Miller v. Esunas , 401 S.W.2d 150 ( 1966 )

ON APPELLANT’S MOTION FOR REHEARING

Earlier in this term we dismissed this appeal because the transcript failed affirmatively to disclose that we had jurisdiction. Appellant later filed a supplemental transcript from which, in connection with the original transcript, it now appears that we do have jurisdiction. Appellant has moved for rehearing and that we set aside our former order dismissing the appeal. The motion is well taken and our former order is set aside and the appeal reinstated.

The appellant charges the appellee with fraud, alleging that the appellee’s geological report, purportedly based upon core hole information and purportedly showing the location of core holes, was false, which fact was and must have been known to the appellee when he prepared and submitted his report to the appellant, knowing that appellant would rely thereon and incur substantial expense and obligation as a result of such reliance, which plaintiff alleges he did.

It is appellant’s contention that the significance of a core hole is that it is a geological factor in establishing a geological “high.” Significant information in this respect can also be obtained from a well which has been drilled, whether a producer or dry hole, where there is the additional advantage of the information obtained from logs and tests, such as drill stem tests. Appellant testified at one point that the presence of absence of core holes in the report did not mean anything to him; he relied on appellee’s conclusions based thereon.

The geological report is based in part on various geological information available to appellee, including logs from other wells, drilled in the area and certain core hole information. At the time appellee Esunas delivered the report to appellant Miller, and at numerous other times both before and thereafter, appellee told appellant that the core hole information had been passed on to him from other geologists; and that he could not prove that such core holes existed or give him any logs on them. Appellant admitted that appellee told him that the information had been given to him by some other geologist or engineer, but appellant maintains that appellee told him that he had to protect such party and could not divulge the source.

The parties were looking for high structure in the Yates Sand, a shallow non-producing sand which is indicative of closed geological features below in which oil may be trapped. It is shown that the appellee’s projections as contained in such report were quite accurate. The sand in which they hoped to find oil — the Ellenberger— was encountered in the well at almost the exact depth as projected. Of course, all geological structures do not contain oil, which accounts for why, as the record shows, that there have been numerous geological successes which are oil failures. With appellant’s experience in the oil business, he was aware of the obvious fact that no geologist could guarantee the finding of oil and appellee’s report in question did not purport to do so.

A geological report is analogous to one who might be seeking the whereabouts of Sam Jones and in so doing receives information that Sam Jones maintains a home at Tyler, Texas, 1420 Oakwood Street, and that he might be found there. Perhaps upon arriving at this address expecting to find Sam Jones, you learn that he is not at home. This would not be evidence that the information given was false or misleading. Even though the informant had pointed out to his inquirer where he would be expected to find Mr. Jones, the only way that it could be ascertained whether or not Mr. Jones was there was by reaching the address previously given. A geologist can only, through his skill, training and knowledge of a particular area, supply information as to where structures, pinch-outs, or other traps that may contain oil or gas may be found, but the only way of ascertaining if oil or gas is actually there is by drilling into such structures or formations.

Appellant’s first two Points of Error read as follows:

“Point One: Esunas having admitted under Rule 169 that he showed the existence of the core holes on his written geological report furnished to Miller, this was conclusive as a judicial admission, and there was no evidence to sustain the jury’s finding to the contrary in answer to Special Issue No. One.

“Point Two: Esunas having admitted under Rule 169 that he showed the existence of the core holes on his written geological report furnished to Miller, there was no issue of fact justifying submission of Special Issue No. One asking whether Esunas did represent as a fact to Miller that two core holes existed.”

Appellant by his Points 1 and 2 contends that appellee’s answers to appellant’s requests Nos. 3 and 4 in his request for admissions, to the effect that appellee furnished appellant a written report containing core hole information and showing core holes, constituted a judicial admission by appellee and that he represented to appellant — as a fad — that core holes existed. Appellant therefore urges that Special Issue No. One¹ should not have been submitted and that no evidence bearing on such issue should have been heard.

Appellee, by the way of counter points, contends that “The jury found on ample evidence that appellee did not represent to appellant — as a fact — that certain core holes existed, and the trial court properly rendered judgment in favor of appellee based thereon;” that “Appellee’s answers to appellant’s request for admissions pursuant to Rule 169 show that appellee fully disclosed to appellant that he was without knowledge as to the actual existence of core holes, and the trial court properly submitted the issue of misrepresentation to the jury.” This contention we sustain.

The appellant’s position is based upon the erroneous assumption that the questions propounded by him in his requests Nos. 3 and 4 embrace the ultimate issue submitted to and determined by the jury as to whether “On or before March 1, 1958, the defendant, Bernard Esunas, represented to Jeffrey V. Miller, as a fact, that two core holes existed in Section 40 adjoining the lease in question.” There is a considerable amount of evidence (some of which came from appellant himself) that appellee repeatedly told appellant in connection with the report that the core hole information was something which he had been told by others and that he could not prove that such core holes existed. This evidence must be considered in answering the ultimate issue of whether appellee made the representation, as a fact.

This is in accordance with settled law on the subject. As stated in 25 Tex.Jur.2d 675, Section 39:

“An action for fraud may not, ordinarily, be based on statements that are expressly declared to be made merely on information. Such statements may, however, amount to positive statements of fact if full responsibility for their truth is assumed. * * * ”

See also Foster v. L.M.S. Development Co., 346 S.W.2d 387, 396, (Tex.Civ.App.) 1961, error refused, n.r.e., wherein it is held that:

“ * * * Fraud is not to be predicated on statements expressly represented to be made merely on information. * * * ”

The appellee in his brief says:

“Actually the ultimate issue of whether appellee represented the existence of core holes as a fact is possibly established by the evidence as a matter of law in favor of appellee rather than appellant.”

Be that as it may, such issue was submitted to the jury and was answered adversely to appellant.

The issue as to whether appellee made a misrepresentation as a fact was one which formed a part of appellant’s case and on which it devolved upon him to carry the burden. Appellant made no objection to Special Issue No. 1 as submitted by the trial court, either as to form or substance. The trial court properly submitted the ultimate issue, and in so doing he observed the mandate of Rule 279, Texas Rules of Civil Procedure, that “he shall submit the controlling issue [s]” without the necessity of submitting “other and various phases or different shades of the same issue.” Neither party objected to such issue.

Appellee does not deny that he furnished the written geological report inquired about in the appellant’s requests Nos. 3 and 4, nor did he take a contrary position at trial. The point is, however, that the matters inquired about do not embrace the ultimate issue of whether, under the evidence in this case, the particular representation was ■ in fact made. Appellee’s answer to appellant’s request No. 5 clearly shows that appellee fully disclosed his lack of knowledge to appellant. Appellant’s Points 1 and 2 are without merit and are overruled.

Appellant by his Point No. 3 contends that “Miller having contracted with the landowner to drill the wells, the costs of which he seeks to recover from Esunas as damages for fraudulent misrepresentation, the source of his financing constitutes no defense available to Esunas, and evidence thereof was inadmissible and prejudicial.” The jury’s finding in response to Special Issue No. 1 that there was no representation as a fact that appellee represented to appellant that two core holes existed in Section 40 adjoining the lease in question, renders this point immaterial. In view of this finding of the jury, the error, if it is error, it is not material to the outcome of the suit, and under Rule 434, T.R.C.P., furnishes no proper basis for a reversal of the judgment. Pride v. Pride, 318 S.W.2d 715, (Tex.Civ. App.) 1958, no writ history. Error in admitting or excluding evidence becomes immaterial where the case does not turn on the excluded or admitted evidence, that is, where it is not material and does not affect the verdict and judgment rendered. Flores v. Missouri-Kansas-Texas Railroad Company, 365 S.W.2d 379, (Tex.Civ.App.) 1963, writ refused, n. r. e.; Gross v. Dallas Ry. & Terminal Co., 131 S.W.2d 113, (Tex.Civ. App.) 1939, writ dismissed, judgment correct. This Point is overruled.

Appellant by his Points 4, 5, 6 and 7 complains that the trial court required the plaintiff to give the defendant the benefit of his self-serving additions to the answer for request for admissions; would not permit the plaintiff to testify that the showing of core holes on the geological report was material and that he relied upon them; would not permit the plaintiff to explain the meaning of the technical exhibit concluding a portion of the geological report while permitting defendant to do so; and would not permit the plaintiff to refresh his memory of exact figures from five years before without cluttering up the record with irrelevant instruments. We have carefully considered these Points and under the record in this case, we believe them to be without merit and each are overruled. We have likewise considered appellant’s Points of Error Nos. 8 and 9 and the same are overruled for lack of merit.

Appellant had his day in court before a jury which found against him on the facts and we hold that the testimony was ample to support the jury findings.

The jury finding in response to Special Issue No. 1 alone is sufficient to preclude a recovery of damages by the appellant under the pleadings and evidence in this case.

Finding no reversible error in the record, the trial court judgment is affirmed.

1 . Do you find from a preponderance of the evidence that on or before March 1, 1958, the defendant, Bernard Esunas, representing to Jeffrey V. Miller, as a fact that two core boles existed in Section 40 adjoining the lease in question?

Answer “Yes” or “No.”

ANSWER: Nq_