Wagner Supply Co. v. Bateman

• Decision Date: 28 June 1929
• Docket Number: (No. 4187.)
• Citation: 18 S.W.2d 1052
• Parties: WAGNER SUPPLY CO. v. BATEMAN.
• Court: Texas Supreme Court

18 S.W.2d 1052

WAGNER SUPPLY CO. v. BATEMAN.

(No. 4187.)

Supreme Court of Texas.

June 28, 1929.

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

Suit by J. C. Roberts and others against A. O. Bateman and others, in which defendant

Bateman filed a cross-bill and impleaded the Wagner Supply Company and others. A judgment for defendant Bateman and the supply company was reformed in part and affirmed in part by the Court of Civil Appeals (260 S. W. 672), and the supply company brings error. Reversed and remanded in part, and affirmed in part.

Samuels & Brown, of Fort Worth, for plaintiff in error.

L. J. Wardlaw and J. T. Tuohy, both of Fort Worth, and Grady Lowrey, of Del Rio, for defendant in error.

CURETON, C. J.

J. C. Roberts and others owned an oil and gas lease in Stephens county, on which there was an uncompleted well. Roberts, acting for himself and associates, employed Bateman to finish the well. Bateman was to receive a one-fourth interest in the lease and its products, and in addition was to be paid cash for a certain portion of his labor and for shutdown time. The well was brought in as a producer, but at the time of the trial of this case had ceased to have any productive value. Because of disagreement or dissatisfaction among the owners, J. C. Roberts and others filed suit on June 9, 1921, in the district court, against Bateman and others, setting out the differences which had arisen between the parties, and praying for a receiver. A receiver was appointed, and was apparently in possession of the property at the time of the trial of this case. In April, 1922, Bateman filed his original answer to plaintiff's original petition, and by cross-bill claimed an indebtedness alleged to have been incurred under the contract for drilling the well and caring for the property. He impleaded the Wagner Supply Company and others, who it was stated were asserting liens on the lease and personal property, but stated that his lien under the drilling contract as a laborer was superior to the lien held by the Wagner Supply Company. The Wagner Supply Company answered this cross-action, and by plea of intervention set up a claim for material furnished, alleged the execution of a chattel mortgage by J. C. Roberts and others on certain personal property used in connection with the well, asserted a material-man's lien also on the lease and on the personalty furnished by it and other personal property used in connection with the well, and prayed for judgment in the amount of its debt, and the establishment of its liens. It also claimed its liens were superior to any lien that Batement might have, and that its claim had priority over the expenses of the receivership. The trial court rendered judgment for both Bateman and the supply company, awarding to the former a mechanic's lien, and to the latter a materialman's lien, on the lease and personal property used in connection with the well; but declared that these liens were co-ordinate and of equal dignity. He ordered the property sold, and the proceeds derived therefrom paid out proportionately on the judgments of Bateman and the Wagner Supply Company. The Wagner Supply Company appealed to the Court of Civil Appeals, where the judgment of the trial court was reformed as to the payment of certain receivership expenses, but otherwise affirmed. The opinion of the Court of Civil Appeals may be found in 260 S. W. 672.

On January 7, 1921, Withers and Roberts purchased a large amount of well casing from the Wagner Supply Company, and to secure the purchase price executed to that company a chattel mortgage on 850 feet of 12½-inch casing and 1,650 feet of 10-inch casing, which is described in the instrument. The mortgage declared that the material was to be placed on a tract of land in Stephens county, described by metes and bounds, being land upon which the well herein referred to was to be or was being drilled. The mortgage in part declared: "This conveyance being made and the liens hereby acknowledged and created incident to the purchase by us from Wagner Supply Company of all the said property, and while the said property is yet in possession of Wagner Supply Company, and the delivery of which to us is made subject to the lien retained by the Wagner Supply Company on all of said property, and which said property is to be placed upon the hereinabove described tract of land, but subject to our exclusive control, and not to become attached to or affixed to the realty."

The mortgage also covered future advances or deliveries of property of like character to that described in the mortgage. Under this instrument the Wagner Supply Company not only sold and delivered to Withers and Roberts the 12½-inch and 10-inch casing specifically described in the mortgage, but delivered a large amount of other casing and related supplies, upon which it also claims a lien under this instrument. We think the chattel mortgage was sufficient to cover such future deliveries or advances as were within the descriptive clause of the mortgage, and at the time of this trial evidenced a valid and subsisting lien. Stell v. Paschal, 41 Tex. 640; Glenn v. Seeley, 25 Tex. Civ. App. 523, 61 S. W. 959; Openshaw v. Dean, 59 Tex. Civ. App. 498, 125 S. W. 989; 11 Corpus Juris, p. 495, § 159; 41 Corpus Juris, p. 462, §§ 362, 365; 37 Corpus Juris, p. 324, § 32; Phillips on Mechanic's Liens (3d Ed.) § 236.

Bateman claimed a lien on this property under article 5639a, Revised Statutes, Vernon's Complete Texas Statutes 1920, because, he contended, that as a laborer and mechanic, under his contract to drill the well, he had a lien on the material used in and appurtenant to the well. We do not agree with this contention. The material furnished by the Wagner Supply Company was not supplied by Bateman, and the mechanic's or laborer's lien under the statute invoked did not apply in his behalf to material as such furnished by the Wagner Supply Company. Security Banking & Investment Co. v. Flanagan (Tex. Com. App.) 254 S. W. 761.

The only way by which Bateman could claim a laborer's or mechanic's lien on the well casing, or other material which became a part of the property used in drilling and operating the well, would be for us to say that this material became a part of or appurtenant to that portion of the realty, or the lease, or well, to which Bateman's laborer's or mechanic's lien did attach under the statute invoked; in other words, to say that the chattel mortgage ceased to be effective because the property described in the mortgage and embraced in its specific and general terms became a part of the realty, or of the lease or well, and no longer subject to the terms of the chattel mortgage. However, we do not think it became a part of the realty or of the lease or of the well, or appurtenant thereto, under circumstances which defeat the mortgage lien. It is clear from the mortgage itself that the contracting parties intended that it should remain personalty and be subject at all times to the mortgage lien. It is true that the casing was placed in an oil well, a use no doubt in the contemplation of the parties at the time the mortgage was given, but one not inconsistent with the right at all times to consider the casing as personal property, and to agree that it should not, by such use, become a part of the realty. In fact, the action of the parties in this instance is a very fair illustration of the use which may be made of casing, and of the interpretation which ought to be put upon this mortgage and the rights thereunder. As a matter of fact, some of the casing was drawn from the well, sold by Mr. Bateman, and the proceeds therefrom paid to the Wagner Supply Company in partial satisfaction of its note and mortgage. Under elementary authorities the parties had the undoubted right to agree that the property covered by the mortgage should continue to be personalty, although attached in the manner shown to the realty. Jones on Mortgages (8th Ed.) §§ 531, 532, 534.

Roberts and associates merely had an oil and gas lease on the land. They did not own the soil itself, in which the casing was placed, aside from the oil and gas in place embraced within the terms of their lease. The exact terms of their lease are not shown by the record, but there is no contention here but that it was in the usual form of such conveyances, which permit the drawing of the casing and removal of rigs when a dry hole or unproductive well is found. In fact, the contract between A. O. Bateman and J. C. Roberts, under which Bateman claims in this suit, clearly shows that it was contemplated that the casing put into the well might be pulled. This instrument provides that in the event of the abandonment of the well, Bateman is to be paid for pulling the casing at a certain rate per day. This we think shows plainly that it was never in the contemplation of Bateman that this casing should become a part either of the realty itself, and therefore the property of the owner of the solid materials of the earth, or that it should become a part of the oil and gas lease, a one-fourth undivided interest in which was conveyed to him by his drilling contract.

The owner of the soil is not a party to this suit, and no one is contending that he has any interest or claim in this casing, or that he has any rights to the casing superior to those of the Wagner Supply Company. We do not think that the casing, under the facts of this case, became a portion of that part of the realty embraced in the oil and gas lease, and therefore a fixture which could not be removed. Southwestern Oil & Gas Co. v. Kimball O. & D. Co. (Tex. Civ. App.) 224 S. W. 1111; Wright v. MacDonnell, 88 Tex. 140, 30 S. W. 907; Summers on Oil & Gas, § 210; Thornton on Oil & Gas (4th Ed.) vol. 1, § 653; 26 Corpus Juris, p. 696, §§ 81, 83, 84, 85, 87, and cases cited in note 97, p. 702. See also Moore v. Carey Bros. Oil Co. (Tex. Com. App.) 269 S. W. 75, 39 A. L. R. 1247.

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