Frazier v. Hanlon Gasoline Co. , 29 S.W.2d 461 ( 1930 )

Being unable to concur in the opinion and judgment of the majority, I will briefly express my views on the more important and controlling questions presented by the appeal.

Of first importance, I think, is the question of whether or not the contract of October 17, 1924, by which A. J. Jones undertook to grant some character of rights or interests to Clark Johnson, conveyed to them an interest in the land upon which the tank was located. In the majority opinion it is held that the nature of the interest granted was a profit a prendre, an interest in land. A good definition of a contract is: "A promise or set of promises to which the law attaches legal obligation." Williston on Contracts, § 1. "The definition given at least makes clear that the obligation of a contractor is based on a promise made by him." Id. Under the definition, a contract evidences rights and obligations. Each party may have both rights and obligations. But, even so, the "rights" are not "obligations," nor are the obligations rights. In the contract in question, the obligations of Clark Johnson consisted of promises. Those promises, or the obligations existing by reason thereof, must not be confounded with their rights. Aside from the provisions of the "Appendix," to be discussed later, the sole right which the contract gave to Clark Johnson was the right to "one-half interest in whatever revenue that might be realized from the sale of water out of said tank." Since a profit a prendre includes an easement, and it is because of that fact that it is an interest in land, and, since an easement, as to one claiming it, is a "right," it follows that the contract does not grant a profit a prendre unless the provisions of the "Appendix" do so. This statement is based upon the assumption that no one will contend that the right to one-half the revenues that might be derived from the sale of water out of said tank in itself includes an easement in the land. Water artificially impounded, as was this, is, I think, personal property. "By a conveyance of `water,' the land under the water does not usually pass, the proper description being of the land as covered by water." Tiffany on Real Property, p. 1647. Water which, under certain conditions, is not the subject of private ownership, is, according to the same authority, property when taken into possession by placing it in a reservoir or other receptacle. In that case it is said: "Water thus privately owned has been regarded as personal property." Id., p. 1131. It seems to me that the rule for determining whether manure is real or personal property may be applied to determine whether water is real or personal property. That rule is: "Manure in a heap is a chattel, and goes to the executor, while, if it lies scattered on the ground, it is parcel of the freehold." Id. p. 949. By just analogy, percolating waters or waters in their natural state in and upon the land may be regarded as a part of the land, but when artificially impounded in a reservoir or tank should, I think, be regarded as personal property. But the contract did not purport to grant to Clark Johnson an interest in the water. Even if the water was part of the land, they acquired no interest in the land by a grant of an interest in one-half the revenues derived from the sale of water. A fair test of the question would be whether the contract was one required to be in writing under the statute of frauds. It is well settled that a promise or contract by one person to pay another a certain sum of money out of, or a certain share of the proceeds of a contemplated sale of land, or an interest therein, is not within the statute. 27 C.J. 226; Lincoln v. Kirk (Tex.Civ.App.) 243 S.W. 671; Martin v. Morrison (Tex.Civ.App.) 260 S.W. 893.

I cannot agree that there is any question of possession or right of possession, or right of use of the land in the nature of a servitude or easement involved. The possession, if the contract deals with that matter, was that of Jones, the owner, through Clark Johnson, his employees. The provisions which seem to be construed as showing rights in Clark Johnson in the nature of a servitude or easement are, on the contrary, obligations and burdens, constituting expressly the consideration moving from them for the right above mentioned.

By the "Appendix" to the contract, Jones obligated himself not to remove the equipment from the tank, nor to sell same, "as long as revenue from the tank is a paying proposition, and for five months thereafter." That obligation gave to Clark Johnson the correlative right to have the equipment so remain and not be sold. Does that alone evidence the conveyance of an interest in land? The contract does not state what the equipment was. Whatever it was, it was something which the parties contemplated might be sold. Is it probable that they would, in their contract, make no provision restricting the sale of the land, and yet make the one they did as to the equipment, unless they regarded the latter as something separate from the land? If the equipment was personal property, of course the provision cannot be held to effect the conveyance of an interest in land. The same test is applicable here as to whether the contract is one required to be in writing under the statute of frauds. "A contract, though oral, that land shall be used or shall not be used in a particular way, is enforceable unless the contract, if enforced, would give rise to a legal or equitable easement." Williston on Contracts, § 493. "The agreement not to use his mill, after a certain day, is not within the statute of frauds and perjuries, for this statute contemplates only a transfer of lands, or some interest in them." Bostwick v. Leach, 3 Day (Conn.) 476; Hall v. Solomon, 61 Conn. 476,23 A. 876, 29 Am. St. Rep. 220. I am unable to appreciate the point that the contract provided for any restriction in the use of the land such as that the performance of the contract would give rise to a legal or equitable easement. The equipment was merely to remain where it was. Surely it cannot be said, as a matter of law, that that was a restriction upon the use of the land. The restriction against sale, as already said, could not have reference to a sale of land. It is unreasonable, I think, to ascribe to the parties an intent by such provision to restrict any sale of the land when, if such had been the intent it was so easy, and the natural thing, to plainly say so.

Another reason that seems to me to compel the holding that the contract conveyed no interest in land is the conclusion hereafter to be discussed, that the contract was invalid and unenforceable because of indefiniteness, save and except to the extent it was made definite by the actual sale of water or provisions for such actual sale. If the contract was unenforceable prospectively, then the time that the "revenue from the tank is a paying proposition" was, from the very first, too uncertain and indefinite to fix any term of the grant of an interest in land. If it was intended to convey an interest in the land, it is certain that it was not to be unlimited in duration. There would have to be some certainty of duration for any interest to be sufficiently defined.

The question last adverted to will next be considered. The contract, by its terms, grants "one-half interest in whatever revenue that might be realized from the sale of water out of said tank." No obligation is imposed upon the owner of the tank to sell water. No restriction appears to be imposed upon the owner to make other and different uses of the water. Were we to attempt to imply an obligation to sell water, we would be met with the difficulty of indefiniteness and uncertainty as to how much water should be sold. It would be unreasonable, I think, to undertake to imply a duty to sell water that would restrict and limit the otherwise existing right of the owner to use water to irrigate his lands or to make other proper uses thereof. Apparently Clark Johnson relied upon the self-interest of Jones to sell water, content to have their rights and interests conditioned or contingent upon such sales being made. Their rights were therefore not materially unlike those of one who makes or assigns an oil or gas lease for a consideration to be paid in oil produced from the land without imposing drilling obligations on the lessee or assignee. Harris v. Wheeler (Tex.Com.App.) 267 S.W. 465; Cotherman v. Oriental Oil Co. (Tex.Civ.App.) 272 S.W. 616; Ferguson v. Mansfield, 114 Tex. 112, 263 S.W. 900; Ferris v. Huffman (Tex.Com.App.) 274 S.W. 125; Great Western Oil Co. v. Carpenter, 43 Tex. Civ. App. 229,95 S.W. 57.

The contract, because of indefiniteness, was never enforceable, so far as it was executory, but, to the extent it was performed by actual sales, no reason appears why it was not enforceable. Williston on Contracts, § 49. I am of opinion that, as to all revenues that the contract of May 1, 1925, to which Hanlon Gasoline Company succeeded, secured to the parties, the rights of Clark Johnson to one-half thereof became enforceable. The last-named contract itself, expressly recognizing Jones as the owner of the land, conveyed an interest in the land to Hanlon Gasoline Company, which, being such, survived the death of A. J. Jones, and continued by its terms until May 1, 1927. The contract with Clark Johnson would not, I think, have continued as an enforceable obligation after the death of Jones, but for the last-named fact. Their rights before Jones' death had become fixed and operative to one-half of all the revenues from the sale of water taken under the contract with Hanlon Gasoline Company. The last-named contract simply supplied a definite subject-matter, upon which the otherwise indefinite contract of Clark Johnson could operate.

As thus fixed and operative, it was none the less only an interest in the revenue from the sale of water; neither the amount of which nor means of ascertaining such amount was fixed by the contract. For aught the contract provides to the contrary, ownership of all the water without restriction as to his right to use same for other purposes than for sale remained in Jones, the owner. As already pointed out, he was in no manner restricted in his use of the water.

The next question is: What is the effect of the judgment in the partition suit? The first judgment of July 13, 1926, decreeing the interest of all the several owners of all the land under the will of A. J. Jones, made no mention of the interest therein in the nature of an easement held by Hanlon Gasoline Company. Neither did it mention the contract of Clark Johnson. I think, therefore, that that judgment did not affect such easement or contract. Since the easement expired on May 1, 1927, thereafter, the operation of the judgment thereafter being precisely as though no such easement ever existed, it is unnecessary to examine into the question of whether the judgment was invalid because it took no account of the easement and the owner thereof. It is sufficient to say that, if it were defective for that reason, it is not a matter to be urged upon a collateral attack. As to the contract, it ceased to operate with the expiration of the easement, because, as already said, there was no longer any subject-matter so defined as to make it operative.

The judgment of July 13, 1926, having fixed the interests of the several parties, and ordered partition in accordance therewith, the power of the commissioners to make partition, and the power of the court at a subsequent term to approve the report and order the vesting of title in severalty, were, I think, definitely prescribed and limited by the terms of the first judgment. White v. Mitchell, 60 Tex. 164; Arnold v. Cauble,49 Tex. 527. The entire foundation for the second decree was the first decree. Scheiner v. Proband, 73 Tex. 532, 11 S.W. 538; White v. Mitchell, supra.

In my opinion, the court was without power to adjudge the existence of easements and the right and power of Clark Johnson to make contracts, etc., for the sale of water, or to collect the proceeds thereof. Such a matter was never addressed to the jurisdiction of the court by any character of pleadings. But, aside from the question of a lack of power in the court to adjudicate such matters, it is our duty to so construe the action of the court, if possible, as to acquit the court of any intent to do what it clearly had no power to do. In so far as the commissioners of partition reported that they had not undertaken to make any apportionment of the funds received, or to be received from the proceeds of the sale of water, they were but declaring they had not undertaken to do a thing which they had no power to do. Their recommendation and expression of intention "that such proceeds be paid into the general or common funds of the A. J. Jones estate, to be divided and distributed from time to time among all the parties interested in said estate," etc., could no more affect the partition of land they did make than a suggestion that any other fund or personal asset of the estate should be appropriated in a certain way. It simply means no more than that matter was expressly excluded from the partition as then being made. If not, nevertheless it should be held to refer to the sales made under the then existing contract and easement, and to have ended with the expiration of that easement. As to the recommendation "that proper rights-of-way and easements be continued and allowed from time to time, over, along and across any of the land owned by A. J. Jones in his lifetime, to permit and allow reasonable access to use of and transportation of said waters," two things may be said:

In the first place, at the time, there was one easement and only one, and that was not affected by the partition and could not be. The judgment based upon this recommendation should be construed as simply a recognition of same. The "time to time" should be held to refer to that easement as but a recognition of its continued existence, according to its terms. That construction would be entirely consistent with the intent of the court not to do anything it had no authority to do. Likewise it would affect no question involved in this suit.

In the second place, the provision, if not so construed, is wholly ineffectual to create an easement because of uncertainty and indefiniteness. To what lands does it apply? By its terms, to "any of the land owned by A. J. Jones in his lifetime." It was not even confined to such lands as he owned at his death. What was the nature, extent, and duration of such easements? It is wholly unreasonable, it seems to me, that a possibly perpetual servitude can be held to have been placed upon a particular tract of land by any such designation and description. But, since the judgment otherwise carried out the mandate of the prior judgment, it is my opinion that the last-named judgment, with the exception noted, was valid, at least as against collateral attack.

I will but briefly dwell upon other questions. We will take, first, the question of the rights and liabilities of the Hanlon Gasoline Company as to water taken from the tank from May 1, 1927, the date of the expiration of its easement, up to June 1, 1928, the date it had notice that plaintiff Frazier was claiming inconsistent rights to all the water. When Hanlon Gasoline Company, after a reasonable time for taking away its equipment, continued to use water from the lake just as it had done theretofore, it became a trespasser or else a licensee. If the former, it is liable for the value of all the water taken as for a conversion. If the latter, its taking the water was justified, and in my opinion there exists no right of recovery by plaintiff against either Hanlon Gasoline Company or any one to whom it may have made payments for the water. The license, if it existed, was an implied one and not express. "A license to do certain acts on land may occasionally be inferred from the owner's failure to object to the doing of such acts thereon." 2 Tiffany, p. 1205. "No formality is necessary to a license. It may be * * * implied from the relations of the parties or from the conduct of the landowner as when he indicates an assent to the doing of certain acts on his land." Id. p. 1204. Says Corpus Juris: "When the owner of land, with full knowledge of the facts, tacitly permits another repeatedly to do acts upon the land, a license may be implied from his acquiescence or failure to object." 37 C.J. 283. "An ineffectual attempt to convey or lease land may operate as a license to enter and occupy until the lease is revoked." 37 C.J. 284.

Accordingly, it has been held that a parol sale of standing trees, although void as a sale of an interest in land, operates as a license to enter and cut and carry away the trees until revocation. Jenkins v. Lykes, 19 Fla. 148, 45 Am.Rep. 19; Spalding v. Archibald, 52 Mich. 365,17 N.W. 940, 50 Am.Rep. 253.

The license excuses the licensee and exempts him from liability to the licensor for all acts done within the scope of the license prior to its revocation. The situation was that Frazier purchased the land on August 8, 1927, with knowledge that Hanlon Gasoline Company, with its equipment on the ground, was taking the water under a claim of right. He knew that a judgment to which his grantors were parties undertook to confirm in it an easement and right to take the water, ineffectual though it was. The taking of the water constituted no permanent injury to the freehold. If the water, aside from the contract, had the market value that it was agreed it had, there was no limitation or restriction on Frazier's right to sell it or make other use of it. With this situation existing, Frazier made no objection or gave any notice that he claimed any rights inconsistent with the rights asserted. Was the taking of the water by Hanlon Gasoline Company wrongful? If not, it cannot be held to the liabilities of a trespasser. I think the conclusion justified that it was protected as a licensee up to the time it received notice that amounted to a revocation. Its acts being not unlawful, and Frazier not being a party to the contract for the payment of water, I am further of opinion that Frazier has no just claim against any of the parties to whom the money was paid.

The license was subject to be terminated by revocation. It was revoked as of June 1, 1928, when he first gave notice of his claim. By such revocation the contract of Clark Johnson became inoperative. The subject-matter of the contract was in a sense destroyed. The right to sell water was thereby terminated, and without such right there was no way to produce the revenues in which alone they had their interest. Thereafter, the Hanlon Gasoline Company protected itself by withholding the money in the sum of $5,500. I see no reason why, under the agreed facts, plaintiff should not recover the value of the water taken subsequent to June 1, 1928.

I am also of opinion that the trial court correctly instructed a verdict in favor of plaintiff and W. H. Green on the cross-action of Bryant Heatley and wife.

It is further my opinion that, by means of the implied license given by Frazier to Hanlon Gasoline Company after May 1, 1927, the contract of Clark Johnson was rendered operative and enforceable as between them and the heirs and devisees of A. J. Jones as to all revenues paid them under the terms of that contract, and that therefore the trial court did not err in denying recovery to the executor and trustee and the devisees upon their cross-action against Clark Johnson.

I am also of opinion that the judgment of the trial court, in so far as it awarded to plaintiff Pat Frazier recovery for the title and possession of the surface of said land, and in so far as it denied recovery in favor of Bryant Heatley and wife against plaintiff and W. H. Green on the cross-action for reformation of the deed, should be affirmed. In so far as said judgment awarded to Pat Frazier recovery of 1/30th of 1/2 of the money held by Hanlon Gasoline Company, it should be reformed, and, as so reformed, be affirmed. In so far as said judgment awards recovery in favor of Clark Johnson against Hanlon Gasoline Company, and in so far as it awards recovery in favor of G. P. Jones, individually and as executor and trustee, and the other parties joined with him in their cross-action against Hanlon Gasoline Company, should be reversed and rendered in favor of Hanlon Gasoline Company.