#### ATLANTIC GULF OIL CORPORATION v. THE UNITED STATES

[No. B-150]

*On the Proofs*

*Contract; crude mid fuel oil; dmnjmition of source of supply; potential; force majeure clause; breach; damages.-*— The plaintiff entered into a contract with the Shipping Board to supply it with designated quantities of crude and fuel oil during the year 1921 from its Mexican wells, subject to diminution of the source of supply and to prevention of performance for any cause “ not within the control of the party whose performance is interfered with and which by the exercise of reasonable diligence it is unable to prevent.” The Shipping Board’s requirements having .greatly decreased due to a slump in shipping it refused to take the full contract quotas. Due to this refusal the plaintiff limited the flow of its wells, not, however, without accumulating a surplus which it was compelled otherwise to dispose of. In lieu of fuel oil from the contract source, plaintiff’s refining capacity being inadequate, the Shipping Board agreed to take such oil from other sources, plaintiff purchasing it for the Shipping Board. The Shipping Board took delivery of a portion only of the fuel oil so purchased. *Held,*that (1) there being no evidence that it could not in fact have taken more oil than it did, the Shipping Board was not, under the exceptions or force majeure clause, excused from performance because of decrease in business but was obligated to take the entire actual production, or oil purchased in lieu thereof, within the designated quantities; that (2) though there might be an obligation to take “ potential,” i. e., some or all of the oil left in the ground,'the uncertainty of quantity precluded a money judgment thereon.

*The Reporter's*statement of the case:

*Mr. Philip L. Miller*for the plaintiff. *Mr. William B. King*and *Sullivan <& Oronvwell*were on the briefs.

*Mr. J. Frank Staley,*with whom was *Mr. Assistant Attorney General Herman J.*Galloway, for the defendant. *Mr. W. Olifton Stone*was on the briefs.

Decided June 6, 1927.

Motion for new trial overruled February 20, 1928.

*163The court made special findings of fact, as follows:

I. The plaintiff is a corporation duly organized and existing under the laws of the State of Virginia, and was at the times hereinafter mentioned engaged in the business of producing and selling petroleum and its products.

II. On or about August 10, 1920, the plaintiff submitted to the United States Shipping Board a proposal for furnishing during the year 1921, 6,000,000 barrels of fuel oil- and 9,000,000 barrels of crude petroleum.

The said proposal was accepted by the Shipping Board August 19, 1920, and as of that date a formal contract, ,in writing, was entered into between the Atlantic Gulf Oil Corporation,'plaintiff herein, by its treasurer, A. R. Nicol, and the United States Shipping Board, herein referred to as the Shipping Board, representing the United States, by the chairman of sa,id board, W. S. Benson. The said contract was signed by the parties thereto on or about January 12, 1921. Copies of the aforesaid proposal, acceptance, and contract are attached to the petition as Exhibits I, II, and III, respectively, which are made a part of this finding by reference thereto.

The contract provided, among other things, for the sale to the Shipping Board of 6,000,000 barrels of fuel oil and 9,000,000 barrels of crude petroleum, according to certain specifications, delivery to be made and taken on board the Shipping Board’s vessels at Tecomate, Mexico, at the rate of 500,000 barrels of fuel oil and 750,000 barrels of crude petroleum per month during the year 1921, monthly delivery subject to a more-or-less margin of 10 per cent, buyer’s option, the margin conditional upon plaintiff’s ability to deliver. The price named was $1.25 per barrel, plaintiff to pay all taxes. It was agreed therein that the fulfillment of the terms and proyisions of the contract by the plaintiff was subject to prior commitments to five other companies which were named, and to “ diminution in and/or failure of the seller’s source of supply of crude petroleum.”

*164III. The amounts of crude and fuel oil delivered to and paid for by the Shipping Board under the contract in suit were as follows:

Month of delivery Crude petroleum Fuel oil Month of delivery Crude petroleum Fuel oil

*Barrels Barrels Barrels Barrels*

January.. 621,076.69 55,373.92 August_ 193,891.34 3,046.30

February. 763,633.90 September.. 70,459.54

March__. 1,239,746.88 October_ 65,022.59

April_ 820,296.60 November.. 135,754.62 66,741.92

May. 368,294.48 December-630,155.61 308,976.42

June. 477,082.97

July_ 354,297.17 12,930.09 Total.. 5,659,252.85 517,528.19

For the months of August, September, October, November, and December, 1921, the said deliveries amounted to 1,024,-824.16 barrels of crude petroleum and 449,224.18 barrels of fuel oil.

Of the above deliveries 200,958.86 barrels of fuel oil were accepted by the Shipping Board at terminals other than Tecomate, and as follows:

Port of delivery Date of delivery Barrels

Guayavallio (Atlántica).. July, 1921. 6,853.68

Palo Blanco.. September, 1921.. 67,108.86

Tampico___ November, 1921.. 39,676.17

Palo Blanco. _do.. 24,565.69

Tampico. December, 1921_. 62,754.46

200,958.86 Total.

By arrangement between the plaintiff and the Shipping Board crude petroleum deliverable under a contract between said parties entered into prior to the contract in suit, and not yet delivered at the close of the year 1920, was to be applied as deliveries under the contract in suit, so that all deliveries made during the year 1921 were treated by said parties as deliveries on the contract in suit.

IV. The prior obligations of the plaintiff to other companies for the year 1921, to which fulfillment of the terms and provisions of the contract in suit was therein made subject, were as follows:

*165Contracted to deliver Actually delivered

*Barrels Barrels*

To Beacon Oil Co..-3,600,000 2,405,659.78

To Sun Co.. 400,000 438,452.52

To Agwi Petroleum Corporation-1 1,200,000 178,227.42

Total-5,200,000 3,022,339.72

i Estimated.

V. The plaintiff had sufficient storage, pipe-line, and* loading capacity to enable it to make the deliveries required by the contract in suit.

VI. The plaintiff did not have refining capacity sufficient to enable it to deliver to the Shipping Board 500,000 barrels of fuel oil each month.

The fuel oil deliverable under the contract in suit was produced from crude petroleum by the use of a refinery, which consisted of stills.

For the purpose of producing fuel oil the plaintiff constructed a refining unit (or topping plant) at Tecomate, consisting of four stills, and this unit was ready for operation on or about April 15, 1921. Its capacity was 300,000 barrels of fuel oil per month and from 6 barrels of crude petroleum it distilled therefrom approximately 5 barrels of fuel oil. The first of the said stills was put into operation about April II, the second April 28, the third May 5, and the fourth June 2, 1921.

In order to produce the full quantity of fuel oil deliverable under the contract with the Shipping Board it would have been necessary for plaintiff to have constructed a second refining unit. Had the Shipping Board required the contract deliveries of fuel oil, plaintiff would have constructed the said second unit, and was ready, willing, and able to do so, and could have completed it ready for operation on or about July 15, 1921. Plans were made for its construction, and some materials therefor were' assembled, but it was not constructed.

On May 18,1921, the Shipping Board notified the plaintiff that it would not take any more fuel oil. Thereafter the Shipping Board did take and pay for the quantities of fuel oil stated in Finding III.

*166VII. The plaintiff’s sources of crude petroleum diminished during the year 1921, and after August they became insufficient to supply the full monthly contract quotas for 750,000 barrels of crude petroleum and 500,000 barrels of fuel oil to the Shipping Board after delivering the oil called for under its prior commitments.

In the months of May, June, July, and August, 1921, the plaintiff did not pump from its wells their maximum capacity, owing to the failure of the Shipping Board to call for the full1 monthly quotas named in the contract. If the Shipping Board had called for more oil than it did, the plaintiff could and would have pumped from its said wells sufficient oil to have satisfied a part or all of the contract quotas. The difference between the maximum capacity of the said wells and the amount produced therefrom, which the plaintiff terms their “ potential,” is not capable of exact determination.

Underlying the oil field from which the plaintiff produced the oil deliverable under the contract in suit was a layer of salt water which intruded itself into the oil and when mingled therewith rendered the oil unsalable. Upon the appearance of salt water it was the practice, followed in the instant case, wholly to suppress the salt water by means of a process called “stripping” — that is, diminishing the aperture or mouth of the well — and this also lessened its flow. It does not satisfactorily appear to what extent, if any, the process of “ stripping ” interfered with plaintiff’s ability to produce the quantity of crude petroleum necessary to fill its contract obligations.

VIII. In arranging for deliveries of oil under the contract in suit, a representative of the plaintiff conferred with the manager of the tank steamer department of the Shipping Board in New York City before the end of each month, and the two worked out a schedule for the succeeding month containing the name of the vessel to be loaded, the approximate time she was due at Tecomate, and how many barrels she would be able to load. The schedule was based on the number of its tankers which the Shipping Board had available and plaintiff’^ ability to load them. This schedule was substantially adhered to during the contract period.

*167Tbe plaintiff delivered to the Shipping Board all the oil for which the said schedules provided, and it was all the oil that the Shipping Board made arrangements t,o take.

The plaintiff tendered to the Shipping Board on numerous occasions, and was ready, willing, and able to deliver thereto, all the oil produced by it under the contract in suit in excess of its said prior commitments and actual deliveries to the Shipping Board, and the Shipping Board failed and refused to take the same.

IX. The contract in /suit was entered into by the Shipping Board for the purpose of supplying a part of the bunker requirements of its ships for the year 1921. Trade and shipping conditions began to slump late in' 1920, and the demand for shipping facilities greatly decreased during 1921. The Shipping Board in 1921 withdrew many of its ships from service and its requirements of bunker oil greatly'decreased.

For its bunker requirements the Shipping Board used fuel oil, and the crude petroleum delivered to it by the plaintiff under the contract in suit was given by it to other companies in exchange for fuel oil barrel for barrel.

X. After the contract in suit was signed by the parties thereto the Shipping Board found that the oil therein contracted for was greatly in excess of its requirements due to the aforesaid lessened demand for water transportation. The plaintiff was also unable to furnish the agreed quota,s of fuel oil at Tecomate due to its lack of refining capacity. The contract in suit was modified by the parties thereto, the Shipping Board to take and apply on the contract quotas of 500,000 barrels per month fuel oil at terminals other than Tecomate, which plaintiff was to purchase and make available to the Shipping Board at said other terminals. Of the fuel oil purchased and made available by the plaintiff under this modification of the contract, the plaintiff tendered and the Shipping Board took and accepted 200,958.86 barrels, shown in Finding III, *sufra.*In addition to this amount the plaintiff contracted with third parties to purchase from them in December, 1921, at Tampico, “ when and if lifted by the Shipping Board,” and to apply on the contract in suit as modified, 249,496.58 barrels of fuel oil which were tendered to the Shipping Board, and the Shipping Board failed and *168refused to take the same. The Shipping Board was fully acquainted with plaintiff’s situation respecting its ability to deliver fuel oil and signed the contract involved herein with the mutual understanding that the board would be willing to accept deliveries of fuel oil at points other than Tecomate, Mexico, until the plaintiff finished its refineries and was able to make deliveries at Tecomate.

XI. (1) During the period of the contract in suit, and under the terips thereof, plaintiff could and would have’ delivered to the Shipping Board if called for 1,548,006.55 barrels of crude petroleum and 1,379,634.52 barrels of fuel oil in addition to the quantities thereof actually delivered. The net contract price or return to the plaintiff therefor, after deducting Mexican taxes, would have been $3,153,763.54.

(2)Plaintiff refined only a minor portion of the crude petroleum which it had produced in excess of its prior commitments and deliveries to the Shipping Board,-and it sold a part of its excess to other parties and received therefor, less Mexican taxes, the following amounts, which were the highest prices, with due diligence, that could be obtained therefor:

2,683,146-23 barrels crude petroleum_$1, 067, 000.18

393,377.45 barrels fuel oil_ 219, 878.14

1,286, 878. 32

(3) Of its said excess the plaintiff also disposed of 95,-820.61 barrels of fuel oil in respect to which damages are not proved. The net price or return to the plaintiff on the same at the contract price of $1.25, less Mexican taxes, would have been $105,195.70.

(4) The plaintiff had left in storage at the end of the contract period 12,233.82 barrels of crude petroleum, which at said contract price, less said taxes, would have amounted to $12,954.15.

(5) For the fuel o,il made available to the Shipping Board at Tampico in December, 1921, amounting to 249,496.58 barrels (Finding X), and which was not lifted, the plaintiff agreed to pay $1.125 per barrel including taxes. The difference between said price, which was not less than the then *169prevailing market price, and $1.25 is 12% cents per barrel, amounting to $31,187.07 on 249,496.58 barrels.

XII. If plaintiff is entitled to recover the difference between the net contract price or return to it on the oil which the Shipping Board failed and refused to take plus the prospective profits on the oil contracted for at Tampico, on the one hand, and the other said several sums mentioned in Finding XI, *sivpra,*on the other hand, the amount thereof would be $1,779,922.44, as follows:

(1)Net contract price_$3,153, 763. 54

(5) Prospective profits_ 31,187. 07

Total___$3,184, 950. 61

Less:

(2) Sales___ 1, 286, 878.32

(3) Other disposals_ 105,195.70

(4) Storage_ 12, 954.15

Total_ 1, 405, 028.17

Net_ 1, 779, 922. 44

The court decided that plaintiff was entitled to recover, in part.

Booth, Judge,

delivered the opinion of the court:

The plaintiff, a Virginia corporation, is engaged in producing oil and selling petroleum and its products. The cause of action relied upon for judgment in this' case is predicated upon the breach of an express contract. Plaintiff, ,in August, 1920, submitted to the United States Shipping Board a proposal to supply during the calendar year 1921, 9,000,000 barrels of crude and 6,000,000 barrels of fuel oil. The plaintiff’s offer was accepted by the board on August 19, 1920, and a formal written contract as of that date was duly executed by the parties. The contract provided for the sale to the board of the stipulated quantity of oil to be delivered by the plaintiff on board the defendant’s vessel's at Tecomate, Mexico, at the monthly rate of 750,000 barrels of crude and 500,000 barrels of fuel oil, price $1.25 per barrel. A deviation of 10 per centum e,ither more or less was allowed, and the plaintiff’s undertaking was ex*170pressly conditioned upon its prior commitments to other parties and the capacity of its oil wells to meet deliveries.

From January to May, 1921, the plaintiff supplied and the defendant accepted the full monthly quotas of *crude*oil and paid for the same. From May until the close of the contract period the defendant did not call for or take the full contract quotas of *crude*oil, and the plaintiff, subsequent to the month of August, 1921, could not have supplied the same. Along about August 28, 1921, salt Vater, which had from the beginning been a source of anxiety to the plaintiff, made its appearance in the plaintiff’s oil wells to- such an extent as to seriously curtail production, and render impossible plaintiff’s compliance with the exact terms of the contract as to monthly deliveries of *ende*oil. During the months of May, June, July, and August, 1921, the plaintiff, possessing knowledge that the defendant did not and would not call for or accept delivery of the full monthly quotas of 750,000 barrels of *crude*oil, did not pump its oil wells to their capacity. In other words, the wells were “pinched,” the supply curtailed by a process of partial pumping, and this practice continued until salt water rendered it inexpedient. Plaintiff, therefore, as to this branch of the case, prefers an alternative claim for damages. First, it is insisted that until the last of August the plaintiff could have, from its actual and potential production, supplied the full contract quotas of *crude*oil under the contract, and the defendant’s refusal to take the same constitutes a breach of the contract and a corresponding liability to pay therefor. Second, if the defendant is not to respond for the plaintiff’s potential production, defendant is in any event liable for plaintiff’s actual production; i. e., the oil on hand and available for delivery. The record sustains the fact that plaintiff, faced with an absolute refusal to accept full contract quotas of *crude*oil by the defendant, did “ pinch ” its productive wells, and did not take therefrom all the *crude*oil they would have produced.

The difficulty encountered in an analysis of the facts as to what the plaintiff terms its “ potential supply ” of *crude*oil resides in obvious uncertainty as to the quantity. Expert testimony is offered by the plaintiff to establish a potential

*171supply far in excess of needed, quantities to meet contract requirements until September, 1921. The defendant, on the other hand, meets plaintiff’s experts with an array of its! own, all expert witnesses being of equal skill and personally familiar with the oil situation in this particular Mexican oil field. The wide divergence of expert opinion and the manifest impossibility of reconciling the facts are, we believe, sufficient factors to forestall1 resting a money judgment thereon, even if the contention is otherwise tenable. While potential production may be the single means of fixing present value to a producing oil well, it is by no means a safe criterion upon which to award a fixed money judgment dependent upon a future quantity of oil in the ground and only potentially available. The character of the commodity and the actual experience in oil production from producing wells renders the facts far too speculative and remote.

Plaintiff conceded the encroachment of salt water in its producing wells, and admits that after August it could not have fulfilled contract deliveries. When, therefore, the extensive decline in production is taken into consideration and the sudden and sharp failure óf production is considered, the difficulty of according certainty to potential production is apparent. The court, to award judgment on this basis, must of necessity be able to find that plaintiff’s wells would have, if allowed to produce at a maximum flow, produced at least the contract quotas, i. e., 750,000 barrels per month, until that period of time when salt water enormously reduced the supply. This we have been unable from the record to do. Such a finding would in its very nature express no more than the usual indefiniteness of an estimate predicated upon a guess.

As to plaintiff’s second contention in this respect, an entirely different situation prevails. The plaintiff did produce during the contract period, and could have actually delivered to the defendant, 1,548,066.55 barrels of *crude*oil over and above the quantities actually delivered and paid for. This quantity of *crude*oil the defendant did not call for and refused to take. Plaintiff disposed of all this oil, as set forth in Finding XI, and unless the defendant’s general defense under the express terms of the contract is in*172•vulnerable the plaintiff is entitled to judgment in accord with Finding XI for its loss under the *crude*oil provisions of the contract, keeping in mind the provisions of the contract which absolved the plaintiff from supplying exact quantities monthly if its wells deteriorated to such an extent as to render it impossible to do so, as well as prior commitments to third parties.

The *fuel*oil provisions of the contract are clearly more difficult of solution that those of the *crude*oil. At the time the contract was executed both parties to the agreement were-aware that the plaintiff could not for some time supply the contract quotas of *fuel*oil at Tecomate, Mexico, for the very obvious reason that plaintiff possessed no refineries, and *fuel*oil is a refined product from *crude*oil. Therefore the parties mutually agreed that the plaintiff might supply whatever quantities of *fuel*oil the defendant called for at points of delivery other than Tecomate, Mexico. This is emphatically confirmed by the fact that the defendant actually accepted delivery of *fuel*oil at points other than Tecomate.

Plaintiff had in course of construction at Tecomate a refinery, or,-así designated, a “topping plant,” with a capacity of 300,000 barrels of *fuel*oil-per month. This plant was put into partial operation aboujt April 17, 1921, and finally completed on June 2, 1921. The maximum capacity of this plant would, of course, have been insufficient to meet the contract requirements for *fuel*oil, and the plaintiff contemplated and had planned ,the construction of a second *“*topping plant,” and would have gone forward with its completion, for plans and specifications had been adopted and some material assembled toward its construction. We think it clearly proved that it could have been completed and put in operation by July 15, 1921. The plant was never completed because on or about May 18, 1921, the board notified the plaintiff that it would take no more *fuel*oil under the contract. The defendant did, however, despite this notice, call for and accept delivery of practically all the *fuel*oil taken, subsequent to the date of this notice. (Finding III.) The Shipping Board received and paid for 517,528.19 barrels *173of *fuel*oil, most of which was taken subsequent to May 18, 1921. The plaintiff could have supplied 1,379,634.52 barrels of *fuel*oil (Finding X), but the defendant declined .to accept it, and damages are now claimed for the quantity of *fuel*oil the defendant did not take.

Three events characterize the situation respecting *fuel*oil, first, ,the fact that the defendant, fully informed as to the situation with respect to plaintiff’s inability to deliver the contract quotas of *fuel*oil at Tecomate, Mexico, entered into the contract knowing *fuel*oil must be accepted under the contract at other points. Second, the defendant did call for and accept deliveries at other points than Tecomate, and paid for the same without protest. Third, that in the face of a positive refusal to accept deliveries of *fuel*oil after May 18, 1921, the defendant continued to call for and accept cargoes of *fuel*oil; in fact, notified the plaintiff to furnish full contract quotas of the same from October, 1921, until the expiration of the contract. There is no doubt, and the record sustains the fact, that the plaintiff negotiated by way of contracts and loans for a supply of *fuel*oil sufficient to meet the demands of the defendant under the contract; but for one reason or another the defendant did not accept or take but one cargo of *fuel*oil from January, 1921, until July, 1921, and did nof in any one month accept delivery of the full contract quota. True, the plaintiff was able to escape obligations to third parties for *fuel*oil which might have ensued from defendant’s failure to accept *fuel*oil; but the situation was such that the plaintiff did not know from month to month what quantities of *fuel*oil it might be called upon to supply. The plaintiff therefore insists that its inability ¡to comply with contract provisions as to deliveries of *fuel*oil at Tecomate, Mexico, was waived, and as a result of such waiver the plaintiff was only released from the obligation of delivering such quantities as it could not deliver at Tecomate, asserting a corresponding obligation upon the defendant to accept deliveries of *all*the *fuel*oil the plaintiff could have delivered at Tecomate. We believe the plaintiff is right. The defendant did waive deliveries of *fuel*oil at Tecomate. (See paragraph 2, Finding

*174III.) The plaintiff could have met the requirements of the contract by deliveries elsewhere. Adequate preparations were made to that end, but the plaintiff declined to accept the same, except as to quantities of *fuel*oil it desired to take.

Then on May 18, 1921, the defendant positively declined to go forward with the contract, subsequently reversing its position and calling for *fuel*oil in July, August, September, November, and December, 1921, accepting deliveries thereof and paying therefor. The plaintiff might have lawfully declined to supply additional *fuel*oil after May 18, 1921. It did not do so'. On the contrary, it held itself in readiness to comply with defendant’s demands, and received notice that the full contract quotas for October and December would be called for. What was the result? The plaintiff had on hand this large quantity of *fuel*oil ready and willing to deliver it to the defendant, and the defendant refused to accept only such quantities as it desired. What we intend by this statement is to say that the plaintiff had available a sufficient quantity of *crude*which it could have refined into *fuel*oil, but which was not done because it was plain the defendant would not accept it. To have refined the *onide*oil available for *fuel*oil would have added expense, and the purchase price of *crude*and *fuel*oil was the same, and in no way affects the amount of the judgment. We have computed available *fuel*oil on the basis of six barbels of *crude*to one of *fuel.*The plaintiff could not have done less than it did. After notice for full contract quotas it was the duty of the plaintiff to prepare to meet the requirements of the defendant to the limit of its capacity; the plaintiff did this very thing, and the defendant, ignoring previous requests, left in the possession of the plaintiff this large quantity of additional *fuel*oil accumulated by the plaintiff to apply on the contract. While t.ime and place may be the essence of the contract as well as quantity, there is no legal impediment to a mutual waiver of any one or all, and courts may deduce a waiver from conduct as well as express language.

The defendant, in addition to disputation of essential facts, confidently relies upon the general exceptions clause of *175the contract in suit as legally sufficient to relieve the defendant from taking any quantity of crude or fuel oil in excess of its requirements for the year 1921. The general exceptions clause is designated by the defendant as a “ force majeure” clause, and the assertion is made that proof obtains to establish the fact of the Government’s requirements for the year 1921 and they were not in excess of the quantity of oil taken and paid for. The clause in the contract upon which the defendant relies reads in terms as follows:

> “ATLANTIC GULF OIL COMPANY

> *“ If either party to this agreement shall be delayed or prevented from fulfilling any, of the terms and provisions hereof*by reason of revolution or other internal disorders, war, acts of enemies, fires, strikes, lockouts, riots, floods, earthquakes, acts of God, arrest and restraint of princes, rulers of peoples, perils of the sea, accidents of navigation, breakdown of or injury to ships, pipe lines, pumping machinery or sea-loading lines, expropriation or confiscation of seller’s properties constituting its source of supply, or, *without limiting the*foregoing, *by any other cause not within the control of the party whose performance is' interfered with and which by the exercise of reasonable diligence it is unable to*prevent, *whether of the class of causes herein enumerated before or not and wheresoever*occurring, *no liability for damage*or demurrage *shall arise against said*party, *on account of delay■ or prevention due to such cause or causes.*

> *“*It is expressly understood • that the fulfillment of the terms and provisions hereof by the seller is subject to the requirements of the prior obligations of the seller to the Beacon Oil .Company, the Sun Company, the Cia. Refinadora del Agwi, the Agwi Petroleum Corporation, Ltd., and the Cié. Francaise Atlantique des Mazouts et Petroles, and to diminution in and/or failure of the seller’s source of supply of crude petroleum. In the event of such reduction of the seller’s obligation to deliver crude petroleum and/or fuel oil hereunder, then the buyer’s obligation to furnish tank steamers hereunder may at its option be proportionately reduced and charter parties for tank steamers proportionately canceled.”

The defendant resorted to members of the Shipping Board to prove the requirements of the Government for the year involved, and their understanding of the contract. This *176proof does indicate in a general way that previous to the execution of the contract in suit a survey of the oil needs of the board for 1921 was made and an estimate reached of the quantity of bunker oil required. The estimated quantity finally agreed upon was far in excess of the quantities to be supplied by the plaintiff, and the amount, 40,000,000 .barrels, was allocated among several oil companies other than the plaintiff. Granting *arguendo*the force of defendant’s contention as to the effect of the exceptions clause, the record relied upon by the defendant to bring the facts within its operation falls far short of the necessities of the case. In the first place, there is not sufficient proof that the defendant called for or accepted the full proportion of its oil requirements from the plaintiff. It is wholly insufficient to predicate the fact upon the general slump of shipping in the year 1921.and the withdrawal of numerous vessels from the trade by the board, and what is more to the point, there is a complete absence of any understanding or mutual assent to the proposition of a simple requirements contract upon the part of the plaintiff.

It would be difficult to deduce from the voluminous record in this case that the parties to this agreement intended other than a sale and purchase of definite quantities of crude and fuel oil, to be delivered at stated times during the year 1921. The case of the *International Paper Company*v. *Beacon Oil*Company, 290 Fed. 45, is cited as controlling. Without assenting to the conclusion reached in the cited case, a comparison of the respective situations of the parties in that case and this discloses a wide divergence of facts and a manifest dissimilarity of contractual relationship. In the instant case there are no provisions which even hint at a right to escape contractual obligations except as stated in the exceptions clause. The contractor is nowhere warned to anticipate the ordinary vicissitudes of business or lack of market, or obliged to assume responsibility for their happening. The contract calls for the delivery of the stipulated quantities of oil, as per specifications, “ suitable for use as fuel oil by oil-burning merchant ships under the ownership and/or control of the buyer.” In the case relied upon the contract was a *177designated-requirements contract between a single vendor and vendee, containing a designated “ force majeure ” clause, accompanied by a showing of requirements below the maximum quantities of oil to be delivered, and an express stipulation against resale by the vendee. No such state of facts exists as to this case, and in the absence of some provision of the contract, positive in its terms, it is impossible to convert a straight-out bargain of purchase and sale into a provisional agreement limiting the stipulated quantities to pass under the contract to buyer’s needs. The exceptions clause in plaintiff’s contract was not unusual; the scope and effect of such provisions are well recognized. Manifestly, what was intended was to escape the *ejudem generis*rule and relief from liability for causes when performance is physically prevented under circumstances where nonperformance is not legally excused.

We do not believe we need to indulge further comment. The court is not warranted in construing the contract, unambiguous and perfectly plain, by resorting to extraneous testimony in a final effort to convert the agreement into a binding obligation contrary to the terms of the instrument itself. As a matter of general business principles it may not escape observation that it would be most unusual to obligate oneself to furnish during a period of twelve months 1,500,000 barrels of oil and assume the perilous obligation of such wide fluctuations in quantity as this case discloses. The possible loss to the contractor is beyond contemplation, and the manifest uncertainties of the situation so great that nothing but express contractual stipulations to that effect would sustain such a holding.

Under Findings XI and XII the plaintiff is entitled to a judgment for $1,779,922.44. It is so ordered.

Moss, *Judge;*Hat, *Judge;*and Campbell, *Chief Justice,*concur.

Gkaham, Judge, took no part in the decision of this case.