Cummins and Walker Oil Co., Inc. v. Smith, 04-90-00244-CV
| Decision Date | 28 August 1991 |
| Docket Number | No. 04-90-00244-CV,04-90-00244-CV |
| Parties | CUMMINS AND WALKER OIL COMPANY, INC., Appellant, v. Robert L. SMITH, et al., Appellees. |
| Court | Texas Court of Appeals |
Tim Tynan, Thurmond & Thurman, San Antonio, for appellant.
A. Michael Ferrill, Kevin M. Beiter, Cox & Smith, Inc., San Antonio, for appellees.
Before REEVES, C.J., and CHAPA and CARR, JJ.
This appeal arises out of a suit for specific performance of certain letter agreements, declaratory relief, and an accounting. Plaintiffs, appellees, claimed that Cummins & Walker Oil Co., Inc., appellants, breached certain letter agreements between the parties in which Cummins & Walker promised to assign to each of the plaintiffs an after payout working interest. Cummins & Walker interposed limitations, and counterclaimed for a declaratory judgment and attorney's fees.
Cummins & Walker's only defense was an alleged limitations bar. The case was submitted to the District court on agreed facts. The court overruled the plea of limitations and rendered judgment for the plaintiffs on their claims for declaratory relief and specific performance, together with recovery of proceeds from the past sales of oil and gas production, interest, attorney's fees and costs.
In 1981 and 1982, Cummins & Walker promoted an oil and gas prospect in Acadia Parish, Louisiana. The drilling was financed by selling working interests to various investors. A one percent overriding royalty interest was reserved by Cummins & Walker until payout occurred. At that time Cummins & Walker would assign its royalty interest to the investors and they in turn would assign a twenty percent working interest to Cummins & Walker. The agreements between Cummins & Walker and these investors are known as the Underlying Letter Agreements.
In January of 1982, the company delivered a second set of letter agreements to six employees which stated that their compensation would include a portion of the "after payout working interest retained by Cummins & Walker". The letters further stated that "The assignment of such interest will be made whenever requested". These agreements are known as the Plaintiffs' Letter Agreements.
In early 1982 a well subject to the Underlying Letter Agreements was completed as a producing well. The well reached payout in March, 1989. In May of that same year, Cummins & Walker notified plaintiffs that they would not receive the assignments, because the company was financially unable to make payment. Plaintiffs then made a written demand. Shortly thereafter, Cummins & Walker advised plaintiffs that no assignment would be made because the demand for payment was untimely. 1 Suit was filed in November, 1989.
The parties agreed to the statement of facts pursuant to TEX.R.CIV.P. 263. All facts necessary to the presentation and adjudication of the case are conclusively presumed to have been brought before the court. Accordingly, we will not draw any inference or find any facts not embraced in the agreement. Members Mutual Ins. Co. v. Cutaia, 460 S.W.2d 493, 496 (Tex.Civ.App.--Houston [14th Dist.] 1970, writ ref'd n.r.e.).
We are presented with the central issue of when does a cause of action accrue. Cummins-Walker challenges the ruling of the trial court on the basis that the plaintiffs' suits were barred by the statute of limitations. TEX.CIV.PRAC. & REM.CODE § 16.004 provides [in pertinent part]:
(a) a person must bring suit on the following actions not later than four years after the day the cause of action accrues:
(1) specific performance of a contract for the conveyance of real property; ...
In the instant case, Cummins & Walker contend that plaintiffs' cause of action for specific performance and declaratory relief began to accrue on January 5, 1982, the date the agreement was executed. It is asserted that the interests promised to the Plaintiffs were present, existing and assignable at the time the parties entered into the Letter Agreements. Therefore, Cummins & Walker argue that the obligation to assign began on January 5, 1982, the date of the agreement and the plaintiffs' cause of action for specific performance and declaratory relief began to accrue on that same date. The suit was filed more than four years after the date of the agreement, thus appellant contends it is barred by the statute of limitations. TEX.CIV.PRAC. & REM.CODE § 16.004.
In the alternative, appellant asserts that if the plaintiffs' Letter Agreements...
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