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MRS. J. V. WHELAN ET AL. v. BOBBY MANZIEL ET AL. (04/08/58)

April 8, 1958

MRS. J. V. WHELAN ET AL., APPELLANTS,
v.
BOBBY MANZIEL ET AL., APPELLEES



Author: Davis

DAVIS, Justice.

On the 26th day of February, 1956, Mrs. J. V. Whelan, et al., filed suit in trespass to try title against Bobby Manziel, Carter-Jones Drilling Company, a partnership composed of J. K. Maxwell, W. T. Maxwell, Harry Jones and C. C. Woodruff, and Humble Oil & Refining Company to seven tracts of land described in a single oil and gas lease executed by J. D. Whelan, J. V. Whelan, D. E. Whelan, Sister Mary Angele, born Regina Whelan, Angela Whelan and R. J. Whelan, to Humble Oil & Refining Company, which lease is dated December 10, 1945. Before the case was tried, Bobby Manziel died and Dorothy Nolan Manziel, a widow, individually and as administratrix of the estate of Bobby Manziel, deceased, Gloria Manziel Saleh and her husband, Phillip Saleh, Bobby Joe Manziel, a minor, Nolan Edward Manziel, a minor, Victoria Lynn Manziel, a minor, and Dorothy Suzanne Manziel, a minor, were made parties defendant in lieu of Bobby Manziel, deceased.

On June 7, 1946, the lessors and lessees in the foregoing lease executed a supplemental letter agreement, the construction of which letter agreement in conjunction with the lease is in truth and in fact the sole basis of this lawsuit.

Before we outline the contention of the parties, we will give a brief history of the case. In October, 1952, Humble assigned a portion of the above lease to Renwar Oil Corporation. Renwar secured production in a well drilled in an assigned portion of the lease which production commenced in October, 1952, and continued through July, 1954. Renwar designated 40 acres of land around the well as a drill site. No delay rentals were paid on any of the 1261.15 acres for the years beginning December 10, 1952, and December 10, 1953. Humble tendered to lessors delay rentals in December, 1954, on the entire lease for the final year of the primary term of said lease; lessors contend they have never accepted these delay rentals.

Prior to December 10, 1955, Humble contracted to convey to Bobby Manziel (subsequently deceased) and Carter-Jones Drilling Company, a partnership, certain interests in the lease, and prior to said date Manziel and Carter-Jones went upon the lease and commenced drilling operations.

All the defendants answered and a plea of intervention was filed by one Edward Mike Davis, claiming an assignment from Bobby Manziel to a certain interest in the lease. Humble filed a motion for summary judgment based upon the lease and the supplemental letter agreement and the other defendants filed their motions and adopted the lease exhibit of Humble, and more or less claimed as innocent purchasers in relation to the supplemental letter agreement on the theory that such letter was not filed for record and they were not charged with notice of same.

Production of oil was secured in the first well which was commenced immediately prior to December 10, 1955, and other wells were subsequently drilled. Cross-actions were filed based upon negligence, estoppel and good faith improvements, which matters by agreement of the parties were severed from the motions for summary judgment.

On the hearing on the motions for summary judgment, the motions were granted. Appellants have perfected their appeal, and bring forward two points of error which read as follows:

"1. The District Court erred in rendering summary judgment in favor of appellees for the mineral leasehold estate in the land in suit, because there was at least a fact issue raised as to whether under the supplemental letter agreement of June 7, 1946, the lease terminated (except as to the 40 acres in the Renwar well unit) when delay rentals were not paid for the year beginning December 10, 1952.

"2. The District Court erred in rendering summary judgment in favor of appellees for the mineral leasehold estate in the land in suit, because there was at least a fact issue raised as to whether under the supplemental letter agreement of June 7, 1946, the lease terminated at the expiration of the primary term on December 10, 1955, since there was then no producing oil or gas well on the leased premises."

The supplemental letter agreement referred to in Point 1, and pleaded by Humble Company, reads as follows:

"Humble Oil & Refining Company

"Houston 1, Texas

"Geologic Lease and Scouting Department.

"June 7, 1946.

"Mr. J. V. Whelan

"Mr. J. B. Whelan

"Mr. D. E. Whelan

"Sister Mary Angele

"born Regina Whelan

"Miss Angela Whelan

"Mr. R. J. Whelan

"Dear Mesdames and Sirs:

"Reference is made to the oil, gas and mineral lease dated December 10, 1945, which was executed by each of you as lessor to Humble Oil & Refining Company as lessee, covering seven tracts of land aggregating 1261.15 acres, more or less, in the Levi A. McLaughlin et al Surveys in Marion County, Texas.

"In paragraph 4 of the lease, lessee is granted the right and power to pool or combine the acreage covered thereby or any portion thereof, with other land, lease or leases in the immediate vicinity thereof; such pooling ...


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