OFFXc& OF !IXE&TTORHfXOEpDpRAL
OFTEXAB
BUSTS%
Cterald
C. Mann
AttorneyGeneral
HonorableC. D. Siolplonrr,
Co~~ptrollor
sttigty 2bartt
1
DserSlrl~ Ritt~n~e;tFuel
oontttruotion
No. 04938
op5.nion
of ma-
compaw :
.
We have your lettsr.ofFebruary19, 19433re-
qwstlngour oplniorkoonstruiagoertaiapr,rovislcms of
a oontraatbfotween Tha Mollleater
Fuel Companyand The
Stateof Texas coveringthe flsaelyear 1942-43,from
whleh letter we quoter
~%he MoAlesterFuel Capany, dth enoral
02ftoeaet EWlerCter,Oklahcmatand wi%l other
offlaerrat 3002 sunlus street Dellat,Texas
and also at R0okiW.e Teas &as the oonWa&
for iurniehLnglign& to l&e Unlversltyof
Tsaaars year 194243. In pore
for the fittaal
Y t&arm la .nota pro er one aoctordlqto
dttrunderof;sndingo
P theoontraot. Tha q3m-
pttnyhas replIedthat the ahergeIs e
one In aooordenoewith thc~a4tntraote
we have your offloial ad-rho on the
n * + +,w
HonorableC. D. Slmnons,Page 2
provisionsof the aontraotln question
Pertinfant
are the followinga
"The Party oftthe First Part hereby oontraota,
binds and obligates%tself to furnishto
%%iversity of Tems 6f the State of Texas
~omftE~ioTtyooitheBeaartdPartt;hroughallt:
the perladooveredby this eontreot,
w*+**
* + * * All lignite to be of go@ gram
ta ot.not lass thfl 10
on
Page 3
HonorableC. D. Sialptoas,
"The said Uhlversltyof Texas end the Stats
of Texan agree to pay to The laiilesterFuel
Companythe sum OS One Dollarand Seventy-three
Cants ($1.73) per ton F.O.B. Austin,Texas f'or
each and every ton of llgnltedelivereduuder
this oontreat. The above prlaa of Oua Dollar
end Seventy-three Cants ($1.73) per ton for
all Ligtitkdeliver&dunder~thisoontradtshall
"It la understoodend agreed that in the
*Vent the unitedStates of Awrlaa or the State
of Teht imposesa .saverenoo hx or other direat
tax on Ligniteduring the liie of this ~o&tra&,
aad the Sellerhas to ay the tax, that SW&
tax will be added to tEe Sellers priae on L+
nlte.
n * * **
"It is furtheroontraotedand agreed that*
breaahof the terms of this oontraut,
"1chisaoutraothas bean gntaredinto by
authorityoi?e~rasolutioudurJI~entered iut@
by the Board of Controlof the State of Terns,
HonorableC, D. SImmoas,Page 4
after cellingfor bids and advertisements
thera-
EXHIBIT At Conditionsof ProwsaL a@
sDeaifL'ioationa
for llanL* .
%XHIBIT Bt Id of MoAlesterFuel CO~IJ~Q.~
phesis ours)
Tha pertinentpart of the bid referredto In the
above quoted -p?or;tions
of the oontraatreads.
The general pule that writings whlah am either.
enuexed to or referred tie in a aontre& will be am&rued
as e part 0~s the aontraotis well stated In 17 C.J.6.
716, 8eoI 29%
A cursory examinationof the oontraut,~fromwhluh
wo have quotbdoo ioualy,diaoloaes the feat that almwt
every provlaiontierein oontelnadis referableto end
dependentupon the terms end aondItionsof the *%paaifiaations,
proposalsendbid*nhiohare "medee pert" thereofby
reSinmoe end are enwxed theretaes Erhlbll% With&at
suah axh%bItsit la crlearthat the eontreatis lnaomplete.
Werower, the aontreqtoontaipa its own 8peaiilorule
of construction req&r%ng that the exhibitsshellbe eon-
atruades pert thereoft "the terms of this * * * oontreot
shellbe aonstruadto inoltade spealfiuetlons, bids and
propose18oonneotedthercrvith end heretoettachedW.
HonorableC. b, Simuons~Page 5
It is fundauentalthat 3.naonstruingcontraots
effeotail1 be iven to all provIsionsthereincontained,
If possible. If is likewisefundamentalthat the expressed
inteotof the c6ntraatingpartiesmst be given effeot.
We think that under the rule of uonstruationlaid
down In the aontracti&elf, the provlslonsaontainedin
the specificationsbid and proposalsmst be given the sam
*eight,and that &ey are of equal rorae and effeatof any
other provisionsoontalnedIn the aontraat. Unless thke 3.8
some ambiguityor eonfliatbetweenthe variousprovisions
of the aantract,no construatlonis needed. We find no
such aonfliatand no suah ambiguityes to justirya aon-
structionof the aontract. It is clear and expllaitwith
referenaeto the matters thereinoontalned. 1tspeolf@aUy
providesthat In the event of au lnareaseor deareaseIn
freightrates or of Federal taxes thereon,that the prioe
providedfor in the eoattiaotshallbe increasedor deareased
acoordinglp.
therefore advfaeyou that if-the frei f
Vtilel
rate has increasedor 1f the Federaltaxes thereon e Y8
increasedthe sellerls entitledto add Such Auareaset0
the priae of the te end the pur&aser uuder this aon-
treat,Ss.obllgated~
Y pay such additionalan&m!&, W
veraely,~if suoh.rekesor taxea should be dimepjed then
the purahaaerwould be entitledto have the advantageof
such decmase in the price peld?
Our ittentionMa been aalled to the cases of
JohnsonV* Grand Fraternity+255 Fed. 929 and Delanray ve
Fefnt%rsSiiate~ 115 8.8. (26~ 736, We think that
?3enlc,
neitherof suuhoeaes la In paina here, The Jc&xrison 0888
is authorityfor the generalpropesitlonthat the state-
ment%hat the exhibit14 #made a art" of a tm&raati; ir
not aontrolling,a@ that~where,&It pZ’OViS$~lN of the ,&an-
treatand those of the arhlbitare in ednflictt the prbc
visionsof the aontraotwill oo&reL Th* Ddla~y O~SI)
did not involvean exhibitat all but a eneml referenae
ta oontraotsbetwen other parties,and fhe ooart h&d
HonorableC, IL Binanon5,
Page 6
that suuh generalzyferenoeoould not have the effectof
substltutlng the provlslo~ of the oontraotreferredto
Yor the speaifieally expressedprovisionsof the oontract."
We have neitherof suah f#ltuationnpresentedhere.
On the aontraryt the contraatbeforeus speolflaally
rovldesthat it shall be oonstruedto "iAaiUdespeoiflcatlona,
Ids, and proposalseonuectedtherewlthn.We can no more
ii
disregardthis provisionof the ooatraatthan we 06~1dis-
regardany Other prOVhiOA theIWinoontained,
It has alla0been suggestedthat the portionof
the bid providingfor the add%tionto t&e sellingprioe of
.an lnarease,offreightrates or Pederaltaxes is %n ao~-
fllctwith that portionof the oontraotwhloh providesthat
lf State or Federal%everanae taxes or other directtaxes"
are leviedupon llgnite",~ and sellerhas to pay such taxes
the mount so paid shall be added to the sellingprice be-
cause It .lssaid that only ~~~evcmnce or other dlreat&es
on lignite*were %A the m$nds of'the aontraatingpatiies
and that such revision superuedebthe said provisionIn
thebld. To &a we cannot agree for the reason that it is
oboioua~that a Federal.tax upon fzelghtrates mentionedln
the bid is neithera %mveranqe tax",norIs It any "other
dhwt tax upon llgA%W. The two are altogetherdifferen
aAddietiAt?t*Furthermorehaving lnoludedthe provW.en
for the addltlonof such transportation taxes in the bid
whiahjunder the speclflolrnguageof the aontraot,must
be construedae a part of It, It ,wasnelther~neoessary
nor desirableto reiteratesucrh~provislon in the addltlonal
writ+&
Aguln it Is sugge8teathat the Z?OV.tSfOA
~Shat"all
tracesrtatlon’aharges must be prepaid4y the geller.,lrIn
OOACLp"
at ulth -theprovlsianthat lnoreasedFederaltrans-
portationtaxas'shallbe added to the price, The bid was
~made.FcO.Birtustin,Texa& It dleems fairlyobvlouathat
all partleato the oontraat,at all times,axpeatedmtlLer
to pey euah izansportotl6n tiger. Thla, however doe8
not, ia the leastBkilitate agnhUt 0Ur co~~hIsioAiha%
ther? in no%kfllat In auuh provisions. It ls'equallyas
xonorableC, 9, %BEWSU% Pm 7
obviousthat if the pax-tier, hadUoAtemplatedpaymeAtof
transportation ehargeaby the buyer there would have been
ho reasonand ho jU8tificratioA for adding an increase in
such charges to the sellingprioe,nor would there have
been any reason for the provisiondeareaslngthe selling
prlae in the event of a dearease in euah aharges.
n?ustingthat the above fully answersyour in=-
quiry,we are
Very truly yours :
ATTORWHYOEWSRALOF TEXAS
By /is/ Forler Roberts
i?ow~~ler~tts