Eastland Oil Co. v. Fenoglio

102 S.W.2d 1092
CourtCourt of Appeals of Texas
DecidedFebruary 12, 1937
DocketNo. 13502
StatusPublished
Cited by4 cases

This text of 102 S.W.2d 1092 (Eastland Oil Co. v. Fenoglio) 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
Eastland Oil Co. v. Fenoglio, 102 S.W.2d 1092 (Tex. Ct. App. 1937).

Opinions

DUNKLIN; Chief Justice.

B. P. Fenoglio instituted a former suit in the district court of Ward county, Tex., against The Eastland Oil Company, W. J. Armstrong, L. H. Choate, and others to recover an interest in an oil lease on one-fourth of a section of land in .that county, the legal title to which stood in the name of defendants. Mrs. Fay Fenoglio, wife of plaintiff, was an intervener.

On February 14, 1935, a compromise was made between the parties and entered as a judgment in the case, by the terms of which plaintiff and intervener relinquished all of their asserted rights in the lease, and the case was dismissed. The recited consideration for such compromise was a payment by the defendants to the plaintiff of the sum of $10 in cash and “other valuable consideration,” and the sum of $1,000 cash was then paid to Fenoglio. On the same day the Eastland Oil Company, acting by and through its president, Geo. A. Don-nelly, and W. J. Armstrong, executed a written agreement with Harry E. Gerke, by the terms of which Gerke was given the option to purchase one-half of the southeast quarter of section 4, block 34, IT. & T. C. Railway Survey in Ward county, the same being half of the oil lease involved in the former suit and on which there were three producing oil'wells, for a cash consideration of $70,000 to the grantors, conditioned upon the deposit by Gerke or his assignee, of that sum of money in the Continental National Bank of Fort Worth, Tex., in escrow, to be paid over to the grantors upon a consummation of the sale; the deposit to be made within seven days after the date of the instrument, with the further stipulation that, if the deposit was not so made within that period of time, then the bank was to return the option agreement to its makers, and to be of no further force or effect.

There was a further stipulation that, if the deposit was made within the time prescribed, then the makers would execute an assignment of the lease in favor of Gerke or his assignee, and the bank would deliver the same to such purchaser, together with the option agreement.

The option agreement contained a stipulation that the same would be subject to “the original agreement of the Sun Oil Company to make such assignment,” with this further stipulation: “It is understood that 'there- are certain other personal properties located on said lease belonging to First Parties and not used in the producing of said oil wells, among which is a drilling machine and a tractor, and that none of said personal properties are to be transferred to Second Party except the personal properties used in the production and operation of said wells.”

On the same day that option was given, to wit, February 14, 1935, Gerke wrote the following letter:

“February 14, 1935.
“Mr. B. P. Fenoglio,
“Mr. L. H. Choate,
“Fort Worth, Texas.
“Gentlemen:
“I have secured an option for the sale of an oil producing property belonging to the Eastland Oil Company and W. J. Armstrong covering the south half (s%) of the west quarter (W^ of Section 4, Block 34, H. & T. C. Ry. Company Survey, Ward County, Texas, at a price of $70,-000.00. I will endeavor to consummate a trade for this property and it is agreed that any profits made over and above the purchase price of $70,000.00 will be shared alike between the three of us.
“It is further agreed and understood that we will advise with each other and work together in the sale of this property with any prospective purchaser.
“This agreement shall be binding only for-a duration of the option agreement.
“Yours very truly,
“H. E. Gerke.”

The record shows that L. H. Choate held title to an interest in the lease, although the same did not appear of record.

During the life of that option Gerke and Fenoglio attempted to sell the property to Roy A. Westbrook, but their efforts were unsuccessful and the option given expired by virtue of its own terms.

On March 1, 1935, Roy Westbrook wrote the following letter:

“Fort -Worth, Texas. March 1, 1935. “Mr. B. P. Fenoglio,
“Fort Worth, Texas.
“Dear Sir:
“It is my understanding that you are offering for sale the oil and gas leasehold estate covering certain lands in Ward County, Texas, said land being known as the South half of the Southwest quarter of Section 4, Block 34, H. & T. C. Railway Company Survey, sometimes known as the South half of the West quarter of said [1095]*1095section, the West corner of the quarter section thereby described being the common corner of Sections 5, 19 and 11, all in Block 34, H. & T. C. Railway Company Survey, said lease being now owned and operated by the Eastland Oil Company and W. J. Armstrong.
“In answer to your officer, I agree to purchase said oil and gas leasehold for a cash consideration of $72,000. The closing of said purchase and the payment of the purchase price being subject to the following: •
“1. Assignments and contracts necessary to cover title to said property to me are to be prepared and placed in escrow with the First National Bank of Fort Worth, Texas, before the close of banking hours on Monday, March 4, 1935.
“2. Simultaneously with the deposit in escrow of said conveyances, I will deposit with said named bank certified check in the sum of $72,000.
“3. You agree to submit to me on or before Monday, March 11, 1935, complete abstract certified to date covering this property prepared by a reputable abstracter of Ward County, and I am to have seven days in which to have the same examined by my attorneys and submit written opinion of title to you. You are to have seven days thereafter in which to meet such requirements as are needed, at the end of which time if such requirements are not met, I am to have the option of waiving such title defects and making payment for said property.
“When title to said property has been approved by me or my attorneys, the above named bank is to deliver to me assignments covering said property and is to deliver to the Eastland Oil Company and W. J. Armstrong the agreed purchase price placed in escrow with it, save and except there is to be delivered to you by said bank the sum of $2,000 to be deducted from said agreed purchase price. It is further understood that the conveyance to me is to cover said oil and gas leasehold estate subject to the over-riding royalty now owned by the Sun Oil Company and is also to cover and include all personal property situated thereon or used in connection therewith, together with all materials and equipment employed on said lease in the production of oil and the operation of said property.”

Following are two telegrams which passed between W. J. Armstrong and Fen-oglio :

“DL 55 DL Ft Worth, Texas. 2:12:05 P March 2, 1935 12:30
“W. J. Armstrong.

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102 S.W.2d 1092, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eastland-oil-co-v-fenoglio-texapp-1937.