Campbell v. Hicks , 1935 Tex. App. LEXIS 647 ( 1935 )

This suit was instituted by the World Oil Company against John C. Hicks, independent executor of the estate of L. R. Hicks, deceased, to recover on a note executed by the decedent for the sum of $2,800, dated August 2, 1926, with a credit indorsed thereon for $200, of date September 2, 1926.

The defendant filed an answer presenting the defense of want of consideration and payment, based on allegations that the note and credit payment thereon were solely for accommodation of the World Oil Company.

Defendant also filed a cross-action in which it was alleged that on May 13, 1926, plaintiff executed to L. R. Hicks its contract, in writing, to sell to him 640 acres of oil and gas leases in Tom Green county on a basis of $10 per acre, payable in certain specified installments on different dates, and to assign an equal proportion of the acreage involved according to the amount of money paid in on the contract by L. R. Hicks in the event he should be unable to complete the remainder of the payments, and that under said contract L. R. Hicks had paid to plaintiff $3,800 as the purchase price for 380 acres of said leases and had demanded an assignment of the same which plaintiff World Oil Company had refused, and, since such refusal, those leases had become valueless. In the cross-action defendant sought a recovery of the purchase price so paid as the measure of damages for such breach of contract.

By supplemental petition plaintiff interposed pleas of limitation, followed by this special plea:

"And by way of special answer herein, if necessary, not waiving the above pleas, but still insisting upon the same this plaintiff says that it is true that said World Oil Company and L. R. Hicks, Jr., did enter into and execute the contract set out in defendant's said answer and cross action and to which was attached and made a part thereof an assignment of said oil and gas leases as described in said contract; that the effect of the whole of said instrument was to constitute and did constitute an assignment of said oil and gas lease insofar as the same covered said 640 acres of land therein described and reserving a vendor's lien in favor of said World Oil Company, Inc., to secure the payment thereof; that said contract as shown by said answer and cross action contains the following provision:

"``In the event that said payments are defaulted the World Oil Company, may at its option cancel the remainder of oil and gas leases purchased hereunder and said assignment will be construed as a null and void instrument and without effect even though the same has been recorded. Or at the option of party of the first part (World Oil Company) said payment may be extended without prejudice to its interests.'

"That said defendant L. R. Hicks, Jr., did make default and failed to pay the whole of said purchase price as therein stated and in conformity with said provision of said contract said World Oil Company, Inc., did exercise its option to extend the time of said payments as evidenced by said note herein sued upon, which said note was duly executed and delivered by said L. R. Hicks, Jr., in accordance with said contract and agreement; that at no time did said defendant L. R. Hicks, Jr., ever demand or request of World Oil Company an assignment to any portion of said acreage, but in truth and in fact by reason of his having sold certain undivided interests in six hundred acres of said oil and gas leases had placed himself in a position where he could not accept such assignment and refused to accept at all times any certain specific acreage in consideration of payments theretofore made; that at the time of the execution of said contract said World Oil Company, Inc., was engaged in the drilling of a well for oil and gas on lands adjacent, contiguous and near each of the tracts covered by said contract and assignment to said defendant L. R. Hicks, Jr., that the drilling of said well was prosecuted until on or about the first day of September, A.D. 1926, at a depth of approximately 4000 feet, which said well was a non-producer and failed wholly to produce oil or gas in any quantity and the said well was abandoned as a dry hole; that thereupon said territory including the lands on which an oil and gas lease was to be assigned to said L. R. Hicks, Jr., under and by terms of said contract and which was in truth and in fact assigned to him, was condemned as oil or gas producing lands and became wholly worthless and valueless, and that said oil and gas lease soon became terminated under its terms and forfeited, that by virtue thereof any further assignment or claim to said lease by the said L. R. Hicks, Jr., became worthless and void and of no further force and effect and said L. R. Hicks, Jr., recognized his liability under the terms of said contract and under and by virtue of the terms of said note at all times prior to the time of filing a suit herein recognized the validity thereof, and towit, on or about the 2nd day of September, 1926, paid to said World Oil Company, Inc., the sum of Two Hundred Dollars ($200.00) thereon thereby recognizing and admitting his liability thereon and thereby waives such defense so set up and the matters contained in said cross action, and said John C. Hicks, independent executor of the Estate of L. R. Hicks, Jr., is now estopped to deny the validity of said note and the obligation therein contained; that by virtue of the foregoing said note is a valid and binding obligation against the said John C. Hicks, independent executor of the Estate of L. R. Hicks, Jr., the said L. R. Hicks, Jr., having received the benefits from said contract and having exercised dominion, control and ownership over said leases so assigned and contracted to be assigned by selling interests therein to the extent of more than the purchase price thereof and that the defenses and counter claims of said John C. Hicks, independent executor of the estate of L. R. Hicks, Jr., should be in all things denied."

The case was tried before a jury, and the following are the issues submitted with their findings thereon:

"1. Did the deceased L. R. Hicks, Jr., execute and deliver to World Oil Company, Inc., the $2,800.00 note sued upon herein? Answer: Yes.

"2. Was the note sued upon herein executed by L. R. Hicks, Jr., and delivered to World Oil Company, Inc., as an accommodation note? Answer: Yes.

"3. What sum of money, if any, do you find L. R. Hicks, Jr., paid World Oil Company, Inc., on the oil and gas leases in Tom Green County, Texas, mentioned in the contract of date May 13, 1926? Answer: $3,800.00.

"4. Did the World Oil Company, Inc., execute and deliver to L. R. Hicks, Jr., an assignment of any oil lease or oil leases mentioned in the contract of date May 13, 1926 ? Answer: No.

"5. Did L. R. Hicks, Jr., receive any valuable consideration from World Oil Company, Inc., for the note sued upon herein? Answer: No.

"6. What, if anything, do you find was the consideration for which L. R. Hicks, Jr., executed to World Oil Company, Inc., the $2800 note sued upon herein? Answer: _____

Judgment was then entered denying plaintiff a recovery on the note sued on by it and awarding the defendant a recovery for the amount claimed in the cross-action.

During the pendency of the suit, George H. Campbell had been appointed receiver of the World Oil Company and had been made a party plaintiff, and judgment was rendered against him as such receiver.

Complaint is made of the court's refusal to submit appellant's requested issues presenting the defenses of the statutes of limitation of two and four years.

According to allegations in the cross-action, the defendant paid to plaintiff the sum of $3,800 as the purchase price of certain oil leases which plaintiff contracted to convey to him but which he had never received, and that was the basis of the demand asserted in the cross-action. That cross-action was asserted in defendant's second amended original answer, which was filed October 23, 1933. If that was the first time the cross-action had been asserted, then the pleas of limitation would have been good. The original answer and cross-action had been lost and could not be produced, but the defendant offered evidence to show that the same cross-action had been asserted in his original answer. The proof offered consisted of plaintiff's first supplemental petition, filed April 21, 1927, which expressly alleges that it was in reply to defendant's cross-action theretofore filed with other allegations showing that the cross-action theretofore filed was substantially the same as that alleged in the amended original answer, filed October 23, 1933, and upon which the defendant went to trial. We believe that the evidence, in connection with parol testimony in corroboration thereof, and with no evidence introduced to controvert it, conclusively showed that the pleas of limitation urged by plaintiff to the cross-action were without merit, especially since the plaintiff had the burden of proof to sustain them, and therefore the court was authorized to determine the same as a matter of law without submitting them to the jury.

Another assignment of error is addressed to the introduction in evidence of testimony given by L. R. Hicks, Jr., now deceased, on the trial of a former suit by him against the World Oil Company and Chester R. Bunker, its president, for recovery of certain commissions claimed by Hicks for advertising oil leases owned by those defendants, and which it was alleged they had agreed to pay him. That testimony had been taken down by the regular court stenographer, who verified it as correctly transcribed. The transcript of the evidence so made by the stenographer shows that, while L. R. Hicks, Jr., was on the witness stand, in answer to questions propounded by attorneys for the World Oil Company and Bunker, he testified, in substance, as follows: To the execution of the note sued on by plaintiff and payment thereon of $200 as an accommodation to the World Oil Company; also the written contract of that company, which was introduced in evidence, to sell him 640 acres of oil and gas leases in Tom Green county, on a basis of $10 per acre, and to convey to him such portions thereof as he might pay for, and payment made by him thereon by checks for 380 acres.

The stenographer's notes taken in that case show that, after L. R. Hicks had testified to the above, he further testified in answer to questions propounded by his own counsel that he had paid the oil company $3,800 for oil and gas leases within the 640-acre tract covered by the World Oil Company's written contract of sale, and that the company had failed and refused to convey it to him. The transcript of that testimony was introduced by the defendant in support of the cross-action over plaintiff's objection that it was hearsay.

The general rule is that testimony of a witness on a former trial between the same parties or their privies, involving substantially the same issues where there was opportunity to cross-examine him, may be reproduced on another trial if the witness has since died. In Greenleaf on Evidence (16th Ed.) Vol. 1, p. 276, § 163-A, this is said: "Furthermore, there is not an adequate opportunity of cross-examination unless on the former occasion of litigation the issues and the parties were substantially the same as in the present case. As to the issues, the material inquiry is whether the present topic was then a subject of investigation; e. g., if the then litigation concerned Blackacre and the present case concerns Whiteacre, but the controversy in both is whether John Doe is Richard Roe's heir, the rule is satisfied, but if, though the same act of taking is involved, the charge in one case larceny of a horse, and in the other larceny of a weapon, the rule might not be regarded as satisfied. The application of the principle will depend chiefly on the circumstances of each case."

See, also, 17 Tex.Jur. § 276, p. 658; Boyd v. St. Louis S.W. Ry.,101 Tex. 411, 108 S.W. 813; St. Louis S.W. R. Co. v. Hengst,36 Tex. Civ. App. 217, 81 S.W. 832; Trinity P. Ry. v. Geary (Tex.Civ.App.) 194 S.W. 458; Morris v. Davis (Tex.Civ.App.) 292 S.W. 574,575; Holcombe v. Holcombe's Ex'rs, 10 N.J. Eq. 284; 2 Wigmore on Evidence, vol. 2, p. 1728.

The authorities cited seem to lay special stress on the necessity of showing that the party against whom such testimony is offered had opportunity to cross-examine the witness in the former suit.

Two of those tests were met in this instance, to wit, the parties in the two suits were the same and both parties examined the witness on the former trial. The question then remains whether there was a substantial identity of issues.

It is apparent that the testimony brought out by the oil company on the trial of the former suit was introduced to refute the claim made by Hicks upon the theory that, if the company owed him for services rendered under its contract with him, then it was entirely unreasonable to suppose that he would have executed the note identified as the same as the one sued on in this case, and thereafter would have paid $200 thereon. And such testimony would have been admissible under a plea of general denial without the necessity of a special plea as a basis for its introduction. While that suit was not to recover on the note involved in this suit, yet the majority of us believe that the issue upon which the testimony introduced was involved in this suit to such an extent as to meet the test of substantial identity of issues, and was therefore admissible under the rule announced; although Mr. Justice LATTIMORE does not concur in this conclusion.

However, independently of that question, we all conclude that the error, if any, in admitting that testimony was harmless, in view of the admissions made in plaintiff's supplemental petition that plaintiff did enter into the contract to convey oil and gas leases of 640 acres and had failed to convey the portion for which he had paid, with no offer of testimony to support the further allegation of reasons for such failure. 17 Tex.Jur. 576; Lafield v. Maryland Casualty Co., 119 Tex. 466,33 S.W.2d 187. And this is an answer to further complaints of admission of the contract referred to.

All assignments of error are overruled and the judgment of the trial court is affirmed.