Southern Commun. Gas Co. v. Houston Nat. Gas Corp., 11638.

• Decision Date: 02 October 1946
• Docket Number: No. 11638.,11638.
• Citation: 197 S.W.2d 488
• Parties: SOUTHERN COMMUNITY GAS CO. et al. v. HOUSTON NATURAL GAS CORPORATION.
• Court: Texas Court of Appeals

197 S.W.2d 488

SOUTHERN COMMUNITY GAS CO. et al. v. HOUSTON NATURAL GAS CORPORATION.

No. 11638.

Court of Civil Appeals of Texas. San Antonio.

October 2, 1946.

Rehearing Overruled October 30, 1946.

Appeal from District Court, Nueces County, Ninety-Fourth District; Allen Wood, Judge.

Suit by the Houston Natural Gas Corporation against the Southern Community Gas Company, the Southern Coast Corporation, and another for specific performance of a contract provision giving the Nueces Corporation, plaintiff's assignor, an option to repurchase and repossess a gas transmission line conveyed by such corporation to defendant Southern Coast Corporation. Judgment for plaintiff, and defendants appeal.

Affirmed.

Kemp, Lewright, Dyer, Wilson & Sorrell, of Corpus Christi, Thompson, Knight, Harris, Wright & Weisberg, J. Hart Willis, and James E. Henderson, all of Dallas, for appellants.

Blades, Chiles, Moore & Kennerly, of Houston, Fischer, Lyle & Burney, of Corpus Christi, and B. F. Whitworth, of Houston, for appellee.

MURRAY, Justice.

This suit was instituted by Houston Natural Gas Corporation against Southern Community Gas Company, Southern Coast Corporation and S. C. Lewis, seeking specific performance of a certain portion of a contract between The Nueces Corporation, on the one hand, and Southern Community Gas Company and Southern Coast Corporation, on the other, dated December 29, 1943. The rights asserted by Houston Natural Gas Corporation were based upon an alleged assignment, on January 25, 1945, by The Nueces Corporation, of all its rights under said contract to Houston Natural Gas Corporation. The suit was defended upon the theory that the asserted rights were nonassignable.

The trial was before the court without a jury and resulted in a finding that rights were assignable and therefore plaintiff was given a judgment for specific performance. From that judgment Southern Community Gas Company, Southern Coast Corporation and S. C. Lewis have prosecuted this appeal.

The facts are practically undisputed and but one question is presented which relates to the assignability of the right which The Nueces Corporation had to repurchase and repossess a gas transmission pipe line.

Originally The Nueces Corporation, hereinafter referred to as Nueces, owned a gas transmission line extending from the Clarkwood Area to the City of Robstown in Nueces County. On December 29, 1943, Nueces entered into a written contract with Southern Community Gas Company and Southern Coast Corporation, hereinafter referred to as Southern, among other things conveying the above described gas transmitting pipe line to Southern. Paragraph 5 of the contract provided for an option to repurchase and repossess this gas line in the following language, to-wit:

"It is agreed and understood that after the expiration of the primary term of one year and at any time thereafter within the period provided in Paragraph 4 above, Nueces may, if it so elects, repurchase and repossess the pipe line herein sold and conveyed to Southern as then existing by giving Southern 120 days notice of its intention to purchase, said purchase to be made for a consideration of $10.00 cash, plus the actual cost of the materials used and necessary for Southern to repair and recondition, or replace the said line and plus one-half of the cost of the necessary labor actually used in installing the repairs and maintaining said line, but less 10% per annum depreciation on the said cost of materials and one-half of the said cost of labor. In the event Nueces exercises its option to repurchase and repossess the gas pipe line, all obligations of Southern under this contract will be terminated at the time Nueces takes over the line."

In addition to this provision the contract obligated appellants to (1) sell to Nueces, for a period of one year, sufficient gas to meet the requirements of Nueces under its contract with the City of Robstown, and (2) transport all gas, for the duration of the war and for six months thereafter, needed by Nueces in the fulfillment of its contract with the City of Robstown. Provisions were made relative to metering the gas, the price to be paid for the gas and its transportation and other pertinent matters.

On January 25, 1945...