability of the first party ceases when shipment is delivered to railroad company,” is entirely irreconcilable with the two former clauses, is repugnant to the general purport and intent of the contract, and under the doctrine approved in Jones v. Casually Co., 140 N. C., 262, and other cases of like import, the same should be set aside and not allowed to affect in any way the rights of the contracting parties. But on' the facts in evidence the Court is of opinion that defendant's counterclaim may not be brought within the principle. In Railroad v. Railroad, 147 N. C., 382, the Court, speaking to the controlling rule in the interpretation of contracts, said: “It is well recognized that the object of all rules of interpretation is to arrive at the intention of the parties as expressed in the contract, and that in written contracts which permit of construction this intent is to be gathered from a perusal of the entire instrument. In Paige on Contracts, sec. 1112, we find it stated: ‘Since the object of construction is to ascertain the intent of the parties, the contract must be considered as an entirety. The jiroblem is not what the separate parts mean, but what the contract means when considered as a whole.’ ” And in Davis v. Frazier, 150 N. C., 451, the Court, referring to the principle recognized in Jones v. Casualty Co. and other cases of like kind, said: “It is an undoubted principle that a ‘subsequent clause irreconcilable with a former clause and repugnant to the general purpose and intent of the contract will be set aside.’ This was expressly held in Jones v. Casualty Co., 140 N. C., 262) and there are many decisions with us to like effect; but, as indicated in the case referred to and the authorities cited in its support, this principle is in subordination to [281] another position, that the intent of the parties as embodied in the entire instrument is the end to be attained, and that each and every part of the contract must be given effect, if this can be done by any fair or reasonable interpretation; and it is only after subjecting the instrument to this controlling principle of construction that a subsequent clause may be rejected as repugnant and irreconcilable. Jones v. Casualty Co., supra; Lawson on Contracts, secs. 388, 389; Bishop on Contracts, sees. 386, 387.” The opinion then quotes with approval from Lawson on Contracts as follows: “The third main rule is that that construction will be given which will best effectuate the intention of the parties, to be collected from the whole of the agreement; and, to ascertain the intention, regard-must be had to the nature of the instrument, the condition of the parties executing it, and the objects which they had in view. .' . . Courts will examine the whole of the contract and so construe each part with the others that all of them may, if possible, have some effect, for it is to be presumed that each part was inserted for a purpose and has its office to perform. So, where two clauses are inconsistent they should be construed so as to give effect to the intention of the parties as gathered from the -whole instrument. So every word will, if possible, be made to operate, if by law it may, according to the intention of the parties.” These cases and the principle upon which they rest were again stated with approval in a decision by Mr. Associate Justice Allen in Hendrix v. Furniture Co., 156 N. C., 569. While the rules of interpretation insisted on by defendant’s counsel are correct as general propositions, and the authorities cited in his learned argument are apt to support them in proper cases, they are subordinated to the general principle recognized in the decisions cited, and correctly applying the same to the contract in question, there is no such conflict in the last clause of the agreement as requires or permits that it be rejected as meaningless. But on perusal of the entire instrument, we think it clear that the oil was to be delivered at the tank of defendant company at Charlotte, N. C.; that title did not pass and no charge for the oil could be made till such delivery, but at the [282] price' agreed upon, 5% cents per gallon, tbe party of tbe first part was not willing to stand for delays in shipment on tbe part of tbe railroad company, and in tbat view tbe final clause was inserted, “Liability of party of first part ceases wben shipment is delivered to railroad company.” This construction gives reasonable significance to all parts of the contract, harmonizes tbe different clauses, and is in accord with tbe rules of interpretation which we have approved and hold to be controlling on tbe facts presented. There is no error, and tbe judgment below is affirmed. No error.