Citations
- 212 F. Supp. 116
Full opinion text
ROGER H. SAVAGE, District Judge.
This cause came on regularly for trial before the Court, without jury, on October 28, 1959; the parties appeared by their respective attorneys of record; and the Court, having heard the evidence and argument of counsel, and having considered the briefs filed on behalf of the parties, finds as follows:
1.
Plaintiff, Cities Service Gas Company, at all times pertinent hereto, was a citizen and resident of the State of Delaware ; defendant, United Producing Company, Inc., was, at all times pertinent hereto, a citizen and resident of the State of Maryland; the amount in controversy, exclusive of interest and costs, exceeds the sum of $10,000.
2.
At all times pertinent hereto, plaintiff was engaged in its business as an interstate pipeline company, purchasing, transporting and wholesaling natural gas, including the natural gas purchased from defendant involved here, to its customers located in Oklahoma, Kansas, Missouri and Nebraska.
3.
Defendant owns wells located in the-Kansas Hugoton Field which produce-natural gas and sells plaintiff gas produced therefrom pursuant to a contract, which is plaintiff’s Exhibit 2.* Such-contract provided that plaintiff would' pay on the 25th day of each month for the gas delivered during the past month at a price of 7$ per Mcf, measured at a pressure of 16.4# psia.
4.
During each year involved herein-plaintiff purchased not less than 34.76% of the natural gas which it required for its business as an interstate natural gas-pipeline company, from production in the Kansas Hugoton Field. Plaintiff had no gas production of its own in the Kansas. Hugoton Field.
5.
The purchase and receipt by plaintiff' of natural gas produced in the KansasHugoton Field was essential to plaintiff’s-business, as aforesaid, and was necessary for plaintiff to be able to meet the requirements of plaintiff’s business and its-contractual commitments and the obligations imposed upon it by the terms of' the Natural Gas Act.
6.
Under date of February 18,1949, to be-effective March 1, 1949, the State Corporation Commission of Kansas entered an-Order providing, inter alia, that all persons who take gas from the Kansas Hugo-ton Field shall, as a condition precedent for withdrawal of such gas, pay or attribute a minimum price of not less than-8$ per Mcf, 16.4# psia. Defendant’s-Exhibit D.
7.
On February 21, 1951, the State Corporation Commission of Kansas entered; an order in the form of defendant’s Exhibit E* providing, among other things,, that payments should be made on or before April 1,1951 to producers, land owners, lease owners, and royalty owners in accordance with the order of the Commission of February 18, 1949, and which were impounded or paid under bond thereafter as provided therein.
8.
Under date of May 20, 1953, to be effective July 1, 1953, the State Corporation Commission of Kansas entered its Order promulgating a standard gas measurement pressure of 14.65# psia for all gas produced throughout the State of Kansas. Defendant’s Exhibit C.*
9.
Under date of December 2, 1953, to be effective January 1, 1954, the State Corporation Commission of Kansas entered its Order providing, inter alia, that all persons who take gas from the Kansas Hugoton Field shall, as a condition precedent for- withdrawal of such gas, pay or attribute a minimum price of not less than 11(5 per Mcf, 14.65# psia. Plaintiff’s Exhibit 3
10.
Under date of January 21, 1954, plaintiff wrote to defendant, and in due course •defendant received the letter identified in the record as plaintiff’s Exhibit 4.
11.
On the 25th day of February, 1954, plaintiff paid defendant for gas delivered to it during the month of January, 1954, by check, plaintiff’s Exhibit 5.* To such check there was attached a voucher which bore the following legend:
“In full settlement of gas purchased for the period ending 1-22-54, subject to provisions of letters dated 8-25-53, and 1-21-54 with reference to gas purchased in Kansas.”
On or about the 25th day of each month following, to and including the 25th day •of December, 1957 (for gas delivered for the month October 22, 1957 to November 22,1957), plaintiff paid defendant for the volumes of gas delivered during the previous month by a voucher check identical in form to plaintiff’s Exhibit 5.* Defendant endorsed and cashed each such monthly voucher check.
12.
During the period January 1, 1954 through November 22, 1957, defendant delivered to plaintiff the total quantity of 27,862,502 Mcf of natural gas measured on a pressure base of 16.4# psia at a temperature of 60° F. All of such gas was produced by defendant from the Kansas Hugoton Field. Computed at 7?! per Mcf, 16.4# psia, the amount due for such gas was $1,950,375.14.
13.
During the period January 1, 1954 through November 22,1957, plaintiff paid to defendant for the volumes of gas purchased during such period the total sum of $3,501,077.91, such payment being computed upon a price of 11^ per Mcf, 14.65# psia. Such payment exceeded the amount due for the gas delivered by $1,-550,702.77.
14.
During the period January 1, 1954 through June 6,1954, plaintiff paid to defendant $224,819.74 in excess of the amount due at 7^ per Mcf, 16.4# psia; during the period June 7, 1954 through November 22, 1957, plaintiff paid to defendant $1,325,883.03 in excess of the amount due at 7