Smoot & Smoot v. Nelson

11 S.W.2d 578
CourtCourt of Appeals of Texas
DecidedOctober 27, 1928
DocketNo. 12041.
StatusPublished
Cited by6 cases

This text of 11 S.W.2d 578 (Smoot & Smoot v. Nelson) 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
Smoot & Smoot v. Nelson, 11 S.W.2d 578 (Tex. Ct. App. 1928).

Opinion

CONNER, C. J.

In 1918, Sam Sparks secured a permit from the state of Texas to drill for oil and gas on 981.9 acres of land along the right bank of the Red River northeast of Wichita Falls, claimed by Texas as belonging to her. Sparks subdivided the area, and one of the subdivisions of 10 acres was duly conveyed to appellee Walter Nelson. An adjoining subdivision of a like number of acres was conveyed to John C. Kay. Kay and Nelson later conveyed the several tracts owned by them to the Lone Star Refining Company, hereinafter called refining company, pooling their interest under an agreement that, wherever a well should be drilled on either tract, both were to share in the proceeds. The consideration paid and promised by the refining company for its purchase of the Kay and Nelson tracts was $20,009 in cash, an overriding royalty of one-eighth, and a bonus of $10,000 out of the first oil obtained. In this condition of affairs, the state of Oklahoma, claiming to own the land, instituted a suit against the state of Texas to recover the area included in the Sam Sparks’ permit. Thereafter the United States, as *579 •sorting ownership of the land, intervened in the suit between Oklahoma and Texas, sought .and procured the appointment of a receiver, who took charge of the property involved, including among others the lots sold by Nelson and Kay, and one or more oil-producing wells that in the meantime had been drilled by the refining company. Under an act of Congress (30 USOA §§ 230-236) so authorizing, the refining company and other claimants under the Texas title were permitted to assert and prosecute their claims before the Interior Department at.Washington, D. C., which finally resulted in an award in favor of the refining company of 1.9 acres of land out of the 10-acre lot formerly owned by John C. Kay, upon which a producing well had been drilled, and a further award of $250,000 in cash, presumably as the proceeds of the oil sold by the United States receiver from the well or wells drilled by the refining company. It further appears that an ancillary receiver had been appointed by the United States District Court for the Northern District of Texas, and that appellants, a practicing firm of lawyers in Wichita Falls, were employed and appeared in that ease and sought to obtain a judgment against the refining company for the several $10,000 bonus moneys agreed to be paid by the refining company as part of the consideration for the purchase of the Nelson and Kay lots, as above stated. Through the efforts of appellants and another who in the meantime had been employed by Walter Nelson, the United States District Court in Texas awarded to Kay and Nelson the sum of $60,000. Kay and Nelson and a representative of the refining company later compromised their several claims by the payment of $30,000 in cash to Kay and Nelson; the check therefor 'being made to them jointly and deposited to their credit in a Wichita Falls bank in their joint names, and thereafter equally divided between them.

With the foregoing brief outline of the antecedent circumstances, it will be further stated that the appellants, Smoot & Smoot, instituted this action against Walter Nelson and Dave Nelson, a practicing firm of lawyers in Wichita Falls.

Appellants’ original petition, filed on September 7, 1926, contained two counts. In the first count it was alleged, among other things, that:

“On or about September 1, 1923, the defendants approached plaintiffs with a view to retaining them to represent such defendants before the Federal Court and Federal Land Office and Department of the Interior and represented to plaintiffs that they were interested in the east one-half of block 3 of the Sam Sparks subdivision in Red River, and that such interest consisted of a bonus of $10,000 to be paid out of a certain part of the first oil to be produced from such property and a one-eighth royalty interest. That in return for the services of these plaintiffs in preparing, presenting and prosecuting their claim before the Federal Courts, Land Office and Department of the Interior, as found expedient, defendants offered and agreed to pay plaintiffs $5,000 out of any recovery made. * * * Plaintiffs accepted such employment and defendants agreed with plaintiffs that plaintiffs, in return for their services in preparing, presenting and prosecuting such claim, were to receive a fee of $5,000 to be paid out of any recovery had on such claim, and defendants agreed and bound .themselves to pay plaintiffs such amount if a recovery was had upon such claim to the extent of $10,000.
“That thereafter plaintiffs prepared, filed and prosecuted defendants’ claim before the United States Land Office and the Department of the Interior under the Act of Congress of March 4,1923, and prepared and filed and prosecuted before the United States District Court for the Northern District of Texas such claim against the Lone Star Refining Company, in the form of a bill of intervention, and on or about November 1, 1924, procured a judgment in said court decreeing to the defendant Walter Nelson a recovery for the said bonus of $10,000 and certain royalties. That thereafter by compromise agreement with the said Lone Star Refining Company, such Nelson received $15,000 on account of said judgment, whereby defendants through and by reason of the work and services rendered by plaintiffs recovered more than the $10,000 bonus, and thereby became bound and indebted to and promised to pay plaintiffs the said sum of $5,000 with interest. That such amount became due and payable at the time defendants received payment of said $15,000 on or about March 1, 1926, and plaintiffs should be paid six per cent, interest on such $5,000 so due and owing them from and after such time and until the same is fully paid.
“That when said amount became due and many times- thereafter plaintiffs have demanded payment of same, but the said defendants have failed and refused, and still fail and refuse to pay the same or any part thereof except the sum of $1,666.66, to plaintiffs’ damage in the sum of $3,333.33 with interest thereon from the 1st day of March A. D., 1926, at the rate of six per cent per annum.”

In the second count of the petition, after the recitation of their acceptance of employment “on a basis of receiving $5,000 out of any recovery,” and after reciting that they had found an unconditional transfer from Sam Sparks, the original owner of such rights, to Walter Nelson, and an unconditional reservation of such sums and royalties to Walter Nelson, and of their confidence in and reliance upon the statements of Walter Nelson upon which they accepted the employment, further alleged that:

“They (plaintiffs) did not request a formal *580 contract in writing setting forth the terms of such employment, but relied upon his, the said Walter Nelson’s verbal promise, jointly with defendant Dave Nelson, to pay such amount out of such recovery when made. That relying on such agreement, plaintiff entered upon such employment, prepared, filed and prosecuted such claim before the Federal Land Office and Department of the Interior and at great expense to themselves made numerous and expensive trips to Washington, D. C., and other places, and prepared copies and mailed out by registered mail to adverse claimants at great expense, numerous papers, documents, and notices.

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Bluebook (online)
11 S.W.2d 578, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smoot-smoot-v-nelson-texapp-1928.