Humble Oil & Refining Co. v. Davis

282 S.W. 930, 1926 Tex. App. LEXIS 416
CourtCourt of Appeals of Texas
DecidedMarch 3, 1926
DocketNo. 6927. [fn*]
StatusPublished
Cited by15 cases

This text of 282 S.W. 930 (Humble Oil & Refining Co. v. Davis) 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
Humble Oil & Refining Co. v. Davis, 282 S.W. 930, 1926 Tex. App. LEXIS 416 (Tex. Ct. App. 1926).

Opinion

McCLENDON, C. J.

Plaintiffs below- were B. R. Davis and W. W. Bates. Defendants below were Humble Oil & Refining Company and J*. L. Hill and wife, M. A. Hill. There were other defendants, but they are not involved in the appeal. The purpose of the suit was to reform an oil lease on 20 acres of land. The lease was dated October 4, 1921, and was what is termed a “commercial lease.” It was for a period of five years, or' as long thereafter as oil or gas was produced, in paying quantities. There was a down payment of $120 and -annual rentals of $30’ each. The date inserted for the. payment of the first annual rental was September 4, 1922. Plaintiff sought to have this date changed to October 4, 1922, on the ground that September 4, 1922, was inserted by mutual mistake. It was also sought to reform the lease as-regards the description of the property; but this issue is not involved in the appeal and will not be further noted. The trial was'to the court without a jury, and judgment was rendered reforming the lease as to the date of payment of annual rentals as prayed for. From this judgment the Humble Company has appealed.

We have reached the conclusion that the trial court’s judgment should be affirmed, and will confine our statement to so much of the record as is necessary to a clear understanding of the controversy, in view of the conclusions we have reached.

The facts in the case, in so far as they control these conclusions, are without substantial controversy, and, briefly summarized, follow:

The 20 acres covered by the lease was a part of a 130-acre tract which on and prior to October 4, 1921, was community property and homestead of Hill and wife. On or shortly before October 4, 1921, Hill met one Fleming in Corsicana and began negotiations for an oil lease, in which negotiations Hill expressed a willingness to make a commercial lease covering the 20 acres on the basis of $5 an acre bonus and $1.50 an acre annual rental. The terms of the lease were not further discussed.- Fleming then went to Davis and Bates and arranged with them to take over the lease at $1 an acre profit to Fleming. Davis, Bates, and Fleming then sought out Hill, and the general terms of the lease' that is, the amount of bonus and annual rental, were agreed to, and when the question arose as to who would draw the lease, Fleming suggested having it done by Miss Ruth Up-church, who was a stenographer at the Corsi-cana National Bank. All of the parties then went to the bank, and Fleming handed to Miss Upchurch a printed commercial form of lease and gave her the description of the land and had her fill in the several blanks. When her work was concluded, she handed the instrument to Fleming, who glanced over it and noted that in the several blanks for dates September was inserted instead of October. There were three of these blanks in the instrument propter and two in certificates of acknowledgment. Fleming then called Miss Upchurch’s attention to this error and requested that it be changed. She took the instrument and made the changes in two of the blanks in the instrument and in the acknowledgment certificates, but by oversight left September in the blank calling for annual rentals. This error was not discovered by Fleming nor any of the parties. The instrument was handed to Hill. .He took it home and discussed it with his wife, who signed it. The'next day, October 5, 1921, Hill took the instrument to a notary in Corsicana, who took Hill’s acknowledgment in person and called Mrs. Hill over the telephone and took her acknowledgment in that manner. Hill then took the instrument to Fleming, who. de *932 livered it to Davis and Bates; tlie consideration, being then fully- paid. Neither Fleming nor Davis and Bates had any knowledge that Mrs. Hill’s acknowledgment was taken over the telephone. The instrument was then placed of record by Davis and Bates. The evidence is quite clear that none of the parties discovered the error in date; that Mrs. Hill knew nothing at all about it; and that she relied entirely on her husband as her agent in negotiating.the lease.

The lease begins, “Agreement, made and entered into the 4th day of October’, 1921,” and concludes: “In testimony whereof, we sign this the 4th day of October, A. D. 1921.” Other pertinent portions of the lease follow:

“It is agreed that this lease shall remain in force for a term of five (5) years from this date, and, as long thereafter as oil or gas, or either of them, is produced from said land by the lessee.
“If no well be commenced on said land on or before the 4th day of September, A. D. 1922, this lease shall terminate as to both parties, unless the lessee on or before that date shall pay or tender to the lessor, or lessor’s credit in the Corsicana National Bank at Corsicana, Texas, or its successors, which shall continue as the depository, regardless of changes in the ownership of said land, the sum of thirty ($30.00) dollars, which shall operate as a rental and cover the privilege of deferring the commencement of a well for 12 months from said date. In like manner and upon like payments, or tenders, the commencement of a well may be further deferred for like periods of the same number of months successively. And it is understood and agreed that the consideration first recited herein, the down payment, covers not only the privilege granted to the date when said first rental is payable as aforesaid, but also the lessee’s option of extending that period as aforesaid, and any and all other rights conferred.
“Should the first well drilled on the above-described land be a dry hole, then, and in that event, if a second well is not commenced on said land within twelve months from the expiration of the last rental period for which rental has been paid, this lease shall terminate as to both parties, unless the lessee on or before the expiration of said twelve months shall resume payment of rentals in the same manner as here-inbefore provided. And it is agreed that upon the resumption of the payment of rentals as above provided, that the last preceding paragraph hereof, governing the payment of rentals and the effect thereof, shall continue in force just as though there had been no interruption in the rental payments.”

Davis and Bates paid to Hill the $30 annual rental on September 30, 1922; but no question was raised as to the time of payment, and Hill did not know that the payment was made after the date specified in the lease. About June 28, 1923, the Humble Company entered into negotiations with Hill looking to the purchase of the 130-acre tract, and on that date a sales agreement was executed. This agreement did not mention any oil leases on the property, but the Humble Company’s agent in the transaction was cognizant of the existence of such leases. Hill furnished the Humble Company an abstract; and a report of the compiany’s attorney to it, calling attention to the oil lease in question, described it as being “upon commercial form of five years with provision for an annual rental.” A further report on the title was fp the effect that this lease was still subsisting and in force. The Humble Company was willing to purchase the property subject to this as well as other existing leases, and the deed was drawn and executed with all legal formalities, whereby Hill and wife conveyed the property by general warranty to the Humble Company..

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Bluebook (online)
282 S.W. 930, 1926 Tex. App. LEXIS 416, Counsel Stack Legal Research, https://law.counselstack.com/opinion/humble-oil-refining-co-v-davis-texapp-1926.