Long v. Humble Oil & Refining Co.

154 S.W.2d 925
CourtCourt of Appeals of Texas
DecidedNovember 14, 1940
DocketNo. 10943
StatusPublished
Cited by10 cases

This text of 154 S.W.2d 925 (Long v. Humble Oil & Refining 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
Long v. Humble Oil & Refining Co., 154 S.W.2d 925 (Tex. Ct. App. 1940).

Opinions

CODY, Justice.

The‘sole question on this appeal is the sufficiency of the allegations in plaintiff’s petition as against a general demurrer, to state a cause of action against defendant. For this is an appeal from a judgment dismissing appellant’s suit, after appellant refused to further amend. And, as we are here dealing with the allegations of the petition, it seems appropriate to designate appellant and appellee in this opinion as they were designated in the pleadings below.

It is plaintiff’s contention that his petition states two causes of action, one being a cause of action for damages ex delicto, being pitched under Article 4004, R.S.1925, based upon fraudulent promises; the other being an action for reformation of contract, and for damages for breach of the contract up to day of judgment, and for specific performance of such contract thereafter.

As the petition is quite lengthy, covering ninety odd pages of the transcript, only the substance of its allegations can be given.

The allegations of paragraph II are to the effect that on August 20, 1929, plaintiff and defendant made a contract of the character thereafter alleged in paragraphs III and IV of plaintiff’s said petition. The authority of R. B. Cooper to act for defendant in connection with making such contract is [927]*927fully alleged. The allegations of paragraph III are to the effect that at and before the making of said contract, defendant desired to obtain a block of oil, gas and mineral leases on some forty thousand acres of land in Chambers County, in the area now known as Anahuac Oil Field; and defendant desired plaintiff to get up such block of leases for it, the leases to be those known to the trade as “selection type”, to be taken in plaintiff's name, but on defendant’s form of selection type lease, having defendant’s form of selection agreement incorporated therein. That plaintiff was to procure such leases at a cost to defendant of not more than SO cents per acre. Such leases were to run for a term of six months, within which term defendant should make a thorough geophysical test of the acreage. And with respect to the acreage which was to be selected as a result of the contemplated geophysical tests, it was to be provided that the down payments should not exceed $7.50 per acre for the first six months (following the selection), and the annual rentals should not exceed $5, the primary term to be five years. It was agreed and understood that the 50 cents per acre down payment which was to be made plaintiff to obtain the “selection type” leases on the 40,000 acres covered the bare expense of obtaining such leases, and that plaintiff’s compensation should consist of an overriding royalty reserved by him in his assignments of the leases to defendant. That such overriding royalty was the sole consideration which the parties plaintiff and defendant contemplated moved from defendant to plaintiff for his performance of the contract. And that, when plaintiff had procured and assigned said leases to defendant it was agreed that defendant should thereupon diligently prosecute its geophysical exploration of the lands covered by said leases, and make a test of said lands. And that, in such connection, defendant should in good faith exercise its contractual right of selecting the acreage which the aforesaid geophysical tests indicated were probably oil bearing, and would act fairly in selecting and rejecting such indicated oil bearing lands, and thereby protect the interest moving to plaintiff as consideration, etc.

In paragraph IV of plaintiff’s petition, it is alleged that the agreement should be partly oral and partly in writing; that the part which was to be in writing should be incorporated in the assignments of the leases from plaintiff to defendant. That the overriding royalty provision which it was agreed to be incorporated in the assignments, and which should be binding between the parties, should be as follows: “Assignor herein expressly reserves to himself his heirs and assigns, the equal one-forty-eighth (l/48th) part of all oil which may be produced and saved by Humble Oil & Refining Company, its successors and assigns, from the land affected hereby under and by virtue of the lease above mentioned, delivery of such oil to be made free of cost to the credit of assignor into storage tanks by him provided, or into the pipe line to which the wells on said premises may be connected. On dry gas, or casinghead gas, when marketed from said premises, assignor shall be paid one-forty-eighth (l/48th) of twenty five per cent (25%) of the value of the recoverable gasoline contained therein as shown by periodic tests for gasoline content, and meterings for volume, said value to be determined as the average of all high and low quotations for gasoline of the grade and quality manufactured at the plant in which said gas is utilized, as shown in the market section for the territory in which said lease is situated, published weekly in the National Petroleum News during the month for which settlement is made. Fuel oil and gas for operating the premises, and for treating and handling products therefrom (and the proportionate part of fuel oil and gas consumed in a central plant, should this lease be operated jointly with other premises through the use of such plant) shall be deducted before said royalties on oil and gas are computed. Assignor reserves an overriding royalty on sulphur equal to ten (1(⅛) cents per long ton of 2240 pounds on all sulphur mined and marketed from said premises.”

And that the agreement that when plaintiff had delivered the leases to be obtained as aforesaid, defendant should make the geophysical exploration and fairly select leases which covered the lands indicated to be oil bearing, and reject only the leases indicated not to be oil bearing, was oral. And the agreement of defendant to keep the leases in force on lands indicated to be oil bearing was also oral. And it was further orally agreed that defendant should notify plaintiff in writing of the leases which it would thus keep in effect, and also that defendant would drill a test well in the lease block, and if the well was productive of oil, gas, or other minerals, defendant would continue to develop said properties with reasonable diligence.

[928]*928In the following paragraph of plaintiff’s petition, being paragraph V thereof, it is alleged that the contract as alleged in paragraph IV of the petition, constituted the real agreement between plaintiff and defendant, but that it was understood that defendant did not wish the oral provisions of the agreement to be placed in writing in the assignments of the leases for reasons of its own (which were specified) and that in lieu of writing into the assignment the provisions which were orally agreed upon, the defendant desired and required the following provision to be written therein:

"It is expressly agreed that neither Humble Oil & Refining Company, nor its successors and assigns, shall be under any obligation, against its or their w'ill, either to preserve the leases by rental payment or to operate on said premises for the discovery, development or production of oil, gas or sulphur; but all such rental payments and operations and the extent and duration thereof, as well as the preservation of the leasehold shall be solely at the will of Humble Oil & Refining Company, its- successors and assigns.”

That defendant acting through R. B.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Weinacht v. Phillips Coal Co.
673 S.W.2d 677 (Court of Appeals of Texas, 1984)
Sun Oil (Delaware) v. Madeley
610 S.W.2d 798 (Court of Appeals of Texas, 1980)
Keriotis v. Lombardo Rental Trust
607 S.W.2d 44 (Court of Appeals of Texas, 1980)
Wirtz v. Orr
575 S.W.2d 66 (Court of Appeals of Texas, 1978)
Southwest Savings Association v. Dunagan
392 S.W.2d 761 (Court of Appeals of Texas, 1965)
Ashland Oil & Refining Company v. Carlton Beal
224 F.2d 731 (Fifth Circuit, 1955)
Cockburn v. Dixon
261 S.W.2d 689 (Texas Supreme Court, 1953)
Spradlin v. I. & L. Development Co.
253 S.W.2d 92 (Court of Appeals of Texas, 1952)
Taylor v. Gill
211 S.W.2d 363 (Court of Appeals of Texas, 1948)

Cite This Page — Counsel Stack

Bluebook (online)
154 S.W.2d 925, Counsel Stack Legal Research, https://law.counselstack.com/opinion/long-v-humble-oil-refining-co-texapp-1940.