Case Information
*1 OFFXc& OF !IXE&TTORHfXOEpDpRAL OFTEXAB BUSTS%
Cterald C. Mann
Attorney General
Honorable C. D. Siolplonrr, Co~~ptrollor
sttigty 2bartt 1 op5.nion No. Ritt oontttruotion of ma-
Dser Slrl~
~n~e;tFuel compaw : .
We have your lettsr.of February 19, 19433 re- qwstlngour oplniorkoonstruiagoertaiapr,rovislcms of a oontraat bfotween Tha Mollleater Fuel Company and The State of Texas covering the flsael year 1942-43, from whleh letter we quoter
~%he MoAlester Fuel Capany, dth enoral 02ftoea et EWlerCter, Oklahcmat and wi %l other offlaerr at 3002 sunlus street Dellat, Texas and also at R0okiW.e Teas &as the oonWa& for iurniehLng lign& to l&e Unlverslty of Tsaaars for the fittaal year 194243. In pore Y
t&arm la .not a pro er one aoctordlq to dttrunderof;sndingo P theoontraot. Tha q3m- pttny has replIed that the aherge Is e one In aooordenoe with thc~ a4tntraote we have your offloial ad-rho on the n * + +,w
Honorable C. D. Slmnons, Page 2
Pertinfant provisions of the aontraot ln question are the followinga
"The Party oft the First Part hereby oontraota, binds and obligates %tself to furnish to %%iversity of Tems 6f the State of Texas ~omftE~ioTtyooitheBeaartdPartt;hroughallt: the perlad oovered by this eontreot, w*+**
* + * * All lignite to be of go@ gram ta ot.not lass thfl 10 on *3 Honorable C. D. Sialptoas, Page
"The said Uhlverslty of Texas end the Stats of Texan agree to pay to The laiilester Fuel Company the sum OS One Dollar and Seventy-three Cants ($1.73) per ton F.O.B. Austin, Texas f'or each and every ton of llgnlte delivered uuder this oontreat. The above prlaa of Oua Dollar end Seventy-three Cants ($1.73) per ton for all Ligtitk deliver&d under~this oontradt shall "It la understood end agreed that in the *Vent the united States of Awrlaa or the State of Teht imposes a .saverenoo hx or other direat tax on Lignite during the liie of this ~o&tra&, ay the tax, that SW& aad the Seller has to tax will be added to tEe priae on L+ Sellers nlte.
n * * **
"It is further oontraoted and agreed that* breaah of the terms of this oontraut, "1chis aoutraot has bean gntared into by authority oi? e~rasolutiou durJI~entered iut@ by the Board of Control of the State of Terns, *4 Honorable C, D. SImmoas, Page 4
after celling for bids and advertisements thera- EXHIBIT At Conditions of ProwsaL a@ sDeaifL'ioationa for llanL* .
%XHIBIT Bt Id of MoAlester Fuel CO~IJ~Q.~ phesis ours)
Tha pertinent part of the bid referred to In the
above quoted -p?or;tions of the oontraat reads. that writings whlah am either. The general pule in a aontre& will be am&rued
enuexed to or referred tie as e part 0~s the aontraot is well stated In 17 C.J.6.
716, 8eoI 29%
A cursory examination of the oontraut, ~from whluh wo have quotbd oo ioualy, diaoloaes the feat that almwt every provlaion tie rein oontelnad is referable to end dependent upon the terms end aondItions of the *%paaifiaations, proposals endbid*nhiohare "medee pert" thereofby reSinmoe end are enwxed thereta es Erhlbll% With&at suah axh%bIts it la crlear that the eontreat is lnaomplete. Werower, the aontreqt oontaipa its own 8peaiilo rule of construction req&r%ng that the exhibits shell be eon- atruad es pert thereoft "the terms of this * * * oontreot shell be aonstruad to inoltade spealfiuetlons, bids and propose18 oonneoted thercrvith end hereto ettachedW.
Honorable C. b, Simuons~ Page 5
It is fundauental that 3.n aonstruing contraots
effeot ail1 be iven to all provIsions therein contained, If possible. I f is likewise fundamental that the expressed inteot of the c6ntraating parties mst be given effeot.
We think that under the rule of uonstruation laid down In the aontract i&elf, the provlslons aontained in the specifications bid and proposals mst be given the sam *eight, and that &ey are of equal rorae and effeat of any other provisions oontalned In the aontraat. Unless thke 3.8 some ambiguity or eonfliat between the various provisions of the aantract, no construatlon is needed. We find no such aonfliat and no suah ambiguity es to justiry a aon- struction of the aontract. It is clear and expllait with referenae to the matters therein oontalned. 1tspeolf@aUy provides that In the event of au lnarease or dearease In freight rates or of Federal taxes thereon, that the prioe provided for in the eoattiaot shall be increased or deareased acoordinglp.
Vtilel therefore advfae you that if-the frei f rate has increased or 1 f the Federal taxes thereon e Y8 increased the seller ls entitled to add Such Auarease t0 the priae of the te end the pur&aser uuder this aon- treat ,Ss .obllgated~ Y pay such additional an&m!&, W veraely,~ if suoh.rekes or taxea should be dimepjed then the purahaaer would be entitled to have the advantage of such decmase in the price peld?
Our ittention Ma been aalled to the cases of Johnson V* Grand Fraternity+ 255 Fed. 929 and Delanray ve Fefnt%rs Siiate~ ?3enlc, 115 8.8. (26~ 736, We think that neither of suuhoeaes la In pain here, The Jc&xrison a is authority for the general propesitlon that the state- ment%hat the exhibit 14 #made a art" of a tm&raati; ir not aontrolling, a@ that~ where, &It pZ’OViS$~lN of the ,&an- treat and those of the arhlbit are in ednflictt the prbc visions of the aontraot will oo&reL Th* Ddla~y O~SI) did not involve an exhibit at all but a eneml referenae ta oontraots betwen other parties, and fh e ooart h&d *6 Honorable C, IL Binanon5, Page 6
that suuh general zyferenoe oould not have the effect of substltutlng the provlslo~ of the oontraot referred to Yor the speaifieally expressed provisions of the oontract." We have neither of suah f#ltuationn presented here.
On the aontraryt the contraat before us speolflaally rovldes that it shall be oonstrued to "iAaiUde speoiflcatlona, ii Ids, and proposals eonuected therewlthn. We can no more disregard this provision of the ooatraat than we 06~1 dis- regard any Other prOVhiOA theIWin oontained,
It has alla0 been suggested that the portion of
the bid providing for the add%tion to t&e selling prioe of .an lnarease,of freight rates or Pederal taxes is %n ao~- fllct with that portion of the oontraot whloh provides that lf State or Federal %everanae taxes or other direct taxes" are levied upon llgnite",~ and seller has to pay such taxes the mount so paid shall be added to the selling price be- cause It .ls said that only ~~~evcmnce or other dlreat &es on lignite* were %A the m$nds of' the aontraating patiies and that such revision superuedeb the said provision In thebld. To &a we cannot agree for the reason that it is oboioua~that a Federal. tax upon fzelght rates mentioned ln the bid is neither a %mveranqe tax" ,nor Is It any "other dhwt tax upon llgA%W. The two are altogether differen aAddietiAt?t* Furthermore having lnoluded the provW.en for the addltlon of such transportation taxes in the bid whiahj under the speclflo lrnguage of the aontraot, must be construed ae a part of It, It ,was nelther~neoessary nor desirable to reiterate sucrh~provislon in the addltlonal writ+&
Aguln it Is sugge8tea that the Z?OV.tSfOA ~Shat "all traces rtatlon’aharges must be prepaid 4y the geller.,lr In OOACL p" at ulth -the provlsian that lnoreased Federal trans- portation taxas'shall be added to the price, The bid was ~made.FcO.Bi rtustin, Texa& It dleems fairlyobvloua that all partlea to the oontraat, at all times, axpeated mtlLer to pey euah izansportotl6n tiger. Thla, however doe8 not, ia the least Bkilitate agnhUt 0Ur co~~hIsioA iha% ther? in no%kfllat In auuh provisions. It ls'equally as *7 xonorable C, 9, %BEWSU% Pm 7
obvious that if the pax-tier, had UoAtemplated paymeAt of transportation ehargea by the buyer there would have been ho reason and ho for adding an increase in jU8tificratioA such charges to the selling prioe, nor would there have been any reason for the provision deareaslng the selling prlae in the event of a dearease in euah aharges.
n?usting that the above fully answers your in=-
quiry, we are
Very truly yours : ATTORWHY OEWSRAL OF TEXAS By /is/ Forler Roberts i?ow~~ler~tts