Court Opinion

ID: 9583771
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:41:53.38447+00
Date Added: 2024-06-11T14:59:42.244551
License: Public Domain

Birdsong, Presiding Judge,
dissenting.
The majority finds that in this contract, “not only is there no obligation imposed upon Rawl to purchase all of its requirements of gasoline, but also there is no obligation imposed upon Rawl to buy even its Exxon requirements from Seaside,” citing Miami Butterine *343Co. v. Frankel, 190 Ga. 88, 94 (8 SE2d 398).
The contract in Miami Butterine Co. unlike the requirements contract in this case, is an “exclusive dealing” contract. Under OCGA § 11-2-306 (2), the buyer in an exclusive dealings contract promises to use best efforts to sell and distribute. Similarly, the buyer in a requirements contract is bound to purchase a quantity not “unreasonably disproportionate to any . . . comparable prior . . . requirements.” OCGA § 11-2-306 (1).
In finding that there was no obligation upon Rawl to buy Exxon, the majority ignores the Supreme Court’s early decision in Fontaine v. Baxley, Boles & Co., 90 Ga. 416, 426 (17 SE 1015). There the court, using common sense and interpreting the contract to express the intentions of the parties, said that if the seller complied with his obligation the buyer “would be equally bound to order and receive [the railroad ties] from this [seller], to the exclusion of all others. While he did not expressly promise to do so, such was the fair import of the agreement, according to its tenor and spirit. There can be no doubt that the terms of such an agreement would raise a just expectation on the part of him who engaged to supply and deliver as many cross-ties as the other might need, that the latter would order and receive from him all he needed. It must be remembered, in behalf of both these contracting parties, that cross-ties are not a commodity of general commerce; that they are neither to be procured at all times in the market by one wishing to buy them, nor to be disposed of readily and quickly by one wishing to sell them. On the contrary, demand must prearrange for supply, and supply before becoming abundant must prearrange for demand. Here was a mutual arrangement by which certainty of supply was sought to be secured on the one hand, and certainty of demand on the other. The measure of both was to be one and the same, to wit, the quantity (not exceeding so many in each month) which Fontaine could succeed in pre-engaging to his customers within the period of one year. Such an arrangement was, in its nature, calculated to be mutually beneficial; one of the parties undertaking to make or find a market for this non-commercial or extra-commercial article, to the extent of his ability, and the other undertaking to supply it up to a given limit. We think the objection of the want of mutuality was not well taken.”
Following that case, the federal court in Pittsburgh Plate Glass Co. v. Jarrett, 42 FSupp. 723, 728, said: “In a requirements contract, an agreement by the seller to sell imports an agreement by the buyer to buy. [Cits.] And an agreement by one party to buy binds the other party to sell.” Moreover, if there was any lack of mutuality in this contract, it was supplied when Seaside supplied gasoline in accordance with the terms of the contract. Southern R. Co. v. Cathey, 28 Ga. App. 521, 522-523 (111 SE 825), and this was received by Rawl *344for many years.
The evidence in this case tends to show that during an oil supply crisis Knight Oil (Seaside’s assignor) agreed to obtain an allotment of gasoline for Rawl, which would result in Rawl’s having a steady supply of gasoline. These are the circumstances underlying the agreement. “Here was a mutual arrangement by which certainty of supply was sought to be secured on the one hand, and certainty of demand on the other. . . . Such an arrangement was, in its nature, calculated to be mutually beneficial.” Fontaine, supra at 426. Seaside complied with its obligation under the contract, and so did Rawl, as long as it served Rawl to do so. The contract, having been performed, is binding. Southern R. Co., supra.
Moreover, the contract itself provides that Knight Oil (Seaside) furnishes to Rawl certain Exxon equipment and supplies to use for ten years (the term of contract) and gives Rawl an option to buy. This supplies consideration for an agreement by Rawl to purchase Exxon for ten years, Crawford v. Baker, 207 Ga. 56, 59-61 (60 SE2d 146). See also Brack v. Brownlee, 246 Ga. 818, 819 (273 SE2d 390).
Finally, sworn evidence by Seaside states that exclusive requirements buying is the practice in the industry and is the meaning that is attached by the industry to the language used in this contract. This meaning and usage should be given weight in interpreting the contract. OCGA § 13-2-2 (2).
The cardinal rule in contract interpretation is to ascertain the intent of the parties, and to give the contract that meaning which will best effectuate that intent. McVay v. Anderson, 221 Ga. 381 (144 SE2d 741); Brooke v. Phillips Petroleum Co., 113 Ga. App. 742 (149 SE2d 511). To effectuate the parties’ intent, the court must take the whole instrument together and consider it in light of the surrounding circumstance. Brooke, supra.
Reasonable minds cannot doubt, nor common sense deny, that Knight Oil (Seaside) would not have furnished its equipment to Rawl to use for ten years, without contingency, unless Rawl was intended to and promised to buy its gasoline from Knight Oil during that time. Upon the strength of that promise, in a gasoline shortage Knight Oil secured an allocation of gasoline for Rawl which, the evidence suggests, it could not have done except by obtaining it from one company, Exxon. There is no indication whatsoever in the contract that Rawl was not intended to buy only Exxon gasoline during this term.
The language and terms of the contract viewed in light of the surrounding circumstances, leave no question but that Rawl promised to and was intended to buy only Exxon. At the very least, the issue is a jury question. “The construction which will uphold a contract in whole and in every part is to be preferred.” Hearn v. Old Dominion Freight Lines, 172 Ga. App. 658, 659 (324 SE2d 517). To hold as the *345majority does is to presume the parties intended it to be meaningless and unenforceable, even though they performed under it for several years until Rawl decided it did not want to perform it, and even though Rawl continued and continues to use Seaside’s equipment. The law seeks to uphold contracts so long as it can enforce the intent of the parties. The majority has not done so in this case although it could have done so easily without going outside its terms, by giving the common sense meaning, in light of all the surrounding circumstances and the entire contract, to the terms by which the seller agreed to, and did, “sell and deliver to [Rawl] . . . [Rawl’s] requirements of Exxon, Exxon Unleaded, and Exxon Extra at the prices and upon the terms herein contained.”
Decided November 20, 1985
Rehearing denied December 6, 1985
George M. Rountree, for appellant.
John J. Ossick, Jr., for appellee.
I respectfully dissent. I am authorized to state that Presiding Judge McMurray, Judge Sognier, and Judge Pope join in this dissent.