Dale v. Simon

• Decision Date: 18 January 1923
• Docket Number: (No. 1395.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 248 S.W. 703
• Parties: DALE et al. v. SIMON et al.
• Court: Texas Court of Appeals

248 S.W. 703

DALE et al. v. SIMON et al.

(No. 1395.)^*

Court of Civil Appeals of Texas. El Paso.

January 18, 1923.

Rehearing Denied February 21, 1923.

Appeal from District Court, El Paso County; P. R. Price, Judge.

Suit by U. M. Simon and another against J. E. Dale and others. Judgment for plaintiffs, and defendants appeal. Affirmed as modified.

Wantland & Dickey, of Henrietta, Taylor & Allen, of Fort Worth, and Lea, McGrady, Thomason & Edwards, of El Paso, for appellants.

Ocie Speer and Slay, Simon & Smith, all of Fort Worth, and Turney, Burges, Culwell, Holliday & Pollard, of El Paso, for appellees.

WALTHALL, J.

Appellees, U. M. Simon and Dan Brown, brought this suit against appellants, J. E. Dale, J. T. Dale, and the heirs of J. B. Dale, now deceased, to recover back $22,000 alleged to have been paid by appellees to appellants under such stress, advantage, and coercion as amounted to duress of property, or moral duress, alleging that appellants had leased to appellees for development for oil and gas a tract of 22,000 acres of land in Clay and Archer counties, in this state, and pleading the provisions of said lease contract, and setting out a copy thereof of date May 29, 1919, and by provision and reason of which appellees alleged they could keep such lease in force from year to year for four successive years next after the first year, either by payment of $1 per acre or by beginning a well for oil and gas on or before April 30th of each succeeding year for four years next after the first year, without production, and pleaded a provision in the lease contract reading, "But in this connection it is agreed that the completion of a well which produces oil or gas in paying quantities shall hold only the 640 acres surrounding it, with such well as near the center thereof as may be practicable, without further cash rental, but as to all other acreage the provisions for cash rental as in this paragraph [third paragraph] contained, remains in force," appellees, lessees, paying one-eighth royalty of oil, and annual cash rental in amount stated for gas, that appellees entered upon constructive possession of said leased lands for the purposes authorized, and prior to the 30th day of April, 1920, commenced three wells as test wells for oil and gas and continuously and diligently prosecuted the drilling same until said date, but that on said date (April 30, 1920) neither of said wells had been completed to production. It was alleged that the beginning of said wells operated under the terms of said lease to continue said lease in force without the further payment of any sum. Notwithstanding said lease contract and its rental terms, and notwithstanding the commencement of said wells, appellants about April, 1920, wrongfully claimed that appellees were due to pay them, under the terms of said lease contract, $1 per acre, amounting to the sum of $22,000, as rentals, and demanded of appellees the payments of said sum as rentals, and insisting that, if same was not paid by April 30, 1920, appellants would declare a forfeit of said lease and oust appellees from said premises, whereupon appellees paid said sum under protest and duress, which payment, appellees alleged, they were compelled to make to protect their financial interests, in this: Appellees had made and had outstanding existing contracts for the assignment and sale of a large portion of the lease upon said lands for large sums of money partly paid and partly unpaid, and conditioned upon the completion by appellees of a test well or wells to a specified depth upon some of said lands, and which depth had not been reached in drilling, and that for that and other reasons specially pleaded by appellees, but not necessary to further here state, and that by reason of which, if appellants forfeited the said lease and ousted appellees and those holding under them, appellees would sustain a loss of many thousand dollars, and subject them to large damage suits, and cloud their title to said lease, to their irreparable injury.

Appellants answered by general denial, and further that the writing, signed by appellants and appellees, due to mutual mistake as to its contents, and also as to the meaning of terms used in the writing, did not state the real contract made by the parties, in this: It was the real contract that appellees, in addition to the down payment of $110,000 made when the contract was signed, should pay $1 per acre per year on or before April 30, 1920, 1921, 1922, and 1923, for the 22,000 acres, save that for such 640-acre tract as might have producing wells, as such sections as appellees might test out and release back to appellants; that no producing wells were had nor sections released back to appellants. The answer specifically sets out in detail how the alleged mutual mistake in the writing came about. The answer also contained a cross-action against appellees for $22,000, alleged to be the installment due April 30, 1921. The answer further prayed for a reformation of the writing and recovery of $22,000 and general relief. Each party filed supplemental pleadings, and we will further state such additional matters as may seem necessary in the discussion of the several propositions presented.

The case was tried with a jury and submitted upon special issues. Upon the issues submitted the jury found:

(1) Prior to the execution of the lease contract it was, in substance, verbally agreed between J. E. Dale and Dan Brown that the Dales should lease the land in question for a period of five years for $5 per acre for the first year, and $1 per acre per annum unconditionally for the next four years, with the qualification that a producing well or a dry hole should release 640 acres on which it was located from future rentals.

(2) In respect to the matter inquired about in question No. 1, through mutual mistake of J. E. Dale and Dan Brown, a different term was written into the contract of date the 29th day of May, 1919.

(3) At the time they signed the typewritten lease, both Dan Brown and the Dales believed that its terms, as actually written, meant and required unconditionally the payment of $1 per acre as rents for the next four years after the first year, with the qualification that a producing well or dry hole would release 640 acres surrounding it from rentals.

(4) At the time they signed the typewritten lease, Dan Brown and U. M. Simon, as lessees, and the Dales, as lessors, did not believe that its terms, as actually written, meant and required unconditionally the payment of $1 per acre per annum as rent for the next four years after the first year, with the qualification that a producing well or dry hole would release 640 acres surrounding it from future rentals.

(5) The payment by plaintiffs to defendants of $22,000 on or about April 29, 1920, was made under duress.

In response to supplemental issue A the jury found: T. A. Dale and J. B. Dale, at the time they fixed their signatures to the lease introduced in evidence, dated May 29, 1919, did so with the mistaken belief that said lease contained the unconditional term that the lessees were to pay for the land after the expiration of the first year at the rate of $1 per acre per annum, with the qualification that a producing well or dry hole should release the 640 acres on which it was from future rentals.

On the above findings of the jury, the court, on motion of appellees, entered judgment in their favor for $22,000, with interest and costs, and that appellants take nothing by their cross-action, from which judgment this appeal is prosecuted.

Under the first proposition the contention is made that the evidence is insufficient to show duress, in that no force or violence was offered or threatened appellees, and their drillers were in peaceable possession of the premises with their equipment, and the only thing done by appellants was their declaration that they would forfeit the lease if the rental was not paid.

Under the above appellants concede as a legal principle that there may be duress of property, as well as duress of the person, but insist that, to amount to a duress of property, there must be some form of coercion; otherwise the payment of the $22,000 would be a voluntary payment, and not under duress of property, and a suit to recover the amount paid would not lie. Appellees make the counter proposition that the evidence is sufficient to show duress of property in that appellees' rights under the lease contract were subject to termination and forfeiture by appellants for nonpayment of rentals under certain contingencies, and the appellants wrongfully demanded of appellees the payment of such rentals under the threat and penalty of declaring such forfeiture if such rentals were not paid, and having the power, or apparent power, to enforce such demand and declare such forfeiture against appellees' property without any resort whatever to the courts. It is further insisted by appellees under this proposition that the evidence shows such payment was not voluntary, but under duress, in this, that the appellees' business of drilling and developing said lands and as selling acreage thereof was threatened and jeopardized by the acts of appellants in threatening such forfeiture, and that such payment was made only for the purpose of protecting such business for serious injury; that the evidence further shows that the threatened forfeiture by appellants was of such a nature as, under all the circumstances at the time, to deprive appellees of the power of exercising their own free will in the matter, and did so deprive them in the matter of making such payment as to constitute duress.

The lease pleaded and shown in the record contained the following stipulation:

"If no well be commenced on said land on or before the 30th day of April, 1920, this lease shall terminate as to both parties unless the lessee on or before that date shall pay or tender to his lessor, or the lessors' credit, in...