OPINION
This appeal arises out of a suit for specific performance of certain letter agreements, declarаtory relief, and an accounting. Plaintiffs, appellees, claimed that Cummins & Walker Oil Co., Inc., appellants, breached сertain letter agreements between the parties in which Cummins & Walker promised to assign to each of the plaintiffs an aftеr payout working interest. Cummins & Walker interposed limitations, and counterclaimed for a declaratory judgment and attorney’s fеes.
Cummins & Walker’s only defense was an alleged limitations bar. The case was submitted to the District court on agreed facts. The court overruled the plea of limitations and rendered judgment for the plaintiffs on their claims for declaratory relief and sрecific performance, together with recovery of proceeds from the past sales of oil and gas production, interest, attorney’s fees and costs.
In 1981 and 1982, Cummins & Walker promoted an oil and gas prospect in Acadia Parish, Louisiana. The drilling was financed by selling working interests to various investors. A one percent overriding royalty interest was reserved by Cummins & Walker until payout occurred. At that time Cummins & Walker would assign its royalty interest to the investors and they in turn would assign a twenty percent working interest to Cummins & Walker. The agreements between Cummins & Walker and these investors are known as the Underlying Letter Agreements.
In early 1982 a well subject to the Underlying Letter Agreements was completed as a producing well. The well reached payout in March, 1989. In May of that same year, Cummins & Walker notified plaintiffs that they would not receive the assignments, because the company was financially unable to make payment. Plaintiffs then made a written demand. Shortly thereafter, Cummins & Walker advised plaintiffs that no assignment would be made because the demand for payment was untimely. 1 Suit was filed in November, 1989.
The parties agreed tо the statement of facts pursuant to TEX.R.CIV.P. 263. All facts necessary to the presentation and adjudication of the case аre conclusively presumed to have been brought before the court. Accordingly, we will not draw any inference or find any facts not embraced in the agreement.
Members Mutual Ins. Co. v. Cutaia,
We are presented with the central issue of when doеs a cause of action accrue. Cummins-Walker challenges the ruling of the trial court on the basis that the plaintiffs’ suits were bаrred by the statute of limitations. TEX.CIV.PRAC. & REM. CODE § 16.004 provides [in pertinent part]:
(a) a person must bring suit on the following actions not later than four years after the day the cause of action accrues:
(1) specific performance of a contract for the conveyance of real property; ...
In the instant case, Cummins & Walker contend that plaintiffs’ cause of action for specific performance and declaratory relief began to accrue on January 5, 1982, the date the agreement was executed. It is asserted that the interests promised to the Plaintiffs were present, existing and assignable at the time the parties entered into the Letter Agreemеnts. Therefore, Cummins & Walker argue that the obligation to assign began on January 5, 1982, the date of the agreement and the plaintiffs’ cause of action for specific performance and declaratory relief began to accrue on that same date. The suit was filed more than four years after the date of the agreement, thus appellant contends it is barrеd by the statute of limitations. TEX.CIY. PRAC. & REM.CODE § 16.004.
In the alternative, appellant asserts that if the plaintiffs’ Letter Agreements could be interpreted such that assignment of the plaintiff’s interests was conditioned upon demand, the plaintiffs failed to make demand within a reasonable time. Absent stipulations to the contrary, a reasonable time is deemed to be coequal with the period of limitatiоns, four years.
Clements v. Lee,
We hold that enforcement of the rights under the Plaintiffs’ Letter Agreements is not barred by the statute of limitations for two reasons. First, the Underlying Letter Agreements provide that Cum-mins & Walker would not receive the working interest until after payout had occurrеd. Cummins & Walker did not have the ability to perform until after payout. Thus, the cause of action could not accrue until such time that demand was made, performance was possible, and Cummins & Walker failed or refused to perform. Where a condition precedent to a right of action exists, the cause of action does not accrue and the statute of limitations dоes not begin to operate until the condition is performed.
Washington v. Martin,
503
Secondly, it was not reasonable to expect that plaintiffs would not wait until the well reached payout before requesting assignments of their respective shares. An eаrlier request would have resulted in nonpayment since the after payout working interest had not yet accrued. A court would nоt be able to compel payment before appellant had received the source of the payment.
See American Housing Resources, Inc. v. Slaughter,
Accordingly, Cummins & Walker’s point is overruled.
The judgment of the trial court is affirmed.
Notes
. Previously, Cummins & Wаlker and each of the plaintiffs’ have entered into similar agreements. In each instance payment was made upоn request, even in a circumstance where demand was made more than four years after the date of the agreements and plaintiffs’ request.