Susanoil, Inc. v. Continental Oil Company

516 S.W.2d 260, 1973 Tex. App. LEXIS 2462
CourtCourt of Appeals of Texas
DecidedApril 25, 1973
Docket15139
StatusPublished
Cited by16 cases

This text of 516 S.W.2d 260 (Susanoil, Inc. v. Continental Oil Company) 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
Susanoil, Inc. v. Continental Oil Company, 516 S.W.2d 260, 1973 Tex. App. LEXIS 2462 (Tex. Ct. App. 1973).

Opinion

KLINGEMAN, Justice.

This is an appeal from a final judgment ordering severance and decreeing that appellants, Susanoil, Inc. and Harry Jacobs, take nothing from appellee, Continental Oil Company, under the severed portions.

The original suit was brought by ten named plaintiffs against numerous defendants seeking a wide variety of relief in eight separate counts, the composition of plaintiffs and defendants varying among the eight separate counts. The cause was originally docketed as Cause No. 5928. The litigation involves, among other things, alleged fraud in obtaining a uniti-zation agreement and alleged breaches of the terms of such agreement in operating a secondary recovery project for oil by water flooding in the Velma (Escondido) Field in Atascosa County, Texas. This appeal involves only the first and third counts.

Although we do not deem it necessary on this appeal to set forth in detail the eight counts, 1 we feel it is appropriate to *262 set forth the trial court’s procedure with regard to the various counts. Count Six was severed out of the main cause and settled by the parties. The remaining counts were set for separate trials, with Counts One, Two and Three set for jury trial, and with Counts Four, Five, Seven and Eight set for trial to the court. The non jury trials were held during the week of May 15, 1972, and the jury trials were set for the following week of May 22, 1972.

On Monday morning, May 22, 1972, the date set for jury trial, appellee, Continental Oil Company, filed a document styled “Second Motion of Continental Oil Company to Strike Counts One and Three of Plaintiffs’ Fourth Amended Original Petition and Alternatively for Severance.” 2 After a discussion between the attorneys and the trial judge, the trial judge initialed on such motion herein involved, “Strike— Granted 5-22-72” and “Severed out as 5928-B,” and also entered a judgment severing out Counts One and Three, decreeing that appellants, Susanoil, Inc. and Harry Jacobs, take nothing from Continental Oil Company under such counts, and taxing costs attributable to such counts against appellants. 3

Appellants assert five points of error: (1) the trial court erred in upholding ap-pellee’s motion to strike, and in striking out plaintiffs’ allegations of fraud and damages on the grounds that the petition stated no cause of action for fraud; (2) the trial court erred in withdrawing the case from the jury and rendering a take-nothing judgment on the pleadings; (3) the trial court erred in holding that proof of fraud in the procurement of the contract would be precluded under the parol evidence rule by language contained in the contract; (4) the trial court erred in taxing costs attributable to Counts One and Three against appellants; and (5) that the inclusion of findings of fact and conclusions of law made by the trial judge in the transcript was erroneous, and these transcript costs should be taxed against appel-lee.

Count One alleges in substance that ap-pellee represented to appellants that all *263 leasehold owners under the unitization agreement would be required to contribute the rent-free use of their oil production equipment to the secondary recovery operations ; that before appellants executed the agreement, appellee had secretly relieved another leasehold owner from the rent-free provision; that the purpose of the concealment was to obtain the rent-free use of appellants’ equipment; that appellants were deceived by and relied upon the equal treatment representations; and that as a proximate result of this fraud, appellants have been denied use of their equipment in an amount equal to the reasonable rental value of the equipment, to-wit, $158,103.90.

Count Three seeks exemplary damages from Continental in the amount of $500,000 because the wrongful acts set forth in Count One were willful and fraudulent.

Although Count Two is not involved in this appeal, damages are there sought against Continental and W. H. Doran because of their alleged failure to conduct and maintain the secondary recovery operations in good faith and in a prudent manner, and in accordance with the unitization agreement.

Appellee’s motion to strike Counts One and Three here involved asked the court to sever and strike for the following reasons: (1) that Count Two involves all ten plaintiffs, whereas Counts One and Three involve only Susanoil, Inc. and Harry Jacobs as- plaintiffs, and that the issues as to Counts One and Three were not germane to those in Count Two; (2) that appellants had ratified and confirmed the unitization agreement by their pleadings, and the evidence adduced by the court in the non jury trials relating to the fourth, fifth, seventh and eighth counts; (3) that having attempted to enforce the unitization agreement, appellants are bound by the terms of the unitization agreement and cannot seek relief inconsistent therewith; and (4) the third count for exemplary damages is predicated upon appellants’ right to recover actual damages, and they are precluded from recovering actual damages by the terms of the unitization agreement because they have ratified the unitization agreement.

Although the transcript contains extensive findings of fact, there is no statement of facts in the record before us, and no testimony was heard or evidence adduced at the hearing on the motion to strike.

Appellee contended that appellants’ pleadings were insufficient as a matter of law to state a cause of action, and in its brief states: “In conclusion, if every material allegation of the appellants’ petition as contained in the First and Third Counts of the Fourth Petition were true, their allegations with respect to fraud would be legally insufficient or completely immaterial.” It appears evident from the arguments and statements of counsel and the remarks of the trial judge at the hearing on appellee’s motion to strike, that the court entered its judgment on the ground that Counts One and Three failed to state a cause of action for fraud.

Appellants’ basic complaint on this appeal is that the trial court, on the morning that the motion to strike was filed, which was the date set for jury trial of such cause, summarily entered a take-nothing judgment without giving appellants an opportunity to amend their pleadings, or to present any evidence. In support of such contention they assert that appellee’s motion to strike was in reality an untimely filed special exception, in the nature of a speaking demurrer or a global exception. Irrespective of whether you term this document a motion to strike, a speaking demurrer, a general demurrer, or a special exception, 4 the result was that a take-noth *264 ing judgment was entered thereon on the morning that it was filed, without appellants having the opportunity to amend or to present evidence. The court’s judgment had the same effect as if a summary judgment had been granted, without going through the requisites of summary judgment procedure, or as if a general demurrer had been sustained under the old general demurrer practice.

A motion to strike the whole pleadings is in effect a general demurrer. City of Brownsville v.

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Bluebook (online)
516 S.W.2d 260, 1973 Tex. App. LEXIS 2462, Counsel Stack Legal Research, https://law.counselstack.com/opinion/susanoil-inc-v-continental-oil-company-texapp-1973.