Culver v. Cockburn, 10815.

• Decision Date: 30 March 1939
• Docket Number: No. 10815.,10815.
• Citation: 127 S.W.2d 328
• Parties: CULVER v. COCKBURN.
• Court: Texas Court of Appeals

127 S.W.2d 328

CULVER v. COCKBURN.

No. 10815.

Court of Civil Appeals of Texas. Galveston.

March 30, 1939.

Rehearing Denied April 20, 1939.

Appeal from District Court, Matagorda County; M. S. Munson, Judge.

Action by George Cockburn against George D. Culver for commissions allegedly due the plaintiff from defendant for services performed by plaintiff in the sale of certain mineral leases. From a judgment in favor of the plaintiff, the defendant appeals.

Judgment affirmed.

Styles & Erickson, of Bay City (C. A. Erickson, of Bay City, of counsel), for appellant.

J. L. Webb, of Houston, and W. E. Davant, of Bay City, for appellee.

MONTEITH, Chief Justice.

This is an appeal from a judgment of the district court of Matagorda County in an action brought by George Cockburn, appellee, against George D. Culver, appellant, for commissions alleged by appellee to be due him from appellant for services performed by him in the sales of certain mineral leases.

Appellee alleged that he was engaged in the business of procuring purchasers and making sales of lands and leases for others; that appellant listed with him for sale the oil and gas leases on two certain tracts of land in Matagorda County, Texas, and promised to pay him 10% of the sales price thereof, when and if the sale was consummated and the purchase price paid therefor; that in pursuance of said contract, he sold two leases on said land, one to J. M. Finley, Jr., and one to T. Berthelsen; that the consideration therefor had been paid and that he was entitled to commissions therefor in the sum of $2250. Appellant answered by general denial and general demurrer.

The jury found, in answer to three special issues submitted, in substance, that appellant had agreed to pay appellee a commission of 10% to procure a purchaser of oil and gas lease on land belonging to him; that appellee was not the procuring cause of the sale made to J. M. Finley, Jr., but that he was the procuring cause of the lease to T. Berthelsen. Based on the answers to said special issues, the court rendered judgment in favor of appellee and against appellant for the sum of $1500.

Appellant contends that appellee alleged in his petition facts which brought him within the scope of the Securities Act of Texas, and that having failed to secure a permit required under such Act, and having failed to allege and prove that he had such permit, he was not authorized to maintain a suit for or collect commissions on such sale, and that any contract he made with appellant for the sale of said lease and the payment of commissions therefor was invalid. Appellant further contends that the answer of the jury to special issue No. 3, to the effect that appellee was the procuring cause of the sale of said lease to T. Berthelsen, and the judgment of the court based on said answer, are contrary to the law and the evidence.

Article 600a, Vernon's Ann.Civ.St., known as the Securities Act, was passed by the 44th Legislature in 1935. It became effective on May 23, 1935, and repealed the "Blue Sky Law", Articles 579-600, Revised Civil Statutes.

The Securities Act defines the certain terms used therein as follows:

Section 2.(a): "The term `security' or `securities' shall include * * * any instrument representing any interest in or under an oil, gas or mining lease, fee or title."

Section 2.(b): "The term `company' shall include a corporation a * * * company * * *."

Section 2.(c): "The term `dealer' shall include every person * * * who engages in this State, either for all or part of his * * * time, directly or through an agent, in selling, offering for sale or delivery or soliciting subscriptions to, or orders for, or undertaking to dispose of, or to invite offers for, or dealing in any other manner in any security or securities within this State."

Section 2.(d): "The term `salesman' shall include every person or company employed or appointed or authorized by a dealer to sell, offer for sale or delivery, or solicit subscriptions to or orders for, or deal in any other manner, in securities within this State * * *."

Section 2.(e): "The terms `sale,' or `offer for sale' or `sell' shall include every disposition, or attempt to dispose of a security for value. The term `sale' means and includes contracts and agreements whereby securities are sold * * * for money", etc., and "the term `sell' means any act by which a sale is made, and the term `sale' or `offer for sale' shall include * * * a solicitation of sale, an attempt to sell, or an offer to sell, directly or by an agent * * * or otherwise; * * provided, however, that nothing herein shall limit or diminish the full meaning of the terms `sale,' * * *."

Section 2.(h): "`Broker' shall mean dealer as herein defined."

Section 3 of said Act provides: "Except as hereinafter in this Act specifically provided, the provisions of this Act shall not apply to the sale of any security when made in any of the following transactions and under any of the following conditions, and the company or person engaged therein shall not be deemed a dealer within the meaning of this Act. * * *

"(c) Sales of securities made by, or in behalf of a vendor in the ordinary course of bona fide personal investment of his personal holdings * * *."

Section 12 provides: "Except as provided in Section 3 of this Act, no person, firm, corporation or dealer shall, directly or [indirectly], * * * offer for sale, sell or make a sale of, any securities in this State without first being registered as in this Act provided."

Section 23 provides: "Except with reference to exempt transactions provided for in Section 3 of this Act, it shall be unlawful for any dealer * * * to sell any securities * * * until such dealer shall have been registered or temporary permission obtained as in this Act provided * * *."

Section 35 provides for the payment of certain registration, license, or permit fees, and Section 30 contains the penal provisions Article 1083a, Vernon's Ann.P.C., for violation of the Act.

The record of the facts in this case shows that appellant was the owner of both the fee and the mineral title to the land on which the lease under consideration was made; that appellee's activities as a dealer in oil and gas leases were incidental to his employment by the Cockburn Oil Corporation, and that his employer had no connection therewith; that he had made only two other sales besides the one under consideration; that no certificate or other evidence of ownership of said lease was issued to appellee, and that he was, in fact, not present when the sale of said lease was closed and the lease delivered to Berthelsen, the purchaser thereof. The jury found that appellee was the procuring cause of the sale of said lease to Berthelsen and that appellant had agreed to pay appellee a commission of 10% of the purchase price thereof. No permit or certificate under the Securities Act was issued to either appellant or appellee.

Under the above facts, we think that appellee was neither a dealer, nor was said lease such a security as to require appellee to secure a permit under said Act in order to contract with appellant for the payment of compensation for his services in procuring a purchaser of the lease under consideration.

Further, in the event appellant is correct in his contention that the oil and gas lease under consideration may be termed a security under the provisions of said Act, we are convinced that the sale of said lease clearly falls under the class of exemptions enumerated in Section 3 of said Act. Appellee's only connection with said sale was that of a go-between in bringing appellant and J. M. Finley, Jr., who was instrumental in closing said sale, together. The sale was closed and the lease was delivered to the purchaser by appellant, the owner of both the fee and the mineral interest in said land.

From the above facts it is our opinion that appellee offered no security to Berthelsen, and the property being a part of the personal holdings of appellant, the transaction falls clearly...