Harris v. Wheeler

• Decision Date: 20 December 1924
• Docket Number: (Nos. 598-4073.)
• Citation: 267 S.W. 465
• Parties: HARRIS et al. v. WHEELER.
• Court: Texas Supreme Court

267 S.W. 465

HARRIS et al. v. WHEELER.

(Nos. 598-4073.)

Commission of Appeals of Texas, Section A.

December 20, 1924.

Error to Court of Civil Appeals of Seventh Supreme Judicial District.

Action by L. Wheeler against R. T. Harris and others. Judgment for plaintiff affirmed by Court of Civil Appeals (255 S. W. 206), and defendants bring error. Reversed and remanded to trial court.

Bonner, Bonner & Sanford, of Wichita Falls, and O. F. Wencker, of Dallas, for plaintiffs in error.

Hunter & Scott, of Wichita Falls, for defendant in error.

CHAPMAN, J.

R. T. Harris and several associates were joint owners of a five-acre producing oil lease in Wichita county, which they were operating under the name of Gray Gander Oil Company. Through one L. Wheeler as agent, sale of the lease was made to Ralph R. Langley of Kansas City, Mo. The consideration from Langley to Harris and associates was in these words:

"Whereas, said present owners have sold said property to Ralph R. Langley of Kansas City, Missouri, for the sum of four hundred twenty-five thousand ($425,000.00) dollars paid and to be paid as follows: One hundred thousand ($100,000.00) dollars cash in hand paid, the receipt of which is hereby acknowledged; fifty thousand ($50,000.00) dollars evidenced by the note of the said Langley, of even date herewith, payable to R. T. Harris, bearing interest from maturity at the rate of eight (8) per cent. per annum, providing for attorneys fees clause payable at Wichita Falls, Texas, due thirty (30) days after date; two hundred seventy-five thousand ($275,000.00) dollars to be paid out of the production from said lease run to the account of the seven-eighths working interest of the lessee as follows: For every barrel of oil so run to the account of the seven-eighths working interest of the lessee, $1.50 shall be paid to the assignors, to be paid to R. T. Harris for the assignors, he being authorized to collect the same, receipt therefor and execute all division orders and all other instruments necessary to obtain the same; said money so paid out of the production shall be paid directly to the said Harris by the pipe line companies or other parties purchasing said oil."

There is also in the contract this provision:

"As a part of the consideration for this conveyance the said Ralph R. Langley hereby binds himself, his heirs, executors, administrators and assigns to continue the operation of the wells on the lease of the above described five acres in an efficient manner to the end that the monies to be paid out of production to the assignors may be paid as early as practicable."

Wheeler's commission was provided for in a letter to him from Harris in these words:

                        "Wichita Falls, Tex., Sept. 15, 1919
                

"L. Wheeler: I agree to pay you commission of ($25,000.00) twenty-five thousand dollars out of sale price of Gray Gander Oil Co. Commission to be prorated as to cash payment and deferred payment, you to get your proportion of the cash payment and the balance out of deferred payments as they are made by the purchaser.

                                  [Signed] R. T. Harris."
                

Wheeler accepted the terms of this letter in writing. The cash and note mentioned in the consideration were paid, and Wheeler received his commission on these items. Lessors were also paid $50,000 additional from the production, and Wheeler received his commission on this item with the possible exception of a small amount of about $100. Langley then abandoned the lease and left the state and made no further payments. The assignors in the lease brought suit for the balance due them by Langley and for a foreclosure of an equitable purchase-money lien on the lease and recovered judgment for balance due, and for foreclosure of their lien. A receiver was appointed to make sale of the lease, and at the receiver's sale lessors bid in the property for $100,000, which amount was credited on the judgment. Wheeler brought this suit against Harris and his associates to recover his pro rata of commission on the $100,000...