Coalinga Mohawk Oil Co. v. Standard Oil Co.

LANGDON, P. J.

This is an action upon a contract entered into between plaintiff and defendant for the recovery of additional compensation claimed by plaintiff to be due for oil delivered under the contract. At the conclusion of plaintiff’s ease the court directed the jury to bring in a verdict for defendant. The appeal is from the judgment rendered on that verdict.

The contract between the parties was dated May 17, 1915, and a copy thereof appears in the record. It provided for the sale by plaintiff for the period of one year from the date thereof of certain crude oil produced by plaintiff from the premises described in the contract. The controversy between the parties arises under the price clause of the contract, which reads as follows:

“The first party agrees to sell and deliver to the second party, ánd the second party agrees to accept said oil under the conditions herein named, and, except as herein otherwise provided, the first party agrees to accept, and the second party agrees to pay therefor the

current prices

offered by the second party to other producers in the said Coalinga Oil Field for oil of like gravity and quality as the oil delivered

hereunder;

said prices, at the date hereof, being as follows”: (Then follows a specification of prices, varying with the gravities of the oils.) The contract then proceeds: “Whenever and as often as the prices so offered by the second party, at any time during the period of this contract, to such other producers in the Coalinga Oil Field for oils of like gravity and quality as the oil delivered hereunder are higher than the prices hereinabove mentioned, the first party shall be entitled to such higher prices from and after the tenth day after such higher prices are offered, and whenever and as often as the prices so offered are less than the prices hereinabove stated, then, at the expiration of ten days after such lower offer is made to such other producers, but not before five days’ written notice thereof has

[706]

been given to the first party, the first party shall deliver said oil under this contract at the lower price so offered, unless, prior to the expiration of said ten day period the first party notifies the second party that such lower prices are not acceptable, in which event this contract shall by such notice, be terminated at the expiration of said ten days, and the first party relieved of all further obligation to deliver, and the second party relieved of all further obligation to receive, any further oil hereunder.”