Le Bus v. Le Bus, 15510

• Decision Date: 30 April 1954
• Docket Number: No. 15510,15510
• Parties: LEBUS v. LEBUS et al.
• Court: Texas Court of Appeals

Page 506

269 S.W.2d 506

LEBUS v. LEBUS et al.

No. 15510.

Court of Civil Appeals of Texas, Fort Worth.

April 30, 1954.

Rehearing Denied June 11, 1954.

Ben W. Tipton, Jr., Fort Worth, McDonald & Anderson, C. C. McDonald, Wichita Falls, for appellant.

Tipps, Masters & McCormick, O. R. Tipps, Wichita Falls, for appellees.

MASSEY, Chief Justice.

From a summary judgment rendered for the defendants in a suit against them to impress a trust upon funds recovered as profits from operation of a certain oil and gas lease, and for an accounting of such funds, the plaintiff appealed.

Judgment reversed and the cause remanded for a trial on the merits.

The suit was initiated in March of 1953 by Ervin C. LeBus, who was the executor of the estate of John E. LeBus, deceased and who died in November of 1952. His suit was premised upon his allegation of certain rights having been in existence in his father at the date of his death, and to enforce the same as of the date of death. The rights sued upon were founded in a transaction of October, 1937, as result of which the lease known as the Mangold lease in Wichita County, Texas, was acquired in the name of George F. LeBus. The original parties to the transaction were the deceased and a brother of the deceased, George F. LeBus. Subsequently, George F. LeBus' interest in the oil and gas properties involved in the suit was transferred, at least in part, to his sons, Roy H. LeBus and George F. LeBus, Jr. All three persons were named as defendants, but since George F. LeBus' sons' interest in the suit has resulted simply by reason of transactions between them and their father and since their interest is identical with that of the father, our discussion in this opinion is simplified by treating the executor as one party and George F. LeBus as the other.

The defendants filed a motion for summary judgment and upon a hearing the trial court sustained the defendants' motion and rendered a take nothing judgment in favor of the defendants, and the plaintiff appealed.

George F. LeBus and his brother John, now deceased, were indisputably partners, in so far as partnership in a mining partnership is concerned, in connection with several operations, both prior and subsequent to October of 1937 when the Mangold lease was acquired in the name of George F. LeBus. Indeed, it was through information acquired pursuant to the operations under one of these mining partnership situations that the desirability of the Mangold lease was discovered. The brothers were jointly drilling on a neighboring lease in which they each owned a proportionate interest, and as to which the other attributes of a mining partnership existed between them, when they learned as a result of the operations that they were about to bring in an oil well thereon. This information directly occasioned the acts resulting in the acquisition of the neighboring Mangold lease.

While not certain, it appears probable that George F. LeBus was the only one of the two brothers who had the money to buy in the Mangold lease. His brother was fully informed as to the desirability of acquiring such lease but was financially unable to put up any proportionate part of the cost of acquisition, or of any operations thereon after acquisition. There was no lack of good faith on the part of either brother and each was in a position of full compliance with all the duties incumbent upon him as result of the trust relationship which existed between them. It was simply a situation where George F. LeBus was in a position financially to take advantage of the knowledge which was the property of both himself and his brother, but his brother was not.

In view of this circumstance the two brothers entered into an oral contract concerning the Mangold lease. According to the appellant this agreement involved a purchase of the Mangold lease by George F. LeBus, and in connection with the purchase his brother John E. LeBus acted as his agent and servant in making the approach to the owners of the Mangold lease, establishing a favorable relationship, suggesting a purchase, negotiating the consideration, and effecting a close of the transaction whereby the prior owners conveyed the legal and equitable title to the lease property to George F. LeBus. As consideration to John E. LeBus for performance of these services George F. LeBus made certain promises to him, conditioned upon such transaction proving profitable. The condition was actually twofold. Firstly, in the event of a resale of the Mangold lease John E. LeBus was promised one-fourth of the net profit, if any, resulting from the resale. Secondly, in the event of operations upon the Mangold lease, John E. LeBus was promised one-fourth of the net profit, if any, resulting from the operations. Under this secondary situation, there was an agreement that John E. LeBus' entitlement should not begin until George F. LeBus had reimbursed himself all the amount that he expended in acquiring the lease plus all his expenses in connection with operations conducted thereon, after which the one-fourth would be payable to his brother periodically and after computation of the net profits. There was no time limit stated during which George F. LeBus would be obligated to pay the consideration so agreed upon and during which John E. LeBus would be entitled to receive the same.

With this contention as a premise, appellant contends that the Mangold lease was not resold, but was in fact retained by George F. LeBus and was operated by him and successful drilling operations were conducted thereon, and production of oil and gas in paying quantities was realized from said operations with such great success that during the period from the time the lease was acquired in 1937 to the time of John E. LeBus' death in November of 1952, a net profit for such period would exceed one million dollars. During such period it is undisputed that George F. LeBus ans John E. LeBus were mining partners in so far as various other enterprises were concerned, and George F. LeBus was engaged in other and more extensive enterprises in which he was in mining partnership with other persons than John E. LeBus. In part, at least, because of George F. LeBus' more extensive and more highly involved activities he maintained a business office, and he kept books and records, while John E. LeBus did not maintain a business office and did not keep books and records. George F. LeBus kept all the records of the activities in which he was engaged in which John E. LeBus had an interest. It was his custom to remit to John E. LeBus from time to time payments due him as his part of profits from their joint activities. By appellant's pleadings, at least at one stage, he admits that George F. LeBus did properly compute all the profits due his brother, and did pay to him all such profits to and including the month of November, 1952, during which month John E. LeBus died, save and except the amount in money which George F. LeBus justly owed his brother John E. LeBus because of the oral agreement made with him concerning the one-fourth of the net profits from the Mangold lease.

Appellant alleged that John E. LeBus, as result of the relationship with George F. LeBus and because of the fact that George F. LeBus was keeping the books and remitting such profits to him as he was entitled under the various agreements and relationships with him in and to various operations, never did know even until the date of his death that he was not receiving the money he was entitled to receive under the agreement and oral contract of October, 1937, pursuant to which he had fully performed his obligation by obtaining the Mangold lease for George F. LeBus. On the contrary, according to the allegations or the appellant, John E. LeBus was misled because of the fiduciary relationship, and additionally during the last five years of his life because of the fact that he was mentally incompetent as result of his addition to alcohol and drugs, into believing that George F. LeBus was in fact paying him the profits due him under the contract, and was keeping the account thereon current by regular payments of amounts due because thereof.

Appellant alleges further that contrary to the understanding and belief on the part of John E. LeBus during the entire period from October, 1937, to date of his death, he had not been paid one cent pursuant to the oral contract and agreement in question, whereby the total amount accrued under and by reason of the said agreement and due him as indebtedness because thereof was in excess of the sum of $250,000. The appellant's suit is to extablish the contract, and to establish by an accounting the amount of the indebtedness due the estate of John E. LeBus as of the date of his death in November of 1952, and to impress an equitable lien upon all the partnership properties still owned by the estate of said deceased along with George F. LeBus and the other appellees, as security for the payment of the debt so accrued.

Pursuant to his suit in this regard the appellant alleged that immediately upon the acquisition of the Mangold lease, George F. LeBus set out to defraud John E. LeBus and to deprive him of any benefits accruing under the agreement and contract of October, 1937, and that pursuant to such fraudulent purpose George F. LeBus did lead him to believe that he was receiving the money due him under and by virtue of said contract and agreement, when in fact he was receiving nothing thereunder,. Further allegations were to the effect that the other appellees did likewise and participated in the fraud.

It is true that in order to resolve the effect of the appellant's pleadings into allegations set out by us as our understanding of them, some difficulty was experienced. This difficulty arose because the pleadings primarily proceed on the premise that the agreement made between John E. LeBus and George F. LeBus in 1937 created a partnership relationship between the two...