Blackstock v. Gribble, 3347

• Decision Date: 21 March 1958
• Docket Number: No. 3347,3347
• Citation: 312 S.W.2d 289
• Parties: Forest BLACKSTOCK et al., Appellants, v. Lewis L. GRIBBLE, Appellee.
• Court: Texas Court of Appeals

Page 289

312 S.W.2d 289

Forest BLACKSTOCK et al., Appellants, v. Lewis L. GRIBBLE, Appellee.

No. 3347.

Court of Civil Appeals of Texas, Eastland.

March 21, 1958.

Rehearing Denied April 11, 1958.

Jameson, Whitten, Harrell & Wilcox, Abilene, for appellants.

Tom Gordon, Bradbury, Tippen & Brown, Smith, Bickley & Pope, Abilene, for appellee.

COLLINGS, Justice.

This suit was brought by Lewis L. Gribble against Forest Blackstock, J. B. Harrell, Jr., and Nelson Clabaugh. Mr. Clabaugh is now deceased and all of his interest in the matters in controversy has been acquired and is now held by Forest Blackstock. Plaintiff alleged that in February of 1953 a partnership, known as Big State Tool Company, was formed by plaintiff and the named defendants for the purpose of engaging in the business of oil field testing and cementing service. The partnership continued until February of 1954 when a dissolution agreement was entered into between the parties providing a method of settling the partnership affairs. Plaintiff alleged that the plan provided in the agreement for dissolution of partnership was not followed; that there had been no accounting and distribution and no opportunity for a division of the assets in kind as contemplated by the agreement; that on the contrary defendants had notified plaintiff that the assets of the partnership would be sold and the money received applied to the payment of the partnership debts prior to the completion of an audit, and that there was consequently no dissolution under the agreement. Plaintiff further alleged that the assests of the partnership included an oil and gas lease known as 'The Berry Lease'. Plaintiff asked for a dissolution of the partnership, an accounting of the partnership affairs, the appointment of a receiver and the recovery of an undivided one-twelfth interest in the producing oil lease referred to as the 'Berry Lease'. Defendants answered resisting the appointment of a receiver. They filed a cross action against Gribble asking specific performance of the contract of dissolution insofar as it related to the sale by Gribble of his interest in the 'Berry Lease'. The accounting phase of the case was heard and determined by the court without a jury. The remaining issues were tried before a jury which found that an audit of the books of the partnership was not completed before the sale of any of its assets, and that an accounting and distribution of the assets and liabilities of the partnership on the basis of ownership as provided in the agreement of dissolution was never undertaken by the parties before the sale of any of the assets of the partnership. The jury further found that it was understood and agreed between the partners that the Berry Lease would be acquired for the partnership. The court found that the partnership was not dissolved according to the terms of the agreement of dissolution, but that a different method of liquidating the assets was used, and that the agreement, therefore, did not effect a dissolution. Judgment was entered dissolving the partnership as of the date of the judgment, stating the accounts and decreeing title to one-twelfth interest in the Berry Lease to Lewis L. Gribble. Defendants Harrell and Blackstock have brought this appeal.

The evidence shows that the parties to this suit entered into a partnership on February 23, 1953. The agreement for dissolution was dated February 18, 1954. This agreement recited the respective interests of the partners in the business as follows: Gribble a 1/3rd interest, J. B. Harrell a 1/3rd interest, Forest Blackstock a 1/6th interest and Nelson Clabaugh a 1/6th interest, which interest is now held by Blackstock. It was agreed between the parties that the partnership was to be dissolved effective as of 7 o'clock p. m., February 18, 1954, and that Gribble would immediately deliver to the other partners all tools, supplies, equipment, checks funds and property of any nature belonging to the partnership. It was agreed that there would be a division of the partnership assets to be accomplished as follows: the other partners agreed to deliver to Lewis L. Gribble all of the books, records and other papers pertaining to the Big State Tool Company within three days in order that he might have an audit made. It was provided that upon completion of the audit an accounting and distribution of the assets and liabilities of the company should be made on the basis of ownership as above stated. It was further provided, however, that in the event the parties were unable to agree upon a distribution 'in kind of the assets' that the affairs of the partnership should be finally settled in this manner: that Lewis Gribble should submit to the other partners a written statement of the value placed by him on the assets of the partnership as a whole and offer to buy the interest of his partners or sell his interest to them on the basis of such value. It was agreed that the other partners should, within ten days after receipt of such offer, notify Lewis Gribble in writing whether they would sell their interest or buy the interest of Gribble on the basis of his offer. It was further agreed that the party selling should be released of all liability on any partnership obligations. The dissolution agreement also contained the following provision:

'It being agreed and understood by all parties hereto that an undivided interest in a certain oil and gas lease situated in Callahan County, Texas, known by the parties hereto as the Berry Lease shall not be considered as an asset of the Big State Tool Company in the settlement of its affairs. However, the other parties hereto agree with Lewis L. Gribble that they will pay to him at the time the final settlement of the partnership affairs is made as provided for herein, the sum of $10,750.00 for his contingent interest in said Barry Lease, and Lewis L. Gribble whil at the time execute and deliver to the other partners a quitclaim conveyance of all his claim or interest in and to said Berry Lease and the personal property thereon.'

The property referred to as 'The Berry Lease' is now a valuable producing oil and gas lease. At the time of the purchase of the 1/4th interest here in controversy the lease was undeveloped. At the time of the agreement for dissolution oil had been found and was being produced from the lease, but the income therefrom was still about $20,000 less than the original purchase price and cost of development. There was and is a sharp controversy as to whether the 1/4th interest in the Berry Lease was purchased as and became a part of the partnership assets. The jury found that at the time of the acquisition of the Berry Lease it was understood between the parties that the lease would be acquired for the partnership. Appellants' complaint of this finding will be considered later. In any event it is obvious that Gribble was at the time of the dissolution agreement claiming an interest in the lease and that the agreement provided for a settlement of that claim.

In appellants' first point it is contended that the court erred in decreeing title in appellee to an undivided 1/3rd of the 1/4th interest in the Berry Lease and in refusing to sustain appellant's motion for judgment non obstante veredicto granting specific performance of the provision of the contract of dissolution pertaining to the sale of appellee's contingent interest in the lease.

Appellants urge that the contract of dissolution of February 18, 1954, deals with two separate and distinct matters and is severable. They urge that the first part of the contract concerned the dissolution of the partnership and provided a method for settlement of the partnership affairs; that the contract stipulated that the Berry Lease was not to be considered as an asset of the partnership. Appellants contend that as a separate and distinct part of the contract and for a stated consideration the parties contracted for the sale to appellants of appellee's contingent interest in the Berry Lease. Appellants urge that the portion of the contract pertaining to the sale and purchase of said lease is wholly distinct and severable from the remainder of the contract. They alleged and here contend that Gribble failed and refused to perform the first part of the contract dealing with the settlement of the partnership affairs. They contend that the fact that the first part of the contract has not been carried out and cannot at this time be specifically enforced, does not affect appellants' right to enforce that portion of the contract providing for appellee's sale to appellants of his interest in the Berry Lease.

The intention of the parties as determined by the language used in a contract is controlling in determining whether the contract is severable or is entire and indivisible. Smith v. Crosby, 47 Tex. 121; 17 C.J.S. Contracts Secs. 333, 334, pp. 789, 790; 10-A Tex.Jur. pp. 396, 402, 403.

Appellee did agree to sell his interest in the Berry Lease to appellants for a consideration of $10,750. This agreement, however, was a part of the agreement for dissolution of the partnership. The agreement for dissolution provided a method for the liquidation and distribution of the assets of the partnership, and provided that at the time of the final settlement of the partnership affairs 'as provided herein' Gribble would sell and convey to appellants his interest in the lease. The sale of the lease was to be made at the time of the 'final settlement'. The 'final settlement' at which the sale was to be made was a settlement 'as provided herein', that is, a settlement by the method provided. The language of the contract indicates that the provision for the sale by appellee of his interest in the Berry Lease to appellants was contingent upon a final settlement of the partnership affairs in the manner provided by the contract and that such a settlement was a condition precedent to appellee's promise to sell. This language shows an...