Foster v. Spice
Foster v. Spice
Opinion of the Court
This is an appeal by David Foster, his brother and three sisters from a take-nothing judgment entered on an instructed verdict granted appellee, William H. Spice, Jr., at the close of all evidence in appellants’ suit to recover damages resulting from appellee’s negligence in the performance of his duty as an expert witness to calculate and testify as to the amount of gas royalty owing them by The Atlantic Refining Company under a producing oil and gas lease.
In 1944, the seven Foster children, hereinafter sometimes referred to as lessors, executed an oil and gas lease to Atlantic of 1500 acres located in the Hagist Ranch
This gas as produced is called “natural or wet gas” and it was sold to the Goliad Gasoline Plant and others who extracted gasoline and other liquid hydro-carbons. The residue gas was thereafter sold to Texas-Ulinois under the above sales contract. Atlantic accounted to lessors for one-eighth
Judgment was entered in this cause on April 9, 1963, wherein the trial court found in part: “That the difference between the price of gas actually paid the plaintiffs by The Atlantic Refining Company for gas produced and marketed from the Foster Lease from the Wilcox Sands from January 1, 1957, to July 1, 1962 (which was the period in controversy), and the price of such gas calculated at 13c per MCF for 1957 and 14c per MCF for 1958, 1959, 1960, 1961 and 1962, plus tax reimbursement in each case, which the court has found to- be the market price therefor prevailing for the field where produced when run during such years is: * * (Emphasis ours.) The total of the amounts awarded plaintiffs therein, after applying the four-year statute of limitations to each, was $67,-015.00, plus certain overriding royalty interests owned by some of the plaintiffs. These figures, with the exception of the overriding interest, were all based on the calculations of appellee. This part of the judgment was subsequently affirmed on March 26, 1964, by the U. S. Court of Appeals for the Fifth Circuit. See Foster v. Atlantic Refining Co., 329 F.2d 485.
In April, 1964, Miss Doris Foster, one of appellants herein, asked appellee how to calculate the gas royalty so that she could check future run statements. She recalculated appellee’s figures which had been used in the Federal Court suit and came up with a substantially higher figure. At her request appellee recalculated his figures and on August 12, 1964, appellee wrote Jesse Foster a letter advising in part: “In reviewing my calculations, I find that I had omitted the gas sales under certain lease numbers shown on the Atlantic’s
The Circuit Court overruled such motion, and on January 28, 1965, final judgment was entered based upon the original findings made by the trial court. This suit was filed in Bexar County on April 5, 1965, wherein appellants assert appellee negligently erred in the calculations used in the Federal Court suit by failing to apply the market price of the gas in this field to only the residue gas sold under the Texas-Illinois contract. Appellee had used the total volume of gas produced as set forth in the monthly run statements sent lessors and had given Atlantic credit for all payments made to lessors. This credit included payments made by the Goliad Gasoline plant and by other purchasers of the natural or wet gas. Since the natural gas and the products extracted therefrom, sold for a higher average price than was realized from the residue gas, this resulted in raising the average price paid for all gas produced by about 1.64 cents per MCF over the contract sales price.
Appellants illustrate this contention by an analysis of the severance tax report to the State Comptroller for March, 1961. The total natural or wet gas produced was 231,540 MCF, which was delivered to the Goliad Gasoline plant, and the products extracted therefrom were sold for $4,095.92. After being processed at this plant the residue gas of 216,500 MCF was sold to Texas-Illinois at the contract price of 8.553 cents per MCF, for a total of $18,517.46. Lessors were paid a one-eighth royalty on $4,095.92 and on $18,517.46. When the amount of natural gas produced is divided into the total value received from all sources an average price of 9.766 cents per MCF is determined. It is appellants’ contention that the market price of 13c and 14c should be applied only to the residue gas. Obviously, such .a differential should be based upon only the total amount of residue gas sold under the Texas-Illinois contract, although it is not clear if the 1964 letter and affidavit of appellee were based upon this volume or the volume of natural gas produced as shown on the run statements.
Appellants assert the sole point on this appeal that the trial court erred in sustaining appellee’s motion for instructed verdict and entering a take-nothing judgment against them. Appellee urged five grounds for his motion for instructed verdict and for affirmance of said take nothing judgment: 1-2. There is no evidence of negligence which is a proximate cause of injury or damage to appellants, in that the gas price differential was correctly calculated by appellee. 3. A witness is not liable for erroneous testimony given in a legal proceeding in the absence of malice or bad faith. 4. Appellants, through their attorneys, were charged with notice of the basis of the calculations used in the Federal Court and if appellee is negligent, appellants’ attorneys were also negligent and their negligence is imputed to appellants. 5. Since appellee testified in January, 1963, and this suit was not filed until April, 1965, appellants’ claim is barred by the two-year statute of limitations.
Appellants’ complaint that appellee used an erroneous basis for his calculations of
Lessors successfully urged in the Federal Court case that the royalties to be paid by lessee were not determined by the amount lessee realized from sale of the gas, but by “the market price prevailing for the field where produced when run.”
Appellants urge that “delivery of gas from the well to the pipeline” has reference to the delivery of residue gas to a transmission company and that the market price established was for such residue gas. The uncontradicted testimony of appellee is to the contrary. He testified that his opinion of the market price of gas for this field was based on the market price of all gas run from the well into the pipeline. He specifically denied, without contradiction, that his testimony in the Federal Court as to the prevailing market price was based on the price of residue gas only.
Thus we are faced with the unique situation where appellee wrote a letter and made an affidavit stating that he had made an error in his calculations in the Federal Court, yet such statement and affidavit have been conclusively shown in this trial to be incorrect. Assuming that such statement and affidavit would raise a fact question that appellee had made an error, the subsequent falsity of such opinion compels the result that such an error was not the proximate cause of any injury or damage to appellants. The trial court therefore correctly granted appellee’s motion for instructed verdict and entered a take-nothing judgment. In view of this conclusion, it is unnecessary to discuss appellee’s other grounds for such motion and judgment.
The judgment is affirmed.
. All emphasis herein is ours.
. We have disregarded a small overriding interest owned by some of appellants.
. See also Texas Oil & Gas Corp. v. Yela, 429 S.W.2d 866 (Tex.Sup. 1968).
Case-law data current through December 31, 2025. Source: CourtListener bulk data.