Erwin v. Olsen
Erwin v. Olsen
Opinion of the Court
The plaintiffs in this suit (Erwin and others), who were the assignees of the lessee (Clements) in an oil lease which vVas in escrow pending curing certain defects in the title to the land covered by the lease, brought this suit against a subsequent lessee (Harris) under an oil lease executed by a vendee (Olsen) of part of the land from plaintiffs’ lessors (Brandon and wife) for the purpose of canceling the Harris lease, and in- the alternative against Olsen for damages for having wrongfully executed lease to Harris, an innocent purchaser, thereby destroying the value of plaintiffs’ lease. The trial was without a jury, resulting in a judgment in. favor of Harris, holding his lease valid on the ground that he was an innocent purchaser, and against Olsen for the value of plaintiffs’ lease to the extent that it covered the Olsen land. The case was carried to the Court of Civil Appeals upon writ of error by Olsen alone. That court reversed the case, and rendered judgment for Olsen, holding, in effect, that plaintiffs’ lease was rendered void by failure to pay a certain stipulated sum as rental which accrued during the time the lease was in escrow. 229 S. W. 878. The correctness of this holding presents the only important question for determination in this court.
The material facts in the case follow: On February 14, 1918, T. E. Brandon and wife signed and acknowledged a standard form oil lease in favor of W. P. Clements, covering a 201-acre tract of land then owned by the grantors. The consideration for the lease was ?2 per acre, and it was provided tha't, if drilling operations were not com
The decision of the Court of Civil Appeals is rested upon the proposition that, the evidence showing no waiver of payment to Mrs. Brandon or Olsen on or before February 14, 1919, of the amount required to extend the lease beyond that date, and there having been no eommencem'ent of drilling operations by that time, the lease was automatically terminated. This proposition might be correct if the Clements lease had been delivered on or prior to February 14, 1919. But so long as that lease was in escrow there was clearly no obligation on the part of Clements or his assigns to make any payment whatever to Mrs. Brandon or Olsen. A tender to them would necessarily be conditional and a useless thing until the time arrived when Clements and his assigns were willing or bound to accept the title or forfeit their rights to have the lease delivered them by the bank under the escrow arrangement. Until that time arrived neither Mrs. Brandon nor Olsen was entitled to the original consideration for the lease deposited with the bank, or to any subsequent amounts which might become payable thereunder.
By depositing the amount with the bank, it became a part of the escrow, and its final disposition subject to the escrow agreement. Plaintiffs had done all that was required of them when they made this deposit. Failure to pay or tender to Mrs. Brandon or Olsen the rental stipulated for on or before February 14, 1919, would therefore have no effect whatever upon the validity of the lease, which was on that date still in escrow. Olsen having closed the trade for his 90 acres with full knowledge of the arrangement by which Russell was to represent all interests in clearing the title, he was in no position to complain, and, so far as the record shows, made no complaint of any laches on Russell’s part in bringing the suit. 1-Iis action on February 25, 1919, in m’aking the lease to Harris, an innocent purchaser, effectually destroyed the Clements lease to the extent of the Olsen land, and fixed the rights of Clements’ assigns as against Olsen, subject to approval of the title by the' former. Between the time Olsen accepted the deed from Mrs. Brandon on December 27, 1918, ánd the execution 'by Olsen of the Harris lease there had not been an opportunity to clear the title by suit. The action of Olsen in executing that lease rendered impossible the carrying out of the es
There are several other assignments of error urged by Olsen in the Court of Civil Appeals, all of which were considered and overruled by that court. We have examined these assignments, and are of the view that they are without merit.
We therefore conclude that the judgment of the Court of Civil Appeals should be reversed, and that of the district court affirmed.
The judgment recommended in the report of the Commission of Appeals is adopted, and will be entered as the judgment of the Supreme Court.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.