Court Opinion

ID: 9833015
Source: CourtListenerOpinion
Date Created: 2023-09-01 22:22:27.581378+00
Date Added: 2024-06-11T07:43:57.707483
License: Public Domain

On Motion for Rehearing.
Appellee, in its motion for rehearing, very vigorously contends that this court erred in holding that the contract entered into between it and Bell was a speculative contract, from which a court of equity will not relieve the parties thereto upon the grounds of mutual mistake. In support of its contention, appellee, Kirby Company, cites Edwards et al. v. T. & B. V. Ry. Co., 54 Tex. Civ. App. 334, 118 S. W. 572, and cases of similar holdings as decisive of the question involved in the present case. We do not think the holdings of these cases are applicable to the facts of the present eqse.
In the Edwards’ Case, Edwards, as part owner of certain land, and as agent for other co-owners thereof, upon which there was a deposit of gravel conveyed to the Trinity & B. V. Ry. Co. all gravel on said land suitable for ballasting its railroad, which said railway company was to remove in 5 years at the. rate or 5,000 cubic yards per month, and to pay therefor 1 cent per cubic yard. Both parties believed at the time of entering into the contract that a sufficient quantity of the quality of gravel specified existed on said land, and that the railway company could remove 5,000 cubic yards per month for the term of 5 years, but it was soon discovered that there was ' only about 6,0001 cubic yards- of such gravel on the land. Upon such discovery, the railway company informed Edwards that they could not and would not carry out their contract to remove the quantity of gravel mentioned therein; Upon such refusal, Edwards and his associates sued for $2,600, alleged to be the value of the gravel, which could have been removed by the railway company, had it existed, within the 5 years at the rate of 5,000 cubic yards per month. The trial court held that, as there was not the quantity and quality of gravel contracted for, on the land, the railway company was not bound to pay for more gravel than it could take from the land, and, so holding, gave judgment against the railway company for the quantity it could have taken, and by its judgment released said company from the payment of further damages. On appeal this court affirmed the judgment of the trial court. It is clear, we think, that Edwards believed there was on said land‘the quantity and quality of gravel-contracted for, and that he intended to sell the railway company so much gravel of the quality contracted for as the railway company could take from the land in 5 years ati the rate 'of 5,000 cubic yards per month, and that it was ‘the belief of the railway company that such gravel actually existed on the ground; -that Edwards and his associatesi owned the gravel that they were undertaking to sell. In other words, it was the quantity of gravel of a certain quality which Edwards believed he had that he was conveying to the railway company, and which the railway company thought was on the land, and which it contracted to remove and pay for, while as a fact there was not the quantity of gravel sold or bought on the land.
In the present case, Bell sold the petroleum company no certain quantity of oil. He sold the lease only — -the right to take all the oil from the land found upon development. Neither party could have pretended to have any certain knowledge at the time of the making of the contract that oil was under the land far below the surface. Bargains of this kind are necessarily speculative in their nature and such as will not be relieved against by a court of equity. In purchasing said lease, petroleum company was not unlike others. Many others made like purchases. No doubt Bell had purchased the 'same land under circumstances practically the same, as to the state of his knowledge, as were present at the time said, company bought from him, such knowledge being equally accessible to both. The contract was entered into in days notorious for speculation in oil leases and oil lands, when but few persons made purchases for development purposes; the object being to sell again at a profit. Such purchases and sales were without number; all understanding from *176the beginning that no inconsiderable share of hazard was to be encountered. Mistakes of the kind complained of by the petroleum company were, at the time of the making of the contract, without number. Both Bell and the petroleum company understood from the beginning of the negotiations that no inconsiderable hazard was to be encountered. In the absence of fraud upon the part of Bell, which was neither pleaded nor proven, it could not have been contemplated, no matter how injurious the result of the mistake on the part of the petroleum company might be, that, in case of loss to it, the petroleum company had any grounds of complaint, and, if fortunate enough to mass a fortune from the contract, no matter how large, or to what extent the mistake affected Bell, that a portion of such fortune was to be refunded to Bell.
In the case of McCobb v. Richardson, 24 Me. 82, 41 Am. Dec. 374, the court said:
“The plaintiff, then a young man, and but then recently introduced into business in the profession of the law, was induced to embark in the purchase of timber lands, and to invest between $5,000 and $6,000, constituting the greater portion of his patrimony, in lands of that description, lying remote from his place of residence, in the wilderness part of this state, to which he had never had access, and of which he had no knowledge, relying for their quality upon the certificates of two individuals, of whom he had only heard a favorable report. In so purchasing, however, he was not singular. Many other individuals did the like. His grantor, a man of mature years, had purchased the same land, under circumstances precisely similar, as to the state of his knowledge and for the identical price at which he sold to the plaintiff. It turns out, nevertheless, that the intrinsic value of the land was not, probably, over one-tenth part of the amount paid for it.”
Again:
“It is urged here that the timber was the thing contracted for, and that the land was but the incident, the place of deposit merely, the land without the timber being of very little, if of any, value; that both parties at the time supposed it to be covered with a valuable growth of timber, when in fact the timber thereon was from 10 to 20 times less than was supposed. But there is much of fallacy in the position of the plaintiff. There was no fixed and certain item of timber, distinctly and identically in the mind of each party, as intended to be conveyed, as in the case of the dwelling house before instanced. Neither party could have pretended to have any certain knowledge of what was growing upon the land. Neither haij ever seen it. The land itself was a specific thing, distinctly in the mind of each party; but of what was growing upon it no precise idea could be entertained. The value of the growth upon a piece of land is always a -matter of uncertainty. Estimates concerning it, even by those who have had the best means of forming an opinion, are more or less merely conjectural, and are often void of the truth; and it is familiar knowledge, that nothing is more difficult than to ascertain with precision the quantity and quality of a forest growth, on a large tract of land, in a wilderness, country. This the parties must be presumed to have well understood. Neither can be supposed, in such case, to have contracted with the other in the belief that either had any certain knowledge on the subject. Bargains of this description are necessarily made haphazard. Each party speculates, grounding his calculations upon such general information as may be at hand, placing reliance upon his own perspicacity.
“This contract was entered into in days notorious for speculation, when but few if any persons made purchases of timber lands for private use; the object being to sell again at a profit, until which, some operations, by way of getting off timber, might take place. Mistakes of the kind here complained of were without .number; all understanding, from the beginning, that no inconsiderable share of hazard was to be encountered. In the absence of fraudulent or erroneous representations, or fraudulent practices on the part of the vendor, it could never have been contemplated, however gross might be the mistake on the part of the vendee, that, in case of loss, he had any ground of complaint, and if fortunate enough to buy ever so advantageously. How-eve^ great the mistake of the vendor might have been, no one Gould have supposed that any portion of his gains was to be refunded.”
In Story on Equity, § 150, it is said that—
“Where the fact is equally unknown to both parties; or where each has equal and adequate means of information; or where the foot is doubtful from its own nature; in every such case, if the parties have acted with entire good faith, a court of equity will not interpose.”
And again in section 151 it is said that—
“Where each party is equally innocent, and there is no concealment of facts, which the other party has a right to know, and no surprise or imposition, the mistake or ignorance, whether mutual or unilateral, is treated as laying no foundation for equitable interference.”
We feel that further discussion of the contentions made by appellee are unnecessary, and, having reached the conclusion that we did not err in the particulars complained of, the motion is overruled.