Patterson v. Texas Co.

131 F.2d 998, 1942 U.S. App. LEXIS 4676
Court of Appeals for the Fifth Circuit·Decided December 7, 1942·No. No. 10168·Published·Cited by 19 cases

Opinion

HUTCPfESON, Circuit Judge.

Appellants, plaintiffs below, grantors in a mineral deed1 to 1,600 acres of land comprising 2% sections in Yoakum County, Texas, claiming that appellee, as assignee 2 of its grantee, had leased the land for a bonus,3 brought this suit to recover the [1000] one-fourth thereof provided for in their deed. There was an alternative prayer for “the fair cash market value of the lease value of their interest” and for a cancellation of the leases to defendant as to depths below 5,500 feet. Defendant denied both, that it had received anything by way of bonus for the Patterson leases except the contingent bonus agreement of $3,500 for each well drilled, and that these leases had any bonus value, and set out fully the facts of the transaction between it and Aloco. There was a trial to a jury with a motion by plaintiffs for a directed verdict for 400/15,846 of the cash consideration paid, and the overriding royalties and rights accrued and to accrue to the defendant under the agreement with Aloco. The motion overruled, there were jury findings fully supported by the evidence; that the $441,-445.72 paid The Texas Company by Aloco was not bonus but consideration for the 17 completed oil wells on lands other than plaintiffs; that no bonus was paid for the leases on plaintiffs’ land; and that they were, without bonus value. Plaintiffs moved for judgment for 400/15,846 of the cash consideration received and the overriding rights and royalties reserved by defendant. under its agreement with Aloco, and that the lease from Freeman to defendant on its land as to a depth below 5,500 féet; and, in the alternative, for one-fourth of the cash received by, and one-fourth of the overriding royalty and rights reserved to, defendant in respect of the plaintiffs’ lands; and for one-fourth of the market value on a bonus basis of an oil, gas and mineral lease on those lands. This motion overruled, there was a judgment for defendant, and plaintiffs have appealed. Below appellants took the position; that when the defendant in one instrument conveyed all the leases, including the ones on plaintiffs’ lands, it created a kind of confusion or commingling of leases and of interests so that plaintiffs became entitled to an aliquot part of the whole consideration; that the recitation of consideration in the agreement defendant made with Aloco conclusively established that the recited cash payment was a. bonus for the leases as a whole; that parol evidence as to the true consideration could not be received; and that it was error, therefore, not to instruct a verdict for plaintiffs for one-fourth of that part of the consideration which their acreage bore to the acreage as a whole. In the alternative, they contended that the instrument, by which they sold their mineral interest, made The Texas Company, as assignee, a kind of trustee for them and obligated it in leasing the lands to obtain their bonus value for plaintiffs. They take the same positions here. The instrument by which plaintiffs sold is without ambiguity or need for construction. It plainly and clearly reserves to plaintiff a royalty interest and as plainly and clearly provides that if grantee, its successors or assigns, obtains a bonus for leasing the minerals, plaintiffs shall have one-fourth thereof. It as plainly and clearly provides though that no obligation to lease the land or obtain a bonus is imposed, and leaves to the discretion of grantee whether, and the terms upon which, the land should be leased. It clearly gives plaintiffs a one-fourth interest in any bonus which may be reserved, and plaintiffs are, therefore, entitled to inquire and have determined in connection with any leasing made of the land what the true facts are. The Texas Company could not, therefore, by any form of agreement, have prevented plaintiffs from obtaining its share of a bonus if one was reserved, nor could plaintiffs claim a bonus on their land under instruments executed by The Texas Company, no matter what the terms of those instruments if, in fact, no bonus was received.-

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Patterson v. Texas Co., 131 F.2d 998, 1942 U.S. App. LEXIS 4676 (5th Cir. 1942).

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