Dunn v. Duval Texas Sulphur Co.

153 S.W.2d 484, 1939 Tex. App. LEXIS 1265
CourtCourt of Appeals of Texas
DecidedMay 11, 1939
DocketNo. 10703
StatusPublished

This text of 153 S.W.2d 484 (Dunn v. Duval Texas Sulphur Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dunn v. Duval Texas Sulphur Co., 153 S.W.2d 484, 1939 Tex. App. LEXIS 1265 (Tex. Ct. App. 1939).

Opinions

CODY, Justice.

This suit involves the construction of a contract and the determination of whether the court erred in dismissing the jury and rendering the judgment sought by appellees.

The suit was brought by appellants, L. H. Dunn, C. E. Lawhon, and Riverside Royalty Company, in the district court of Harris County, Texas, against the appellees, Duval Texas Sulphur Company, Marion B. Cloud, and Joe Davidek, and against appellant, the Federal Royalty Company, for the construction and enforcement of a contract with the aforesaid Duval Texas Sulphur Company, which will hereafter be sometimes referred to as the Duval Company. Margaret Averill intervened, basing her claim as an assignee of a part of C. E. Lawhon interest, and adopted Lawhon’s pleadings.

The plaintiffs alleged as the true meaning of the contract what they contended it meant, as hereafter indicated; and, alternatively, that if the contract did not clearly and unambiguously mean what they contended, then it was ambiguous, and its meaning was in fact as contended for by plaintiffs; they further alleged, in the alternative, that if the contract did not mean what plaintiffs contended it meant, that then, through accident or mistake of the parties, or through fraud on the part of the Duval Company and accident and mistake on the part of Dunn and the Federal Royalty Company, the contract did not express the true agreement of the parties, and should be reformed to make it do so.

The Duval Company, so far as is material to this appeal, answered by general demurrer and general denial. ■

The Federal Royalty Company sought the same relief against the Duval Company as did plaintiffs, and filed a cross-action against appellee Davidek and appellee Cloud.

We now state the pertinent facts about which there is no dispute:

In the summer of 1932 it was agreed between Dunn and the Duval Company acting through its manager, Zoffman, that Dunn (and his associates) should endeavor to assemble a block of leases on what is now known as the Boling Sulphur Dome in Wharton County. Dunn was to receive an overriding royalty of $1 per ton on sulphur on leases he should transfer to the Duval Company except that, with respect to tracts on which only a fractional part of the sul-phur should be acquired, a different overriding royalty should be given him. A producer of sulphur, where he owns less than 100% of the sulphur rights in a tract from which he produces sulphur most incur the same cost of operation in the production of sulphur as though he owned 100% of the sulphur produced therefrom, but his profit is confined, of course, to what he can make on his portion of the sulphur which he produces; for the most that he can hope to get from the other joint owners of the sul-phur rights in such tract is that they will repay him the cost to him of producing their sulphur for them. So, to meet the situation of divided ownership of the sulphur rights in a tract, the parties agreed upon a formula by which to reduce the overriding sulphur royalty that should go to Dunn (and which should be less than $1 per long ton) in connection with those tracts in which he should fail to get leases covering 100% of the sul-phur rights. It is in connection with the agreement as to when such formula should apply, that the controversy has arisen. On December 22, 1932, Dunn assigned to the Duval Company the leases which he had secured, the parties reduced their agreement to writing, as follows (though oil royalties are provided for in the agreement also, we are practically concerned only with sul-phur) :

“The State of Texas'!
County of Wharton J
“Whereas, by assignment of even date herewith and which is referred to and made a part hereof for all purposes, L. H. Dunn, of Harris County, Texas, has assigned, [486]*486transferred and conveyed unto Duval Texas Sulphur Company all those certain oil, gas and mineral leases covering lands and mineral interest in Wharton County, Texas, specifically described as follows, to-wit: (Here follows a description of the leases assigned).
“And Whereas, said assignment to Duval Texas Sulphur Company does not fully express the understanding and agreement between the said L. H. Dunn and Duval Texas Sulphur Company, and it is desired that the exact understanding and agreement between said parties with reference to said leases shall be fully set out in writing:
“Now, Therefore, Know All Men by These Presents: That for and in consideration of the premises and of the sum of Twenty-Five Hundred Dollars ($2500.00) cash in hand paid by Duval Texas Sulphur Company to L. H. Dunn, the receipt of which is hereby acknowledged, the said L. H. Dunn, hereinafter referred to as ‘First Party’, and Duval Texas Sulphur Company, hereinafter referred to as ‘Second Party’, hereby agree as follows:
“L Second Party is hereby given the right and option for a period of ninety (90) days from the date hereof to purchase from First Party all of the above described and referred to oil, gas and mineral leases and mineral interests covering lands in Wharton County, Texas, together with the right and option, during said period, to purchase from First Party such other oil, gas and mineral leases and mineral interests which First Party may acquire in that certain area in Wharton County, Texas, hereinafter referred to as the ‘contract area’, and which is colored red on the map or plat attached hereto and made a part hereof, under the terms and conditions hereinafter set out.
“II. During said ninety (90) day period, First Party Agrees to use his best efforts to secure oil, gas and mineral leases or mineral conveyances covering all of said contract area, including all outstanding mineral interest or leases on such mineral interest in the tracts of land above described and in which the leases or conveyances now held by First Party do not cover the entire mineral interest. And such leases so acquired shall be on the same form and contain the same terms and conditions as the leases set out hereinabove and shall contain not to exceed the royalties specified therein, that is to say, one-eighth (⅛) of the oil, gas and other mineral, except sulphur, and One Dollar ($1.00) per long ton on sulphur on the full one hundred per cent, interest. Whenever any such leases or mineral interests are acquired by First Party, he shall immediately assign the same to Second Party, and in case Second Party exercises its option to purchase such leases or mineral interests, it shall, at the time of exercising such option, reimburse First Party the actual cost of acquiring such leases or mineral interests, but not to exceed in any case an average cost of Five Dollars ($5.00) per acre for the full one hundred per cent, mineral intérest except with express consent of Second Party. Second Party shall have the right, during said period of time, to secure leases or conveyances covering any and all mineral interest in said contract area not secured by First Party, and may, if it desires, take the same in the name of First Party, but shall pay the entire cost thereof.
“III. (This paragraph has to do with procurement of title, examination of titles, and curing of title defects, and is omitted).
“IV.

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Related

Sun Oil Co. v. Bennett
84 S.W.2d 447 (Texas Supreme Court, 1935)
Dunn v. Duval Texas Sulphur Co.
152 S.W.2d 1080 (Texas Supreme Court, 1941)

Cite This Page — Counsel Stack

Bluebook (online)
153 S.W.2d 484, 1939 Tex. App. LEXIS 1265, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dunn-v-duval-texas-sulphur-co-texapp-1939.