AMERICAN STEEL FOUNDRIES v. INDIAN REFINING CO., 275 F. 800

EVAN A. EVANS, Circuit Judge (after stating the facts as above). The parties differ as to the proper construction to be given to their contract. Defendant contends that it was obligated to purchase all of its requirements from the plaintiff, and plaintiff was obligated to sell all of defendant’s requirements up to a maximum of 15,000,000 gallons in fifteen mouths; that if it did not order 1,000,000 gallons in any one or more mouths, it could, if its requirements permitted, increase its demand for any other month. Plaintiff contends that it was not compelled to ship more than 1,000,000 gallons in any one month.

Was this a requirements or a quantity contract? Defendant urges that the fair construction of the entire contract impels us to hold that it was a requirements contact, and further, if any uncertainty exists, it is removed when we read the two paragraphs above quoted which were stricken from the contract before it was executed.

When these omitted paragraphs were offered in evidence, Judge Page said: “It seems to me that the language oí this contract is perfectly plain and easily understood, and for this reason I am not permitting extraneous and outside matters to be introduced.” We agree that the contract is clear and unambiguous, and needs no evidence to remove asserted ambiguities. Further, we cannot agree with counsel that the two paragraphs stricken from the original contract would tend to clarify it. The evidence was therefore properly excluded. Brawley v. United States, 96 U. S. 168, 173, 24 L. Ed. 622; 6 Ruling Case Law, p. 839.

The contract contains a maximum and a minimum provision. The minimum is stated as “the actual requirements” of defendant. It is evident therefrom that the conti-act is not, as defendant urges, a “requirements contract.” Lor it must have been contemplated that there was a difference between the minimum and the maximum, and if the minimum was represented by defendant’s requirements, it cannot be said that the parties were contracting to furnish defendant’s actual requirements.

Rather would it be logical to assume that the parties were contracting to purchase and sell a quantity of oil, the maximum amount being 15,000,000 gallons, and the minimum to be defendant’s requirements, not, of course, exceeding 15,000,000 gallons. This conclusion might be entirely consistent with defendant’s claim (if not with its theory) but for the two other quoted paragraphs of the contract, which we are not at liberty to ignore.

When the parties provided for shipments to be made in “fairly equal monthly quantities,” the maximum and minimum provision must be read in the light thereof and in connection therewith. Is a court justified in saying that a contract which contained a clause for shipment in “fairly equal monthly quantities” permits of a construction that allows defendant to demand 254,633 gallons in one month and 1,632,236 gallons in another month? Or for four successive months the defendant may call for a total of 1,280,000 gallons, and for four other successive months 5,970,000 gallons?

To justify this conclusion we would be compelled to totally ignore the “fairly equal monthly shipments” provision of the contract. But another reason may be found to support plaintiff’s position. The provision making each shipment a separate and independent contract cannot be ignored. Read in the light of the further clause calling for shipments to follow shortly after plaintiff’s receipt of a statement of defendant’s monthly requirements, we conclude the separate shipment which is there referred to as a separate and independent contract is a monthly shipment.

Further reason, therefore, exists for stressing the effect of a “fairly equal monthly quantities” provision, where the parties have specifically provided that each such monthly shipment is “a separate and independent contract.” The maximum amount which plaintiff was obligated to deliver was 15,000,000 gallons. The period of delivery was 15 months. Deliveries were to be made in “fairly equal monthly quantities.” The conclusion that the parties intended that the monthly maximum should be 1,000,000 gallons is unavoidable. The judgment is affirmed.