Sun Co. v. Vinton Petroleum Co.

• Decision Date: 15 February 1918
• Docket Number: 3039.
• Citation: 248 F. 623
• Parties: SUN CO. et al. v. VINTON PETROLEUM CO.
• Court: U.S. Court of Appeals — Fifth Circuit

248 F. 623

SUN CO. et al. v. VINTON PETROLEUM CO.

No. 3039.

United States Court of Appeals, Fifth Circuit.

February 15, 1918

Rehearing Denied March 23, 1918.

Batts Circuit Judge, dissenting.

E. E Townes, of Houston, Tex., T. L. Foster, of Beaumont, Tex and Alex W. Smith, of Atlanta, Ga., for appellants.

W. D. Gordon and Henry G. Russell, both of Beaumont, Tex., and A. P. Pujo, of Lake Charles, La., for appellee.

Before PARDEE, WALKER, and BATTS, Circuit Judges.

WALKER Circuit Judge.

This is an appeal from a decree rendered after the reversal by this court, on an appeal by the plaintiff, the appellee in the present appeal, of a former decree, and the remandment of the cause. Vinton Petroleum Co. v. Sun Co., 230 F. 105, 144 C.C.A. 403. There was no change in either the pleadings or the evidence in the case after it went back to the trial court. What the appellant, the defendant below (and which will be called the defendant), now complains of, is the refusal of the trial court, when the case came before it again as a result of the reversal and remandment by this court, to consider and pass on that part of the defendant's answer to the bill which prayed that the option clause of the contract between the parties of December 21, 1912, be reformed, and alleged, in support of the prayer for such relief, that before that contract was reduced to writing it was mutually agreed between the parties that the price at which the defendant was to have the option of renewing the contract for the plaintiff's production of oil for an additional two years following December 24, 1914, was to be equal to the highest price which either of the pipe line companies doing business in the Vinton oil field when the original contract was made was, on or about December 24, 1914, in good faith contracting to pay or offering by contract to pay for oil in said field, but that by mutual mistake in the choice of words and in reducing the contract to writing the contract failed to clearly express the intention and meaning of the parties which had actually been agreed on before the contract was written, and which they thought and believed the writing expressed. It is pointed out by counsel for the defendant that the claim asserted by the bill was resisted on two grounds, namely: (1) That the contract as it was written did not have the meaning attributed to it by the bill; and (2) that if, as it was written, it had that meaning, such a mutual mistake was made in reducing it to writing as to entitle the defendant to have it reformed, and that the trial court, by the decree which was reversed, sustained the first-mentioned ground of defense and made no disposition of the other one. And, based upon the fact that in the opinion rendered by this court on the former appeal nothing was said about the claim made by the defendant in its answer that the option provision, the exercise of which was sued on, should be reformed, the contention is made that the former action of this court left that issue undisposed of and subject to be presented anew to the trial court.

In the opinion of the writer the last-mentioned contention is not sustainable. Under the well-settled rule that an appeal in an equity case brings the entire case before the appellate court, the issue raised by the defendant's answer and the evidence adduced to support it as to its right to have the option feature of the contract so reformed as to make it express the agreement which it was alleged the parties made before they undertook to reduce it to writing was before this court when the case was here on a former appeal. It was as open to the party opposed to the reversal of that decree to resist a reversal of it on the ground that the evidence supported its cross-demand for a reformation of the option provision of the contract as it was to resist reversal on the ground that the meaning for which it contended was expressed by the contract as it was written. If the issue as to the suggested reformation of the option clause of the contract had been insisted on by the defendant when the case was here on the former appeal, the ruling which this court then made could not properly have been made without deciding that issue against the defendant. A party may abandon an issue by failing to insist on it. It seems that this is what the defendant did by failing to urge in this court, when the case was here on the former appeal, that the decree then under review should be sustained because the evidence supported the claim, set up by the defendant's answer, that the option provision of the contract should be reformed. It is not at all uncommon for a court's opinion to omit any mention of an issue raised by the pleadings and evidence in the case under consideration, but which is not insisted on by the party by whom that issue was tendered. The writer understands that questions which by an appeal have been brought before an appellate court for its decision cannot again be insisted on when the case comes before the same court on a subsequent appeal; that a party cannot create an exception to this rule by calling to the attention of the appellate court, when the case is first before it, some only of the questions which the record presents for its decision, reserving other questions, also presented by the record, for a second presentation to the trial court in the event of the remandment of the case to it, or to the same appellate court on a subsequent appeal; and that a subsequent appeal brings up nothing but the proceedings subsequent to the mandate. Illinois v. Illinois Central Ry. Co., 184 U.S. 77, 22 Sup.Ct. 300, 46 L.Ed. 440; United States v. Camou, 184 U.S. 572, 22 Sup.Ct. 505, 46 L.Ed. 694; Smith v. Vulcan Iron Works, 165 U.S. 518, 17 Sup.Ct. 407, 41 L.Ed.810. As was said in the opinion in the first-cited case:

'To allow a second writ * * * or appeal to a court of last resort on the same questions which were open to dispute on the first would lead to endless litigation.'

The propositions just stated are not controverted by the decisions in the cases of Mutual Life Insurance Co. v. Hill, 193 U.S. 551, 24 Sup.Ct. 538, 48 L.Ed. 788; and In re Sanford Fork & Tool Co., 160 U.S. 247, 16 Sup.Ct. 291, 40 L.Ed. 414. The questions which in those two cases were held to have been open to decision in the trial court after a remandment by the appellate court had not been raised when the cases were first in the appellate court, but were first raised by proceedings in the trial court subsequent to the mandates. Expressions made use of in the opinions in those cases are to be read in the light of this fact. It seems to the writer that this court's former decree disposed of the issues raised by the pleadings and evidence as disclosed by the record then before it, as well the one which was waived by not being urged for consideration, when it was open to the defendant to do so if it chose, as the one which was argued by counsel and was discussed in the court's opinion.

But, if the record discloses that the result must have been the same if the action which is complained of had not been taken, it may be assumed, without being conceded or decided, that when the case went back to the trial court the demand asserted by the bill could not properly have been maintained, if the evidence which had been adduced was such as to support the claim set up by the defendant that it was entitled to have the option provision of the contract reformed pursuant to the prayer contained in its answer. The defendant could not have been prejudiced by the refusal of the trial court, when the case was last before it, to pass on an issue it had tendered, if the record discloses that the evidence which it had to rely on to support that issue was insufficient for that purpose.

By a written contract between the plaintiff and the defendant dated December 21, 1912, the former sold and the latter bought the former's production of oil during the period of two years commencing December 25, 1912. What is sought to be reformed is a clause contained in that contract which gave the defendant the option of renewing the contract for an additional two years following December 24, 1914. On January 2, 1915, the defendant exercised the option in the way prescribed in the option provision as it was written, without suggesting that the option it was entitled to exercise was in any way different from what the writing showed it to be. So far as the record discloses, the first suggestion that the option which the parties agreed on was not truly expressed in the writing was made by the defendant in its answer, filed April 10, 1915, to the bill in this case. It may be inferred that in the circumstances existing on January 2, 1915, the defendant would not have exercised the option, if it had then understood or believed that the option provision contained in the written contract had the meaning which this court has decided was expressed in the provision as it was written. So it is disclosed that the defendant did not seek a reformation of the option provision as it was written until after its exercise of the option had made it of vital importance to it to sustain the contention that the option for which it really contracted was not correctly stated in the written instrument which evidenced the contract. If at any time both the parties to the contract understood that the option provision which they agreed on was different from the one expressed in the writing, certainly it was not made to appear that that mutual understanding existed when the option was exercised. The defendant's exercise of the option, shown by the written communication, dated January 2, 1915, was not preceded by any negotiations or verbal communications between its representatives and those of the...