Carmichael v. Delta Drilling Co., 6590

• Decision Date: 04 October 1951
• Docket Number: No. 6590,6590
• Citation: 243 S.W.2d 458
• Parties: CARMICHAEL et al. v. DELTA DRILLING CO.
• Court: Texas Court of Appeals

Page 458

243 S.W.2d 458

CARMICHAEL et al. v. DELTA DRILLING CO.

No. 6590.

Court of Civil Appeals of Texas, Texarkana.

Oct. 4, 1951.

Rehearing Denied Nov. 8, 1951.

Pollard, Lawrence & Reeves, Tyler, J. N. Saye, Longview, for appellants.

Blalock, Blalock, Lohman & Blalock, Houston, Smith & Smith, Tyler, Edward Kliewer, Jr., Dallas, for appellee.

HALL, Chief Justice.

On September 1, 1942, appellants and appellee entered into a 'Joint Operating Agreement' whereby appellee was to furnish two of its drilling rigs in prospecting for oil and gas in Illinois, Indiana and Kentucky. The agreement provided that: 'It is the desire of Delta to place said drilling equipment in charge of Carmichael-Johnston (appellants), who, up to this time, have been in the employ of Delta Drilling Company, for the purpose of operating them on a profit sharing basis instead of as employees of Delta, as heretofore, and Carmichael-Johnston desire to take charge of and operate said equipment on such basis, it is agreed between the parties as follows: From and after this date, the said Carmichael-Johnston shall take charge of the drilling equipment herein described and operate it for the joint benefit on a profit sharing basis.' The method of a division of the profits was agreed upon. The agreement provided further that it was not to be construed as a partnership but merely a working agreement between Delta and Carmichael-Johnston for the operation of said equipment and declaring Carmichael and Johnston as agents of appellee Delta Drilling Company, etc. Some two hundred wells were drilled under this agreement.

Aside from and in addition to, the 'Joint Operating Agreement' appellants alleged an oral agreement which they assert was consummated in the latter part of November, 1945, between them and J. Zeppa, president of appellee company, which controlled the development of an 80-acre lease located in Posey County, Indiana, and known as the Elliott Lease. This alleged oral contract forms the basis of this lawsuit. Appellee leveled fifteen exceptions to appellants' first amended original petition, all of which were sustained. They declined to amend their pleadings and the cause was dismissed.

Appellants' first point is: 'The trial court erred in holding that it did not have jurisdiction of plaintiffs' cause of action.' This point is based upon the action of the court in sustaining appellee's special exceptions 1, 2, 3 and 4, which challenged the jurisdiction of the court to try this cause. Appellants in their brief clearly state their view of the nature of their cause of action: 'It is readily seen from a reading of the prayer that this is a suit for an accounting for oil produced from an oil lease in Indiana and for an order of the court directing the defendant to specifically perform a contract with plaintiffs to convey to them an undivided one-fourth interest in said oil and gas lease, or in lieu thereof, that plaintiffs have judgment for the value of the lease. The court has jurisdiction over the defendant itself by reason of the fact that the defendant has appeared in the case and filed two answers.' Appellee contends that the nature of appellants' suit is one to try title to the 80-acre leasehold in the state of Indiana and that the trial court was without jurisdiction to try same. The allegations in appellants' first amended original petition will determine which of the above contentions is correct and will control the disposition of this appeal.

Appellants' pleadings denote that their claim is for 25% of the value of the oil sold from the 80-acre lease located in Indiana from the early part of 1946 until the trial of the suit, which is based upon a claim by them of a one-fourth interest in the 80-acre leasehold estate. In their prayer they seek judgment for the 25% of the profits accruing from said lease and also pray that 'Delta Drilling Company be required by an order of this court to execute, acknowledge and deliver to plaintiffs (appellants) a good and sufficient assignment of an undivided one-fourth working interest in and to said Elliott 80-acre oil and gas lease to these plaintiffs.' It is true the 80-acre lease here involved was purchased by appellant Carmichael for appellee, Delta Drilling Company, in the latter part of 1941, before the execution of the 'Joint Operating Agreement,' but while Carmichael was an employee of Delta Drilling Company. There is no contention here that the 80-acre lease was not wholly owned by Delta up to the time appellants brought in an oil well on same in the latter part of 1946, under the alleged oral agreement.

Throughout the plaintiffs'...