Hinson v. Noble, 13793.

• Citation: 122 S.W.2d 1082
• Decision Date: 23 December 1938
• Docket Number: No. 13793.,13793.
• Parties: HINSON et al. v. NOBLE et al.
• Court: Court of Appeals of Texas

122 S.W.2d 1082

HINSON et al. v. NOBLE et al.

No. 13793.

Court of Civil Appeals of Texas. Fort Worth.

December 23, 1938.

Appeal from District Court, Young County; Allan D. Montgomery, Judge.

Suit by G. D. Hinson and R. V. Tidwell against W. S. Noble and R. S. Baker in trespass to try title, wherein the defendants filed a cross-action. From a judgment against plaintiffs in their case of trespass to try title, and in favor of defendants on their cross-action, the plaintiffs appeal.

Judgment affirmed.

Marshall & King, of Graham, for appellants.

W. Carroll Barnett, Jr., of Houston, and Fred T. Arnold, of Graham, for appellees.

SPEER, Justice.

This suit grew out of an oil and gas lease and an optional contract alleged to have been executed simultaneously with the lease.

G. D. Hinson and R. V. Tidwell sued W. S. Noble and R. S. Baker in regular form of trespass to try title to the west half of Section T. E. & L. Co. Survey No. 427, Abstract No. 634, in Young County, Texas. The petition discloses that plaintiffs' title consists of an oil and gas lease on the land.

Defendants answered with general denial, plea of not guilty and by a cross action to establish their own title to an undivided one-eighth interest in the minerals, including oil and gas, in, on and under the tract of land. In the cross action they alleged that they had executed an oil and gas lease on each the east and west one-half of said survey. That the lease on the east half was for the consideration that plaintiffs would commence to drill a well thereon before May 16, 1936, and would prosecute the same diligently until a designated sand should be reached, unless oil and gas were produced at a lesser depth; that defendants, with other owners, had also executed a lease to plaintiffs on the west half of said survey, and simultaneously therewith defendants entered into a written contract with plaintiffs, on February 24, 1936, by the terms of which it was provided that if plaintiffs decided to drill a well on said west half within one year after the date of the lease, they would notify defendants of their decision fifteen days before the commencement of such a well, and that defendants should have fifteen days after the receipt of such notice in which to determine whether or not they desired to participate in the drilling of the well upon the basis of an undivided one-eighth interest in the well and lease. That if defendants exercised their option to participate they should give the notice to plaintiffs by registered mail within the time named, and if they did not so give said notice, their option to do so would expire.

Allegations are made that the lease on said west half was so worded that in the beginning thereof it recited the agreement was entered into on November 6, 1935, and immediately above the place for lessors' signatures it recites, "In testimony of which we sign", etc., this November 21, 1935; but that the instrument was signed and acknowledged by the lessors on different dates, subsequent to the one last given. That the last one signed and acknowledged the instrument on May 22, 1936. That the defendants (plaintiffs in cross action) signed and acknowledged said instrument on February 24, 1936, the same day on which they entered into the supplemental contract which gave them the right, under the conditions named, to participate in the drilling of any well attempted by plaintiffs thereon.

It is further alleged in said cross action that plaintiffs did notify defendants, within one year from the date of the lease, that they intended to drill a well on the land and requested defendants to advise them whether or not they desired to participate therein; that defendants advised plaintiffs by telegram, dated December 2, 1936, and within fifteen days from date of notice, that they had exercised their option to participate in the drilling.

Allegations are made that plaintiffs thereafter drilled the well and finished it as a producer of oil and gas in paying quantities, and had refused to permit defendants to pay their pro rata part of the expense of drilling and to participate in the profits derived from the production.

There was a further plea in the alternative, that if the court should hold that the period of time in which defendants could exercise their option to participate in the project, was confined to one year from November 6, 1935 (the first date shown in the lease), then they averred that plaintiffs had, by their acts and statements, waived their right to claim such forfeiture and were estopped to assert it. The facts and circumstances relied upon for the alternative plea are shown to be oral statements made by plaintiffs, in conversations with the defendants subsequent to the expiration of said period of one year. Allegations were made thereunder, to the effect that defendants had relied upon said statements and understood therefrom that plaintiffs had so waived such forfeiture.

Prayer in the cross action was that plaintiffs take nothing by reason of their action in trespass to try title, and that defendants recover a working interest in the lease equal to one-eighth thereof, upon payment by them to plaintiffs of one-eighth of the drilling cost of the well, said drilling cost to be not in excess of $20,000. They further prayed for the reformation of the lease in certain respects and in the alternative for its cancellation, but neither of those matters are involved in this appeal.

There is attached to the petition in cross action a copy of the contract between the parties, alleged to have been executed on February 24, 1936, relied upon by defendants, as conferring the optional rights claimed in their suit. The copy is referred to by all parties throughout their pleadings as defendants' "Exhibit A".

Plaintiff replied to the cross action with general demurrer and several special exceptions, by a general denial and special plea denying agency upon the part of each plaintiff for the other. No issue is presented here involving the plea relating to agency and it will be unnecessary for us to give it further notice. The general demurrer and all special exceptions were overruled by the court and errors are assigned in regard to some of them. They will be noticed in their proper order.

The case was tried to the court without a jury and judgment was entered against plaintiffs in their case of trespass to try title and in favor of defendants on their cross action, quieting their title to an undivided one-eighth interest in the oil lease on the west one-half of said survey, and for one-seventh of seven-eighths of all oil and gas saved and sold from the well in the past, and to be saved and sold in the future, subject, however, to the payment by defendants to plaintiffs of the amount next awarded. That plaintiffs recover of defendants $3,700 as the amount found by the court to be one-eighth of the expense of drilling the well.

Exceptions were taken to the actions of the court in overruling the special exceptions and in rendering the judgment shown; hence this appeal.

We shall continue to give the parties the same designations carried by them in the trial court, irrespective of defendants' cross action. There are no findings of fact and conclusions of law by the court, and we therefore must look to the record for support of the judgment rendered, if it is to be found there.

Plaintiffs have brought forward ten assignments of error, but have stated in their brief with much frankness that they believe there are only two questions before the court for determination. No criticism is intended for the presentation of ten assignments, for they each present some phase of the two points raised. The points to be determined are:

1. Whether or not the rights of defendants, Noble and Baker, in the oil and gas lease, pleaded by the plaintiffs, expired under the terms of the agreement of February 24, 1936, shown as defendants' "Exhibit A", in their petition of cross action.

2. Whether or not defendants' optional rights were revived by reason of waivers by plaintiffs and estoppel thereunder, if said optional rights under the provisions of the agreement of February 24, 1936, had previously expired.

We, too, believe a determination of these two questions will suffice. In fact, we do not consider the second point is necessarily involved, since there is nothing in the record to show that the court based his judgment on waiver and estoppel.

Plaintiffs' first and second assignments of error complain of the court's action in overruling their ninth and tenth special exceptions. These exceptions complain of named paragraphs of defendants' petition in cross action, while the record before us does not indicate that any one of the paragraphs of the ten page petition is numbered, but there is sufficient quotation of the parts excepted to, contained in the brief to enable us to locate them in the pleading. There was no exception taken to the petition because the paragraphs were not numbered, and we are considering the rulings based on the exceptions shown.

By reference to the petition in cross action, we find that the portions to which the exceptions were directed were alternative pleas, which, in effect, said that if the court should hold defendants could not recover because their option had expired under the terms of the written agreement, then they plead that plaintiffs had, by their acts and statements, waived the right to declare a forfeiture under the agreement, and were estopped to assert the same at this time. The acts of waiver and estoppel were not shown to be evidenced by instruments in writing. It was because of this that the plaintiffs claimed their ninth special exception should have been sustained. And it is urged that the tenth special exception should have been sustained because defendants had alleged in said (alternative) pleading that they had relied upon the oral statements of plaintiffs and understood that no waiver would be claimed,...