McMillin v. Wilson

121 S.W.2d 1029
CourtCourt of Appeals of Texas
DecidedNovember 11, 1938
DocketNo. 1852.
StatusPublished
Cited by4 cases

This text of 121 S.W.2d 1029 (McMillin v. Wilson) 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
McMillin v. Wilson, 121 S.W.2d 1029 (Tex. Ct. App. 1938).

Opinion

GRIS.SOM, Justice.

Plaintiffs, W. E. Wilson and wife, Lennie Lee Wilson, sued defendants, J. F. McMillin and Texas Canadian Oil Corporation, Ltd., to recover $800 agreed to be paid plaintiffs, out of oil, as the consideration for an assignment of oil and gas lease by plaintiffs to McMillin. Plaintiffs alleged that they entered “into an agreement with Mc-Millin, acting for himself and Texas Canadian Oil Corporation, Ltd., by the terms of which it was agreed and understood that Ben Cooper (brother of Mrs. Wilson) would assign to the said J. F. McMillin an oil and gas lease on the north 2*4 acres of said 4⅜ acre tract and the plaintiffs would assign to McMillin an oil and gas lease *1030 covering the south 2½ acres of said 4½ acre tract” and that “the said defendant would drill the first well on some part of the 4½ acre tract beginning within 30 days from the time of said contract, and out of the first oil produced from said 4½ acre tract would pay plaintiffs a bonus of $800 as provided in the assignment hereafter set out.” Plaintiffs alleged that, pursuant to such agreement, McMillin prepared an 'assignment of an oil and gas lease, which was executed 'by plaintiffs. Said assignment recites the execution by C. C. Cooper (another brother of Mrs. Wilson) and his wife to Joe A. Sanders of an oil and gas .lease on an 86.5 acre tract of land;, that on the same date, W. H. Bode, and others, also executed an oil and gas lease to Sanders on the same land. It continues “Whereas, the said lease and all fights thereunder or incident thereto are now owned by Lennie Lee Wilson and W. E.' Wilson insofar as it covers the hereinafter described 2½ acre tract.” It recites 'that for $1 and other good and valuable consideration, plaintiffs assign said lease to McMillin “insofar as it covers the following described 2*4 acres of land, to-wit-:’ 'Being the south 2½ acres of the following described 4½ acre tract.” Then follows .a description of the 4½ acre tract. The assignment then continues:

■■ “As further and additional consideration for • this transfer and assignment, the as-signee herein agrees to pay assignor eight hundred dollars, $225 of;said amount to be payable out of ⅞ of the first oil produced, Saved and marketed from said premises, the remaining $575 of said oil payment is to be payable out of ⅛ of the ⅞ of all the oil saved, produced and marketed from said premises. It is understood that the above amounts are to be payable out of the prorata part of the oil as mentioned as and when produced solely and alone and is not to be a personal obligation of the assignee herein.

“Assignee agrees to begin operation for drilling a well on some part of the above described 4½ acres tract within 30 days from date of obtaining permit therefor he to use due diligence in obtaining permit.” (Italics ours.)

Plaintiffs alleged that after the execution of said assignment defendants promptly drilled an oil well on the north 2¼ acres of said 4½ acre tract; that defendants have been producing oil from said well since about July, 1935; that defendants have produced enough oil from said well to pay plaintiffs, out of oil therefrom, taken in the proportion recited in the assignment, the consideration agreed to be paid for the assignment. That McMillin had assigned the lease to his co-defendant Texas Canadian Oil Corporation, Ltd., who took the assignment charged with the consideration payable to plaintiffs.

Defendants answered by disclaiming all right, title and interest in the oil and gas lease assigned to McMillin by plaintiffs, by general demurrer, special exceptions and general denial.

Upon a trial to the court, judgment was rendered for plaintiffs against defendants for $800, with interest from June 15, 1936. The court recited in its judgment that it found: “ * * * that the contract pleaded by plaintiffs provides for the payment of the sum of $800 out of oil produced and marketed from the well provided for by said contract and that said well was drilled and completed about October 1, 1935, and has produced sufficient oil so that the porportion out of which said sum ($800.00) was to be paid entitled the plaintiffs to receive all of said $800 not later than June 15, 1936, and that the plaintiffs are entitled to recover of and from defendants J. E. McMillin and Texas Canadian Oil Corporation Ltd. the sum of $800 with interest thereon at the rate of 6 per cent per annum from said date of June 15, 1936, together with all costs,” etc.

From the judgment rendered defendants have appealed.

The evidence introduced and agreements made on the trial show that at the time plaintiffs made the assignment of- the south 2¼ acres of the 4½ acre tract, out of the 86.5 acre tract, Mrs. Wilson’s brother, Ben' Cooper, assigned to McMillin the north 2^4 acres of said 4½ acre tract; that defendants drilled a well on the north 2¼ acres assigned to defendants by Ben Cooper; that said well has been producing oil since October, 1935; that it has produced enough oil to pay plaintiffs out of said oil, the consideration agreed to be paid for plaintiff’s assignment; that no well has been drilled on the south 2½ acres assigned by plaintiffs, and plaintiffs have never been paid anything for said assignment; that defendants and others have other producing wells adjacent to the 4½ acre tract covered by the assignments by plaintiffs and Ben Cooper.

Defendants contend that plaintiffs were not entitled to the $800 consideration agreed *1031 to be paid them as recited in their assignment to McMillih, unless and until sufficient oil is produced from the south 2⅝. acre tract assigned by plaintiffs to McMillin*. Defendants further contend the recitals in plaintiffs’ assignment to McMillin “as further and additional consideration for this transfer and agreement, the assignee herein agrees to pay assignor $800” out of oil “produced, saved and marketed from said premises" means the payment was to be made out of oil produced from the south 2¼ acre tract, the lease on which was assigned by plaintiffs to McMillin, and that it has no reference to the 4½ acre tract described in the assignment. The said 4½ acre tract comprises both tracts assigned to McMillin by plaintiffs and Ben Cooper. Plaintiffs contend that the reasonable and proper construction of the instrument is that plaintiffs were to be paid from oil produced from the 4⅛ acre tract whether it was produced from the tract assigned by them or by Ben Cooper. They point out the following provision of the lease as evidence of the correctness of such contention, to-wit: “Assignee agrees to begin operation for drilling a well on some part of the above described 4½ acre tract within thirty days from date of obtaining permit therefor he to use due diligence in obtaining permit.” Plaintiffs argue that since the assignment provided for the drilling of only one 'well, and that the‘consideration to be paid plaintiffs was to be paid out of oil, and expressly provided that such well should be drilled by defendants at any place defendants might choose on the 4½ acre tract, the consideration to be paid out of oil produced must necessarily refer to the oil produced from the one well contracted to be drilled; otherwise the obligation to pay would be meaningless and there would be no source from which the payment could be required to be made.

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Bluebook (online)
121 S.W.2d 1029, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcmillin-v-wilson-texapp-1938.