Smith v. Hall

Decision Date23 March 1949
Docket NumberNo. A-2053.,A-2053.
Citation219 S.W.2d 441
PartiesSMITH v. HALL et al.
CourtTexas Supreme Court

Bryan, Suhr & Bering, and E. H. Suhr, all of Houston, and Long & Strong and Neal Powers, Jr., all of Carthage, for relator.

Sellers & Fanning and William J. Fanning, all of Sulphur Springs, for respondents.

HART, Justice.

Panola County Royalty Owners Association, a corporation, and numerous individual royalty owners brought this suit in Panola County against R. E. Smith, a resident of Harris County. The corporate plaintiff was alleged to be a nonprofit organization designed to represent and promote the interests of landowners and royalty owners in their dealings with producers of oil and gas in Panola County. The individual plaintiffs were alleged to be the owners of royalty and similar interests in approximately 2710 acres of land in the Carthage Gas Field in Panola County, all of which was under lease to the defendant, R. E. Smith. This acreage has been pooled and unitized into four units, under agreements between Panola County Royalty Owners Association, acting for the individual plaintiffs, and R. E. Smith.

The plaintiffs alleged that prior to February 15, 1946, a dispute arose between the parties "with respect to their royalty rights and interests and the basis of computation, payment and settlement therefor" under existing leases and agreements. On February 15, 1946, a letter was addressed to R. E. Smith by the Association's attorney urging the importance "to the operators, as well as to the royalty owners that the basis of royalty payments be as standard and uniform as possible" and suggesting the modification of existing contracts so as to conform to agreements between royalty owners and other producers, including the Chicago Corporation. Forms of gas pooling agreements between the Chicago Corporation and its lessors were attached to the letter. On April 13, 1946, R. E. Smith replied, offering several propositions, including the following:

"If the above proposition is not acceptable to the royalty owners, then in lieu thereof, I will agree to enter into a contract with the royalty owners under my four units in the Carthage Field identical in its terms and for the same period of time, as the contract which was entered into by the Chicago Corporation with the royalty owners under land in such Field on which the Chicago Corporation owns leases and on which it has drilled wells, and from which it is producing gas."

On April 30, 1946, the Association replied by letter accepting the proposition we have quoted.

The plaintiffs alleged that they have made demands upon the defendant to execute and deliver the contract in accordance with his agreement, but that he has failed and refused to do so; that the value of the plaintiffs' interests have been and will be impaired until the defendant performs his contract; that the actual difference in money between the sums paid by the defendant to the plaintiffs and the sums he should have paid if he had performed his agreement is unknown to the plaintiffs but it is a sum in excess of $5,000; that the market value of plaintiffs' interests at the time of the filing of the suit was $100 per mineral acre, but that it would be $150 per mineral acre if the defendant performed his contract, and that plaintiffs will be damaged in an aggregate amount of not less than $50,000 unless the defendant should be required to perform his contract.

In their petition the plaintiffs prayed that "an order be entered requiring defendant to specifically perform the contract and agreement hereinabove alleged and for an accounting and to do and perform all acts and things reasonably necessary and incident thereto, and for judgment for damages as above alleged, for costs of suit" and for general relief.

The defendant filed his plea of privilege to be sued in Harris County, where he resides, and the plaintiffs filed a controverting plea in which they asserted that venue lay in Panola County under the provisions of Sections 14 and 5 of Article 1995, Vernon's Texas Civil Statutes. The court overruled the plea of privilege, and its judgment was affirmed by the Court of Civil Appeals, which held that this case comes within the provisions of Section 14 of Article 1995. Smith v. Panola County Royalty Owners Ass'n, Tex.Civ.App., 215 S.W.2d 199. That court having overruled motions for rehearing and to certify questions to this court, relator here seeks a writ of mandamus to compel certification of the following questions:

"Question No. 1. Is the primary cause of action alleged in Appellees' petition one for specific performance?

"Question No. 2. Are the general allegations in Appellees' petition for accounting for gas produced and for damages because of alleged diminution in value of royalties only incident to the request for specific performance?

"Question No. 3. Is Article 1995, Sec. 14, R.C.S. of Texas, applicable to the nature of the cause of action stated in Appellees' petition?"

Having granted the motion for leave to file the petition, under Rule 475, Texas Rules of Civil Procedure, on the ground of alleged conflict of decisions, we have concluded that a conflict exists and that on the merits the Court of Civil Appeals erred in affirming the judgment of the trial court.

Section 14 of Article 1995 reads as follows:

"14. Lands. — Suits for the recovery of lands or damages thereto, or to remove encumbrances upon the title to land, or to quiet the title to land, or to prevent or stay waste on lands, must be brought in the county in which the land, or a part thereof, may lie."

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