Gaines v. Hamman

• Citation: 346 S.W.2d 186
• Decision Date: 14 April 1961
• Docket Number: No. 16210,16210
• Parties: Leon GAINES, Appellant, v. Blake HAMMAN, Appellee.
• Court: Court of Appeals of Texas. Court of Civil Appeals of Texas

Page 186

346 S.W.2d 186

Leon GAINES, Appellant, v. Blake HAMMAN, Appellee.

No. 16210.

Court of Civil Appeals of Texas, Fort Worth.

April 14, 1961.

Rehearing Denied May 12, 1961.

Settle & Settle, and Peveril O. Settle, Jr., Fort Worth, for appellant.

Hudson, Keltner, Jordan, Smith & Cunningham, Fort Worth, for appellee.

MASSEY, Chief Justice.

From a summary judgment in behalf of defendant Blake Hamman, plaintiff Leon Gaines has perfected an appeal.

Judgment affirmed.

Appellant squarely predicates his right to recover upon the contention that the pleadings and evidence before the trial court on appellee's motion for summary judgment raise issues of fact of which if determined in his favor in a trial on the merits would obligate entry of a judgment imposing a constructive trust on a one-eighth (1/8th) working interest in a certain oil and gas lease in Jack County, Texas.

Appellant is a geologist. Appellee is an oil field land man and promoter. Each is in business for himself. In past years they have been joint adventurers as to individual or groups of oil and gas lease 'deals'. During these years each of them have individually engaged in joint ventures in which the other had no interest. For purposes of the case we will assume that the basic oral agreement of the parties was as stated by appellant, viz.: '* * * As to any lease * * * on which I developed or prepared the geology and which Hamman, or both of us working together, attempted to sell, we would own an equal interest * * * and would share equally in any interest reserved when it turned. It was understood that in making a trade, Hamman would be entitled to recoup the costs which he had incurred in acquiring it.'

From other undisputed evidence in the record it is clear that the parties had no objection if title was taken in the name of either one, and that the appellant had no complaint to make that title to the particular lease in controversy in this case was taken by appellee in his name only. In other words appellant is not complaining in this case because his name was not mentioned in the written lease taken by the appellee.

As applied to the instant controversy it is the appellant's pleading and evidence that he developed or prepared the geology on the lease in question and pointed it out to the appellee as one wherein oil and/or gas was probably to be found, and as one which the parties could probably promote for the financing of drilling operations through conveyance of the majority interest in the lease. Appellee, acting upon the recommendation of appellant, and upon the geology developed by him, acquired the lease in his own name. Thereafter, with the aid of appellant, appellee promoted the drilling of an oil well upon the lease by conveying to those financing the same the majority interest therein, also making himself whole in that such financing covered his outlay in cash necessary to acquire the lease. Appellee was left with a one-fourth (1/4th) working interest in the lease. He refused to convey half of his interest to appellant, denying any agreement or obligation to do so. By reason thereof appellant's suit was brought.

We believe that the question posed may be simplified by considering it as follows: Question. If a man has information that riches underlie a certain tract of land as a part thereof, but has no funds wherewith he might purchase the tract and through labor in the extraction of the riches therefrom acquire a profit, may he safely rely upon the oral agreement, of one who has the necessary funds, that if he point out the premises so that the other may purchase it the riches will be shared equally with him who knows where they are to be found by means of a conveyance to him of his proportionate interest in the land?

We believe that the answer to the question must be in the negative in view of the Statute of Frauds and the Texas Trust Act, for the appellant must necessarily demonstrate circumstances which would entitle a court to impose a constructive trust upon the property interest of the appellee and this cannot be done under such state of facts.

The situation is not to be distinguished from a transaction where one party entrusts money to another so that such other may purchase a designated parcel of real estate and take title thereto in his own name but for the use and benefit of both parties. Either transaction would be an express oral trust. The trusting party who is victimized upon the refusal of the trustee to honor his agreement and convey the other his proportionate interest in the property purchased would be unable to enforce the same because it would clearly be an express trust which was not in writing. Vernon's Ann.Civ.Tex.St. Title 65 'Frauds and Fraudulent Conveyances', Art. 3995 'Writing required'; V.A.T.S. Title 125A 'Trusts and Trustees', Art. 7425b-1 et seq., 'Texas Trust Act', Art. 7425b-7, 'Requisites of a trust'.

A constructive trust could not be imposed upon the transaction. Our statute requires trusts to be in writing and in jurisdictions where such is the case the trustee, as transferee of the title to real estate, could be said to hold the interest of a trusting party as a constructive trust which...