Godfrey v. Central State Bank

• Court: Texas Court of Appeals
• Writing for the Court: Leslie
• Citation: Godfrey v. Central State Bank, 5 S.W.2d 529 (Tex. App. 1928)
• Decision Date: 27 January 1928
• Docket Number: (No. 390.)
• Parties: GODFREY et al. v. CENTRAL STATE BANK OF ABILENE.

5 S.W.2d 529

GODFREY et al. v. CENTRAL STATE BANK OF ABILENE.

(No. 390.)

Court of Civil Appeals of Texas. Eastland.

January 27, 1928.

Rehearing Denied April 13, 1928.

Error from District Court, Taylor County; M. S. Long, Judge.

Action by P. S. Godfrey and another against the Central State Bank of Abilene. Judgment on verdict directed for defendant, and plaintiffs bring error. Reversed and remanded.

Goggans & Allison, of Breckenridge, Davidson & Hickman, of Abilene, and Clint & Eades, of Dallas, for plaintiffs in error.

Scarborough & Wilson, of Abilene, and Grisham Bros., of Eastland, for defendant in error.

LESLIE, J.

This suit is to enforce specific performance of an alleged contract to convey certain oil and gas rights in lands situated in Winkler county, Tex. The contract relied on is evidenced by a series of letters passed between President Hutchison of the Central State Bank of Abilene, Tex., defendant below and the plaintiff Godfrey. In this opinion the parties will be designated as below, plaintiffs and defendant. The defendant bank contends that the correspondence amounts to nothing more than negotiations to sell and purchase, and not a consummated or concluded agreement to that effect.

At the conclusion of the trial, each party asked an instructed verdict, and the court directed one in favor of defendant bank. To this action of the court there are seven assignments of error. Two main questions are before this court: (1) Did the trial court correctly construe the correspondence or documentary testimony? and (2) does the testimony otherwise raise an issue of fact that should have gone to the jury?

Previous to this transaction, plaintiff Godfrey had purchased from said bank royalty on an undivided one-half interest in section 41. Following that deal, the president of said bank wrote Godfrey that he had for sale other royalties in that vicinity. This was the beginning of the negotiations which terminated in this lawsuit. Since the appeal necessarily turns upon the construction given the correspondence passing between the litigants, that correspondence will be set out in full. It is as follows:

               "Abilene, Tex., May 18, 1926
                

"Mr. P. S. Godfrey, Mercantile National Bank Bldg., Dallas, Tex. — Dear Sir: Replying to your letter of the 13th in which you inclose oil and gas lease on the Southwest 1/4 of section No. 38 which you agree to lease at the rate of $1.25 per acre will say that between the time that I wrote you and received your letter, I sold the three sections we have been mentioning, namely, 23-25 and 38, in fee and therefore will not be able to deliver to you this lease unless for some reason this deal fails to mature and I do not think it will. I am sorry that I did not receive your letter before I closed this deal with the other party, however I still have plenty of royalty in the other six sections which are nearer the well, same being sections 34-35-40-41-45 and 46, that I could sell you which in many instances is better to buy than lease from the fact that it does not run out as a lease does. If you could use the royalty in any of these sections, I will be glad to name you a price which will run a little cheaper than section No. 41 that you bought on account of it being further away from the well.

"Let me hear from you regarding this matter that I may be able to sell you some royalty in these sections.

"Assuring you that I regret very much having sold the lease before receiving your letter and trust that I may be able to sell you some of the royalty, I am,

"Yours truly,             C. T. Hutchison
                

"P. S. — Would have written you sooner but I have been tied up in court."

               "Dallas, Tex., May 27, 1926
                

"Mr. C. T. Hutchison, c/o Central State Bank, Abilene, Tex. — Dear Sir: Replying to your favor of May 18th, advising that you had sold the three sections, part of one of which I was desirous of leasing but that you will quote me a cheaper price on the royalty in sections 34, 35, 40, 45 and 46 than I paid on section 41 by reason of their being farther away from the well.

"You, no doubt, know that this well is at present drilling below 1,300 feet and has not had a showing of either gas or oil, so that a man purchasing royalties at this time would not expect to pay as much as when the well was first spudded, as he has lost the play on the first 1,300 feet and his chances are now narrowed down to balance of the depth of the well; and usually a well that has any deep oil makes some showing at a shallow depth of either oil or gas. However, if your price is enough cheaper than that I paid on section 41 to interest me, I might purchase some more royalty from you and would, therefore, suggest that you quote me a price on a one-sixteenth royalty on Section 34; also, on Sections 46 and 35, same to be sold upon you furnishing complete abstract showing good and marketable title in the Central State Bank.

"Kindly let me hear from you promptly on this matter, and oblige.

      "Very truly yours,      P. S. Godfrey
                

"PSG-LC"

           "Abilene, Tex., May 29, 1926
                

"Mr. P. S. Godfrey, Mercantile Nat. Bank Bldg., Dallas, Tex. — Dear Sir: Referring to your letter of May 27th, in which you state that you would be interested in buying one-sixteenth royalty in sections 34, 35, and 46 in Winkler county, would say that I would make you a price of three dollars per acre on the one-sixteenth royalty in the three above mentioned sections, furnishing you one complete abstract covering the three sections. If this proposition is agreeable to you, please let me hear promptly, and

oblige.          Yours very truly
                "CTH:UC     C. T. Hutchison, President."
                              "Dallas, Tex., June 3, 1926.
                

"Mr. C. T. Hutchison, Central State Bank, Abilene, Tex. — Dear Sir: Replying to your favor of the 29th ult., advising that you will make me a price of $3.00 per acre on one-sixteenth royalty covering the three sections, to wit, 34, 35 and 46 in Winkler county, I suppose by this that you mean you are willing to sell this on a $3.00 basis, or a basis of $3.00 per acre for full royalty, which would be a little less than what I paid in section 41 which was on a basis of $5.00 per acre.

"My latest information on the Westbrook well shows this well to be drilling below 1,800 ft., and no showing of either oil or gas up to the present time, which, of course, does not make things look very favorable. However, if a deal could be closed immediately I would be willing to pay the sum of $650.00 for two-sixteenths of the royalty on the above three sections, and you to furnish one abstract showing good and marketable title covering the three sections. This is very little less than the price you offered to take and is taking two-sixteenths instead of one-sixteenth, so I feel that under the circumstances I would be entitled to this reduction. If you care to sell at this price please confirm by return mail, and if you desire I will then prepare contract for both parties to sign and will close the deal in the same manner as the last deal was closed.

"Trusting to hear from you by return mail, I

beg to remain,        Very truly yours,
                "PSG-LC                     P. S. Godfrey.
                

"In answering please address me at 902 Mercantile Bank Bldg., as your last letter was addressed in care of Mercantile Bank and was delivered to the bank instead of to my office, and was delayed several days in being forwarded to me."

                "Abilene, Tex., June 4, 1926.
                

"Mr. P. S. Godfrey, 902 Mercantile National Bank Bldg., Dallas, Tex. — Dear Sir: Replying to yours of the 3d concerning the purchase of some interest in sections 34-35 and 46 in Winkler County will say that I will deliver to you two-sixteenths of one-eighth of the royalty in these three sections for $650.00. If you would prefer to draw the contract or deed, you may do so and send same to me for my examination and will accept same if it meets with our terms. I would prefer your making the contract because it would be worded in a way that would be satisfactory to you, which I might not do in case I should prepare same.

"I will furnish you one complete abstract covering amount of royalty in the three sections which will be exactly the same as the abstract that you now hold on section 41 as this abstract covers the six sections and just certifies to for one section. I will give you a letter guaranteeing the abstract to be a duplicate of the one you have so that you may pay on this amount and which will protect you so that you may recover the amount paid for this royalty in case the abstract is not as represented. When I receive your deed and execute same and return to you, I will send you the letter at the same. You will please send this at once so that we can get this matter closed up at once.

                         "Yours truly,
                  "H-p.        C. T. Hutchinson, President."
                               "Dallas, Tex., July 12, 1926.
                

"Central State Bank, Abilene, Tex. Attention: C. T. Hutchison — Dear Sir: I owe you an apology for not answering your letter of June 4th regarding the sale of two-sixteenths of the landowner's one-eighth royalty in sections 34, 35 and 46, Winkler county, Tex. This letter evidently was delivered while I was busily engaged in the trial of a case at the courthouse and was placed on my desk and got mixed up with some other papers and placed in one of the files without my having opened same, and on last Saturday on going through this file I came across this letter and opened and read it for the first time.

"I am still willing to purchase this royalty on the basis mentioned in my letter to you and in your letter to me. I have a friend here who is taking one-half of this; that is, I am buying one-sixteenth of the landowner's one-eighth royalty, and he is taking the other one-sixteenth of the landowner's one-eighth royalty, and in order to close this deal I do not think it will be necessary for us to execute any sale contract but instead...