Texarkana Pipe Works v. Caddo Oil & Refining Co. of Louisiana

228 S.W. 586, 1921 Tex. App. LEXIS 758
CourtCourt of Appeals of Texas
DecidedFebruary 11, 1921
DocketNo. 2328.
StatusPublished
Cited by7 cases

This text of 228 S.W. 586 (Texarkana Pipe Works v. Caddo Oil & Refining Co. of Louisiana) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Texarkana Pipe Works v. Caddo Oil & Refining Co. of Louisiana, 228 S.W. 586, 1921 Tex. App. LEXIS 758 (Tex. Ct. App. 1921).

Opinion

LEVY, J.

(after stating the facts as above). It is chiefly to be determined on thib appeal whether or not the appellant failed to support the plea in reconvention by any such evidence as would authorize the jury to find for them on such plea. The first question arising, therefore, is, Did the appellant and appellee, pursuant to the stipulation in the contract, enter into a binding contract for the sale and purchase of fuel oil for the year 1918? The pertinent stipulation provides:

“In consideration of the purchase of residuum fuel oil by the buyer as above set forth, the seller hereby gives to the buyer an option on residuum fuel oil required to operate their pipe works at Texarkana during the years 1917 and 1918 on the following terms [which are set out].”

[1] According to the wording of the stipulation in hand, “the seller,” for a “consideration of the purchase of residuum fuel oil by the buyer as above set forth” does “give,” or assent, that “the buyer” have “an option,” or privilege or right to buy residuum oil to the quantity “required to operate their pipe works at Texarkana during the years 1917 and 1918” for the prices specified. There are no terms left open for further negotiations. A consideration is stated which is sufficient. The seller was agreeing, for a consideration, with the buyer that it should have the right to buy oil during a certain time at a stipulated price. It is a continuing offer to sell which may or may not, within the time specified, at the election of the optionee, be accepted. In effect it is an agreement to renew or extend the original contract for another year at the option of the buyer, and an acceptance of the option within the time is sufficient to bind both parties. The option, though, is not in legal effect a completed contract until there is acceptance by the buyer of the continuing offer of the seller in the manner and within the time specified. The testimony relied on to establish the alleged contract of option was'that of the general manager of the pipe works and certain correspondence between him and the oil company. According to the manager’s testimony:

“We bad the matter up with the Caddo Oil and Refining Company of Louisiana in December, 1917, on the question of renewing under our option in the original contract,” meaning that of 1915.

The letter from the oil company to the manager, of date December 5,1917, was read, which says:

“We are in receipt of your letter of the 4th (December 4, 1917) stating you desire to avail yourselves of the option of December 1, 1917, for fuel oil for 1918. I have the contract before *589 me, aiad it appears you had an option from December 1. Your letter was dated December 4, some three days after your option expired. The price of fuel oil is very high, a considerable quantity is now being sold for $1.80 to $2.50 per barrel, and it looks as if it will maintain these prices during the present year. We have been billing you oil at 72 cents per barrel, being about one-half of the market value of the oil. We do not care to take the advantage of the technicality of your permitting the option to expire, but we do believe under the unusual circumstances we should be entitled to a better price than $1.22 per barrel for the year 1918. When our contract was made neither of us expected these unusual conditions would come about. I think you should pay us at least $1.40 per barrel for your 1918 supply of fuel oil.”

The manager, continuing, testified:

“I answered that letter. We were writing about a contract dated December 15, 1915, covering our fuel oil requirements for 1916, with option for renewal for the years 1917 and 1918. That is the contract we were corresponding about. I got this letter of December 17 in reply to what I had written him about the option; he accepted it.”

The letter mentioned reads:

“We are in receipt of your letter of 6th inst., stating your contract automatically renews itself on the 1st of December, and it was not necessary for you to notify us of your intention to extend the option over the year 1918. We still feel that you should have notified us promptly on December 1. However, this is a small matter, and as written you ' previously, we do not feel inclined to take advantage of you, but do feel under the circumstances we are, entitled to a better price than $1.22 for the oil." When contract was made with you there was no thought of our being at war. We feel that you should take this into consideration and pay us a fair price for the oil. If you insist on oil at $1.22 per barrel we will supply. However, we do feel that we are entitled to a fair price for same. We will be pleased to hear from you .on this matter.”

The manager, continuing, said:

“We replied to that letter, to ship the oil. The Oaddo Oil & Refining Company after that up until May complied with the terms of that contract. They furnished us oil at the fixed price of $1.22 per barrel.”

[2-4] There is no precise time stated in the stipulation' within which the acceptance must be made; but it is reasonably contemplated that such acceptance should be made before the expiration of December 31, for the original agreement provided that shipments of oil were to begin “on January 1,” and the oil was to be delivered “between January 1 and December 31.” Therefore the time of the notice, on December 4, as shown in the letters, would be within the time required by the option. And any particular form or method of acceptance is not provided for in the stipulation. Simple assent would be sufficient compliance, and such assent is apparent from the evidence. Did the appellant accept the option contained in the 1915 contract according to its terms? The letter written by appellant to appellee was not in evidence, and the exact wording of the acceptance does not appear. The letter of appellee states the letter of appellant to have stated, “Desire to avail yourselves of the option of December 1, 1917, for fuel oil for 1918,” And in the light of the evidence it would fairly appear that the appellant was accepting the option provided for in the “contract entered into in December, 1915, covering fuel oil requirements for 1916 ‘with option for renewal for the years 1917 and 1918.” The general manager of the appellant so testified, and there is_evidence authorizing an inference of fact that there had been a renewal by the parties of the option for the year 1917. The manager of the appellant further testified that in November, 1917, the appellee was furnished oil on the contract of 1915. And viewed from the standpoint of a peremptory instruction, it is thought that it may be inferred that the acceptance of December 4 was to continue in force the contract of 1915, as renewed in 1917, for the year 1918. There is, at least, not a lack of any evidence to show identity of the option pleaded, or a want of mutuality of the parties as to the identical option thus accepted. The effect of the acceptance of appellant was to convert the offer in the option on the part of the appellee into a binding contract upon both parties. The correspondence seems to state that the price payable for the oil was “$1.22 per barrel,” but such wording cannot be said, as a matter of law, to have so changed and varied the terms of the option stipulation to that extent as to make the acceptance in terms other than the very terms of the option.

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Cite This Page — Counsel Stack

Bluebook (online)
228 S.W. 586, 1921 Tex. App. LEXIS 758, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texarkana-pipe-works-v-caddo-oil-refining-co-of-louisiana-texapp-1921.