Youngstown Sheet & Tube Co. v. Penn
| Decision Date | 07 March 1962 |
| Docket Number | No. 10916,10916 |
| Citation | Youngstown Sheet & Tube Co. v. Penn, 355 S.W.2d 239 (Tex. Ct. App. 1962) |
| Parties | The YOUNGSTOWN SHEET AND TUBE COMPANY, Appellant, v. Henry W. PENN et al., Appellees. |
| Court | Texas Civil Court of Appeals |
L. L. James, Tyler, for appellant.
Morrison, Dittmar, Dahlgren & Kaine, San Antonio, for appellees.
Our former opinion dismissing this appeal is withdrawn.We will determine its merits.
The appeal is from a summary judgment in favor of appellees, Henry W. Penn, J. K. Stark and J. P. Hale.
Appellant, The Youngstown Sheet and Tube Company, sued Texita Oil Company, alleging it to be a partnership composed of appellees and Gordon W. Johnson, I. A. McNab and Morris Cannan.1
The nature of the suit was upon a sworn account covering the period from March 14, 1958 to December 4, 1959, and for foreclosure of materialmen's liens on two oil and gas leases in Atascosa County.
Gordon W. Johnson and I. A. McNab answered alleging that Texita Oil Company was a partnership and that they were the partners composing it.
Appellees answered, under oath, and denied that they were partners, as alleged, and denied 'that they were at any time material to this suit or otherwise engaged in a partnership or mining partnership with Texita Oil Company or were joint adventurers with' it in developing the leases in suit.
Appellees' motion for summary judgment was based upon two grounds, and supported by affidavits.The first ground was that it is conclusively shown that they and Texita were not partners and that there were no pleadings or facts upon which they could be held liable as partners since it is conclusively shown that the credit extended by appellant was extended exclusively to Texita and without any reliance upon the liability of appellees.
The second ground of the motion for summary judgment was that appellant failed to perfect a materialmen's lien, as to the interests owned by them in the leasehold estates, because of failure to state in the affidavit filed by it for the purpose of fixing such lien, as required by Art. 5476a, Vernon's Ann.Civ.St., that the notice required by Art. 5476c, V.A.C.S. was given to appellees, and because such notice was not in fact given.
Attached to the motion for summary judgment were several affidavits, one of which was made by Gordon W. Johnson who was a partner with I. A. McNab operating as Texita Oil Company from March, 1950 to December 1, 1958.Mr. Johnson stated that during such time Texita had no other partners, and that appellees were not partners and never held themselves out as partners.He also stated that all purchases made by Texita from appellant2 were made exclusively on the credit of Texita.That from time to time appellant required Texita to execute notes secured by deeds of trust on interests owned by Texita in the leases in suit.Mr. Johnson further stated that Texita developed and operated the leases in suit under a written agreement which was attached to appellees' answer and referred to in his affidavit.Other statements were made by him to the manner in which appellant billed Texita for purchases made; the bankruptcy proceedings of Texita and the failure of appellant therein to claim that anyone but Texita was liable for its account, and the fact that appellant accepted dividends from the bankruptcy court without any notice or reference to appellees.Appellant's claim in the bankruptcy court was based, in part, upon the account sued on here.
Mr. Johnson also swore that no notice was given to any of appellees that appellant intended to filed a materialmen's lien against their interests in the leases in suit.
Mr. Michael J. Kaine, an attorney for appellees, made an affidavit, attached to the motion for summary judgment which confirms, in many respects, the affidavit of Mr. Johnson.
Attached also to the motion for summary judgment were copies of two materialmen's lien affidavits made by the Treasurer of Continental-Emsco Company, relied upon by appellant to establish the liens claimed by it, which contain the statements that 'Continental-Emsco Company has furnished, sold and delivered to Texita Oil Company, a partnership comprised of Gordon W. Johnson and I. A. McNab' materials etc.
The operating agreement was between 'Texita Oil Company, a partnership composed of Gordon W. Johnson and I. A. McNab,' called operator, and appellees, called non-operators.These parties owned all the working interest under an oil and gas lease on certain described lands.The agreement recites that 'it is the desire of the parties hereto that operator shall be in charge of operations under' the lease.It provided that operator should have 'exclusive charge, control and supervision of all operations of every kind' in the development and operation of the leases.It also provides that operator shall charge to a joint account all costs and expenses incurred by him under the agreement and that monthly statements should be made by him to non-operators who should pay, in accordance with the interest of each, the account within 15 days, and each non-operator granted operator a lien on his interest to secure the payment of such expenses.
The agreement provided that operator should not incur any item of expense in excess of $5,000.00 without the written approval of non-operators, with certain exceptions.It also provided that each party should have the right to receive in kind and separately to dispose of such parties' share of any minerals produced.We copy from the agreement as follows:
The agreement further provides that it shall not constitute a partnership under Federal taxing laws or under any similar State laws.
AppelleesJ. K. Stark and J. P. Hale filed affidavits in support of the motions for summary judgment, both similar.We quote from the affidavit of Mr. Hale:
In opposition to the motion for summary judgment, Mr. C. L. Vickers, appellant's General Credit Manager, made an affidavit from which we quote:
'Soon after the said Texita Oil Company began the development and operation of said leases, for and on behalf of all the owners of each lease respectively, they applied for and was granted a line of credit by The Continental Supply Company and its successor Continental-Emsco Company, a Division of The Youngstown Sheet and Tube Company, for the purchase of supplies and equipment to be used in the development and operation of said leases.
'Affiant further says that when the said Texita Oil Company began the purchase of such supplies and equipment for said leases from The Continental Supply Company, the said The Continental Supply Company charged such supplies and equipment to the Texita Oil Company and to each and all of the other owners of the lease for which said material and supplies were being purchased.In each instance the Texita Oil Company, its duly authorized agents and representatives, would furnish the names of the other owners of the lease for which such material was being purchased.This procedure was followed until Texita Oil Company acting through Gordon W. Johnson, one of the partners, requested The Continental Supply Company to place all of said charges under one account as a matter of convenience.Thereafter, all charges for materials and supplies purchased by Texita Oil Company from The Continental Supply Company or from Continental-Emsco Company for use on the said leases, including the leases involved in this suit, were charged to Texita Oil Company but a separate record was kept by the said The Continental Supply Company and Continental-Emsco Company of the supplies and materials purchased for each lease so that if it became necessary or desirable the said The Continental Supply Company and/or Continental-Emsco Company could enforce the collection of their accounts for such materials and supplies against all the owners of said leases and could, if they so desired, file a statutory lien against the lease for which such material and supplies were delivered.
* * *
'Affiant states that over a period of several years the Texita Oil Company offered and did execute certain notes payable to The...
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