Normandie Oil Corporation v. Oil Trading Co., 11011.

Decision Date17 October 1940
Docket NumberNo. 11011.,11011.
Citation147 S.W.2d 557
PartiesNORMANDIE OIL CORPORATION v. OIL TRADING CO., Inc.
CourtTexas Court of Appeals

Appeal from District Court, Harris County; Ewing Boyd, Judge.

Action by the Oil Trading Company, Inc., against the Normandie Oil Corporation, to recover a broker's commission for procuring the sale of an oil and gas lease. Judgment for plaintiff, and defendant appeals.

Affirmed.

C. A. Leddy (of Fulbright, Crooker & Freeman), of Houston, Wm. N. Bonner, Virgil Childress, and Lawler, Wood & Childress, all of Houston, for appellant.

Sewell, Taylor, Morris & Connally, Ben G. Sewell, and J. Toll Underwood, all of Houston, and John S. Keith and Joseph W. Murphy, both of New York City, for appellee.

GRAVES, Justice.

This appeal is from a $19,437.51 judgment of the 55th District Court of Harris County entered upon a jury's verdict in response to special issues, as well as upon independent findings of the court itself from what it termed "the undisputed evidence", in favor of the appellee, a New York Corporation, and against the appellant, a Delaware corporation, with a permit to do business in Texas, as the money so determined by court and jury to be due the appellee as a broker's commission from the appellant for the former's having been the procuring cause of the sale of "the Krohn-oil-and-gaslease" in the Conroe oil field in Montgomery County, Texas, by the Alpha Petroleum Company to the Tidewater Oil Company under an alleged verbal contract (both made and performed in New York State) for such service, of January, 1934, between the appellee, and the predecessors in obligation to pay therefor of the appellant.

The cause of action, so declared upon by and so matured into the appellee by that judgment, was based upon a sale that admittedly occurred on or about April 15, 1935, of such Krohn lease by the Alpha Petroleum Company to the Tidewater Oil Company for $900,000, $550,000 in cash, and the remaining $350,000 payable out of 1/4 of 7/8 of the oil to be thereafter produced therefrom; the recovery so awarded it rested upon averments and consequent findings to the effect that the appellee's services to appellant's predecessors in obligation, together with its negotiations for them in that behalf, had been the procuring cause of the stated sale; that the Alpha Petroleum Company had thereafter conveyed all of its properties to the appellant, which had in consideration therefor assumed all the Alpha Company's liabilities, including the one to the appellee herein recovered for by it, and that thereafter the Alpha had been dissolved; and finally, that the individual defendants the appellee sued herein with the appellant had been officers and directors of the Alpha Company at the time of its recited dissolution.

The appellant, along with its codefendants, in addition to demurrers and denials, general and special, answered below by these, among other, special pleas:

"(1) That plaintiff's claim for commission is void, because plaintiff was not a licensed real estate broker, as required by certain statutes of New York which declared void and unenforceable all contracts made and claims for commission asserted by an unlicensed real estate broker for services rendered in New York.

"(2) That plaintiff, a foreign corporation, had engaged in business in Texas without a permit to do so, in violation of the statutes of Texas, and was prohibited by such statutes from maintaining this suit.

"(3) That plaintiff was not the procuring cause of the sale of the Krohn lease by Alpha to Tide Water, on April 15, 1935, but that long after plaintiff's negotiations with Tide Water had terminated unsuccessfully, said sale was effected solely through the efforts of Alpha's general counsel, Wm. N. Bonner, as an emergency measure to raise funds for the settlement of a lawsuit which, as a result of a lis pendens notice thereof filed shortly theretofore, clouded the title to all of Alpha's oil properties in Texas; and that said attorney was paid a commission for such services.

"(4) That any efforts made by plaintiff to sell the Krohn lease to Tide Water were made under and by virtue of a written contract between Alpha and plaintiff, which terminated on December 31, 1934, without any sale having been effected; that plaintiff had negotiated a contract, dated November 10, 1932, between Alpha and Tide Water, wherein Alpha had agreed to sell and Tide Water had agreed to buy the oil produced from Alpha's leases at Conroe during the period from January 1, 1933, to December 31, 1934, and Alpha had granted to Tide Water the right to purchase any of said leases, including the Krohn lease, at the highest price offered by another during said period; that by its said contract with plaintiff Alpha agreed in writing to pay plaintiff one cent per barrel on all oil sold thereunder and a commission of 2½ per cent on the sale price of any of said leases that might be sold to Tide Water during said period; that Alpha was willing to sell the Krohn lease for $1,300,000.00 and so informed plaintiff in the summer of 1934 while said contract was still in force, but the only offer ever obtained by plaintiff from Tide Water for the purchase of said lease was one for $850,000.00 payable half in cash and half in oil from said lease, which offer was made in the summer of 1934 and promptly rejected by Alpha; and that thereafter Alpha had no other dealings or negotiations with plaintiff regarding the sale of said lease."

The special issues and the jury's answers were as follows:

"No. 1. Do you find from a preponderance of the evidence that George Frankel in the month of January, 1934, employed plaintiff to negotiate a sale of the Krohn lease to the Tidewater Oil Company? Answer: `Yes'.

"No. 1-A. Do you find from a preponderance of the evidence that in so employing the plaintiff, George Frankel purported to act for the Alpha Petroleum Company? Answer: `Yes'.

"No. 2. Do you find from a preponderance of the evidence that after George Frankel so employed plaintiff to negotiate for the sale of the Krohn lease to the Tide Water Oil Company, if you have so found, all of the officers and directors of Alpha Petroleum Company, except ____ Friedman, were fully informed as to such employment? Answer: `Yes'.

"No. 3. Do you find from a preponderance of the evidence that all of the officers and directors of the Alpha Petroleum Company, except ____ Friedman, after being so informed of the employment of plaintiff by George Frankel, if you have so found, acquiesced in and approved of such employment? Answer: `Yes'.

"No. 4. Do you find from a preponderance of the evidence that after the officers and directors of the Alpha Petroleum Company, other than Friedman, were advised of such employment of plaintiff and its efforts and activities in negotiating such sale of the Krohn lease to the Tide Water Oil Company, if they were so advised, they gave plaintiff instructions in respect to negotiating the sale of said lease to said Tide Water Oil Company? Answer: `Yes'.

"No. 5. Do you find from a preponderance of the evidence that the officers and directors of Alpha Petroleum Company, other than Friedman, knew of the efforts of plaintiff to negotiate the sale of the Krohn Lease to the Tide Water Oil Company? Answer: `Yes'.

"No. 6. Do you find from a preponderance of the evidence that the defendant, Alpha Petroleum Company, acting by and through its officers and directors, other than Friedman, knowingly accepted the benefit of plaintiff's services, if any, in negotiating the sale of the Krohn Lease to the Tide Water Oil Company? Answer: `Yes'.

"No. 7. Do you find from a preponderance of the evidence that the efforts, if any, on the part of plaintiff to sell the Krohn lease to the Tide Water Oil Company was the procuring cause of such sale? Answer: `Yes'.

"No. 8. What do you find from a preponderance of the evidence was the reasonable cash market value in New York of the $350,000 oil payment due Alpha Petroleum Company by Tide Water Oil Company on April 15, 1935? Answer: `65%'.

"No. 9. What do you find from a preponderance of the evidence was the usual, customary and reasonable broker's commission in the City of New York during the years 1934 and 1935, for negotiating a sale of an oil lease substantially similar to the Krohn lease? Answer: `2½%'.

"No. 10. What do you find from a preponderance of the evidence was the usual, customary and reasonable broker's commission in the City of Houston, Texas, during the years 1934 and 1935 for negotiating a sale of an oil lease substantially similar to the Krohn lease? Answer: `2½%'.

"No. 11. Do you find from a preponderance of the evidence that the minds of George Frankel and Harvey Carter met in agreement, in the employment inquired about in Special Issue No. 1, if you have answered that Frankel did employ him, that a compensation should be paid to Carter's company other than the 2½% provided in the written contract of December 5, 1932? Answer: `We do'.

"No. 11-A. What do you find from a preponderance of the evidence would be a fair and reasonable compensation for the services of the plaintiff, if any, upon sale of the property in controversy? Answer: `2½%'."

"Defendants' Specially Requested Issue No. 1.

"If you have answered Special Issue No. 1 in the affirmative, then you will answer the following question: Do you find from a preponderance of the evidence that subsequent to the offer of Tide Water Oil Company to purchase the Krohn lease for $800,000 or $850,000, as you may find the facts to be, George Frankel notified Harvey Carter, president of Oil Trading Company, that said lease was withdrawn from the market? Answer: `No'.

"Defendants' Specially Requested Issue No. 2.

"Do you find from a preponderance of the evidence that the negotiations and efforts of Wm. N. Bonner were the procuring cause of the sale of the Conroe lease to the Tidewater Oil Company? ...

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3 cases
  • Backar v. Western States Producing Company
    • United States
    • U.S. District Court — Western District of Texas
    • July 8, 1974
    ...10 Tex.L.Rev. 163 (1932). 18 Restatement (Second) of Conflict of Laws § 7, comment (c) at 18 (1971). 19 In Normandie Oil Corp. v. Oil Trading Co., 147 S.W.2d 557 (Ct.Civ.App.Tex.1940), rev'd on other grounds, 139 Tex. 402, 163 S.W.2d 179 (1942), the Texas Court of Civil Appeals noted that u......
  • Backar v. Western States Producing Co.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • February 24, 1977
    ...under N. Y. General Construction Law (McKinney) § 39, oil and gas leases were personal property. Normandie Oil Corp. v. Oil Trading Co., Inc., 147 S.W.2d 557, 561 (Tex.Civ.App. Galveston 1940), rev'd on other grounds, 139 Tex. 402, 163 S.W.2d 179 (1942). Although the Texas Supreme Court rev......
  • Normandie Oil Corporation v. Oil Trading Co.
    • United States
    • Texas Supreme Court
    • April 8, 1942

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