Townsend v. Day , 1920 Tex. App. LEXIS 878 ( 1920 )

Suit was filed September 10, 1918, by F. E. Day against F. W. Townsend, S.W. Bishop, J. M. Higginbotham, and the Farmers' State Bank Trust Company of Gorman. In his amended petition, he alleged that W. L. Thornton and wife, Della Thornton, had on the 14th day of February, 1918, executed and delivered to F. W. Townsend a certain oil and gas lease to a certain tract of land, containing 110 acres, which lease was recorded in volume ______, page ______, Deed Records of Erath County; that said lease was for the purpose of mining and operating for oil and gas for five years, describing its terms, and, if no well is commenced on or before February 14, 1919, said lease would terminate unless lessee should pay to lessor, or to his credit in the Farmers' State Bank of Gorman, Tex., $55, which when paid should defer the expiration of said lease for six months, etc.; that on September 3, 1918, the plaintiff purchased said lease from defendants Townsend, Bishop, and Higginbotham for $100 per acre, the consideration being payable after the examination of abstract and title to same being found good; that about this time, Townsend for himself and his codefendants, Bishop and Higginbotham, executed an assignment of said lease to plaintiff, and plaintiff executed his draft for $11,000, and the assignment and lease were placed in escrow with said bank, to be held under the terms of said agreement, and, after said title was found good, said assignment was to be delivered by said bank to plaintiff, and said check to be delivered to defendants Townsend, Bishop, and Higginbotham; that within the time agreed upon, and within a reasonable time, plaintiff accepted said title, and demanded the delivery thereof, and tendered to said defendants the $11,000, but that said defendants and said bank refused to deliver said assignment, wherefore he prayed that said bank be made a party defendant, that the court order the delivery of said assignment to plaintiff, and, in the alternative, he prayed for damages in the sum of $90,000.

Defendants, after general demurrer and special exceptions, acknowledged that Townsend, Bishop, and Higginbotham did in truth and in fact enter into a verbal contract with plaintiff to sell him the lease in controversy, but alleged that said agreement was a mere option for one day, and that plaintiff failed, within the time stipulated, to accept said assignment and pay the consideration, and that the contract was at an end. Defendants specially denied that they entered into any written contract with plaintiff, but alleged that all of their negotiations were verbal. Frank Cullinan interpleaded, alleging that he had bought the lease from Day.

The cause was tried upon special issues, and to the interrogatories submitted the jury found as follows:

1. That Day was to have 24 hours after the abstract was placed in the hands of his attorney, H. P. Brelsford, in which to accept or reject said title and to pay the money due therefor.

2. That Day did pay, or offer to pay, defendants the sum stipulated, to wit, $11,000, within said 24 hours after the abstract had been placed in the hands of H. P. Brelsford, his attorney.

3. That it was not the agreement that Day was to have only one day from and after the delivery of the title to plaintiff to pay the consideration.

4. That plaintiff had not been damaged by reason of the refusal of defendants to transfer and assign to him the lease.

5. (Propounded by defendants.) That the defendants Bishop, Townsend, or Higginbotham, or either of them, did enter into an agreement with plaintiff that they would assign the mineral lease to him.

6. (Propounded by defendants.) That this agreement was in writing.

7. (Propounded by plaintiff.) That defendants did not place in escrow such agreement.

8. (Propounded by plaintiff.) That there was no agreement between plaintiff and defendants to limit the time in which the title should be accepted and the money paid over.

Upon these answers, the court rendered judgment for plaintiffs for the gas and oil lease executed by W. L. and Della Thornton to F. W. Townsend, describing the land in detail, and also that plaintiffs have and hold a valid and subsisting assignment of said lease from the defendant F. W. Townsend, who acted for himself and S.W. Bishop and J. M. Higginbotham, and that plaintiffs recover from all of the defendants all rights, title, and interest conveyed by said Thornton and wife, February 14, 1918.

The judgment further recited that, it appearing that plaintiff F. E. Day had not paid the consideration for the assignment of the lease, but had offered, and was still offering, to pay the same, defendants Townsend, Bishop, and Higginbotham have an equitable lien on the lease to secure the payment of the purchase price. The defendants Townsend, Bishop, and Higginbotham have appealed.

The first question to be considered is whether the assignment described the land to be conveyed so as to take the case out of the statute of frauds. Appellants pleaded in the trial court that the contract was only for one day after the signing of the assignment by Townsend, and that, Day having failed to pay the consideration within that time, the contract was at an end. But Day testified that the contract was that he was to have one day after his lawyer had received the abstract, and the jury has found against appellants on this contention. The assignment which Townsend signed, but did not acknowledge, on September 3, 1918, did not set out the description of the property. It reads in part as follows:

"Assignment of Oil and Gas Lease. "Whereas, on the 14th day of February, 1918, a certain oil and gas mining lease was made and entered into by and between W. L. Thornton and wife, Della Thornton, lessor, and F. W. Townsend, lessee, covering the following described land in the county of Erath and state of Texas, to wit: * * * Said lease being recorded in the office of the registry of deeds in and for said county, in book _____, page _____; and whereas, the said lease and all rights thereunder or incident thereto are now owned by F. W. Townsend, now, therefore, for and in consideration of one dollar (and other good and valuable considerations), the receipt of which is hereby acknowledged, the undersigned, the present owner of said lease and all rights thereunder or incident thereto, do hereby bargain, sell, transfer, assign and convey unto F. E. Day all of his right, title and interest of the original lessee and present owner in and to said lease and rights thereunder in so far as it covers the above-described 110 acres of land," etc.

F. E. Day testified:

"Mr. Bishop delivered me an abstract describing the land that I was buying. The land in the abstract is described as the Thornton land, and is the same described in the petition in this suit. I afterwards transferred or assigned that to Mr. Cullinan. I saw the original lease also. That described the land as the abstract. Now, about the original lease, I don't think I ever saw the original lease. I saw the certificate of the abstractor. I saw the lease was recorded, and I saw the abstractor's certificate. That lease was recorded in Erath county; Thornton's lease."

He further testified, after describing the circumstances connected with his going out to the Duke well and the offer by Mr. Bishop to sell him the lease on the 110 acres for $100 an acre:

"I says, ``Let's go down to the bank, and I will put up my money against the assignment; or you can keep the assignment, and I will go down to the bank and put the money in there.' I told him that all I wanted was the title examined and approved, by Mr. Brelsford, and ``your money is ready for you'; and so we went on down to the bank, and Mr. Bishop carried the assignment down there, and he said to me there was no use in keeping the assignment out; that Mr. Townsend could go up there to the bank, and Mr. Walter Collie could take his acknowledgment — that he could just go up there and sign it — and so I just put up my money against the assignment. He assured me that it would be signed up and fixed up all right, and I left my draft for $11,000, and wrote on the back of it, ``Payable on approval of title.' * * * I went to the bank, down to Mr. Collie's bank there in Gorman, and got this draft for $11,000 on the First State Bank of Eastland, and marked on the back of the draft, ``To be paid upon approval of title by H. P. Brelsford, Attorney.'"

Mr. Townsend came into the bank the next day and signed the assignment

The jury found that defendants Bishop, Townsend, and Higginbotham did not place in escrow such an assignment of the lease as was agreed upon between them and plaintiff. This finding may have been due to the fact that at the time the instrument was placed in Mr. Collie's hands it was not signed by Mr. Townsend, and therefore was not an escrow at that time. After Townsend signed the instrument and left it in the hands of Collie for delivery, it was in escrow. Or it may be that the jury concluded that the lease agreed upon between plaintiff Day and defendants Bishop, Townsend, and Higginbotham was one which included a description of the premises conveyed and acknowledgment of the assignment. Either conclusion may have been justified, and it is the duty of this court to accept such finding with the interpretation which supports the judgment, if possible.

10 Ruling Case Law, page 621, § 2, defines an escrow as follows:

"An escrow is a written instrument which by its terms imports a legal obligation, and which is deposited by the grantor, promisor, or obligor, or his agent, with a stranger or third party, to be kept by the depositary until the performance of a condition or the happening of a certain event, and then to be delivered over to the grantee, promisee, or obligee."

The reference to a certain oil and gas lease made by W. L. Thornton and wife to F. W. Townsend on February 14, 1918, and the statement that said lease was recorded in the deed records of Erath county, sufficiently described the land intended to be conveyed by the instrument executed by F. W. Townsend, and a portion of which is set out above, if by reference to the deed records of Erath county and the lease by Thornton and wife to Townsend the correct description of the property intended to be conveyed by Townsend to Day could be secured. In construing deeds, resort must be had to the general rule that that is certain which may be made certain. Vineyard v. O'Connor, 90 Tex. 59, 36 S.W. 424; Gresham v. Chambers,80 Tex. 544, 16 S.W. 326; Bowles v. Beal, 60 Tex. 322; Land Cattle Co. v. Chisholm, 71 Tex. 523, 9 S.W. 479.

In answer to questions 5 and 6, propounded by defendants, the jury answered that Bishop, Townsend, or Higginbotham, or either of them, entered into an agreement in writing with the plaintiff that they would assign the mineral lease to plaintiff. This finding was evidently based upon the fact that Townsend, in whom the title was vested, did sign the instrument left with Collie, for neither of the three signed any other instrument in connection with this deal.

Devlin on Deeds, § 312, defines escrow as follows:

"A delivery may be made to a third person conditional on the performance of an act or the happening of an event, whereupon it is to be delivered to the grantee. Such delivery to a third person is called an escrow."

When so delivered and accepted the depositary becomes in a sense a trustee for both parties to the transaction, and neither may withdraw the deed until the happening of the condition upon which it was deposited, or until after a reasonable time given for the performance of the condition. 16 Cyc. 568; Bott v. Wright, 62 Tex. Civ. App. 632, 132 S.W. 960, 962.

But appellants urge that, even though the instrument was a sufficient memorandum in writing to convey title to the land involved, and even though it should be held that appellee Day had, under the contract with Bishop, one day after the examination of the title by the former's attorney, H. P. Brelsford, yet appellees would not be entitled to a judgment; for, as claimed by the appellants, the instrument, placed in the hands of Collie and the next day signed by Townsend, was a complete conveyance, and as such would not be a memorandum of an oral agreement for the transfer of the land. They cite the cases of Simpson v. Green,212 S.W. 263, by this court, Wilson v. Winters, 108 Tenn. 398, 67 S.W. 800, by the Tennessee Supreme Court, and Morrow v. Moore, 98 Me. 69, 56 A. 209,99 Am. St. Rep. 410, a Maine case, to support this assignment. The Morrow v. Moore Case simply holds that an oral contract for the sale of lands is not taken out of the statute of frauds as to the vendor by his signing and acknowledging a conveyance pursuant thereto and placing it in the hands of his attorney, if such deed remains within the grantor's control. The Wilson v. Winters Case is where a vendor of realty, having secured the cash payments and notes for the purchase price, executed a deed, which he retained in order that his wife, who was ill at the time, might subsequently sign it. The vendee went into possession, and the vendor assumed that he had title to the notes. Held, that no title passed, because of no delivery of the deed. We do not believe these decisions reach the case before us. In Simpson v. Green, by this court, it was held that a deed deposited in escrow, reciting full payment of consideration for the sale of land, was not such a memorandum of an oral agreement for the transfer of the land in consideration of an automobile, cash paid, and deferred payment, as to satisfy the statute of frauds.

Appellants seem to rely upon the last-cited case, and call attention to the fact that the instrument signed by Townsend recited that the grantor, "for and in consideration of one dollar (and other good and valuable considerations), the receipt of which is hereby acknowledged," did bargain, sell and transfer unto the grantee all of his right, title, etc. Appellants urge that in this respect the instrument signed by Townsend is similar to the one involved in the Simpson v. Green case; for, in the last-named case, as well as perhaps in this case, the consideration recited in the instrument was different from the one agreed upon in the verbal contract. But we do not find it necessary to base our conclusion, reached herein, that the instrument was a present conveyance, upon this urged ground. The majority have concluded that the instrument signed by Townsend was not a memorandum in writing of the parol contract of sale and purchase of the lease agreed upon between the parties, and the right to the enforcement of which was made the basis of plaintiff's suit, but was a present conveyance of the lease, and as such it comes within the rule laid down in Simpson v. Green; it being a familiar rule that delivery of a conveyance is just as necessary as its execution to give it legal effect.

The writer hesitates in disposing of the instant case upon the authority laid down in Simpson v. Green. An application for writ of error to the Supreme Court has been applied for in that case, but the Supreme Court has not taken action thereon. Irrespective of whether or not we are sustained in our conclusion reached in that case, the writer believes that, taking into consideration the failure of the assignment to specifically describe the property, and the finding of the jury that defendants Townsend, Bishop, and Higginbotham did enter into an agreement in writing with plaintiff that they would assign the mineral lease to him, and the further finding that said defendants did not place in escrow such an assignment of the lease in issue as was agreed upon between them and plaintiff, we are justified in holding that the instrument, signed but not acknowledged by Townsend, was a sufficient memorandum of the contract, in writing, as to take the case out of the statute of frauds, though t was not sufficient as a present conveyance. This instrument, without acknowledgment, was not subject to registration, and upon the refusal of the defendants to make a complete conveyance, duly acknowledged, it was necessary that suit be filed thereon, in order that the plaintiff secure a judgment of the court vesting the title in him to the land in controversy, and divesting it out of the defendants. See articles 1109, 1116, V. S. Tex. Civ.Stats.

But the majority have concluded otherwise, and therefore, without further discussion, on appellants' first assignment of error, the judgment below will be reversed and here rendered for appellants.