Whitaker v. Formby

469 S.W.2d 241, 40 Oil & Gas Rep. 101, 1971 Tex. App. LEXIS 2796
CourtCourt of Appeals of Texas
DecidedMay 25, 1971
Docket8001
StatusPublished
Cited by5 cases

This text of 469 S.W.2d 241 (Whitaker v. Formby) 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
Whitaker v. Formby, 469 S.W.2d 241, 40 Oil & Gas Rep. 101, 1971 Tex. App. LEXIS 2796 (Tex. Ct. App. 1971).

Opinion

DAVIS, Justice.

The Opinion handed down in this case on March 30, 1971, is withdrawn, and the following is substituted in lieu thereof.

The Appellees, N. E. Formby, H. E. Thornbrough, James A. Talley, A. L. Dawsey, Jr., W. E. Richey, Weldon D. Moore, John K. Cain, Lee Ray, Taylor Jobe, H. L. Rogers, Jr., B. J. Woolley, Dr. Charles S. Bloom, Joe Collins, Gerald Hammer, Dr. W. C. Smith, Sidney Pinkston, Jr., L. W. Martin, Marion Dingier, Trustee, Southside State Bank, Tyler, Texas, First State Bank, Big Sandy, Texas, Vincent Richbourg, Howard W. Wilson, Murph Wilson, J. G. Roberts, A. W. Riter, Jr., Trustee, and Peoples National Bank of Tyler, Texas, have filed an outstanding and most excellent Motion for Rehearing. They have convinced this Court that our original Opinion is not in keeping with the laws of contracts and Rule 166-A, Texas Rules of Civil Procedure. We must affirm the Judgment of the Trial Court.

This law suit involves two Oil and Gas Leases, executed on February 18, 1961, by Rade Snelgrove, now deceased, and his wife, Coystal Snelgrove, and Ralph Snelgrove, Lessors, to John R. Yarbrough, Lessee, on 128 acres and 100 acres of land in the Henry Chapman Survey in Rusk County, Texas. These Leases were amended on March 6, 1961. Lessee signed the Leases and Lease Amendment. Only the original Lease to the 100-acre tract, and the Amendment thereto, is contained in the record. The 128-acre Lease is not in the record.

A survey of the land described in the Lease as containing 100 acres of land, shows that it contains 113.12 acres.

After the death of Rade Snelgrove, Peggy Leopard became an heir to his interest.

On April 8, 1966, Coystal Snelgrove, surviving wife of Rade Snelgrove, Peggy Leopard and husband, Horace Leopard, and Ralph Snelgrove, as Lessors, executed an Oil and Gas Lease to Fred Whitaker, as Lessee, which only conveyed a lease on 33 acres of land out of the 113.12 acres for a primary term of U/2 years.

The original Lease and the Amendment thereto were assigned to N. E. Formby, et al, under the terms of the Lease and the Amendment. Lessees commenced the drilling of an oil well on the 113.12-acre tract of land, and secured a producing oil well. The original Lease and the Amendment thereto contain a provision that if Lessee secured the production of an Oil Well and should fail to commence the drilling of another oil well within 12 months after the completion of such well “ * * * all acreage covered by this Lease save and except 80 acres around the first well, * * shall terminate.” The Lease Amendment provided that Lessee shall, at his sole election, select or designate the acreage that shall he earned or validated by the drilling of the first test well. The first test well *243 was completed as a commercial producer during the primary term of the original Lease. The application to drill the test well, as required by the Railroad Commission of Texas, Form 2 — Well Record, and Form 3— Potential Test, were all filed within the 90-day primary term.

Division orders covering all of the productions from the well, dated January 22, 1961, were executed by all owners of interest in production, including royalty, overriding royalty, and working interest of the owners.

After the death of Rade Snelgrove, leaving an interest to his daughter, Peggy Leopard, wife of Horace Leopard, who, with Coystal Snelgrove, a widow, Ralph Snelgrove, Peggy Leopard and husband, Horace Leopard, executed an Amended Division Order on February 6, 1964.

The Oil and Gas Lease executed to Fred Whitaker on April 8, 1966, covering the 100-acre tract, expressly excepted “ * * * 80 acres of land subject to * * * the Oil, Gas, and Mineral Lease” of Appellees. Prior to delivery or payment for this Lease, the attorneys for the Snelgrove and Leopards advised Appellant Whitaker that the 80 acres owned by Appellees’ Lease had not been set off, and required a letter-agreement, which reads as follows:

“Dear Mr. Whitaker:
“The undersigned are delivering to you a Lease dated April 8, 1966, covering 113 acres of the Henry Chapman Survey, save and except 80 acres held under an oil and gas lease executed by Rade Snelgrove, et al. Lessors, to John R. Yarborough, as Lessee, dated February 18, 1961, recorded in Volume 717, Page 571, of the Deed Records of Rusk County, Texas.
“It is agreed that by the acceptance of the lease dated April 8, 1966, you understand that the 80 acres held under such lease above referred to, has not been set out by field notes.
“In any event, any expenses which may be incurred in having the 80 acres held under such lease set out and described, shall be born by you, including any expense of litigation, attorneys fees, court costs, or otherwise. That is, the Lessors in the lease dated April 8, 1966, shall not be out any expense in such matter; notwithstanding it may develop that it be necessary to name the Lessors of such lease of April 8, 1966, as parties to any suit.
“You may indicate your acceptance of the terms of this letter in connection with the delivery of the lease dated April 8, 1966, by signing at the place indicated.”

Appellants Snelgroves and Leopards always admitted that the Lessees owned an 80-acre Lease out of the 113.12-acre tract of land, called 100 acres in some of the title papers. They actually included in the Lease to Appellant Whitaker the following language:

“SAVE AND EXCEPT, however, 80 acres of said lands subject to an oil, gas and mineral lease executed by Rade Snelgrove, et al, as Lessors, to John R. Yarborough, as Lessee, dated February 18, 1961, filed for record March 13, 1961, recorded in Vol. 717, Page 571 of the Deed Records of Rusk County, Texas.”

According to the letter, Appellants Snel-groves and Leopards were not claiming any title to the lease on the 80 acres around the well, were not making any demand upon Lessees to declare which 80 acres they would take out of the 113.-12-acre tract, and they were all accepting the royalty payments as specified in the original lease and the amendment thereto.

Both Appellants and Appellees filed Motions for Summary Judgment. Judgment was entered in favor of the Appellees, holding that the Appellants take nothing. Appellants perfected their appeal and bring forward nine points of error.

Appellants had also sued Permian Corporation, the purchaser of the oil. A Motion was filed to sever the action *244 against Permian Corporation, pending a final Judgment in the case. The Motion was granted.

Appellants say that the trial court erred in granting the Judgment in favor of Appellees bcause there were material fact issues as a matter of law that have to be decided by the trial court, or a jury, that the Appellees had failed to select the 80-acre lease, Appellees’ failure to designate the 80 acres created a material issue of fact, and because of the failure to partition the acreage, they were damaged in the amount of $60,000.00.

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Bluebook (online)
469 S.W.2d 241, 40 Oil & Gas Rep. 101, 1971 Tex. App. LEXIS 2796, Counsel Stack Legal Research, https://law.counselstack.com/opinion/whitaker-v-formby-texapp-1971.