Navarro Oil Co. v. Cross

150 S.W.2d 117, 1941 Tex. App. LEXIS 259
CourtCourt of Appeals of Texas
DecidedMarch 28, 1941
DocketNo. 14196.
StatusPublished
Cited by5 cases

This text of 150 S.W.2d 117 (Navarro Oil Co. v. Cross) 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
Navarro Oil Co. v. Cross, 150 S.W.2d 117, 1941 Tex. App. LEXIS 259 (Tex. Ct. App. 1941).

Opinion

McDONALD, Chief Justice.

This suit grew out of an oil and gas lease covering a tract of land bearing a mineral classification, executed pursuant to Articles 5367 et seq., Revised Civil Statutes, Vernon’s Ann.Civ.St. art. 5367 et seq., commonly known as the Relinquishment Act. The lease was executed by defendant and wife as lessors, in favor of plaintiff, as lessee.

Plaintiff, Navarro Oil Company, sued defendant, John T. Cross, for the sum of $6,-000, alleging that the purchase price or bonus paid for the lease was $12,000; that plaintiff did not know that at the time this money was paid that one-half the bonus should have been paid to the State of Texas; that the entire $12,000 was paid to defendant; that $6,000, or one-half, of the amount was wrongfully received by defendant because it should have been paid to the State; and that later the State sued plaintiff for the $6,000, recovered judgment, therefor, and collected it from plaintiff.. Defendant was not made a party to that, suit by either the State or the plaintiff. The trial court, in the present suit, sustained a general demurrer to plaintiff’s pe-. *119 fition, plaintiff declined to amend, the cause was thereupon dismissed, and plaintiff has •appealed.

Attached to the petition, and made a part of the petition by reference, is a copy of the lease.

The alleged cause of action is based upon three counts in the petition, to-wit, breach of warranty, subrogation of plaintiff to the rights of the State against defendant, and right of plaintiff to indemnity from defendant for the amount paid by plaintiff to the State.

Defendant’s contentions, presented in his brief, are that the terms of the lease itself show that the $12,000 paid to Cross was for his individual use, and that the lease obligates plaintiff to pay to the State all sums of money which might be due the State as its share of the bonus, over and above the $12,000 paid to defendant. The clauses of the lease which defendant relies upon are a portion of the clause reciting the consideration, reading as follows:

“Lessors in consideration of the sum of Twelve Thousand Dollars ($12,000.00) j cash in hand paid * * * and of the agreements of Lessees herein contained,” and another clause reading as follows:

“1 ½. In the event any of the lands embraced in this lease are classified as mineral lands and thereby the State of Texas is due its pro rata part of the oil and gas royalty hereinafter provided, then it is agreed that Lessees herein shall deduct and pay to the State of Texas such pro rata part of the oil and gas royalty to which it may be entitled under such cases, made and provided in the event of the production of oil and gas from any of the lands containing such mineral classification; Lessees further agree, and are hereby authorized to pay to the State of Texas the ten cents per acre annual rental due the State of Texas under the law, on the lands herein described, and to fully comply with all present and future laws of the State of Texas, and Rules and Regulations of the Commissioner of the General Land Office of the State of Texas, applicable to any of the lands herein involved. In the event it develops that all or any part of the lands herein described and leased is subject to the Mineral Classifications of the State of Texas, then Lessors execute this instrument not only in their individual capacities but as agents for the State of Texas, which they are authorized to do under the Act or Acts governing the handling of lands with Mineral Classifications.”

A copy of the lease is attached to the petition and by reference made a part of the petition. Thus, in considering the demurrer, the terms of the lease will control over any contradictory allegations in the petition. Freiberg, Kline & Co. v. Magale, 70 Tex. 116, 7 S.W. 684; Cowden v. Broderick & Calvert, 131 Tex. 434, 114 S.W.2d 1166, 117 A.L.R. 61. While plaintiff’s petition alleges that the $12,000 was the entire bonus, including the share of the State, as well as that of the landowner, we are governed, in passing upon the demurrer, by the provisions of the lease itself, and not by the allegations of the petition as to what the lease provides.

The question for decision, therefore, is whether the allegations of the petition, as controlled by the terms of the lease, are sufficient to show that the $12,000 was the entire bonus provided in the lease to be paid by the lessee.

The effect of the Relinquishment Act, the ownership of oil and gas in lands bearing a mineral classification, the respective rights of the State and the landowner in the bonus, rents and royalties, and the rights, duties and obligations of the landowner and the lessee, are set out in Greene v. Robison, 117 Tex. 516, 8 S.W.2d 655; Empire Gas & Fuel Co. v. State, 121 Tex. 138, 47 S.W.2d 265; Shell Petroleum Corp. v. Tippett, Tex.Civ.App., 103 S.W.2d 448, writ of error refused; and Allison v. Stanolind Oil & Gas Co., 133 Tex. 540, 129 S.W.2d 267. The State and the landowner are each entitled to one-half of the bonus paid for the lease. The landowner has no authority to collect the one-half belonging to the State, but if he does so, both he and the lessee become jointly and severally liable to the State for its one-half, although as between the landowner and the lessee in such case, the duty is primarily upon the landowner to pay the State, if the landowner has actually collected the entire bonus.

We do not consider it necessary in this case to determine whether the defendant’s liability, if he received bonus money belonging to the State, is based upon his warranty of title, upon subrogation of the lessee to the rights of the State, or upon indemnity owed by the landowner to the lessee. If in fact the $12,000 was the total bonus agreed by the parties to be paid for the *120 lease, he is liable to the lessee. But if the $12,000 was only the landowner’s part of the bonus, and if under the lease the lessee is required to pay to the State such amount of bonus as the State was entitled to receive, in addition to the amount payable to the landowner, then plaintiff is not entitled to recover for the reason that the landowner has been paid only the part of the bonus to which he was entitled.

Although the Supreme Court in the Empire Gas & Fuel Co. case, supra, stated that there was a general misunderstanding of the Relinquishment Act prior to the decision in Greene v. Robison, supra, we believe that we should, nevertheless, indulge in the presumption that defendant knew the law, in the absence of any allegation to the contrary. Plaintiff alleges that it did not know the law, but it does not allege that defendant was under any mistake as to the law.

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Related

Cross v. Shell Oil Co.
188 S.W.2d 373 (Court of Appeals of Texas, 1944)
Duffey v. Cross
175 S.W.2d 637 (Court of Appeals of Texas, 1943)
Navarro Oil Co. v. Cross
162 S.W.2d 677 (Texas Supreme Court, 1942)
Shell Oil Co. v. Lutz
155 S.W.2d 392 (Court of Appeals of Texas, 1941)

Cite This Page — Counsel Stack

Bluebook (online)
150 S.W.2d 117, 1941 Tex. App. LEXIS 259, Counsel Stack Legal Research, https://law.counselstack.com/opinion/navarro-oil-co-v-cross-texapp-1941.