author: BOYCE, J.

text:
    STINE et al. v. PRODUCERS’ OIL CO.
    (No. 1340.)
    (Court of Civil Appeals of Texas. Amarillo.
    April 24, 1918.)
    1. Mines and Minerals <&wkey;78(l) — Oil and Gas Leases — Construction.
    An oil and gas lease provided that after drilling operations had been begun operations might be suspended for 30 days without forfeiture of the lease, and that after drilling operations were begun no tender of the stipulated payment should be necessary when the operations were being carried on in good faith, that if lessee should sink a well and discover oil in paying quantities the lease was to remain in full force for 10 years from such discovery and as much longer as oil should be produced in paying quantities, and, having made such discovery, the lessee was to he exempt from forfeiture, except after judicial ascertainment that he had failed to perform his duty, and that regardless of any other provisions in the lease drilling, when commenced, should be prosecuted with reasonable diligence. Held, that the lease was subject to forfeiture on account of the suspension of drilling following the completion of a well by the lessee, and that the sinking of one well did not make the lease absolute, so that thereafter the. lessee was merely bound to prosecute drilling 'operations with reasonable diligence.
    2. Mines and Minerals <&wkey;78(7) — Oil and Gas Lease — Forfeiture.
    Where an oil and gas lease was made subject to forfeiture on account of the suspension for 30 days of drilling following the completion of a well, unless a stipulated cash payment was made, but providing that reasonable opportunity for preventing forfeiture should be given after a judicial ascertainment thereof, and the lessee suspended drilling for more than 30 days without tendering the cash payment, judgment of cancellation should have been entered, giving the lessee an opportunity to prevent forfeiture by complying with the lease.
    3. Mines and Minerals <&wkey;78(l) — Oil and Gas Lease — Construction.
    Where an oil and gas lease provided that forfeiture might be avoided by the payment of a stipulated sum in cash every six months, an absolute obligation on the part of the lessee to prosecute the drilling or to pay the stipulated amount was not imposed; the only contractual liability imposed by the contract being that following a termination thereof.
    4. Mines and Minerals <&wkey;78(7)-~Oil and Gas Lease — Breach—Judgment.
    .Where an oil and gas lease provided that forfeiture could be prevented by the payment of a stipulated sum or by resumption of the drilling, the lessor was not entitled, where the lease was breached, to judgment both for cancellation and for the cash payment.
    Appeal from District Court, Clay County; Wm. N. Bonner, Judge.
    .Action by F. Stine and others against ilie Producers’ Oil Company. Judgment for defendant, and plaintiffs appeal.
    Reversed and reformed.
    Taylor, Allen & Taylor and Wantland & Parish, all of Henrietta, for appellants. Kay & Akin, of Wichita Falls, and R. A. John and T. J. Lawhon, both of Houston, for appellee.
   BOYCE, J.

This suit was brought by appellants to cancel an oil lease, and to recover rentals alleged to he due thereunder. As the decision of the case depends on the construction of the lease contract, we will here copy such of its terms as are important to the consideration of the questions presented —for convenience in reference giving the paragraphs our own numberings:

First: “Know all men by these presents, that F. Stine and J. H. Stine, for themselves and F. Stine and J. H. Stine as administrators of the estate of B. R. Stine, deceased, of the post office of Henrietta, state of Texas, hereinafter called lessor (whether one or more), for and in consideration of the sum of $20,700.00, cash in hand paid, receipt of which is hereby acknowledged, do hereby lease unto the Producers’ Oil Company, a corporation of Texas, hereinafter called lessee, the following described land, situated in the county of Clay, state of Texas: [Here follows description of several tracts of land aggregating some 200 or 300 acres]. The above land is leased for the purpose of prospecting for oil and the production of the same therefrom, together with the exclusive right of ingress, etc. * '* * And subject to the royalties hereinafter mentioned, there is hereby granted and conveyed to said lessee all the oil in and under said land. The royalties mentioned above shall be on oil, a quantity equal to .one-eighth of all produced and saved, etc. * * * ”
Second: “If operations for the drilling of an oil well are not begun on said land on or before the 29th day of May, 1916, 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 credit of the lessor in the bank of W. B. Worsham & Co., bankers, at Henrietta, Texas (which shall continue as the depository regardless of changes in ownership of the land), the sum of ten thousand, three hundred eighty ($10,380.00) dollars, which payment or tender may be made by the check or draft of the lessee, and, however made, operate to confer on the lessee the privilege of deferring the time limit for six months from said date. Thereafter, in like manner and upon like payments or tenders of said amount, the time limit may be further deferred for additional period of six months successively, provided always that this lease cannot be kept in force by such payments in the absence of drilling operations for a longer period than five years from the date last above set forth. But nothing in this paragraph contained shall obligate the lessee, against its wish or option, to make any such payment, or to drill or otherwise carry on operations hereunder. And it is understood and expressly agreed that the first consideration first recited in this lease, the down cash payment, and the obligation of the grantee contained in the next ensuing paragraph thereof, shall be held to support and sustain not only the privileges granted to the date first written in this paragraph, namely, the date when this lease is to terminate, unless an additional payment or tender is made, but also the lessee’s option of extending that period from time to time and keeping this lease in force as aforesaid, as well as any and all other rights and privileges conferred on the lessee by this instrument. * * * ”
Third. “After operations for the dialling of an oil well shall have begun on said leased land, it shall not bo necessary for the lessee to make any further payments in lieu of drilling operations, as provided in the second preceding paragraph hereof, in order to keep this lease in force; and, during said period of five years, drilling operations may be suspended from time to time, without terminating this lease, provided that the lessee shall have paid or tendered, or shall then pay or tendel, the amount herein-before mentioned for the then current 'period of six months, including the time of such suspension, and provided, further, that after such operations are so begun, no such payment or tender shall be necessary when the operations are being carried on in good faith and the period of suspension is less than thirty days.”
Fourth: “If the lessee shall sink a well or shaft and discover oil in paying quantities, in or under the above-described land, then this lease shall remain in full force and effect for ten years from such discovery, and as much longer as oil shall be produced therefrom in paying quantities; and having so discovered oil in paying quantities, the lessee shall be exempt from loss or forfeiture of this lease in whole or in part, except after judicial ascertainment that the lessee has failed to perform its duty and discharge its obligations hereunder and a reasonable opportunity thereafter to prevent such loss or forfeiture, and in event of final loss or forfeiture there shall be reserved to the lessee each producing well with ten (10) acres of land surrounding the same, to be designated by the lessee.”
Fifth: “Regardless of any other provisions in this contract, drilling when commenced shall lie prosecuted with reasonable diligence, and if drilling operations after the expiration of said five years shall be suspended for a period of sixty (60) days, then this lease shall terminate; and in such event there shall be reserved to the lessee each producing well, with ten (10) acres of land surrounding the same, to be designated by the lessee, but this does not effect any_ of the foregoing terms, which are to precede said five-year period.”

Prior to May 29, 1916, the oil company began drilling operations and completed and brought in on August 7, 1906, a well producing oil in paying quantities. No further drilling operations on said lands were begun prior to the filing of this suit on January 30, 1917.

The appellants filed this suit for cancellation of said lease contract, claiming that it had been forfeited except as to ten acres around the producing well on account of the suspension of drilling operations for a longer period than 30 days from the completion of the first well, and by an amendment sought also to recover the sum of $10,380 by reason of appellees holding said lands for a period of 6 months following the completion of said well without drilling, but claiming under said lease. The appellees defended on the ground that the provision for termination of the contract on 30 days’ suspension without payment of $10,380 for the 6-month period in which such suspension occurs in lieu' thereof has no application after the bringing in of a producing well, and that the lease then becomes absolute and the oil company is bound to proceed with drilling operations only with reasonable diligence under the terms of section 5 of the contract as above quoted. The oil company further pleaded that it had exercised due diligence in such matter, and.on January 30, 1917, had made a location for a new well for drilling; that it had in good faith fulfilled its obligation under said contract, as it construed the same and prayed that if it should be judicially ascertained that it had breached the terms of said contract it should be allowed a reasonable opportunity to “prevent such loss or forfeiture,” as provided by the terms of the fourth paragraph, of said contract.

The court below held as a matter of law:

“That it was the duty of the defendant company to commence the drilling of a second well on the land described in the foregoing contract within 30 days from the completion of the first well, or to pay to the defendants the sum of $10,380 for the right to extend the time of commencing the said second well for a period of 6 months.”

But it further concluded:

“That the defendant company is entitled to a reasonable time after this matter has been judicially ascertained in which to commence the drilling of a second well or pay the sum of $10,-380 for a 6-month extension of time.”

And having found that 30 days after the overruling of the motion for a new trial was a reasonable time in which to allow the defendant to commence the drilling of a second well or pay the sum of $10,380 for a 6-month ehtension of time in which to commence said well, it entered judgment forfeiting the lease, but providing that such forfeiture might toe obviated by beginning the drilling of said well within said 30 days or the payment of the sum of $10,380 within said time, in which event the lease contract was 'to remain in effect for 6 months thereafter.

Stated generally, the errors assigned by appellant to this judgment are that the said judgment is erroneous: First, because it does not cancel said lease contract unconditionally; second, because it does not award appellant’s judgment against the oil company unconditionally for the sum of $10,380; and, third, because it grants the oil company the option of preventing forfeiture, either by beginning drilling operations within 30 days after motion for new trial should be overruled, or by payment of said sum of $10,380 within said time. We may dispose of the assignments by a general construction of the contract and determination of the rights of the parties thereunder.

The contract does not fix any definite date for its termination. It is absolute until May 29, 1916. Its continued existence thereafter, laying aside for the present the. consideration of the provisions of section 4 thereof, is conditioned either on drilling operations by the lessee, or the payment of stipulated amounts in lieu thereof. Even these payments might not extend the contract beyond the period of 5 years in the absence of drilling operations (paragraph 2), or he made in lieu of drilling operations after 5 years (section 5). It was expressly provided that drilling operations “when commenced shall be prosecuted with reasonable diligence (section 5), and the contract specifically provides for the result of the suspension of drilling operations, either during the first 5-year period or thereafter, for it is stipulated that “during said period of five years drilling operations may be suspended from time to time without terminating this lease, provided that the lessee shall have paid or tendered or shall then pay or tender the amount herein-before mentioned ($10,380) for the then current period of six months, including the time of such suspension; provided, further, that after such operations are so begun, no such payment or tender shall be necessary when the operations are being carried on in good faith and the period of suspension is less than thirty days” (paragraph 3), and, “if drilling operations, after the expiration of said five years, shall be suspended for a period of sixty days, then this lease shall terminate” (paragraph 5). These provisions are plain, and that quoted from the third paragraph of the contract clearly applies to the situation presented, unless limited by the fourth paragraph of the contract. Considered alone, the first clause of said fourth paragraph might indicate that the lease, upon discovery of oil, became absolute as to the entire land for the term of 10 years, and so long thereafter as oil should be produced in paying quantities, and free from conditions as to further drilling operations. But subsequent clauses of this same fourth paragraph show that it was contemplated that there might be contingencies upon which the lessee would lose its rights in all the land except ten acres around the producing wells developed by it. Clause 5, stipulating for continuous drilling, provides that it shall apply, “regardless of any other provisions,” and then in detail provides for forfeiture for failure of drilling operations after expiration of the 5-year period. These provisions are specific indications of the evident purpose of the entire contract to force the continued development of the oil possibilities of said land by continued drilling or payment of large sums of money in lieu thereof in order to prevent termination of the contract. There is no more inconsistency between the provisions of the third and fourth paragraphs of the contract than between those of the fourth and fifth, and we think the provisions of the third paragraph of the contract are to be construed in connection with the fourth paragraph for the purpose of determining the rights of the parties under the circumstances there stated. The third and fourth paragraphs of the contract, taken together, provide for the termination of the contract, even though oil is discovered, by suspension of drilling operations occurring during the first five years of the contract, and the provisions of the fourth and fifth paragraphs of the contract provide for the termination of the contract and settlement of the rights of the parties in case of suspension of drilling operations after the expiration of the first 5 years.

We conclude, therefore, that the contract was subject to forfeiture on account of the suspension of drilling following the completion of the well by appellee. This forfeiture could have been prevented by the lessee by the payment of the sum of $10,380 in lieu of drilling operations for each 6-month period following the suspension until resumption of operations. The oil company did not offer to pay any sum of money to prevent the forfeiture, but asked that it be given a reasonable opportunity of preventing forfeiture after a judicial ascertainment thereof in accordance with the term of the fourth paragraph of the contract. We think it is entitled to this right, and the forfeiture may now be prevented by doing those things which it should have done in the first instance. The trial was had in May, 1917, and the court found that the defendant company up to that time, had not commenced drilling another well on said land, and had paid no money to the appellants in lieu thereof.

Under these circumstances the court should have entered judgment canceling the lease, unless the defendant should do that which it was bound by contract to have done to prevent such result, to wit, pay the sum of $10,380 in lieu of drilling operations for the 6-month period ending February 7, 1917, and the further sum of $10,380 in lieu of drilling operations for the 6-month period following February 7, 1917, with interest at the rate of 6 per cent, per annum on these respective amounts from September 7, 1916, and February 7, 1917; and we will reverse the judgment of the trial court and here render judgment to that effect, allowing the oil company 30 days after the judgment of this court becomes final-within which to make such payment and reserving from the forfeiture the ten acres of land around the producing well as described in the judgment of the court below. This judgment will not in any manner affect the rights of the parties in reference to any failure of drilling operations on said land after August 7, 1917.

Appellants, however, insist that they are entitled to judgment both for the cancellation of the lease and for $10,380. The suit was instituted on January 30, 1917, which was within a period of 6 months from the completion of the first well, and plaintiff in the original petition merely sought a forfeiture of the lease on account of the suspension of drilling operations for more than 30 days and failure to pay the $10,380 provided for by the contract in lieu thereof. After the expiration of said six-month period, appellants by an amendment, still sought the forfeiture of the lease contract on account of said suspension of drilling, but alleging that “defendant company exercised its option to bold said lease on said land for the period of six months, beginning September 1, 1916, and did hold said lease during said period of six months without the commencement of any drilling operations upon said land during said time, and thereby became indebted and liable to pay the plaintiff the sum of $10,380, etc.,” prayed for judgment for said sum of $10,380, as well as cancellation of said contract. We think that the contract is not to be construed as imposing an absolute obligation on the lessee, either to drill or to pay the $10,380, but as simply providing that the doing of the one or the other of these things is necessary to prevent a termination of the contract after the expiration of the first year. Van Etten v. Kelly, 66 Ohio St. 605, 64 N. E. 560; Hays v. Forest Oil Co., 213 Pa. 556, 62 Atl. 1072; Glasgow v. Oil Co., 152 Pa. 48, 25 Atl. 232; Snodgrass v. Oil Co., 47 W. Va. 509, 35 S. E. 820; Brooks v. Krunkle, 24 Ind. App. 624, 57 N. E. 260; O’Neill v. Bisinger, 77 Kan. 63, 93 Pac. 340; Archer Oil & Gas Co. Cases, p. 290. It is stipulated in the second paragraph of the contract that:

“Nothing in this paragraph contained shall obligate the lessee against its wish or option to make any such payment (that is, $10,380) in lieu of drilling operations, or to drill or otherwise carry on operations thereunder.”

All further reference in the contract to the $10,380 is based on the provisions of the said second paragraph. The provisions of the third and second paragraphs of the contract are closely connected, and as we have already held that the provisions of the said paragraphs must be held to apply to the contract after oil is discovered, it would seem to follow, construing all of the provisions of the contract together, that the intent of the contract is to provide that the failure to drill of to make certain payments in lieu of drilling merely terminates the contract, and that is the only contractual liability that can be enforced against the lessee for failure to do either of these things. We are not called upon to decide what might be the oil company’s liability in tort for wrongfully claiming to hold the land under a wrongful construction of the contract.

But even if the contract did impose an absolute obligation either to drill or to pay the sum of $10,380 every 6 months in lieu thereof, the lessor would then have the option either of enforcing the contract or terminating it on account of failure to do the one or the other of these things. By the institution of the suit on January 30th, before the expiration of the 6-month period, during which the contract would have been in force had the $10,380 been paid, the lessor elected to forfeit the contract on account of the ’lessee’s default. The payment would have obviated the forfeiture. Appellant cannot invoke both the forfeiture for nonpayment, and then collect the money on account of the nonpayment of which the forfeiture was sought. Clemenger v. Flesher, 185 S. W. 304.

The judgment will be reversed and reformed, as we have indicated, and all costs taxed against the appellees.
      <gr=jFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


source: Caselaw Access Project

author: GRAVES, J.

license: Public Domain

text:
    WARD v. COMPTON.
    (No. 7520.)
    (Court of Civil Appeals of Texas. Galveston.
    March 6, 1918.)
    1. Appeal and Error <&wkey;770 (2) — Briefs — Motion, to Strike.
    .A motion to strike out appellant’s brief and assignments of error on the ground that they do not comply with the rules, and were filed too late to afford reasonable time to properly reply, will be overruled, where appellee has filed a comprehensive answering brief.
    2. Insane Persons <&wkey;33 (1) — Appointment of Guardian — Procedure.
    Unless a person has been determined to be of unsound mind by a verdict of a jury, as prescribed in Vernon’s Sayles’ Ann. Civ. St. 1914, arts. 4238-4243, 4245, appointment of a guardian is absolutely void.
    3. Insane Persons &wkey;>33(2) — Reversal —Interests of Parties.
    Where guardian has been appointed for insane person without a verdict of a jury declaring such person insane, as prescribed by Vernon’s Sayles’ Ann. Civ. St. 1914, arts. 4238-4243, the appellate court cannot allow it to stand, although such appointment is for the best interests of all concerned, and although reversal puts the parties to the expense of an entire new proceeding.
    Appeal from District Court, Galveston County; Clay S. Briggs, Judge.
    Separate applications by Mrs. Bettie C. Ward and Eugene Compton, praying to be appointed guardian of the person and estate of Mrs. Matilda Compton. From a judgment appointing Eugene Compton as guardian, Mrs. Ward appeals.
    Reversed and remanded, with instructions.
    Lewis Fisher, of Galveston, for appellant. James B. & Charles J. Stubbs, of Galveston, for appellee. J
   GRAVES, J.

On April 4, 1916, Mrs. Bettie C. Ward, appellant, and Eugene Compton, appellee, brother and sister, separately filed their respective petitions in the county court of Galveston county, Tex., praying for letters of guardianship of the person and estate of their mother, Mrs. Matilda Compton, who was alleged by both petitions to be a person of unsound mind. There had been no prior determination by a jury that she was of unsound mind, as required by articles 4238 to 4242, inclusive, of chapter 16, title 64, Vernon’s Sayles’ Statutes. On the same day the applications were filed the county judge appointed a receiver to take charge of the estate, and afterwards on October 9, 1916, granted letters of guardianship upon the person of Mrs.' Compton to appellee, but denied the application of appellant in toto; both litigants appealed from that judgment of the county court to the district court for the Tenth district.

Upon the trial of.this appeal in the district court, an agreement was made in open court between the parties, which was subsequently entered in the • court’s decree, as follows:

“On this the 19th day of January, A. D. 1917, came on to be heard the application of Eugene Compton and Mrs. Bettie C. Ward, each filed in the county court of Galveston county April 4, 1916, each to be appointed guardian of the person and estate of Matilda Compton, non compos mentis, and each contesting the application of the other, being in this court on appeal from the county court of Galveston county¡ Tex., and said cause having been called for trial upon a regular setting thereof, and the said appellant Eugene Compton being present and represented by counsel, and the said Mrs. Bettie C. Ward being present and represented by counsel, both parties announced ready for trial, and both parties hereto, Eugene Compton and Mrs. Bettie C. Ward, by their counsel having agreed and so announced to the court that the said Matilda Compton is an insane person and that there is a necessity for an administration upon her estate and that her estate is of the probable value of $20,000, and each appellant is duly qualified to be appointed as said guardian, and that the only controversy in this court is as to which of the applicants shall be appointed guardian of the person and estate of Matilda Compton, non compos mentis,” etc.

Thereupon, and after receiving much evidence, both as to Mrs. Compton’s mental condition and concerning the.relative merits of the two opposing claims for such letters, the question as to which of the applicants should be granted letters was submitted by the court to a'jury, and upon the retan of a verdict awarding guardianship of both the person and estate of Mrs. Compton to appellee, judgment was so entered,- from which Mrs. Ward appeals to this court.

The appellee has filed a motion to strike out appellant’s brief and assignments of error, charging that they do not comply with the rules, and were filed too late'to afford him reasonable opportunity to properly reply; but he has filed a comprehensive answering brief, and we accordingly overrule the motion to strike out that of appellant. Moreover, in the view we take of the case, it is deemed unnecessary to determine whether appellant’s assignments meet the particular requirements of the rules, because they 'at least point out what we regard as fundamental error in the rendition of the judgment complained of, and that requires our consideration, without reference to the sufficiency of the assignments in other respects.

That error mus made to appear from this record is the appointment through the processes of the district court of a guardian of the person and estate of Mrs. Compton upon the assumption that she was a person of unsound mind, -without her status as such having been first determined in the only way it could be legally done, that is, upon a jury’s verdict as prescribed in article 4243 and preceding articles in chapter 16, title 64, Ver--non’s Sayles’ Statutes, supra. As already stated, it affirmatively appears that this had never been done, and the district court, in submitting the sole question to the jury as to whether the one or the other of the applicants therefor should be awarded the guardianship sought, assumed that Mrs. Compton was of unsound mind, either upon the strength of the evidence adduced before it in that trial touching her mental condition, or by virtue of the above-quoted agreement of the litigants to that effect, or partly upon both; but we think it had no such authority.

The recited procedure to secure guardianship in this instance seems to have been taken under chapter 3 of title 64, articles 4061 to 4067, inclusive, Vernon’s Sayles’ Statutes, governing the appointment of guardians for minors; we do not think that procedure applicable to guardianship in cases of persons of unsound mind until adjudication of the existence of that condition by a jury’s verdict; it is true article 4245 recites:

■ “All the provisions of this title relating to the guardianship of the persons and estates of minors shall apply to the guardianship of the persons and estates of persons of unsound mind and habitual drunkards, in so far as the same are applicable and not inconsistent with any provision of this chapter.”

As above indicated this quoted article is a part of chapter 16 of title 64, which spe'cially relates to guardianship of persons of unsound mind and habitual drunkards, and by its articles 4238 to 4243, inclusive, through the particular procedure therein detailed, makes it necessary that a jury first say whether or not a person is of unsound mind before a guardian of such a one can be appointed ; in other words, there being no other way provided, so far as we are advised, for determining that matter, a jury trial for the purpose may not be dispensed with; then, after a jury has found that condition of mind to exist, the court is required to proceed immediately, and without further notice, to appoint a guardian of such person in the same manner as in case of a minor. R. S. art. 4243. Then it is, and not till then, we think, that the provisions of chapter 3, relating to guardianship of minors, become applicable and may be invoked in the selection of guardians for persons thus previously found by a jury’s verdict to be of unsound mind. Since this indispensable action was not taken in the case at bar, the judgment appointing a guardian without it cannot stand.

Distinguished counsel for appellee suggest that, under the 'evidence offered in the district court, the selection of the son was properly made there as being for the best interest of the mother and her estate, and should not be disturbed upon appeal because of some mere informality in the proceedings; that this would require a new beginning in the county court, with consequent delay and expense, in order to bring the same question back again to this court for final determination. As a practical question, it may be freely conceded that such would be the effect of the district court’s judgment; but an appellate court may not hold a complete omission to have the mental condition of a person suspected of being non compos determined in the only way the law provides and an attempted agreement between rival applicants for guardianship of such’ person’s estate substituted therefor a mere informality in the rendition of a judgment; rather does such error lie at the very base and foundation of the proceeding, and necessarily affect the validity of the - judgment. Oil Co. v. Kimball, 103 Tex. 103, 122 S. W. 533, 124 S. W. 85. In other words, control of the property of a person of unsound mind cannot in effect be secured by any such agreement, but only through observance of the plain requirements of the law; it is, moreover, the obvious duty of an appellate court to unhesitatingly declare the law as it finds it to be, regardless of whether or not delay or expense may be entailed in individual instances.

Having concluded that the county court’s appointment of a guardian of Mrs. Compton’s person was void because made without prior determination of her mental condition in the manner required by R. S. art. 4238 to 4242, inclusive, and that the district court’s judgment on the appeal therefrom to it was also unauthorized and void for the same reason, the latter judgment will be reversed, with instructions to the district court to dismiss that appeal, in order that the county court may then proceed to appoint a guardian in the regular and legal manner.

Reversed and remanded, with instructions.
      (§=>For other cases see same topic and KEY-NUMBBR in all Key-Numbered Digests and Indexes


author: HARPER, C. J.

text:
    DODD et al. v. W. T. RAWLEIGH CO.
    (No. 841.)
    (Court of Civil Appeals of Texas. El Paso.
    April 19, 1918.
    Rehearing Denied May 9, 1918.)
    1. Principal and Surety <&wkey;6 — Surety-ship Distinguished prom Guaranty.
    Whore a defendant, a claimed guarantor, with his codefendant, the principal debtor, signed an instrument reading that in consideration of the extension of further time to pay an account, and of the creditor’s extending further credit to the debtor, tho undersigned jointly and severally guaranteed to the creditor unconditionally the payment in full of the balance due the creditor on account, as shown by its bhoks at the date of the acceptance of the contract, etc., such contract was one of sure-tyship, and not of guaranty.
    2.'Principal and Surety &wkey;>152 — Joinder as Dependants.
    Under Rev. St. 1911, arts. 1842, 1843, 6336, 6337, the latter two sections providing that no surety shall be sued unless his principal is joined .with, him, etc., a creditor company properly joined in one suit its debtor and the surety who signed with the debtor a purported guaranty of the account; it being a general doctrine that the rights, of ail parties in the subject-matter of litigation, and all matters growing out of the same transaction, should be settled in one suit.
    3. Contracts &wkey;>136, 137(1) — Illegality.
    Where the contract grows out of. and is connected with an illegal or immoral act, a court' of equity will not enforce it; and if the contract is in part only connected with the illegal transaction, and growing immediately out of it, though in fact a mere contract, it is equally tainted by it.
    4. Contracts <&wkey;>137(4) — In Restraint op Trade — Separation op Legal and Illegal Parts.
    Where a company sold merchandise to its agent for resale under a contract violative of the anti-trust act (Acts 28th Leg. c. 94), in that it provided he should have no other business, and subsequently sold the same under a new contract, which was free from illegality, the amount due under such valid contract being susceptible of separation, the company could recover judgment against such agent for the amount due under the valid contract.
    5. Monopolies <&wkey;>17(2) — Anti-Trust Act-Contract — Restricting Purchases.
    A company’s contract for the sale of merchandise to its agent, whereby the agent agreed “to have no other business or employment,” not only required him to devote his entire time to the pursuit of the business, but restricted him to making purchases of merchandise from the company only, and so was violative of the antitrust act and void.
    Higgins, J., dissenting in part.
    Appeal from District Court, Coleman County ; John W. Goodwin, Judge.
    Action by the W. T. Rawleigh. Company against L. E. Dodd and another. Prom a judgment for plaintiff, defendants appeal.
    Affirmed.
    Critz & Woodward, of Coleman, for appellants. Snodgrass, Dibrell & Snodgrass, of Coleman, for appellee.
   Findings of Pact.

HARPER, C. J.

March 21, 1913, the W. T. Rawleigh Medical Company and L. E. Dodd' executed a writing providing in substance that the company agreed to sell to Dodd at wholesale prices a certain line of merchandise' to be sold again on his own account. The writing contained the following stipulation:

“Therefore he [Dodd] agrees to have no other business or employment.” •

Under the above, upon the same paper was the following:

“In consideration of the W. T. Rawleigh Medical Company extending credit to the above-named person, we hereby guarantee to it jointly and severally the honest and faithful performance of the .said contract by him, waiving acceptance to this guaranty and all notice, and agree that the written acknowledgment of his account or any judgment against said principal shall in every respect bind and be conclusive against the undersigned and that any extension of time shall not release ns from liability under this guaranty, provided that release may be had from this guaranty at any time upon payment of the balance on account due from said principal to the W. T. Rawleigh Medical Company. • ...
“(Responsible men sign below in mk or indelible pencil.) V. M. Skipwith.
“T. Narderke.
"W. T. Walton.”

On October 24, 1913, a writing substantially the same in its provisions as the above was executed by the company and l)odd, except it did not contain the stipulation that Dodd should have no other business. Upon the same sheet of paper, the following obligation was written and executed:

“Por and in consideration of the extension of further time in which to pay his account for goods previously sold to the above party of the second part, and in further consideration of the W. T. Rawleigh Medical Company extending further credit to him, we, the undersigned, do hereby jointly and severally guarantee unto said the W. T. Rawleigh Medical Company, unconditionally, first, the payment in full of the balance due said company on account as shown by its books at the date of the acceptance of this contract, and, second, the full and complete payment to said company of any and all indebtedness incurred under the terms of the within instrument by the party of the second part, named as such therein, to which terms we fully assent waiving acceptance of this guaranty and all notice, and agree that the written acknowledgment of his account, or any judgment against said party of the second part, shall in every respect bind and be conclusive against the undersigned, and that any extension of time shall not release us from liability under this guaranty.
“(Responsible men sign below in ink or indelible pencil.) Wm. Godwin.
“W. T. Walton”
—indorsed on the back:
“Accepted, January 31, 1914.”

The company sold and delivered to Dodd goods to the value of $821.75 under the first contract, and $688.56 under the second. Dodd paid $320 prior to January 31, 1914, and $198.45 after the latter date. Appellees filed this suit against D. E. Dodd upon verified áccount for balance due of $991.86, for merchandise sold and delivered under these •contracts, ’ and against Wm. Godwin upon the written guaranty; the others being out of the state.

The cause was submitted to jury upon special issues, to which they made the findings: (1) That the plaintiff at the instance and request of defendant sold and delivered the goods to the latter. (2) That he agreed to pay the amounts specified, in the sum of $821.75 prior to December 31, 1913, and $688.56 after the latter date, and that Dodd had paid $320 prior to January, 1914, on said account, and $198.45 on it after the latter date. The court in its decree found that “goods to the amount of $688.56 were sold and delivered under the contract accepted January 31, 1914, upon which payments have been made to the amount of $198.15, leaving a balance due of $490.11,” for which latter amount judgment was entered against L. E. Dodd, as principal, and Wm. Godwin, as surety, with 6 per cent, interest, from which Godwin and Dodd appealed.

First, it is urged that there is a misjoinder of parties and causes of action. There is good authority for the proposition that, where a guarantor is bound by a separate contract of absolute guaranty, he cannot be joined in the same suit with the principal. Brandt, Suretyship & Guaranty, § 2; Young v. Bank of Miami, 161 S. W. 438; Shropshire v. Smith, 37 S. W. 174; Id., 37 S. W. 479; Page v. White, S. W. Mac. Co., 34 S. W. 988. Is Godwin bound by a separate contract? The contract made the basis of this action is the one signed by both parties, is one and the same transaction, and we think constitutes a contract of suretyship, and not of guaranty.

“It being the general doctrine of our courts that the rights of all parties in the subject-matter of.litigation and that all matters growing out of the same transaction should be settled in one suit,” we hold that the court did not err in overruling the plea in abatement. Skipwith v. Hurt, 94 Tex. 322, 60 S. W. 423; Slaughter v. Morton, 185 S. W. 905; Fluhart et al. v. Rawleigh Company, 126 Ark. 307, 190 S. W. 118. It is therefore governed by articles 1842, 1843, 6336, 6337, Rev. Civ. Stat.:

Article 1842: “The acceptor of any bill of exchange, or any other principal obligor in any contract, may be' sued either alone or jointly with any other party who may be liable thereon; but no judgment shall be rendered against such other party, not primarily liable on such bill or other contract, unless judgment shall have been previously, or shall be at the same time, rendered against such acceptor or other principal obligor, except where the plaintiff may discontinue Ms suit against such principal obligor as hereinafter provided.”
Article 1843: “The assignor, indorser, guarantor and surety upon any contract, and the drawer of any bill which has been accepted, may be sued without the necessity of previously, or at the same time, suing the maker, acceptor or other principal obligor, when he resides beyond the limits of the state, or in such part of the same that he cannot be reached by the ordinary process of law, or when his residence is unknown and cannot be ascertained by the use of reasonable diligence, or when he is dead, or actually or notoriously insolvent.”
Article 6336: “No surety shall be sued, unless his principal is joined with him, or unless a judgment has previously been rendered against his principal, except in the cases provided for in article 1843.”
Article 6337: “The remedy provided for sureties by this title extends to indorsers, guarantors, drawers of bills which have been accepted, and every other suretyship, whether created by express contract, or by the operation of law.”

Is the contract of suretyship void because a part of the debt secured by it was illegal? The rule is that, where the contract grows out of and is connected with aji illegal or immoral act, a court of equity will not enforce it, and if the contract be in part only connected with the illegal transaction, and growing immediately out of it, though it be in fact a mere contract, it is equally tainted by it. Seeligson v. Lewis, 65 Tex. 215, 57 Am. Rep. 593; Wegner Bros. v. Biering & Co., 65 Tex. 506; Prudential Life Insurance Co. v. Pearson, 188 S. W. 518.

It is equally well settled that, where the legal can he separated from the illegal transaction, the contract is good for so much as is lawful. AVe think the trial court properly held that the sales under the first contract, which provided that Dodd should have no other business, were in violation of the Texas anti-trust act, and rendered that contract illegal and void (Rawleigh Co. v. Fitzpatrick, 184 S. W. 549), and that the sales-made under the contract of January 31, 1914, being free from illegality, and the amount due thereunder being susceptible of separation, he properly rendered judgment for the amount due under the latter (Haswell v. Blake, 90 S. W. 1125).

Appellee urges that the contract does not restrict Dodd to making purchases of goods, wares, and merchandise from the appellee only, hut only seeks to require him to devote his entire time to the pursuit of the mercantile business. The majority of the court are of the opinion that the phrase in the contract, “Therefore he [Dodd] agrees to have no other business or employment,” conveys the double idea that he binds himself to have or pursue no other business than that of buying the goods specified in the contract from the appellee, and from no other, and that he will sell only such goods as he buys from appellee under this contract, and therefore it coinés 'within the inhibition of the statute invoked to the extent of the sales made under the first contract. ■

Judge HIGGINS does not altogether concur in the above opinion. His views upon the questions presented by this appeal are as follows:

1. It makes no difference whether the contracts sued upon be contracts of suretyship, or of guaranty. He therefore expresses no opinion as to the nature thereof. In either event he is of the opinion that appellee had the right to join Dodd and Godwin in the same suit. The rule which obtains in some jurisdictions, that a guarantor must be sued separately, does not apply under the statutes and decisions of this state. Articles 1842, 1843, 6336, 6337, R. S.; Adams v. First National Bank of Waco, 178 S. W. 993; Slaughter v. Morton, 185 S. W. 905; Cleveland v. Campbell, 38 S. W. 219; Kenedy Town & Improvement Co. v. First Nat. Bank, 136 S. W. 558; Allen v. Edrington, 125 S. W. 362.

2. The clause in the contract of March 21, 1913, whereby Dodd agreed to have no other business or employment, did not violate the Texas anti-trust laws. The contract does not restrict Dodd to making purchases of goods, wares, and merchandise from appellee only, but in effect merely requires him to devote his entire time and attention to the mercantile business. This alone does not render the contract obnoxious to our antitrust statute. Gin Co. v. Riddlesperger, 108 Tex. 273, 192 S. W. 530. In any event, the contract is susceptible of this construction, and that construction should be adopted which will make the contract lawful, rather than a construction which would render it illegal. Foard County v. Sandifer, 105 Tex. 420, 151 S. W. 523.

3.The contract of March 21, 1913, being lawful, appellee should have recovered the unpaid balance for the goods purchased thereunder, and its cross-assignments should be sustained, and judgment in its favor rendered against appellants for such balance. Woeltz v. Woeltz, 93 Tex. 548, 57 S. W. 35; Duren v. Railway Co., 86 Tex. 287, 24 S. W. 258.

Affirmed.
      <&wkey;For other cases see same topic and Ki£Y-NUMBER in all Key-Numbered Digests and Indexes


text:
    WALTON et al. v. WALTON.
    (No. 7536.)
    (Court of Civil Appeals of Texas. Galveston.
    March 6, 1918.
    Rehearing Denied April 11, 1918.)
    1. Marriage <&wkey;50(l) — Common-Law Marriage — Evidence.
    Evidence held conclusive that a common-law marriage existed.
    2. Marriage i&wkey;22 — Common-Law Marriage —Duration oe Relation.
    No fixed or continuous period of time of cohabitation is necessary to constitute a common-law marriage.
    3. Marriage &wkey;>51 — Common-Law Marriage —Question of Fact.
    That a railroad man had a sweetheart in every town, and kept other women at intervals at other places, does not make the question of whether there was a common-law marriage one for jury, where there was otherwise positive uneontradicted evidence of a common-law marriage with the woman in question.
    Appeal from District Court, Galveston. County; Clay S. Briggs, Judge.
    Application by Marie Estelle Walton for appointment as temporary administratrix of the estate of Norton A. Walton, deceased. Contested by Nora Walton and another. Judgment for applicant, and contestants appeal.
    Reversed and rendered.
    See, also, 191 S. W. 188.
    Terry, Cavin & Mills, of Galveston, F. J. Wren, of Ft. Worth, and John G. Gregg, of Galveston, for appellants. Marsene Johnson, Elmo Johnson, Roy Johnson, and Mar-sene Johnson, Jr., all of Galveston, for ap-pellee.
   GRAVES, J.

Mrs. Marie Estelle Walton, claiming to be the statutory wife of Norton A. Walton, deceased, filed in the county court of Galveston county her application for appointment as temporary administra-trix of his estate, alleging that he had been killed while in the employ of the Gulf, Colorado & Santa Fé Railway Company, that his heirs desired to prosecute a suit for' damages for his death against the railway company, and that the law required it to be done in the name of his estate. The Gulf, Colorado & Santa Fé Railway Company filed in its own behalf a contest, alleging that the applicant, Mrs. Marie Estelle Walton, had already filed in the Tenth district court of Galveston county a suit against it for damages for the death of N. A. Walton, that she sought appointment as administratrix of his estate for the sole purpose of- enabling her to prosecute that suit, and 'upon information and belief denying that she was his wife, or that her child was his lawful child; upon like information and belief it further charged that Mrs. Nora Walton and her three children were the lawful wife and children of deceased, N. A. Walton, and then prayed as follows;

“Premises considered, said railway company prays that the court hear evidence and determine by proper decree who is the lawful wife and who are the lawful children of said N. A. Walton, deceased, and that the administrator who may be appointed by the court be directed accordingly, so that suit against your petitioner, if any, may be instituted and prosecuted in behalf of the rightful parties, to the end that your petitioner may be protected by any judgment that may be rendered therein.”

Mrs. Nora Walton also filed a contest, alleging that she was the common-law wife of the deceased under a marriage with him of that character, contracted before his attempt to marry the applicant under statutory authority, which. had never been dissolved, and asked the appointment for herself. Judgment in the county court went in favor of the applicant and against the contestants, who appealed to the district court, where a like result was had. The contestants, Mrs. Nora Walton and the railway' company, have accordingly as appellants brought the district court’s proceedings to this court fox-review. The district court had submitted to a jury the question as to whether there was a common-law marriage between Mrs. Nora Walton and Norton A. Walton, and, upon its finding that there had not been, entered the judgment she here complains of.

By their first and second assignments appellants contend that the. court erred in submitting as a fact issue to the jury this question of whether or not there was any such common-law marriage, but should have granted their requested peremptory instruction to find in favor of Mrs. Nora Walton, upon the ground that the undisputed evidence showed there was a common-law mai--riage between her and Norton A. Walton, and no proper fact issue was therefore left for the jury.. After careful examination of the entire body of evidence offered, we are compelled to agree with them, and must sustain both assignments.

Deeming it unnecessary, we shall not attempt to make any full résumé of the testimony, but will only state the salient features; in doing that, it may first be noted that ap-pellee does not seriously contend that the proof made by appellant upon her claim of a common-law marriage with the deceased was controverted, but her insistence is that the testimony of Mrs. Nora Walton herself was so conflicting and contradictory as to be in itself discrediting, and thereby to raise a question for the jury as to whether the alleged marriage in fact existed.

We think the undisputed proof showed an agreement between appellant and the deceased to become husband and wife, and that pursuant to this agreement they lived and .cohabited together as such, publicly so held each other out to the world, and were so known, received, and recognized by their neighbors and the community in general, for a period of about four or five years, beginning in 1897, and during which time there were bom to them as the fruit of such marriage three children; that they were never divorced; and that all this antedated .by several years the attempt of the deceased through the forms of the statutory law to marry the ap-pellee in 1907. Nor is this result dependent alone upon the testimony of Mrs. Nora Walton, for although she was fully corroborated by unimpeached and uncontroverted proof, both oral and documentary, in all respects essential for establishment of the common-law marriage declared upon, it was likewise shown independently; while N. A. Walton was a railroad man of an apparently roving disposition, hence not at home continuously during that period, from 1897 until somewhere about 1903 he and appellant made their home at Ft. Madison, Iowa, living there together as husband and wife at the home of his parents and elsewhere in the town, and were so recognized by his parents, the local merchants, and the community in general; many letters from him to her while away from home during this time, addressed to her as his wife and signed by himself as her husband, the handwriting in a number of them being identified as his by the ap-pellee herself, were offered in evidence, each being the kind of letter a man would ordinarily write to his wife; there was in evidence also a policy of insurance taken out, signed, and made payable by him to appellant as his wife; likewise an application for employment, in which he had been asked the question whether he was or was not married, which was answered by him in the affirmative, and her address in Ft. Madison, Iowa, given.

Although the appellant was the only witness who directly testified to an actual agreement between herself and the deceased to become husband and wife, the undisputed facts shown from entirely separate sources, by inevitable inference at least, demonstrate that there was one; James Walton, the aged father of deceased, N. A. Walton, testified that soon after their marriage they came to his home and lived with his family for some time; that they lived there as man and wife, and he so considered them; that each told him they had been married, and the deceased caused to be published in the local paper in the town where they lived a notice of their marriage; that his sop. always held her out to him and to his mother as his wife, and that he had never heard this fact questioned. Pictures were introduced in evidence showing the children of the appellant, along with other grandchildren of the deceased’s parents, on picnics and at play, which showed that they were received by all as members of the family. The testimony of one of deceased’s brothers was also to the same effect as that of the father; members of the train crew with which he worked while living in Ft. Madison testified that during the time N. A. and Nora Walton were living there they lived as man and wife, that each held out the other as such, and that up until the time of this trial they had never heard this fact questioned.

There may appear some little discrepancy in the length of time these actual relations were shown to subsist, which we have stated as about four or five years, but that becomes wholly immaterial when it is recalled that no fixed nor continuous period of time for their so living together is necessary to constitute such relations a valid .marriage as at common law. Such was the trial court’s charge, following the holding of this court upon the former appeal, of this same cause. Walton v. Walton, 191 S. W. 188. See, also, G. H. & S. A. Ry. Co. v. Cody, 20 Tex. Civ. App. 520, 50 S. W. 135; Schwarz v. Allen, 37 S. W. 986; Chapman v. Chapman, 11 Tex. Civ. App. 392, 32 S. W. 564.

Neither do the statements and admissions made by Mrs. Nora Walton upon cross-examination that the deceased had the reputation of having a sweetheart in every town, that he received many letters from other women, and being a man of that kind, may have been keeping other women at different places, and at intervals, during the time she claimed he was her common-law husband, militate against the force of the previously stated and unassailed facts establishing that relationship; this is necessarily so for the reason that both conditions, deplorable as they might be, could coexist during the same general period of time without destroying the legal effect of his having actualLy so lived and cohabited with her. And this conclusion really disposes of about the only answer made by appellee to the overwhelming proof offered in substantiation of the common-law marriage alleged; while under the rule announced in McAfee v. Robertson, 41 Tex. 357, and kindred cases, we are not at all prepared to concede that the testimony of Mrs. Nora Walton should be disregarded, as is contended for by appellee, still in the state of this record, as has already been indicated, there was abundant proof from other unquestioned sources.

There are further assignments raising in other forms the same issue as the first two, also some relating to matters of evidence; it becomes unnecessary to discuss them, however, since the conclusion already stated determines the merits of the appeal. No question has been raised in this court as to the right of the railway company to file and prosecute the contest it did in this proceeding, and we .do not pass upon that matter.

As the facts were all fully developed below, it follows that the trial court’s judgment must be reversed, and judgment here rendered for appellant ¡Mrs. Nora Walton, and it has been so ordered.

Reversed and rendered.
      ©=»For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes


author: HUPP, C. J.

text:
    CANADIAN OIL & GAS CO. v. WEBB et al.
    (No. 1333.)
    (Court of Civil Appeals of Texas. Amarillo.
    April 24, 1918.)
    1. Limitation or Actions <&wkey;46(l) — Accrual or Cause or Action — Commencement or Relation or Debtor and Creditor.
    A contract between an oil company and the owner of certain piping provided that the gas company was to borrow such piping used for casing in sinking oil wells, and, if oil was found in paying quantities, to pay the reasonable value of such casing, but if oil was not found, the company would pull the casing from the well, or as much thereof as it could, and leave it at the company’s well on the ground. The company abandoned the well and pulled out a portion of the casing only, leaving part in the well. Held, that the right to sue for the casing left in the well accrued at that time; the relation of lender and borrower having then ceased and the relation of debtor and creditor commenced.
    2. Partnership <&wkey;159 — Notice to Partnership-Agency.
    Where a partnership has loaned casing to an oil company, notice to one partner that the relation of lender and borrower had ceased, and that of debtor and creditor arisen, was notice to the partnership.
    3; Limitation of Actions <&wkey;Q7 — Notice-Conversion.
    Where one partner had loaned casing to an oil company and had been notified about four years, before the commencement of the suit that the casing had been abandoned, such notice, being notice to the partnership, barred an action for conversion by another partner under the two-year statute of limitations in Rev. St. 1911, art. 5687.
    Appeal from Wichita County Court; Harvey Harris, Judge.
    Action by Sidney, Webb against the Canadian Oil & Gas Company and others. Judgment for plaintiff, and defendant Canadian Oil & Gas Company appeals,
    Reversed and rendered.
    Martin, Bullington, Boone & Humphrey, of Wichita Palls, for appellant. Taylor, Allen & Taylor, of Henrietta, for appellees.
   HUPP, C. J.

Wfebb sued R. S. Allen,.J. A. Pisher, L. 0. Thompson, I-I. E. Hume, and the Canadian Oil & Gas Company. The suit was filed originally December 20, 1915. By a- second amended original petition, filed on the 27th day of February, 1917, the Canadian Oil & Gas Company was brought into the suit for the first time. .The petition alleged that Webb was the owner of 2,257 feet of 4-ineh rotary pipe, of the value of $500; that on the 1st day of April, 1914, and shortly thereafter the defendants converted the pipe to their own use, and appellee sued for the value of the pipe, the sum of $500. He also alleged that he did not know of the conversion of this pipe until a short time prior to the filing of this suit, and that the defendants fraudulently conspired together to withhold from plaintiff such knowledge. The defendants each filed an answer to the petition, pleading the bar of the two-year statute of limitations, and the Canadian Oil & Gas Company filed its original answer on the 27th day of February, 1917, in which it pleaded the two-year statute of limitations, and specially alleged that Allen and Webb were copartners in the ownership of the pipe, and ■that it had gotten possession of the pipe from Allen under a certain contract, and that it had complied in all things with the contract made with Allen, and that Allen acted for Webb in making the agreement. The -case was tried before the court without a jury, and judgment rendered against the oil company in the sum of $297. The court also rendered judgment in favor of the other defendants, R. S, Allen, J. A. Fisher, H. E. Hume, and L. O. Thompson, against Webb, finding for Allen on the waiver of judgment by Webb as against Allen filed in the lower court.'

The first assignment of error is to the effect that the conclusions of law of the trial court are erroneous because the pleadings of the oil company set up as a b^.r to the right of recovery the two-year statute of limitations, and findings of facts by the trial court show that this suit was not filed for more than two years prior to the accrual of his cause of action, and that Allen, appellee’s partner, had full knowledge of all the facts at all ■times subsequent to the defendants’ use and retention of the pipe. The findings of the court are as follows:

• “(I) The court finds that on or about the 1st day of April, 1913, the plaintiff Sidney Webb, and the defendant R. S. Allen together were the owners of 2,257 feet of 4-inch rotary pipe of the vaiue of 20 cents per foot, and that on or about said date the defendant R. S. Allen delivered the said pipe to the defendant the Canadian' Oil & Gas Company, to be used by said company in a well that it was drilling in Wichita county, Tex.; that said company agreed that if they found oil in its well in paying quantities and used said casing, then it would pay the reasonable value for the casing so used, but in the event it did not find oil in its well in paying quantities, it would pull said casing from said well, or as much thereof as it could, and leave same at the company’s well' on the ground.
“(2) That the Canadian Oil & Gas Company drilled and completed its well about May 1, 1913, and did not find oil in paying quantities. It pulled some of said casing, about 600 feet, from the said well after it had ascertained that said well would not produce oil in paying quan-, tlties, and left ¿bout 1,400 feet of casing in Swid well which was impossible to be pulled, and that as soon as they had pulled said casing, which was between the 1st and 10th of May, 1913, said Canadian Oil & Gas Company, by and through its agent, informed and told the defendant R. S. Allen of the fact that they were unable to pull about 1,400 feet of said casing, and that they pulled about 600 feet of the casing which they used, and told R. S. Allen that said casing was then on the ground at the well which they had abandoned about May 1, 1913. That the value of the casing left in said well, if it had been pulled on the ground, would have been $297.
“(3) I find that the plaintiff, Sidney Webb, did not authorize the said R. S. Allen to make said disposition of said casing to the said Canadian Oil & Gas Company, but that they were equal partners in said casing, and that the plaintiff, Sidney Webb, and R. S. Allen were the owners of a certain oil and gas lease lying next to the one where the defendant the Canadian Oil & Gas Company were drilling their well, and that the said R. S. Allen was desirous of having a deep test made where the Canadian Oil & Gas Company were drilling, and for that purpose the said R. S. Allen loaned the casing to the Canadian Oil & Gas Company.
“(4) I find that the plaintiff, Sidney Webb, did not know what had become of this casing until a year or 18 months prior to the filing of this suit, but' that Sidney Webb made no effort to find out from R. S. Alien,. his copart-ner, what R. S. Allen had done with this casing.
“(5) I further find that the plaintiff, Sidney Webb, tried for several months before the filing of this suit to force the Canadian Oil & Gas Company to pay for the casing they had left in the well, and that the Canadian Oil & Gas Company failed and refused to pay same, and that on the 16th day of December, 1915, the plaintiff, Sidney Webb, filed this suit, and that the plaintiff, Sidney Webb, filed his second amended petition against the defendant Canadian Oil & Gas Company on the 27th day of February, 1917.
“(6) I further find that the plaintiff, Sidney Webb, in open court waived any judgment that he had against the defendant R. S. Allen.
“Conclusions of Law.
“(1) I conclude as a matter of law that the statute of limitation does not run in favor of the Canadian Oil & Gas Company against the plaintiff, Sidney Webb, in this case, and that the defendant the Canadian Oil & Gas Company is liable to the plaintiff in the sum of $297, the value of the casing which it left in its well and could not return to the plaintiff.
“(2) I further conclude that the plaintiff is not entitled to recover against J. A. Fisher, H. E. Hume, and L. O. Thompson, in any sum whatever.
“(3) Upon the waiver of the plaintiff, Sidney Webb, in open court I conclude that the plaintiff, Sidney Webb, is not entitled to recover anything against the defendant R. S. Allen.”

It is our view that under the court’s findings appellees’ cause of action accrued when appellant the Canadian Oil & Gas Company abandoned the well and under the contract found by the court removed all the casing from the well that could be, and left it at the well, as agreed upon, and notified Allen that it had abandoned the well and could remove no more casing from it. The right to sue then existed for the casing left in the well. The relation of borrower and lender ceased, and the relation of debtor and creditor was established for the casing which it was impossible to remove, if in fact any liability ever attached. Únder the findings of the court there was no illegal taking or conversion of the casing in the first instance, but the casing was taken and kept under an agreement, and only an implied obligation to pay for the casing not removed from the well. Allen, being a partner with Webb in the ownership of the casing, had the right to control it as much so as did Webb.

It appears from the findings that Allen permitted the appellant to use the casing to further the interest of the partnership enterprise. Notice to Allen that the casing was returned as agreed upon, and that, the condition had arisen contemplated by .the contract which would change the relation from a borrower to a debtor, would operate as notice to Webb, 'Notice to one partner will ordinarily operate as notice to the partnership, or. to the other partner, on the ground that one is the agent of the other. Smith v. Adams, 4 Tex. Civ. App. 5, 23 S. W. 49; Rippetoe v. Dwyer, 65 Tex. 703; Liddell v. Crain, 53 Tex. 549.

The appellant oil company was sued nearly four years after the cause of action accrued, and under the findings of fact by the court he should have rendered judgment for the appellant under the two-year statute of limitation pleaded by it. Article 5687, R. C. S. While the appellant pleaded fraud and collusion between appellant Allen and other parties, the court does not find any such, but found that there was a contract made in furtherance of the partnership interest. It was pleaded by the appellee that the casing was represented to have been sold by Allen to Webb, The court does not find such allegation to be true. The court finds no fraud or subterfuge on the part of appellant, or any one else, to conceal the matter from appellee. A copy of a substituted citation and petition shows that the original suit was filed December 20, 1915, against Allen and others, and that the appellant was not sued.until the 27th day of February, 1917. The court found that Webb did not know what had become of the casing until a year or eighteen months prior to the institution of the suit, but that he made no effort to find out from Allen, his copartner. It will be seen that more than two years had elapsed after • he learned about where the casing was before he sued appellant. Part of the property had been turned 'back to the partnership more than three years before appellant was sued, and the admission was made to the partnership that the remainder of the casing could not be removed from the well. If the court’s judgment should - be permitted to stand, Webb would recover Allen’s half when Allen knew for more than four years all the facts. If Allen was acting fraudulently with his partner, this would not defeat appellant’s rights. It should not be charged with Allen’s had faith in dealing with his partner. Webb seeks to recover a partnership debt due both partners because, as a member of the firm, he did not actually know the facts. Certainly Allen could not recover, and we do not think Webb entitled to recover when he permitted Allen to act as' his agent. Notice to Allen was notice to him.

The judgment will be reversed and rendered for appellant, and that Webb take nothing by reason of the suit. Reversed and rendered.

HALL, J., not sitting.
      (&wkey;>For other oases see same topic and KEY-NUMBER. in all Key-Numbered Digests and indexes