United Carbon Co. v. Mississippi River Fuel Co.
| Decision Date | 11 June 1956 |
| Docket Number | No. 41309,41309 |
| Citation | 230 La. 709,89 So.2d 209 |
| Parties | UNITED CARBON COMPANY v. MISSISSIPPI RIVER FUEL CORP. |
| Court | Louisiana Supreme Court |
Herold, Cousin & Herold, Shreveport, for plaintiff-appellant.
Shotwell & Brown, Monroe, for defendant-appellee.
The plaintiff, United Carbon Company, is appealing from a judgment dismissing, on defendant's three-year prescriptive plea, its suit to recover from the Mississippi River Fuel Corporation the sum of $249,140.44, with interest at 6%, 1 under a contract of August 1, 1929, as amended, in which the defendant agreed to pay, over and above the established rate, the sum of 1.6cents per thousand cubic feet on a quantity of gas equivalent to 15,571,278 thousand cubic feet of gas purchased during the period from November 21, 1944, to November of 1946.
The record discloses that the contract sued on (called the 'basic agreement') was entered into by the plaintiff and defendant on August 1, 1929. Thereunder the plaintiff, then constructing a gas pipeline from its lease holdings in the Monroe and Richland gas fields of Louisiana to St. Louis, Missouri, agreed to supply for a period of twenty years, beginning November 21, 1929, 17% of the requirements of the defendant at gradually increased rates per thousand cubic feet, payment therefor to be made by the 20th of each month based upon the daily reading of the meters controlling the intake of the gas, as reflected by statements furnished the seller by the buyer.
The price per thousand cubic feet for the first 3 years (November 21, 1929, to November 21, 1932) was to be 5cents; for the next 2 years (November 21, 1932, to November 21, 1934) 6cents; for the next 5 years (November 21, 1934, to November 21, 1939) 7.6cents; for the next 5 years (November 21, 1939, to November 21, 1944) 8cents; and for the last 5 years (November 21, 1944, to November 21, 1949) the price was to be determined from year to year by mutual agreement or arbitration, though it was never to be less than 8cents. In August of 1934, just before the price of 7.6cents was to go into effect, the plaintiff and defendant amended the basic agreement to provide that the price of 6cents per thousand cubic feet of gas, instead of the 7.6cents originally agreed upon, would continue to prevail during the year beginning November 21, 1934, but that the increase of 1.6cents thus relinquished by the plaintiff on all gas purchased by the defendant during this year would be deferred and added to an equivalent number of thousand cubic feet of gas at the agreed or arbitrated price during the last five years of the contract. Similar amendments covering the intake of gas during the years beginning November 21, 1935, and November 21, 1936, were also entered into.
On January 20, 1937, to facilitate the issuance of some $10,000,000 in bonds by the defendant, another amendment was entered into whereunder the basic agreement of August 1, 1929, scheduled to expire on November 20, 1949, was extended to a period not earlier than February 2, 1952, and it was further agreed that although the price to be paid for the gas was to be as theretofore fixed in the original contract as amended, if this price, including the amounts reflected by the 1.6cents deferred from prior years, exceeded 8cents per thousand cubic feet of gas, then the price, inclusive of the deferred amount, would be such as to insure that the earnings of the defendant during the period November 21, 1944, to February 2, 1952, would 'equal at least 1.5 times the sum of the interest on the sinking fund requirements of all bonds * * * outstanding under the First Mortgage and Deed of Trust * * * for such calendar year.'
The allegations of the petition, which are not denied, are that during the three-year period November 21, 1934, to November 21, 1937, the defendant took 15,571,278 thousand cubic feet of gas, and that inasmuch as beginning November 21, 1944, and through November 9, 1946, the defendant took 15,573,141 M cubic feet of gas, it is indebted to the plaintiff over and above the agreed price of 8cents per thousand cubic feet of gas during this period, the additional amount of 1.6cents previously deferred on an amount equivalent to the 15,571,278 thousand cubic feet taken during the years 1934-37 inasmuch as all of the conditions of the amendment of January 20, 1937, were fulfilled, including the one that the earnings of the defendant be at least equal to 1.5 times the sum of the interest and sinking fund requirements of the first mortgage deed and trust referred to in this amendment.
It is the contention of the defendant, in which it has been maintained by the trial judge, that inasmuch as the contract was one to buy and sell future unspecified quantities of gas, dependent upon the requirements of the purchaser, 'for which the buyer was to pay the seller at stipulated periods in accordance with accounts to be rendered showing the quantity of the commodity delivered during such period and the amount due therefor,' the suit was not one for a specified and definite sum alleged to be due by virtue of a contract, but, rather, one by a merchant on an open account within the meaning and contemplation of Article 3538 of the LSA-Civil Code, 2 and particularly that portion thereof providing that the three-year prescription applies to 'all other accounts'; consequently, inasmuch as the final payment became due under the contract on January 1, 1947, and this suit was not filed until November 13, 1952, more than three years later, whatever right the plaintiff may have had to recover has prescribed under the holdings in J. R. Watkins Co. v. Calhoun, 219 La. 151, 52 So.2d 528; W. T. Rawleigh Co. v. Thrasher, La.App., 153 So. 719; J. R. Watkins Co. v. George, La.App., 169 So. 267; and J. R. Watkins Co. v. Lewis, La.App., 16 So.2d 495.
The plaintiff, on the other hand, contends it is not a merchant and the suit is not one on an account within the meaning and contemplation of Article 3538, but, on the contrary, that it is engaged in the production of natural gas under mineral leases and the sale of that gas under long-term, negotiated firm or requirement contracts, and since its gas is dedicated to the performance of those contracts, being otherwise unavailable for sale, its suit is one by an undertaker or contractor to enforce the particular contractual obligations under which the defendant agreed to pay the plaintiff, upon the happening of certain conditions, which have occurred, the fixed additional sum of 1.6cents per thousand cubic feet on a determined and/or...
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