Lowry Oil Corp. v. Bennett

16 S.W.2d 947, 1929 Tex. App. LEXIS 538
CourtCourt of Appeals of Texas
DecidedMarch 2, 1929
DocketNo. 12088.
StatusPublished
Cited by6 cases

This text of 16 S.W.2d 947 (Lowry Oil Corp. v. Bennett) 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
Lowry Oil Corp. v. Bennett, 16 S.W.2d 947, 1929 Tex. App. LEXIS 538 (Tex. Ct. App. 1929).

Opinion

DUNKLIN, J.

This is an appeal by the Lowry Oil Corporation and J. Lewis Jackson from a judgment rendered against them in favor of L. I. Bennett and M. S. Bennett, doing business under the partnership name of K. M. A. Fuel Oil Company. Plaintiffs’ suit was to recover the value of fuel oil sold by them to James Ferguson and used by him in the drilling of an oil well on 25 acres of land situated in Archer county; a verified account of those sales being attached to the plaintiffs’ petition as a part thereof.

' James Ferguson, W. J. Blake, J. M. Hobbs, J. Lewis Jackson, and the Lowry Oil Corporation were all made defendants in the suit, and judgment was' rendered against each and all of them in plaintiff’s favor for the sum of $542.96, the amount due as shown by the itemized account. There was a judgment in favor of J. Lewis Jackson over against the Lowry Oil Corporation on his cross-action against that defendant, for the same amount as plaintiffs recovered against him. The Lowry Oil Corporation has also appealed from that judgment. No appeal has been prosecuted by the defendants Ferguson, Blake, and Hobbs.

The defendants were all sued as partners, the alleged partnership liability being based on allegations that each of defendants owned an undivided interest in an oil lease on the land mentioned above, and each was entitled, under an agreement with the other co-owners, to a proportionate part of the net profits derived from the drilling of a well upon the land in question; and that the oil for which this suit was instituted was used in drilling operations on the land for the discovery of oil. It was further alleged in that connection that the oil was sold with the knowledge, consent, and acquiescence of each and all of the defendants. It was further alleged that if defendants were not general partners, then they were mining partners and liable as such by reason of the fact that they jointly agreed to place in a common enterprise capital and labor for the purpose of drilling a well for oil and gas, and that they would receive therefrom their proportionate parts of the net proceeds as such.

The evidence showed without controversy the following facts: On June 2, 1925, James Ferguson employed J. Lewis Jackson to haul a drilling rig and place the same on the lease, promising to pay Jackson for such hauling a one-sixteenth interest in the lease, and stipulating in his agreement that he (Ferguson) would drill a well on the lease to a depth of 1,600 feet unless oil or gas was found at a lesser depth. That contract recited that Ferguson then had an agreement to put down the well. On June 12, 1925, James Ferguson entered into a contract with J. W. Blake, who was then the owner of the oil lease on the land above mentioned, to drill a well thereon for oil or gas to a depth of 1,600 feet unless oil or gas in paying quantities was found at a shallower depth. In consideration for the drilling of the well, Blake agreed to assign the entire lease to Ferguson, and Ferguson further . agreed to carry W. J. Blake for a .one-eighth interest in the first well drilled after it was on the pump, free of any cost to Blake; and there was a further stipulation that if the lease should thereafter be further developed, then Blake and Ferguson were to share the expenses pro rata according to their respective interests in the lease. On July 8, 1925, Ferguson conveyed to J. M. Hobbs a one-eighth (interest in the same lease, and on the same day Ferguson conveyed to the Lowry Oil Corporation an undivided one-fourth interest in the lease for a consideration of $1,500 paid to him by the grantee. On the same day W. J. Blake entered into a contract with the Lowry Oil Corporation, stipulating that Ferguson would complete the well that he had theretofore contracted to drill without any; additional cost or expense to tho Lowry Oil Corporation. On July 30, 1925, Ferguson for a consideration of $500 conveyed a one-sixteenth interest in the lease to the Lowry Oil Corporation. On August 14, 1925, a written agreement was executed by and between the Lowry Oil Corporation, W. J. Blake, J. M. Hobbs, James Ferguson, J. Lewis Jackson, and the Lowry-Burns Corporation, in which it was recited that the parties then owned the oil lease in the following proportions: Lowry Oil Corporation six-sixteenths, W. J. Blake two-sixteenths, J. M. Hobbs two-sixteenths, James Ferguson two-sixteenths, J. Lewis Jackson one-sixteenth, Lowry-Burns Corporation three-sixteenths.

The agreement further recited that Ferguson had agreed to drill and complete the first well at his sole expense and it was necessary for some one to take charge of and handle the lease in order to save the cost and expense incident to a receivership of the property. The agreement then stipulated that the Lowry Oil Corporation should have the sole and absolute management of the property on the following terms and conditions, to wit: The assignment to the Lowry Oil Corporation by W. J. Blake of an additional one-sixteenth interest in the lease. It was further stipulated' that the Lowry Oil *949 Corporation did not assume to pay and should in no manner be liable for debts theretofore incurred by Ferguson in the drilling of the well which he had contracted to drill, but in the event the oil runs from the lease thereafter should be credited to Ferguson by the reason of his interest in the lease, then such proceeds as would otherwise be credited to Ferguson would be turned over by the Lowry Oil Corporation to the satisfaction of the debts which Ferguson had theretofore incurred in the drilling of the first well; the application of such funds to such bills to be made by the Lowry Oil Corporation as the agent of Ferguson.

It was further stipulated in the contract that if the Lowry Oil Corporation should advance any money to complete the well theretofore begun by Ferguson, or in any way develop the lease, then all the parties to the agreement should pay such expenses in proportion to the respective interests which they owned in the lease, and the Lowry Oil Corporation should have a special lien on the lease and the equipment thereon to secure it in the payment of the amounts so due it from the other parties. It was further stipulated that the agreement should not be construed in any manner as a copartnership, but that the parties thereto should be considered only as joint owners of the lease, and that the Lowry Oil Corporation in the management of the lease would be understood as acting only as the agent of the other parties to the agreement, such agency being coupled with an irrevocable interest in the lease; and further that in the event no producing well was developed on the lease, then the parties to the agreement, other than the Lowry Oil Corporation, would reimburse it for such expenses in proportion to the interest they owned in the lease respectively.

It was further stipulated that the agreement should not be considered or construed as relieving W. J. Blalre from his obligation to the Lowry Oil Corporation, of date July 8, 1925, to the effect that the first well on the lease would be completed by Ferguson without any cost or expense to the Lowry Oil Corporation; and that from and after the date of the agreement none of the parties thereto would be authorized to incur any expense or contract any bills which would be chargeable to the lease or any interest therein, save such expenses and bills as might be incurred by the Lowry Oil Corporation in the management of the lease.

On the same date of the agreement, W. J. Blake transferred a one-sixteenth interest in the lease to the Lowry Oil Corporation as he agreed to do by the terms of the lease.

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

Related

Wolverton v. Thomas
176 S.W.2d 335 (Court of Appeals of Texas, 1943)
Snodgrass v. Kelley
141 S.W.2d 381 (Court of Appeals of Texas, 1940)
Cox v. Bond
91 S.W.2d 479 (Court of Appeals of Texas, 1936)
Shell Petroleum Corporation v. Caudle
63 F.2d 296 (Fifth Circuit, 1933)
Gardner v. Wesner
55 S.W.2d 1104 (Court of Appeals of Texas, 1932)
Roark v. Hinson
24 S.W.2d 1109 (Court of Appeals of Texas, 1930)

Cite This Page — Counsel Stack

Bluebook (online)
16 S.W.2d 947, 1929 Tex. App. LEXIS 538, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lowry-oil-corp-v-bennett-texapp-1929.