Gardner v. Wesner, 7794.

• Decision Date: 21 December 1932
• Docket Number: No. 7794.,7794.
• Citation: 55 S.W.2d 1104
• Parties: GARDNER et al. v. WESNER et al.
• Court: Texas Court of Appeals

55 S.W.2d 1104

GARDNER et al. v. WESNER et al.

No. 7794.

Court of Civil Appeals of Texas. Austin.

December 21, 1932.

Rehearing Denied January 11, 1933.

Appeal from District Court, Tom Green County; John F. Sutton, Judge.

Suit by J. D. Wesner and another against Daniel S. Gardner, S. J. Brendel, L. J. Brendel, and others. From a judgment for plaintiffs against defendants S. J. and L. J. Brendel and others, the last-named defendants appeal.

Reversed and rendered in part, reversed and remanded in part, and affirmed in part.

Baker & Baker, of Coleman, and Paul Petty, of Ballinger, for appellants S. J. and L. J. Brendel.

Kerr & Gayer, of San Angelo, for appellees.

McCLENDON, C. J.

Wesner and Gruber (to whom we will refer as plaintiffs) sued Boyce, S. J., Frank, and L. J. Brendel, and others upon a contract to remove a bailer from and to clean an oil well; and to foreclose an asserted mechanic's lien upon oil well casing. All of the defendants were served by publication, and only defendants S. J., Frank, and L. J. Brendel answered, the others being represented by attorney ad litem. Upon a directed verdict the plaintiffs recovered a personal judgment against S. J. Brendel for $5,622.55, and against defendants Boyce, and S. J., and L. J. Brendel, foreclosing the mechanic's lien. From this judgment S. J. and L. J. Brendel have appealed.

The contract was in writing and was executed by Boyce as first party and by Wesner and Gruber as second parties. It recited that Boyce was the owner of the oil lease and Wesner and Gruber agreed to do the work of removing the bailer and cleaning the well. The defendants, other than Boyce, were sought to be held liable on the ground that they were all mining partners in the drilling of the well.

Appellants' contentions which appear to present questions of any substantial merit are disposed of by the following conclusions, which we have reached:

1. The evidence does not support a finding that S. J. Brendel was a partner (mining or otherwise) with Boyce in the drilling of the well.

2. The evidence shows conclusively that the casing upon which the mechanic's lien was foreclosed was the property of S. J. Brendel; that it was loaned to Boyce in connection with drilling the well; that plaintiffs knew of such ownership and contracted with reference thereto, and therefore there could be no mechanic's lien created thereon in favor of plaintiffs.

3. The evidence was not of such conclusive character as to warrant a directed verdict upon the amount of recovery.

Upon the issues of partnership and mechanic's lien the evidence showed: Boyce was the assignee of the lessee of an oil and gas lease containing the usual provisions of what is commonly known as an 88 form lease. Some time prior to December 12, 1929, a well had been drilled to a depth of 1,365 feet on the lease under a drilling contract between Boyce on the one hand and plaintiffs (as drillers) on the other.

On November 12, 1929, Boyce assigned to S. J. Brendel an undivided 4/32 interest in the lease, the assignment providing: "It being the intention of this assignment of interest to convey to the holder hereof, an undivided 4/32 interest in and to a well to be drilled on the above mentioned lease. This well to be drilled to a total depth of thirty-five hundred (3500) feet unless oil or gas is found in paying quantities at a lesser depth."

On December 12, 1929, plaintiffs and Boyce executed the contract in question, and another contract whereby the plaintiffs agreed to drill the well to an additional depth.

This latter contract contained the following stipulation: "That the party of the first part (Boyce) shall furnish the casing necessary to deepen said well, as herein set out. It is understood, however, by the parties hereto that said pipe belongs to and is the property of S. J. Brendel; that said casing is to remain the property of the said S. J. Brendel and is to be returned to him after its use on this well is no longer necessary, and it is further agreed that no attachment or lien of any kind shall be fixed upon said casing."

On May 14, 1930, S. J. Brendel assigned his interest in the lease to L. J. Brendel. On August 28, 1930, Boyce and Wesner executed a contract under which Wesner agreed to pull the casing from the well, the consideration being $700 cash. The evidence showed conclusively that S. J. Brendel, with Wesner's full knowledge, furnished the money which Wesner received under this contract. The contract contained the following recital: "Whereas he (Boyce) is desirous of having the casing pulled and placed upon a rack at the well, said casing belonging to S. J. Brendel when the same is pulled and placed upon a rack."

The partnership between Boyce and S. J. Brendel is predicated upon the above assignment of November 12, 1929, and the following testimony, taken from a deposition of S. J. Brendel:

"(b) What is your association with the said Geo. W. Boyce in drilling said well on the Lange farm in Runnels County, Texas? Explain fully.

"(c) What agreement, if any, have you with Geo. W. Boyce about sharing in the profits and losses in connection with the drilling of said well? Explain fully."

"(b) Association with Geo. W. Boyce was merely in the loan of certain casing for the well drilled by said Boyce and others.

"(c) I agreed to loan casing, not to exceed $15,000.00 in value, to the said Geo. W. Boyce, said casing to be used in the drilling of said well. If the well proved productive I was to receive in cash whatever money I paid for casing. If the well proved unproductive, I was to secure the casing pulled from the well, as it was my personal property. In consideration of my loaning the casing, Boyce assigned to me an interest of 1/8 of the net profits derived from said well; but all obligations for drilling and operating were for his account, and my sole interest was to be derived from the net profits resulting from his operation."

The evidence negatives any holding out of S. J. Brendel as a partner. The contract was made with Boyce alone, in his individual name, and solely upon his individual responsibility. To hold S. J. Brendel as a partner, therefore, the relation of the parties inter sese must alone be looked to.

In order to constitute a mining partnership (sometimes called a joint venture) there must be not only a joint ownership of the mining property (which of itself creates only the relation of co-tenancy), but also a joint operation. "The actual working of the mine by the joint owners is essential to a mining partnership." 22 A. & E. Ency. of Law, p. 228. This rule is so well established as to be now regarded as elementary (40 C. J., p. 1145; 18 R. C. L. p. 1200, § 106; 2 Thornton's Oil & Gas (5th Ed.) §§ 658-667; Summer's Oil & Gas, § 235), and has been followed in this state whenever the question has been presented. Bolding v. Camp (Tex. Com. App.) 6 S.W.(2d) 94; Leath v. Benton Abstract & Title Co. (Tex. Civ. App.) 9 S.W.(2d) 501; Lowry Oil Corp. v. Bennett (Tex. Civ. App.) 16 S.W.(2d) 947; Ferguson v. Rhoades Drilling Co. (Tex. Civ. App.) 271 S. W. 155; Adams v. Texhoma O. & R. Co. (Tex. Civ. App.) 262 S. W. 139.

The Texas cases in which it has been held that a mining partnership existed presented the elements "not only a joint ownership of the lease * * * but joint operation, sharing of profits, community of interests, and the mutual agency * * * in the management of the lease and exploration for oil." Wagner Supply Co. v. Bateman, 118 Tex. 499, 18 S.W.(2d) 1052, 1055; Munsey v. Mills & Garitty, 115 Tex. 469, 283 S. W. 754; Mayfield v. Key (Tex. Civ. App.) 260 S. W. 926; Indiahoma Ref. Co. v. Wood (Tex. Civ. App.) 255 S. W. 212.

That sharing in the net profits of a mining venture does not create the relation of mining partner, was held in the early Colorado case of Le Fevre v. Castagnio, 5 Colo. 564. The facts in that case, which present a close analogy to those at bar, are briefly summarized in the opinion as follows: "For the purpose of enabling Moffett to work his mine, the appellant agreed (upon the terms set forth) to furnish him with money or supplies to the amount of twenty-two hundred dollars. In consideration of these advances, Moffett agreed to pay Le Fevre one-fifth of all the profits derived from working the mine during the term of the lease. To secure Le Fevre in his advances, Moffett further agreed to deliver to him all ores taken out of the mine on the dump, until Le Fevre should be repaid all his advances." The court's holding is embodied in the following quotation: "The agreement in question, while it stipulates that the appellant is to be paid one-fifth of the profits, falls clearly within the exceptions to the rule, that interest in profits involves liability as a partner. Its leading recitals and terms show its true character to be a mere contract to advance money or supplies. not as an owner, but as a creditor,...