La Frentz v. Blake

As stated in the prevailing opinion, the findings of fact entered by the lower court are lacking in many respects. I add to that, this: They are so lacking that one is unable to determine upon what theory the lower court decided the case. This is of particular importance in view of the fact title to the tanks was stipulated, at the beginning of the trial, to have originally been in plaintiffs. The questions then arise: Did defendants buy the tanks? Did they buy them from plaintiffs through the ostensible agency of Lay; or did they buy the tanks from Lay? If the latter, then what title did Lay have to convey to them? If Lay had no title was there an estoppel? I am, of course, familiar with the principle of estoppel illustrated in the case ofHarrison v. Auto Securities Co., 70 Utah 11, 257 P. 677, and annotations 57 A.L.R. 388. There must, however, be an estoppel. 46 Am. Jur. 620, Sec. 458, and page 629, Sec. 464.

Let us start first with the methods of furnishing this liquid gas. The tanks are installed in the customer's place of business, and are filled and refilled by plaintiffs, not by Lay — at least until the latter terminated his contract with plaintiffs and went into the gas distribution business for himself. The franchise contract uses terms in its paragraph 3 (quoted in the prevailing opinion) that indicate that Lay stored gas for delivery to customers, and it was the tanks used for such storage that were the only tanks under lease arrangement between plaintiffs and Lay. However, there is no evidence that Lay stored gas at all, or that he possessed tanks for that purpose. In his testimony there is nothing as to tanks other than the two accounted for as delivered to the defendants in these actions. Apparently they were the tanks used for storage purposes and were on the the defendants' premises and were to be filled by plaintiffs.

I use the paragraph immediately above as an introduction for the reason that the prevailing opinion contemplates tanks delivered to customers as saleable articles under the franchise contract and impliedly limits leased tanks to those used on Lay's premises — of which there appears to be none. In spite of such an interpretation of paragraph 3 being within the realm of reasonableness in the light of its wording, I am impressed with the fact that the parties did not so interpret it; and that in fact, Lay did not sell the tanks, nor did the defendants intend to buy them.

One must concede, of course, that a party may give such apparent authority to his agent as to permit that agent to convey good title from the principal to the purchaser; but that is not the theory upon which this case was tried. Neither Mr. Johnson, nor Mr. Blake in his testimony gave any indication that he thought he was buying the tanks from the plaintiffs through the agency of Lay. Mr. Blake testified that he paid the Richfield Commercial Bank. That bank was representing Lay, as he did not have sufficient funds to support the deal without the bank's aid. Mr. Johnson testified:

"I have receipts and checks in my pocket to show that I bought $1,100 worth of equipment from Mr. Lay. I bought the tank, andit was my understanding it was mine * * *" (Italics added. He seems doubtful.)

The checks submitted by Mr. Johnson are all made payable to Lay or his company. On one check is written "on gas set up." This check is for $556.83, and Johnson claims that it includes the tank price; but there is nothing to indicate that it was for the price of a tank any more than for its installation and rental. The LaFrentz sales slip 00991 made out by Lay is also uncertain in that particular. So far then, we have no apparent attempt on the part of either Blake or Johnson to claim that they bought the tanks from plaintiffs, through Lay, as agent.

Mr. Lay was called as a witness. I desire to quote part of his testimony:

"Q. And isn't it a fact that the first invoice of material which was billed to you, consisted of certain cylinders? A. That's right.

"Q. With attachments, such as regulators, pigtails and switchover valves and so forth? (See Exhibit 8 below) A. That's right.

"Q. Now, did you have any arrangement with the LaFrentz Company whether or not your method of acquiring possession and taking over tanks, such as this five hundred gallon tank and the three hundred gallon tank, was different from taking over the cylinders?

A. There was nothing said.

"Q. In other words, do I understand that the arrangement or deal, whatever it was between you and the LaFrentz people was the same concerning any equipment that was to be installed or refilled whether it be these one hundred pound cylinders or these larger tanks? A. So far as I knew there was no difference.

"Q. No difference, and whatever your deal was concerning one hundred pound cylinders would be the same type of deal and arrangement concerning other equipment, and these larger tanks, which were to be installed for customers use and to be refilled when empty? A. That's right."

Exhibit 8, I quote, except as to the list of 100 numbers apparently representing the numbers of each cylinder, of the 100 pound cylinders mentioned above:

"100 — 100# Cylinders complete with regulators, pigtails and Switchover valves $150.00

"100 Cylinders of Gas A 4.00 per Cylinder $400.00

* * * * * "The 100# cylinders remain the property of the LaFrentz Liquid Gas Company, Cedar City, Utah, who are the distributors for the dealer known as the LaGas Company, located at Circleville, Utah.

"Signed: Ervin C. Lay "Signed: F.H. LaFrentz"

It is to be noted that even though these cylinders remain the property of the LaFrentz Company they are listed at a total price of $1,500. In other words, the dealer is charged with the cylinders at a given price. The effect of Lay's testimony is that the same applied to the tanks.

Now let us consider Invoice No. 2593, which is part of defendant's Exhibit I, The exhibit is quoted:

Dealer Retail

"1 500-gallon tank No. D-4053 .................. $250.00 $ ______ 6 Lbs. Bu-Seal @ $1.25 3 lb. can .............. 2.50 ______ 1 R-500 Roney Regulator ....................... N/C ______ 1 10 gallon tank No. 4032 ..................... N/C ______ 10 gallons propane .......................... .40 ______ 2 Instant Steam Boilers @ 168.00 ea. .......... 336.00 210.00 ea. 1 20-gallon Smith-Milwaukee Hot Water Heater ...................................... 63.29 83.39 1 Eagle Gas Range ............................. 96.22 128.30 1 DeLuxe Tappan Range ......................... 179.78 239.19 1 O'Keefe Merritt Range (Combination) ....... 197.68 259.25 2 O'Keefe Merritt Electric Clocks @ 22.50 ea. 45.00 ______ 1 30,000 B.T.U. Panelray ...................... 77.17 102.89 1 Southern Aire Heater ........................ 42.00 58.60 1 45,000 B.T.U. Warmolater Heater ............. 117.60 156.80 _______ 1407.64

Signed: E. Lay LaGas Liquid Gas Company"

Invoice No. 74 has two columns, too: "Dealers Cost" and "Retail For." Invoice No. 2598 after charging dealer 15c per foot for copper tubing says: "you chge. 25c per foot when using for installations."

These extracts from Exhibit I indicate that as to those articles which fall under the franchise contract as purchases for resale by the dealer, two prices are listed; one the dealers price and one the retail price. The tank has no retail price.

Considering Mr. Lay's testimony in the light of these exhibits and in the light of his franchise contract, it seems reasonable to say that he knew he was not purchasing title to the tanks from plaintiffs. He thus had no title to pass to defendants if we conclude he tried to pass title to them.

Now, what about estoppel applied on a basis of giving a dealer apparent title to sell? Let us examine the "combination" agreements plaintiff had defendants sign. They recite that the buyers rent these tanks from plaintiffs. The Johnsons admitted in their pleadings that they were partners doing business as the Horseshoe Cafe. Johnson testified that in his absence his wife looked after the business. Three of the checks offered in evidence by Johnson in payment of Lay are signed "Horseshoe Cafe Motel by Loraine M. Johnson." The "combination" contract speaks of Morris Johnson as "Buyer." Under Morris Johnson appears "Horseshoe Cafe" in pencil. Loraine Johnson signs as buyer. The tank in question is the one in controversy, claimed by the Johnsons. Quite aside from the question of whether or not the writing is a contract it seems clear that Loraine Johnson was signing as one of the partners. So far as Robinson and Blake are concerned, the "combination" agreement was made out to them as the R B Cafe, and Blake in effect admits that the firm name was signed by Robinson. Are these instruments, then, not written admissions of ownership of the tank in plaintiffs? If so, can there be an estoppel if defendants knew that plaintiffs had title and Lay did not?

Furthermore, there is the evidence that plaintiffs kept the tanks in repair and painted the signs which read:

"This tank should not be filled by anyone other than the LaFrentz Liquid Gas Co."

If defendants owned the tanks, what was the purpose of the sign?

The statement in the prevailing opinion that we should interpret the franchise contract so that it cannot be a means of trapping innocent parties, is not appropriate to the issues of this case. Had defendants proved that they were of the trapped class, they would, of course, be protected (see citations above); but I am not convinced that they have placed themselves within that class.

McDONOUGH, J., concurs in the dissenting opinion of PRATT, C.J.