Opinion
May 2, 1950 —
June 30, 1950.
APPEAL from part of a judgment of the circuit court for Racine county: ALFRED L. DRURY, Circuit Judge. Affirmed.
For the appellant there were briefs by Benson, Butchart, Haley Benson of Racine, and oral argument by Donald A. Butchart.
For the respondent there was a brief by Heft, Burgess Brown of Racine, and oral argument by Carroll R. Heft and John R. Brown.
Action by the Skelly Oil Company, plaintiff, to enjoin Milton Peterson, defendant, a former distributor for the plaintiff, from inducing consumers of plaintiff's liquid gas to violate their agreements with the company and to enjoin the defendant from using or interfering with property of the plaintiff in the possession of such consumers. The defendant counterclaimed for money deposited with the company by him and prior distributors under the terms of distributor agreements. The judgment, dated September 19, 1949, granted the injunction prayed for by the plaintiff and gave judgment to the defendant for a portion of the amount prayed for in his counterclaim. Plaintiff appeals from that part of the judgment awarding damages to the defendant. Defendant moves for a review of other portions of the judgment.
On all of the dates pertinent to this action, the plaintiff was a Delaware corporation with its principal offices at Kansas City, Missouri, and was duly licensed to transact business within the state of Wisconsin. It was engaged in the sale, among other products, of liquefied petroleum gas confined under high pressure in metal containers. It also sold gas appliances, such as stoves and heaters. In order to transfer the liquefied gas to a low-pressure gas for burning in appliances, the containers are connected at the consumer's premises to a utilization equipment or regulator. Sales were made through local distributors. During the period in question the plaintiff had entered into six written distributor agreements for the distribution of gas and appliances in the trading area at Racine, as follows:
Agreement Date of Date of Name and designation of No. execution termination distributor 159-1 9/1/39 11/9/40 C.A. Boggs, d/b/a Milwaukee Skelgas Service 961-1 11/9/40 4/23/41 John A. Agathen, d/b/a Racine Skelgas Service 1131-1 4/23/41 4/29/42 Grant C. Haas, d/b/a Racine Skelgas Service 1480-1 4/29/42 9/1/43 Milton Peterson, d/b/a Racine Skelgas Company 1706-1 9/1/43 6/2/47 Milton Peterson, d/b/a Peterson Gas Appliance Company 9553-0 6/2/47 5/29/48 Milton Peterson, d/b/a Peterson Gas Appliance Company A stipulation of the facts resolved all of the issues between the parties with the exception of the necessity for an injunction and that portion of the defendant's counterclaim arising under an identical paragraph in the first five distributor agreements, which reads as follows:"Skelgas utilization equipment will be consigned to the distributor for distribution to Skelgas consumers in accordance with terms fixed from time to time by the company. The distributor will make a cash deposit on each such equipment, the amount thereof to be fixed by the company. All such equipments and parts thereof shall remain the company's property, but the distributor will be responsible therefor and will furnish a complete inventory thereof at any time upon the company's request, and will pay in cash upon demand company's current selling price for each complete equipment, or part thereof, which distributor does not return in good condition."
The amounts of money deposited with the plaintiff in accordance with the above provision of the distributor agreements for equipments consigned by the plaintiff to the various distributors are as follows:
Distributor's Amount of agreement deposits 159-1 $ 270.50 961-1 1,043.75 1131-1 2,199.90 1480-1 259.75 1706-1 1,983.00 9553-0 none --------- $5,756.90 After the commencement of the action, defendant secured written assignments from Agathen and Haas of all their claims against plaintiff by virtue of deposits made by them under their respective distributor agreements. Each purchaser of gas or appliances signed a consumer agreement with plaintiff. Various forms of this agreement were used and the language therein differed somewhat, but each contained two provisions pertinent to the issue in this case. First, the consumer agreed to buy from plaintiff, and plaintiff agreed to sell, or cause to be supplied to consumer through an authorized distributor, the consumer's requirements of liquefied petroleum gas. Second, for the consumer's convenience in utilizing the gas, plaintiff agreed to lend to consumer the necessary regulating equipment and containers without charge except for installation. The consumer agreed to pay for such installation and all taxes assessed against such equipment while in his possession. The defendant and his predecessor distributors had secured more than five hundred agreements with consumers.Defendant terminated his final distributor agreement pursuant to the terms thereof on May 29, 1948. On the same date he forwarded to plaintiff his check for $890.36, on the back of which he had marked "Balance in full on account to date." The defendant made no demand for the return of deposits except the demand in his counterclaim. The check was not cashed by the plaintiff, and in the stipulation it was agreed that defendant was indebted to plaintiff in the sum of $1,401.69 for goods purchased after giving him credit for items returned but without credit for deposits.
Soon after terminating the contract defendant wrote letters to nearly all of the persons holding consumer agreements with plaintiff, in which he stated that he had obtained a new source of supply of bottled gas and solicited their patronage. He also inclosed a notice that although the consumers did not actually own the gas regulator and cylinders, they did not have to relinquish the equipment to anyone unless proof ownership and a replevin order were presented. He also claimed an interest in the equipment. It was because of this and other activities that the injunction was sought.
The judgment enjoined the defendant from interfering with plaintiff's customers and equipment and allowed the defendant to recover the amount of his deposits under contracts 1480-1 and 1706-1, less the admitted indebtedness of defendant to plaintiff.
Further facts will be stated in the opinion.
The plaintiff contends that the trial court erroneously assumed that the use of the unexplained word "deposit" in the distributor agreements required the return of the money deposited to the distributor; that the use of the word "deposit" requires an expression of the disposition to be made of the money deposited; that the absence of such expression makes the word ambiguous and the agreement incomplete; therefore, the conduct of the parties over the period of their business relationship should be the controlling factor in determining the disposition to be made of the money deposited with the plaintiff.
Plaintiff further contends that both parties understood that the distributor was to recover the cost of the utilization equipment, which was the amount deposited, as part of the installation charge; that the defendant had actually recovered the money in that manner and that the money so deposited was to be retained by the plaintiff; and that the trial court erred in refusing to consider the conduct of both parties as a demonstration of their understanding of the disposition to be made of the sums on deposit.
The record discloses that the defendant, after canceling his last contract, admitted liability to the plaintiff and mailed plaintiff a check, and that he made no demand for a return of deposits until after the commencement of this action. Plaintiff views this as an admission that both parties understood the plaintiff was to retain all deposits. The defendant claimed that he made no prior demand for a return of deposits because the equipments were in the hands of consumers and he was in no position to return them; that he was responsible for them until a new company agent was appointed to take over; that he then had made a constructive return of the equipments to the company as contemplated by the consumers agreements, some of which he introduced, and he testified to oral agreements by two company agents that his deposits would be returned when he ceased to represent the company.
In construing this contract the word "deposit" must be given its common and accepted definition. In that sense the word "deposit" means property, usually money, placed in another's hands in trust or safekeeping or to one's credit. The most common usage of the word refers to money deposited in a bank, subject to the order of the depositor. In many commercial transactions deposits are made to cover the cost of equipment and containers, and in those instances the deposit is returned to the depositor upon delivery of the equipment or containers. With this common and accepted usage of the word "deposit," the contract is hardly ambiguous. If it is ambiguous, as plaintiff contends, it appears from the record that both the distributor and consumer agreements were executed upon printed blanks furnished by the plaintiff, and it is a recognized rule of law that a written contract should, if ambiguous, be construed most strongly against the party preparing it. Schuhknecht v. Robers, 192 Wis. 275, 212 N.W. 657; Deree v. Reliable Tool Machine, Inc., 250 Wis. 224, 26 N.W.2d 673. Where there is ambiguity in a contract the sense in which words therein are used is a question of fact. Woodall v. Democrat Printing Co. 250 Wis. 348, 27 N.W.2d 437. There was sufficient credible evidence in the record to sustain the finding of the trial court as to the meaning of the word "deposit."
The plaintiff finally contends that the defendant has recovered all the money deposited by him from the consumers through his charges for installation of the equipments, and that he is now estopped from unjustly enriching himself by now recovering it a second time. That argument could be applied with equal force to the plaintiff. The plaintiff, having reserved title to the utilization equipments and having loaned them to its consumer customers, would likewise be unjustly enriched if permitted to retain the deposits. The record discloses that some of the installation charges were sufficient to cover the cost of the equipments, and it is apparent that the consumer is the only one who may not be unjustly enriched.
Upon motion to review the defendant also claims that the trial court erred — in making the temporary injunction permanent, in applying the statute of limitations to contracts 159-1, 961-1, and 1131-1, and in allowing the premium paid for a surety bond to be taxed as part of the costs and disbursements.
As to the injunction, the defendant contends that upon the issuance of the temporary restraining order he accepted the court's determination of his rights and discontinued the practices complained of, and therefore the permanent injunction is unnecessary. The trial court held that the plaintiff was entitled to have its rights under its consumer contracts, which were known to the defendant, protected by a permanent injunction. The trial court was satisfied that because of the competition between the parties the situation had not so changed as to preclude the necessity for the permanent injunction. We affirm the action of the trial court in so doing.
The record discloses that the defendant operated for some time under the distributor agreements of his predecessors. Therefore, he contends, the six-year statute of limitations should not apply because all of the deposits were part of an open, mutual account, and because each of the distributor agreements was an instrument under seal. Each of the distributor agreements contained a provision as follows:
". . . it cancels and terminates as of the effective date hereof all prior existing contracts between the parties hereto for the distribution of merchandise as referred to herein."
Thus any cause of action under these contracts commenced with the termination thereof, and the trial court properly applied the statute of limitations thereto. The agreements were not sealed with the plaintiff's corporate seal nor with any scroll or device following the name of the distributor that might be determined to represent a seal. The agreements did contain the following provision: "Witness our hands and seals this the day and year first above written." This was not sufficient to constitute them instruments under seal.
In its bill of costs the plaintiff listed as a disbursement the premium paid upon a surety bond filed in connection with the issuance of the temporary restraining order. Sec 204.11, Stats., contains the following provision:
". . . Any party entitled to recover costs or disbursements in an action or special proceeding may include in such disbursements the lawful premium paid to such corporation for a suretyship obligation. . . ."
The allowance thereof was proper.
By the Court. — Judgment affirmed.