Russell v. Dooley

260 S.W.2d 908, 1953 Tex. App. LEXIS 1971
CourtCourt of Appeals of Texas
DecidedJuly 10, 1953
DocketNo. 14673
StatusPublished
Cited by1 cases

This text of 260 S.W.2d 908 (Russell v. Dooley) 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
Russell v. Dooley, 260 S.W.2d 908, 1953 Tex. App. LEXIS 1971 (Tex. Ct. App. 1953).

Opinion

CRAMER, Justice.

W. Frank Russell as plaintiff instituted this suit in the District Court against B. V. Dooley and Mrs. L. C. Harrison, a widow, as defendants, for damages and penalty under art. 4004, R.C.S., alleging that Dooley misrepresented certain attributes of oil producing properties which were a material inducement to the purchase by Russell from Dooley of an interest in such oil properties. Russell further alleged that Mrs. Harrison was liable to him by reason of benefits received by her in the reduction of the principal of a note on which she and Dooley were co-signers.

Dooley and Mrs. Harrison filed motion for summary judgment and the court having sustained such motion and entered judgment thereon, Russell has perfected this appeal. He asserts two points of error, in substance: (1) A material disputed fact issue was raised for the jury, (2) which was beyond the province of the trial court to decide on a motion for summary judgment. It was undisputed that on May 7, 1951 Russell purchased from Dooley a certain undivided interest in an oil and gas lease on three certain tracts of land located in Cooke County, Texas. Russell pled in substance that it was represented to him that the Felderhoff tract No. 5 and Felderhoff Tract No. 15 each had four producing wells located thereon and that the Solomon tract had nine producing wells thereon; that each and all such wells were producing and had produced their allowable since the beginning of their operation. That in truth and in fact such wells had not always produced their allowable but had in various months and particularly those during the negotiation of the sale from Dooley to Russell failed to produce their allowable, but that oil was pumped from storage tanks, and payments were made to the interest holders in amounts substantially equal to the allow[909]*909able on their interests; that Dooley was an experienced oil man and that he, Russell, was a complete novice; that Dooley represented the wells were a 26-months pay out, that is to say, his investment would be recovered in 26 months; when in'truth and in fact in a period of five months after the transaction involved the royalty payments had reduced to almost one-third the amount represented. The reductions commencing' with increased rapidity the months subsequent to the sale here involved. Russell also alleged Dooley represented the fair market value of the interests here involved to be $15,500, when in truth and in fact the fair market value was less than $5,500.

Dooley, after filing.his answer, filed his motion for summary judgment supported by his affidavit in which he under oath stated in substance that he was over 21 years of age, of sound mind, had never been convicted of any crime or offense, had personal knowledge of every statement in the affidavit. He denied he ever represented to Russell that if he would pay $15,500 for the lease in question he would recover therefrom a sum of money equal to his investment in 26 months; denied he ever represented to Russell that the oil wells on the lease in question were making their allowable in May, 1951, or that he would receive a monthly income of not less than $600 per month, or that he would recover his investment in 26 months. Denied that he represented to Russell that he had been in the oil business for a number of years; denied that he stated he was well acquainted with the lease in question and that all of the wells were producing their allowable; denied that he withheld from Russell information as to production of the wells in question, but asserts that he showed Russell the production records of such wells and discussed with him the fact that the production on the lease had declined since March 1951; denied that he at any time represented to Russell that for a period of 5⅜ months he would receive an income of $3,400 from such wells; denied he at any time conspired to defraud Russell or that he at any time willfully and fraudulently misrepresented that the leases would produce a monthly income of $600; denied that he withheld information from Russell regarding the production record of such wells or an engineering report covering such wells; but stated affirmatively that he did not know in May 1951 that a reserve had been accumulated in prior months and that oil would be taken from tanks as well as from the wells in order to bolster the income for the months of May and June 1951; denied he withheld from Russell any information he had regarding the condition of the wells for the purpose of perpetrating a fraud on Russell; or that he withheld any information from him as to what the wells had been producing in the past. He further denied that he ever represented to Russell that the income from the wells in question would average for the next 26 months after the sale the sum of $600 per month.

The only question on this appeal is whether Russell made such a showing under oath, as that, on a jury trial the court would be justified in giving an instructed verdict in favor of Dooley against Russell. There is no question that the affidavit of Dooley taken alone would justify the court’s judgment, but the question here, on this record, is whether, assuming Russell’s evidence to be true, a fact issue is raised for the jury.

Fraud material here involves the following fact issues: (1) A representation, or representations, that a definite condition or fact then existed; (2) that such condition or fact did not in truth then exist; (3) that the representation, or representations, were made to induce Russell to enter into the transaction here involved; (4) that Russell did rely thereon; (5) that such representation, or representations, were a material inducement to Russell’s entering into the contract; and (6) damage to Russell.

Defensive fact issues are: (1) Prior knowledge by Russell of the true condition; or (2) his ability, in the exercise of ordinary care, before the sale, to ascertain [910]*910the true facts about the property purchased.

A review of Russell’s evidence shows he, in rebuttal to the affidavit, offered his deposition in which he testified to two transactions, one in which the sale was by Mrs. Harrison, not a party to this appeal, which took place in March, and the one in May 1951 when he purchased a fractional interest in the same property from Dooley. Russell, on his affirmative issues, testified that he was and had been for 18 years an automobile manufacturer’s agent and had never been in the oil business prior to the transaction here involved. He learned of the lease here involved from Mr. Jacobson whom he had known for some 14 years; then from Dooley. He had told Jacobson he might be interested in making an investment and that if he saw something good to let him know. Jacobson had theretofore been investing some money in oil. On the deal here, Jacobson told him he thought it was a good one; that he had bought an interest therein for his sister. Dooley had known Jacobson for a number of years and knew Jacobson had known Dooley for a number of years; also that Jacobson considered Dooley reliable.

The evidence on the first transaction in March, between Harrison and Russell, was admissible only on the issue of knowledge, by Russell, of the property and its value before the second transaction in May, and was material for that purpose only.

Russell testified that Jacobson before the first purchase told him the wells were producing; that the monthly payments on the first transaction were approximately $290 per month. Dooley told him substantially the same and added that the interest was owned by Wilson Brothers who needed to sell to pay income taxes; that the property there was a 30-months pay-off.

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Bluebook (online)
260 S.W.2d 908, 1953 Tex. App. LEXIS 1971, Counsel Stack Legal Research, https://law.counselstack.com/opinion/russell-v-dooley-texapp-1953.