Continental Oil Co. v. Ideal Truck Lines, Inc.

Swinehart, J.,

dissenting. The majority has missed the important points that were clearly and convincingly shown by the undisputed evidence and exhibits presented at trial.

The alleged contract, marked plaintiff’s Exhibit No. 2, appears both on its face and by testimony presented at trial to be nothing more than a statement by plaintiff to defendant that for the remainder of 1974, commencing June 19, 1974, plaintiff would sell to defendant fuel oil in a quantity not to exceed specified gallons per month. If a lesser amount was purchased by defendant, the balance not purchased would not be available the next month or in subsequent months. The price of the fuel oil on that date was based on a specific, set amount per gallon, and the price would fluctuate during the time period involved as was permitted *160by law. The document also provided that defendant would be billed by plaintiff for the fuel oil delivered and that there would be added thereto any sum of money paid by plaintiff in the nature of taxes for the benefit of defendant.

First, it is clear under any broad or reasonably liberal interpretation that by signing this document, defendant was not obligated to purchase fuel oil from plaintiff. At most, defendant, if he did choose to purchase, would be limited to the gallonages set forth in the document for an unknown price, plus any taxes paid by plaintiff for defendant’s benefit on the purchase.

The record reflects that defendant purchased fuel oil from plaintiff and was originally billed both for the fuel oil and the taxes. These billings were made on plaintiff’s blank invoice forms and continued to be made on the forms for the period of the relationship of seller and purchaser. The record further sustains the fact that defendant faithfully paid to plaintiff the charges as billed on each and every purchase. These individual sales of fuel oil continued over a period of several years. The record further reveals that each year, during this period of time, defendant gave written authorization to plaintiff to pay to the federal government the excise taxes on the fuel oil, which by law was defendant’s obligation to pay.

It was only as the result of plaintiff’s unilateral actions that in its billings to defendant, for whatever reason, it discontinued its practice of itemizing the charges here involved, i.e., (1) the number of gallons of fuel oil delivered, the price per gallon and the total sum thereof, (2) the percentage of excise taxes paid and the gallons delivered and the total sum, and (3) the total amount due which would be the sum of these items.

For a period of approximately six months, June 19, 1974, to January 3, 1975, the above procedure was regularly followed, as the following representation of the invoices discloses:

*161CONOCO Invoice

CONTINENTAL OIL COMPANY

Remit to:

BOX 947

KANSAS CITY, MISSOURI

64141

Sold IDEAL TRUCK LINES Invoice No. 183864

to Invoice date 01-03-75

NORTON KS 67654 24134645 00 Terms NET 30

Stamped on the invoices by the defendant was a breakdown for its accounting purposes, as follows:

Then, without explanation or notice of any kind, commencing July 15, 1975, the subsequent billings showed gallons of fuel delivered and the total price due from defendant to plaintiff for the purchase, as shown by the following representative invoice:

*162CONOCO Invoice

CONTINENTAL OIL COMPANY

Remit to:

BOX 947

KANSAS CITY, MISSOURI

64141

Sold IDEAL TRUCK LINES Invoice No. 091383

To NORTON, KS 67654 Invoice Date 07-15-75

24134645 00 Terms NET 30

Stamped on the invoices by the defendant was the following breakdown for accounting purposes:

The itemization of the federal excise taxes was omitted, and the trial court found by implication that defendant, in good faith, believed that the charge for the excise tax was therefore included in the lump sum billed.

As can be seen from the calculations of defendant on the invoice dated July 15, 1975, and all invoices until May 17, 1978, defendant’s actions remained consistent. Defendant considered the billing by plaintiff as the total amount owed for fuel oil purchased and that as with past billings and their previous understanding, course of dealing and/or contract, that plaintiff had charged and billed for the federal excise tax authorized to be paid by plaintiff for defendant’s benefit. That belief is evidenced by defendant’s calculations in determining the amount of federal tax paid on the purchase of the gallons of fuel oil listed on the invoice.

*163I agree with the trial court that plaintiff’s Exhibit No. 2 did not constitute a contract. Assuming arguendo that the document did constitute a contract between the parties, I think the evidence fails to show a breach of said contract by defendant. Defendant purchased fuel oil and, upon plaintiff’s invoice billings for these purchases, paid in full the amounts billed by plaintiff. Since defendant did not breach the contract, plaintiff does not have a cause of action.

Further, the mistake of plaintiff in failing to bill defendant for the excise tax as provided in Exhibit No. 2 was the sole mistake of plaintiff, and the evidence failed to establish that the failure on the part of plaintiff to charge, bill and collect from defendant said sum was not caused by the fraud of defendant, but by a mistake, error, oversight and negligence of plaintiff’s agents and employees. Still further, the evidence failed to substantiate that defendant knew or should reasonably have known from the past relationship of the parties that he owed more than he was billed.

It should also be noted that the rule of law as stated by the majority that “[a] person is presumed to have seen what he could have seen had he looked” (Horton v. Atchison, T. & S. F. Rly. Co., 161 Kan. 403, Syl. ¶ 8), certainly is not questioned as it is used in the cited case under the facts there existing (negligence and contributory negligence considered in a railroad crossing accident). I fail to see any application of this rule of law to the facts of this case, which is primarily based upon contract.

Since the aforementioned rule is inapplicable in this contract case, and since the trial court found that the mistake that occurred was the mistake of plaintiff in failing to bill defendant, either separately or jointly, for the excise tax, and did not find that defendant should have known that he was not being billed for the four cents per gallon excise tax, I feel that the only mistake that occurred in this case was the mistake of plaintiff. Therefore, it was a unilateral mistake and not a mutual mistake as found by the majority, and the law governing such a problem is controlled by the following principles.

The law in Kansas is clear and well-established that a unilateral mistake by one of the parties to a contract prohibits the use of equity by the courts to adjust the loss suffered by one’s unilateral mistake.

*164“In the absence of fraud, a unilateral mistake is insufficient to relieve the mistaken party from the terms of the agreement except where (a) hardship amounting to injustice would be inflicted by holding the mistaken party to the agreement and where it would be harsh and unreasonable to enforce it; and (b) the mistake was known to the other party to the contract.” Squires v. Woodbury, 5 Kan. App. 2d 596, Syl. ¶ 4,621 P.2d 443 (1980), rev. denied 229 Kan. 671 (1981).

When one views the nature of the claimed amount by plaintiff in the context of its total operation, I fail to find a hardship amounting to an injustice, and I do not find it harsh and unreasonable in any way to require plaintiff to accept the consequences of its unilateral mistake.

I would affirm.