Hamill v. Moore , 194 La. 486 ( 1939 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] Plaintiffs are residents of the City of Houston, and defendant is a resident of the City of Dallas, State of Texas.

On January 28, 1936, plaintiffs filed suit in the District Court for the Parish of Vermilion to enforce specific performance of the following agreement:

"June 6, 1934."

"Mr. Claude B. Hamill,

"Mr. R.E. Smith,

"Houston, Texas,

"Gentlemen:

"I hereby agree that when I have finished the well that I am about to drill in the Abbeville Block of approximately 7,300 acres, if the well is a producer, I will assign to you three-fourths of all the minerals that I now hold in my name; or, if the well is a dry hole, I will assign to you all the minerals that I now hold in my name. You have this day assigned to me approximately 7,300 acres of the 15,000 acres under lease in your name in this area. It is understood that you will continue to carry me and my associatesfor a one-fourth interest in the remaining leases in this block." (Italics by Court.)

"Signed: J.C. Moore

"Accepted:

"Claude B. Hamill

"R.E. Smith."

The trial judge held "that plaintiffs had suffered the leases to ``terminate', and performance on the part of the plaintiffs of their engagements under the contract had become impossible.

"Such being the situation here presented, plaintiffs are not entitled to a decree of specific performance and their demands and claims herein must be rejected at their costs."

From a judgment rejecting the demands of plaintiffs at their costs, plaintiffs have appealed.

On or about July 1st, 1933, defendant, J.C. Moore, under an agreement with plaintiffs, came to Abbeville, in the Parish of Vermilion, for the purpose of securing from certain land owners in that parish certain oil and mineral leases, to be known as the "Abbeville Block", with the understanding that the leases were to be secured and placed in the name of Moore, to be thereafter assigned by him to plaintiffs.

All expenses in connection with the undertaking were to be borne by plaintiffs, and Moore was to have one-fourth (1/4) share and interest in the leases.

In pursuance of the agreement, Moore leased a certain block of land in Vermilion Parish, known as the "Abbeville Block", consisting of approximately 15,000 acres. These leases were thereafter assigned to plaintiffs on November 25, 1933, and duly recorded in the conveyance records of Vermilion Parish on January 20, 1934.

In addition to these leases, it was further agreed that Moore was to acquire in his name for plaintiffs certain mineral interests and rights, to be evidenced by mineral deeds, in the "Abbeville Block", for such consideration as he might be compelled to pay, and to pay therefor by drafts upon plaintiffs.

In keeping with this agreement, Moore acquired in his name an undivided one-half (1/2) interest in and to all oil, gas and other minerals, in and under 3,500 acres in the "Abbeville Block".

These lands were secured by Moore under deed from various land owners in Vermilion Parish, and are described in paragraph 3 of plaintiffs' petition.

In the very beginning of plaintiffs' petition, it is alleged in paragraph 2, "that the said J.C. Moore was to have a one-fourth (1/4) share and interest therein," referring to the leases secured by Moore for plaintiffs in his name, and paid for by plaintiffs.

It is apparent that Moore was to receive this undivided one-fourth (1/4) interest in these leases for his services in securing them for plaintiffs, and that this was an undivided one-fourth (1/4) interest acquired by Moore, before thedrilling of the well by him, and the abandonment of same as a dry hole. This undivided one-fourth (1/4) interest extended to all the leases acquired for plaintiffs in Moore's name in the entire 15,000 acre block.

In the agreement which plaintiffs seek to have specifically performed, relating to the drilling of the well by Moore, is the following clause:

"You have this day assigned to me approximately 7,300 acres of the 15,000 acres under lease in your name in this area. It is understood that you will continue to carry me and my associatesfor a one-fourth interest in the remaining leases in thisblock", i.e. for the remaining leases in 7,700 acres. (Italics by Court.)

At the time this drilling contract was made between plaintiffs and Moore, the defendant was entitled to, and already had, an undivided one-fourth (1/4) interest in all the leases, as specifically admitted in the allegations of plaintiffs' petition.

The agreement is not that plaintiffs would give to Moore and his associates an undivided one-fourth interest in the remaining leases on 7,700 acres, "if the well is a producer", but it wasto "continue to carry" Moore and his associates for a one-fourth interest, which Moore already had in the remaining leases, and which plaintiffs, manifestly, had been "carrying", prior to the contract to be specifically enforced. If not so, why the agreement to "continue to carry"?

Moore did not purchase these leases from plaintiffs, and owed plaintiffs not one cent, as far as the acquisition of his interest in the leases was concerned. The only way that plaintiffs could "continue to carry" Moore and his associates was by paying the yearly rentals on these leases.

In referring to these leases, the trial judge says in his opinion:

"These leases are all dated the 6th of November, 1933, are identical in terms, and recited that they should remain in force for a term of ten years from their date and as long thereafter as either oil or gas is or can be produced from any well on said land. It was also stipulated in said leases that if drilling operations are not commenced on said land on or before one year from date ``this lease shall be terminated as to both parties, unless lessee shall pay Lessor the sum of $_____ hereinafter termed rental.'

"The yearly rentals stipulated were never paid, and as a result, the leases were ``terminated' long before the institution of this suit."

On the trial of the case, Mr. Smith, one of the plaintiffs, was asked to explain what was meant by the clause in the contract: "It is understood that you will continue to carry me and my associates for a one-fourth interest in the remaining leases in the block." The witness answered: "That was put in there for the purpose of assuring Mr. Moore that they would have the sameproportionate interest in the leases that we retained in our name; that we would carry them for that interest just so long as the title remained in our hands. It was agreed that there would be no rentals paid in the event of the failure of the well that Mr. Moore was to drill." (Italics by Court.)

This testimony was objected to by defendant's counsel, and the objection was referred to the merits.

The testimony of Mr. Smith, one of the plaintiffs, is an explanation that fails to explain. Defendant and his associates were to be carried for one-fourth interest between them, and not for one-fourth interest each, while plaintiffs Hamill and Smith, under the agreement, were to retain three-fourths interests in the remaining leases.

Besides, on March 8, 1935, several months after the leases had terminated, Mr. Smith wrote defendant, Moore, a letter containing the following admissions and statements:

"After talking to you in Dallas, it is necessary, as I explained to you there, to show on our income tax return the money spent in Vermilion Parish in its entirety. Am enclosing instruments" (these were assignments to be signed by defendant of all the minerals held in his name referred to in the contract declared on) "which I spoke to you about and am asking you to sign them and return them to this office. You mention to your attorney that you have a letter showing our agreement which willprotect you under the terms set forth, as that is the status wehave been existing under for some time." (Italics by the Court.)

The letter referred to is the contract which plaintiffs seek to have specifically enforced in this case.

Further quoting from the same letter, Mr. Smith had this to say:

"You mentioned that you wanted the block of leases kept intact for purposes of drilling a well. The changing of the title of royalty cannot in any way affect this, as I am telling you that we will do everything that we said we would just as we have done in the past andwill continue to do." (Italics by Court.)

We agree with the trial judge in his finding that the above quotations from the letter of April 8th, 1935, written several months after the leases had lapsed, as a result of the non-payment of the rentals, is a clear and unequivocal recognition on the part of Mr. Smith of his obligation to carry defendant for a fourth interest in the leases held by plaintiffs, as well as a declaration of his willingness to perform what was required of the plaintiffs under their contract.

Mr. Smith's attempt, as a witness, to modify the contract declared upon, by the statement "that we would carry them for that interest just so long as the title remained in our hands," and that "It was agreed that there would be no rentals paid in the event of the failure of the well that defendant, Moore, was to drill", was objected to, and properly so, by defendant, as the purpose of this testimony was to vary, add to, or contradict the terms of the written contract declared upon, there being no allegation of fraud, error or mistake in plaintiffs' pleadings.

Where a written instrument is sued upon, as in this case, the best evidence of the engagements of the parties is the document itself.

Besides, parol evidence, under the laws of this State, is inadmissible to establish title to real estate, or to establish the existence of a mineral lease, a real right.

Plaintiffs had suffered the leases to terminate, and performance of the contract on their part had become impossible.

Under such a situation, plaintiffs are not entitled to a decree of specific performance. Seeger v. Seeger, 169 La. 611,125 So. 732.

Judgment affirmed.

HIGGINS, J., concurs in decree.

FOURNET and PONDER, JJ., absent.