Youngstown Sheet and Tube Company v. Penn

355 S.W.2d 239, 16 Oil & Gas Rep. 453, 1962 Tex. App. LEXIS 2270
CourtCourt of Appeals of Texas
DecidedMarch 7, 1962
Docket10916
StatusPublished
Cited by8 cases

This text of 355 S.W.2d 239 (Youngstown Sheet and Tube Company v. Penn) 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
Youngstown Sheet and Tube Company v. Penn, 355 S.W.2d 239, 16 Oil & Gas Rep. 453, 1962 Tex. App. LEXIS 2270 (Tex. Ct. App. 1962).

Opinion

HUGHES, Justice.

Our former opinion dismissing this appeal is withdrawn. We will determine its merits.

The appeal is from a summary judgment in favor of appellees, Henry W. Penn, J. K. Stark and J. P. Hale.

Appellant, The Youngstown Sheet and Tube Company, sued Texita Oil Company, alleging it to be a partnership composed of appellees and Gordon W. Johnson, I. A. McNab and Morris Cannan. 1

The nature of the suit was upon a sworn account covering the period from March 14, 1958 to December 4, 1959, and for foreclosure of materialmen’s liens on two oil and gas leases in Atascosa County.

Gordon W. Johnson and I. A. McNab answered alleging that Texita Oil Company was a partnership and that they were the partners composing it.

Appellees answered, under oath, and denied that they were partners, as alleged, and denied “that they were at any time material to this suit or otherwise engaged in a partnership or mining partnership with Texita Oil Company or were joint adventurers with” it in developing the leases in suit.

Appellees’ motion for summary judgment was based upon two grounds, and supported by affidavits. The first ground was that it is conclusively shown that they and Texita were not partners and that there were no pleadings or facts upon which they could be held liable as partners since it is conclusively shown that the credit extended by appellant was extended exclusively to Tex-ita and without any reliance upon the liability of appellees.

The second ground of the motion for summary judgment was that appellant failed to perfect a materialmen’s lien, as to the interests owned by them in the leasehold estates, because of failure to state in the affidavit filed by it for the purpose of fixing such lien, as required by Art. 5476a, Vernon’s Ann.Civ.St., that the notice required by Art. 5476c, V.A.C.S. was given to appellees, and because such notice was not in fact given.

Attached to the motion for summary judgment were several affidavits, one of which was made by Gordon W. Johnson who was a partner with I. A. McNab operating as Texita Oil Company from March, 1950 to December 1, 1958. Mr. Johnson stated that during such time Texita had no other partners, and that appellees were not partners and never held themselves out as partners. He also stated that all purchases made by Texita from appellant 2 were made exclusively on the credit of Texita. That from time to time appellant required Texita to execute notes secured by deeds of trust on interests owned by Texita in the leases *241 in suit. Mr. Johnson further stated that Texita developed and operated the leases in suit under a written agreement which was attached to appellees’ answer and referred to in his affidavit. Other statements were made by him to the manner in which appellant billed Texita for purchases made; the bankruptcy proceedings of Texita and the failure of appellant therein to claim that anyone but Texita was liable for its account, and the fact that appellant accepted dividends from the bankruptcy court without any notice or reference to appellees. Appellant’s claim in the bankruptcy court was based, in part, upon the account sued on here.

Mr. Johnson also swore that no notice was given to any of appellees that appellant intended to file a materialmen’s lien against their interests in the leases in suit.

Mr. Michael J. Kaine, an attorney for appellees, made an affidavit, attached to the motion for summary judgment which confirms, in many respects, the affidavit of Mr. Johnson.

Attached also to the motion for summary judgment were copies of two materialmen’s lien affidavits made by the Treasurer of Continental-Emsco Company, relied upon by appellant to establish the liens claimed by it, which contain the statements that “Continental-Emsco Company has furnished, sold and delivered to Texita Oil Company, a partnership comprised of Gordon W. Johnson and I. A. McNab” materials etc.

The operating agreement was between “Texita Oil Company, a partnership composed of Gordon W. Johnson and I. A. McNab,” called operator, and appellees, called non-operators. These parties owned all the working interest under an oil and gas lease on certain described lands. The agreement recites that “it is the desire of the parties hereto that operator shall be in charge of operations under” the lease. It provided that operator should have “exclusive charge, control and supervision of all operations of every kind” in the development and operation of the leases. It also provides that operator shall charge to a joint account all costs and expenses incurred by him under the agreement and that monthly statements should be made by him to non-operators who should pay, in accordance with the interest of each, the account within 15 days, and each non-operator granted operator a lien on his interest to secure the payment of such expenses.

The agreement provided that operator should not incur any item of expense in excess of $5,000.00 without the written approval of non-operators, with certain exceptions. It also provided that each party should have the right to receive in kind and separately to dispose of such parties’ share of any minerals produced. We copy from the agreement as follows:

“10. LIABILITY OF PARTIES: The Joint Leases shall not be operated hereunder as a partnership venture, and the liability of the parties hereunder shall be several and not joint or collective. Each party shall be responsible only for his obligations as set out herein and shall be liable only for his proportionate share of the cost of operation hereunder.”

The agreement further provides that it shall not constitute a partnership under Federal taxing laws or under any similar State laws.

Appellees J. K. Stark and J. P. Hale filed affidavits in support of the motions for summary judgment, both similar. We quote from the affidavit of Mr. Hale:

“Continental-Emsco Company billed all of the items upon which its suit is based directly to Texita Oil Company and did not send any of the invoices therefor to me and no inquiry was ever made of me by Continental-Emsco Company regarding any responsibility on my part for the payment of such debts incurred and owing by Texita Oil Company. That the materials, supplies, equipment and services upon which the
*242 Plaintiff’s suit is based were not ordered by me or any authorized agent, servant or employee of mine, and were not furnished to me by the Continental-Emsco Company as alleged in the Petition. That no demand was ever made upon me by Continental-Emsco Company for the payment of the debts which are made subject to this suit, or any part thereof, and no notice was ever given to me by Continental-Emsco Company that any lien was claimed or being asserted against my leasehold interest in the above lease.

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Bluebook (online)
355 S.W.2d 239, 16 Oil & Gas Rep. 453, 1962 Tex. App. LEXIS 2270, Counsel Stack Legal Research, https://law.counselstack.com/opinion/youngstown-sheet-and-tube-company-v-penn-texapp-1962.