181 F.2d 960 (5th Cir. 1950), 12656, Southern Coast Corp. v. Sinclair Refining Co.

• Docket Nº: 12656.
• Citation: 181 F.2d 960
• Party Name: SOUTHERN COAST CORPORATION v. SINCLAIR REFINING CO.
• Case Date: May 17, 1950
• Court: United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 960

181 F.2d 960 (5th Cir. 1950)

SOUTHERN COAST CORPORATION

v.

SINCLAIR REFINING CO.

No. 12656.

United States Court of Appeals, Fifth Circuit.

May 17, 1950

Rehearing Denied June 19, 1950.

J. Hart Willis, Dallas, Tex., William A. Rembert, Jr., Dallas, Tex., W. M. Lewright, Corpus Christi, Tex., for appellant.

Carlisle Cravens, Fort Worth Tex., Allen V. Davis, Corpus Christi, Tex., Warren Scarborough, fort Worth, Tex., Nat. J. Harben, Fort Worth, Tex., Sloan Blair, Fort Worth, Tex., for appellee.

Before HOLMES, McCORD, and RUSSELL, Circuit Judges.

HOLMES, Circuit Judge.

Originally, this was a suit for the reformation and specific performance of a written contract to purchase gas; now, after the winnowing process of a trial in the court below, it is simply an action for damages for the alleged breach of such contract. There are only two points that we need to notice on this appeal: one is the refusal of the court below to admit parol evidence to explain an alleged ambiguity in the contract as to whether appellant had a right to meet every bid received by appellee, or only those of reputable, responsible, and then existing, gas pipe line distributing

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companies; the other is the denial by the court of the appellant's application to amend its complaint at the conclusion of the evidence so as to raise the issue of whether appellee is a gas pipe line distributing company.

Said contract gave the appellee an option to purchase gas from appellant for the years 1946-1951, inclusive at the rate of 5 1/2 cents per one thousand cubic feet, provided said option was exercised in writing on or before ninety days from the date thereof; but it was further agreed that the appellant should have 'the preferred and preferential right, ' in the event the appellee did not exercise such option, to meet any price for gas quoted to appellee by a reputable, responsible, and then existing, gas pipe line distributing company. The contract also provided that, before purchasing gas from any such competitor, appellee should first obtain a refusal in writing from appellant, declining to meet such competitive price as offered.

Appellant contended in the court below that the contract was ambiguous in that it could not be ascertained with certainty which of two possible alternatives the parties intended when they gave appellant the preferred and preferential right to meet any price for gas quoted by a reputable, responsible, then existing, gas pipe line distribution company. The appellant construes the language to mean that the parties intended to make a reputable, responsible, then existing, gas pipe line distributing company the only type of competitor whose bid it would have to meet in order to hold appellee's business. In other words, appellant says that the appellee was required to buy its gas from it from 1946 through 1951 unless appellant failed to meet the offer of a reputable, responsible, then existing, gas pipe line distributing company. On the other hand, the appellee contends that the only duty imposed on it under the preferred and preferential clause is not to purchase gas from a reputable, responsible, then existing, gas pipe line distributing company without first obtaining a refusal in writing from appellant declining to meet such competitive price as might be offered by such named competitor.

In order to determine the intention of the parties with respect to their rights after the contract, we must consider the language contained in the following paragraphs of the contract:

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