Premier Oil Refining Co. of Tex. v. Bates, 3757
| Decision Date | 12 April 1963 |
| Docket Number | No. 3757,3757 |
| Parties | PREMIER OIL REFINING COMPANY OF TEXAS, Appellant, v. W. A. BATES, Appellee. |
| Court | Texas Court of Appeals |
Liddell, Austin, Dawson & Sapp, Houston, for appellant.
J. Ray Martin, Snyder, for appellee.
W. A. Bates brought suit against Premier Oil Refining Company of Texas, Division Western Natural Gas Company, seeking damages from defendant because of the breach of an alleged lease agreement covering a service station site in Snyder, Texas. The pleadings of the defendant urged defenses based upon the claim that there was no written agreement signed by the parties, the statute of frauds and that there had been actual and constructive eviction and surrender. The case was tried before a jury and based upon its findings judgment was rendered awarding W. A. Bates a judgment against the defendant in the amount of $3,000.00, plus 6 per cent interest from the date of judgment and costs of suit. Defendant Premier Oil Refining Company has appealed.
The undisputed evidence shows that in June of 1960, %.r. b. s/ears contacted appellee Bates inquiring about the possibility of leasing the service station property in question. Bates told Sears he would only lease the premises to a company and not to an individual. Sears was an independent buyer of gasoline and gasoline products and was not an employee, agent or representative of Premier although he did handle Premier products. At Sears' suggestion Bates called Premier concerning a proposed lease of the filling station and thereafter negotiations commenced between Premier and Bates. Mr. Ferrell handled the negotiations for Premier. Bates submitted to Ferrell a written lease agreement which was introduced in evidence over appellant's objection as plaintiff's 'Exhibit A.' The proposed written lease agreement provided for a term of three years at a monthly rental of $135.00. Ferrell acknowledged that the written lease was received but it is undisputed that the instrument was never returned to Bates as an executed lease. There is a dispute between the parties concerning the question of whether the instrument was signed by Bates before it was delivered to Ferrell.
The findings of the jury upon which the judgment is based are that Bates and Premier agreed to all the terms and provisions of the instrument described as plaintiff's 'Exhibit A'; that Premier allowed Sears to enter into possession of the filling station and accepted or allowed Sears to accept benefits provided by the terms of the form of the proposed written lease, which provided for a term of three years beginning July 10, 1960; that Premier thereby took possession of the premises; that Sears paid rentals to Bates on behalf of Premier for the use of the filling station; that Bates did not evict Premier from the premises and did not give Premier written notice of default and intention to declare the alleged lease forfeited; that Bates and Premier did not agree to terminate the lease and that Bates and Sears did not agree that Sears would rent the premises in question. The jury further found damages to Bates caused by the failure of Premier to pay or cause to pay the unpaid rental provided by the terms of said lease to be $3,000.00.
Appellant Premier Oil Refining Company urges points contending that the court erred in entering judgment for Bates because the undisputed evidence established that both parties to the alleged contract intended to finalize the lease negotiations with an executed, delivered written lease, and that no lease was ever executed and delivered; that the alleged lease is unenforcible under the Statutes of Frauds; that the evidence shows, as a matter of law, that if any valid lease ever existed, Bates evicted appellant from the premises, in that he put Sears in possession thereof on July 10, 1960 and in that he, Bates, used the premises himself during March and April of 1961, and that Bates accepted surrender of the premises in 1961 and thereby waived any claim for damages for the alleged breach of the lease.
We first consider appellant's contention that the evidence shows conclusively that no contract was ever consummated between the parties. It is held that there is no valid contract between negotiating parties until they have reached an agreement concerning all the material terms of a proposed contract. Appellant contends that no contract was ever entered into because the parties were negotiating a contract which contemplated a written agreement as the consummation of the negotiations and the intention of the parties was that there was to be no contract until a writing setting out the agreement was signed by both parties thereto.
Appellee Bates contends that there was an oral contract of lease of the filling station; that 'Exhibit A', a proposed written lease was prepared and signed by him which set out the full agreement between the parties; that although Premier did not sign the lease all the terms thereof were fully agreed to by both Bates and Premier; that the writing was a convenient memorial of the contract entered into between the parties; that Sears entered upon the property under the terms of the lease and operated the station in accorance therewith for a period of about 8 months. Appellee contends that Ferrell, Premier's agent, although Sears had so entered into possession of the property for Premier, attempted by introducing a slightly altered redraft of the original memorial of the contract to show that there was never any contract, either written or oral, made and consummated between the parties.
It is settled proposition of law that if parties negotiating a contract intend that the contract shall be reduced to writing and signed by the parties, and consider a written agreement as the consummation of their negotiations and a prerequisite to a binding contract, then the agreement is incomplete and either party may withdraw and decline to consummate the agreement at any time before the written agreement is drawn up and signed by both parties. It is also well settled that the parties may, if they so desire, at any time during the negotiations enter into an oral contract, if the subject matter of the contract permits.
In 17 C.J.S. Constracts Sec. 49, at page 391, it is stated that:
'Whether an informal...
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