Texas Pac. Coal & Oil Co. v. Patton

• Decision Date: 08 March 1922
• Docket Number: (No. 293-3556.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 238 S.W. 202
• Parties: TEXAS PAC. COAL & OIL CO. v. PATTON et al.
• Court: Texas Supreme Court

Page 202

238 S.W. 202

TEXAS PAC. COAL & OIL CO. v. PATTON et al.

(No. 293-3556.)^*

Commission of Appeals of Texas, Section A.

March 8, 1922.

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

Suit by Mrs. Mattie C. Patton, J. H. Patton and wife, and Mrs. Fay Patton Cox and husband against the Texas Pacific Coal & Oil Company. Judgment for defendant was affirmed as to Mattie C. Patton, but reversed as to and rendered for J. H. Patton and wife and Mrs. Fay Patton Cox and husband, by the Court of Civil Appeals (225 S. W. 857), and the defendant brings error. Judgment of Court of Civil Appeals affirmed as between the defendant and Mrs. Mattie C. Patton, and reversed and the judgment of the district court affirmed as between defendant and plaintiffs J. H. Patton and wife and Fay Patton Cox and husband.

W. J. Oxford, of Stephenville, and John Hancock, of Fort Worth, for plaintiff in error.

Snodgrass & Dibrell, of Coleman, for defendants in error.

GALLAGHER, J.

Mrs. Mattie C. Patton, a widow, and her children, J. H. Patton, joined by his wife, and Mrs. Fay Patton Cox, joined by her husband, filed suit in the district court of Stephens county against Texas Pacific Coal & Oil Company, a corporation, in trespass to try title to recover title and possession of certain lands and to cancel an oil and gas lease thereon. There was a trial before the court without a jury, and judgment rendered that plaintiffs take nothing by their suit, and declaring that the plaintiffs were the grantors in said lease; that the same was valid and binding, and reforming the same so as to make plaintiffs appear by name as grantors therein. The plaintiffs appealed, and the Court of Civil Appeals affirmed the judgment of the trial court against Mrs. Mattie C. Patton, but reversed said judgment against J. H. Patton and Mrs. Fay Patton Cox and their respective spouses, and rendered judgment in their favor. 225 S. W. 857. The Coal & Oil Company applied for a writ of error, which was granted by the Supreme Court.

Defendants in error have filed a motion in this court to dismiss this writ of error on the ground that the lease in litigation in this case has by its own terms expired, and that therefore the subject-matter of the suit has ceased to exist, and the validity of the lease has become an abstract question of law.

The lease was executed July 26, 1916, and was to continue for five years from its date. The consideration was $621.50 cash and a like sum annually in advance beginning 12 months from its date. It granted lessee full and exclusive authority to enter upon the premises with all machinery and materials necessary in the operation thereof, and to remove the same therefrom at pleasure. It did not in terms require the lessee to drill wells, or to do anything toward the development of the mineral resources of the land, but it did provide for the payment of royalties in event of production of oil or gas, and further provided that, in event oil or gas was discovered on the premises, it should continue in full force and effect so long as either should be produced in paying quantities. The lessee paid the rental in advance by depositing the same at the bank specified in the lease for the years beginning July 26, 1917, 1918, and 1919, respectively. The lessors accepted the money each year until 1919. They refused to accept the money deposited for said year and let it remain in the bank. This deposit was made April 10, 1919. On April 11, 1919, the lessors instituted this suit against the lessees, claiming that the lease was null and void for various reasons, and that it constituted a cloud upon the title to their lands, and prayed that it be canceled by decree of the court.

Defendants in error have submitted with their motion to dismiss an affidavit showing that neither the lessee nor any one in its behalf has ever entered upon said lands since the date of said lease for any purpose, that no one has drilled for either oil or gas thereon, and that neither oil nor gas has been produced therefrom.

Plaintiff in error resists the motion to dismiss and contends that, when defendants in error refused to accept the annual rental and filed this suit to cancel and avoid the lease, such action constituted a breach thereof and a denial of its existence, and that therefore they were in no position to insist that the fixed term provided by the lease was running in their favor and against the lessee while they denied the right of such lessee to exercise the rights and enjoy the privileges granted by the lease, and that the determination of the rights and equities of the parties would involve a hearing on the facts and the exercise of original jurisdiction, which the Supreme Court does not possess.

We construe the lease to grant to lessee an option at any time within five years from its date to enter upon the lands demised and drill for oil and gas. It has been held that in options time is of the essence of the contract, but it has also been held that, when the party granting an option himself prevents its exercise during the time limited therefor, he must give a reasonable time for its exercise after any obstruction which he has interposed has been removed. 13 C. J. pp. 688-690. It has been held that this principle is applicable in case of an option to prospect for, discover, and produce oil and gas. McCallister v. Texas Co. (Tex. Civ. App.) 223 S. W. 859, 862, par. 4; Consumers' Gas Trust Co. v. Worth, 163 Ind. 141, 71 N. E. 489, 492. Plaintiff in error cites the foregoing cases in support of its contention and in addition thereto the following: Weaver Mining Co. v. Guthrie, 189 Mo. App. 108, 175 S. W. 118; La Fayette v. Kelsay, 164 Ind. 563, 74 N. E. 7; Ross v. Shelton (Ky.) 119 S. W. 225; Jennings v. So. Carbon Co., 81 W. Va. 347, 94 S. E. 365; Eastern Oil Co. v. Coulehan, 65 W. Va. 531, 64 S. E. 836; Leonard v. Busch-Everett Co., 139 La. 1099, 72 South. 749; Keen v. Logan, 147 La. 80, 84 South. 501; Standard Oil Co. v. Webb (La.) 88 South. 808; Blodgett v. Lanyon Co., 120 Fed. 893, 58 C. C. A. 79; Gulf Refining Co. v. Hayne, 148 La. 340, 86 South. 891; Stahl v. Van Vleck, 53 Ohio St. 136, 41 N. E. 35.

The Court of Civil Appeals rendered judgment against plaintiff in error in favor of J. H. Patton and Mrs. Fay Patton Cox and their spouses canceling the lease as to them.

If the writ of error is dismissed, such judgment will be left in full force and effect and binding on plaintiff in error as a final adjudication of its rights in the premises and will be a complete bar to any action which plaintiff in error may institute to test the merits of its claim to an equitable extension of time. Plaintiff in error is claiming substantial rights and equities. They can be fully presented and adjudicated only in a court of original jurisdiction. They depend in part upon whether or not the decision of the Court of Civil Appeals and its judgment canceling this lease shall stand. It has been held in such cases that the controversy is not ended, and that the court should proceed to hear the appeal. Less, Guardian, v. Ghio, 92 Tex. 651, 653, 51 S. W. 502; Wichita Electric Co. v. Hinckley (Tex. Civ. App.) 131 S. W. 1192; Kaufman v. Mastin, 66 W. Va. 99, 66 S. E. 92, 25 L. R. A. (N. S.) 855; Whipple v. Lee, 58 Wash. 253, 108 Pac. 601; Click v. Sample, 73 Ark. 194, 83 S. W. 932; Houston & B. V. Ry. Co. v. Hughes (Tex. Civ. App.) 182 S. W. 23, 29.

This case is distinguishable from the case of McWhorter v. Northcut, 94 Tex. 86, 58 S. W. 720. That was a proceeding by mandamus to compel the mayor and board of aldermen to reinstate McWhorter in the office of city marshal, from which he had been removed by the respondents. The trial court sustained a general demurrer to the petition, and McWhorter appealed. Before the appeal was reached for hearing in the Court of Civil Appeals the term of office expired. The Court of Civil Appeals for the Fourth District held that, inasmuch as the term had expired, if it held that appellant, McWhorter, was at the date of the trial entitled to the mandamus prayed for, the judgment of the court could not be lawfully executed, and, according to the published report of the case, dismissed the appeal. 24 Tex. Civ. App. 22, 57 S. W. 904.

The Supreme Court in passing upon an application for writ of error in that case, said that the statement in the opinion that the appeal was dismissed was doubtless inadvertently made, and that the Court of Civil Appeals in fact dismissed the whole case. The Supreme Court refused a writ of error.

The case of Riggins v. Richards was also a proceeding by mandamus to require the city council to restore Riggins to the office of mayor, from which he had been removed by such council. The trial court denied him the relief sought, and the Court of Civil Appeals affirmed its judgment. 79 S. W. 84. While the application for writ of error was pending the term of office expired, and the defendants in error moved to dismiss the case. The Supreme Court granted the motion without prejudice to the rights of plaintiff in error to sue for his salary. Riggins v. Richards, 97 Tex. 526, 80 S. W. 524.

The only issue involved in either of these cases was the right of the plaintiff to be reinstated in an office from which he claimed to have been wrongfully ousted. In each case the office was an essential part of the municipal government, and the public were interested in the discharge of its duties. The term of office was fixed and determined by law and could not be equitably extended in the interest of individual claimants. When the term expired, the court was powerless to reinstate the complainant, and no other relief was sought.

In this case the validity of the lease is the only issue involved. We think this court has jurisdiction to determine that question, and that the motion to dismiss the writ of error should be overruled.

The Court of Civil Appeals held that there was nothing in the lease under...