Stinnette v. Mauldin

• Decision Date: 14 March 1952
• Docket Number: No. 2876,2876
• Citation: 251 S.W.2d 186
• Parties: STINNETTE et al. v. MAULDIN et al.
• Court: Texas Court of Appeals

Page 186

251 S.W.2d 186

STINNETTE et al. v. MAULDIN et al.

No. 2876.

Court of Civil Appeals of Texas, Eastland.

March 14, 1952.

First Motion for Rehearing Granted in Part and Overruled in

Part June 27, 1952.

Rehearing Denied Sept. 5, 1952.

Lane & Savage, Dallas, for appellants Mrs. J. M. Stinnette, and others.

Robert M. Rowland and S. C. Rowe, Fort Worth, for appellant, Mrs. Leonard M. Levy.

Mays & Lea, Dallas, and Turner & Seaberry, Eastland, for appellants Producers Investment Corp., American Liberty Pipeline Co., a corp., and the American Liberty Oil Co., a corp.

A. C. Scurlock, Dallas, for appellees Mrs. Buda Mauldin and H. C. Mauldin.

Lester Whipple, San Antonio, for appellees Fred A. Perrenot, and other.

R. J. Cantrell, Dallas, for appellee Nancy Fritz Moon and husband, A. L. Moon.

Franklin Jones, Marshall, filed a motion to dismiss the appeal on the grounds that the Court of Civil Appeals did not have jurisdiction.

COLLINGS, Justice.

This suit was instituted as a Bill of Review, the object of which was to set aside a judgment rendered in the 101st Judicial District Court of Dallas County, Texas, on September 19, 1936, in Receivership Cause No. 95715E, styled Mrs. Virginia Sanders, et al. v. J. E. Stack, et al. This suit was originally filed in the District Court on January 17, 1939 by H. C. Mauldin and wife, Buda Mauldin, and subsequently various parties who, together with the Mauldins, are appellees herein, filed pleadings setting up claims. Appellees sought in this suit against appellants to recover the title and possession of the 7/8ths working interest in and to a producing 15 acre oil and gas lease in Gregg County, Texas, together with an accounting for all of the production from the lease since it first began to produce oil on September 3, 1931. The accounting phase of the case was severed from the title issues which were tried before a jury on November 1, 1949. Based upon the verdict of the jury, the District Court, on March 4, 1950, rendered judgment in favor of appellees for title and possession to the oil and gas lease interest in question. From such judgment this appeal is brought.

A former appeal of this case from a judgment of the District Court dismissing the suit is reported in Mauldin v. American Liberty Pipe Line Co., Tex.Civ.App., 185 S.W.2d 158. The statement of the reported case is referred to for the purpose of supplementing the statement of the pleadings and facts of this case, insofar as same are applicable. The pleadings are essentially the same. The pleadings and facts of the instant case are so extended and complicated that it is difficult to confine them to a reasonable length, and since it was held on the prior appeal that appellees were entitled to a trial on the fact issues, we will here deal principally with such issues.

In 1930, Mesdames Virginia Sanders, J. M. Stinnette and George E. Light entered into a verbal agreement to purchase for their joint use and benefit the oil and gas lease here involved; each agreed to pay $50 on the purchase price and it was understood that each was to have an equal proportional interest in the lease; Mrs. Sanders was to negotiate the transaction, pay the purchase price and take the title in her own name as a matter of convenience and after the completion of the transaction, the other two were to pay their part of the consideration. In compliance with the agreement, Mrs. Sanders took title to the lease in her own name and paid the consideration therefor. At the time of the purchase the lease was in nonproducing oil territory.

On April 17, 1931, Mrs. Virginia Sanders, joined by her husband, J. A. Sanders, entered into the following written agreement with F. A. Perrenot, H. C. Mauldin and wife, Buda Mauldin who had no notice of the interest of Mrs. Stinnette and Mrs. Light therein, for the development of the leasehold for oil and gas:

'State of Texas

County of Gregg

'This Instrument Evidences:

'That F. A. Perrenot, and H. C. Mauldin, and wife, Buda Mauldin, hereinafter called party of the first part, of Bexar County, Texas, and Mrs. Virginia Sanders, joined by her husband, J. A. Sanders, hereinafter called parties of the second part, of Dallas County, Texas, have contracted and agreed with each other as follows:

'1. Party of the second part represent that they are the owners of the mineral estate, including oil and gas thereon, within, upon and under that certain piece, parcel or tract of fifteen (15) acres of land, more or less, being described by metes and bounds as follows:

'A part of a section of one hundred seventy (170) acres out of said survey, as described in an oil and gas lease from J. B. Doby and wife, and R. W. Calloway and wife to W. W. Lechner, which lease is recorded in Vol. 62, pages 49-51, in the Deed Records, of Gregg County, Texas, the part of said one hundred seventy (170) acre tract affected hereby being the north fifteen (15) acres of the north seventeen and one-half (17 1/2) acres of the West twenty-seven and one-half (27 1/2) acres of the East one-half of the above described one hundred seventy (170) acre tract.

'2. The first party being desirous of obtaining the title to said lease, the second parties agree to convey it to him upon the following terms and conditions:

'The first party may enter into possession thereof and they hereby contract and agree to drill a well for oil on said land, designated herein as 'first well,' at such point thereon as may be selected by party of the first part, to the Woodbine sand, unless oil is found thereby at a shallower depth, and to that end to have a derrick thereon within thirty (30) days from date hereof, and to begin drilling operations thereon within sixty (60) days from this date, same to be so done without cost or expense to parties of the second part; performance of these terms are conditions precedent to any liability of the second parties.

'3. Upon the completion of such 'first well,' and in the event oil and gas or either is produced therefrom in paying quantities, and when and as same or either is sold, first party agrees to pay to second party the sum of $15,000.00 out of one-fourth of the first proceeds thereof, as such proceeds accumulate and to authorize the purchaser or purchasers of such oil or gas to pay such sums directly to the second party, and the balance of such proceeds, or so much thereof, as may be required by party of the first part, shall be and remain available to, and shall be payable to or on the order of, party of the first part for the purpose of and in the drilling of other well or wells on said land by or under the supervision of party of the first part, and party of the first part shall have the right to drill other well or wells on said land to the extent expedient and authorized by law, and therein to use and expend so much of said balance of such proceeds as may be proper and necessary. When and as and to the extent said balance of such proceeds or any part of same is not necessary or required by party of the first part in and for the drilling of such other well or wells, one-half ( 1/2) of such excess shall then be paid to party of the first part as further consideration for the purchase hereof.

'4. When said 'first well' has been completed as herein provided, and in the event oil and gas or either is produced therefrom in paying quantities, the title to said mineral estate on said land now owned by party of the second part shall thereupon vest, and same is in that event conveyed by party of the second part to party of the first part, but with the reservation that first party shall in turn pay to second part, a sum equal to one-half of all profits received by him from the operation of said wells, as same are received.

'5. Party of the second part, or either of them, either by themselves or authorized agent or representative, shall at all reasonable times have access to the record memoranda or report of the log of any well or wells drilled hereunder and other books, records and memoranda made or kept by party of the first part concerning or in any way pertaining hereto.

'6. No partnership is formed by the execution of this agreement, the same being intended as a conditional contract for the assignment of the lease mentioned, and it is expressly understood that the second parties retain no right to direct the manner and means, of performance by the first party of the covenant and conditions herein contained.

'Witness our hands in duplicate originals on this the 17th day of April, 1931.

/s/ Henry C. Mauldin

Mrs. Buda Mauldin

F. A. Perrenot

Party of the First Part

Mrs. Virginia Sanders

J. A. Sanders

Parties of the Second Part.'

On April 18, 1931, F. A. Perrenot and the Mauldins entered into a written agreement with one J. E. Stack in which they assigned to him the leasehold in question under terms and conditions similar to those provided in the assignment from the Sanders to them, except that Stack agreed to place a derrick on the lease within 29 days, to commence drilling operations within 59 days and to proceed to drill the 'first well' thereon, to pay Perrenot and the Mauldins $15,000 out of 1/4th of the first proceeds of the first well, the balance of such proceeds or so much as was necessary, to be retained and used by Stack for the purpose of drilling other wells on the lease; that 3/4ths of all excess profits be paid to Perrenot and the Mauldins. This assignment was filed and recorded in the Deed Records of Gregg County on July 15, 1931.

Drilling was started on the lease and by July 25, 1931 the first well had been drilled to a depth of about 2800 feet but had not been completed as a producing well. In order to raise money with which to pay accrued bills and to complete the well, J. E Stack, on July 25, 1931, with the approval and ratification of Perrenot, the Mauldins and the Sanders, sold a $40,000 oil payment to Charles Pettit. It was specifically provided in the ratification of the assignment from Stack to...