Genereux v. Richfield Oil Co.

ELLISON, P. J.,

pro tem

On the eighteenth day of December, 1915, the plaintiffs and the defendant entered into a written contract in writing by which it was agreed that the defendant would sell, and the plaintiffs would buy all the gas engine fuel oil of a gravity of forty to forty-four degrees, which plaintiffs might require in their business or pumping plant in Riverside County, California, for a period of two years, commencing May 17, 1916, and ending May 16, 1918. The price agreed upon was one dollar and eight cents per barrel of forty-two gallons each. _

The contract provided that payments should be made on the 15th of 'each month for all goods delivered during the previous calendar month. It also contained the following: “If payments are not made as specified, the seller shall have the option of canceling this contract.” Pursuant to the terms of the contract the defendant delivered to the plaintiffs during the month of June, 1916, oil amounting at the contract price to $401.76. On the seventeenth day of July, 1916, no payment having been made by the plaintiffs to the defendant for the oil delivered in the month of June, the latter sent a telegram to the plaintiffs, as follows: “Engine fuel oil contract, dated December 18, 1915, is hereby canceled for failure to make payment on the 15th of July for deliveries for previous calendar month.”

Thereafter, though requested by the plaintiffs, the defendant refused to make any further deliveries of oil under the contract. Whereupon the plaintiffs brought this action to secure damages for failure of defendant to furnish them fuel oil. Findings and judgment were in favor of the defendant and the plaintiffs appeal.

The decision of the court was founded on the express terms of the contract wherein the option was given the defendant to cancel it if payments were not made according to the terms thereof. Appellants claim that defendant was not justified in availing itself of this provision of the contract because by its long-continued course of business with

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the plaintiffs it had waived it, and before it could avail itself of it defendant should have given plaintiffs notice that they would be held in the future strictly to the terms of the contract in this regard.