Texas Co. v. Burkett

• Decision Date: 04 June 1927
• Docket Number: (No. 4087.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 296 S.W. 273
• Parties: TEXAS CO. v. BURKETT.
• Court: Texas Supreme Court

Page 273

296 S.W. 273

TEXAS CO. v. BURKETT.

(No. 4087.)^*

Supreme Court of Texas.

June 4, 1927.

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

Action by Joe Burkett against the Texas Company. Judgment for plaintiff was affirmed by the Court of Civil Appeals (255 S. W. 763), and defendant brings error. Affirmed.

H. S. Garrett, of Fort Worth (C. B. Ames, of Oklahoma City, Okl., and Robt. A. John, and T. J. Lawhon, all of Houston, of counsel), for plaintiff in error.

Burkett, Orr & McCarty and Conner & McRae, all of Eastland, for defendant in error.

CURETON, C. J.

Joe Burkett brought this suit in the district court of Eastland county against the Texas Company, to recover the sum of $5,000 and interest, alleged to be due him as the agreed consideration for the right and privilege of taking and using certain waters, hereafter to be described of erecting pumping plants on and laying pipe lines over his lands, and for damages incident to the exercise of the privileges and rights granted. The original contract was in writing, and extended one year from and after September 24, 1919. He alleged a written contract entered into with the company on September 24, 1919, through its agent, J. E. Rees, for an agreed consideration of $5,000, which was paid, and that at the time of the execution of the written contract it was verbally understood and agreed between him and Rees, acting for the company, that the company should have the option and right, at or before the expiration of said year term, to extend the contract for a similar consideration for another year. He alleged, and the jury found, that the contract was extended in June, 1920. He stated that, on inquiry by him of Rees whether or not the company desired to exercise its option and contract for said water for another year, Rees said to him that the company was desirous of using the water for another year, and that he (the plaintiff) need not look any further towards selling the water, and to consider the contract closed. He subsequently saw Rees, by whom he was informed that the company desired to exercise it option, and to consider the contract closed for the use of the water for the second year, to which the plaintiff assented, for the same consideration stated in the original agreement.

The Texas Company answered by general and special exceptions and general denial, and alleged on September 24, 1919, that the plaintiff did by means of a written deed attempt to sell to it said waters, but that the deed expired by its own terms on September 24, 1920, and that on August 16 and August 20, 1920, it gave plaintiff notice that the contract would expire as above, and denied that it ever attempted to make a contract for the use of the water other than the written one. It denied plaintiff's right to sell the said water for commercial use on nonriparian land, alleged that the oral option and contract sued upon were unlawful, contrary to public policy, wanting in mutuality, without consideration, and unenforceable; that the water involved was the property of the state, and not subject to private contract; that, if the plaintiff owned the water or right therein, such right was real estate or interest in land; and that by reason of the statute of frauds plaintiff could not maintain the suit or recover. It also denied that Rees had authority to make such optional agreement or contract for defendant, and declined to be bound thereby. Both parties pleaded other matters, which we think unnecessary to state, except that the plaintiff pleaded estoppel as against the company's contentions in various forms.

On special issues submitted the jury found:

(1) At the time the parties entered into the written contract, it was agreed that the company should have an option or right to extend the same for a second year beginning September 24, 1920, for which the company was to pay Burkett the additional sum of $5,000.

(2) The Texas Company, through its representative, J. A. Rees, prior to the expiration of the written contract, exercised its option to extend the term of the written contract, and agreed to pay Burkett therefor the sum of $5,000.

(3) It was within the authority or scope of the apparent authority of Rees to exercise the option to extend the term of the written contract for the second year.

This judgment was affirmed on appeal to the Court of Civil Appeals. 255 S. W. 763. The case is here by writ of error.

The written contract referred to was signed and acknowledged by Joe Burkett, and signed by the Texas Company by J. A. Rees. Under this contract, in consideration of $5,000 paid by the company, Burkett granted to it "the right and privilege to take and use all the water in the Leon river" upon the lands described in the instrument. Continuing, the contract reads as follows:

"That the term of this grant is for a period of one year from the date of the execution hereof, and grants unto the Texas Company the exclusive privilege in and to all of the water in the Leon river upon the above-described premises, save and except the lessor reserves sufficient water for drilling operations upon his own land, should drilling actually begin thereon.

"That the Texas Company may erect and maintain pumps, pump stations, and necessary buildings and equipment on the land, and may lay pipe lines for the purpose of carrying fuel and water upon said land, and removing and pumping water from said river, and may install engines and telephone lines and posts, and all other necessary equipment, machinery, and fixtures necessary under the terms of this contract, and may pump from said Leon river all said water and all that may be impounded in said Leon river upon the above-described premises during the term of this grant, and the above-named consideration not only pays for the exclusive right to use water from the Leon river, but also pays for all damages to crops, fences, and grasses that may be occasioned by its laying pipe lines over and through said lands.

"That the Texas Company shall have the right to locate its pump station or stations, and remove water from the river at any place it deems proper, and also the right, should it become necessary, to excavate on the banks of said river for the purpose of getting access to any underground streams.

"At the termination of this contract, the Texas Company may remove all property placed by it on said land, whether affixed to the realty or not, and shall have a reasonable time within which to do so.

"The Texas Company shall have and is hereby granted the right of ingress and egress for all purposes and especially to make inspections, repairs, and to operate such water plant.

"It is further understood and agreed that, in consideration of the cash so paid on the delivery hereon, we, the grantors herein, hereby declare our acquiescence, approval, and consent of the act of the said company in exercising its rights as above set forth.

"To have and to hold all and singular the above rights, easements, and privileges herein granted to the Texas Company, and we, the grantors herein, do hereby warrant the said the Texas Company, in the quiet and peaceable possession of the above-described premises for and during the term of this grant."

Rees and Burkett, prior to the time of the execution of the contract, went upon the ground. The visible water dam and other features of the land involved were pointed out, including the places where springs existed, and generally the status of the land as water producing soil. In order, therefore, that we may have in mind clearly just what the company was contracting for, we will direct attention to the land described for water producing purposes. Speaking with reference to this feature, the plaintiff, Burkett, among other things, testified:

"The south prong of the Leon river runs through that piece of land. That stream does not contain running water all the time, except in flood time. Prior to this contract, I had constructed a dam, something to catch water in the creek. I built a roadway which made the dam, and it was made out of rock and concrete, limestone and concrete. That was completed on the 4th day of July, 1917. The contract is dated September 24, 1919.

"Under my contract with the Texas Company, that company erected a pumping plant. They placed two pumps above the dam; first I believe they placed one pump above the dam and placed one pump down the river something like 200 or 300 feet, at the spring, where there is a spring in the creek, and they also erected a house and laid a water line across my place, northeast across my place, also laid a gas line across my place. That spring below the dam was there all the time. It has never been dry since I have owned the place, since in 1912. * * *

"I went out with Mr. Rees alone the first time we went out on the premises. There wasn't very much water in the creek above the dam, but I took Mr. Rees down where this spring was, and told him that there was an abundance of water there; in case of dry weather, when all of the surface water was gone, that there was lots of water there that could be had by scraping out the filling in of the creek bed there. * * * We drove down through the alfalfa patch and stopped the car, and I went with him and told him about the spring there in the creek — the creek had water in it then — that, if the creek should go dry, there was an abundance of water that could be had; that it never had been dry. I also told them about digging a well right on the bank of the creek, and about there being an abundance of water there, and another well about 50 or 75 feet further east, and there was an abundance of water there. And I also told them about digging a well in the bed of the creek about 50 yards down the creek, and that they found water there, and that there was water there in abundant quantities in case they used up all of the water in the creek. * * *

"The Leon river so-called at that point is a running...