Owens v. Ridgeway

• Court: Texas Civil Court of Appeals
• Writing for the Court: CHAPMAN
• Citation: Owens v. Ridgeway, 395 S.W.2d 704 (Tex. Ct. App. 1965)
• Decision Date: 13 September 1965
• Docket Number: No. 7478,7478
• Petition History: writ ref'd n.r.e.
• Parties: Rhea H. OWENS, Appellant, v. Grover C. RIDGEWAY, Jr., and Malcolm L. Morrison, Appellees.

Page 704

395 S.W.2d 704

Rhea H. OWENS, Appellant, v. Grover C. RIDGEWAY, Jr., and Malcolm L. Morrison, Appellees.

No. 7478.

Court of Civil Appeals of Texas, Amarillo.

Sept. 13, 1965.

Rehearing Denied Oct. 11, 1965.

Stone & Stone, Amarillo, for appellant.

Carnahan & Fields, Amarillo, for appellees.

CHAPMAN, Justice.

This is an appeal by Rhea H. Owens from an instructed verdict in a suit to cancel and rescind tow assignments of oil and gas leases to him by defendants below, Grover C. Ridgeway, Jr., and Malcolm L. Morrison, of 3/4 of their 8/8 working interest therein to specified depths in the oil and gas leases on two sections of land in Beaver County, Oklahoma, described as Sections 8 and 17, Township 6 North, Range 22 E.C.M. upon which is situated a gas well known as Taylor No. 1. The parties will be referred to as the court below.

Plaintiff Owens alleged that defendants personally and through their duly authorized agent, David L. Whatley, represented to him as a fact that such well was producing 600 M.C.F. of gas per day without diminution of the flowing pressure, and condensate at the rate of five barrels per 1000 M.C.F.; that in reliance upon such representations he entered into a contract on July 19, 1962, with defendants for the purchase of 1/2 of their working interest in such leases and well for the consideration of $28,000.00; that thereafter Mr. Morrison, for himself and Mr. Ridgeway, negotiated with plaintiff for the sale of an additional 1/4 of their working interest in such leases and well, representing to plaintiff as a fact that daily production of such well 'was holding up,' and that it could produce 1000 M.C.F. of gas per day without bad effect; that after such representations, defendants on November 9, 1962, executed and delivered to him an assignment of 1/4 of their working interest for which he paid defendants $6,000.00 in cash; that said well never at any time had a daily production of 600 M.C.F. of gas per day, never produced condensate at the rate of five barrels per 1000 M.C.F. of gas per day; that two weeks prior to July 19, 1962, the well had a daily production of less than 1000 M.C.F. of gas per day and never produced the represented amount of condensate; that plaintiff has never received any proceeds whatever from any production of such well and the working interests therein transferred and assigned by defendants to plaintiff have no value whatever; that all such representations were false and untrue at the time they were made; that they were made with the intent to induce plaintiff to make such purchases; that they were representations of material facts; that plaintiff relied on such representations believing them to be true, and was induced thereby to purchase the 3/4 working interest from defendants; that such false representations made by defendants and their agent, Whatley, were made with their knowledge that such representations were untrue and made with the intent to deceive or mislead plaintiff.

After the testimony was closed and a motion made by defendants for an instructed verdict, plaintiff was permitted to file the following trial amendments:

'NOW COMES, the plaintiff, Rhea H. Owens, and herewith tenders to the defendants in this cause a reassignment of all of the interests assigned by the defendants to the plaintiff described in the Plaintiff's Original Petition and binds himself to do all things necessary to do complete equity herein as finally determined by the Court.'

From the judgment based upon the instructed verdict plaintiff has appealed upon the one point of error in the trial court instructing the jury to return a verdict against plaintiff in favor of defendants.

We believe there is more than a scintilla of evidence to raise fact issues in the case and that the trial court was in error in not permitting the jury to pass upon them.

If there is any relevant evidence of probative value, a fact issue is rasied and a directed verdict is improper. Texas Law Review, Vol. 22, p. 359. 'This is a corollary of the constitutional guarantee of trial by jury in TEX.CONST. Art. I, Sec. 15.' Id.; Buckholts State Bank v. Graf, Tex.Civ.App., 200 S.W. 858 (N.W.H.). Likewise, a strong preponderance of the evidence on one side or the other is not sufficient to justify a trial court in denying the right to trial by jury. Drew v. American Automobile Ins. Co., Tex.Civ.App., 207 S.W. 547 (N.W.H.).

'In determining in any case whether or not error has been committed by a trial court in instructing a verdict, the testimony must be considered in the light most favorable to the losing party. Conflicts in the testimony must be disregarded, and every intendment reasonably deducible from the evidence must be indulged in favor of such party and against the verdict.' Anglin v. Cisco Mortg. Loan Co., 135 Tex. 188, 141 S.W.2d 935.

With respect to the testimony given by plaintiff concerning representations made by defendants or their agent, Mr. Whatley, as to the production of the well the record shows as follows:

'Q. All right-now, did you have another conversation with Mr. Whatley a few days later?

A. It was some days later-it was a day or two before--

'Q. Well, let me go back a little. Did Mr. Whatley say anything about where he got his information?

A. Not at that time. Not on this occasion we are referring to.

Q. State whether or not he said that an employee of Morrison's office had called Panhandle Eastern?

A. That is as I recall it, on a subsequent date to this first date we are talking about.

A. * * * So then, Mr. Hatton spoke up and asked him, says, 'Now, Cotton, what is it doing to the pressure?' And he says, 'Well, the pressure is holding up fine.'

Q. Now, it was after he told you it was still producing six hundred thousand cubic feet a day, and the pressure was holding up, that you first became interested in buying an interest in the well?

A. That is right.

Q. When was the next time you heard from Mr. Whatley?

A. It was on the 19th, the date that we, that the deal was actually escrowed.

Q. Did he call you or did you call him?

A. He called me by telephone.

Q. That morning, was it?

A. I don't remember exactly; I would say around noon.

Q. What did he say?

A. He said that Ridgeway and Morrison want to escrow that deal; says, 'if you want it, you go up to Neal, an attorney by name of Neal's office.' Says, 'If you don't, they are going to sell it to somebody else.'

Q. Did you ask him anything about the production at that point?

A. I says, 'What is the production doing now?' He says, 'It is still holding to six hundred thousand cubic feet a day.'

Q. Now, Mr. Owens, what was said during these conversations about the condensate?

A. The general talk was that it would yield from four to eight barrels per million cubic feet. Whatley's talk seemed to center on five barrels per million cubic feet.

Q. Well, did he ever actually tell you it was actually producing five barrels per million cubic feet, per day?

A. That's right, he did.

Q. On how many occasions?

A. At least three occasions-well, I wouldn't say exactly, because on the telephone I don't think he repeated about the condensate.

Q. But at least on two occasions he talked about it?

A. Yes, at least two occasions.

Q. In addition to saying it was producing six hundred thousand cubic feet of gas a day, he also said it was producing five barrels of condensate per million cubic feet?

A. That's right.'

All italics herein are ours.

With respect to the second purchase of the 1/4 of the working interest plaintiff testified as follows concerning the representations made to him by defendant Morrison:

'A. * * * He talked at length, and I told him, I says, 'Now, Whatley told me before I bought that half that that well was delivering six hundred thousand cubic feet a day.' I says, 'Is it delivering that much?' So he went to a large sheet...