IN THE SUPREME COURT OF TEXAS

IN THE SUPREME COURT OF TEXAS

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No. 04-0825

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The Long Trusts,=20 Petitioner,

Robert M. Griffin, = Robert M.=20 Griffin, Jr., Marvin and Marie Ogilvie

and Charles W. = Conrad,=20 Respondents

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On Petition for Review from = the

Court of Appeals for the Sixth = District of=20 Texas

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PER = CURIAM

As = this case=20 comes to us, two important issues remain.

First: The=20 parties agreed that petitioners would bill the Griffin respondents = monthly for=20 their share of litigation expenses, the Griffins would pay each bill = within=20 thirty days of billing, and they would share in any recovery. = Petitioners failed=20 to bill monthly, but later presented a bill for twenty months of = accumulated=20 expenses; the Griffin respondents refused to pay in full within thirty = days, but=20 demanded their share when the case settled some two years later. The = court of=20 appeals held that respondents were entitled to recover because their = breach was=20 excused by petitioners=92 breach. 144 S.W.3d 99, 107-08 (Tex. = App.=97Texarkana=20 2004). But the Griffin respondents could not refuse performance and = still insist=20 on the full benefits of the contract.

Second:=20 Respondents agreed to pay part of petitioners=92 drilling and operating = costs in=20 exchange for part of the working interest in producing wells. The court = of=20 appeals held that petitioners could not use the Statute of Frauds to = avoid=20 performance because the interests involved were identified with = reasonable=20 certainty, and in any event, petitioners had accepted respondents=92 = payments=20 under the agreements. 144 S.W.3d at 105. But we disagree that the = interests were=20 sufficiently identified, and while petitioners could not invoke the = Statute of=20 Frauds with respect to performance already accepted, future performance = under=20 the agreement was unenforceable.

We = reverse in=20 part the judgment of the court of appeals and remand the case to the = trial court=20 to redetermine attorney fees.

Respondents[1] sued = petitioners[2] over various = disagreements=20 that had arisen among them concerning their joint participation in oil = and gas=20 ventures. After a bench trial, the trial court rendered judgment largely = for=20 respondents. Both sides appealed. The court of appeals modified the = judgment in=20 several respects and otherwise affirmed it. 144 S.W.3d at 112. Only = petitioners=20 seek review in this Court.

With respect=20 to the first issue now before us: Petitioners sued the Tejas Gas Co. to = enforce=20 take-or-pay obligations and offered to split any recovery with = respondents=20 Robert M. Griffin and Robert M. Griffin, Jr. and other investors who = shared in=20 the cost of the litigation. Their agreement provided that litigation = expenses=20 would be =93billed out monthly=94 but imposed no consequence for = petitioners=92=20 failure to do so. The agreement stated that late payments would bear = interest at=20 the rate specified in a Joint Operating Agreement, but further provided = that it=20 was =93essential=94 that all bills be paid within thirty days and that = missing more=20 than one payment would result in a participant=92s =93being dropped from = the list of=20 working interest owners who are participating in the litigation.=94 For = nearly=20 three years, only a few bills came monthly, but the Griffins paid them = timely.=20 Then petitioners submitted bills for twenty months of accumulated = expenses a=20 bill, and the Griffins notified petitioners they would pay only a = portion of the=20 accumulated bills each subsequent month. Petitioners rejected this = arrangement,=20 and when the Griffins did not timely pay the next month=92s bill, = either,=20 petitioners returned the Griffins=92 delinquent payments and notified = them that=20 they had been excluded from further participation in the litigation. The = Griffins made no more payments, but when the litigation settled about = two years=20 later for $11.1 million, they demanded their share.

When=20 petitioners failed to bill each month, the Griffins could have demanded = that=20 they do so and sued to enforce the agreement, but they chose not to do = so.=20 Assuming petitioners=92 breach of their monthly billing obligation was = material,=20 as the trial court found, the Griffins were excused from any further = obligation=20 to perform. Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 692 = (Tex.=20 1994) (=93A fundamental principle of contract law is that when one party = to a=20 contract commits a material breach of that contract, the other party is=20 discharged or excused from any obligation to perform.=94). They were = entitled to=20 terminate the agreement and sue for breach. But =93[a] party who elects = to treat a=20 contract as continuing deprives himself of any excuse for ceasing = performance on=20 his own part.=94 Hanks v. GAB Bus. Servs., Inc., 644 S.W.2d 707, = 708 (Tex.=20 1982). By claiming as damages their share of the Tejas lawsuit = recovery,=20 which was the benefit of the bargain, the Griffins treated the agreement = not as=20 terminated but as continuing. The Griffins could not cease to share in = the=20 expenses and still insist in sharing in the recovery. The court of = appeals erred=20 in affirming this part of the judgment for the Griffins.

With respect=20 to the second issue: Respondents agreed, in 1978 and 1982, to pay part = of the=20 drilling and operating costs in exchange for an assignment of part of = the=20 working interest in producing wells. Most of the wells were producers, = and the=20 parties=92 arrangement continued for many years. But when disputes arose = among=20 them, petitioners asserted that the agreements were unenforceable under = the=20 Statute of Frauds because they did not sufficiently identify the = properties=20 intended to be covered. As the court of appeals recognized, oil and gas=20 interests are real property, 144 S.W.3d at 104-05, and thus contracts = for the=20 transfer or assignment of oil and gas interests are subject to the = Statute of=20 Frauds. Tex. Bus. & Com. = Code=20 =A7 26.01. To satisfy the Statute of Frauds, a contract =93must furnish = within=20 itself, or by reference to some other existing writing, the means or = data by=20 which the [property] to be conveyed may be identified with reasonable=20 certainty.=94 Morrow v. Shotwell, 477 S.W.2d 538, 539 (Tex. = 1972).=20 Extrinsic evidence may be used =93=91only for the purpose of identifying = the=20 [property] with reasonable certainty from the data=92=94 contained in = the contract,=20 =93=91not for the purpose of supplying the location or description of = the=20 [property].=92=94 Pick v. Bartel, 659 S.W.2d 636, 637 (Tex. 1983) = (quoting=20 Wilson v. Fisher, 188 S.W.2d 150, 152 (Tex. 1945)).

The = 1978=20 agreements stated that the subject leases were located =93in the = Northeast portion=20 of Rusk County, Texas, and consist[ed] of 50+ leases covering = approximately=20 2100+ net mineral acres in the Dirgin and Oak Hill Fields area=94 as = =93described in=20 the attached Exhibit =91A.=92=94 Exhibit A provided the lessor name, the = survey name,=20 the term, and the net acreage for each lease at issue. As we have = previously=20 held, such information is insufficient to identify the exact location of = a lease=20 with reasonable certainty. Smith v. Sorrelle, 87 S.W.2d 703, 705 = (Tex.=20 1935) (=93[A] deed purporting to convey land, which describes it only by = quantity=20 and as being part of a larger tract, with nothing whereby to identify = what=20 specific portion of the larger tract is intended to be conveyed, is void = for=20 uncertainty of description.=94); Matney v. Odom, 210 S.W.2d 980 = (Tex. 1948)=20 (finding the following description insufficient: =93Landlord [] does = hereby lease,=20 to tenant, four (4) acres out of the East end of a ten‑acre block = on the P.=20 Chireno Survey about 2 miles East from the courthouse of the city of = Tyler,=20 Smith County, Texas, located on the North side of the Kilgore = highway=94). Thus,=20 the 1978 agreements are unenforceable under the Statute of Frauds.

The = 1982=20 agreements stated that the subject leases were =93located in the = Northcentral=20 portion of Rusk County, Texas, in the North Henderson Field Area, and=20 consist[ed] of 143 leases covering approximately 2100 net mineral = acres=94 as=20 =93described in the attached Exhibit =91A.=92=94 It also stated that = =93[a]ll of the=20 acreage as shown on Exhibit =91A=92 (attached) is dedicated to a Gas = Contract with=20 Tejas Gas Corporation.=94 No Exhibit A was attached to the 1982 = agreements. The=20 Tejas Gas contract referred to in the agreements is in the record, but = it fails=20 to sufficiently identify the leases, even assuming that was the = reference=92s=20 purpose. The Tejas Gas contract defined the term =93contract acreage=94 = as =93all of=20 the leases and lands described in Exhibit =91A=92 and outlined on = Exhibit =91B.=92=94=20 Exhibit A to the contract stated the leases were =93more fully described = as=20 follows,=94 but contained no more than headings for items like lease = name,=20 description, and acreage, and was blank below the headings. Exhibit B = provided a=20 plat that alone is insufficient to identify the subject leases. Another=20 document, also entitled =93Exhibit =91A,=92=94 was attached at the end = of the contract=20 and provided the name and legal description of each lease, but it stated = that it=20 was =93[a]ttached to and made part of that certain Letter Agreement = dated November=20 22, 1982, and between Riddle Oil Company, Farmoutor and The Long Trusts, = Farmoutee=94, not the Tejas Gas contract. Contrary to the purpose of = extrinsic=20 evidence, the Tejas Gas contract only provides confusion, not reasonable = certainty, as to the identity of each lease in the 1982 agreements. = Thus, the=20 1982 agreements are also unenforceable under the Statute of Frauds.

The = court of=20 appeals held that petitioners could not use the Statute of Frauds to = avoid=20 enforcement of the agreements when they had knowingly accepted the = benefits of=20 the agreement. 144 S.W.3d at 105. Whether or not this is a correct = application=20 of the law, petitioners do not seek to avoid their agreements with = respect to=20 wells already drilled. But the 1978 and 1982 agreements expressly = provided that=20 respondents=92 right to participate in future leases existed on a = =93project by=20 project or well by well basis,=94 and that =93participation or = non‑participation in=20 any one project or well will not affect your right to participate in any = other=20 project or well.=94 Respondents=92 acquisition of interests in the past = were=20 completely separate from future transactions and did not insulate the = agreements=20 from the Statute of Frauds for wells not drilled, nor is it unfair to = permit=20 petitioners to assert the defense as to future transactions toward which = respondents have paid nothing. To the extent the court of appeals = enforced the=20 1978 and 1982 agreements for future wells, it was in error.

Because the=20 court of appeals erred in affirming the trial court=92s enforcement of = the=20 litigation recovery agreement, and to the extent it affirmed future = enforcement=20 of the 1978 and 1982 agreements, the award of attorney fees must be=20 redetermined. Barker v. Eckman, ___ S.W.3d ___ (Tex. 2006).

Accordingly,=20 we grant the petition for review and without hearing oral argument, = Tex. R. App. P. 59.1, reverse = the court=20 of appeals=92 judgment in part and remand the case to the trial court = for further=20 proceedings consistent with this opinion.

Opinion=20 delivered: December 8, 2006