Pure Oil Co. v. Ross

• Decision Date: 12 January 1938
• Docket Number: No. 7211.,7211.
• Citation: 111 S.W.2d 1076
• Parties: PURE OIL CO. v. ROSS et al.
• Court: Texas Supreme Court

111 S.W.2d 1076

PURE OIL CO. v. ROSS et al.

No. 7211.

Supreme Court of Texas.

January 12, 1938.

Error to Court of Civil Appeals of First Supreme Judicial District.

Suit by Ellen B. Ross and others against the Pure Oil Company to reform and cancel a mineral lease. To review a judgment of the Court of Civil Appeals, 98 S.W.2d 1045, affirming a judgment for plaintiffs, the defendant brings error.

Judgments of the Court of Civil Appeals and of trial court reversed, and judgment rendered for defendant.

Vinson, Elkins, Weems & Francis and David T. Searls, all of Houston, for plaintiff in error.

Maco Stewart, of Galveston, Albert J. DeLange and Noble Carl, both of Houston, and George T. Burgess, of Dallas, for defendants in error.

GERMAN, Commissioner.

On April 26, 1928, J. O. Ross and wife, Ellen B. Ross, executed and delivered to Paul Lobit an oil, gas, and mineral lease upon 1,528.11 acres of land in Galveston county, Tex. The portions of said lease which are material here are as follows: "This grant shall terminate on April 27, 1933, and none of the provisions hereof shall be effective thereafter, unless, on or before such date, the Grantee either: (1) notifies Grantor that it will drill a well on the land, in which event the Grantee shall begin operations therefor within sixty (60) days from such date and shall drill such well with reasonable diligence to completion or abandonment in an honest effort to discover minerals in paying quantities; or, (2) pays Grantor One & No/100 Dollars ($1.00) per acre for all or that part of the land which the Grantee elects to continue to hold hereunder, releasing any balance thereupon or at any time thereafter on demand of the Lessor, which payment shall maintain the Grantee's rights in effect without any operations for 12 months from the date above mentioned; and the Grantee may maintain his rights in effect without any operations for successive 48 months' periods, aggregating four (4) additional years, by paying Grantor, on or before the beginning of such respective periods, One No/100 Dollars ($1.00) per acre for all or that part of the land which the Grantee has elected to continue to hold hereunder. Payments may be made to Grantor personally or by mailing, on or before the due date of the payment, letter addressed to the Union National Bank of Houston, Texas (or its successor), transmitting the Grantee's check with instructions to such bank to deposit same to Grantor's credit; such bank being hereby constituted Grantor's agent."

By mesne assignments in the usual form, this lease as to 463.11 acres of the tract passed to the Pure Oil Company for a valuable consideration, the assignment to it being dated April 12, 1933.

The tract of land covered by the lease was the separate estate of Ellen B. Ross. Prior to February 10, 1933, J. O. Ross died, and on that date Mrs. Ross conveyed the 463.11 acres to Maco Stewart. At the same time she assigned the lease of August 26, 1928, to Stewart, reserving a one thirty-second royalty interest.

On April 24, 1933, the Pure Oil Company transmitted to Stewart cashier's check for $463.11 to pay rentals for one year on the 463.11 acres. This check was deposited to the account of Stewart. March 21, 1934, the Pure Oil Company transmitted to Stewart check for $463.11 to pay rentals for another year on the 463.11 acres, but the check was refused.

May 5, 1934, Maco Stewart and others instituted this suit against the Pure Oil Company and others in the district court of Galveston county. As the nature of this suit becomes of controlling importance, we will endeavor to make an accurate summary of the allegations of the petition tending to show the nature of the cause of action asserted. The parties will be designated as in the trial court.

After alleging the execution of the lease of April 26, 1928, by Ross and wife to Lobit, it is alleged by plaintiffs that the words and figures "April 27, 1933" were inserted in the lease by mutual mistake. It is claimed that the real agreement between the parties was that, while the lease was to have a primary term of five years, the date "April 27, 1933" should have been April 27, 1929, and that the rental payments of $1 per year per acre were actually payable on or before April 27, 1929. It is then alleged that, as the true agreement was that the first annual rental should be paid on or before April 27, 1929, and no rental was paid prior to April 24, 1933, the lease had become automatically forfeited and was void.

There was a further allegation to the effect that the provisions with reference to extension of lessee's rights without operations "from the above mentioned date" were erroneous and improper, because of the fact that the date mentioned, to wit, April 27, 1933, should have in fact been April 27, 1929. It is also alleged that the provisions with reference to extension of time for operations were ambiguous.

There was a special allegation that, although the Pure Oil Company deposited in the Union National Bank of Houston, Tex., the sum of $463.11 on April 25, 1933, and same was transmitted to and accepted by plaintiff Stewart, nevertheless the same was accepted by him...