Texas Co. v. Ramsower

7 S.W.2d 872
CourtTexas Commission of Appeals
DecidedFebruary 29, 1928
DocketNo. 1048-4682
StatusPublished
Cited by33 cases

This text of 7 S.W.2d 872 (Texas Co. v. Ramsower) is published on Counsel Stack Legal Research, covering Texas Commission of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Texas Co. v. Ramsower, 7 S.W.2d 872 (Tex. Super. Ct. 1928).

Opinion

NICKELS, J.

The opinion of the Court of Civil Appeals (255 S. W. 466) includes a [874]*874general statement of the case which, in its general features, is adopted here. The questions brought to the Supreme Oourt are severally discussed below.

1. The lease was executed August 15, 1918. It includes the following stipulations:

“If no well be commenced on said land on or before the 15th day of August, 1919, this lease shall terminate as to both parties, unless the lessee on or before that date shall pay or tender to the lessor, or to the lessor’s credit in the First Guaranty State Bank at Cisco, Tex., or its successors, which shall continue as the depository regardless of changes in the ownership-of said land, the sum of $200.00,-dollars, which shall operate as a rental and cover the privilege of deferring the commencement of a well for 12 months from said date. In like manner and upon like payments or tenders the commencement of a well may be further deferred for like period of the same number of months successively. And it is understood and agreed that the consideration first recited herein, the down payment covers not only the privileges granted to the date when said first rental is payable as aforesaid, but also the lessee’s option of extending that period as aforesaid, and any and all other rights conferred.”

In that stipulation, it is asserted, the agreement of the parties in respect to the particular subject-matter is expressly stated, and hence “there is no room for implication for anything not so stipulated.”

It is to be regarded as settled law that the nature of the contract such as that before us injects into the situation an implied covenant of protection. Grubb v. McAfee, 109 Tex. 527, 212 S. W. 464; Jeff Ohaison Townsite Co. v. Guffey Petroleum Co. (Tex. Civ. App.) 107 S. W. 609, and cases cited by the Court of Civil Appeals. Such a contract is to be distinguished from one like that involved in Burt v. D'eorsam (Tex. Civ. App.) 227 S. W. 354, wherein, it appears, the parties in express terms covered the subject of protection from drainage. The implied obligation which we say inheres in the relation of the parties here is additional to what is expressly provided for in the instrument and is as much a part of the contract as if expressly stated. The fact that the obligation rests in implication and not in words may have an important bearing on remedies and their enforcement, but not in respect to rights otherwise.

2. With the obligation mentioned con--cmed arguendo,-it is presented (under third assignment) that judgment of the lessee “exercised in good faith” is determinative, first, of whether given conditions make the duty active, and, second, of what ought then be done in performance. “The operator,” it is said, “may make a mistake (no man is infallible), but his good-faith judgment precludes the matter” — i. e., of further inquiry.

The non sequitur arises on the fact that the standard of conduct is what is reasonable — i. e., the supposed conduct of the average man. The “man on the spot” may be an expert and use his best judgment, yet he may be negligent or otherwise fall short of what the circumstances require (The Germanic, 196 U. S. 589, 25 S. Ct. 317, 49 L. Ed. 610; Comanche Duke Oil Co. v. T. P. Coal & Oil Co. [Tex. Com. App.] 298 S. W. 554), and if, perchance, he be less than “expert,” the chances of variance from what is re-quireji in the standard have multiplication. [3j The contradiction of ideas inheres in «⅞ impossibility of an existent obligation (with essential mutuality) whose burdens (on the covenantor) may be rendered innocuous as to him and whose rights (in the cov'enantee) may be practically defeated at the will of the covenantor. It takes two to make a contract; and if a contract is to be set aside in its practical phases, or novat-ed, by mental operation, concurrence of the two minds is required. Expressions of different import, it must be admitted, are to be found, in texts and opinions. Many of those used by courts, however, will be found to be obiter or in themselves to include mutual contradictions, and others will be found to have been used in relation to situations of such particularity and individuality as to preclude their just application in the general field; many of the texts reproduce those characteristics of the opinions with misstatements, in some instances, of what the courts to which references are there made actually said.

The importance of the question and proper respect to those urging the position here and elsewhere require some exemplar discussion.

In T. & P. Coal & Oil Co. v. Stuard (Tex. Civ. App.) 269 S. W. 482, it was said:

“The implied obligation on the part of a lessee * * ⅞ is to exercise good faith and sound discretion to drill to a depth that is reasonably necessary to test the land. ⅞ * * ⅞ think the evidence fully supports the trial court’s finding to the effect that the lessee in this case exercised good faith and discretion in its conclusion that it would not be profitable to it to drill deeper the two wells sunk on the Stuard lease, or to sink another well on it, and that such is all that a lessee is required to do.”

In the contract there the number and depths of such wells as would be sunk were left to implication; the suit was brought to recover damages upon allegations that the “two wells” mentioned were not sunk to the depths required by circumstances and that the circumstances required drilling of still “another well.” Yet there was reversal of the trial court’s judgment and remand of the cause, instead of reversal of the trial court’s judgment and rendition of judgment for the lessee, despite the fact (held) that lessee had done “all that a lessee is required to do.” In general, it may be said, “sound discretion,” used in reference to duty of (and [875]*875performance by) an individual, is tbat discretion which the ordinarily prudent man would have used in a like situation, and the remand of the case may be explained only upon the supposition that the court used the terip in that sense in the first sentence quoted. True, this brings the first sentence into conflict with the last clause of the last sentence quoted, but the fact of remander gives to the later expression a character of error, if the first expression be correct, and of ob-iter in any event. Grubb v. McAfee, supra, is cited to the propositions announced in the excerpt. In that case the Supreme Court specifically declared an obligation in the lessee “to exercise reasonable diligence to continue drilling and mining operations on the land after oil * * * encountered in the first well” (as, e. g., in the “two wells sunk on the Stuard lease” mentioned by the Court of Civil Appeals), and this, we think, establishes error in any ruling by'the Court of Civil Appeals to the effect that a lessee’s “good faith and discretion” (unless the “discretion” be a “sound” one) control. And that the Court of Civil Appeals reversed the trial court because of determination that the verdict and judgment were “against the weight of the evidence” (see Houston & T. C. R. Co. v. Strycharski, 92 Tex. 1, 37 S. W. 415), and not because, as a matter of law, the lessee’s judgment exercised in good, faith is the standard of conduct, has plain implication in the fact that the Supreme Court dismissed a petition in error “for want of jurisdiction.”

It is our view that neither the lessee nor the lessor, situated as the parties here, is the final judge, but each is “bound by the standard of what is reasonable.” Grubb v.

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