On Motion for Rehearing.
[12,13] Appellants insist that this court cannot lawfully set aside1 the conclusion of the trial court that appellees had waived that term of the escrow contract requiring the use of a standard rig in developing the property because, they say, it is a fact found by the trial judge and supported by competent evidence. We think it is a conclusion of law rather than a finding of fact.
“Where the facts and circumstances relating to the subject are admitted, or clearly established, waiver, becomes a question of law.” 27 R. C. L. 912, § 7; 19 Ann. Cas. 879, note.
Courts of Civil Appeals are not bound in all cases by findings of fact of either the jury or the trial judge, and certainly not by the conclusions of law filed in the trial court, even where the appellee agrees that such findings are supported by the evidence, or such conclusions are correct.
It may be admitted that a well 4,000 feet in depth could have been drilled with a No. 28 star rig, and, further, that placing such rig upon the premises constituted substantial compliance with the contract, and yet the appellants would not be entitled to the possession of the lease. The installation of such a rig was not a strict compliance with the standard rig requirement. It is not contended that appellees affirmatively and directly waived that term of the contract which required appellants to place a standard rig upon the premises. It is clear from the record that none of the parties understood that it had been so waived. The written extension agreement which O. E. Deahl gave to McSpadden et al., and which we have construed as merely extending the time in which a standard rig should be installed, was dated January 25, 1919. Meade, who was appellants’ head driller, testified:
“A derrick could have been constructed in connection with that operation out there while the drilling operations (with the star rig) were going on and being continued. Efforts were made and supplies were secured for the purpose of building a derrick out there. We had Mr. Burgess (a lumber dealer) to figure on furnishing the derrick. At that time he could not get timbers, and he did not have any timbers, but we got part of the timbers, that is the mudsills and the floor, and he figured on furnishing the derrick, and also said he would get the timbers. With the timbers that we did secure we built a floor around the machine and around the derrick; actually carried it out there and used it, and we were preparing to construct a derrick out there.”
If it is true, as contended by appellants, that the star rig was a compliance, that ap-pellees were willing for development to pro*687ceed with such a rig, and had waived the standard rig requirement, theh why were appellants endeavoring to erect a derrick for the installation of a standard rig? This testimony is inconsistent with their position as to a waiver. W. A. Miller, Sr., in detailing the conversation and transaction at the time he, with Meade, called upon O. E. Deahl some time in the month of February, with reference to beginning operations with a star rig, testified:
“Mr. Meade told Mr. Deahl he knew of a certain outfit, and told him we would have the machine there to do the work before March 9th, which we did. Before March 9th we had a machine there that would use standard tools. We told him we would follow that up with a standard outfit and standard rig, and derrick before we got 2,009 feet. Meade told him we could easily go 2,000 feet, or more, with the star rig. I undertook to say it was specifically understood we were going 2,000 feet before beginning the derrick. We expected to begin the standard rig in a short time — as soon as it was necessary.”
Certainly a finding of fact by the trial judge, in the face of this testimony, that the standard rig requirement had been waived, cannot be sustained. R. A. Webb, who was associated with the Millers at Wichita Falls, in operations down there, testified that Will A. Miller, Jr., was telling him about the Millers’ leases in the Panhandle and especially the Deahl lease, and that Miller asked him to look out for a standard rig for him. This was between February 1st a'nd 17th of 1918, and after the extension agreement had been given by Deahl to McSpadden et al. This witness stated that there was a freight em: bargo on at Wichita Falls. He stated that they finally located a star rig at Healdton, Okl., which was shipped to Miller & Sons at St. Francis. He further testified in this connection:
“After that star rig and standard tools were shipped from Healdton, Okl., to St. Francis we further pursued the quest of the standard rig or standard derrick. We proceeded then to get big timbers for a rig to arrange for the work. I went to see Mr. Stovall, who had a rig there out of Vernon and out of the territory where we could ship. I located that, and we had made arrangements to get that standard rig and ship it up here after we got spudded in with the other one. That was in the latter part of February, 1919. * * * We had made arrangements to get a standard rig with a bullwheel. I noticed a part of that rig there yesterday. They have never disposed of all of it yet. If you should go from here to Wichita Falls, you would notice it on the left-hand side of the railroad as you go down. * ⅜ * I advised Mr. Miller I had located a standard rig, but the rig was never shipped, because they never got the leases in shape so that the little company we made up at Wichita Falls never had any guaranty that we would get the (Deahl) lease in case we went to the expense and shipped the rig, and we didn’t want to make an expense on a lease we didn’t have. The Deahl and Miller . lease is the one I refer to. If Miller got it, he was to give us an interest in it for drilling the well. * ⅜ * With reference to the derrick, I had located some heavy timbers down there. It seemed they had tried to get some heavy timbers down there from the lumber company' up here, and had ordered some and were unable to get them. So I finally located some, and ordered three or four of the heavy timbers. I forget now where they were. I know who I ordered them from, but I was trying to locate where the heavy timbers were. I ordered them from Jack Stovall. * * * We contracted for the standard rig the latter part of February from Mr. Stovall. We had ordered it from Mr. Stovall, and we was ready to drill, but that was after — that was during the time that this rig was bought over'at Heald-ton, to start the well. It would do to start a well, but in order to complete it at S,500 feet, of course we figured on a larger rig, a standard rig, a big standard rig.”
W. A. Miller, Jr., who it appears was the active manager of the firm of Miller & Sons, testified upon this point in part as follows:
“At the time we started this well (with the star rig) we intended to put a derrick there, and we built our floor and bought everything except the timbers for the legs. A derrick consists of four legs, and sometimes they’are interlocked or doubled. We could not get those timbers' at that time. Looking toward putting up a derrick at this place, we built the derrick floor and made proper excavations. I had made an agreement vfith Mr. Stovall, Mr. Webb, and Mr. Art, and others, in Wichita Falls, who owned a standard rig near Vernon, to get that rig complete, with all of their timbers and engine blocks, and so on, as soon as I could deliver them title or leases. * * * I had negotiated with Mr. Burgess here about ordering lumber for building a derrick. Mr. Burgess didn’t .have all the timbers; we could only get the flooring and lOxlO’s and sills for the derrick floor. That is all he had in stock, and we bought that much and built the derrick floor around the rig.”
There is nothing in the testimony of either G. W. or O. E. Deahl inconsistent with that quoted above, and, whether the pronouncement of the trial judge to the effect that the standard rig had been waived is considered as a finding of fact or conclusion of law, we feel constrained to dissent from it. A careful reading of the entire record leads to the inevitable conclusion that none of the parties considered the Millers relieved from the duty imposed by the standard rig requirenient of the contract up to March 16th, when by agreement of all the parties efforts were made in several different directions to have the premises drilled by other parties. It is clear from the entire record that the Millers were not able, without some such arrangement, and through the help of outside parties, to develop the property in accordance with the requirements of the contract. To this end they first agreed with McSpadden, Blackshear, and others, giving them a sublease. When this lease was forfeited, about *688the 1st of February, the matter was taken up with Webb, Stovall, Art, and. their associates at Wichita Falls. They declined to furnish and install the standard rig until the Millers had • acquired the lease. Then it was proposed to organize a corporation, and, in connection with Carson county parties, acquire more acreage, and with the proceeds to be derived from the sale of stock the standard rig could be installed. Because of the inability of Rorex and the other Carson county parties to obtain additional acreage in that locality, the scheme to incorporate was abandoned, and it was proposed to organize a joint-stock company, with the same powers which originally were intended to be vested in the corporation. This scheme also failed, and immediately Will A. Miller, Jr., appeared upon the scene with Seigfried, and with whom a contract was made, as set out in the original opinion. During all of these negotiations by common consent the actual work of drilling was suspended.
The above-mentioned negotiations were instigated by, and were for the benefit of, the Millers, and it would be inequitable to hold that the acquiescence of the appellees in such negotiations, or even their active support of any or all of the schemes, should be construed as a waiver of the escrow contract, either as a matter of fact or law. We think it should rather be construed as an effort to enable the Millers to comply with the contract through other parties, and to protect them in their rights if possible under the original lease. Nothing is clearer than that the Millers and those associated with them, Meade and Webb, understood, at least until March 16th, that a standard rig would have to be eventually erected upon the' premises. As. said in the original opinion, there is no evidence of an express waiver. The above-quoted testimony shows no intent on the part of any one to waive, but, on the contrary, . clearly shows that the Millers and those connected with them understood that it had not been waived. We have searched the record in vain to discover any act of the Deahls, or either of them, which amounts to an estoppel, and the record is barren of any consideration moving to them which would support an agreement to waive. The appellants insist that, since there was no attack made upon the court’s finding and no cross-assignment by the appellees, but rather an admission by appellees that the finding is supported by testimony, this court has no right to review this phase of the case; the authorities hold otherwise. The court’s conclusions of law, based upon his findings of fact, are in effect the judgment of the court; and, where the facts are practically undisputed upon any issue, as we find them here, to hold that this court cannot review and reverse the trial judge upon'said conclusions is in effect a holding that appellate courts cannot reverse the judgments of lower courts. It has been frequently held that an erroneous conclusion of law, based upon undisputed facts, presents fundamental error in the appellate court. Carroll v. Evansville Brewing Association (Tex. Civ. App.) 179 S. W. 1099; Bexar Building Association v. Newman (Tex. Civ. App.) 25 S. W. 461. The effect of the Supreme Court’s holding in Walker v. Haley, 110 Tex. 50, 214 S. W. 295, is that the trial judge’s conclusion of law upon undisputed facts presents fundamental error, where such conclusion is put into effect by directing a verdict. Norvell-Shapleigh Hdwe. Co. v. Lumpkin (Tex. Civ. App.) 150 S. W. 1194.
We have not held that the failure of the Millers to pay the rental provided for in the original lease was a forfeiture. The transaction has not reached the state where a forfeiture could be declared. We do hold, however, that their failure to pay or tender the rentals is a persuasive fact, tending strongly to show that they understood they were not entitled to possession of the lease, and that no rights thereunder had vested in them.
The motion for rehearing is overruled.