Gulf Pipe Line Co. v. Mann

On Rehearing.

Appellant vigorously assails our conclusion on the issue of interest, citing among other authorities Clester Bluitt et al. v. Pure Oil Company by Judge Hutcheson, now of the New Orleans Circuit Court of Appeals, filed on the 24th day of March, 1930, when he was district judge, wherein, construing the division order before us in these cases, he refused to follow the Kishi Case on the issue of interest. We do not further review this case because Judge Hutcheson’s opinion is not reported; it is before us as an exhibit to appellant’s argument on rehearing.

Appellant would distinguish the Parsons Case, cited in the original opinion, on the ground that it involved a verbal contract, while article 5070, R.S. 1925, governs written contracts; that the distinction is not sound in principle is demonstrated by the following additional quotation from the Parsons Case: “Undoubtedly, where the contract in any wise stipulates for interest from date, or from any other event as to that, it will control, and such intention may be evidenced not alone by the express stipulations of the instrument, or agreement, but may be proven by circumstances and inferences, as well.”

Appellant gives emphasis to the following quotation from article 5070 — that interest is allowed on a written contract “from and after the time when the sum is due and payable.” As we understand its argument, the contention is made that the purchase price of the oil, after the Falls suit was filed, matured under section 4 of the division order, and that section 2 ceased to operate as between the parties. This is not a correct construction of the division order. There is nothing in this record denying full validity and controlling effect to its each and every word. There is no conflict in its terms, and between these parties every word can be given effect. Section 2 expressly provided for the payment of the purchase price of the oil semimonthly; the parties agreed to this condition, so, let it stand as a part of their contract. Section 4 did not postpone the maturity date of the purchase price of the oil as provided under section 2; it only gave appellant the right to “retain” the purchase price after it matured, to be paid on the conditions therein stipulated. It does no violence to the language of the contract to relate article 5070 to section 2 of the division order; the purchase price of the oil did not draw interest from the day the oil was delivered to appellant, but had payment been refused, only from the maturity of the semimonthly payments. By exercising the right given it by the division order to “retain” money which had matured in its hands under section 2, appellant directly invoking in appellees’ favor the proposition in the Parsons Case that one should be compensated for “a present * * * advance to another.”

The division order was prepared by appellant and presented to appellees for their signatures; there was nothing in the original lease contract that required appellees to join in its execution. Piad the division order stipulated on its face that appellant would .have the right to retain appellees’ money under section 4 without paying interest, in this case for ten years, appellees might have refused to execute it; in that event appellant would have been compelled to pay for the oil as stipulated in the lease contract or to refuse to receive the oil under the lease. By its construction of the division order appellant would read into it an extremely onerous obligation which was not in the contemplation of the parties when the original lease contract was executed. Appellant could have avoided the payment of interest by simply stipulating to that effect in the division order; that stipulation was not made and it, and not appellees, ought to bear the consequences. *341A division order similar in its terms to the one in issue in these cases was before the court in Gulf Pipe Line Co. v. Warren, 45 S.W.2d 719, 723; construing the division order, the Court of Civil Appeals said: “Under the contract appellant, upon the appearance of an adverse claim, had the right, under the contract, to retain the fund and demand a bond, and having that right it should not be liable for interest on the funds, after such bond had been demanded and refused, regardless of when the demand and refusal occurred.”

Appellant insists that we are in conflict with this conclusion. The judgment of the court in that case charged appellant with interest from the date the oil was run to March 8, 1928; on that date it filed its bill of interpleader, tendering the fund into the registry of the court, the proceeding suggested in the Kishi Case, cited in the original opinion. On the facts of the Warren Case, the proposition cited by appellant was pure dicta.

The motion for rehearing is overruled.