American Cotton Oil Co. v. Kirk

BUNN, District Judge (after stating the facts as above). There are several questions presented by the record in íhe (tase, but wo have found it necessary to determine but one, and ilmt is whether the contraed as alleged in (lie declaration testified to by the plaintiffs, and found by the jury, is a valid contract for the sale and delivery of 10,000 barrels of oil, or is it invalid for want of mutuality in its provisions? A promise on the part of the defendant io sell and deliver 10,000 barrels, without a corresponding agreement on the part of the plaintiffs to purchase and receive it, would dearly he' void for want of mutuality. Where, in this contraed, as testified! to by the plaintiffs, is there any agreement to order and receive 10,000 barrels? It is clear that the time of ordering, as well as the quantity, is left wholly to the discretion of the plaintiffs. Deliveries are to be made per week, as Kirk & Co. desire. But suppose Kirk & Co. do not desire, and do not order or order in such quantities as would require a hundred years to complete the delivery, — is there any way open to the defendant to put plaintiffs in default? We think not, and that there is no mutuality of promises for the sale of a definite or ascertainable quantity of oil. Suppose the plaintiffs had decided upon ordering six barrels of oil per wee;k, or one barrel for every working day. That would require 32 years for the fulfillment of the contract. And we can discover no way, by the terms of the contract, whereby the defendant could put the plaintiffs in default for failure to order more oil each week, because the amount and times of ordering are left wholly to the plaintiffs. If- the market price of oil should fall below the contract price, then, according to their contention as to the terms of the contract, the plaintiffs could purchase their supply of oil elsewhere, and at the lower price, resorting to the contract when, and only when, the price stated was lower than the market price, — and this without respect to time. Such a contract is one-sided, and without mutuality. If the contract had been that the plaintiffs should order and receive, and the defendant should ship, all the oil which would be required in the plaintiffs’ business for a definite period, not exceeding 10,000 barrels, there would be a mutual obligation. The plaintiffs could not, in such case, order oil from other sources, and could be put at fault for not ordering and receiving all which was reasonably 794 required to run their plant. The case would then come within the principle of National Furnace Co. v. Keystone Manuf'g Co., 110 Ill. 427. In that case the National Furnace Company agreed to sell to the Keystone Company all of certain quality of pig iron, known as Lake Superior Charcoal Iron, which the Keystone Company would need, use, or consume in its business during the coming season from July 9, 1879, to July 1, 1880, such amount supposed by the parties to be about 700 tons. This was held to be a good contract. The court say: “It cannot toe said that the appellee [Keystone Company] was not hound toy the contract. It had no right to purchase iron elsewhere for use in its business. If it had done so, appellant might have maintained an action for breach of the contract.” In the case at bar, there was no agreement on the part of plaintiffs to purchase from defendant all the oil they required in their business. They might order as little as they pleased, and supply the bulk of what they needed from other sources. The contract had the effect merely to bind the plaintiffs to receive and pay for at the stipulated price all the oil which might be shipped upon their order, from time to time, by the defendant, not exceeding 10,000 barrels. Further than that it can have no binding force, for want of mutuality. The case comes fairly within the principles announced in Railway Co. v. Dane, 48 N. Y. 240; Wilkinson v. Heavenrich, 58 Mich. 574, 26 N. W. 139; Sykes v. Dixon, 9 Adol. & E. 693; Railway Co. v. Mitchell, 38 Tex. 85; Stiles v. McClellan, 6 Colo. 89; Cool v. Cuningham, 25 S. C. 136; Davie v. Mining Co., 53 N. W. 625, 93 Mich. 491; Dorsey v. Packwood, 12 How. 126. See, also, 1 Pars. Cont. (Ed. 1893) 448. Judgment is reversed, and the cause remanded to the court below, with directions to award a new trial.