Court Opinion

ID: 6840159
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:15:24.526021+00
Date Added: 2024-06-11T16:04:49.569909
License: Public Domain

WALKER, Circuit Judge
(dissenting). After the appellant had received all the pebble phosphate to which it was entitled under its contract with the phosphate company, it brought this suit, asserting the claim that the appellee was liable for the amount of the difference between the contract price paid by appellant for phosphate delivered after the expiration of two years from the date of the lease and the lower prices at which during that period phosphate from the leased property was sold to others. The claim asserted that appellee was liable under a provision of a contract to which it was not a party, was sought to be sustained on the following grounds: (1) That following the making of the lease appellee assumed the phosphate company’s liability under the contract by treating that contract as its own, and complying with the obligations which the contract imposed on the phosphate company; and (2) that appellee, by taking over all the property of the phosphate company, 'absorbed that corporation and disabled it from complying with its obligations under the contract.
The conclusion that appellee assumed the phosphate company’s liabilities under the contract is not consistent with the uncontradicted evidence to the effect that the phosphate company remained in existence with a separate corporate organization until the completion in its name of the deliveries of phosphate called for by the contract, that the lease provided for the appellee furnishing to the phosphate company the phosphate required to fill the phosphate company’s existing contracts, and that the deliveries of phosphate to appellant were made pursuant to its orders or shipping directions, usually addressed to the phosphate company, for and in whose name the deliveries were made, and that throughout the period when appellant was getting the phosphate called for by the contract it «was having dealings with both appellee and the phosphate company in their respective names, buying from appellee things other than pebble phosphate, while the stipulated deliveries were being made for and in the name of the phosphate company. The evidence negatived the conclusion that appellee consented to assume the phosphate company’s obligations under the contract, or that, by leading appellant to believe that it assumed the phosphate company’s obligations under the contract, it estopped itself to deny that it assumed those obligations.
The evidence did not show that the lease had the effect of depriving the phosphate company of the means of complying with its obligations under the contract. It is apparent that the making of the lease was without effect upon the ability of the phosphate company to comply with any provision of the contract other than the one as to appellant having the benefit of the minimum price,-as the lease itself provided for the furnishing to the phosphate company of the phosphate required to enable it to make the deliveries to appellant called for by the contract, and the required amount of phosphate was furnished, and all the stipulated deliveries were made. The provision of the contract as to appellant having the benefit of the minimum price accorded by the phosphate company to any other purchaser was not applicable, in the absence of the phosphate company during any year actually making a sale or sales to another or others at a price less than that stated in the contract. The contract conferred on the appellant no right to require the phosphate company to continue to make sales of phosphate to others than appellant, or to, have. the. benefit of the -minimum price *816at which phosphate from land owned by the-phosphate company when the contract was made was sold by one who during the period covered by the contract acquired the ownership or control of that land. As the contract left the phosphate company free to discontinue sales of phosphate not already contracted for, no contract right of the appellant was violated by the phosphate company discontinuing sales of phosphate other than those it was under contract to make to appellant. No right of the appellant was violated by the appellee so using the power it possessed by reason of its ownership of all the capital stock of the phosphate company as to permit the phosphate company for about two years from the date of the lease to make sales of phosphate to others than appellant, and after the expiration of two years from the date of the lease to restrict its sales of phosphate to such sa^es as it had, prior to the date of the lease, obligated itself to make.
For sales to others than appellant of phosphate from the leased land at prices lower than, that stated in the contract to have the effect of entitling appellant tó the benefit of the minimum price, such sale or sales at lower prices must have been made by the phosphate company — the provision as to the minimum price governing being such a one that the applicability of it was subject to the condition or contingency of sales of phosphate at less than the contract price being made in any year by the phosphate company. The contingent nature of that provision made it unlike the one which unconditionally conferred on appellant the right to receive the amount of phosphate contracted for. If such sales were made, not by the phosphate company, but by the lessee, the appellee, the invoked contract provision, was not applicable. That provision cannot properly be given the same effect it would have had if it had been so framed as to give to appellant the benefit of the minimum price at which during any year within the period covered by the contract phosphate from land owned by the phosphate company when the contract was entered into was sold to another or others by either the phosphate company or its successor in the ownership or control of that land. To subject the appellee to the liability asserted, it is not enough that it used its power as lessee to keep the phosphate company from selling any phosphate except such as, prior to the making of the lease, it had' obligated itself to sell. It seems to me that the court’s ruling is sustainable on the ground that the evidence showed that appellant got all the phosphate it contracted for, that the burden was on the appellant to prove that it failed to get the stipulated benefit of any sales of phosphate made by the phosphate company at a price less than that stated in the contract, and that the evidence adduced was not such as to warrant a finding that during any year in question the phosphate company sold to another or others phosphate at a price less than that stated in the contract. The evidence as to sales of phosphate relied on as giving rise to liability under the provision according to appellant the benefit of the minimum price well may be regarded as having no tendency to prove that those sales were made by the phosphate company, or were such sales as gave rise to the liability asserted.