Court Opinion

ID: 9834111
Source: CourtListenerOpinion
Date Created: 2023-09-01 23:18:09.252864+00
Date Added: 2024-06-11T07:44:11.709384
License: Public Domain

On Motion for Rehearing.
Each party has filed a motion for rehearing. Purchaser and Big Lake agree that their practical construction of the contract is that the storage to be maintained is not necessarily deliverable oil. We, therefore, withdraw our holding to that effect. This makes unnecessary any inquiry as to the state of Group No. l’s storage as of May 1, 1932. The undisputed evidence showed it to be in excess of 150,000 barrels.
We adhere to the view heretofore expressed that Big Lake’s alleged right of action against Purchaser is controlled by the two-year statute of limitation. It does not allege breach of a promise contained in the written contract. It alleges a fraudulent representation, which could give rise to an action for deceit. It was therefore an action for debt as defined by the Supreme Court in Gordon v. Rhodes & Daniel, 102 Tex. 300, 116 S.W. 40. Bishop-Babcock-Becker Co. v. Jennings (Tex.Civ.App.) 245 S.W. 104.
We think it immaterial, however, whether or not Big Lake’s alleged cause of action was barred by the two-year statute or the four-year statute. The un-contradicted evidence shows that subsequent to October 24, 1932, Big Lake supplied in excess of the May-June *472deficit, with the written request that any over delivery be applied to the next succeeding deficit. This does not make a case of relying upon the former representation, nor yet does it constitute as a matter of law a waiver of its right to timely notice of the May-June deficit. Such waiver being a necessary element in Purchaser’s right to recover upon the failure to make up this deficit, it must be pleaded and proved by Purchaser.
Upon further examination of the stipulation of January 10, 1927, respecting temporary changes in articles V and VI of the contract we find that we erred in holding that Big Lake in any event was charged with the duty of making up 4,582.27 barrels, the amount of- Group No. l’s deficit at the end of May 11, 1932. The stipulation did not suspend the provision requiring notice of deficits. It merely changed the provisions “relative to the time of delivery” of deficits, and expressly provided that no other provisions of the contract should be affected.
We adhere to our holding that Purchaser carried the burden of proving that it accepted all of the pipe line oil proffered by Group No. 1. It was put upon this proof by Big Lake’s general denial. It was necessary for Purchaser to prove its case, and part of that case was that it had complied with its obligation to receive all oil that Group No. 1 put in storage and stock tanks and delivered to the custody of its representative, and that there yet -remained the deficit which it demanded Big Lake to supply. Paragraph VI of the contract obligated Purchaser to buy from each group the daily production “tendered” it by each Group up to the amount of the contract quoted.
However, when we come to the alleged failure of Purchaser to accept 9,046.28 barrels of oil on April 30, 1933, we hold that the duty was upon Big Lake to both plead and prove that it had on hand pipe line oil which it tendered Purchaser in such condition- that it could be taken by Purchaser with safety on or before April 30, 1933, and that Purchaser refused to take it. It would be necessary, not merely that- the fluid on hand contain the amount, if any, with which Purchaser is-sought to be charged, but that the conditions were such that Purchaser was in duty bound to.receive it. We have sufficiently indicated when that duty arose.
In our opinion we expressed the view that Big Lake’s pleadings were sufficient as a cross-action against Group No. 1. We did that because they seemed to allege a refusal to deliver oil to Purchaser. 'Necessarily a refusal would be intentional. The obligations of neither Producer were unconditional. These obligations were conditioned, in the last analysis, upon production. There was no promise to go into the market to make up the daily, quota. There was the express obligation as to the operation of the wells stated in article XIV of the contract. Necessarily there was implied an obligation to use reasonable diligence in putting the oil in deliverable condition and tendering it for delivery after production. When these obligations were complied with, Group No. l’s performance was complete. While we thought that Big Lake had not made a case against Group No. 1 on the evidence, yet, inasmuch as its pleadings, with all reasonable intendments resolved in favor of the pleader, seemed sufficient to require submission of the theory of intentional default, we believed it had a right to a remand in order that it might, if possible,, further develop its case. However, as we-understand its motion for rehearing, Big-Lake rejects definitely the theory upon; which we based its right to a further hearing upon the asserted cross-action against. Group No, 1. In such a situation a new trial as between these two litigants would be futile. Accordingly, a rehearing is-granted Group No. 1 Oil Corporation, and' the judgment against it and in favor of Big Lake Oil Company is reversed and; here rendered in favor of Group No. 1 Oil Corporation.
The motions for rehearing filed by Reagan County Purchasing Company, Inc., and Big Lake Oil Company are overruled.
Costs will be taxed against the two last-named parties in equal proportions.