East Texas Refining Company v. Helvir Oil Company

In East Texas Refining Company v. Helvir Oil Company, 82 S.W.2d 392 (Tex. Civ. App.--Dallas 1935, writ dism'd w.o.j.), the plaintiff pumped oil from leased wells and delivered it to defendant's refinery. See Helvir, 82 S.W.2d at 392. Before defendant paid for the oil runs, plaintiff assigned its interest in the oil lease to a third-party purchaser. See id. at 393. Although plaintiff's agent who negotiated the sale was authorized to sell only the lease, he exceeded his authority and sold both the lease and the accrued oil runs. See id. He drafted a letter to the defendant authorizing it to pay the third-party purchaser for the oil runs accrued before the assignment. See id. In the ensuing lawsuit, the trial court found the agent acted without authority and awarded the plaintiff judgment for the value of the oil. See id. at 394. In affirming the trial court's judgment, this Court concluded that the evidence supported the trial court's finding that the agent sold the oil runs and drafted his letter without authority. In explaining why the wording of the assignment itself did not convey the accrued oil runs to the third-party purchaser, the Court stated that because the oil had already been extracted, sold, and delivered to the defendant, a mere assignment of the real property oil lease would not also convey the accrued oil runs. See id. at 395.