Ladd v. Upham, 12800.

• Citation: 58 S.W.2d 1037
• Decision Date: 11 March 1933
• Docket Number: No. 12800.,12800.
• Parties: LADD v. UPHAM.<SMALL><SUP>*</SUP></SMALL>
• Court: Court of Appeals of Texas

58 S.W.2d 1037

LADD v. UPHAM.^*

No. 12800.

Court of Civil Appeals of Texas. Fort Worth.

March 11, 1933.

Rehearing Denied April 8, 1933.

Appeal from District Court, Wichita County; W. W. Cook, Judge.

Suit by Paul Ladd against D. A. Upham. From an order dismissing the cause, plaintiff appeals.

Reversed and remanded.

Reynolds & Heare, of Shamrock, for appellant.

H. B. Penix, of Wichita Falls, and W. H. Penix, of Mineral Wells, for appellee.

CONNER, Chief Justice.

This suit was instituted by Paul Ladd in the district court of Wichita county against D. A. Upham to recover the sum of $19,432.81, together with interest and costs of suit.

Omitting jurisdictional and other allegations not necessary to mention, plaintiff alleged that he was the owner of a certain tract of land described in his petition, which, on November 5, 1929, was held and possessed by the defendant, Upham, under a certain oil and gas lease executed by the plaintiff and his wife; that said lease contained the following express conditions and obligations, to wit:

"The lessee shall pay lessor, as royalty, one-eighth of the proceeds from the sale of the gas, as such, for gas from wells where gas only is found, and where not sold shall pay Fifty ($50.00) Dollars per annum as royalty from each such well, and while such royalty is so paid, such well shall be held to be a producing well under paragraph numbered two hereof. The lessor to have gas free of charge from any gas well on the leased premises for stoves and inside lights in the principal dwelling house on said land by making his own connections with the well, the use of said gas to be at the lessor's sole risk and expense. The lessee shall pay to lessor for gas produced from any oil well and used by the lessee for the manufacture of gasoline, or any other product, as royalty one-eighth of the market value of such gas. If said gas is sold by the lessee, then as royalty one-eighth of the proceeds of the sale thereof."

Plaintiff further alleged that from November 5, 1929, to May 1, 1931, the defendant had sold at points off the premises 323,859,600 cubic feet of gas for the sum of $161,929.80, of which amount defendant had paid only the sum of $809.69, thus leaving a balance of $19,432.81 justly due and payable to plaintiff under the terms of said lease, which, together with interest and costs as stated, plaintiff sought to recover.

Defendant answered by a general denial and a general demurrer and certain special exceptions. The court sustained the general demurrer and the special exceptions, and the plaintiff having declined to amend, the cause was dismissed. From the order of dismissal the plaintiff has appealed and assigns error to the court's ruling.

Appellee concedes, as must be done under the rule which obtains in such cases, that the sufficiency of the special exceptions to the petition may be here passed as immaterial without discussion in view of the court's ruling upon the general demurrer. See City of Dallas v. Shows (Tex. Com. App.) 212 S. W. 633; Karnes v. Barton (Tex. Civ. App.) 272 S. W. 317; Bigham Bros. v. Port Arthur Channel & Dock Co., 100 Tex. 192, 97 S. W. 686, 13 L. R. A. (N. S.) 656.

Appellee's contention before us, however, which presumably was adopted by the trial court, is that by the provisions of the lease made by Ladd and wife, the petition "shows on its face that appellant is entitled to one-eighth of the sale price of the gas as measured into the pipe line of the appellee which connected with said well, and not the price or value that appellee obtained for said gas at some place off the premises and at McLean and Alanreed, to which it was transported by him," and that hence the trial court properly sustained the general demurrer. To sustain this contention appellee cites the cases of Martin v. Amis (Tex. Com. App.) 288 S. W. 431; Rains v. Kentucky Oil Co., 200 Ky. 480, 255 S. W. 121; Scott v. Steinberger, 113 Kan. 67, 213 P. 646, 647; Thornton's Law of Oil & Gas, vol. 1, p. 257.

We think the cases cited are distinguishable from the one before us. The case of Scott v. Steinberger appears to be the one most strongly relied on, but in that case the payment of royalties was: "Party of the second part [the lessee] shall deliver to the credit of party of the first part [lessor] free of cost in the pipe lines to which he may connect his wells one-eighth of all oil produced and saved on said premises, and shall pay the market price for same in cash if party of the first part shall so desire, and shall pay to party of the first part one-eighth of all gas produced and marketed."

It was held that the lessor was entitled to receive his share as measured into pipe lines which connected with the...