Foster v. Spearman Equity Exch.

266 S.W. 583
CourtCourt of Appeals of Texas
DecidedOctober 22, 1924
DocketNo. 2274.
StatusPublished
Cited by8 cases

This text of 266 S.W. 583 (Foster v. Spearman Equity Exch.) 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
Foster v. Spearman Equity Exch., 266 S.W. 583 (Tex. Ct. App. 1924).

Opinion

RANDOLPH, J.

The references made by the pleadings of appellants are confusing, in that the parties are not properly styled for some reason; hence we will, for-the purpose of identification, refer to the parties as named in the trial court, the Exchange being referred to as plaintiff, and Foster and Null, appellants herein, as claimants. The Spear-man Equity Exchange sued the Snorty-Gobler Company, alleging that it was a partnership composed of John W Foster, Dan Vinson, O. E. Null, John Gobin, J. H. Hiner, D. E. Hammett, J. V. Cogdill, and O. A. Null, in the district court of Roberts county, Tex. Service of citation upon said partnership was had upon, D. E. Hammett, one of the alleged partners. Judgment by default was rendered only as against the Snorty-Gobler Company.

Soon after the rendition of the judgment, plaintiff caused'the issuance of a writ of attachment as against the property of said company, and had it levied on the property in controversy. Plaintiff then issued execution on the judgment and caused it to be levied by the -sheriff of Roberts county upon the *585 property theretofore levied on under the writ of attachment. Foster and Null, as claimants, tendered to the sheriff their affidavit, claim of ownership and bond in due form. A trial of the right of property was had before the court, a jury being waived. The trial court rendered judgment in favor of plaintiff, and claimants have appealed from said judgment to this court.

For the purpose of making a necessary statement of the case, we will ignore the effect certain testimony may have had on the mind of the trial court, in order that our discussion of the various questions may be understood. The plaintiff, prior to organization of the Snorty-Gobler Company, had been selling goods to Foster & Null, who were engaged in drilling a well in Roberts county. On the organization of the Snorty-Gobler Company, the plaintiff sold its goods, wares, and merchandise to that company. Their debt not having been paid, plaintiff sued the company upon its account, and also upon certain other accounts which it had taken over by transfer to it. Judgment having been rendered in its favor, and against the Snorty-Gobler Company, plaintiff had the property in controversy levied on under attachment and execution as above stated, whereupon claimants intervened and claimed the property levied on.

Claimants were the owners of an oil and gas lease by virtue of a lease and purchase thereof by them from one Whitsel, and owned and controlled a drilling rig, tools, and casing situated on said lease, which is known as the W. I. Whitsel lease, which lease amounted to and covered 14,000 acres, and the Snorty-Gobler Oil Company was the owner of an interest in said lease by virtue of transfers to the component members of the Snorty-Gobler Company, and by reason of the provisions of the declaration of trust herein later discussed. By assignment from Foster & Null, said company had assigned to it 4,920 acres. This assignment also conveyed all personal property used or obtained in connection with said lease.

.Claimants, on the 13th day of October, 1921, made and entered into a contract in writing, as first parties, with the Snorty-Gobler Company, of the second part, and Dan Yinson, John Gobin, L. H. Hiner, D. E. Hammett, and J. Y. Cogdill, parties of the third part, which provides as follows:

“That first parties are the owners of certain oil and gas leases, upon which they own and control a drilling rig, tools, and casing, situated in the northwest part of Roberts county, Tex., and known as the W I. Whitsel lease, to the amount of 14,000 aeres; and whereas, the second party is the owner of 5,000 acres of said lease obtained from said first parties on certain terms and conditions, said principal condition being to the effect that said second party shall complete the well now drilling on its part of said Whitsel lease; and whereas, said third parties are interested in said well and lease in the matter of skill and labor performed and to be performed on the completion of said well: Now, therefore, said first parties covenant and agree with the second and third parties that they will set apart 2,000 acres of said leases to be selected in checkerboard fashion, and assign and deliver the same to said third parties on completion of said well, or will ássign and deliver assignments' on such portions of said 2,000 acres from time to time, if sold or disposed of by said third parties, during -the prog • ress of the drilling of said well.
“Second party hereby covenants and agrees that in consideration of skill and labor performed and to be performed on the part of the third parties, it will make, execute, and deliver unto said Dan Vinson, 5,000 shares of its capital stock, to D. H. Hiner 5,000 shares, to John Gobin 5,000 shares, to D. E. Hammett, 5,000 shares, and to J. V. Gogdill 5,000 shares, to be issued and delivered as follows: One-iifth on delivery of this contract, and one-fifth when a depth of 1,000 feet is reached, and one-fifth when 2,000 feet is reached in the well, and the balance on completion of said well to a depth of 3,000 feet, unless a lesser depth shall develop production, in which event any remaining stock or shares shall issue as above provided.
“In consideration of all of which said second and third parties hereby covenant and agree with first parties that they will proceed without delay to drill and finish the aforesaid well to a depth of 3,000 feet, unless oil or gas shall be encountered at a lesser depth, furnishing all necessary skill and labor required in furnishing funds, material, and labor for such completion, saving the said Foster and Null, first parties, from further expense on said well. Said first parties agree and covenant with second and third parties that they will set aside the remaining 12,000 acres of the aforesaid leases for the purpose of defraying the expenses incident to the completion of said well, to be held by the said first parties, or so much thereof as may be necessary in the following manner, to wit:
“Said second and third parties may bargain and sell assignments of leases, from said 12,000 acres, and the proceeds thereof to be divided 65 per cent, to the second party, and 35 per cent, to the first parties, until the sum of $20,-000 shall be paid to first parties, and after which the said proceeds shall be divided 50 per cent, to second party and 50 per cent, to first parties; provided, that upon the payment of $15,000 to said first parties from said funds so derived, the ownership of the rig, tools, and casing on said lease shall pass to and become the property of the first and third parties jointly: Provided further that the necessary traveling expenses of agents and expenses incident to the sale of acreage shall be paid before any division of funds shall be made as above provided for.
“In consideration of the improvement and work of drilling,on said acreage assigned to said second party by first parties, the above and foregoing division of funds shall be made in the same ratio of funds derived from the sale of shares in the second party company. It is further agreed and understood by and between all parties hereto, that in the event any portion or part of the aforesaid 12,000 aeres remain unsold at the time of completion of the well aforesaid, the same shall remain and be th& *586

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Bluebook (online)
266 S.W. 583, Counsel Stack Legal Research, https://law.counselstack.com/opinion/foster-v-spearman-equity-exch-texapp-1924.