Waurika Oil Ass'n No. 1 v. Ellis

• Decision Date: 01 June 1921
• Docket Number: (No. 1772.)
• Citation: 232 S.W. 364
• Parties: WAURIKA OIL ASS'N NO. 1 et al. v. ELLIS.
• Court: Texas Court of Appeals

232 S.W. 364

WAURIKA OIL ASS'N NO. 1 et al. v. ELLIS.

(No. 1772.)

Court of Civil Appeals of Texas. Amarillo.

June 1, 1921.

Rehearing Denied June 22, 1921.

Appeal from District Court, Wichita County; Edgar Scurry, Judge.

Action by G. R. Ellis against the Waurika Oil Association No. 1, and others. From a judgment for plaintiff, defendants appeal. Affirmed.

Weeks, Morrow, Francis & King and Davenport & Wilson, all of Wichita Falls, for appellants.

Bonner, Bonner & Sanford, of Wichita Falls (Wm. N. Bonner and Wayland H. Sanford, both of Wichita Falls, of counsel), for appellee.

HUFF, C. J.

The appellee Ellis sued the appellant, Waurika Oil Association, a joint stock company, acting under a declaration of trust, with W. R. Shankle, Y. E. Hildredth, and T. A. Edmonds as trustees, together with Alfred D. Diffie. It is alleged that Ellis was a broker, and that appellant company had listed with him nine acres of oil land in Wichita county, and that appellants stated to him they desired his services in finding and procuring a purchaser for said property at a price of $650,000, and agreed, for his services in finding a purchaser who was ready, able, and willing to purchase the property, that it would pay him 5 per cent. on the entire sale price, which would amount and did amount to the sum of $32,500; that in that territory it was the custom, and in this case it was agreed, that the broker should find a purchaser ready, willing, and able to purchase, and to leave to the parties making the contract the matters of arranging the details and exact terms of closing the deal, but in this case appellants authorized appellee to state they were willing to sell partly for cash and partly for a certain amount of the oil to be thereafter produced from the lease, which had thereon at that time several valuable producing oil wells; that by his efforts he brought appellants in touch with purchasers, the Caldwell Oil Company and the Swanson Company, both oil companies, who were acting together, and that he assisted in arranging the details of the purchase and that they entered into a contract of sale at the price of $650,000, and that the contract of purchase has since been executed, and that thereby he had earned the commissions agreed upon, amounting to $32,500.

Before entering upon the trial of the case, the appellee dismissed Diffie from the petition by and with the consent of all parties and the court. The appellants answered only by general exception, one special exception, and general denial. The trial court submitted three special issues to a jury, which they answered, and the effect of which is that the Waurika Oil Association, by and through W. R. Shankle, placed what is known as Waurika No. 1, composed of nine acres of land, with Ellis for sale; that the company, through W. R. Shankle, agreed to pay Ellis commission of 5 per cent. to find a purchaser who was ready, able, and willing to purchase said property on terms satisfactory to the company, and that he did find a purchaser or purchasers who were ready, able, and willing to purchase said property on terms satisfactory to said company. We may state the evidence, we think, supports the finding of the jury.

It is shown, on or about August 13 or 15, 1919, W. R. Shankle, the president and one of the directors of the Waurika Oil Association, listed the nine-acre lease with Ellis at $650,000, agreeing to pay him 5 per cent. commission. The terms then explained what would be required would be part cash, several reasonable payments, and the balance out of the production of oil. It seems the association had previously had the lease on the market at $750,000, but had been unable to effect a sale at that price, and Ellis had tried to obtain purchasers at that price by getting certain data, for the purpose of submitting it to the producers. After the listing, the appellee associated with him E. F. Sparrow, and through the joint efforts of the two they secured the Caldwell Oil Company and the Swanson Company, who, on the 20th day of August, 1919, entered into a written contract with the Waurika Oil Association, signed by W. R. Shankle, who the evidence shows was president and director in the association. The contract provided the Waurika Oil Association agreed to assign and transfer the oil and gas lease to the nine acres of land, describing it, in consideration of $50,000 cash which was to be deposited in the bank in escrow, to be paid over to the association upon approval of the abstract of title, and of the instrument of conveyance, including assignment of the oil and gas lease and bill of sale to all personal property. An additional $50,000 to be paid in cash on or before 20 days from date and $100,000 30 days from date, and the remainder, $400,000 in oil, as follows: The grantee should produce and place as much of the production as is possible from the wells now on the lease, and from such other wells as may be drilled thereafter, in the pipe lines, or market the same, executing division orders to the pipe line or purchasers for two-thirds of the oil sold or placed in the pipe lines in favor of the Waurika Oil Association, which was to be credited by it upon the $400,000 until fully paid. The grantees were to receive one-third from the date of their accepting the title. Abstracts were to be furnished, examined, and, if approved, the $50,000 deposited in the bank in escrow was to be paid to the association. If any delay in the completion of the assignment, or in obtaining authority to execute the necessary instruments, and such delay should be beyond the date for the payment of the future installments of cash, such sums shall await the end of such delay and be paid thereafter, together with cash placed in escrow.

"It is further understood and agreed that T. A. Edmonds, one of the trustees of said association, shall confirm this agreement of sale, and should he fail or refuse to immediately so do, the grantees shall have the right to withdraw this agreement and the cash from the escrow keeper, and the same shall be at an end."

On the 1st day of November, 1919, the Waurika Oil Association, through its then trustees, W. R. Shankle, J. Harrison White, and G. H. Colvin, conveyed by proper assignment, duly attested and acknowledged, the nine acres described in the former contract to the Caldwell Oil Company and the All American Oil & Gas Company. The recited consideration was $200,000 cash, and an agreement to pay seven-sixteenths of the production until the payment amounted to the total additional sum of $400,000. The instruments in evidence, as well as the parol testimony, show T. A. Edmonds, Y. E. Hildredth, and W. R. Shankle, were the trustees of the association at the time of entering into the contract, and that when the assignment was made J. Harrison White and G. H. Colvin were then the present elected, duly qualified, and acting trustees authorized to execute the assignment. The record further shows that, about September 11, 1919, the Swanson Company sold its interest in the contract executed on the 20th day of August to the Caldwell Oil Company, and that on the same day the Caldwell Company transferred a half interest in the contract to the All American Oil & Gas Company, together with the deposit in the bank of the sum of $50,000. The evidence further shows this deposit was used as part of the cash payment paid upon the execution of the assignment November 1st. The evidence shows the Swanson Company and the Caldwell Company were ready, willing, and able to take the land at the price and upon the terms agreed upon. Shankle, two or three times in his testimony, states Edmonds did not agree to or approve the contract made on the 20th of August but at one place he testified that he (Shankle) signed one, "and that a little later, as soon as Mr. Edmonds could be reached, he signed it." There is also evidence that Edmonds approved the contract by telegram, and also that Hildredth did so over the phone. This is perhaps a sufficient outline of the case, but it may be necessary to refer to other evidence in disposing of the assignments. The testimony is sharply conflicting at several points.

The first assignment is to the effect that the jury's finding that Ellis found purchasers ready, willing, and able to buy on terms satisfactory to appellant is against the great preponderance of the evidence, and that there is no sufficient legal and competent evidence to support the finding that the contract which Ellis procured was ever consummated, etc. It is asserted as a proposition that the only contract procured was with the Swanson and Caldwell Companies, which contract, upon its face, was conditional, and that appellee is not, therefore, entitled to recover; and by a second proposition the fact that, subsequent to the execution of the contract, other trustees performed the contract as between one of the parties thereto and an alleged assignee of the other party thereto. This gave appellee no right upon his suit, for the reason the suit is not upon a quantum meruit, but upon a contract, based upon the fact alone that he had procured the contract.

The general rule is a real estate broker, having a contract authorizing him to effect a sale, is entitled to the commission agreed upon when he procures a buyer who consummates the purchase of the property on terms satisfactory to the owner, and, ordinarily, when it is shown that the agent is instrumental in bringing the buyer and seller together, the fact that the agent was the procuring cause of the sale afterwards consummated is sufficiently established. Graves v. Bains, 78 Tex. 92, 14 S. W. 256; Conkling v. Krakauer, 70 Tex. 735, 11 S. W. 117; Hancock v. Stacy, 103 Tex. 219, 125 S. W. 884; McDonald v. Cabiness, 100 Tex....