National Oil & Pipe Line Co. v. Teel

• Decision Date: 16 June 1902
• Parties: NATIONAL OIL & PIPE LINE CO. et al. v. TEEL et ux.
• Court: Texas Supreme Court

68 S.W. 979

NATIONAL OIL & PIPE LINE CO. et al. v. TEEL et ux.

Supreme Court of Texas.

June 16, 1902.

Error to court of civil appeals of Fourth supreme judicial district.

Suit by Richard Teel and wife against the National Oil & Pipe Line Company and others. There was a decree of the court of civil appeals (67 S. W. 545) affirming a decree for plaintiffs, and defendants bring error. Affirmed.

Watts, Chester & Ellison, E. R. Spotts, and A. E. Amerman, for plaintiffs in error. Cruse & Noll and Smith, Crawford & Sonfield, for defendants in error.

GAINES, C. J.

This suit was brought by the defendants in error to cancel two certain contracts which purported to convey to Chas. A. Nicholson the right to bore for and take away the oil, gas, and other minerals, each upon a distinct tract of land. Nicholson assigned his right under both contracts to John F. Mundy, who in time conveyed his right in one tract to the National Oil & Pipe Line Company and in the other to the Empire State Oil, Coal & Iron Company. Nicholson and each of his successors in title were made parties defendant. Nicholson and Mundy disclaimed. The defendant companies made defense, and upon the trial judgment was rendered against them. Upon appeal the judgment was affirmed. The plaintiffs, in their petition, alleged that the contracts were procured by the fraud of Nicholson; that no consideration was paid therefor; and, in effect, that they were void for want of mutuality. The defendant companies, answering, denied the allegations of the petition, and pleaded that they were purchasers for value, without notice of the fraud of Nicholson. The trial court found as a matter of fact that the contracts were procured by fraud; that the assignments to Mundy and to the defendant companies were made for value, and without actual notice of the alleged fraud; but also found that the plaintiffs, at the time of the transfers, were in actual possession of the lands, and therefore concluded, as a matter of law, that they had constructive notice. But the court of civil appeals (67 S. W. 545) reversed the ruling of the trial court upon the question of constructive notice, and held that, since the possession of the plaintiffs was entirely consistent with the rights attempted to be secured by the contracts in question, such possession did not affect purchasers with notice of the infirmity of the contracts. They, however, affirmed the judgment upon other grounds. In the court of civil appeals the appellants assigned error as to the finding of the trial court that the contracts were procured by fraud. But the court of civil appeals—presumably for the reason that in their opinion the appellants were protected as purchasers for a valuable consideration without notice—did not pass upon the question. But, whatever their reasons for the failure to decide the point, the important fact is that they did not sustain the assignment. It must, therefore, be considered by us as if it had been expressly overruled. Capes v. Burgess, 135 Ill. 61, 25 N. E. 1000. Since we are without jurisdiction to determine a question of fact, and since the plaintiffs in error have not assigned in this court that there was no evidence to sustain the finding of the trial court, we must treat the case as if fraud had been established by the evidence. This brings us to the question, is the plea of innocent purchasers a valid defense to this action? In order to decide this question it is necessary to determine the nature of the contracts under which the plaintiffs in error claim. Viewing the written agreements in the light most favorable to these parties, they do not pass an interest in the lands, but are mere contracts for an option by which they may acquire such interest. A naked agreement, by which one promises to convey to another an interest in land in consideration of money to be paid or acts to be performed by such other, but which does not bind the other to pay or perform the consideration, as the case may be, cannot be enforced. In such case there is a want of mutuality in the agreement. The one party promises to do something; the other does not promise absolutely to do anything; hence there is no consideration to support a contract, and it is void. On the other hand, a promise to give an option is valid if supported by an independent consideration. For example, if a sum of money...