Cragin v. Henderson County Oil Development Co.

• Decision Date: 12 February 1925
• Docket Number: (No. 152.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: Cragin v. Henderson County Oil Development Co., 270 S.W. 202 (Tex. App. 1925)
• Parties: CRAGIN v. HENDERSON COUNTY OIL DEVELOPMENT CO.
• Court: Texas Court of Appeals

270 S.W. 202

CRAGIN v. HENDERSON COUNTY OIL DEVELOPMENT CO.

(No. 152.)^*

Court of Civil Appeals of Texas. Waco.

February 12, 1925.

Rehearing Denied March 19, 1925.

Appeal from District Court, Henderson County; Ben F. Dent, Judge.

Action by the Henderson County Oil Development Company against F. E. Cragin and another. From overruling of defendants' motion for new trial after entry of judgment against them in their absence and without representation, defendant Cragin appeals. Affirmed.

J. J. Faulk, of Athens, for appellant.

Crane & Crane, of Dallas, for appellee.

GALLAGHER, C. J.

Appellee, Henderson County Oil Development Company, a jointstock association, sued appellant F. E. Cragin and one H. T. Ables in the district court to recover damages for the breach of a written contract to drill an oil well. The parties will be designated as in the trial court.

Defendants were represented by Messrs. Crane & Crane, attorneys at law, residing in Dallas. That firm filed a formal answer for each of said defendants. The district court of Henderson county convened on Monday, August 20, 1923, and continued in session until October 2, 1923. On August 21st the court made an order setting this case for trial on September 10, 1923. Defendants appear to have been joint obligors in the execution of the contract sued on. They are not sued as partners, nor do we understand that any contention is made that they were partners in fact. Ables lived at Dallas and Cragin lived in Tarrant county. Said firm of lawyers were first employed by Ables to represent him, but later, at the request of Cragin, made through Ables, they undertook to represent Cragin also. Said attorneys were advised by letter from counsel for plaintiff, received on August 22d, of the setting of this case as above recited. In reply to such letter said attorneys advised counsel for plaintiff that they no longer represented defendants, and that they would immediately file a motion to be permitted to withdraw from the case. The motion was filed as indicated on August 24, 1923, and on August 31st the same was heard by the court and granted. It seems the withdrawal of said attorneys for defendants was understood by counsel for plaintiff and by the court as an abandonment by defendants of any attempt to defend against a judgment in this case, and the case was on the same day, August 31st, called and tried ex parte and judgment rendered in favor of plaintiff against both defendants for the sum of $12,500.

It seems that some dissatisfaction on the part of Messrs. Crane & Crane arose with reference to the attention being given by defendant Ables to the preparation for trial of the case and to the matter of meeting expenses incident thereto. It further appears that the matter of preparing for defense at the trial was in the hands of said Ables. Messrs. Crane & Crane, prior to August 22d, the date not being shown, wrote Ables that "if he would not give to the case the attention necessary, he had better get some other counsel to represent him." They notified Ables of their withdrawal from the case by mailing to him a carbon copy of their letter to counsel for plaintiff, above referred to. No prior notice of actual withdrawal from the case is shown. Cragin testified that he learned of such withdrawal for the first time during the first week in September. It seems he then went to Dallas and arranged for said firm to continue as counsel for defendants. A member of the firm of Crane & Crane then called counsel for plaintiff by phone with reference to securing a postponement of the trial to a later day of the term, and learned in such conversation for the first time of the ex parte trial of said case on August 31st. Defendant Cragin and his counsel appeared in court on September 10th, the day the case was set for trial, and at that time filed a motion for a new trial. Defendants, in their motion for new trial, set up the facts above recited. Defendant Ables was on September 4, 1923, duly adjudged a bankrupt. His trustee in bankruptcy filed a separate motion for a new trial. The contract sued on contained, among others, the following paragraphs:

"(1) That the said association this day assigns to the said H. T. Ables and F. E. Cragin, the leases so secured and held by them, which have been examined by the said parties so receiving them, and which are accompanied by a plat explaining and indicating their location which is fully understood by the parties hereto. The assignment and leases to same however are to be placed in the possession and holding of the First National Bank of Athens, which bank is to keep the same for the parties hereto subject to the following terms and conditions entered into by the said H. T. Ables and F. E. Cragin.

"(2) It is understood that the said H. T. Ables and F. E. Cragin are expected to sell and transfer a part of the said leases to other parties, and they are to have the right to so do, and to place the contract of purchase with the said First National Bank of Athens, and withdraw the leases so sold by them to said parties; the bank having the right to approve the reliability of the purchasers. And when the said parties have sold as much as twenty thousand dollars worth of leases, the purchaser being approved by the said bank, then all of the said leases are to be turned over to the said H. T. Ables and F. E. Cragin.

"(3) The said H. T. Ables and F. E. Cragin agree to begin drilling an oil and gas well on some part of the said premises to be selected by themselves on or by March 1st, A. D. 1922, and to drill to the depth of 3,500 feet or through the Woodbine sands unless oil or gas is sooner found in paying quantities; the association to have the privilege of examining the log of the well during its progress."

Defendants set up in their said motion as grounds of meritorious defense the following:

(1) That by the terms of the contract sued on, the assignment to defendants of the leases therein specified was the sole consideration for the agreement to drill said well; that a lease on a certain 430 acres of land, situated near the center of the body of land represented to be covered by such leases, was included therein and constituted an important and material part of such consideration; that a prior lease thereto was held by other parties and that only a partial release by the holders thereof was ever secured; and that such partial release was not secured until long after the date originally set for beginning the drilling of the well provided for in said contract.

(2) That the leases referred to in the contract sued on were valueless and could not have been sold at any time (from the making of the contract until its breach) for any sum, and that plaintiffs had therefore not suffered damage in the sum of $12,500 recovered by them in the judgment sought to be set aside, or in any other sum.

(3) That the contract sued on was incomplete and ineffective because it was therein provided that defendants were to have the privilege of selling $20,000 worth of the leases covered by said contract; that it was understood by all the parties to said contract that defendants relied on such sale of leases to procure cash with which to drill the well; that while said contract omitted to clearly so state, such omission was not due to any fault on the part of defendants, but to an unintentional failure on the part of plaintiff's attorney, who drew said contract, to include the same therein; that defendants believed that said contract by implication so provided; and that all the parties at the time so construed the same.

(4) That plaintiff's original petition, upon which said judgment was rendered, stated no cause of action, in that, the measure of plaintiff's damage, if any, for the breach of said contract was either the reasonable cost of drilling the well as therein provided, or the difference, if any, between the market value of the leases covered by said contract at the time the same was made and at the time the same was breached, and that no correct measure of damage was alleged in said petition.

Said motion was duly verified, and its allegations fully sustained by supporting affidavits attached thereto and made a part thereof. Defendant Cragin also supported the averments of said motion by the oral testimony of his attorney and himself at the hearing thereon. Said motions for a new trial were duly submitted, considered by the court, and overruled. Cragin alone has appealed. The law applicable to motions for new trial, in such cases as this is tersely and correctly stated in the case of Lee v. Zundelowitz (Tex....