Winkler v. Creekmore

• Decision Date: 12 December 1923
• Docket Number: (No. 474-3856.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 256 S.W. 257
• Parties: WINKLER v. CREEKMORE.
• Court: Texas Supreme Court

256 S.W. 257

WINKLER v. CREEKMORE.

(No. 474-3856.)^*

Commission of Appeals of Texas, Section A.

December 12, 1923.

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

Suit by T. A. Creekmore against N. Winkler. Judgment for defendant affirmed by Court of Civil Appeals (241 S. W. 730), and plaintiff brings error. Affirmed.

V. L. Shurtleff, of Breckenridge, and Chas. L. Black, of Austin, for plaintiff in error.

Leverton & Hardy, of Breckenridge, and G. B. Smedley, of Austin, for defendant in error.

BISHOP, J.

The opinion of the Court of Civil Appeals is reported at 241 S. W. 730. We quote, in part, the statement of the case there made.

"Pick Campbell, Cleve Johnson, and S. H. and H. O. Tatum were the owners of an oil and gas lease covering 10 10/11 acres of land in Stephens county, and upon January 17, 1920, they entered into a drilling contract with Henry Riley, whereby Riley obligated himself to begin the drilling of a well on the premises on or before June 1, 1920, and drill the same 3,500 feet deep unless oil was found in paying quantities at a lesser depth."

Riley was to drill the well at his own expense, and also obligated himself to drill a second well beginning actual drilling of same within 90 days after drilling ceased on the first well. This drilling contract contained also the following:

"It being understood that party of the second part is to drill at least two wells on said premises and as many more as is necessary to fully develop said premises, or as many that become necessary to properly offset wells on adjoining territory. Each of said wells on the said premises shall be drilled to a depth of at least 3,500 feet unless oil is found in paying quantities at a lesser depth, or unless parties hereto agree in writing to cease operation sooner.

"The expense of drilling, equipping and connecting to the pipe lines all wells except the first well shall be borne by the parties hereto, one-half by party of the first part, and one-half by party of the second part, and the expense of operating all wells, after they are connected to pipe lines, shall be borne in like manner, one-half by each party hereto."

"On the same date the Tatums, Johnson, and Campbell transferred and assigned unto T. A. Creekmore, his heirs and assigns, a one-fourteenth undivided interest in and to said leasehold interest, subject to the oil and gas lease and to the terms and conditions of said drilling contract. On July 30, 1920, Creekmore conveyed an undivided 1/32 interest in the leasehold unto N. Winkler in consideration of a note for $5,500 executed by Winkler in favor of Creekmore. This transfer from Creekmore recites the assignment to him from Campbell and others dated January 17, 1920."

It conveys the 1/32 interest, subject, however, to the terms and conditions of the lease and drilling contract, and provides as follows:

"It is expressly understood that N. Winkler is to receive 1/32 of the production under the above-mentioned contracts, free of any cost to N. Winkler, except the consideration mentioned, and in case there is no production within the terms of said contracts, or valid extension thereof, then this assignment shall become null and void, but the validity of the hereinbefore mentioned note shall not be affected in any way."

The suit was filed by defendant in error, Creekmore, in the district court of Stephens county, setting up the note and also the written transfer from him to Winkler, plaintiff in error, and alleging the execution and delivery by Winkler of the note in payment of the 1/32 interest conveyed.

Plaintiff in error in his answer set out in full the drilling contract, the assignment to Creekmore, and the assignment to himself, and alleged that at the time the note was executed plaintiff in error personally guaranteed that there would be at least two wells drilled on the property under the terms of the drilling contract; that the second well has not been drilled under its terms, and that the consideration for which the note was given has failed, and that he was not liable thereon.

The trial court instructed a verdict for defendant in error, and on appeal from the judgment rendered and entered thereon the Court of Civil Appeals affirmed the judgment.

On the trial the court excluded the testimony offered by plaintiff in error, while testifying in his own behalf, to the effect that, at the time the trade was made between himself and Creekmore, the latter guaranteed that at least two wells would be drilled on the property, and that the second well would be drilled within 90 days after the first well was completed, and error is assigned on the exclusion of this testimony.

As far as the drilling of a second well as part of the consideration is concerned, the note, together with...