author: WERLEIN, Justice.

text:
    BROOKS GAS CORPORATION, Appellant, v. SINCLAIR OIL & GAS CO. et al., Appellees.
    No. 14970.
    Court of Civil Appeals of Texas. Houston.
    Nov. 17, 1966.
    Rehearing Denied Dec. 8, 1966.

      Ben G. Sewell, McGregor, Sewell, Junell & Riggs, Houston, and James W. Wilson, Shannon H. Ratliff, McGinnis, Lochridge, Kilgore, Hunter & Wilson, Austin, for appellant.
    Richard J. Dent, Tulsa, Okl., Richard P. Keeton, David T. Searls, J. Evans Attwell, William H. Drushel, Jr., Houston, for ap-pellee Skelly Oil Co.; Vinson, Elkins, Weems & Searls, Houston, of counsel.
    Horace N. Burton, John R. Scott and Rush Moody, Jr., Midland, for appellee Sinclair Oil & Gas Co.; Stubbeman, Mc-Rae, Sealy & Laughlin, Midland, of counsel.
   WERLEIN, Justice.

In its motion for rehearing appellant complains that some of the language used in our opinion handed down on November 17, 1966, might be construed as an expression of opinion by this Court as to certain disputed facts and the law applicable thereto, and that appellant could be prejudiced thereby upon a trial of the case on its merits. In order to avoid any possibility of such construction of the language used in said opinion, we are withdrawing the same and are substituting the following opinion in lieu thereof.

This is an appeal from an order of the trial court denying appellant, Brooks Gas Corporation, a temporary injunction sought against Sinclair Oil & Gas Co., hereinafter called Sinclair, Skelly Oil Company, referred to herein as Skelly, Sinclair Oil & Gas Company and Skelly Oil Company, alleged to be a partnership or a joint venture, Tenneco Oil Co., and Mallard Petroleum, Inc. In its judgment the trial court made certain fact findings and conclusions of law. Such findings are substantially as follows:

Appellant is the owner and operator of a gas processing plant located near Mertz-on, Irion County, Texas, and of an associated system of gas gathering pipelines and facilities for the collection of casing-head and gas-well gas from wells located in the Mertzon and’ Brooks Field area in Irion County, Texas, and the Velrex Canyon, Velrex Upper Henderson, Velrex Henderson, Velrex Southwest, Velrex South, Case Canyon and Eldorado Canyon Fields area in Schleicher County, Texas, and purchases gas from producers in those areas, extracts the butane, propane and other liquid hydrocarbons from the gas and sells the residue gas to Northern Natural Gas Co., a gas pipeline company. The Mertzon gas processing plant and the gas gathering facilities associated with such plant constitute appellant’s only business operation.

Appellees, Sinclair and Skelly, each own a one-half interest in a gas processing plant located near Hulldale in Schleicher County, Texas, and an associated System of gas gathering pipelines and facilities. Appellee Sinclair is the operator of said facilities under a joint operating agreement authorizing Sinclair to operate such facilities on behalf of both Sinclair and Skelly, except that Skelly’s approval is required for any capital improvement costing in excess of $5,000.00. The Sinclair-Skelly Hulldale gas processing plant is similar in function to that of appellant except larger since ap-pellees obtain gas from wells in a number of fields in Schleicher, Irion and several other counties for their Hulldale plant; that at the time of the negotiations hereinafter referred to between appellant and Skelly and at the time of the hearing of the temporary injunction by the trial court, the Sinclair-Skelly Hulldale gas gathering pipelines and facilities did not extend into the gas supply areas served by appellant, but such plant was located in the same area as appellant’s gas supply area, and only approximately 12 miles away from the area served by appellant in Schleicher County, and thus presented a competitive threat to appellant’s position in such area.

On or about February of 1964, B. R. Nunn, assistant to Skelly’s gasoline plants Division Manager, approached W. M. Dow, appellant’s President, on Skelly’s behalf for the purpose of entering into negotiations looking to the purchase of plaintiff’s gas processing plant and gas gathering system. Dow advised Nunn that though appellant would be interested in negotiating with Skelly for an interest in appellant’s system, it would not divulge to Skelly the detailed confidential information including trade secrets necessary to an evaluation by Skelly of appellant’s system because of Skelly’s ownership of a one-half interest in the Sinclair-Skelly Hulldale plant, and the potential threat presented to appellant’s gas purchase and gas processing position in Irion and Schleicher Counties by such plant. Nunn advised Dow that Sinclair-Skelly had no plan or intention of extending its gas gathering system into any of the gas supply areas served by appellant and that Skelly would give appellant any assurance required by appellant to protect appellant’s position. Dow advised Nunn that in addition to an agreement not to divulge information provided by appellant and the agreement not to use such information to appellant’s detriment, appellant would require an agreement that the Sinclair-Skelly Hulldale system would not be extended into the gas supply areas served by appellant, and that appellant would not furnish any information unless such conditions were agreed to by Skelly. Nunn agreed to such conditions on Skelly’s behalf and stated that Sinclair’s concurrence would be unnecessary since Skelly would have to approve any extension of the Hulldale system into the areas of appellant’s gas supply.

On April 10, 1964, Nunn came to Dow’s office to obtain the information requested by Skelly for the purpose of evaluating appellant’s plant, but before Dow would release such information he required that Nunn sign a letter setting forth specifically the purpose for which the information was provided and the agreements and conditions under which the information was to be given Skelly. This letter was signed and agreed to on behalf of Skelly by Nunn, and reads as follows:

“We are submitting to you herewith on a confidential basis a report entitled, ‘Description of Mertzon-Brooks Gas Gathering and Processing System, Irion and Schleicher Counties, Texas,’ together with Appendix I containing system maps and gas reserve isopach maps, and Appendix II containing copies of gas purchase and residue gas sales contracts. This material is being furnished at your request so that Skelly Oil Company can evaluate its desires to purchase an interest in our operations.
“It is agreed that the information furnished on the Mertzon-Brooks system will be held by Skelly Oil Company in strict confidence and will be revealed only to the necessary and authorized representatives of Skelly Oil Company. Skelly agrees to promptly notify Brooks the names and positions of all Skelly representatives to whom the enclosed information on the Mertzon-Brooks system is revealed.
“It is further agreed that Skelly will in no manner use the information furnished on the Mertzon-Brooks system to the detriment of Brooks Gas Corporation and/or Mertzon Corporation, nor will in any way hinder or undermine Brooks Gas Corporation’s gas purchase and gas processing position in Irion and Schleicher Counties, Texas.
“It is agreed that one copy only of the information as described by the attached lists of contents has been furnished to Skelly Oil Company and that this information will not be reproduced in whole or in part. It is further agreed that all of this information will be returned to Brooks by Skelly within 90 days from this date, along with either a purchase proposal or an expression of no interest by Skelly. It is further agreed that Brooks Gas Corporation has willingly furnished this information to Skelly on the above conditions and that Skelly has no obligation to purchase any part of the Mertzon-Brooks System, nor to pay any fee to Brooks Gas Corporation.”

The written information submitted by appellant after Nunn signed said letter included the narrative statement setting forth a general description of appellant’s processing plant and gas gathering system and its operations, description of all processing and gathering equipment, a summary of all gas purchase contracts and appellant’s gas sales contract, detailed information on the plant’s processing capacity, the plant’s record for recovery of products from gas, information on product sales contracts and products sales, and detailed information on gas reserves and potential field development in the fields served by appellant, and a summary of past, current and projected economics of appellant’s system. In addition, Skelly was given two large folders of written instruments including a list of equipment utilized in appellant’s plant and system, and various system maps and gas reserve isopach maps and copies of appellant’s gas contracts, some of such material being of a confidential nature and constituting trade secrets.

The court further found that the language of said letter to the effect that Skelly would not “in any way hinder or undermine Brooks Gas Corporation’s gas purchase and gas processing in Irion and Schleicher Counties, Texas,” considered in the light of all of the surrounding circumstances constituted an agreement and covenant on the part of Skelly that the Hulldale system would not be extended in appellant’s gas supply area in said counties and that Skelly would not approve any extension of the said system into appellant’s gas supply area. The court found that appellant and Skelly negotiated in good faith concerning the possible sale of an interest in appellant’s system to Skelly, but no sale was consummated.

The court also found that sometime late in 1965, Nunn acting on Skelly’s behalf, approved an extension of the Hulldale system into the Eldorado Canyon Field in Schleicher County, Texas, within appellant’s gas supply area as contemplated by the agreement of said parties. Although appellant’s gas gathering system did not extend into the Eldorado Canyon Field at the time Nunn signed said letter of April 10, 1964 on behalf of Skelly, appellant’s system was connected to wells -in the area of said field, and that Dow told Nunn of appellant’s negotiations for the purchase of gas in the Eldorado Canyon Field and of its plans to extend its gas gathering system into said field, and also that the Eldorado Canyon Field was within the gas supply area that appellant intended to be protected by said covenant and agreement.

That acting on its own behalf and on behalf of Skelly, Sinclair is constructing a pipeline from the Sinclair-Skelly Hulldale plant to the Eldorado field and unless restrained will complete said pipeline and construct a gas gathering system to gas wells in the Eldorado Canyon Field and connect said system to gas wells in said field and take gas from said wells. The court further found that there is no evidence of probative value that Skelly disclosed to Sinclair or to any other unauthorized person any of the confidential information and trade secrets made available to Skelly by appellant, or that Skelly or Sinclair made any specific use of said information in connection with the extension of the Hulldale gathering system to the Eldorado Canyon Field, or otherwise; that there is no evidence of probative value that Sinclair was aware of the negotiations between Skelly and appellant or of the covenant and agreement by Skelly that the Hulldale system would not be extended to the Eldorado Canyon Field and that Skelly would not approve any extensions into said field.

Based on the foregoing facts as found by the court, the court was of the opinion that Skelly agreed that the Hulldale gas gathering system would not be extended into the Eldorado Canyon Field and that it would not approve any such extension proposed by Sinclair; that Skelly’s approval of the extension of the Hulldale gas gathering system to the Eldorado Canyon Field under construction was contrary to such agreement and that the construction of such extension and the connection of such system to wells in the Eldorado Canyon Field and the taking of gas from such wells on Skelly’s behalf would be contrary to such agreement; that the connection of such extension to such wells and the taking of gas therefrom would cause appellant irreparable injury, for which it had no adequate remedy at law, and that appellant would be entitled to temporary injunctive relief if the court were not of the opinion that such agreement is in restraint of trade and not within any presently recognized exceptions allowing reasonable restraints in contracts. The court then stated, “If such agreement were shown to be enforceable the court would grant temporary injunctive relief against Defendant Skelly.”

The court was of the further opinion that appellant had failed to show any entitlement to temporary relief based on any misuse or threatened misuse of confidential information or trade secrets; and that even if said agreement were not an unenforceable contract in restraint of trade, appellant has failed to show any entitlement to temporary relief against Sinclair.

Prior to submission of this cause both Sinclair and Skelly filed motions to dismiss the appeal, asserting that the only temporary relief sought by appellant was an order enjoining the construction of the pipeline between the Sinclair Hulldale Eldorado plant and the Eldorado gas field in Schleicher County, and that since such pipeline had been completed the appeal was moot. They also asserted that the Federal Power Commission had exclusive jurisdiction over the controversy since service through such pipeline, which was commenced under an order of the Federal Power Commission entered January 17, 1966, could not be discontinued without prior approval of the Commission. This Court concluded that appellant’s prayer and appeal encompassed not only the enjoining of the construction of the one pipeline that had been completed, but also included enjoining related gathering facilities into the Eldorado field, or any part thereof, and from doing any act in furtherance thereof. The court, therefore, ordered that appel-lees’ motions to dismiss the appeal, or in the alternative to dismiss the entire cause of action, be refused.

The trial court’s findings of fact in its judgment refusing the temporary injunction are supported by evidence of probative force. We are unable to say that the construction placed upon the agreement is contrary to the evidence and facts adduced at the hearing or is contrary to law. The trial court based its refusal of the temporary injunction upon its conclusion that the agreement and covenant between appellant and Skelly was in restaint of trade and not within any presently recognized exceptions allowing reasonable restraints provided in contracts. In deciding whether the trial court abused its discretion in refusing to grant the temporary injunction, this Court is not limited to a consideration of the grounds or reasons assigned by the trial court for its determination of appellant’s cause of action. The law is well settled that an appellate court will sustain the judgment of the trial court if it is correct on any theory of law applicable to the record, regardless of whether or not the trial court gives the correct legal reason for its judgment, or gives any reason at all. Southwestern Associated Tel. Co. v. City of Dalhart, Tex.Civ.App., 254 S.W.2d 819, writ ref., n. r. e.; Construction & General Labor Union, Local 688, v. Stephenson, Tex.Sup. 1950, 148 Tex. 434, 225 S.W.2d 958; Gulf Land Co. v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.2d 73.

The granting or refusing of a temporary injunction is within the sound discretion of the trial court, and its action will not be disturbed on appeal unless it clearly appears that the court has abused its discretion. Harding v. W. L. Pearson & Co., Tex.Com.App.1932, 48 S.W.2d 964; Southwestern Associated Tel. Co. v. City of Dalhart, supra; 31 Tex.Jur.2d 345, Injunctions, Sec. 224, and cases cited. Furthermore, in determining whether the court erred in refusing to grant the injunction, this Court is required to review all the evidence and legitimate presumptions consistent with the record in the light most favorable to the judgment of the trial court’s exercise of discretion in denying the temporary injunction. Southwestern Associated Tel. Co. v. City of Dalhart, 254 S.W.2d 819, writ ref., n. r. e.; Bond v. Owen, Tex.Civ.App., 257 S.W.2d 833; Daniel v. Goesl, Tex.Civ.App. 1960, 336 S.W.2d 890, reversed on other grounds 161 Tex. 490, 341 S.W.2d 892.

The trial court was of the opinion that the letter agreement was calculated to prevent competition and was in restraint of trade and, therefore, invalid. Appellees contend that such agreement was not ancillary to any contract of sale or purchase or employment, or other contract, and hence was invalid because in restraint of trade. A contract not to compete is generally considered in restraint of trade and will not be enforced unless such contract is ancillary either to a contract for the transfer of good will or other subject or property or to an existing employment or contract of employment. Restatement of Contracts, Sec. 515 (1932); Potomac Fire Ins. Co. v. State, Tex.Civ.App.1929, 18 S.W.2d 929, writ ref.; Hyde Corp. v. Huffines, 1958, 158 Tex. 566, 314 S.W.2d 763.

Appellant argues that such letter agreement is not in restraint of trade, and that it is ancillary to appellant’s action consisting of delivering to Skelly the confidential data and trade secrets in question; that such data and secrets were in fact turned over to Skelly for the sole purpose of evaluating appellant’s plant and facilities and such delivery was in the nature of a bailment to which the contract not to compete was ancillary. In this connection appellant cites Budget Rent-A-Car Corporation of America v. Fein, 5th Cir., 342 F.2d 509. Appellant further contends that the agreement was limited to the particular Eldorado area and had a “built-in” time limit in the estimated 20 year life of the gas production in the Eldorado Field.

We cannot say that the trial court abused its discretion in construing the letter agreement as being unreasonably in restraint of trade, and in denying the temporary injunction. The court found that the language of the letter, considered in the light of all the surrounding circumstances, constituted an agreement and covenant on the part of Skelly that the Hulldale system would not be extended in appellant’s gas supply area in said counties and that Skelly would not approve any extension of the said system into appellant’s gas supply area. The court made no specific finding that such extension would be in restraint of trade because of the area involved, nor did the court make any finding as to what would be a reasonable duration for the restriction imposed by such agreement. There is nothing in the record to indicate whether the court’s decision was based in whole or in part upon the duration of the agreement which was not limited or in whole or in part upon the area to which the agreement would apply. At the time of the letter agreement appellant’s gathering facilities had not been extended into the Eldorado fields and were not so extended until July, 1965.

Appellant has no point to the effect that the trial court erred in failing to limit the agreement either as to area or duration. It is settled law in this State that though the territory or period stipulated by the parties may be unreasonable, a court of equity may nevertheless enforce the contract by granting an injunction restraining the defendant from competing within an area and for a period of time that are reasonable under the circumstances. Lewis v. Krueger Hutchinson & Overton Clinic, 153 Tex. 363, 269 S.W.2d 798; Spinks v. Riebold, Tex.Civ.App., 310 S.W.2d 668, writ ref.; Weatherford Oil Tool Co. v. Campbell, 1960, 161 Tex. 310, 340 S.W.2d 950. Under the facts of this case, and with no point raising the question, this Court is not disposed to resort to such procedure on this appeal from the court’s order refusing to grant the temporary injunction, especially in view of the fact that the court’s refusal to grant the same may be upheld on other grounds. Every reasonable presumption which finds support in the evidence and the trial court’s findings will be indulged in support of the order of the trial court. Butler v. Butler, Tex.Civ.App., 296 S.W.2d 635; Landwer v. Fuller, Tex.Civ.App., 187 S.W.2d 670, error ref., w. o. m.; International Union of Operating Engineers v. Cox, 1949, 148 Tex. 42, 219 S.W.2d 787.

The trial court found, and such finding is supported by the evidence, that appellant had failed to show any entitlement to temporary relief based on any misuse or threatened misuse of confidential information or trade secrets. The court further found that there is no evidence of probative value that Skelly disclosed to Sinclair or to any other unauthorized person any of the confidential information and trade secrets made available to Skelly by appellant, or that Skelly or Sinclair made any specific use of said information in connection with the extension of the Hull-dale gathering system to the Eldorado Canyon Field, or otherwise. The court also found that there is no evidence of probative value that Sinclair was aware of the negotiations between Skelly and appellant or of the covenant and agreement by Skelly that the Hulldale system would not be extended to the Eldorado Canyon Field and that Skelly would not approve any extensions into said field.

The court thus found that Sinclair was innocent of any wrongdoing whatever, and that appellant was not entitled to any temporary relief against Sinclair of any kind. The evidence shows that Sinclair first became interested in constructing the pipeline in 1963, and eventually used its own information to conduct economic and engineering studies to determine whether the line in question was justifiable. Because the project would cost in excess of $5,000.00, Sinclair prepared and presented its recommendation to Skelly for Skelly’s approval. Up to this time Skelly had not been consulted by Sinclair and none of the information used by Sinclair in its evaluation studies was obtained from Skelly, and Skelly, in no way participated in such studies, and did not help prepare Sinclair’s recommendations or requests for approval from Skelly. Appellant admits that Sinclair had no knowledge of Skelly’s agreement with appellant and did not acquire knowledge until appellant protested the Sinclair-Skelly plans to construct the line to the Eldorado field. Appellant’s president, Dow, testified that Skelly’s representative never purported to be acting in Sinclair’s behalf. The letter drafted by Dow was addressed solely to Skelly Oil Company, and according to appellant Skelly informed Dow that Sinclair’s concurrence in the agreement would be unnecessary.

Appellant now seeks a temporary injunction against Skelly Oil Company, Sinclair Oil & Gas Company, Sinclair-Skelly, and each of them, and seeks to enforce Skelly’s covenant not to compete by issuing a temporary injunction against Sinclair-Skelly, which if granted would necessarily result in hardship and loss to Sinclair although there is evidence that it is innocent of any wrongdoing. There is evidence that Skelly and Sinclair are joint adventurers, in connection with the operation of the Hulldale plant, each owning a one-half interest in the enterprise which appellant seeks to enjoin so that any injunction against Skelly with respect to such enterprise would necessarily affect the rights of Sinclair. Under such circumstances the denial of a temporary injunction against Sinclair and Sinclair-Skelly could not be said to be an abuse of discretion. Apparently Skelly is neither operating nor threatening to operate in the area involved other than as a joint owner of the Hulldale plant. The trial court, therefore, did not abuse its discretion in denying the temporary injunction as to Skelly.

The evidence shows that Skelly entered into the agreement with appellant in anticipation of acquiring an interest in appellant’s plant which was being operated or likely would be operated in competition with the plant of Skelly-Sinclair, and that Skelly agreed that the information furnished by appellant would be disclosed only to Skelly’s necessary and authorized representatives, and that such information would not be used in any manner detrimental to appellant, and further that Skelly would not in any way hinder or undermine appellant’s gas purchase and gas processing position in Irion and Schleicher Counties, Texas. Both appellant and Skelly knew of Sinclair’s operations in such counties. Appellant feared competition from the Sinclair-Skelly plant, and knew that Sinclair was the managing co-owner thereof.

The evidence shows that in order to obtain the necessary information to evaluate appellant’s plant, Skelly agreed in effect to veto all future efforts by Sinclair to compete with appellant in the area in question if Skelly did not buy an interest in the plant. The evidence shows also that Sinclair first became interested in building the pipeline from the Eldorado field to the Hull-dale plant in 1963. The agreement between Sinclair and Skelly originally applied only to some four fields or areas. Later the said parties agreed to extend their joint operations to other fields. Sinclair as the managing operator of the Hulldale plant could make expenditures in connection with its operation for Sinclair-Skelly but had to have the approval of Skelly for any expenditure in excess of $5,000.00. The evidence does not disclose whether Skelly knew prior to its negotiations with appellant that Sinclair had been interested in building a pipeline from the Hulldale plant to the Eldorado field. The evidence does show, however, that Sinclair had attempted to negotiate contracts in the area in question, and also that the business of Sinclair-Skelly had been expanded into a number of other areas serving the Hulldale plant.

This gives rise to a serious question as to whether appellant with knowledge of such facts participated in an agreement with Sinclair’s co-owner of the Hulldale plant, which was calculated to injure Sinclair to whom the negotiations were not disclosed, and thus interfere with Sinclair’s competition, in operating the Hulldale plant, with appellant’s plant and facilities. Skelly was aware of the expansion policy of the Hulldale operation and at least of the possibility that Sinclair in behalf of Sinclair-Skelly might want to extend a line from the Hulldale plant to the Eldorado Field which was only some eleven miles distant, and yet with such knowledge Skelly entered into the agreement with appellant because of appellant’s fear of competition with Sinclair-Skelly, that Skelly would veto any effort of Sinclair-Skelly to enter the Eldorado Field. Sinclair asserts that under these circumstances appellant has not come into court with clean hands. Without deciding the point, we are of the opinion that a serious factual issue was raised from which a court in equity might have concluded that appellant was not entitled to a temporary injunction.

From what has been said hereinabove, it appears obvious that this suit involves serious and somewhat complicated controversies, as well as the applicability of legal principles to facts, some of which were found by the trial court and other facts concededly not adduced in evidence or developed. We are of the opinion that these matters should be determined upon a final hearing of the case on the merits and that there was no abuse of discretion by the trial court in denying the temporary injunction. James v. E. Weinstein & Sons, Tex.Com.App.1929, 12 S.W.2d 959; General Drivers, Etc. v. Dallas County Const. Employers’ Ass’n, Tex.Civ.App., 246 S.W.2d 677, error ref., n. r. e.; Whitaker v. Wilson, Tex.Civ.App., 349 S.W.2d 753, writ ref., n. r. e.; Anderson v. Tall Timbers Corporation, 1961, 162 Tex. 450, 347 S.W.2d 592. We paraphrase the statement of the Supreme Court in the latter case by saying that this opinion is not to he construed as passing on the merits of the case in any respect. Its sole function is to uphold the action of the trial court in denying the temporary injunction.

Motion for rehearing overruled.

Judgment affirmed.


source: Caselaw Access Project

author: CHAPMAN, Justice.

license: Public Domain

text:
    In Re GUARDIANSHIP of Bertie Noland PRICE et al., Appellants, v. Kathryn Price MURFEE, Guardian, Appellee.
    No. 7645.
    Court of Civil Appeals of Texas. Amarillo.
    Oct. 31, 1966.
    Rehearing Denied Dec. 5, 1966.
    Sanders, Scott, Saunders, Brian & Humphrey, Amarillo, for appellants.
    Murfee & Hoover, Houston, Gibson, Ochsner, Harlan, Kinney & Morris, Amarillo, for appellee.
   CHAPMAN, Justice.

It appears from the voluminous record before us that L. M. Price, deceased, and his wife, Bertie Noland Price, accumulated an estate of the total value of approximately five million dollars located principally in the North Plains of Texas, but partly in New Mexico and Oklahoma, consisting of land, cattle, oil and gas, banking, an insurance business and investments.

L. M. Price died in 19S5, leaving surviving him his wife, Bertie Noland Price (the sole beneficiary under his will) and two children, a son, W. N. Price, and a daughter, Kathryn Price Murfee.

W. N. Price died on October 4, 1964. Surviving him as children were W. L. Price, Jeanne P. Whittenburg, Lela Price Coyle and Patricia Price Roberson.

On October 19, 1964, Kathryn Price Mur-fee, the only surviving child of L. M. Price and Bertie Noland Price, filed an application for Temporary Guardianship of the person and estate of her mother, then eighty-six years of age, alleging her to have been “ * * • * bedridden and under the continuous care of medical doctors and nurses for a number of years and she is both physically and mentally incompetent to manage and handle her property, financial affairs and estate and that she is a person of unsound mind.”

Mrs. Murfee was appointed Temporary Guardian of her mother on that same day. Apparently a suit then was filed by the children of W. N. Price contesting the permanent appointment of Mrs. Murfee as guardian of the person and estate of her mother and later withdrawn. The order of January 4, 1965-, appointing her so states. The order of the probate court found the ward, as a matter of law, to be a person of unsound mind and that it would be to the benefit and interest of such ward and her estate that Mrs. Murfee be appointed as guardian and “ * * * that the rights of persons and property will be protected by such appointment.” The proper oath was taken and a bond of $100,000 was duly executed to bind the faithful discharge of the guardian’s duties.

Subsequent to the dates above mentioned applications were filed in the probate court by the guardian for approval of professional fees incurred in the employment of accountants and attorneys and a contest thereto filed by the children of W. N. Price above named in their capacity as grandchildren of Bertie Noland Price, “ * * * a person of unsound mind” challenging the jurisdiction of the probate court to approve such fees. The record does not reveal a contest to the first application of March 1, 1965, for approval of the guardian to pay the professional fees but only a contest to the application of September 29, 1965.

An order was entered by the probate court on November 1, 1965, allowing the payment of such professional fees with the exception of $1,000. The grandchildren named gave notice of appeal to the district court of the order just recited and mechanically perfected such appeal. In the district court a Plea in Abatement and Motion to Dismiss were filed by the guardian under the contention that such grandchildren “ * * * have no right to maintain this suit in that no one of them is legally such an interested aggrieved person within the meaning of Section 28 of the Probate Code, V.A.C.S. of Texas, as to be permitted to contest the application of Kathryn Price Murfee, guardian of the person and estate of Bertie Noland Price, for approval and authority to pay statements for professional services rendered on behalf of such guardianship estate for the period of February 1, 1965, through September 15, 1965.” Also a motion for request for commission to take deposition of the guardian was filed, contested on many grounds, and the contest sustained by the district court.

On January 4, 1966, the district court sustained the guardian’s Plea in Abatement and Motion to Dismiss. Appeal is perfected to this court on points contending error of the trial court in not dismissing the guardian’s application for authority to pay the professional fees because of lack of jurisdiction of the county court of Randall County sitting in probate to entertain such motion and error of the trial court in sustaining the guardian’s Plea in Abatement and Motion to Dismiss. One point of error is also asserted for refusal of the trial court to admit testimony of a money claim by appellants against the ward. We shall first discuss the third point of error urged in the court’s sustaining of the guardian’s Plea In Abatement and Motion to Dismiss.

The objections to allowance of professional fees was filed by the parties named in their capacity as grandchildren of the ward and they admit by brief that the crux of their third point is the question as to whether they had such interest in the ward’s estate and were persons aggrieved under the Probate Code of Texas so as to allow them to appear or to appeal. No point is made of alleged error in considering questions in the district court not considered in the probate court, so that question is not before us.

All emphases shown hereafter are ours unless otherwise indicated.

Section 28 of the Probate Code (successor to Article 4318, V.A.T.S.) above referred to provides, inter alia: “Any person who may consider himself aggrieved by any decision, order, decree, or judgment of the court shall have the right to appeal therefrom to the district court of the county.”

Appellants by brief admit the case of Craycroft v. Craycroft, Tex.Civ.App., 250 S.W.2d 458 is the only appellate authority construing Section 28, from which we have just quoted, since the probate code was adopted, and seeks to distinguish it on its facts from the instant case. There are some distinguishing facts, but it is worthy to note that the court said: “The primary question and, we think, the crux of this appeal, is that Wm. R. Craycroft is not legally such an ‘interested’ aggrieved party in the person and estate of his mother as to confer jurisdiction on the trial court on his petition to terminate the guardianship, alleging * * * in effect that his only interest in the matter is the natural inherent personal feeling of a son, with only a prospective inheritable interest in his mother’s estate.” The court then held:

“Only a person legally interested in an estate in which guardianship is pending may have any decision, order or judgment rendered by the probate court or the judge thereof, revised, corrected, or set aside. Such interest as the son bears to the ward does not qualify him as an ‘interested’ person as authorized by law to intervene in the probate court. Jones v. Eastham, Tex.Civ.App., 36 S.W.2d 538, writ refused. Obviously he has * * * no present legal rights in and to his mother’s property involved as would be affected by said guardianship proceedings.”

Jones v. Eastham cited in the Craycroft case and decided under former Article 4328, the predecessor article to Section 31 of the Probate Code, involved the question of whether a sister of the ward was such an aggrieved person as to entitle her to maintain a bill of review in the guardianship. The court said: “We hold that it is conclusively shown by the record that Mrs. Jones was not a party who could have been aggrieved at the judgment entered by the probate court in this suit,” citing cases.

The Supreme Court of Texas, so far as we have been able to determine, has not constructed Section 28 of the Probate Code any further than to agree with the result in Craycroft. The reasoning in that case appears sound and we feel compelled to follow it until higher contrary authority is announced.

Appellants urge 3(r) of the Probate Code under “Definitions and Use of Terms” as authority that they are such aggrieved persons as to be entitled to contest the payment of the professional fees in question. We do not believe the legislature intended by such general definition of terms to enlarge the classes of persons who could challenge an order of the probate court in a proper guardianship proceeding. To do so would be to open “Pandora’s Box” to a constant interference by legally disinterested persons, would greatly handicap the orderly business of the probate court, and incident thereto would create extra expenses and detriment to the properties of the ward.

The fourth point of appellants asserts error in refusing the testimony of W. J. Fellers seeking to show appellants had a money claim against the ward. The record shows both in the transcript and the statement of facts that the only pleading of asserted interest before the probate court and the district court was that appellants were grandchildren of the ward, which we have just held is not such interest alone as to entitle them to the contest they have sought to make. We do not believe such pleadings would permit proof such as that tendered, to the effect that appellants were creditors of the ward. In referring to testimony excluded because it had no pleadings to support it, the Supreme Court of Texas in Bowles v. Fickas, 140 Tex. 312, 167 S.W.2d 741, has held: “The trial court did not err in excluding this testimony for the reason, — if for no other, — that same has no foundation in the pleadings.” Many intermediate appellate courts have held likewise. Stone v. Boone, Tex.Civ.App., 160 S.W.2d 578, 581 (ref. w. m.); Gunnells Sand Company v. Wilhite, Tex.Civ.App., 389 S.W.2d 596 (N.R.E.); Bearden v. Coker, Tex.Civ.App., 291 S.W.2d 790 (N.R. E.). Accordingly, we believe appellants’ fourth point is without merit.

If the cases we have cited and from which we have quoted are approved by our court of last resort, and we have properly interpreted the record, what we have said would require us to affirm the judgment of the trial court sustaining the Plea in Abatement and Motion to Dismiss. Nevertheless, we shall discuss appellants’ first two points of error, which raise essentially the same question; i. e., the county court in Randall County (sitting in probate) lacked jurisdiction to enter the order for payment of professional fees.

Section 4 of the Probate Code provides, inter alia, that the county court shall have authority to “ * * * transact all business appertaining to * * * guardianship.” Section 242 provides:

“Personal representatives of estates shall also be entitled to all necessary and reasonable expenses incurred by them in the preservation, safe-keeping, and management of the estate, and in collecting or attempting to collect claims or debts, and in recovering or attempting to recover property to which the estate has a title or claim, and all reasonable attorney’s fees, necessarily incurred in connection with the proceedings and management of such estate, on satisfactory proof to the court.”

Appellants rely principally upon Morton's Estate v. Ferguson, Tex.Civ.App., 45 S.W.2d 419 (writ ref.) for their authority to sustain their contentions under their first two points. That case was decided before the adoption of the Probate Code in Texas and must be construed under the former statutes. It does not concern guardians but construed statutes applying exclusively to executors and administrators. With respect to expenses allowed for executors and administrators necessarily incurred by them in the preservation, safekeeping, and management of the estate being administered, and all reasonable attorney’s fees, the court quoted former Article 3691. Concerning the prescribed method for presenting claims for such fees former Article 4692 was quoted, which required expense charges should be in writing, verified by affidavit of the fiduciary, filed with the clerk and entered on the claim docket. However, at the time of the decision of Morton’s Estate v. Ferguson, supra, the statute governing guardian and ward with respect to expenses incurred by the guardian for attorney’s fees in the management of the guardianship was under a completely different title and involved completely different requirements. These statutes referred to may be found in the Appendix to Vernon’s Annotated Civil Statutes, Vol. 17-B, Probate Code, beginning immediately preceding Page 359 and entitled “Appendix Former Probate Laws.” The applicable statute for guardians in securing probate court approval for attorney’s fees was former Article 4312 and only required that satisfactory proof be made to the court for reasonable attorney’s fees necessarily incurred by the guardian in the preservation and management of the ward’s estate. There is intermediate appellate court authority to the effect that strict compliance with filing a claim for attorney’s fees even under former title 69, Chapter 11 did not deprive the probate court of jurisdiction. The Austin intermediate court held:

“But, being governed by article 4312, R.S., compliance by Autry with chapter 11, title 69, relating to presentation and allowance of such claims, was not required. The value of such services not being capable of definite ascertainment in advance, Autry was not required to file his account as such claim. While a better course would perhaps have been to present such statement to the new guardian, failure to do so did not deprive the probate court of jurisdiction to act upon it. Greer’s Estate v. Cooper (Tex.Civ.App.) 50 S.W.(2d) 345; Rowe v. Dyess, (Tex.Com.App.) 213 S.W. 234. The value of such services as Autry rendered and the necessity therefor were both primarily matters for determination by the probate court, rather than by the guardian; and the allowance therefor is in reality one to the guardian, rather than to the attorney. Rowe v. Dyess, supra. Clearly, therefore, the probate court had jurisdiction to pass upon the matter, and article 4312, R.S., makes it the duty of the court to determine by satisfactory proof the necessity for, and value of, the services rendered.”

Additionally, this court in a later case than Morton’s Estate v. Ferguson, that involved executors, held that an attorney need not file a verified claim when he made application for reasonable attorney’s fees for services rendered the estate. There, as in our case, the attorneys agreed to perform services for reasonable fees. This court in a “writ refused” case held:

“It will be observed that the contract made between the executors and appellees was for reasonable attorneys’ fees to be fixed by the probate judge. Until the services had been rendered, the question of what would constitute a reasonable fee was uncertain and impossible of ascertainment, for which reason appellees could not file a verified claim for attorneys’ fees, and in such cases they are not required to do so.”

The record here suggests there will be need for many more services of attorneys and accountants.

Guardianship letters were granted appellee on January 14, 1965. All professional fees submitted by the guardian in her application to the probate court were for services rendered after she was granted such letters. Therefore, if Subsection (b) of Section 317 of the Probate Code could be said to have legislated away the rules applied in Mathews v. Autry, supra, and Greer’s Estate v. Cooper, supra, the exclusions of Subdivision (d) of Section 317 would appear to eliminate the requirement for filing claims by guardians under Subsection (b), wherein said Subsection (d) provided: “The foregoing provisions relative to the presentment of claims shall not be so construed as to apply to * * * any claim that accrues against the estate after the granting of letters for which the representative of the estate has contracted.”

Though at first blush some of the attorney’s fees appear to total large sums, the record shows that some of them were accumulated in the preparation for the filing of a law suit in Sherman County affecting the estate. An attorney of the firm with the claim for the largest amount testified in the record that there would be no double charges and in effect that the expenditures made in preparation for the filing of said law suit were included in the total of the claims filed.

We hold the district court properly sustained the Plea in Abatement and Motion to Dismiss filed by the guardians. We also hold that it did not err in refusing to dismiss the guardian’s application for approval of professional fees or in refusing to vacate the “Order for Payment of Professional Fees” entertained, rendered and entered by the probate court.

The judgment of the trial court is in all things affirmed.

      . Mathews v. Autry, Tex.Civ.App., 65 S.W.2d 798.

      . Greer’s Estate v. Cooper, Tex.Civ.App., 50 S.W.2d 345 (writ ref.).


author: MASSEY, Chief Justice.

text:
    James B. HENSLEY, Appellant, v. FORT WORTH AND DENVER RAILWAY COMPANY, Appellee.
    No. 16768.
    Court of Civil Appeals of Texas. Fort Worth.
    Nov. 4, 1966.
    Rehearing Denied Dec. 9, 1966.

      Spurlock & Schattman, and Denning Schattman, Fort Worth, for appellant.
    Tilley, Hyder & Law, and Robert M. Randolph and Thos. H. Law, Fort Worth, for appellee.
   OPINION

MASSEY, Chief Justice.

Suit was under the Federal Employers’ Liability Act by James B. Hensley, as plaintiff, against his employer the Fort Worth and Denver Railway Company. Trial was to a jury, which returned answers to special issues upon which the court entered a judgment for the defendant. Plaintiff appealed.

Judgment affirmed.

In the instant case issues under the doctrine of res ipsa loquitur were raised under the pleadings and the evidence. The instrumentality involved was a railroad switch. The switch was of the type which when “thrown” in one direction would cause a train passing over the tracks controlled thereby to go forward onto one path, but which when “thrown” in the other direction would cause the train to go forward onto another path. The securing of the switch, so that directional control of the train would be constant, involved manual pressure exerted on the switch-handle, which controlled the switching result, so that a part thereof went into a slot and there remained so that the movable portion of the tracks themselves would not move — being secured by the presence of the handle in the slot. There were two slots for positioning the switch-handle, one for directional control of the train onto one set of tracks, and the second for directional control of the train onto other tracks.

Evidence in the record showed not only that the switch-handle was out of (or insecurely fastened in) the slot in which it was supposed to rest, but furthermore presented a situation from which the jury was entitled to conclude (as it did) that the vibration from the cars of a train which was in the process of passing over the roadbed caused movement in the switch (and accompanying movement in the insecurely positioned switch-handle) allowing the front of the railroad car on which plaintiff was riding to go to the right on one set of tracks — and allowing the rear of the same railroad car to proceed straight ahead on the other set of tracks. A derailment resulted, and in consequence thereof plaintiff fell or was thrown from the car and sustained personal injuries.

It is conceded by the defendant railroad that the plaintiff made out his prima facie case under the doctrine of res ipsa loqui-tur. Defendant insists that its evidence met the requisite of providing justification and excuse for the derailment and resultant injuries to the plaintiff, a theory advanced as part of its defense. It is defendant’s contention that its evidence showed that two young boys were taking a short cut from school on the day immediately prior to the evening on which the derailment occurred, and that during the course thereof they manipulated the switch-handle so that it came out of the slot in which it was supposed to remain secured, leaving it in such condition that vibration of the railroad cars resulted in the derailment. The author of this opinion believes such evidence failed in that the action of the boys was not shown to have had connection with the switch in question and/or was not shown to have had connection at a material time. The other two members of the Court are not in accord, and they believe that there was evidence from which the jury was entitled to conclude that the boys did tamper with the switch in question thereby occasioning the derailment. However, all members are of the opinion that there was other evidence competent to show that the switch-handle could not have been out of (or insecurely fastened in) the slot but for tampering by person or persons unknown.

In any event the plaintiff failed to obtain jury findings sufficient to support a judgment for him against the defendant under the doctrine of res ipsa loquitur. The jury in response to the issues submitted found that the track and roadbed involved was under the exclusive control and direction of the defendant, its agents and employees. (This was undisputed.) However, it further found that the defendant railway “did not fail” to use ordinary care to have and maintain the track and roadbed in a reasonably safe condition at the place and on the occasion in question. Because of the conditional submission of the issue the jury was not required to answer the inquiry as to whether defendant’s failure to exercise care contributed to cause plaintiff’s injuries.

As we view the case the plaintiff simply failed to sustain his burden of proof. Other than in an exceptional res ipsa loquitur case the plaintiff must have his case submitted to the jury. (The instant situation is not such an exceptional case.) Submission is ordinarily by a general issue asking if the defendant was negligent in the manner of his handling of the instrumentality involved, with a corollary issue on proximate cause — or—in a Federal Employers’ Liability Act (FELA) case a corollary issue on “contributing cause, in whole or in part”. An issue inquiring as to the prerequisite of exclusive control of the instrumentality by the defendant may or may not be necessary to be submitted to the jury, depending upon whether the factual situation existent under the facts of the case raises the issue. However, whether submission thereof is requisite or not would have no bearing upon the necessity for the plaintiff to obtain jury findings on negligence and cause. Under no theory would the plaintiff in the case under scrutiny be entitled to receive an instructed verdict or a judgment non obstante veredicto, even when we treat the “track and roadbed at the place in question” as constituting the instrumentality involved.

See Hodges on Special Issue Submission in Texas, p. 106, “Size and number of issues”, § 39, “Particular Problems in Negligence Cases”; Note, 36 Tex.Law Review 698; 40 Tex.Jur.2d 679, “Negligence”, § 149, “(Res Ipsa Loquitur)—Effect of application”: Houston, E. & W. T. Ry. Co. v. Roach, 52 Tex.Civ.App. 95, 114 S.W. 418 (1908, writ refused); Simpson v. Dallas Ry. & Terminal Co., 143 S.W.2d 416 (Dallas Civ.App., 1940, writ dism., judgm. correct); Gaunce v. Gulf, C. & S. F. Ry. Co., 20 Tex.Civ.App. 33, 48 S.W. 524 (1898, no writ hist.), and discussion of cases beginning on page 526.

Plaintiff points out that federal decisions are controlling on the question of the applicability of the doctrine of res ipsa loquitur. However, we do not perceive wherein the federal decisions differ from those in other Texas cases. The principal case cited by appellant is Moore v. Atchison, Topeka and Santa Fe Railway Co., 28 Ill.App.2d 340, 171 N.E.2d 393, 97 A.L.R.2d 511 (1961), a case where it was held that the doctrine had application and that (despite the jury’s verdict for the defendant railroad) the unexplained and unexcused movement of a train through a red signal and thus upon a main line where there was a collision of trains entitled plaintiff to an instructed verdict on the matter of liability for injuries resulting in death to a railroad employee. Obviously this was an exceptional case, and we must agree with a statement quoted from the opinion, viz.: “ ‘The time will probably never come when a collision resulting from an attempt to have two trains going at full speed, in opposite directions, pass each other on the same track, will not be held to be negligence, in law.’ ”

In the Moore case it was said: “The doctrine of res ipsa loquitur ‘means that the facts of the occurrence warrant the inference of negligence, not that they compel such an inference; that they furnish circumstantial evidence of negligence where direct evidence of it may be lacking, but it is evidence to be weighed, not necessarily to be accepted as sufficient; that they call for explanation or rebuttal, not necessarily that they require it; that they make a case to be decided by the jury not that they forestall the verdict. Res ipsa loquitur, where it applies, does not convert the defendant’s general issue into an affirmative defense. When all the evidence is in, the question for the jury is, whether the preponderance is with the plaintiff.’ Sweeney v. Erving, 228 U.S. 233, 240, 33 S.Ct. 416, 418, 57 L.Ed. 815.” This we likewise understand to be the law in Texas whether the case is under the Federal Employers’ Liability Act or otherwise.

It is the usual, not exceptional, case to which the quoted language in the preceding paragraph has reference. In our opinion the instant case is not the exceptional. Furthermore, as already stated, there is adequate proof constituting an explanation and excuse for the condition of the insecure switch and switch-handle, despite the defendant’s failure to show by any direct evidence that the boys were the parties who had tampered with such. The trial court did not err in overruling motions for instructed verdict and for judgment non obstante veredicto.

Plaintiff also complains because of the trial court’s refusal to submit three separate instructions as part of its charge to the jury. One instruction set forth the liability of the defendant for injuries to its employees resulting in whole or in part from negligence of its employees, officers or agents. The second instruction informed the jury that an employee of a railroad, such as the plaintiff, did not assume the risks of his employment. The third instruction informed the jury that the defendant was under the duty to exercise ordinary care to provide plaintiff with a reasonably safe place to work. It is the plaintiff’s contention that all three of the requested instructions constituted a departure from the usual rules governing the relationship of master and servant at common law without knowledge of which the jury could not intelligently answer certain special issues. The jury did answer such issues against the plaintiff.

Plaintiff has cited no authority for the novel proposition he advances. He apparently regards it as a substantive federal right which must be given effect over local law which he assumes is to the contrary. Under the charge of the court the jury was not permitted to speculate upon any supposed knowledge of unmodified common law. Had the court instructed the jury on the law, simply because it was a modification of the common law, it would have amounted to a general charge on the law, error under our practice if objected to by a litigant. 57 Tex.Jur.2d 200, “Trial”, § 512, “Instructions prohibited —General charges on law.” More materially, however, plaintiff cannot demonstrate any prejudice to have been the result of the court’s refusal of the instructions affecting his interest.

Judgment is affirmed.


author: COLLINGS, Justice.

text:
    TRIANGLE SUPPLY COMPANY, Appellant, v. E. B. FLETCHER et al., Appellees.
    No. 4102.
    Court of Civil Appeals of Texas. Eastland.
    Nov. 11, 1966.
    Rehearing Denied Dec. 9, 1966.
    McMahon, Smart, Sprain, Wilson & Camp, Bob J. Surovik, Abilene, for appellant.

      Shank, Irwin, Chester & Conant, Allan B. Conant, Jr., and Ivan Irwin, Jr., Ross H. Scott, Dallas, for appellee.
   COLLINGS, Justice.

Triangle Supply Company brought suit against E. B. Fletcher and Gene McCutch-in. Plaintiff sought to remove a cloud from its title to a %2 of the %:hs working interest in the Genevieve Woods oil and gas lease in Fisher County and for an accounting and recovery of the value of oil runs received by the defendant McCutchin. Upon a trial before the court without a jury judgment was entered denying plaintiff the relief prayed for. Triangle Supply Company has appealed.

On August 21, 1963, Thomas and Saxon Drilling Company assigned to Triangle Supply Company an undivided ⅜2 of %ths working interest in and to the 640 acre Genevieve Woods lease in Fisher County. The lease at that time had one producing well in the northeast quarter of the section. On August 30, 1963, the assignment was mistakenly filed for record in Taylor County. On January 15, 1965, after appellant discovered the error in filing in Taylor, the assignment was filed in Fisher County. On March 1964, after the assignment to appellant, a judgment was obtained against Thomas & Saxon Drilling Company by J. E. Cox and Sons, Inc., in the District Court of Stephens County. This judgment was assigned to H. D. Cook on May 7, 1964, and an abstract of the judgment was filed in Fisher County on May 14, 1964. On November 3, 1964, a writ of execution was issued on the judgment and on November 10, 1964, the Sheriff of Fisher County levied upon “all the interest of Thomas & Saxon Drilling Company”, in the lease in question. A sheriff’s sale was conducted on December 1, 1964, at which “all of the estate, right, title, interest and claim which the said Thomas and Saxon Drilling Company had on the 10th day of November, 1964 or at any time afterwards in and to” certain described oil and gas leases including the lease in question was conveyed by sheriff’s deed executed on that date. Ap-pellee E. B. Fletcher, acting by and through his attorney, Ross H. Scott, was the purchaser at said sheriff’s sale for a cash consideration of $200.00.

On May 14, 1964 when the abstract of judgment lien was filed in Fisher County, on November 10, 1964 when the levy of execution was made and on December 1, 1964, the date of the sheriff’s sale, the said H. D. Cook, judgment creditor and E. B. Fletcher the execution purchaser knew of the unrecorded interest of appellant in and to the working interest in question. On December 27, 1964, Fletcher assigned the lease in so far as it covered the southwest 560 acres thereof (carving out 80 acres surrounding the producing oil well heretofore mentioned) to appellee Gene McCutchin. McCutchin completed a well on the 560 acre lease in January of 1965. Thereafter and not later than June 1, 1965, appellant informed McCutchin of its interest in the property.

In appellant’s first three points it is urged that the court (1) erred in failing to hold that the sheriff’s sale was void and that appellee McCutchin deraigned no title therefrom because the abstract of judgment and execution liens upon which the sale was based were affixed at a time when the judgment creditor had actual knowledge of appellant’s interest in the property, (2) erred in failing to find that McCutchin deraigned no title from the sheriff’s sale because the sheriff’s return of the writ of execution and the sheriff’s deed purported to convey only the right, title and interest of the judgment debtor Thomas & Saxon Drilling Company, and said judgment debtor had theretofore assigned all of its right, title and interest in and to said leasehold estate prior to the affixing of the purported liens forming the basis of the sheriff’s sale, and (3) erred in failing to hold that the writ of execution, its return and the sheriff’s deed through which Mc-Cutchin claims title was in the nature of a quitclaim conveyance of the title of the judgment debtor Thomas & Saxon Drilling Company, and that no title passed because said judgment debtor had previously conveyed its right, title and interest in the property prior to the affixing of the purported liens which were the basis of the sheriff’s sale. These points are overruled.

The sheriff’s sale, although voidable, was not absolutely void by reason of the fact that the abstract of judgment and execution liens were affixed at a time when the judgment creditor and Fletcher, the execution purchaser, had actual knowledge of appellant’s interest in the property. Mc-Cutchin holds under a valid judgment, levy, execution, sale and deed. The sale was therefore not void. Moore v. Johnston, 12 Tex.Civ.App. 694, 34 S.W. 771. He was an innocent purchaser without notice of appellant’s interest and the conveyance to him was binding. Vernon’s Ann.Tex.Civ. St. Article 6627.

The material facts in Holmes v. Buckner, 67 Tex. 107, 2 S.W. 452 were similar to those in the instant case. There Watson conveyed land to his wife but the deed was not recorded until after the land had been bought at a sheriff’s sale by Roberts and had been conveyed by Roberts to Buckner. On these facts the Supreme Court in holding for Buckner stated as follows:

“Roberts himself was not an innocent purchaser, because he had actual knowledge of the deed from Watson to his wife. But his vendees were, as they had no such knowledge; and it is a familiar principle of equity that an innocent purchaser from one who purchased with notice is as fully protected as if he had bought without notice from the vendor of the party from whom he purchased.”

We also overrule appellant’s points urging in effect that McCutchin acquired no title to the leasehold interest because the writ of execution, return and sheriff’s deed under which he held was in the nature of a quitclaim and purported to convey only “the right, title and interest of the judgment creditor, Thomas & Saxon Drilling Company”, and that such judgment creditor at that time had no title to said leasehold interest because it had theretofore conveyed away all of its interest therein. Articles 3816 and 3818 provide for the form of a sheriff’s deed, and further provide that innocent purchasers may claim through such deeds. Article 3816 provides as follows:

“When a sale has been made and the terms thereof complied with, the officer shall execute and deliver to the purchaser a conveyance of all the right, title, interest and claim which the defendant in execution had in and to the property sold.”

The statute thus provides for the form of the sheriff’s deed. Appellant’s contention that the conveyance in compliance therewith is ineffective to convey title is not well taken. Ward v. League, Tex.Civ.App., 24 S.W. 986 involves the question of whether commissioner’s deed was a quitclaim so as to put the purchaser on notice of a prior unrecorded conveyance. In this connection the court stated as follows :

“The court, then, correctly concluded that there was nothing in the manner of this sale to prevent appellee from being an innocent purchaser. By reference to the conclusions of fact it will be seen that we have not been furnished with a sufficiently full statement of the contents of the deed made by the commissioner to appellee to enable us to pronounce it, over the finding of the lower court, to be a pure quitclaim in form. On the contrary, we infer that it was in the ordinary form for such deeds, which, we have already seen, are fully protected by our statute.”

It is also held that an assignment of mineral leases purporting to assign all the “right, title and interest” of the assignor in and to certain leases is not a quitclaim, but conveys the instruments as well as the title to the minerals that the instruments themselves convey. Miller v. Hodges, Tex.Com.App., 260 S.W. 168 and cases cited therein.

In numerous points appellant contends, in effect, that the court erred in holding that appellee McCutchin was an innocent purchaser; that the court erred in finding that appellant did not have open and visible possession of the leasehold estate in question; erred in finding that Mc-Cutchin did not have knowledge or notice of appellant’s prior acquisition of said leasehold estate, or at least knowledge of facts sufficient to put a reasonable prudent person on inquiry concerning appellant’s claim. Appellant urges that there is no evidence and that the evidence is insufficient to support such findings and holdings, and that such findings and holdings are against the great weight and preponderance of the evidence. Appellant contends that at the time of the assignment from Fletcher to Mc-Cutchin in December of 1964, appellant was in possession of its ⅜2 working interest in the lease through its agent and operator, LeClair Operating Company and that by reason of this fact McCutchin could not have been an innocent purchaser. The evidence does show that LeClair Operating Company was the operator of the well in the northeast 80 acres of the section; that LeClair owned no interest in the leasehold estate and was paid for performing the service of operating the well thereon. There was evidence to the effect that after receiving its assignment from Thomas & Saxon Drilling Company in August of 1963, appellant in October of 1963 and ever since has received payments from Mc-Wood Corp., for oil produced from the well on the northeast 80 acre tract. As heretofore noted this tract was not included in Fletcher’s assignment to McCutchin. Mc-Cutchin later drilled a well on the southwest 560 acre tract assigned to him and no payments have ever been made to appellant for oil produced therefrom. It is held that open, exclusive, visible and unequivocal possession by the owner of an unrecorded deed when the right of the creditor attaches, is notice of the right under which the land is held. Newman v. Phalen, Tex.Civ.App., 214 S.W. 958; Ball v. Norton, Tex.Com.App., 238 S.W. 889; Howard v. Leonard, 185 S.W.2d 490, (CCA 1945, Ref.W.M.) However, joint occupancy of land by two or more persons, one of whom is the record owner, will not put prospective purchasers on inquiry of an adverse claim. 2 A.L.R. 2d 858.

Appellee contends that appellant, if it had possession at all, was not in exclusive possession of any of the property in question; that 2%2 interest in the lease was outstanding and that Fletcher was the record owner of at least a ⅜2 interest in the 560 acre part of the lease which was assigned to McCutchin. There was evidence to the effect that Fletcher also owned a ⅜2 working interest in the northeast 80 acres. Mr. Roberts, president of appellant Triangle Supply Company, stated that appellant maintained no employees or structures on either the 80 acre tract or the 560 acres in question. There was an oil well on the 80 acre tract but at the time of the conveyance to McCutchin there was no well on the other 560 acres, nor was there anything thereon to indicate that appellant owned a portion thereof. There was no evidence to the effect that anyone told McCutchin that appellant was making any claim to the property. At the time McCutchin purchased the 560 acre leasehold estate he went on the premises and examined it but saw nothing which indicated that appellant had any claim thereto. He knew that there was a well on the northeast 80 acres of the section but was not buying any part of the acreage on that portion of the lease. Mc-Cutchin testified that the pipeline purchaser was not on the premises at the time he made an inspection of the property; that the operator, LeClair Operating Company, was not on the premises, and at that time he did not know who the operating company was. He stated that he assumed the operator was some of Fletcher’s organization. He further stated that he was an experienced oil man and that even if he had known that LeClair Operating Company was on the premises it would not have indicated to him that there was any adverse claim to the 560 acre leasehold interest he was purchasing. It was stipulated that Mc-Cutchin was advised by his attorney that he was getting good title.

The findings and holdings to the effect that McCutchin was an innocent purchaser without notice of appellant’s claim are, in our opinion, supported by evidence. Certainly, the evidence does not, as appellant seems to contend, conclusively show that appellant had open, exclusive, visible and unequivocal possession of such leasehold, including the 560 acres purchased by McCutchin. We also overrule appellant’s points contending that the evidence is insufficient and that such findings are against the great weight and preponderance of the evidence. Appellant’s points are all overruled.

The judgment is affirmed.


author: DAVIS, Justice.

text:
    Clara B. ALVORD, a widow, Appellant, v. TENNECO CORPORATION et al., Appellee.
    No. 7743.
    Court of Civil Appeals of Texas. Texarkana.
    Nov. 1, 1966.
    Rehearing Denied Nov. 29, 1966.
    Tom Bankhead, Bankhead & Davis, Carthage, for appellant.
    Patrick H. Rafferty, Rafferty, Taylor, Kepner & Associates, Houston, J. E. Jackson, Long, Strong, Jackson & Strong, Carthage, John Minton, Spruiell, Lowry, Potter, Lasater & Guinn, Murph Wilson, Wilson, Miller, Spivey & Steger, Tyler, for appellee.
   DAVIS, Justice.

H. H. Alvord, Jr., was the original plaintiff in this suit. He was the successor in title of all the properties that had previously been owned by Natural Gas Production Company, Inc., hereinafter called Natural. Tenneco Corporation, et al, as defendants, were sued by H. H. Alvord, Jr., for the purpose of construing certain contracts. A summary judgment was granted in the case in favor of the defendants, and an appeal was taken to the Twelfth Court of Civil Appeals in Tyler. The Twelfth Court of Civil Appeals held there were issues of fact as to whether or not there had been an abandonment of certain oil wells that were owned by H. H. Alvord, Jr. The judgment of the trial court was reversed and the cause remanded for a new trial. Alvord, Jr. v. Tenneco Corporation, Tex.Civ.App., 382 S.W.2d 358, W.R., N.R.E.

Sometime, during these proceedings, H. H. Alvord, Jr., died. His wife, Clara B. Alvord, a widow, was made a party plaintiff in lieu of her husband.

A second motion for summary judgment was filed by Tenneco, et al, in which they admitted that the title to the wells had not been abandoned. It is interesting to note that in an agreement entered into between Midstates and Natural (Midstates being the prior title holder from whom Tenneco Corporation acquired interest in the contracts) did on the 14th day of June, 1947, release the right to purchase from Natural (Alvord) the wells that had been producing oil upon the property described in the lease contracts.

Tenneco, et al, filed a second motion for summary judgment after they had admitted that the 8 oil wells had not been abandoned. The trial court granted the summary judgment. Mrs. Alvord has perfected her appeal, and brings forward 7 points of error.

HISTORY

We will try to give the history of the contracts that are involved. Natural was the owner of certain oil and gas leases that were situated in Harrison County, Texas, and Panola County, Texas. The leases involved in this suit were the ones situated in Panola County, Texas. They were executed in 1923, 1928, 1929 and 1949. On the 7th day of March, 1941, Natural entered in to an agreement with Midstates effecting an interest in the oil, gas and mineral leasehold estates whereby Midstates was to commence drilling a well down to a depth of 6500 feet, but below 4700 feet from the surface. The contract dated March 7, 1941, contains the following provisions: It provides that Natural desires to sell certain rights in each of said leases. It further provides that Natural does: “Grant, sell, transfer and assign all of the right, title and interest of the original lessee and present owner in and to each of said leases, excepting said overriding royalty reserved to Ohio Oil Company under said Bryson leases, unto Midstates, its successors and assigns, subject, to the reservations and conditions hereinafter provided: * * Emphasis added. The contract further reserves to Natural the right to any causes of action which Natural may have and the title to 8 certain wells producing on the leases. The contract gave the depth of each well that was producing down to a depth of 4704 feet. It provided that Mid-states could not produce from either of the horizons from which the 8 wells were producing. Title to each of the wells was reserved with an option for Midstates to purchase them. Midstates later released this right. Natural reserves certain overriding royalties and provided that there would be no overriding royalty on wells that were drilled below a depth of 6500 feet. The contract carries this provision:

“ * * * In the event Midstates elects to commence the drilling of a well as herein provided, it shall proceed with such drilling with reasonable diligence to the horizon from which the Holcomb and Thomason well # 15 Crenshaw is now producing or to a depth of six thousand five hundred (6,500) feet, whichever shall be first encountered, unless production is obtained at lessor depths and below the four thousand seven hundred (4,700) foot horizon.” (Emphasis added.)

The contract provides that:

“ * * * Natural shall cause to be unitized said Roquemore leases into one lease with respect to all horizons below four thousand seven hundred four (4,-704) feet, * * *.”

Section 13 of the contract reads as follows :

“Natural shall pay gross production tax, ad valorem tax and any other tax assessed against Natural upon its proportionate interest when such taxes are assessed or become due.”

In the agreement and release that was entered into between Alvord, successor to Natural, and Midstates, on June 14, 1947, contains the following language:

“NOW, THEREFORE, for and in consideration of the premises and of the mutual covenants and agreements herein provided to be kept and performed Al-vord, Midstates and United mutually and severally agree each with the other that the said above described gas purchase contracts and all amendments and supplements thereto, whether such amendments and supplements are described and listed above or not, shall be and they are hereby in all things cancelled, terminated, discharged and declared null and void as of July 26, 1947, and the parties hereto shall be and are hereby released as of said date of and from any and all rights and privileges, liabilities and obligations thereunder; provided, however, that nothing in this instrument contained shall have effect to release or cancel the rights of Midstates and Alvord in that certain gas purchase contract described in paragraph (b) hereinabove in so far as it covers all depths below four thous- and seven hundred four (4704) feet subsurface. For the same consideration Midstates does hereby release, discharge and relinquish any and all rights, if any, which it owns or might assert in said gas purchase contract described in paragraph (b) together with all amendments and supplements thereto, whether such amendments and supplements are described and listed in said paragraph or not, down to a depth of four thousand seven hundred four (4704) feet, and in said gas purchase contract described in paragraph (a) together with all amendments and supplements thereto, whether such amendments and supplements are listed and described in said paragraph or not, together with any and all rights and options which it might have for the purchase and transfer from Alvord of any and all wells now situated on and producing from any properties covered by said gas purchase contracts released by this instrument as is provided for in that certain contract between Natural Gas Production Company, Inc. and Midstates dated the 7th day of March, 1941, recorded in Volume 136, Page 435 of the Deed Records of Panola County, Texas, and that certain transfer and assignment from Natural Gas Production Company, Inc. to Midstates Oil Corporation, dated April 24, 1941, recorded in Volume 137, Page 187, Deed Records, Panola County, Texas, and Volume 245, Page 261 et seq. Records of Harrison County, Texas, to which reference is made. * * Emphasis added.

In a contract and agreement between Midstates and United Gas Pipeline Company, entered into on October 23, 1943, the contract says: “ * * * Midstates is the present owner of an oil and gas leasehold, insofar as said leasehold covers and applies to all horizons below a depth of 4704 feet subsurface. * * Emphasis added. This contract and agreement refers to the contract and agreement entered into between Natural and Midstates on April 7, 1941.

Alvord alleged in the original petition that all rights acquired by Midstates under the contract of March 7, 1941, was to drill certain wells at a depth below 4700 feet from the surface. He further alleged that wells had been drilled to a depth above 4704 feet by virtue of certain other contracts that had been entered into between Midstates and others and that he had been fraudulently deprived of the value of the production therefrom. He further alleged that all of the contracts were ambiguous and uncertain in the language adopted concerning the rights and interest reserved by Natural in said shallow rights and the interest and rights acquired by Midstates in said shallow rights. He further alleged that because of the uncertainty and ambiguity in the contracts he was entitled to show by extrinsic evidence the surrounding circumstances and true intent of the parties. He further alleged that he did show that under the agreement that the true intent of the parties was that the shallow rights were retained by Natural and that Midstates only acquired and claimed the title or interest below the depth of 4704 feet from the surface.

Tenneco, et al, takes the position that the contracts were not ambiguous and can be construed as a matter of law.

Alvord alleged in his reply and affidavit to the motion for a summary judgment that he was the owner of the shallow lease rights down to a depth of 4704 feet and that Midstates had only acquired the deeper leasehold interest in and to the leases.

Alvord, taking the position that the contracts were ambiguous, offered in evidence by the deposition of F. H. Harrell, a former officer in Midstates, who testified that he knew of the contract that was entered into between Natural and Midstates and that Midstates did not at any time claim any interest in the leasehold estates above a depth of 4704 feet. He testified positively that Midstates did not acquire any interest above the 4704 feet, but only acquired the interest below that depth.

On April 24, 1941, an assignment was entered into between Natural and Midstates which adopted an “unrecorded agreement”. Apparently, the unrecorded agreement was dated prior to March 7, 1941, and probably does not pertain to the issues involved in this suit. The writer has made a careful search of the record for the “unrecorded agreement”, but is unable to find the same.

This court is supposed to construe all of these contracts together, if possible. We have tried to do so in view of the points of error that have been raised.

By her first S points of error, Mrs. Al-vord says the trial court erred in the judgment he entered because: he denied her the shallow rights of the leasehold estate in controversy; in adjudging her right to enter upon the leasehold to be for the sole purpose of operating and reworking the wells that were producing on March 7, 1941; that she had no right to deepen her wells or produce from any other formation other than those from which they were being produced on March 7, 1941; that she did not have the right to drill any new wells on any location on the leased premises ; and that the contracts are ambiguous.

In trying to interpret the contracts that are involved, we have decided that the contracts are ambiguous (doubtful in meaning) and that the plaintiff should be entitled to offer extrinsic evidence to show the true intent of the parties at all times during the entire life of the contracts. When a contract, or contracts, is/are unambiguous, they must be construed as a whole in the light most favorable to the grantee. This has always been the law. Anderson & Kerr Drilling Company v. Bruhlmeyer (1940), 134 Tex. 574, 136 S.W.2d 800, 127 A.L.R. 1217.

In trying to make up our mind as to whether the contracts are ambiguous, or not, many cases have been read and much law has been studied. We even referred to Webster’s Dictionary, which gives the meaning of ambiguous as follows :

“Having two or more meanings; doubtful; being of uncertain signification; susceptible of different interpretations; hence, obscure. It is applied to words and expressions; not to a dubious state of mind, though it may be to a person using words of doubtful signification; as, the ancient oracles were ambiguous.
“Syn: Doubtful, indefinite, dubious, equivocal, uncertain, involved.”

As we view the contracts, it seems that Natural (Alvord) did not reserve unto himself in the contract dated March 7, 1941, to anything but the title to the existing oil wells. But, other reservations were made and excepted from the conveyance. The contract further provided that Midstates may drill a well to 6500 feet, but below 4700 feet. It seems that the contract that was entered into on June 14, 1947, settled the issue as to who owned the shallow mineral rights down to a depth of 4704 feet, because Midstates thereby released all of its rights above 4704 feet. Also it relinquished its right to buy the wells, if abandoned. Then the contract that was entered into on October 23, 1943, between Mid-states and United Gas Pipeline Company, creates more doubt as to the intent of all the parties. We hold that there are material questions of fact as to who owns the leasehold estate above 4704 feet, and that the contracts are ambiguous. Smith v. Allison, 1956, 157 Tex. 220, 301 S.W.2d 608. The points are sustained.

If the material fact issues hereinbefore stated are decided against the appellees, the 6th point of error will be decided. Although she is complaining that a predecessor in title, Midstates, had already relinquished to her any and all rights to the lease in question down to a depth of 4704 feet. In construing the release, it seems that this is true that they did release all the rights that they had in the leases down to that depth. The point is sustained.

By her 7th point of error, Mrs. Alvord says the trial court erred in taxing “all costs” in this cause against her, especially upon the prior appeal and the mandate from the Court of Civil Appeals in Tyler. With this we agree. The trial court should not have taxed the cost of that appeal against Mrs. Alvord.

The judgment of the trial court is reversed and remanded, and all cost of this appeal is taxed against the appellees.


author: PHILLIPS, Justice.

text:
    John M. HAMILTON et al., Appellants, v. S & H SUPPLY COMPANY, Inc., Appellee.
    No. 11446.
    Court of Civil Appeals of Texas. Austin.
    Nov. 9, 1966.
    Rehearing Denied Dec. 7, 1966.

      Andress, Woodgate, Richards & Condos, Wm. Andress, Jr., Dallas, for appellants.
    Thompson, Coe, Cousins & Irons, Larry L. Gollaher, Sanders & Nolen, Virgil Sanders, Jr., Dallas, for appellee.
   PHILLIPS, Justice.

This case involves a suit upon a note.

Thomas H. Rose, Jr., doing business as JTR Plumbing Company, contracted with Louis Krodell to install the plumbing in an apartment building on Bennett Street then being built by Krodell. This contract involved about $20,000. The job was completed in December of 1963, but Krodell failed to pay Rose. Neither Krodell nor Rose are parties to this litigation.

In April of 1964, Krodell contracted to sell the Bennett Street Apartment and several other apartments to Hamilton and Craig, the appellants here. In this contract, a part of the consideration moving between Krodell and Hamilton and Craig was that the latter parti.es, upon the delivery of deeds to the properties involved by Krodell to them, they, Hamilton and Craig, would pay certain of Krodell’s creditors, including Rose.

This contract was never consummated and no deeds to the properties were ever delivered to Hamilton and Craig. Ultimately, a year later, the properties were foreclosed by the first mortgagee.

After they had made their contract with Krodell, and in anticipation of its consummation, Hamilton and Craig paid JTR Plumbing Company $3,800.00 on Krodell’s debt to it and in addition gave JTR Plumbing Company the note in suit for $7,500.00, payable in two installments of $3,750.00 each. The first of such installments was due August 1, 1964.

Hamilton and Craig did not pay the first installment of the note upon maturity in August and it was therefore in default.

In September, Rose assigned the note to the appellee S & H Supply Company, Inc., to whom he owed a large amount of money on open account.

S & H Supply Company brought suit against Hamilton and Craig upon the note and the Court, upon the completion of a non-jury trial, rendered judgment in favor of S & H Supply Company, the assignee of the note, for the full amount of principal, interest and attorney’s fees.

We reverse the judgment of the trial court and render judgment that appellee, the plaintiff below, take nothing by its suit.

Appellants are before this Court with five points of error, however, inasmuch as we sustain the first four points, there is no necessity to discuss the fifth.

Appellants’ first four points of error are as follows: appellee, as assignee of the note after maturity when it was in default, is not a holder in due course, and takes it subject to all defenses available against the original payee; there is no evidence of any consideration for the note sued upon, and the court erred in rendering judgment on it in favor of the appellee who was not a holder in due course; when appellants, as makers of the note, showed that they received nothing of benefit for its execution and that the payee suffered no detriment, and that it was given solely in connection with an obligation of a third party under their contract with him which was never consummated, they have discharged their burden to show want of consideration for the note, and the judgment against them is erroneous; there is no tenable theory, based upon evidence, upon which the trial court’s judgment can be sustained.

The appellee itself pleaded that the note sued upon was payable in two equal installments of $3,750.00 each, one installment due on August 1, 1964 and the other on November 1, 1964; that on September 9, 1964, the note was assigned to appellee by the original payee. Appellee further pleads that because of the existing default on August 1, and before maturity of the second installment on November 1, it exercised the right to declare the entire balance due and payable and seeks past due interest at the rate of 10% and attorney’s fees.

One acquiring a note after maturity is not a holder in due course and takes it subject to all defenses in the hands of the original payee, Article 5935, Sec. 52, Vernon’s Ann.Civ.St. The note being past due, S & H Supply Company is not an innocent holder for value.

Appellants’ contract with Krodell was to pay certain of his creditors upon the delivery of certain deeds. This delivery never came to .pass. There was a failure of consideration, consequently, a defense against the notes. Art. 5933, Sec. 28, V.A. C.S.

Appellee contends that the judgment supports the findings of fact and conclusions of law filed by the trial court. That certain of these findings support the judgment on the theory of estoppel or waiver. Inasmuch as a full statement of facts was filed with this Court, any findings made by the trial court are not conclusive here. Swanson v. Swanson, 148 Tex. 600, 228 S.W.2d 156, Sup.Ct. We find no evidence that would support either of these theories.

The rights of the parties were fixed on the date the note was given. The appel-lee who accepted the assignment without any consideration after it was past due and in default had no better rights than Rose had on the day of the execution of the note.

While there is a conflict in the testimony as to whether or not one of the appellants told appellee over the telephone that he would pay the first installment of the note, for such to constitute a waiver of a known defense, a valuable consideration must be shown. 9 Tex.Jur.2d, p. 91, Sec. 77. There was none here.

The judgment of the trial court is reversed and rendered.

Reversed and rendered.