author: CHADICK, Chief Justice.

text:
    HOOKS TELEPHONE COMPANY, Appellant, v. TOWN OF LEARY, Appellee.
    No. 7373.
    Court of Civil Appeals of Texas. Texarkana.
    Dec. 12, 1961.

      Moore & Lipscomb, Paris, Austin Guest, •Clarksville, for appellant.
    Wheeler, Watkins, Hubbard & Patton, Texarkana, for appellee.
   CHADICK, Chief Justice.

This is an appeal from a decree granting a temporary injunction pending trial on the merits of a suit for permanent injunction. The judgment is affirmed.

For several years before July, 1960, Mrs. Maud Dennis operated a telephone service in the Leary community of Bowie County. The service consisted of two five party lines connected with the Hooks, Texas, telephone exchange. C. L. Johnson, the owner of the Hooks telephone system, purchased these two lines and the equipment, etc., appurtenant thereto from Mrs. Dennis July 1, 1960. At the time of sale the lines had eight subscriber patrons, and one has since been added.

The Leary community voted at an election held September 27, 1960, to incorporate as a municipality. The results were certified thereafter on October 10th by the County Judge, and duly recorded October 14th. The telephone lines serving the Leary community were located generally within the incorporated area of the new town of Leary. The lines were erected along and across a State Highway with Highway Department permission.

Following acquisition of the two lines Johnson began an improvement program. He negotiated a large loan and allocated $20,000 to extensions and improvements in the Leary area. A cable with capacity for handling a much larger volume of business than the two party lines was started, though it had not been extended into the Leary area at the time this litigation commenced. Poles for six miles of lines were set, though lines were not strung. Much of the hardware to be used in the completion of the improvement program was bought and stored. The program with its stockpiling and construction was in progress before and on the eve of the incorporation election in the Leary community.

Johnson went forward with the program after the town, of Leary incorporated. Beginning in November he operated as a private corporation, having so incorporated his business in that month. To avoid confusion reference to Johnson hereinafter is intended to mean his corporate enterprise. A letter dated December 1, 1960, signed by the Mayor and all five aldermen of the town of Leary requested Johnson to immediately stop construction and remove his telephone system from the town. A conference was arranged between the mayor, aldermen and Johnson. No agreement was reached and the conference adjourned. Johnson left with the impression that he would be accorded other opportunities to negotiate with the town officials for a franchise to operate within the incorporated limits. However, no further meetings were held, though there is some indication that informal conversations may have occurred from time to time.

Shortly before April 5, 1961, Johnson commenced construction again, and on the 5th the Council passed the following resolution:

“Whereas, the Hooks Telephone Company of Hooks, Texas, operates a general telephone exchange with the City of Hooks and the contiguous area, and
“Whereas, said Company through its officers, agents, and employees has extended its poles and lines upon public and private property within the corporate limits of the Town of Leary, Texas, without request, invitation, contract or franchise; and
“Whereas, repeated requests have been made upon said Company to cease such operations and extensions within the Town of Leary, Texas, it being the desire of this Board as representative of the people of the Town of Leary, Texas, that such Company not operate within said Town nor maintain any of its poles, lines, fixed equipment or facilities within the corporate limits thereof:
“Now, Therefore, Be It Resolved by the Board of Aldermen of the Town of Leary, Texas,
“1. That a copy of this resolution be forwarded to the Hooks Telephone Company as a final and formal request that it cease its operations within the Town of Leary, Texas, and withdraw all of its lines, poles, and other fixed facilities from within the corporate limits of the Town of Leary, Texas, within twenty (20) days from the receipt hereof, and
“2. That if within twenty (20) days from receipt hereof such request has not been complied with or the Hooks Telephone Exchange has not made arrangements therefor to the satisfaction of this Board, then the City Attorney is authorized and instructed to file suit in the name of the Town of Leary, Texas, as Plaintiff against such corporation in order to secure full compliance with the matters set forth herein.
“Unanimously Passed, Approved and Executed at a regular meeting of the Board of Aldermen of the Town of . Leary, Texas, on this the 5th day of April, A.D.1961. * * * ”

Suit was thereafter instituted by the town against Johnson. This appeal is in a proceeding ancillary thereto.

The temporary injunction granted was prohibitionary, enjoining the Hooks Telephone Company from constructing extensions or installing additional lines, etc., upon, along, over, or across the highway, streets, alleys and public property within the corporate limits of Leary. The appellant has briefed the following four points of error, to-wit:

“First Point. Hooks Telephone Company is entitled to use the streets of the town of Leary, as it furnishes an out-of-town as well as a local telephone service.
“Second Point., The trial court erred in granting the temporary injunction against Hooks Telephone Company, as a local telephone company lawfully operating in an unincorporated area is entitled after incorporation to continue its operation in that territory.
“Third Point. The trial court erred in granting the temporary injunction against Hooks Telephone Company, as a balancing of equities discloses to do so imposes on it a disproportionate financial loss and injury, posed against an absence of showing of irreparable damage to the Town of Leary by denial of the temporary injunction.
“Fourth Point. The trial court erred in granting the temporary injunction against Hooks Telephone Company, as there was no evidence of probable injury.”

In discussing these points, recitation of the facts will be made in harmony with the familiar rule that on appellate review the facts shown by the record, and reasonable inferences therefrom will be given a construction, so far as susceptible, that will support the judgment rendered by the trial court.

The town of Leary has and may exercise through its Board of Aldermen exclusive control over its streets, alleys and other public places within its corporate limits. See Sec. 2, Art. 1146, Vernon’s Ann. Tex.St. The Supreme Court of Texas in Town of Ascarate v. Villalobos, 148 Tex. 254, 223 S.W.2d 945, 949, said: “No one has the inherent right to carry on his private business upon the public streets of a town or city.”

In briefing his first two points appellant does not fault the statements in the paragraph above as an abstract statement of the law, but insists that the trial court erred in failing to recognize his operation in the Leary area as being in the nature of long distance telephone service rather than local service. He claims that the facts in this case entitled him to the privileges Art. 1416 confers upon long distance telephone systems to erect lines over and across the streets and alleys of an incorporated town. In support of this position, City of Brownwood v. Brown Telegraph & Telephone Co., 106 Tex. 114, 157 S.W. 1163 and 40 T.J. Sec. 35, pp. 413-415 are cited.

At the hearing it was established that the telephone service rendered by the lines in operation and the service to be made available by the improvement and extension program Johnson inaugurated after acquiring the Dennis facilities was local service out of the Hooks exchange. Long distance telephone service had always been handled, and under Johnson’s program would continue to be handled by connections through the Hooks exchange with long distance lines of the Bell Telephone Company. Johnson’s program was to expand the existing operation, and improve the service with more modern equipment and facilities, but it is nowhere suggested that the fundamental nature of the local telephone service operation was to be changed. A local telephone system is not entitled to the privileges granted long distance telephone companies by Art. 1416, as it is interpreted by the courts. See, Alpine Telephone Corporation v. McCall, 143 Tex. 335, 184 S.W.2d 830; City of Brownwood v. Brown Telegraph & Telephone Co., 106 Tex. 114, 157 S.W. 1163; Athens Telephone Co. v. City of Athens, Tex.Civ.App., 163 S.W. 371, wr. ref.; Athens Telephone Co. v. City of Athens, Tex.Civ.App., 182 S.W. 42, wr. ref.; Fink v. City of Clarendon, Tex.Civ.App., 282 S.W. 912; Texas Telephone Company v. City of Mart, Tex.Civ.App., 226 S.W. 497.

The cases cited next above clearly show that telephone companies in Texas fall into two classes, either local or long distance. A succinct definition clearly distinguishing a local telephone system from a. long distance system under all circumstances might be difficult to formulate, but it is not called for here as Johnson continued to operate the identical local system’ that was purchased from Mrs. Dennis and planned only to improve and expand it. A change from local to long distance telephone-business would require a change in the type • of service performed by the local system The fact that a part of the area in which it operates has changed from rural to urban made no change in the nature of the service-rendered or the purpose of the business the-appellant is engaged in. Art. 1416 has no application in this case.

The appellant was and is operating its lines in the area later incorporated into-the town of Leary. It had the permission of the State Highway Department to erect its lines along that part of the State highway which later became a part of the-municipality. Appellant argues that these facts give it a status which was unaffected by the incorporation of the area, and gave it the privilege of using the streets of the town without permission from its governing body. No authority is cited which will' support this proposition. Use of the State highway right-of-way is at most a matter of permissive occupancy, and as between the appellant and the town of Leary, the appellant acquired no rights superior to those ■ exercisable by the town pursuant to Art. 1146. The first and second points of error-are overruled.

As background to consideration of appel- - lant’s third point, that is, in respect-to-balancing the equities between the parties,. it is to be noted that the writ did not enjoin the appellant from operating existing lines. The appellant was only prevented from-undertaking additional construction and expansion. It was not required to remove,. dismantle or destroy any facility erected or ■ dispose of material stockpiled. It is significant also that the greater part of the construction was undertaken a short time before the incorporation election and that fol-lowing incorporation at least two clear requests from the town officials to cease operation were ignored. The telephone lines were in operation and construction had been resumed when the temporary injunction was granted.

The trial judge might well have concluded from the evidence that Johnson took a calculated risk in undertaking and going forward with his construction program, and was prepared to accept the consequences •good and bad. The evidence indicated Johnson probably had actual knowledge of the effort to incorporate the Leary area at the time he began his program, and certainly had constructive knowledge that the area might become incorporated and control of the streets pass to the municipal corporation. As to such constructive knowledge see Davis v. State ex rel. Incorporated Town of Anthony, Tex.Civ.App., 298 S.W.2d 219, n. r. e. The Judge could have, and probably did, conclude that since Johnson voluntarily embraced the risk, he arranged to minimize any loss that might occur and in any event only slight monetary loss would be involved as the injunction granted did not require him to dismantle his lines or cease operating the local system.

On the other hand the town through its governing officials had an obligation to ■control and regulate the use of its streets in the interest and welfare of its citizens. In the execution of this duty the town was •empowered to make reasonable rules and regulations governing traffic and other use to which its streets might be put. The town was empowered to grant franchises to public utility operators permitting them the use ■of the streets and other public property and impose conditions in this respect. See “Streets”, 39 Tex.Jur., Sec. 68, 75 and 79. Mr. Johnson testified that it was a custom of the industry that one telephone company would not come into an area occupied by ■another company.

Looking to the position of both -parties, as the trial judge must be presumed to have done, it is apparent that if the court did not vindicate the authority of the town to control its streets, with the telephone company free to make such use of the. streets as it desired, the town would be paralyzed in any effort to regulate traffic in the streets, or the use thereof by other utilities. A loss of control would render difficult, perhaps impossible, the franchising of riot only telephone but other utility service for its inhabitants. Negotiations would be foreclosed so far as a telephone service franchise was concerned, as other companies would not come into the area. The town would be limited to using the appellant’s services upon whatever terms the appellant considered reasonable.

In balancing the equities in cases such as this the authorities agree that the public welfare and convenience is of paramount importance. See Mitchell v. City of Temple, Tex.Civ.App., 152 S.W.2d 1116, wr. ref.; “Injunctions”, Texas Practice (Lowe and Archer) p. 323, Sec. 315; 24-A Tex. Jur. (2) p. 105, Sec. 59. Under the circumstances shown the trial judge might reasonably have concluded that the disadvantage to the welfare of the inhabitants of the town outweighed the probability of loss to Johnson resulting from a temporary cessation of his expansion program. Appellant’s point 3 is overruled.

In considering appellant’s fourth point the previous discussions with respect to the disadvantageous position of the town in negotiating for utility service, including telephone service, has equal application in considering the probability of injury to the town if the injunction was not granted. It might be added that it is the duty of the town to keep its streets open for the use of the public, and in order to do so it is not necessary to prove that it has sustained pecuniary damage, or that it has no adequate remedy at law. Patterson v. City of Bowie, Tex.Civ.App., 295 S.W.2d 676, n. w. h. The record in its entirety contains evidence sufficient to show a probable right in the town to deny appellant the use of its streets in the manner proposed, and a probable injury to its welfare if that right was denied. The trial judge did not err in this respect. See Transport Co. of Texas v. Robertson Transports, Inc., 152 Tex. 551, 261 S.W.2d 549. The appellant’s fourth point of error is overruled.

No error requiring reversal is shown; therefore the judgment of the trial court must be affirmed. It is so ordered.


source: Caselaw Access Project

author: McNEILL, Justice.

license: Public Domain

text:
    HUNT OIL COMPANY et al., Appellants, v. H. E. DISHMAN et al., Appellees.
    No. 6503.
    Court of Civil Appeals of Texas. Beaumont.
    Nov. 9, 1961.
    Rehearing Denied Dec. 13, 1961.
    Shank, Dedman & Irwin, Dallas, Keith, Mehaffy, McNicholas & Weber, Beaumont, for appellants.
    Bowers & Bowers, Beaumont, for appel-lees.
   McNEILL, Justice.

This suit was instituted by appellees against appellants to remove cloud from the title to a tract of 320 acres (except 40 acres thereof), retained by appellant Hunt Oil Company out of the mineral lease referred to in the succeeding paragraph. The dispute has grown out of the proper construction of a settlement agreement disposing of a previous suit over whether there had been reasonable development of the leased premises. Judgment below sustained appellee’s position and removed the cloud on the disputed acreage. Appellant Hunt Oil Company will sometimes be referred to herein as Hunt or Hunt Oil Company.

On April 4, 1947, H. E. Dishman and Harry Lucas, as lessors, executed the lease covering 1,660.5 acres in the Wm. McFarland League, Jefferson County, to W. C. Schmitz as lessee. The lease was for a primary period of 5 years and as long thereafter as oil, gas or other minerals may he produced from said land. It had the usual clause that if operations for drilling were not commenced on the land within one year, lessee may extend the lease for a period of 12 months by paying certain rental. In like manner this period may be extended for successive periods of 12 months during the primary term. The lease provided that lessee may at any time or times execute and deliver to lessor a release covering any portion or portions of said premises and thereby surrender this lease as to such portion or portions and be relieved of all obligations •as to the acreage surrendered, and any future rentals would be reduced proportionately. This lease provided further * * * '“if after discovery of oil, gas or other minerals, the production thereof should cease from any cause, the terms of this shall not terminate if lessee commences additional •drilling or reworking operations within sixty days thereafter * * *."

Paragraph 8 of the lease is:

“In the event Lessor considers that operations are not at any time being conducted in compliance with this lease, Lessor shall notify Lessee in writing of the facts relied upon as constituting a breach hereof, and Lessee, if in default, shall have sixty (60) days .after receipt of such notice in which -to commence the compliance with the obligations imposed by virtue of this instrument. After the discovery of oil, ;gas or other mineral in paying quantities on said premises, Lessee shall reasonably develop the acreage retained hereunder. Lessee agrees to protect the premises from drainage at all times. In case of cancellation or termination of this lease for any cause, Lessee shall have the right to retain under the terms hereof forty acres of land around each well producing, being worked on, or ■drilling hereunder, unless, in order to comply with an order, rule or regulation of governmental authority or agency, more than forty acres has been allotted to each well, in which case Lessee shall have the right to retain around each such well the number of acres so allotted to each well. The tract so retained shall be designated by Lessee in as near a square form as practicable.”

This lease was assigned by lessee to J. S. Abercrombie, who, in turn, assigned it to Hunt Oil Company reserving an overriding royalty. Drilling commenced on this lease in February, 1948, and the Dishman-Lucas No. 1 well was completed and abandoned as a dry hole in April, 1948. A second well commenced in February, 1949, turned out to be a dry hole and the third well was drilled in December, 1949, and also resulted in a dry hole. On April 4, 1950 Hunt Oil Company executed a partial release of the lease whereby the northerly one-half of the tract was released and the southerly one-half retained. On December 27, 1951 the Dish-man-Lucas No. 4 well was commenced on the retained portion of the lease. This well was drilled to a depth of about 8,700 feet. It was completed as an oil well in the 5,320 foot zone February 21, 1952. During the drilling of this well an electric log test was obtained showing that there were two zones, one from 8,590 to 8,600 feet and one from 5,300 feet to 5,380 feet which might contain oil and gas reserves, and when the well was completed tests were run on the lower zone, indicating the presence of gas, but after the test the well was completed as an oil well at the upper level. Said well has subsequently produced oil and/or gas in paying quantities.

However, after the Dishman-Lucas No. 4 well was drilled there was no further drilling operation upon said retained premises for a period of over five years, and on June 17, 1957 appellees, constituting the successors in interest to lessors, instituted suit against appellant Hunt Oil Company and others for alleged failure of reasonable development of the unreleased southerly portion of the lease. On September 10, 1957, the settlement agreement here involved was executed between Hunt Oil Company, et al., and H. E. Dishman, et al., whereby the disputed issues in said suit were settled upon the terms and provisions therein set forth. After describing Hunt, et al., as First Party and Dishman, et al., as Second Party and the isssues in the suit were being settled, the agreement then provides that First Party shall pay $5,000 to Second Party. Par. I then -provides that Second Party shall dismiss the suit and Par. II requires First Party to pay $1,000 to Second Party’s attorneys in connection with the suit. We quote the balance of this agreement:

“III.
“First Party agrees to commence or cause to be commenced, within sixty (60) days from and after the date hereof, operations for the drilling of a well for oil and gas at a location to be selected by First Party on the Leased Premises, and to thereafter continue such operations and the drilling of said well in a diligent and workmanlike manner to a depth sufficient to test:
“a. The upper Hackberry formation producing zone, as identified and producing at a depth of approximately 8080 feet to 8086 feet * * *; and
“b. The Nodosaria formation producing zone, as identified and producing at a depth of approximately 8568 feet to 8572 feet * * *.
First Party shall thereafter, in like manner, conduct continuous drilling operations on the Leased Premises by commencing operations for drilling an additional well for oil and gas within one year from and after the completion of the first well hereunder either as a dry hole or as a producer, and from and after the completion of each sue-ceeding well to be drilled by First Party on the Leased Premises by virtue hereof.
“IV.
“If First Party fails to commence- and drill the first well as required hereunder, or any succeeding well, said, lease shall terminate without further liability on First Party and First Party shall release the same of record, as to-all the leased premises except forty (40) acres in as near the form of a square as practical around each producing oil well, and except 320 acres in as near the form of a square as practical around each producing gas well, in either case said well to be in as near the center of said acreage as is practical. For the purposes hereof, a gas well shall be considered to be a producing gas well if gas therefrom can-. not be marketed at a fair price and if First Party pays monthly the shut-in royalty thereon as provided in said-lease.
“V.
“Compliance by First Party with the provisions hereof shall constitute full and complete satisfaction of all drilling and development obligations under said lease, either express or implied, as -to the Leased Premises.”

In accordance with this agreement, Hunt commenced and drilled the Dishman-Lucas No. 5 well which was completed as a dry hole on November 7, 1957. Under its obligation in the settlement agreement Hunt would have been required to start drilling or another well on or before November 7, 1958. It however elected not to drill another well following completion of the No. 5 well as a dry hole, but chose to suffer the penalties. On October .18, 1958, evidently after having decided to suffer the penalties, it commenced reworking operations on the Dishman-Lucas No. 4 well in order to convert the same to a gas well, for the express purpose of attempting to hold 320 acres of land under the settlement agreement. This operation was successful and the well was recompleted as a gas well on November 4, 1958. It was classified as a gas well by the Railroad Commission on November 11, 1958, and produced gas for a part of November and December, 1958, but jn January, 1959, the Dishman-Lucas No. 4 well reverted to an oil well.

On November 14, 1958, in seeking to comply with its settlement agreement, Hunt released all of the 830 acres retained except 320 acres surrounding said gas well. About 11 months after the reversion of said gas well to an oil well appellees made demand upon Hunt to release all of the 320 acres retained except a tract of 40 acres surrounding the well as an oil well. Hunt refused, and the present suit was instituted by appellees against it and others to remove cloud from appellees’ title to the 320 acres, except for an area of 40 acres surrounding the well to be taken as near as practicable in a square. Appellants say that under said settlement agreement, construed either separately or in connection with the original lease, Hunt Oil Company has performed its whole duty to appellees with respect to the matters involved when it executed, on November 14, 1958, a release of all the premises except 320 acres; that the lease as to the balance of the 830 acres terminated on November 7, 1958, and there was no “further liability” on its part to appellees. In connection with this it is asserted that the lease granted to appellees a determinable fee-simple estate in the minerals under the leased premises; and such vested estate could not be forfeited under the holding in Decker v. Kirlicks, 110 Tex. 90, 216 S.W. 385, in the absence of an agreement, the provisions of which are plain, clear and of such unequivocal character as to render its exercise fair and rightful.

The question before us is novel. No authority directly passing upon the problem has been found by counsel and we have found none. In order to construe the rights of the parties we are required to consider the original lease and the settlement agreement together in the light of the situation of the parties and the circumstances surrounding the transaction. Ryan v. Kent (Tex.Com.App.) 36 S.W.2d 1007; Roseborough v. Loftus, Tex.Civ.App., 13 S.W.2d 950; 31-A Tex.Jur. 938; 13 Tex.Jur.2d 277. Having in mind the terms of the original lease, let us consider the circumstances leading up to the settlement agreement. Although oil was discovered in 1952 in Dishman-Lucas No. 4 well, no additional well was drilled for over five years on the leased premises and in June, 1957, appellees instituted the first suit to cancel the lease for failure to reasonably develop. Under circumstances extraordinary in character the right to cancel a lease for failure to develop will lie. W. T. Waggoner Estate v. Sigler Oil Co., 118 Tex. 509, 19 S.W.2d 27. We need not say whether the circumstances here were extraordinary as the parties compromised their differences exemplified in this suit by the above settlement agreement. The sum of $5,000 was paid appellees and $1,000 to their attorneys. Hunt Oil Company there (Par. III) also undertook to commence the drilling of a well within 60 days and to continue drilling operations diligently to certain subsoil structures; and on or before each year to commence and diligently drill an additional well for oil and gas. But Par. IV provides if Hunt shall fail to do this the lease shall terminate “without further liability” on it “and First Party shall release the same of record, as to all the Leased Premises” except 40 acres around each producing oil well and 320 acres around each producing gas well. Par. V provides compliance with the provisions of the agreement “shall constitute full and complete satisfaction of all drilling and development obligations under said lease, either express or implied.” It is thus seen that the effect of this settlement agreement was to modify, and as modified, provide in much detail for the undertaking substituted for the original obligation of Hunt Oil to reasonably develop the leased premises, as well as to modify the original lease provision providing in case of cancellation or termination it could retain 40 acres around each well. Thus the failure to-so perform, as modified, resulted in the loss of all mineral acreage except the 320 acres around the gas well. As long as this well produced gas in paying quantities so long did Hunt own the mineral estate in 320 acres. But it is without dispute that the well, as a gas well, ceased production of gas by January 1, 1959. There was no attempt to start reworking operations within the 60 day period required in Par. 8 of the lease. As testified to by Hunt’s geologist, the gas well reverted to an oil well, and since then has been classified as an oil well and as such has been continuing production of oil to time of the trial.

The settlement agreement made no express provision controlling a well that would change from oil to gas or from gas to oil production. In this situation we think the problem should be considered as though two different locations were producing — one as a gas well of 320 acres and the other an oil well of 40 acres. If the gas well in this example should cease production and no effort was made to renew its life, the 320 acres would revert to the lessor. Likewise, if such an oil well ceased production and no effort was made to renew it, the 40 acres would likewise revert. That the wells occupied the same location should not require a different solution under the facts before us. We conclude that the terms of the settlement agreement, when construed in connection with and as part of the lease under the circumstances involved, are plain and clear. Consequently we hold that after the end of gas production in Dishman-Lucas No. 4 and failure to attempt reworking operations looking to further gas production, Hunt lost its determinable fee in the 320 mineral acres, except the 40 acre area for the well as an oil well.

But Hunt argues that if a well originally holding 320 acres may later be cut to 40 acres under the settlement agreement, then a well holding 40 acres should likewise upon later production of gas, cover 320 acres. We are not persuaded by this argument. In the first place Hunt realized this would not follow since it purposely cut off oil production in Dishman-Lucas No. 4 and reworked it to produce gas so that by November 7, 1958 it could hold 320 mineral aeres. In the second place, neither the original lease nor the agreement provides for any such revesting of the mineral estate ini other acreage when the lease is once canceled or terminated except as to isolated production.

Hunt also argues that since Par. IV of the agreement provides in case it defaults in its drilling program, said lease shall terminate without “further liability” on it, and to hold a further release of acreage is required, is placing “further liability” on it. We do not so construe this term. The language “and First Party shall release the same of record” follows immediately upon the language “said lease shall terminate without further liability on First Party.” Suppose Hunt had not executed the release it did on November 14, 1958. Could it be contended that this failure was a “liability” of which Hunt was relieved? We think not. When the lease is terminated “further liability” as used in the agreement, ipso facto ceases while the expressly stated duty to furnish such release follows thereafter. In our judgment “liability” as used in the agreement has to do with liability for further development of the retained acreage. This was clearly the intent of the parties. Except for the modification of the development clause and the clause for retaining 40 acres around each well in the original lease, most, if not all, other obligations remain in effect. Although the payment of future royalty is no doubt a liability, Hunt was surely not relieved from paying further royalties of the production to be received thereafter, nor was it relieved from the duty of executing a release that will be due when production ceases on the 40 acres around the No. 4 well. Kidd v. Hoggett, Tex.Civ.App., 331 S.W.2d 515. Neither was it relieved of other obligations in said lease still in effect. And yet, if we apply appellants’ meaning of “further liability”, this would necessarily follow.

We are of the opinion that when the settlement agreement is fairly construed in connection with the lease and the circumstances surrounding the parties, the duty upon Hunt to give the additional release is clear, and the trial court’s judgment should be affirmed.

Affirmed.


author: . WERLEIN, Justice.

text:
    Lewis T. HALL, Appellant, v. Bailey C. HALL, Individually and as Independent Executor of the Will of Alice Josephine Hall, Deceased, Appellee.
    No. 13806.
    Court of Civil Appeals of Texas. Houston.
    Jan. 4, 1962.

      A. C. Goodson, Houston, for appellant.
    Dyess, Dyess, Prewett & Cantey, William R. Powell, A. D. Dyess, Jr., Houston, for appellee.
   . WERLEIN, Justice.

Appellant, Lewis T. Hall, sued Bailey C. Hall, Individually and as Independent Executor of the Estate of Alice Josephine Hall, Deceased, to recover on a $16,000.00 check dated November 15, 1955, allegedly signed by the decedent. The case was tried before the court without a jury, and judgment was rendered that appellant take nothing.

By his First Point appellant contends that appellee’s affidavit does not conform to Rule 93(h), Texas Rules of Civil Procedure, and is insufficient to put in issue the execution and delivery of the check in question. The pertinent part of Rule 93 (h) reads:

“Where such instrument in writing is charged to have been executed by a person then deceased, the affidavit shall be sufficient if it state that the affiant has reason to believe and does believe that such instrument was not executed by the decedent or by his authority. In the absence of such a sworn plea, the instrument shall be received in evidence as fully proved.”

The affidavit of appellee’s attorney states that he has read the foregoing answer and that all matters therein stated are true and correct. Appellee’s answer alleges with respect to the execution of the instrument:

“Your defendant specially denies the execution by ALICE JOSEPHINE HALL of the instrument sued upon because the said ALICE JOSEPHINE HALL is dead and this defendant has no manner of ascertain- ' ing whether ALICE JOSEPHINE HALL did or did not execute the same in whole or in part and knows not whether the signature thereon is or is not genuine.”

We think the foregoing allegation is insufficient to meet the requirements of Rule 93(h). It is further our view, however, that appellant has waived strict compliance with Rule 93(h) by not pointing out by motion or exception in writing the defect or fault and bringing it to the attention of the judge of the trial court before the rendition of judgment. Rule 90, Texas Rules of Civil Procedure. Furthermore, the Point presents no reversible error since the check was admitted in evidence by the court for all purposes.

Appellant next contends that the court erred in not rendering judgment for him, because there is no evidence amounting to a legal defense to the check in question. Appellee in his verified answer put in issue, in addition to the matter of execution and delivery of the check: (1) mental incapacity, (2) undue influence, duress and fraud, (3) material alteration, (4) failure of consideration in whole or part, (5) no consideration, (6) the two and four year statutes of limitation, and (7) the statute of frauds. Since no findings of fact or conclusions of law were requested or filed, the trial court’s judgment implies all necessary fact findings in support thereof. In seeking to determine whether there is any evidence to support the judgment and the implied findings of fact incident thereto, “it is proper to consider only that evidence most favorable to the issue and to disregard entirely that which is opposed to it or contradictory in its nature.” Renfro Drug Co. v. Lewis, 1950, 149 Tex. 507, 235 S.W.2d 609; Kirksey v. Warren, Tex.Civ.App.1961, 348 S.W.2d 33.

The issue as to whether the decedent did or did not have mental capacity is to be determined as of the time of the execution of the instrument. Payne v. Chance, Tex.Civ.App.1928, 4 S.W.2d 328; Venner v. Layton, Tex.Civ.App.1951, 244 S.W.2d 852, ref., n. r. e.; Smith v. Welch, Tex.Civ.App.1955, 285 S.W.2d 823, ref. n. r. e. The foregoing cases involve the execution of wills, but ordinarily less capacity is required to enable one to make a will than to enter into a contract. The following statement is quoted from 24-A Tex.Jur., p. 483, § 18:

“In any proceeding involving the question of mental condition, the proof must be directed to the condition as it existed at a particular time, but such mental condition may be proved by evidence of the state of the person’s mind at other — and especially at prior — times. Considering the remoteness of the time to which the investigation may reach, it has been said that it is impossible to fix a general limit that will control in all cases. The question, however, seems to be one of degree only. The further off the evidence is carried, the weaker it may be, but it is still evidence and should be considered.”

See Fulcher v. Young, Tex.Civ.App.1945, 189 S.W.2d 28, ref., w. m.

The law indulges a disputable presumption of sanity, and casts on the party who alleges mental incapacity the burden of proving his contention. 24 — A Tex.Jur., p. 479, § 15. It is necessary, therefore, to determine whether there was any evidence adduced at the trial to overcome such presumption and upon which the court could base a finding that the deceased was in such mental condition that she lacked contractual capacity on November 15. 1955, when the check in question was allegedly signed by her.

Dr. D. J. Wible, who visited and treated the deceased frequently in 1953, and less often in 1954 and 1955, and who saw her as late as July, 1955, testified that she was in an advanced stage of senility in 1954 and even in a more advanced stage of senility in 1955, right on to 1958 when she expired. He was asked specifically as to her ability to understand the nature of business transactions as of November 15, 1955, and testified that she was in pretty bad shape and that he did not think she was mentally capable of conducting her own business affairs. On cross-examination he testified that the deceased was in bad shape every time he visited her, and that sometimes she was certainly incapable of writing a check.

William L. Hall, brother of the defendant, testified that he had been married since 1923 and that the deceased, who was his mother, knew his wife by sight prior to 1953, but in 1953, when he visited the deceased, she didn’t recognize her daughter-in-law; that he knew his mother was getting worse from 1953 to 1955, and that in November, 1955 she did not have the mental capacity to understand the nature of business transactions and carry on business for herself; and that he would not trust her with any of his business.

Mrs. William L. Hall testified that she married Mr. Hall in 1923, and came to know his mother well in the years she was in the family; that during the years of 1952, ’53, ’54 and ’55, she saw the deceased two or three times a year, maybe a week or two weeks at a time; that in 1953 she and her husband visited the deceased, and that her mother-in-law didn’t recognize her for some thirty minutes or longer and a neighbor tried to convince her mother-in-law who she was; that she saw “Mother Hall” in 1954, and she was growing more forgetful and wasn’t well physically or mentally; that when she saw her the last time in 1955 before November 15, 1955 she didn’t think the deceased had the mental capacity to manage and handle or understand the nature of her own business affairs.

The court may have also considered as having a bearing upon the mental condition of the decedent on November 15, 1955, and possibly also on the defense of undue influence or fraud, appellant’s stipulation that the appellant himself wrote everything on the check except the signature, and the further fact that the largest balance the deceased ever had in the bank during the year 1955 was only $1,199.39, whereas the check was drawn for $16,-000.00. There was also evidence that no one knew of the existence of the check from the time it was allegedly signed in November, 1955, until after the death of the decedent in August, 1958.

In our opinion, the testimony of Dr. Wible and Mrs. Hall, without considering that of Mr. Hall, constitutes some evidence in support of the court’s judgment and the implied findings of fact incident thereto that at the time the check in question was signed the deceased was in such mental and physical condition that she did not have the mental capacity to contract.

By Points 6 and 7 appellant asserts that the court erred in admitting the testimony of William L. Hall and his wife as to the mental capacity of the deceased since such testimony was in violation of Art. 3716, Vernon’s Ann.Tex.Civ.St., in that such witnesses, though not parties to the suit, had a financial interest in its outcome, and also because their testimony was of events too remote in time to have any probative force.

The evidence shows that William L. Hall is one of the devisees in the will of the deceased and that he would secure a larger share of the estate if the plaintiff failed to recover on the check in question. Hence he had a direct and substantial interest in the suit although not a party thereto, and would therefore be incompetent to testify as to transactions with the deceased. Whatley v. Whatley, Tex.Civ.App.1943, 169 S.W.2d 989, writ. ref.

Our Supreme Court, in Holland v. Nimitz, 111 Tex. 419, 232 S.W. 298, went so far as to hold that the words “Transaction with” included every method by which one person can derive impressions or information from the conduct, condition or language of another, and that an opinion as to sanity based not upon any conversation had with or statement by the deceased, but solely upon observations of the deceased’s acts or conduct, and physical and mental condition, was a transaction with the deceased. We feel compelled to hold in conformity with the decision in Holland v. Nimitz, that the trial court erred in admitting the testimony of Mr. Hall as to the mental capacity of the deceased.

It is our view, however, that such error is harmless. When a case is tried by the court without a jury, it will usually be considered on appeal that the court, in reaching its conclusions, did not consider improper opinions erroneously received by it, and, if there is sufficient other competent evidence to sustain the judgment, a reversal will not he granted. 24 Tex.Jur.2d p. 48, Evidence, § 553, and cases there cited. It is our opinion that the testimony of Dr. Wible and Mrs. Hall provided sufficient other competent evidence to sustain the judgment without considering the testimony of Mr. Hall which was more or less cumulative of his wife’s testimony.

We disagree with appellant that Mrs. William L. Hall was also incompetent to testify. Mrs. Hall was not a party to the suit and the subject matter of the suit was the husband’s separate property in which the wife’s rights were at best merely potential and contingent. Under such circumstances she was not incompetent to testify under Art. 3716, V.A.T.S. Mitchell v. Deane, Tex.Com.App.1928, 10 S.W.2d 717; Ragsdale v. Ragsdale, 142 Tex. 476, 179 S.W.2d 291; Lehmann v. Krahl, 155 Tex. 270, 285 S.W.2d 179, 1955. With respect to remoteness, the law is well settled that there is no general limit that will control in all cases. The question is one of degree only. We cannot say that the instance testified to by Mrs. Hall which occurred in 1953 when the deceased failed to recognize her was too remote to have any probative value. The matter of remoteness is largely within the sound discretion of the trial judge taken in relation to all of the testimony in the case. Furthermore, appellant has waived this point by failing to object to the introduction of the testimony on the ground of remoteness at the time the testimony was introduced.

Appellant’s Points of Error Nos. 3, 4, 5, 8, 9 and 10, although restated, are not briefed, as .required by Rule 418, Texas Rules of Civil Procedure, and therefore they will be treated as waived and will not be considered. 4 Tex.Jur.2d 167, Appeal and Error, § 658; Progressive Union of Texas v. Independent Union, etc., Tex.Civ.App.1954, 264 S.W.2d 765, 768, ref., n. r. e.; Charles v. Cole, Tex.Civ.App.1953, 257 S.W.2d 460; Texas Employers Ins. Ass’n v. Tate, Tex.Civ.App.1948, 214 S.W.2d 877, ref., n. r. e

The judgment of the trial court is affirmed.


author: BARROW, Justice.

text:
    BATEX OIL COMPANY et al., Appellants, v. LA BRISA LAND AND CATTLE COMPANY, Appellee.
    No. 13843.
    Court of Civil Appeals of Texas. San Antonio.
    Dec. 13, 1961.
    Rehearing Denied Jan. 10, 1962.

      Lyne, Blanchette, Smith & Shelton, Erich F. Klein, Jr., Dallas, Fouts, Moore, Williams & Caldwell, Houston, for appellants.
    Pope & Pope, Rio Grande City, for ap-pellee.
   BARROW, Justice.

This is a venue case. Suit was brought by La Brisa Land and Cattle Company in the District Court of Starr County, against Batex Oil Company, H. J. Porter, James W. Porter and R. L. Wheelock, along with other named defendants, to cancel and annul an oil, gas and mineral lease on a certain .tract of land situated in Starr County, on the ground that the oil and gas wells on said .land are not producing in paying quantities; and in the alternative plaintiff prayed for cancellation of said lease covering all the land in said tract except twenty acres surrounding each of the producing oil and gas wells, and further alternatively prayed that defendants be required to reasonably develop all the remaining portions of said tract. Each of the above-named defendants filed a plea of privilege to be sued in the county .of his residence. Plaintiff controverted each of the pleas and relied on Article 1995, Subd. 14, Vernon’s Ann.Civ. Stats., to maintain venue in Starr County. The defendants supplemented their pleas 'of privilege and affirmatively alleged that plaintiff’s allegations that there was no production of oil and gas in paying quantities from said lease, were false and not made in good faith, but fraudulently made for the purpose of maintaining venue in the county of suit. Upon a hearing before the court, each of the pleas of privilege was overruled. The above-named defendants have appealed.

Appellants rely for a reversal upon three points of error. Under the view we take of the case, we need not pass upon the first point.

Under their second point appellants contend that the trial court erred in holding that the cause of action on the covenant of reasonable development was controlled by Subdivision 14 of Article 1995, Vernon’s Ann.Civ.Stats. Under their third point they contend that the court erred in holding that appellee’s allegations of cessation of production of oil and gas in commercial or paying quantities were made in good faith and were not fraudulently made for the purpose of maintaining venue. We shall consider both points together.

The lease involved is dated May 27, 1940, and is in the usual form of oil and gas lease. It grants a determinable fee in the mineral estate for the primary term of ten years and as long thereafter as oil, gas or other mineral is produced from said land. The lease contained the following provision:

“The breach by Lessee of any obligation arising hereunder shall not work a forfeiture or termination of this lease nor cause a termination or reversion of the estate created hereby nor be grounds for cancellation hereof in whole or in part. In the event Lessor considers that operations are not at any time being conducted in compliance with this lease, Lessor shall notify Lessee in writing of the facts relied upon as constituting a breach hereof, and Lessee, if in default, shall have sixty days after receipt of such notice in which to commence the compliance with the obligations imposed by virtue of this instrument. After the discovery of oil, gas or other mineral in paying quantities on said premises, Lessee shall reasonably develop the acreage retained hereunder, but in discharging this obligation it shall in no event be required to drill more than one well per twenty (20) acres of the area retained hereunder and capable of producing oil, gas or other mineral in paying quantities.”

Subdivision 14 of Article 1995, states:

“Lands. — Suits for the recovery of lands or damages thereto, or to remove incumbrances upon the title to land, or to quiet the title to land, or to prevent or stay waste on lands, must be brought in the county in which the land, or a part thereof, may lie.”

The precise question which will determine the decision of this case is whether or not appellee’s allegation that the lease has terminated by reason of cessation of production in paying quantities, was made in good faith or only for the purpose of maintaining venue. And if it be determined that the allegation was not made in good faith, then does appellee’s suit for the alleged breach of the covenant of reasonable development come within the provisions of Subdivision 14 of Article 1995, Vernon’s Ann.Civ.Stats.

The venue facts under Subdivision 14 are, (1) the nature of plaintiff’s claim and (2) the location of the land. Ordinarily these facts are proved by the allegations of plaintiff’s petition and by evidence showing the location of the land. Piazza v. Phillips, 153 Tex. 115, 264 S.W.2d 428; Cowden v. Cowden, 143 Tex. 446, 186 S.W.2d 69. But when, as in this case, defendants allege in their pleas of privilege that plaintiff’s allegation that the lease has been terminated by cessation of production of oil or gas in commercial quantities was not made in good faith, but was fraudulently joined with the action for alleged breach of covenant of reasonable development, an additional issue is raised for decision on the venue hearing. Watson v. Baker, 67 Tex. 48, 2 S.W. 375; Thornton v. Thornton, Tex.Civ.App., 74 S.W.2d 429; Southwestern Surgical Supply Co. v. Scarborough, Tex.Civ.App., 15 S.W.2d 65; Koch v. Roedenbeck, Tex.Civ.App., 259 S.W. 328; Baldwin v. Baldwin, Tex.Civ.App., 233 S.W. 130; Pearce v. Wallis, Landers & Co., 58 Tex.Civ.App. 315, 124 S.W. 496; San Antonio & A. P. R. Co. v. Dolan, Tex.Civ.App., 85 S.W. 302; Texas & P.R. Co. v. Stell, Tex.Civ.App., 61 S.W. 980; Gulf, C. & S. F. R. Co. v. Short, Tex.Civ.App., 51 S.W. 261; 1 McDonald, Texas Civil Practice, 422, § 4.38, Subsec. II.

In this case appellee alleged that there were four producing wells drilled on the leased land. Three of them were oil wells and one a gas well; that those three oil wells are not producing in paying quantities; that the gas well was completed as a shut-in gas well, that no connection therefrom to a pipeline has ever been made, and as a result there has been no gas production. In that connection, appellee alleged that appellants have endeavored to continue said lease in force by the payment of the shut-in gas well rental of $100.00 a year. Appellants alleged that all the allegations of appellee with reference to no production in paying quantities were false and fraudulently made for the purpose of retaining venue in Starr County for litigation of its alleged breach of covenant. Appellants affirmatively alleged that said oil wells were producing in paying quantities; that the gas well is also producing in paying quantities, and that appellee is and has been actually receiving royalty on such production.

Upon the hearing of the pleas of privilege, appellants introduced evidence showing that appellant Batex Oil Company purchased this lease in the latter part of 1954, and at that time there were one oil well and one gas well producing and they are still producing; that during the six years appellants have owned and operated the lease they have received a net profit, over and above operating expenses, in excess of $70,000.00; that during each and every year, according to the figures, up to the time of the filing of this suit, said lease has shown a substantial net profit from the production of oil and gas over operating expenses; that the royalty from this production has been paid; that said gas well is not a shut-in well but is and has been connected with their gathering system, in connection with Tennessee Gas Transmission lines and the gas was delivered and sold to that Company. Appellants further proved the payment of the royalties. Appellee did not in any way question the data produced in court showing such production, and offered no evidence whatevér to refute the evidence offered by appellants, but in its brief admits the payment of the royalties. Therefore, the conclusion is inescapable that the lease had not ceased to produce oil and/or gas in paying or commercial quantities, as the term “produce”, as used in oil and gas leases, is defined by the Supreme Court in Garcia v. King, 139 Tex. 578, 164 S.W.2d 509. See also Clifton v. Koontz, 160 Tex. 82, 325 S.W.2d 684, 79 A.L.R.2d 774. Furthermore, the evidence shows without dispute that appellee, at the time it filed this suit and at the time it filed its controverting affidavits, had knowledge of these facts or had the means of knowledge thereof at hand. Therefore, the trial court erred and abused its discretion in finding that appel-lee’s allegation that production in paying quantities had ceased on the land and the lease was terminated, was made by appellee in good faith.

Coming to the question of whether appellee’s alleged cause of action for breach of the implied covenant of reasonable development comes within the provisions of Subdivision 14 of Article 1995. We are of the opinion that the answer to that question depends upon whether or not a breach of the covenant of reasonable development of the leased land would entitle the lessor to a forfeiture and termination of the mineral estate in the land. Since the decisions of the Supreme Court in Waggoner Estate v. Sigler Oil Company, 118 Tex. 509, 19 S.W.2d 27, and Grubb v. McAfee, 109 Tex. 527, 212 S.W. 464, any doubt as to the answer to that question has been set at rest. In the Waggoner case the Court pointed out that after the discovery of oil or gas on the leased land the lessee was under the implied obligation to continue with reasonable diligence the work of exploration for and production of oil and gas from the leased land. The Court, however, held that such obligation was a mere covenant and not a limitation or condition subsequent which would authorize a forfeiture of the lease, and that the usual remedy for breach of such covenant is an action for damages for the breach. And under extraordinary circumstances, in cases where the award of damages is inadequate to afford complete relief, a court of equity might enter an alternative decree requiring the lessee to do those things necessary to fulfill his obligation under the implied covenant, within a reasonable time fixed by the Court, the lease to be forfeited and cancelled in default of such performance. See, also, Scott v. Jackson, Tex.Civ.App., 37 S.W.2d 1068; Rendleman v. Barlett, Tex.Civ.App., 21 S.W.2d 58. We are of the opinion that appellee’s petition and controverting affidavits state no cause of action which would authorize cancellation of the lease in question, and that the exclusive remedy is for damages for the breach, or, in the alternative, for specific performance of lessees’ obligation.

We are further of the opinion that such action for damages would not be damages to real estate, such as is contemplated by Subdivision 14 of Article 1995, Vernon’s Ann.Tex.Stats. Moreover, we are of the opinion that the alternative action for specific performance of the obligation would not bring the case within the provisions of said subdivision. It is well settled that a suit for specific performance of a contract of sale of real estate, although the judgment therein may result in a transfer of title to real estate, does not come under Exception 14 of the venue statute requiring suits for the recovery of land or damages thereto to be brought in the county where the land is situated. Smith v. Hall, 147 Tex. 634, 219 S.W.2d 441.

Having reached the conclusion that the trial court erred in overruling the pleas of privilege, the judgment is reversed and remanded, with instructions to transfer the case as to the appellants to the county of their respective residences, in accordance with Rule 89, Texas Rules of Civil Procedure.


author: COLEMAN, Justice.

text:
    D. J. GLENNEY, III, Appellant, v. Bess Burkitt CRANE, a Feme Sole, Appellee.
    No. 13817.
    Court of Civil Appeals of Texas. Houston.
    Oct. 26, 1961.
    On Motions for Rehearing Nov. 30, 1961.
    Second Motion for Rehearing Overruled Jan. 4, 1962.

      Fred Parks, Donn C. Fullenweider, Houston, for appellant.
    Kelly & Ryan, C. O. Ryan, Houston, for appellee.
   COLEMAN, Justice.

D. J. Glenney, III, plaintiff in the trial court, appeals from the judgment of that court which granted the defendant, Bess Burkitt Crane, a summary judgment.

On May 22, 1950, Joe Glenney, Jr., allegedly under duress, deeded certain real estate to appellee. On November 6, 1957, Joe Glenney, Jr., deeded the same real estate to his son, appellant herein. By affidavit attached to his answer to appel-lee’s motion for summary judgment, appellant alleges that the consideration for this deed was his agreement (1) to pay his father $200.00 to $300.00 monthly for life,. (2) to hire attorneys to institute and prosecute a suit to cancel the deed to appellee, (3) $10.00 in cash, and (4) love and affection.

On December IS, 1959 appellee recovered a judgment against Joe Glenney, Jr. in the sum of $110,399.30 by reason of his default in the payment of certain promissory notes dated June 1, 1950, and executed on or about that date. On January 6, 1960, appellee assigned this judgment to George W. Burkitt, who caused execution to issue. By deed dated March 1, 1960, the Sheriff of Harris County, by virtue of this execution, granted, sold and conveyed to George W. Burkitt all of the right, title and interest of Joe Glenney, Jr. in and to the same real estate previously conveyed by Joe Glenney, Jr., as above recited.

This is a suit by appellant against appel-lee to recover title to this same tract of land and to set aside the deed from Joe Glenney, Jr. to appellee on the ground that it was procured by duress and alternatively, that the deed was intended by the parties as a mortgage to secure indebtedness.

Appellee contends that the deed from Joe Glenney, Jr. to appellant was, as a matter of law, void as to prior creditors of Joe Glenney, Jr. under the terms of Art. 3997, R.C.S., in that it was not made upon consideration deemed valuable in law. There is no contention that Joe Glenney, Jr. was at that time possessed of property within this state, subj ect to execution, sufficient to pay his existing debts. Appellee’s contention, that by reason of the sale under execution appellant no longer has any interest in the land, constituting the subject matter of this suit, which would entitle him either to set aside the conveyance of May 22, 1950, or to have it reformed and declared to be a mortgage, was sustained by the trial court and the summary judgment granted.

The first question to be determined is whether or not the consideration for the deed of May 22, 1950, was one deemed valuable in law. If there was not such a consideration for this deed, it was void as to appellee, a prior creditor, and the property was subject to sale under execution without first bringing a suit to set it aside. Snow v. Harding, 180 S.W.2d 965, Tex.Civ.App., error ref. Under Art. 3997, supra, proof of actual intent to defraud is not necessary to render a conveyance void. First State Bank of Mobeetie v. Goodner, 168 S.W.2d 941, Tex.Civ.App. However, if a conveyance is made with actual intent to delay, hinder or defraud creditors, it is void as to such creditors even though a consideration deemed valuable in law is paid, if the grantee knows of the grantor’s fraudulent purpose. Art. 3996, R.C.S., Vernon’s Ann.Civ.St. Art. 3996; Chauncey v. Gambill, 126 S.W.2d 775, Tex.Civ.App., writ dism., judg. correct.

Ten ($10.00) dollars cash, or love and affection, or both, are not consideration deemed valuable in law. Ramsey v. Abilene Building & Loan Ass’n, 57 S.W.2d 877, Tex.Civ.App. The agreement to hire attorneys to institute a suit could not constitute a consideration deemed valuable at law as against prior creditors since no benefit would accrue to the grantor by reason either of the hiring of the lawyers or by the successful prosecution of the suit. Such a consideration could not be applied by the grantor to the payment of his debts.

The payment of one creditor in preference to another by a transfer of property has been held a consideration valuable in law. Adams v. Williams, 112 Tex. 469, 248 S.W. 673. However, the value of the property transferred cannot be greater than reasonably necessary to pay the debt. Quinn v. Dupree, 157 Tex. 441, 303 S.W.2d 769. Where a conveyance of property in settlement of a debt was made by a father to his son, it was held that the transaction was not void by reason of Art. 3997, R.C.S.; Chauncey v. Gambill, supra.

For a consideration to be one deemed valuable in law, it must be substantially equal to the value of the property conveyed. O’Banion v. Henry, 128 Tex. 59, 96 S.W.2d 233, opinion adopted. Appellant in his affidavit says that he agreed to pay his father not less than $200.00 each month for life. The value of such a contract could be proven by competent evidence. While Joe Glenney, Jr. testified that the property was worth at least $1,000,000.00, there was no testimony as to the value of his equitable right to the property, or of the value of his right, title and interest, if any, therein. The record shows that at the Sheriff’s sale the highest bid was $500.00.

In Pattison v. Highway Insurance Underwriters, Tex.Civ.App., 292 S.W.2d 694, 699, ref., n. r. e., this Court held: “The cases make it plain that in summary proceedings the burden rests heavily upon the moving party to negative conclusively the existence of a genuine issue in regard to some controlling fact entitling the mov-ant to judgment.” (Emphasis supplied.) On this issue the movant has not sustained that burden.

Appellant contends that the court erred in holding that the Sheriff’s deed to the right, title and interest of D. J. Glenney, Jr. in the Jackson E. Bundick Survey conveyed his cause of action to set aside the deed of May 22, 1950, on the ground of duress. Since this question would probably arise on a new trial, we will consider the assignment.

In Jensen et al. v. Wilkinson et al., 133 S.W.2d 982, 986, Tex.Civ.App., writ ref., judg. correct, Justice Cody of this Court, after a careful review of applicable authorities, stated (on motion for rehearing):

“As appears from the Chase case, Chase v. [York County Savings] Bank, 89 Tex. 316, 36 S.W. 406, 32 L.R.A. 785, 59 Am.St.Rep. 48, cited in our original opinion, not every interest in property was subject to execution at common law. Equitable interests and estates were not subject to execution for the technical reason that a writ of execution issued only from law courts where equitable interests were not cognizable. This technical obstacle to subjecting equitable interests to execution, as appears from our original opinion, was removed by an act of Parliament passed in the reign of Charles II. This act resulted in making the property of a defendant in judgment, which he held by equitable title, subject to execution; it did not make mere equities, by which a defendant might acquire title to property or receive other relief, subject to execution, or expressed perhaps more conventionally, the act aforesaid subjected to execution property held by a defendant-in-judgment by a present vested equitable right, but did not affect equitable rights which were not vested in possession but lay only in action, and which could become vested only after judgment had thereon. From the Chase case it is evident to us that our Supreme Court regards the aforesaid act of Parliament as forming a part of the common law of England relative to executions, and which was adopted as the rule of decision by the Legislature.” (Emphasis ours.)

In Brinkman v. Tinkler, 117 S.W.2d 139, 141, Tex.Civ.App., writ ref., Justice Slatton stated:

“It is undoubtedly true that a mere equity in land is not subject to a writ of execution, yet we are of the opinion that a suit may be brought for the purpose of subjecting property owned by a judgment debtor to the payment of his debt. Chase v. York County Savings Bank, 89 Tex. 316, 36 S.W. 406, * * *.”

While the statements quoted from these cases might be characterized as dicta, we feel that great weight must be accorded the interpretation given to the Chase case, supra, by these distinguished judges. Accordingly, we hold that the sale under execution was ineffective to transfer the right of Joe Glenney, Jr. to bring suit to set aside on the ground of duress the deed of May 22, 1950. Kinnear v. Tolbert, 262 S.W. 900, Tex.Civ.App., writ dism.

Appellee has suggested that if the right discussed above is not subject to sale under execution, then it is not assignable and therefore appellant has no standing to bring this suit and the judgment of the trial court should be affirmed. This contention is given weight by the statement appearing in Gregg v. First National Bank, 26 S.W.2d 179, 181, Tex.Com.App.:

“He possessed such an interest in the property as might be transferred by assignment, consequently it was subject to sale under execution, (citing authorities) ”

In Moser v. Tucker, 87 Tex. 94, 26 S.W. 1044, 1045, the court said: “It must be conceded that no property or interest in property is subject to sale under execution or like process unless the debtor, if sui juris, has power to pass title to such property or interest in property by his own act.” However, the court stated further:

“It is not, however, every interest in property a debtor may have right to or to acquire that may be subjected to sale under execution or otherwise for payment of his debts, for in many instances his right is so remote and contingent that it is deemed more likely to subserve the ends of justice not so to subject it than to take the risk of sacrifice of contingent right by procedure which will most likely be of no practical benefit to the creditor, or may be ruinous to the debtor.”

The right to set aside a deed on the ground of fraud or duress is not a right to recover real estate. It has been characterized as a personal action. Deaton v. Rush, 113 Tex. 176, 252 S.W. 1025, opinion adopted. Since it is not an interest in real estate, such a cause of action would not pass as an incident to a deed attempting to convey real estate. We are aware that the Supreme Court of Texas, in Free v. Owen, 131 Tex. 281, 113 S.W.2d 1221, 1224, opinion adopted, construed the phrase “right of action for the recovery of real estate” as used by the Legislature in enacting Art. 5519, R. C. S., to mean “an action of any character where the relief sought, if granted, would have effect to dispossess the defendant of land or to invest the complainant with title to land, including the incidental right of possession.” This definition would include actions such as the one which concerns us here. However, that case cited Deaton v. Rush, supra, and did not purport to overrule it. The court determined that in order for the statute to accomplish the result intended, that phrase, as used therein, must have been intended to include all causes of action a successful assertion of which might result in defeating a title to real estate. Our conclusion that a cause of action to cancel a deed does not constitute legal or equitable title to land, and, therefore, is not an interest in real estate recognized by law, is supported by many cases holding that such a cause of action may not be asserted in the statutory action of trespass to try title. Tijerina v. Tijerina, 290 S.W.2d 277, Tex.Civ.App.; Friend v. McComb, 87 S.W.2d 767, Tex.Civ.App.

In Kinnear v. Tolbert, supra [262 S.W. 901], the court stated: “Duress can be pleaded only by the party upon whom it was exercised and whom it influenced.” In 17-A Amer.Jur., Duress and Undue Influence, § 19, p. 583, we find this statement:

“As a matter of fact, however, duress, like fraud, rarely becomes material as such, except where a contract or conveyance has been made which the maker wishes to avoid, and it is the well-established general rule that in such cases the duress inducing the making,, while rendering the contract or conveyance voidable at the option of the person coerced, does not render it absolutely void, and it is susceptible of ratification express or implied. It is, like other voidable contracts, valid until it is avoided by the person entitled to avoid it" (Italics added.)

In many cases cited in support of the text the right to set aside instruments executed tinder duress is affirmed qualified by a statement such as: “At the election of the party1 thus constrained to make them.” Seiber v. Price, 26 Mich. 522, cited in Thompson v. Niggley, 53 Kan. 664, 35 P. 290, 26 L.R.A. 803, or “ * * * at the election of him whose act was induced by it.” Barnette v. Wells Fargo Nevada Nat. Bank, 270 U.S. 438, 46 S.Ct. 326, 328, 70 L.Ed. 669.

In the case of Smith v. Carter, 45 S.W.2d 398, 400, Tex.Civ.App., writ dism., the court said:

“And even if the execution of the ■ deed to plaintiffs may have been in¡■■fluenced by fraud or duress on the, • part of others acting in the benefit of . the plaintiffs, -the deed would not be -•■void, but merely voidable, and could be avoided only by Mattie Smith up-.■■oil whbm it was exercised and whom ■ it. influenced.”

In Porter v. Brooks, 159 S.W. 192, Tex.Civ.App., Justice Speer, speaking for the. court, held that- one who was only privy in estate to the grantor was not in a position to assert the invalidity of a deed allegedly’invalid by reason of the insanity of the grantor, that right existing only in the grantor, his heirs or legal representatives.

Appellant in the affidavit attached to his answer to the motion for summary judgment set out facts showing that in addition to the conveyance made to him by 'his father, the cause of action to set aside the deed was specifically assigned to him. However the same rule of law applies. Meiners v. Texas Osage Cooperative Royalty Pool, 309 S.W.2d 898, Tex.Civ.App., ref., n. r. e.; Whitney v. Kelley, 94 Cal. 146, 29 P. 624, 15 L.R.A. 813. “The right of rescission is considered to be a personal one which may be exercised only by the party upon whom the fraud is perpetrated, and to be not assignable.” 4 Amer.Jur., Assignments, § 39, p. 258.

Appellant’s alternate cause of action, that the deed attacked was intended as a mortgage, is an assertion of equitable title and, therefore, is subject to sale under execution. Hein v. Debusk, Tex.Civ.App., 265 S.W. 753, aff’d Tex.Com.App., 277 S.W. 1053; Tijerina v. Tijerina, supra.

Although we have determined that appellant’s cause of action based on duress is not available to him, he is entitled to a trial -on the merits on his contention that' the. deed from his father to appellee was intended as a mortgage, unless it. be determined, on retrial that the deed to him from his father is void by reason of Arts. 3996 or 3997, R.C.S. '

Reversed and remanded.

On Motions for Rehearing

Motions for rehearing have been presented by both appellant and appellee. Appellant attacks our holding that a cause of action to set aside a deed on the ground that it was executed under duress is not assignable. On reconsideration of this question, we are of the opinion that the cases cited in our original opinion do not require the holding that an express assignment of such a cause of action is invalid. The questions with which' we are concerned are discussed by the annotator in 110 A.L.R., pp. 850-853, as follows:

“The general conclusion to be drawn from the cases is that the right to sue for the rescission of a voidable transaction (and, apparently, the right to- rescind out of court) may be assigned, either by implication or by direct words, where the right is incidental to some property interest passing from assignor to assignee.
“However, the cases are in a somewhat confusing condition with reference to the question as to when the assignee (by implication or otherwise) of a right to rescind can be regarded as acquiring, or haying, a property interest sufficient to sustain the assignment. If a third party has, through a voidable transaction, acquired real or personal property, and the one thus out of possession has effectually declared an election to rescind, and tendered restoration, etc., — so as, in legal contemplation, to have rescinded the transaction, — legal title to the property is generally regarded as revesting in the latter, so that, at least according to the modern view, and in the absence of statutes affecting the case, he may transfer the property to another, who may maintain a suit to recover it. In such a case the right to rescind is, of course, not assigned, but merely the reacquired title, together with the incidental right to enforce the rescission theretofore declared.
“On the other hand, where there has been no effectual exercise of the right to rescind, and the transaction is merely voidable (of course, if the transaction were actually void, a rescission would be unnecessary, and probably impossible, in the legal sense), it seems that, in strictness, the one who parted with the property, although perhaps potentially the owner of it, has in fact no present title, nothing which conceivably he can transfer other than the right to rescind, or to sue for a rescission, and to reappropriate the property following rescission.
“It may be well to observe at this point that most of the cases give support to the proposition that a mere naked right to rescind or to sue for a rescission is not assignable. At the same time it should be noted that the general harmony of the cases in support of that proposition has not resulted in a corresponding harmony in concrete rulings; for different meanings are given to the proposition. Some of the decisions take the view, to which reference has already been made, that, before rescission occurs, the one who parted with property under a merely voidable transaction has no title thereto to assign, and hence, as is held, cannot assign the right to rescind or to sue for rescission, even though, in form, he conveys to the assignee his interest in the property, and intends thereby to part with all claim to the beneficial interest therein.
“Other decisions, on the contrary, particularly the later ones, uphold the assignability of the right to rescind a voidable transaction, where, by implication or otherwise, the assignment occurs in connection with an intended transfer of the property in the hands of the third party, or the right thereto upon rescission being accomplished. And even where the assignment is, in form, merely of a ‘claim’ or cause of action, it is, by some courts, upheld, if regarded as carrying with it the beneficial interest, or,, as is sometimes held, a share therein. This view may, of course, be said to ignore the distinction between void and voidable transactions, but it has the virtue of being based upon practical considerations, and does not lose sight of the fact that, in the last analysis, the whole question of assignability of choses in action is one of public policy.”

In Edmonds v. White, Tex.Civ.App., 247 S.W. 585, 586, writ ref., the court held:

“Appellants insist that the facts stated showed that the only right acquired by appellee as assignee of the other persons ‘was to [the] bare right to file a bill in equity to set aside’ the contracts made by said persons with appellants, and they further insist that if it should be held that the assignments operated to pass any other right to appellee they necessarily also operated as an affirmance of the contracts by the assignors, and that appellee’s suit for a rescission of the contracts therefore was not maintainable.
“There is no doubt the rule at common law, enforced in many jurisdictions outside this state, is, as stated in 5 C.J. 892, that — ‘The assignment of a mere right to file a bill in equity for fraud committed on the assignor is void as being against public policy and savoring of maintenance.’
“The doubt we have entertained is as to whether this state, in adopting the common law (article 5492, Vernon’s Statutes), adopted the rule. We have not been referred to and have not found a case decided by a court in this state in which the question had been directly presented. But, looking to the basis for the rule, we think it has been in effect determined that it was never adopted in this state. The rule had its origin in the common-law doctrine of champerty and maintenance (Breeden v. [Frankford Marine Accident & Plate Glass] Insurance Co., 220 Mo. 327, 119 S.W. 576), which, and the reasons for it, are stated at length in 11 C.J. 231 et seq., and 5 R.C.L. 268 et seq. It has been held that the reasons for that doctrine have never existed in this state and that it has never been the law here. Bentinck v. Franklin, 38 Tex. 458; Stewart v. [Houston & T. C.] Railway Co., 62 Tex. 246; Perry v. Smith (Tex.Com.App.) 231 S.W. 340. If that is true, then a basis for the rule never existed in conditions here, and it would be illogical to hold that it is a part of the law of this state. We conclude, therefore, that the contention, so far as it is that appellee was not entitled to maintain the suit because of the rule referred to, should be overruled.”

The case of Gray v. Freeman, 37 Tex.Civ.App. 556, 84 S.W. 1105, 1108, held: “The rule is that mere personal actions, such as for slander, libel, assault and battery, false imprisonment, etc., die with the party, but, when the injury affects the estate rather than the person, the action for it may be assigned, and the purchaser can prosecute the action.” (Citing cases.)

We think that the Supreme Court of Texas stated the applicable rule in the case of Halbert v. Green, 156 Tex. 223, 293 S.W.2d 848, 851, as follows:

“When respondents executed the quit-claim deed they may have had an equitable right to have the deed of October 29, 1952, reformed precisely as it was reformed by the February 27th deed, but that right did not pass under the quit-claim either. In Thompson on Real Property, Permanent Edition, Vol. 7, § 3748, p. 222, we find the pertinent rule stated in this language: ‘The grantee’s cause of action to reform the deed is personal to him, and not a covenant running with the land, and will not therefore, without apt words of assignment, pass to a purchaser from the grantee under a deed which describes the same land described in the deed to his grantor.’ The rule, as stated, is supported by Norris v. Colorado Turkey Honestone Co., 22 Colo. 162, 43 P. 1024."

We have held that the trial court erred in granting a summary judgment in this case for the reason that the conveyance made to appellant by his father was not shown to be fraudulent as a matter of law. Our review of the authorities cited in this opinion and in our original opinion leads us to the conclusion that the right to sue for rescission of the deed in question would not pass as an incident to the deed by which appellant’s father attempted to convey the land to appellant, without an express assignment of the cause of action. It would follow that the sale under execution of D. J. Glenney’s interest in the land would not include by implication his cause of action to set aside his deed to appellee. Since this is an appeal from the action of the court in sustaining a motion for summary judgment, and since •appellant in his affidavit stated that part of the consideration for his promise to pay •$200.00 or $300.00 each month to his father was the conveyance to him of this cause •of action together with all his interest in the land, despite the fact that the deed does not contain an assignment, we think the •case must be reversed to afford appellant an opportunity to show that such an assignment was made. Reese v. Davitte, Tex.Civ.App., 255 S.W.2d 1015, error dism. The existence vel non of such an assignment was not placed in issue by the pleadings or affidavit and, while the burden of proving an assignment rests on appellant at the trial on the merits, the failure to discharge this burden at the hearing on summary judgment does not authorize a judgment for appellee. Tigner v. First National Bank of Angleton, 153 Tex. 69, 264 S.W.2d 85.

Appellant’s motion for rehearing is .■granted in part, and our original opinion is modified to conform herewith. Appel-lee’s motion for rehearing is denied.


author: BOYD, Justice.

text:
    C. E. BIRK, Appellant, v. FIRST WICHITA NATIONAL BANK OF WICHITA FALLS, Trustee et al., Appellees.
    No. 16266.
    Court of Civil Appeals of Texas. Fort Worth.
    Nov. 17, 1961.
    Rehearing Denied Jan. 12, 1962.

      Arch Dawson, Wichita Falls, for appellant.
    Rogers, Eggers, Sherrill & Pace, and Guy Rogers, Wichita Falls, for appellees.
   BOYD, Justice.

In 1936 C. Birk died testate, devising the bulk of his estate to his wife and his four children share and share alike, appointing the First National Bank of Wichita Falls (now The First Wichita National Bank) executor, granting the bank five years in which to carry out the provisions of his will, and, with the consent of a majority of the beneficiaries, an additional period not to exceed three years, and directing the bank to make semi-annual distributions of available funds to the beneficiaries. The term was so extended.

Mrs. Birk and the four children, on November IS, 1943, executed a written operative trust agreement and allowed the properties devised by C. Birk to remain in the hands of the bank and Ralph A. Birk, one of the sons, as trustees, for a period of five years with a provision for extensions. The bank was to handle and manage the properties without the joinder of Ralph A. Birk except in certain instances. On August 15, 1950, the trust instrument was amended so as to make applicable the provisions of the Texas Trust Act. By extensions of the term of the trust agreement it was in force at the time of Mrs. Birk’s death.

On January 17, 1958, the four children, each “acting severally as to his interest”, executed a written instrument extending the term of the trust for a period of fifteen years, with a provision for further extensions until a majority of the original beneficiaries should request a termination of the trust and a final distribution of the assets; the trust was to continue with the same accounting procedures, powers and duties as theretofore followed or set out in instruments executed by the signers, and “distribution of all cash, less reasonable reserves, to be made semi-annually to the undersigned beneficiaries, or their estates, in equal shares”.

This instrument of January 17, 1958, also contained the following paragraph: “And we severally GRANT, SELL, CONVEY and DELIVER unto such Trustees, to continue in Trust, all of our mother’s' interest in such Trust, Including all portions of such interest which we may later acquire under her Will or as her heirs at law, same to form a part of the C. Birk Trust Estate and be handled and distributed agreeable with this and all other instruments relating to the C. Birk Estate.”

Mrs. Birk died testate on January 29, 1958, devising “ * * * all of the real estate I own, or have any interest of any kind in, except my home where I now reside * * * ” to C. E. Birk. The realty in the trust estate consisted principally of 2,820.435 acres of land, which had been devised by C. Birk to his wife and his four children share and share alike. A clause in Mrs. Birk’s will devised the residue, after certain other bequests, to the four children share and share alike.

Until the time of this law suit, the bank continued to make semi-annual distributions of available funds, except that it held in suspense the accruals since her death from what had been Mrs. Birk’s one-fifth interest, which at the time this suit was filed amounted to $18,000.00.

C. E. Birk sued the trustees and the other three children to recover the $18,-000.00 which had accrued to such one-fifth interest; prayed that the ownership of the Mrs. Birk interest in the trust estate be established as against all adverse claims; and that the trustees respect his distributive rights thereunder. C. E. Birk claimed such one-fifth interest under his mother’s will.

The trustees and the other defendants denied that Mrs. Birk owned any real estate at the time of her death and contended that her interest in the trust estate was. personalty and vested in all four children equally under the residuary clause of her will; at least, they claimed that the distributable funds constituted personalty; but if it be realty, and, by the other terms of said will passed to C. E. Birk, it was conveyed by him through the instrument of January 17, 1958, to the trustees, and became a part of the “C Birk Trust Estate”, and is subject to be distributed as other accruals and properties, that is, equally to the four children.

Trial was to the court and resulted in a judgment for the defendants, and C. E. Birk has appealed.

Appellant contended in the trial court, and here contends by thorough brief and oral argument, that Mrs. Birk’s interest in the trust properties was an interest in land, and passed to him by the specific devise of the will; and that the instrument of January 17, 1958, was ineffectual to alienate his title, and that the estate would be “ * ⅜ * handled and distributed agreeable with this and all other instruments relating to the C. Birk Estate”, by the distributions being made, not in equal portions, but according to the ownership and interests of the children.

It is a close point, but we have concluded that the judgment should be affirmed. Without determining whether Mrs. Birk’s interest in the trust lands was realty or personalty, and therefore whether it was devised to appellant specifically or passed to the four children under the residuary clause, it is our opinion that by the instrument of January 17, 1958, appellant conveyed whatever interest came to him from his mother’s one-fifth interest to the C. Birk Trust Estate, and agreed that the distributions should be made equally to the four children.

When the instrument of January 17 was executed, none of the children knew the contents of their mother’s will or whether she had made or would make a will. None could know whether he would be loser or gainer by executing the instrument of January 17. Each had a hope, which in law is an expectancy. An expectancy may be conveyed. Humble Oil & Refining Co. v. Luckel, Tex.Civ.App., 171 S.W.2d 902, error refused w.o.m. The January 17 instrument granted, sold, conveyed and delivered to the trustees the Mrs. Birk one-fifth of the trust property. This seems to have been a complete alienation. Hammett v. Farrar, Tex.Com.App., 29 S.W.2d 949; 1 Scott on Trusts, p. 164, Sec. 17. And a deed will be construed to confer upon the grantee the greatest estate which the terms of the instrument will permit. Waters v. Ellis, 158 Tex. 342, 312 S.W.2d 231. If there is any doubt as to the meaning of the language of a deed it will be resolved against the grantor. 19 Tex.Jur.2nd, p. 398, Sec. 110. There need be no consideration to support a conveyance in trust. Restatement of the Law of Trusts, Sec. 29. It is immaterial in what order clauses appear in a deed. Harris v. Strawbridge, Tex.Civ.App., 330 S.W.2d 911; 19 Tex.Jur.2nd, p. 408, Sec. 116. It will be presumed that there was meant to be equality in tiie conveyance. John Hancock Mut. Life Ins. Co. v. Bennett, 133 Tex. 450, 128 S.W.2d 791. Such presumption has been applied in the interpretation of trust instruments. Jackson v. Hughes, Tex.Civ.App., 52 S.W.2d 687; Loring v. Palmer, 118 U.S. 321, 6 S.Ct. 1073, 30 L.Ed. 211; Shaull v. United States, 82 U.S.App.D.C. 174, 161 F.2d 891.

We think it is neither unreasonable nor unusual for children to agree to share equally in their parent’s estate, even where some know or believe they would receive more than an equal share in a testamentary disposition. We think a child’s granting, selling, and conveying to trustees whatever he may acquire from his parent through a will or by the laws of descent, and providing that such interest shall become a part of an existing trust estate derived from the other parent, and shall be distributed agreeably with all instruments relating to such estate, where all such instruments provide for distributions share and share alike, and made along with other children’s identical grants, is a conveyance to the trustees effectual to equalize the expectancies and may be enforced as such.

The judgment is affirmed.