Court Opinion

ID: 9442873
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:02:19.098134+00
Date Added: 2024-06-11T17:29:15.895787
License: Public Domain

HUXMAN, Circuit Judge
(dissenting).
I find myself unable to concur in the opinion of the majority. There is no disagreement between us as to the applicable principles of law. The difficulty, as always, comes when we seek to apply recognized principles of law to a given state of fact. The trial court’s findings, in my view, are supported by substantial evidence and its conclusions of law based thereon are correct. I am, therefore, forced to the conclusion that the judgment should be affirmed.
The definition in Brawley v. United States, 96 U.S. 168, 24 L.Ed. 622, is the generally accepted definition of what constitutes a requirement contract, but the results, when applying it to facts seemingly indistinguishable, are not always reconcilable. In the Brawley case the contractor agreed to furnish 880 cords of wood for Fort Pembina, more or less, as was to be determined necessary by the post commander. Only 40 cords were accepted. The court construed the contract to be a requirement contract and that the words *633“880 cords more or less” were only an estimate of the needs and were not controlling in the absence of bad faith. But in Budge v. United States Smelting and Refining Co., 9 Cir., 104 F. 498, 500, a contractor agreed to furnish a mining company “all mining timbers required and used” in its mines during a year. The contract then specified the prices for delivery at Tunnels 2, 3 and 8 and then contained this phrase, “about fifteen thousand.” The court held that this was not a requirement contract and that the estimate of 15,000 timbers controlled.
There is this distinction between the cases relied on by the majority and the case before us. In all those cases the court had before it only the contract unsupported by any other writing, conversations or circumstances. In our case the purchase order had attached the terms of purchase order. The blue prints, drawings and specifications were also furnished. There was also a number of conversations immediately preceding the execution of the contract and shortly after its execution between the parties to this litigation with respect to their interpretation of the contract.
It was strenuously argued by appellant before us that from the blue prints and drawings could be ascertained and determined the amount of steel required for. all scheduled items. It is of some significance in seeking to ascertain the intent of •the parties that it is conceded that it would require a matter of weeks to glean this information from the drawings and specifications. These drawings were furnished ■only a day or so before the contract was executed.
It is also without dispute that the blue prints contained scheduled and unscheduled items. The purchase order also provided that appellant had the right to change some •of the listed items and that information of .any proposed change would be furnished -at a later date. The purchase order also provided that the height of the listed base support upright members would be determined by appellant’s Engineering Department and that information of such changes would be then furnished to appellee. It is thus clear that appellee could not have ascertained from the drawings and the blue prints the amount of steel required for .ful-filment of the contract. Appellee owned no steel. It was required to purchase on the market the steel required to fulfil its commitments under the contract. It was not interested in acquiring steel beyond such needs; neither was appellant interested in purchasing more steel than was needed for this plant. This was not a case in which appellee had agreed to satisfy appellant’s needs from a stock pile of goods on hand. Both parties were dealing with respect to the specific requirements of a particular job. Thus considered, the estimate of 125 tons of steel takes on special significance.
That the parties did not consider this to be a requirement contract is also supported by their conversations respecting the contract immediately preceding its execution and shortly thereafter. Ogilvie, the president of appellee, testified that in a number of conversations preceding the execution of the contract, he was informed by Mr. Knight, the engineer for appellant, that a minimum of 125 tons of steel would be required and that, when he subsequently told Mr. Knight that he was unable to find more than from 45 to 60 tons; that he was informed that the balance of the steel would be taken up in unscheduled items and in additional requirements for the contract. He testified that Knight told him that there would be a minimum of 125 tons of steel. In my view, he had. a right to rely upon these statements. The trial court no doubt placed reliance on this testimony in concluding that the contract was not a requirement contract.
This line of testimony was properly received in construing the contract and seeking to determine the intent of the parties. The law is well settled that in construing contracts, the acts, conduct and conversations of the parties at the time of the transaction are pertinent and should be considered in ascertaining their intent and the meaning to be ascribed to a contract *634that is not clear and free from doubt.1 Contracts worded as is that contract are not so clear and free from doubt as to make inappropriate a consideration of the circumstances, conversations and conduct of the parties with respect to their real intent. So considered, I agree with the trial court that the contract was one for the delivery of approximately 125 tons of steel and was not a requirement contract.

. Brawley v. United States, 96 U.S. 168, 24 L.Ed. 622; Wolff v. Wells, Fargo & Co., 9 Cir., 115 F. 32; Marx v. American Malting Co., 6 Cir., 169 F. 582; McDowell v. Droz, 179 Okl. 119, 64 P.2d 1210; Washoma Petroleum Co. v. Eason Oil Co., 173 Okl. 430, 49 P.2d 709.