Agreement to Assign Overriding Royalty Held Not Rescinded

摘要

An agent acting on behalf of Santa Fe Petroleum, L.L.C. verbally agreed with Star Canyon Corp. to pay Star Canyon a bonus of 5.00 dollars per acre and assign it a 1 percent overriding royalty interest for any large blocks of leases Star Canyon could purchase and deliver to Santa Fe for its James Lime horizontal gas development project in Shelby County, Texas. Star Canyon procured over 8,000 acres of James Lime leases and assigned them to Santa Fe Petroleum at three closings in March, April, and October 1999. At the March closing Santa Fe's attorney told Kent Lambeth, Star Canyon's president, that he should get his overriding royalty interest in writing. On April 19,1999, Lambeth received 3y facsimile a letter agreement, signed by Tom Griffin, Santa Fe's aresident, describing all the leases and memorializing the understanding that Star Canyon would be given a 1 percent overriding royalty, to be delivered at any time a unit was formed containing any of the acreage. Four days later Lambeth and Griffin met for the second closing. Lambeth presented two originals and a copy of the letter agreement to Griffin for his signature. Instead of signing the agreement counterparts, however, Griffin had them shredded and placed in the trash, apparently stating that he would not close the deal if the 1 percent override were part of it. According to Lambeth, Griffin also told him he "deserved something" and that Griffin would "think about it." Lambeth proceeded to closing, he testified, not knowing whether his facsimile copy was valid but believing that Griffin was prepared to further negotiate the overriding royalty issue with him. After Santa Fe failed to respond to Star Canyon's May 1999 request that it honor the agreement to assign the overriding royalty interest, Star Canyon filed a declaratory judgment action in May 2000. Santa Fe's appeal of the trial court's award, following a bench trial, of the 1% overriding royalty interest to Star Canyon, plus damages, resulted in the court's affirmance in Santa Fe Petroleum, L.L. C. v. Star Canyon Corp., 156 S.W.3d 630 (Tex. App.-Tyler 2004, no pet. h.).