Templeton v. Wolverton

• Decision Date: 15 March 1944
• Docket Number: No. A-18.,A-18.
• Citation: 179 S.W.2d 252
• Parties: TEMPLETON v. WOLVERTON et al.
• Court: Texas Supreme Court

Page 252

179 S.W.2d 252

TEMPLETON v. WOLVERTON et al.

No. A-18.

Supreme Court of Texas.

March 15, 1944.

Rehearing Denied April 12, 1944.

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

Suit by M. H. Wolverton against Leon Thomas, M. B. Moore, and J. B. Templeton to recover for services rendered in oil drilling operations, wherein Templeton filed a cross-action against Thomas and Moore to recover on certain notes. From a judgment for plaintiff for $1,000 against all defendants jointly and severally, and for $18,331 against Thomas and Moore jointly and severally, but denying like recovery against Templeton, plaintiff appealed, and J. B. Templeton appealed seeking to avoid liability for the $1,000 judgment against him. To review a judgment of the Court of Civil Appeals, 176 S.W.2d 335, which corrected and, as corrected, affirmed the judgment for plaintiff, and affirmed the judgment for Templeton on his cross-action, J. B. Templeton brings error.

Judgment of Court of Civil Appeals reversed, and judgment of district court in favor of plaintiff against petitioner reversed and judgment rendered for the petitioner, and judgment of district court reformed so as to adjudge that plaintiff recover judgment against Thomas and Moore jointly and severally for the total sum of $19,331, with interest and costs, and judgment of district court is otherwise affirmed.

Malone, Lipscomb, White & Seay, and M. B. Soloman, all of Dallas, for plaintiff in error.

Stinson, Hair, Brooks & Duke and Smith & Eplen, all of Abilene, and Paul Petty, of Ballinger, for defendants in error.

SMEDLEY, Commissioner.

Respondent Wolverton sued petitioner Templeton, Leon Thomas and M. B. Moore to recover $19,331 for his services in drilling an oil well in Kimble County, alleging that on March 23, 1940, Templeton, Thomas and Moore entered into a written contract of partnership for the purpose of developing land for oil and gas, that thereafter Thomas and Moore, acting for themselves and as agents of Templeton, employed respondent Wolverton by contract partly written and partly oral to drill a well, and that he drilled the well and has never been paid the agreed compensation.

The trial court rendered judgment for respondents against Thomas and Moore for the full amount, $19,331, and judgment against Templeton for $1,000, having concluded that the only claim respondents had against Templeton was under the contract of March 23, 1940, by the terms of which Templeton limited his liability to $3,000. He had advanced $2,000 to Thomas and Moore. Neither Thomas nor Moore appealed. The Court of Civil Appeals, to which both Wolverton and Templeton appealed, corrected the trial court's judgment "so as to run against said Thomas, Moore and J. B. Templeton, jointly and severally, for the sum of $19,331" and affirmed the judgment as thus corrected. 176 S.W.2d 335, 342.

The principal contentions made by petitioner Templeton are, first, that the instrument of date March 23, 1940, and his connection with operations thereunder were insufficient to constitute him a mining partner of Thomas and Moore and, second, that even if by that instrument and in the operations thereunder Templeton became a mining partner of Thomas and Moore in the well then in process of being drilled, Thomas and Moore were not authorized to bind him by the written contract of June 4, 1940 and subsequent oral agreements with respondent Wolverton, whereby an entirely new venture was entered into and another well was drilled.

When the contract of March 23, 1940, was made Thomas, a resident of Ballinger, and Moore, a resident of Abilene, had drilled a well by day labor to a depth of 492 feet. The well was begun for the purpose of making a test of what was known as the Adams Branch sand, which they hoped to reach at about 800 feet. Being in need of financial assistance, Thomas and Moore went to Dallas for the purpose of procuring funds from petitioner Templeton. The agreement there made was evidenced by an instrument in the form of a letter dated March 23, 1940, from Thomas and Moore to Templeton and signed by the three parties. The first paragraph of the letter contains a list of oil and gas leases owned by Thomas and Moore on lands in Kimble County aggregating 4234 acres. This is followed by statements about other wells drilled in the vicinity by other persons and companies, the structures, the sands, etc. The instrument states that the well they are drilling is stopped at 492 feet, that they have a standard rig and necessary tools, and have all payrolls and bills taken care of except certain bills amounting to less than $200. The last paragraph of the instrument is as follows:

"Your proposition was to advance us $750.00, we to give you two notes in amount of $250.00 each aggrigating $500.00, to take care of the expense in getting the pipe to the location and test the Adams Branch Sand. In the event this proves successful we will then want to drill several shallow wells, If it doesn't, our plan now is to go to the next pay sand; or to our contract depth of 2000 if we all agree it is adviseable. For the added expense we will give you additional notes at the same ratio not to exceed $3000.00 total cost. We do hereby agree that any and all returns from the sale or operations of any and all interests we have in the above described acerage and rights will first be applied as a payment to you for all money advanced by you on this project. After this obligation is satisfied all futhur returns we agree to give you a one third interest. It is futhur agreed that we will give to you a legal conveyance of title to a one third interest in all of the above described properties and rights at any time you may request. In addition to the above we will want a letter from you stating you are going to see us through, not to augment this trade but for the influence it will have on a prospective purchaser. We know most of the major companies are interested in this area and some assurance we are going to fulfill our contract will have lots of weight, we fully believe we can drill the well on the bottom hole money we get from the companies, or large independent operators. The operations will be carried on in the name of Thomas & Moore insofar as the name you will not be known in the deal, but we shall expect your council throughout the entire operations, two thirds of the holdings will be in M. B. Moore's name and one third in Leon Thomas'."

At the time of the execution of the foregoing instrument, Templeton advanced $750 to Moore and Thomas, taking the note of each of them for $250. On April 24, 1940 when the original well was being drilled, Thomas and Moore borrowed a second $750 from Templeton, and each of them, as before, gave Templeton his note for $250. They borrowed another $500 from Templeton and evidenced it by their joint note to him in that amount dated July 3, 1940. Thomas testified that this money was borrowed under the same conditions as those under which the $750 was borrowed in March and another $750 in April, 1940.

Thomas and Moore proceeded with the drilling of the well to a depth of 750 feet, when, on about May 1, 1940, a crooked hole was developed and drilling ceased. Wolverton, at the request of Thomas and Moore, worked on the original well a few days and found he could not straighten it, and after he had determined that he could do nothing with the original well, he entered into a written contract on June 4, 1940, with Moore and Thomas to drill another well. This contract is between Moore and Thomas as first parties and Wolverton as second party. By it the second party agreed to drill a well to a depth of 2,000 feet for $3.50 a foot, all tools and equipment to be furnished by him except pipe, which should be supplied by Thomas and Moore. Under the contract Wolverton drilled the new well to the agreed depth of 2,000 feet without producing oil. Thereafter, by oral contract with Moore, he agreed to continue to drill for $100 a day of twenty-four hours and worked under that contract for thirteen days. Then by another oral contract with Moore, he agreed to drill for $90 a day of sixteen hours, and drilled for 117 days under that contract. Drilling ceased in March, 1941, at about 3,102 feet, without production. No payment was made to Wolverton for his services.

The trial court made elaborate findings, the greater part of which consists of a statement of the contents of the contract of March 23, 1940, and of the facts above set out. The court found that Templeton's signature was not on the contract of June 4, 1940, and that he was not a party to the subsequent oral contracts. In detailing the facts as to respondent Wolverton's employment under the contract of June 4, 1940, to drill a new well, the findings state that Thomas and Moore, "for themselves and in behalf of Templeton", employed Wolverton. We cannot construe this statement to mean that Thomas and Moore were authorized to act for Templeton in employing Wolverton, for the trial court found that the only claim Wolverton has against Templeton in this case is by virtue of the contract of March 23, 1940, and limited Templeton's liability to what he had agreed under that contract to advance. If the statement is intended as a finding that Moore and Thomas were authorized to act for Templeton in contracting for the drilling of a second well, it is not supported by evidence. The trial court found further that by virtue of the contract of March 23, 1940, and drilling operations thereunder there was joint ownership of the oil and gas leases by Thomas, Moore and Templeton, joint operation of the leases by them, community of interests, mutual agency and sharing of profits, all of the several elements of a mining partnership.

The Court of Civil Appeals approved and gave effect to the findings of the trial court that Templeton was a member of a mining partnership and concluded also that the contract of June 4, 1940, by which...