Young v. Rudd

• Decision Date: 05 January 1950
• Docket Number: No. 6481,6481
• Parties: YOUNG et al. v. RUDD et al.
• Court: Texas Court of Appeals

Page 469

226 S.W.2d 469

YOUNG et al. v. RUDD et al.

No. 6481.

Court of Civil Appeals of Texas, Texarkana.

Jan. 5, 1950.

Rehearing Denied Jan. 19, 1950.

Bibb & Green, Marshall, for appellant.

J. N. Saye, Longview, for appellee.

LINCOLN, Justice.

This appeal involves primarily a construction of the instrument hereafter copied. The parties will be designated as in the trial court. On September 12, 1924, John W. Furrh and his wife executed and delivered to R. W. Norton an oil and gas lease on their lands, 245 acres of Joel Lipscomb Survey in Harrison County, Texas. Norton assigned the gas rights under the lease to State Line Oil and Gas Company on December 1, 1924. Both the lease and assignment were forthwith placed of record in Harrison County. There was some development and production on Furrh's land under the Norton lease but Furrh became dissatisfied because there was not further development. He insisted upon offset wells being drilled to prevent the gas under his land from being drained off by wells that were producing on adjacent lands. Having been unsuccessful in his efforts, on February 4, 1926, the following instrument was drawn up between Furrh, Bergson and Young:

'Know All Men By These Presents: That I, John W. Furrh, have entered into the following contract with Bert Bergson and William F. Young; the said Bergson and Young are to act for me as my agents and representatives in dealing with the Arkansas Natural Gas Co. and the State Line Oil and Gas Co. and any other persons interested in the leases on my land on the Joel Lipscomb Survey in Harrison County, Texas, near the town of Waskom. Said land being all of the land I own in said survey and being under lease at present to the Arkansas Natural Gas Company and to the State Line Oil and Gas Company, which last company acquired their lease rights from one Norton to whom I, the said John W. Furrh, leased said lands. The said Bergson and Young are to act for me as my agents and representatives in endeavoring to obtain additional development on all of said land on said Lipscomb Survey and in consideration of their services, they are to have and are hereby given and granted ten per cent of all future payments of rentals or royalties or bonuses on any and all future development on any of said land, including any and all offsets money that may be paid thereon.

* * *

* * *'(Signed) John W. Furrh.'

'We accept the foregoing contract:

'This the 4th day of February, A.D. 1926.

'(Signed) William F. Young

'Bert Bergson.'

The foregoing contract was acknowledged by all the parties whose names were signed to it and was filed for record in the office of the county clerk of Harrison County on June 26, 1927, and was recorded in the deed records of said county.

Bergson and Young immediately entered into negotiations with the State Line Oil & Gas Company, and with the Arkansas Natural Gas Company. What interest the Arkansas company had in the lease and its production is not shown. As a result of these negotiations, the State Line Company and the Arkansas Company paid bonuses to Furrh in lieu of offset wells, and also agreed to certain additional development on the land for the production of oil and gas. Bergson and Young received 10% of the bonuses and of Furrh's portion of the royalties.

On or about October 3, 1927, Furrh, Bergson and Young executed and delivered a transfer order to Magnolia Gas Company which stated that a 1/160 interest each in wells number one and up on 80 acres of the land involved had been sold to and was owned by Bergson and Young. The instrument directs that the Magnolia Gas Company will 'show their interest on your books in keeping herewith' and states that the interests are correctly stated in the transfer, and the parties acknowledge themselves bound by the terms and provisions 'of the original contract.'

On March 26, 1929, J. W. Furrh and his children, his wife having died in the meantime, leased the land to C. H. Lyons, and on the same date a like oil and gas lease was executed in favor of Lyons by Bergson and Young, who negotiated the entire transaction with Lyons. Gas wells were drilled and commercial production secured under that lease.

Various division orders were executed, in all of which Bergson and Young each are shown to be the owners of 5% of the 1/8 royalty interest in said gas production. It was stipulated and the court found, that Bergson and Young began receiving 5% each of all the royalty from all the production on the lands described in plaintiffs' petition, from 1927, until Bergson's death, and thereafter Young and Bergson's wife continued to receive such percentages of royalty until the wells ceased production in 1947. The court found that the 10% of royalties paid to Bergson and Young and Mrs. Bergson was paid to them by the lessees or those holding under them and not by Furrh. It was stipulated that the division orders were executed by all the necessary parties to make them effective and that they pertained to the land in controversy.

The First National Bank of Marshall, Texas, acquired the land by foreclosure on July 26, 1933, and conveyed it to W. L. Rudd by warranty deed of November 29, 1933, which deeds were placed of record immediately following their dates. The deed from the First National Bank to Rudd expresses that it is made and accepted 'subject to all outstanding oil, gas and mineral leases and the transfers and assignments thereof and thereunder, and any transfers of royalties in whole or in part that may have heretofore been made, in anywise covering and including the above described land.'

W. L. Rudd and his wife executed an oil and gas lease on said land to J. F. Wright on January 3, 1945, and on March 23, 1945, a similar oil and gas lease was executed on said land to J. F. Wright by Young and Mrs. Bergson. These leases were transferred and assigned to Bert Fields, and drilling has resulted in production of gas and distillate in paying quantities. The leases to Wright and the assignments from Wright to Fields were duly placed of record in Harrison County.

By warranty deed of April 10, 1946, W. L. Rudd and wife conveyed the 245 acres of land to the defendants John Barry Rudd, W. L. Rudd, Jr., and Margaret Rudd Youngblood, children of W. L. Rudd. The suit was against them, their wives and husbands, and W. L. Rudd and his wife, grantors in the deed last mentioned, were also made defendants. The present owners of the land, appellees, rejected the asserted claim of appellants under the above copied instrument to any interest in the Bert Fields production, and this suit resulted.

It is not necessary to mention in detail the findings and conclusions of the court, nor to consider the requests of plaintiffs for additional findings and the action of the court thereon. There is no substantial dispute in the evidence. We deem it sufficient to show the following conclusions of the trial court:

(1) That the contract of February 4, 1926, was an agency contract only for the purpose of employing Bergson and Young to act as Furrh's agent in dealing with the Arkansas company and the State Line company and any other persons interested in the leases on Furrh's land in the Lipscomb Survey, to obtain development for oil and gas, for which services they 'were given and granted 10% of all future payments of rentals, or royalties or bonuses on any and all future developments of any of the land, including any offset money that might be paid thereon.'

(2) That said contract does not convey to Bergson and Young any interest in the oil, gas and other minerals in, under or that may be produced from said land, and that John W. Furrh thereby became a trustee for Bergson and Young to collect and account to them, their heirs and assigns, for rentals or royalties or bonuses mentioned in the contract.

(3) That said contract is not a covenant running with the land, did not restrict or limit the power of Furrh to sell and convey all or any part of the oil, gas and other minerals from the land, but did impose upon Furrh to account to Bergson and Young for their part of any bonuses which may be received as consideration for such sale.

(4) That plaintiffs have no right, title, interest or claim to any part of the oil, gas and other minerals in or under and that may be produced from said land.

(5) That defendants John Barry Rudd, W. L. Rudd, Jr., and Margaret Rudd Youngblood own the land in fee simple, subject to the J. F. Wright lease.

(6) Defendants are not estopped from contesting the claim of plaintiffs.

It is thus seen that the decision of this case turns upon the construction to be given to the contract of February 4, 1926. While that instrument does not conform to the model conveyance set forth in Art. 1292, R.S. of Texas, an examination of it discloses that it contains all the elements necessary in a conveyance of land under the statutes of conveyances of this state and the decisions of our courts. The statutes set forth the requisites and necessary proof of execution for conveyances of land, but it is further provided by Art. 1293, R.S., that 'other forms not contravening the laws of the land shall not be invalidated.' No particular form is required in this state to convey title to land. Leal v. Leal, Tex.Civ.App., 4 S.W.2d 985, affirmed by the Supreme Court in 14 S.W.2d 797; Baker v. Wescott, 73 Tex. 129, 11 S.W. 157. In Harlowe v. Hudgins, 84 Tex. 107, 19 S.W. 364, 365, it is said: 'No precise technical words are required to be used in creating a conveyance. The use of any words which amount to a present contract of bargain and sale is all-sufficient. Whatever may be the inaccuracy of expression or the inaptness of the words used in an instrument, in a legal view, if the intention to pass the title can be discovered, the courts will give effect to it, and construe the words accordingly.' This instrument is in writing, it was signed by the grantor, and acknowledged by him, as required by the statutes of...