Worthington v. Suehs

93 S.W.2d 220, 1936 Tex. App. LEXIS 301
CourtCourt of Appeals of Texas
DecidedMarch 11, 1936
DocketNo. 9966.
StatusPublished
Cited by2 cases

This text of 93 S.W.2d 220 (Worthington v. Suehs) 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
Worthington v. Suehs, 93 S.W.2d 220, 1936 Tex. App. LEXIS 301 (Tex. Ct. App. 1936).

Opinion

BOBBITT, Justice.

This is an appeal from an order appointing a receiver. On November 27, 1935, W. F. Suehs and 28 other persons, as plaintiffs, filed their petition in the district court of Bee county, Tex., against R. J. Worthington and L. K. Worthington, as defendants, alleging that the defendants were doing business under the name of Worth Oil Company; and that each of the plaintiffs “and approximately four hundred other persons” held written contracts with defendants on the following identical form, to wit:

“No. - - Barrels'
“Oil Purchase Contract
“This Contract, made and entered into by and between the Worth Oil Company, 1213-1214 South Texas Bank Building, of the County of Bexar, State of Texas, hereinafter known as Seller, and - of -, hereinafter known as Buyer,
“Witnesseth:
“First: That, for and in consideration of the sum of - ($-) Dollars paid in cash said Seller hereby sells and conveys and is to deliver to said Buyer, or his order, - barrels of crude oil, as, if, and when produced and' saved by said Seller from a certain tract of fifty acres out of the 200 acres tract, located about six miles west of Pettus, Texas, in the Aurelia Hadley Survey, described in the Oil and Gas Lease Contract between W. G. Rutledge and wife, Lessors, and R. J. *221 Worthington, Lessee, dated the 4th day of April, 1934.
“Second: That Seller agrees to begin drilling a well for oil, said well to be known as Seller’s No. 1, W. G. Rutledge, on said tract by actually spudding in on or before the fourth day of May, 1934, and, in a faithful effort to discover and produce oil and/or gas in paying quantities, to prosecute the drilling of said well with due diligence to a depth of four thousand (4,000) feet, unless oil and/or gas in such quantities be discovered at a lesser depth.
“Third: That, out of one-half of the first crude oil that may be produced and saved from said fifty acre tract, Seller hereby sets aside Two Hundred Thousand (200,000) barrels to be delivered in the pipe line or storage tanks to which said well and all other wells that may be drilled on said tract may be connected as, if and when produced and saved from said tract, to the credit of the purchase contract holders jointly, in the respective proportions their purchase contracts bear to the entire Two Hundred Thousand (200,000) barrels.
“Fourth: That, in the event oil or gas be discovered in paying quantities in said Seller’s well No. 1, Seller further agrees that he will assign to the holders of purchase contracts of said 200,000 barrels of oil (of which this contract is one), an undivided one-half interest in and to the oil and gas lease insofar as it covers a tract of fifty acres of land off-setting the fifty acres on which such well No. 1 is drilled, to be held by them in common in proportions of interest which the number of barrels purchased by them in their respective contracts bear to the whole 200,-000 barrels, aforesaid; and Seller agrees that he will drill a well on said off-set fifty acre tract so assigned to them, out of the half interest retained by him and free of costs to them, to the depth from which said well No. 1 is producing in paying quantities, in a faithful effort to find and produce oil and/or gas in paying quantities.
“Fifth: That Seller is to drill on said second added off-set fifty acres tract a well for oil and/or gas to the formation in which production in paying quantities in said Seller’s No. 1 well is encountered, this drilling on said added off-set tract to be financed out of the one-half (½) interest retained by said Seller without other or further cost to said contract holders.
“In testimony whereof, this' contract is executed in San Antonio, Texas, this -day of-, 1934.
“Worth Oil Company
“By R. J. Worthington
“By L. K. Worthingtpn.”

It appears that the contracts of plaintiffs were all executed between March 8, 1934, and October 1, 1935, and provided for varying amounts of oil, ranging from 20 to 1,000 barrels each; and each of the contracts was duly recorded in the deed records of Bee county.

Plaintiffs alleged that on April 15, 1935, defendants completed a well on the easterly 50 acres of the north 100 acres of the lease, described in the contract; that at the time of filing the petition 10,000 barrels of oil had been produced therefrom with a market value of $11,000.

It was further alleged that defendants had executed a written transfer and as--signment of the oil and gas lease mentioned in the contract as agreed, in so far as it covered the westerly 50 acres of the north 100 acres, and as described in the lease; and that the same had been recorded in the deed records of Bee county. It was alleged that the defendants had not drilled, nor made preparations for, or begun to drill the second well mentioned in paragraphs fourth and fifth of the purchase contracts. Plaintiffs alleged that 2,000 barrels of the oil produced from well No. 1 had been lost by reason of being stored in earthen tanks and washed away bv the rains; that of the oil produced and saved, 4,000 barrels had been sold to Primrose Petroleum Company of Dallas; 1,000 barrels to Phcenix Refining Company of San Antonio; and 800 barrels to Pet-tus Refining Company of Pettus, Tex.; but that such purchasers, with the exception of the Phcenix Refining Company, had not paid defendants for the oil, because defendants have not had, and do not have, clear title to the oil. It was further alleged that' Phcenix Refining Company had paid 75 cents a barrel for the 1,000 barrels delivered to it; and “that said defendants have never accounted to these plaintiffs for said money or any part thereof, to plaintiffs’. damage in said amount.”

Plaintiffs then alleged that on November 26, 1935, there was recorded in Bee county an abstract of judgment for $1,031.68 in favor of W. P. Lincoln and against the defendants; and that the defendants owe *222 approximately $1,000 to laborers for work on the oil well, which debts can be fixed as a lien on the oil and gas lease, and that other debts are owing by defendants, which likewise will soon be reduced to judgment, .and thereby render it more difficult to market oil produced in said well.

Plaintiffs further alleged that 'defendants had sold, assigned, and transferred to Conservative Oil Company, a corporation, “said oil and gas lease covering portions of each of the 50 acre tracts, which comprise the north 100 acres, and thereby clóuded the title of these plaintiffs thereto as well as said 400 other persons.”

It was also alleged that: “Plaintiffs, defendants, and said 400 other persons jointly own said oil and gas lease insofar as it covers the northerly 100 acres of said 200 acre tract; and that they all jointly own and are interested in the crude oil .which has been, and that hereafter will be, produced from said Seller’s Well No. 1, as well as. the sums of money owing for such oil as has already been sold and not collected for, and that they all jointly own and are interested in said Seller’s Well No.

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Bluebook (online)
93 S.W.2d 220, 1936 Tex. App. LEXIS 301, Counsel Stack Legal Research, https://law.counselstack.com/opinion/worthington-v-suehs-texapp-1936.