Case Name: OLYMPIA BOTTLING WORKS v. OYLMPIA BREWING CO.
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1910-04-05
Citations: 56 Or. 87
Docket Number: 
Parties: OLYMPIA BOTTLING WORKS v. OYLMPIA BREWING CO.
Judges: 
Reporter: Oregon Reports
Volume: 56
Pages: 87–102

Head Matter:
Argued March 9,
decided April 5, 1910.
OLYMPIA BOTTLING WORKS v. OYLMPIA BREWING CO.
[107 Pac. 969.]
Contracts — Option Agreement — Mutuality.
1. An option agreement, executed on proper consideration, is not lacking in mutuality.
Contracts — Requisites—Definiteness.
2. Less particularity is required in the terms of an agreement to support an action for damages than for a suit for specific performance.
Principal and Agent — Contract—Option Agreement — Extension— Requisites.
3. Where the right of an agent, for the exclusive sale of an article within a specified territory for a fixed period, to continue the agency for another fixed period formed an important part of the consideration for the fixed period, and the contract was fully executed, and the consideration thereby fully paid for the fixed period, more latitude should he allowed in determining whether the optional provision was sufficient than where the option was merely executory, or partly executory.
Principal and Agent — Contract of Agency — Option Agreement— Definiteness.
4. A contract, making one the sole agent of a brewery for the sale of its beer in specified territory for five years, which stipulates that at the close of the five years the agent shall have the option of continuing the agency for another five years, subject to the revision of the prices of beer, not to exceed the prices ruling at that time, contains a sufficiently specific option to constitute an enforceable agreement, and the brewery must agree on a revision of the prices, on the agent electing to continue the agency; and, where it refuses to do so, it does so at its peril, and the matter must then he determined by the proof of the price ruling at the time.
Principal and Agent — Contract of Agency — Option Agreement— Breach — Right of Action.
5. Where a brewery, making one its sole agent for the sale of its beer in specified territory for five years, with the option of the agent to continue the agency for another five years, subject to a revision of the prices of beer, not to exceed the prices ruling at that time, refused to consent to a revision of the prices, on the agent giving notice of his election to continue the agreement under the option, and refused to recognize the rights of the agent; the agent, if unable to make such a showing as would entitle him to equitable relief, could sue for damages for breach of the option agreement.
Contracts — Construction.
6. Where a contract is susceptible of different interpretations, one or more of which would enable it to stand, and others which might vitiate it, the construction giving effect to all its parts, and sustaining the contract and carrying out the evident intent of the parties, will prevail.
Principal and Agent — Contract of Agency — Construction.
7. Where a brewery, making one its sole selling agent within described territory for a fixed period, with the option of the agent to continue the agency for another period, subject to a revision of the prices of beer, not to exceed the prices ruling at that time, received notice of the agent’s election to continue the agency, and then refused to consent to a revision, it was discretionary with the agent whether he would act on the assumption that the brewery was satisfied with the prices specified in the contract for the fixed period, or demand a change in conformity with the then ruling prices, for the effect of the option was to bind the parties to confer and make such revision of the prices as might be deemed advisable, or in the absence thereof that the ruling prices should prevail.
Principal and Agent — Contract of Agency — Option—Notice of Exercise.
8. Where a brewery, making one «its sole selling agent within described territory for a fixed period, with the option of the agent to continue the agency for another period, subject to a revision of the prices of beer, not to exceed the then ruling prices, refused to recognize the rights of the agent under the option, notwithstanding his election to continue the agency, the agent, giving notice of his election to continue 'the agency, was not required to notify the brewery of his intent to insist on the ruling prices.
Evidence — Parol Evidence — Latent Ambiguity.
9. A contract making one the sole selling agent of a brewery for a fixed period, with the option of the agent to continue the agency for another period, subject to the revision of prices of beer, not to exceed the prices ruling at that time, contains a latent ambiguity because the reference to the ruling prices may refer to the wholesale market prices, or to prices allowed to similar agencies, and parol evidence was admissible to show the intention of the parties.
From Multnomah: John B. Cleland, Judge.
Statement by Mr. Justice King.
Plaintiff by this action demands $45,000 damages for-an alleged breach of a written contract, entered into January 25, 1902, by and between the defendant, the Capital Brewing Company of Olympia, Washington (sub sequently changed to the Olympia. Brewing Company), as party of the first part, and the plaintiff, the Olympia Bottling Works, ,as party of the second part, wherein the latter was made the sole agent of the first party for the sale of beer brewed by it in Oregon and the southern part of Washington, the period of which agency was fixed at five years, with the privilege granted to the second party of extending it in a qualified form for an additional term of the same length. The contract provided in detail for the manner of conducting the business, the price of beer per keg, barrel, and other quantities in which to be sold, etc., including the manner of delivery, expense thereof, and other matters pertaining to the conduct of the business for the company. The clause of the contract, giving rise to this controversy, reads:
“At the close of the five-year period covered hereby, the second party shall have the option of continuing this agency for another five years, but the prices of beer shall be revised, but not to exceed the prices ruling at that time. This agreement to take effect on the first day of March, 1902.”
On March 1, 1902, the date when, by the terms of the agreement it became effective, the parties entered upon the performance of the conditions of the contract, and continued operation thereunder until March 1, 1907, but from time to time modified the terms of the agency, respecting the price of beer, supplies to be furnished, and other details incidental to the business. The defendant company, about three months prior to the expiration of the first five-year period, notified plaintiff in writing to the effect that after March first of that year the business relations between plaintiff and defendant must cease. A few days later plaintiff wrote defendant, in part, as follows:
“The contract gives to ourselves, the party of the second part, the option of continuing this agency for another five years, but the price of beer shall be revised, but not to exceed the prices ruling at that time. We now formally notify you that we desire, in the exercise of our option, to continue the agency under the contract for the additional five years, and we are ready at any time that suits your convenience to discuss with you and agree upon such revision of prices as the contract contemplates. After five years of labor expended and money invested in contemplation of future rights, and after incurring obligations for the extended continuance in large amounts with your knowledge and .approval, we cannot consent to this arbitrary repudiation of the contract on your part, resulting, as it would, in destroying in a moment, as far as we are concerned, the business we have built up and fostered.”
An extended correspondence followed between the parties, in which each accused the other of unfair business dealings; the defendant, among other things, informing plaintiff: “The contract you refer to, and under which you claim, is null and void, and terminated a year ago by your own request and full knowledge.” On and after March 1, 1907, beer orders were given defendant as formerly, which orders defendant declined in any manner to recognize, resulting in this action. At the trial plaintiff offered to prove a full compliance on its part with the terms of the option, including the giving of notice to defendant of its intent to exercise the option, all of which was excluded by .the court. No testimony was offered on behalf of defendant, and on request of its counsel a verdict was directed in its favor; hence this .appeal.
Reversed.
For appellant there was a brief over the names of Messrs. Bernstein & Cohen, with an oral argument by Mr. Alex Bernstein.
For respondent there was a brief over the names of Mr. Martin L. Pipes and Mr. Samuel B. Huston, with a.n oral argument by Mr. Pipes.

Opinion:
Mr. Justice King
delivered the opinion of the court.