U.S. Truck Lines v. Texaco, Inc.

• Decision Date: 17 June 1960
• Docket Number: No. 3540,3540
• Citation: 337 S.W.2d 497
• Parties: U. S. TRUCK LINES, Appellant, v. TEXACO, INC., Appellee.
• Court: Texas Court of Appeals

Page 497

337 S.W.2d 497

U. S. TRUCK LINES, Appellant, v.TEXACO, INC., Appellee.

No. 3540.

Court of Civil Appeals of Texas, Eastland.

June 17, 1960.

Rehearing Denied Aug. 5, 1960.

Kirchheimer & Kirchheimer, Houston, for appellant.

Jack D. Childers, Al Crystal, Houston, for appellee.

GRISSOM, Chief Justice.

U. S. Truck Lines sued Merrill Richardson, Inc., and Texaco, Inc., for rent on a board road.In a trial to the court, judgment was rendered for the plaintiff against Richardson, Inc., but judgment was rendered for Texaco, Inc.From that part of the judgment denying recovery against Texaco, U. S. Truck Lines has appealed.

Appellant's points are to the effect that the court erred in failing to hold that Richardson, Inc., and Texaco, Inc., were jointly liable because they were mining partners and that their partnership was established by their written operating agreements and the manner in which they operated leases.Findings of fact and conclusions of law were not requested by appellant and not filed, therefore, if issues of fact were raised the evidence must be viewed in the light most favorable to Texaco, and all facts necessary to support the judgment must be presumed to have been found in favor of Texaco, provided the evidence will support such findings.However, appellant's contention is that, as a matter of law, the written agreements between Texaco and Richardson, Inc., and the manner of developing the lease show that they were mining partners and, therefore, jointly liable for appellant's debt which was contracted only by Richardson, Inc.

In February, 1958, Merrill I. Richardson owned an oil and gas lease on lot 11 of a certain subdivision and Texaco owned a lease on the adjoining lot 10 and, for the purpose of developing said leases, each assigned tos the other a one-half interest.Richardson and Texaco entered into an operating agreement for drilling wells and developing said leases.Merrill I. Richardson was appointed operator.He was given exclusive charge, management and control of all development.The operating agreement provided that Richardson should secure and furnish all material, labor and services necessary for development and operation of said leases; that said operator should pay currently, as incurred, all expenses arising out of operations under said agreement; that the rights and liabilities of said parties should be several, not joint, and that each should be responsible only for its own obligations as stated in said agreement.It recited that it was not the purpose or intention of the parties that said agreement should create, or be construed as creating, a partnership and that it was agreed that said contract should not constitute a partnership as defined in the Internal Revenue Code,26 U.S.C.A. Sec. 7701.It provided that said operator should keep proper accounts showing an accurate record of all expenses incurred by him and that statements for payment made by operator should be rendered to Texaco on the last day of each month for its half of the operator's expenditures during the preceding month but that the operator might require Texaco to pay in advance its propertionate share of a certain anticipated cash expenditure by furnishing an estimate thereof.It provided that gross production, severance and other taxes should be reported and paid by each party on its interest; that any minerals produced under said agreement should be owned by and allocated to the parties according to their respective ownership of the two leases; that each should take in kind, or separately dispose of, its share of productions.It provided that either party might assign its interest in said contract and leases.Texaco denied under oath appellant's allegation that it was engaged with Richardson, Inc., in a mining partnership or a joint venture.The contract for building the board road to the well site was made by the president of appellant and Richardson.Richardson, Inc., succeeded to the rights and duties of Merrill Richardson and the transfer by the individual to the corporation need not be further noticed.According to appellant's president, he made a trip to the well site and agreed on terms for furnishing the board road with Richardson, agreed to build the road for Richardson and carried the account as 'M. I. Richardson, Inc.'He dealt only with Richardson.Texaco did not participate in any of the negotiations, or agreements, between Richardson and appellant for building the road.Appellant never contacted Texaco about building the road.On May 13, 1958, appellant's president wrote M. I. Richardson about 'your' account.Appellant's president testified that he was satisfied to negotiate his agreement solely with Richardson and decided not to contract Texaco to see whether it would be responsible for payment.

The written operating agreement between Richardson and Texaco did not authorize Richardson or Richardson, Inc., to obtain material or labor on Texaco's credit.The contract provided that the operator Richardson, 'shall pay currently as incurred all costs and expenses arising out of operations under this agreement * * *.'It provided that the liabilities of the parties should be several, not joint, and that each should be responsible only for its obligations, 'as stated in this agreement', and that it was not the intention of the parties to create a partnership.It contained this further significant provision: 'It is not the intention of the parties * * * that this contract is made for or is intended for the benefit of any third person'.Under the contract Texaco's obligation was only to pay to Richardson, Inc., one-half of the cost of development.Richardson, Inc., had the power to require Texaco to make payments to its in advance.It expressly precluded the operator from contracting for Texaco, or...