Jeff Kelly and wife, to which said deed reference is here made for a full and complete description of said mining properties, together with all machinery, tools, implements, tracks, stock, and apparatus to the second party:
“Now, therefore, in consideration of the sum of one dollar ($1.00) to it in hand paid, the receipt of which is hereby acknowledged, and the further consideration of the covenants and agreements hereinafter mentioned, the Higrade Lignite Company does hereby lease and demise unto the said S. R. Hill the above-described premises, together with all machinery, tools, implements, tracks, stock, and apparatus owned by said company and situated on said premises, to have and to hold all of said premises and property for a period of one year from and after the date hereof.
“1. Said party of the second part agrees to take possession of the properties above described, and to begin mining operations immediately after the date hereof, and to operate said mining properties continuously at his own expense during the term of this lease. Said second party further agrees to bear all expenses of every kind and character incident to or connected with said mining operations. Said second party further agrees, at his own expense, to keep in good repair all of first party’s tools, apparatus, implements, tracks, and machinery of all kinds, and at the expiration of this lease to deliver same to said first party in as good condition as when he received them, natural wear and tear excepted.
“2. Said second party further agrees to purchase and install any new machinery that may be necessary to properly develop and operate said mining properties, and to furnish said first party a bill of same, and if it appears that said machinery was necessary to the proper development and operation of said mining properties said first party agrees to reimburse said second party for all expenses incident to the purchasing and installment of such new maeijinery.
“3. Said second party further agrees to pay all taxes of every kind that may become due on the above-described property during the term of this lease.
“4. Said first party further agrees to pay said second party 3 cents per ton for each and every ton of coal mined or caused to be mined by him from said properties during the term of this lease. Said payment to be made at the Greenville National Exchange Bank, of Green-ville, Texas, on the 1st day of each month, it is understood, however, that said second party shall realize out of the operations of said properties during the term of said lease the sum of $2,400. If, therefore, at the expiration of this lease contract an audit of the books, records, and business of said second party should disclose that he has made less than $2,400 net from the operation of said properties, then first party agrees to pay him the deficit, said payment to be made at the Greenville National Exchange Bank’ of Greenville, Texas. But if such an audit should disclose that second party has realized more than $2,400 net from the operation of said properties, then said second party agrees to pay to first party such over-plus, said payment to be made at the Green-ville National Exchange Bank of Greenville, Texas.
“5. It is further understood and agreed that said second party is not the agent of first party, and is not authorized to act for, in behalf of, or to bind said first party in any way whatsoever. Higrade Lignite Company (Party of First Part), by Jno. D. Middleton, President. [Seal.] Attest: R. R. Anderson, Secretary. S. R. Hill, Party of Second Part.”
The appellee pleaded that this contract was a sham and a mere device, resorted to for the purpose of disguising the true relationship existing between Hill and the appellant in the operation of the mine.
I-Iill testified, in substance, that he entered into a lease contract with the appellant on the 14th day of August, 1918, and since that time had operated the mine as a lessee; that he had exclusive management and control of the mine; that since the making of that contract he had authority over the employés, power to hire and discharge them, and to direct their work; that the appellant company had no authority in that respect since his lease began; that his first contract expired on August 4, 1919, and that he had made a new lease contract for another year; he had hired the appel-lee, and the latter was working for him at the time he received his injury; he alone paid the appellee his wages, and the appellant had nothing whatever to do with his employment; that it probably did not even know that the appellee was working in the mine. After repeating, in substance, the provisions embraced in the contract relative to his compensation, he stated that he drew expense money against sales of the coal to the appellant; the mine produced about 150 tons of coal a day; he paid the operating expenses, the pay rpll per month amounting to between $1,000 and $1,200, depending upon the amount of work done; some weeks he did not get any orders from the appellant, and other weeks they worked every day; he worked at the mine, and shipped the coal out. as he got orders from the appellant; the appellant did not tell him when to work, or how to work; it sent him shipping ordei's; he was not under its orders as to anything that he did about the mine — the shipping of the coal, or anything like that. He testified, further, that the appellant took all the coal that was mined by him and his employés; that his compensation was paid him monthly in sums of $200; that he drew on the appellant weekly for the money to pay the expenses of operating the mine, including the wages of the employés.
The appellee testified that he was employed by Hill in May of 1919, and was working in the mine at the time he was injured; that he had been at work there about two weeks or a little longer; he was working under the direction of Mr. Workman, a pit foreman; Mr. Hill was down there in the mine from once to twice a week, or more