author: PRICE, Chief Justice.

text:
    SPRING v. MECO PRODUCTION CO.
    No. 3873.
    Court of Civil Appeals of Texas. El Paso.
    Nov. 9, 1939.
    Rehearing Denied Dee. 14, 1939.

      Cofer & Cofer, of Austin, for appellant.
    Chas. F. Potter and Weeks, Hankerson & Potter, all of Tyler, for appellee.
   PRICE, Chief Justice.

This action was instituted by Polk Spring, as plaintiff, against the Meco Production Company, defendant. Plaintiff, in •the form of trespass to try title, specially pleading his title, sought to establish a preference right against defendant to acquire a preference right to lease for production of oil and gas a tract of 18.71 acres situated in Rusk County, Texas. Trial was before the court and resulted in a judgment in favor of defendant. Plaintiff duly perfected his appeal and the case is here for review. The parties here will, for convenience, be referred to in accordance with their designation in the trial court.

Plaintiffs first count contains the stereotyped allegations of an action in trespass to try title. The date of ejectment was alleged as the 5th day of February, 1937. Damages were sought for oil taken from the premises since the fall of 1931 by defendant in the sum of $60,000. The title under which plaintiff claimed was then set out specifically. It is alleged that the land, on the 5th day of July, 1937, was part of the unsurveyed public land of the State, and belonged to the public school fund. Further, that on said date no valid approved field notes had been filed in the Land Office; that desiring to obtain a mineral lease on said land in accordance with the Act of 1931, c. 271, p. 452, Vernon’s Ann. Civ. St. art. 5421c, he filed an application with the County Surveyor of Rusk County for a survey to lease said land as unsur-veyed land, and his application was duly recorded; that in due time he had a survey made by.J. L. Dellis, a licensed land surveyor. This survey was made on the 30th day of July, 1937; that on August 5, 1937 the said field notes and survey were filed and recorded in the office of the county surveyor. On August 7, 1937 he filed in the Land Office his application for a survey to lease, duly and properly authenticated, accompanying same with properly certified and authenticated field notes of said survey so made by Dellis. On the 28th day of October, 1937 the Commissioner of the General Land Office duly considered his application for lease, together with the field notes and plat, and refused to accept his application on the ground that theretofore, on September 24, 1931 the land had been duly patented to one Mealy Johnson. This patent is assailed on the ground that at the time of the issuance thereof that there were numerous producing wells within five miles of the land producing oil and gas in commercial quantities; that before the issuance of the patent the Land Commissioner made no investigation to ascertain whether the land was or was not subject to sale on account of an oil well being located within five miles thereof, but same was issued by that official on the assumption that Section 5 of Article 5421c, Vernon’s Annotated Statutes, Acts 1931, c. 271, § 5, did not preclude the sale of such land to one coming within the provisions thereof, even though such' a well was so located. Plaintiff sought to have the patent aforesaid held invalid and that he be adjudged to have a prior right to the lease sought as against defendant with the preference provided for in Section 8 of said Article 5421c, Acts 1931, c. 271, § 8.

Defendant in due order pleaded in abatement, alleging that plaintiff was not a proper party to attack the patent, and that same had never been attacked or invalidated by the State of Texas. The plea in abatement being overruled, the defendant, subject, thereto, pleaded to the merits: First, a general exception; second, not guilty. Pleading specially,, the defendant alleged that it paid a valuable consideration for its lease without any notice of defebts in its title and was entitled to protection as an innocent purchaser. Improvements in good faith were likewise pleaded. It was alleged that defendant and its predecessors in title had drilled and equipped three commercially producing wells on the land at a reasonable cost of $15,000 per well; that the drilling and equipping of each well enhanced the value of the land by more than $30,000 each. In the event of recovery by plaintiff it prayed for allowance of the cost of. its improvements and a lien on the land to secure the payment thereof.

On the motion of plaintiff the trial court made up and filed findings of fact and conclusions of law. These findings fairly and fully set forth the issues involved in the case with clearness and with such brevity as was consistent with the questions dealt with and are here quoted in full:

“Findings of Fact:
“1. On October 1-1, 1842, the State of Texas regularly and legally issued a patent to the Heirs of George Berry describing and conveying the following tract of land:
“In Rusk County, about 11-1/2 miles N 50 West from Henderson, by virtue of County Warrant No. 1724 issued by Ben-ard E. Bee, Secretary of War on the 10th day of January, 1838.
“Beginning at a post on the west line of Amea Meltons Survey 415 varas North of her SE corner from which a pine bears N. 84 E. 4 varas a dogwood brs. south 1 vara, thence west 214 varas to a post from which a pine bears N 16 E 23 varas another bears S 26 W 12 varas; Thence North 1685 varas to the SW corner of Thompson McCarty’s survey; Thence East 800 varas to the SE corner of said survey, and SW corner of John Smiths Survey 2154 varas to said Anna Meltons Survey; Thence South \yith same 1685 varas to the beginning.
“2. On June 8, 1874, the State of Texas regularly and legally issued a patent to C. C. Doyle, assignee of John Evans, describing and conveying the following tract of land:
“In Rusk on the waters of Rabbit Creek 12-1/2 miles N. 52 W. from Henderson by virtue of unconditional Cert. No. 306 issued by the Board of Land Comrs. of Nacogdoches County, April 7, 1845, and transferred by a regular chain of transfers to C. C. Doyle June 15, 1872.
“Beginning at the S.E. Cor. of a 320 acre sur. for J. Lindley, a stake a R.O. 6 ins. brs. N. 25 E. 5 vrs. do 12 ins. N. 80 W. 5 vrs., Thence W 1300 vrs. with the S.B. line of same to the S.W. cor. a Flickory 20 ins. brs. S. 4 E. 3 vrs. do 14 ins. brs. E. 11 vrs.; Thence S. 48 vrs. to S.E. Cor. of W. G. Tutts, 640 acres sur. a stake from which a B.J. 12 ins. brs. S 40 E. 7 vrs. a Pine 6 ins. N. 39 E. 12 vrs.; Thence E. 1252 vrs. with the N.B. Line of H. B. Dance sur. to N.E. cor. of same a Pine 30 ins. brs. N. 72 W. 15 vrs. do 12 ins. N. 81 E. 8 vrs.; Thence S. 438 vrs. the N.W. cor. of S. P. Hollingsworth’s sur. a Pine brs. N. 1 vr.; Thence E. with the N. B. Line of same 40 vrs. to cor. on the W. B. Line of George Berry’s, 640 acre sur.; Thence N. with the W.B. Line of sd. Berry’s Sur. 486 vrs. to the place of beginning.
“3. By mesne conveyances, title to twenty acres of the Geo. Berry Survey passed to J. R. Irion, who ,on November 15, 1904, conveyed same to Amelia (Mealy) Johnson, such twenty acres being described as follows:
“All that certain lot, tract, or parcel of land described as follows, situated in the County of Rusk, State of Texas:
“Beginning at a stake set in ground on the West boundary line of Abe Holt’s land, from which a pine brs. E. 77 W. 4 vrs. another 24 in. dia. brs. N. 80 E. 7-5/10 vrs.; (the last mentioned pine has been cut down but the mark is on stump) Thence S. along Abe Holt’s West boundary line and Webb O’Guinns West boundary line 486 vrs. to Prof. Huff’s N.E. Cor. said cor. is same as described in deed from B. F. Watlcin to Robert Johnson, a stake set in ground from which a pine brs. W. 3 vrs.; Thence W. along Prof. Huff’s N.B. Line 242 vrs. to the S.E. Cor. of a tract formerly owned by C. C. Doyle, and now owned by Henry Johnson, a stake set in ground; Thence N. along Henry' Johnson’s E.B. line 486 vrs. to stake set in ground from which a Red Oak brs. N. 25 E. 5 vrs. another brs. N. 80 W.-5 vrs.; Thence E. 242 vrs. to place of beginning, containing twenty acres more or less. Said land is a part of the George Berry Headright in Rusk County, Texas.
“4. On September 16, 1930, Mealy Johnson executed and delivered an oil and gas lease on said twenty acre tract to W. E. Duffey; that such lease by regular assignments passed to defendant Meco Production Company. This lease is a regular 88 Form lease, and has never lapsed, but on the contrary, production was secured on said land, and oil and gas has been for more than seven years, and still is being produced in accordance with the terms of said lease.
“4a. On June 12,‘1931, Mealy Johnson filed with the County Surveyor of Rusk County her application for a survey with a view to purchase an alleged vacant unsurveyed area, bounded on the east by the Geo. Berry Survey, and on the west by the Jno. Evans Survey; on the north by the Joe Lee land, and on the south by the S. H. Hollingsworth Surveys. That field notes were duly returned by a licensed State Land Surveyor, filed with the County Surveyor, and forwarded to the Land Office. That such field notes were approved by the Commissioner as containing 18.71 acres of vacant land, and Mealy Johnson duly filed her application to purchase same under the provisions of Revised Civil Statutes, Article 5421-C, as a tract occupied and enclosed by her in good • faith as a part of her adjoining lands; that such facts of occupancy, enclosure, and good faith were established before the Land Commissioner. Mealy Johnson paid the required purchase price.
“5. On September 24, 1931, a patent was issued by the State of Texas to Mealy Johnson purporting to convey to her 18.71 acres of land which is part of the 20 acre tract above referred to and which is the same tract as is described in plaintiff's petition. That such patent was issued to Mealy Johnson under Revised Civil Statutes, Art. 5421-C, as a tract of vacant land occupied by her in good faith and held within her enclosure. That such patent reserved to the State a 1/16 free royalty interest.
“6. On October 25, 1934, Mealy Johnson gave an oil and gas leave in Standard 88 Form to Frank Byrne covering the same 18.71 acre tract described in the patent above referred to. And on February 8, 1935, he filed suit in the District Court of Rusk County, Texas, No. 10945, Frank Byrne v. Meco Production Company, in trespass to try title to recover the oil and gas leasehold in said 18.71 acres. Judgment was entered in said cause on October 3, 1935 that Frank Byrne take nothing against Meco Production Company and that it recover the seven-eighths oil and gas lease estate in said 18.71 acres. In this manner the Frank Byrne lease from Mealy Johnson passed to defendant Meco Production Company.
“7. Plaintiff’s suit in this Court is based upon his claim of a preference right to purchase an oil and gas lease from the State. That his claim is based upon the following' acts and papers filed by him:
“(a) On July 5, 1937, plaintiff filed an application with the Rusk County Surveyor for a survey, with a view to purchase an oil and gas lease, of the same 18.71 acre tract which he called, however, to contain 18.01 acres, Which is alleged to be vacant, unsurveyed land, and paid the fee required by law.
“(b) On August 5, 1937, plaintiff caused J. L. Dellis, a licensed land surveyor, to survey and file a set of field notes on said land with the County Surveyor.
“(c) On August 7, 1937, certified copies of said application and field notes were filed in the Land Office, together with a map of said land prepared by said surveyor.
“(d) On October 28, 1937, the Land Commissioner heard such application and refused to issue a lease to plaintiff and refused to approve his field notes, because said land was not unsurveyed public school land and was not subject to lease.
“8. Plaintiff’s suit is based upon his claim that the said 18.01 acres is vacant land not included in either the Geo. Berry, John Evans, or any other adjoining survey, that the patent of it to Mealy Johnson was void because it was within five miles of a producing oil well at the time her patent was issued On September 24, 1931.
“9. Plaintiff failed to offer any evidence, except the approved field notes of the Mealy Johnson survey, which the Court deems insufficient to establish the existence of the vacancy. There was insufficient evidence to rebut or contradict or show that there was any mistake in the field note calls of the John Evans Survey for adjoinder with the George Berry Survey; and the Court finds from the preponderance of evidence before it that there is no vacancy between said surveys and that the 18.01 acre tract involved in this suit is not vacant unsurveyed school land, and was not such on the date plaintiff initiated his claim.
“10. There was no evidence offered to show that on June 12, 1931, there was an oil well within five miles of this land, producing or capable of producing oil or gas in paying quantities.
“11. The Court finds, however, that on September 24, 1931, there was a well within five miles of said land which was then producing large quantities of oil, but there was no evidence to show what was the ■cost of drilling, equipping and operating such a well, or to show that it was producing a sufficient quantity of oil or gas to pay a profit over such expense; nor was any evidence offered to show that such well produced a sufficient quantity of oil or gas to pay a profit over operating expenses.
“12. The Court finds that at the time plaintiff made his application for survey to lease, the land in controversy was listed upon the records of tire Land Office as school land under number S.F. 13255, as having been surveyed for and patented to Mealy Johnson.
“13. The Court finds that at the time plaintiff made his application for survey to lease the land in controversy it had been delineated upon the official map of the Land Office as surveyed land.
“14. The Court finds that prior to the time plaintiff made his aforesaid application for' survey to lease, the said land had already been surveyed under the application of Mealy Johnson and that the field notes made for her had been approved by the Land Commissioner and were on file in the Land Office.
“15. The former Land Commissioner, Mr. Walker, testified without contradiction that he held such office at the time of the hearing upon the Mealy Johnson application in September, 1931, and that he conducted such hearing and awarded the land to her without hearing evidence upon or determining the issue of how close a producing well was at the time, or as to whether there was a commercially producing well; that he did not pass on this question.
“16. Defendant has drilled three producing oil wells upon this land at a cost of $15,000.00 per well. Such cost was reasonable and necessary at the time the wells were drilled. These wells were drilled by defendant in good faith, without knowledge or notice of any of the defects alleged in plaintiff’s petition. The drilling of the wells enhanced the value of the lease and land by more than the cost of drilling said wells; that is, the drilling of each well increased the value of the lease by more than $15,000.00 over what the value of the lease had been before the well was drilled.
“Conclusions of Law
“1. The Court reiterates the conclusions of law set out in its final judgment filed ■in this cause, and the parties are given their same exceptions there noted.
“II. From the facts above found, the Court concludes that the 18.01 acres was not vacant or unsurveyed public school land at the time plaintiff filed his application for survey to lease and is not such at this time. It was surveyed land all during such time.
“III. Plaintiff was not a discoverer of an unsurveyed area of school land when he filed his application for survey nor when he caused the land to be surveyed because all the facts concerning such land were on file in the Land Office; the land had already been listed as school land in the Land Office, and plaintiff contributed nothing of value to the State.
“IV. Further, plaintiff never qualified under Section eight of Article 5421-C, because prior to the time he filed upon it, it had been delineated upon the official Land Office map as surveyed school land.
“V. The Court finds that since no suit was filed by the State, or any other party within one year from the issuance of the Mealy Johnson patent, that plaintiff cannot now attack it.
“VI. The Court finds that the law is with the defendant, and that plaintiff should not recover.”

Plaintiff requested findings from the Court consistent with his vital contentions in the case, which findings were refused. The findings are attacked on various points by assignments of error with propositions relative thereto.

Both plaintiff and defendant rely on the provisions of the Acts of 1931 of the Forty-Second Legislature, c. 271, page 452, now Vernon’s Annotated Statutes, Article 5421c. This general statement should be qualified and limited by stating that defendant likewise relied on the title of Mealy Johnson alleged to exist prior to the patent to her.

Let us first consider the issues involved here on the assumption that at the time of the application of Mealy Johnson on the 12th day of June, 1931, the land was unsold and unsurveyed school land. Her survey was made by Dellis, a licensed State surveyor. On the filing of the field notes the same were approved, and that thereafter the land involved was shown on the official map and other records of the Land Office as surveyed school land. The plaintiff’s survey covered exactly the same land as the Mealy Johnson survey, and was made by the same surveyor. Mealy Johnson’s claimed right to the land was founded on a purchase based on Section 5 of said Article 5421c, Acts 1931, c. 271, § 5 ; the claimed right of plaintiff on Section 8 of the same article, Acts 1931, c. 271, § 8.

It has been established by a long line of decisions that one claiming an interest in public land, even though said interest be merely inchoate, may maintain an action against another asserting an adversary interest in the same land and if such a one establishes superiority of his right over that of his adversary, judgment follows vindicating that right which is at least binding on the adversary. Nations v. Miller, 107 Tex. 616, 183 S.W. 153. On the other hand, in order to successfully maintain such action, the plaintiff must have at least an inchoate right in the land superior to that of his adversary. Fellers v. McFatter, 46 Tex.Civ.App. 335, 101 S.W. 1065.

Counsel for plaintiff by oral argument and by brief insists that the cases of Stanolind Oil & Gas Co. v. State, Tex.Civ.App., 114 S.W.2d 699, Caples v. Cole, 129 Tex. 370, 102 S.W.2d 173, on rehearing 129 Tex. 370, 104 S.W.2d 3, and Short v. W. T. Carter & Bro., Tex.Sup., 126 S.W.2d 953, conclusively determine this case in favor of plaintiff. Let us, then, carefully consider what those cases decide insofar as applicable here. Stanolind Oil & Gas Co. v. State, supra, is important, in that it construes the second paragraph of Section 8 of Article 5421c, Acts 1931, c. 271, § 8. This portion of Section 8 reads as follows: “Any person who discovers an unsurveyed area of school land which has not been listed on the records of the Land Office as school land, and is not in actual conflict on the ground with land previously sold or appropriated and which appears on the official Land Office map as unsurveyed land, may apply in writing to the county surveyor and have the same surveyed, and after the field notes thereof have been returned to the Land Office and approved and filed with the Land Commissioner, shall have a preference right for sixty (60) days thereafter to purchase a mineral lease thereon at the minimum price fixed by the Land Commissioner, in addition to the other consideration provided herein.”

In Short v. W. T. Carter & Bro., supra, [126 S.W.2d 958], Judge Smedley quotes from the opinion in Stanolind Oil & Gas Co. v. State, supra, as follows: “The discovery alluded to in the 1931 act we think clearly means the discovery by ‘any person’ to the land commissioner, by means of an application to lease under the 1931 act. * * * The underlying policy of the 1931 act was to encourage private individuals, at their own expense, to bring into the school fund mineral lands properly belonging to the fund which had not theretofore been listed as such. The benefits of- the statute enured to the one who discovered that the land was not so listed, and made application in compliance with the statute. This is, we think, the only practical construction of the statute which would effectuate its purpose. Any other construction would lead to interminable confusion.”

In the course of the opinion in Short v. W. T. Carter & Bro., supra, Judge Smedley uses this language: “It is our opinion that, in order to give .effect to the intention of the Legislature as disclosed by the entire Act and to avoid contradiction in a literal interpretation of language used in Section 8, which would defeat the declared purpose to provide for and regulate the sale of all public school land and the disposition and sale of minerals in all unsold public school land, surveyed and unsurveyed, Section 8 of the Act is properly construed as authorizing the Commissioner of the General Land Office to execute mineral leases upon applications filed under that section of the Act when, after examination of the field notes filed, the official maps and other records of the General Land Office, he has determined that the area applied for and described in the field notes is not listed on the records of the Land Office as school land and is unsold, unsurveyed land as defined in Section 3 of the Act, that the field notes are correct, and that the applicant has discovered the area and taken the several steps and made the payment as prescribed by the Act.”

The case óf' Caples v. Cole, supra, is in many respects similar to the case we.have here. There; as here, there was a patent issued under Article 5421c, and then a subsequent application for an oil and gas lease. The application for the lease was rejected- by the Commissioner, as here, on the ground that the said land had been theretofore sold to the patentee.

In Caples v. Cole, supra, the Supreme-Court held: (1) that land within five miles of a producing oil and gas well, whether surveyed or unsurveyed, was not subject to sale, but only to lease; (2) that the subsequent applicant for the lease was precluded by the one year’s statute, Vernon’s Ann. Civ. St.' art. 5329, subd. 4 from assailing the purchase of the pat-entee; (3) that a subsequent applicant for a lease might, in a suit against a prior patentee, where the land was not subject to patent under the law, assert his right in a trespass to try title suit against the patentee. On rehearing it was held that, in a case where there was an entire absence of exercise of discretion on the part of the Commissioner in determining whether the land was within five miles of a producing oil well or not, the one year statute would not preclude an attack — that the 'one year statute did not apply. In that case it was held that there, was no evidence that the ■ Commissioner had not considered the question as to the location of the well in relation to the land involved and determined that it was not in five miles of the land, and hence the one year statute did apply.

We believe that one of the controlling and determinative questions in this case is whether or not the land involved herein was unsurveyed school land within the definition of Section 3 of Article 5421c, Acts 1931, c. 271, § 3, and did plaintiff discover same by his application for a survey preliminary to his application to purchase an oil and gas .lease, within the meaning of Section 8 of the same article, Acts 1931, c. 271, § 8. In determining this question the case of Landry v. Robison, 110 Tex. 295, 219 S.W. 819, should be c.arefully weighed and considered. In that case Judge Greenwood wrote the opinion for the Supreme Court. Briefly stated, the facts were substantially, as follows: One Duffy made application to prospect for and develop petroleum and natural gas on 195 acres of land in tlarris County in the bed and channel of the Sail Jacinto River, a navigable stream. The application was regular in form and survey was duly made and all requisite steps taken. Field notes ■ of the survey were filed in the General Land Office, and on April 9,-1916, the Commissioner approved same and issued the permit sought. The proceedings were all taken in conformity to General Laws of ThirtyrThird Legislature, (1913) c. 173, page 409.

Landry filed with the County Surveyor on June 20, 1917 his application to prospect for and develop petroleum and natural gas on 156.3 acres of the 195 acres covered by the Duffy permit. Landry’s application was under the law passed by the Thirty-Fifth Legislature in 1917, c. 83, p. 158: The necessary steps to perfect Landry’s rights under that law were performed. On July- 6, 1917, Duffy’s permit was can-celled by the Commissioner for failure to comply ■ with the terms thereof. On July 6, 1917, one Meador filed with the County Clerk of Harris County written application for -right to prospect for and develop -petroleum and natural gas on the 195 acres surveyed for Duffy. The Meador application was filed on the theory that the Duffy application changed the land from unsurr veyed land to surveyed land, and the field notes of the Duffy application were used as a basis for the Meador application. It was held the. Act of April 9, 1913, did not authorize the issuance of the Duffy permit, in that the bed of a navigable stream was not included in the provisions thereof. Further, the Duffy application, survey and 'field notes were void and that at the time of the Landry application the land was unsurveyed land within the meaning of the Act of 1917; that at the time of the Duffy survey the law forbade a survey 'for an individual of any part of the bed of a navigable stream. See Article 5302, Vernon’s,Annotated Statutes.

It is to be further noted that the Act of 1917 did not define “surveyed” or “un-surveyed” school lands. The terms were merely used without definition. Article 5421C, Section 3, Acts 1931, c. 271, § 3, is as follows: “Surveyed lands within the terms of this Act is defined to be all tracts or parts of tracts heretofore surveyed either on the ground or by protraction, and .set apart for the public school funds and .which is unsold, and for which field notes are on file in the General Land Office or which may .be delineated on the maps of said office as such,, ánd un-surveyed land is defined to be all areas not included in surveys on file in the - General Land Office or surveys delineated on the maps thereof.”

Paragraph 2 of Section 8 of this Article Acts 1931, c. 271, § 8, has been heretofore quoted herein.

At the time of the Mealy Johnson application the land was subject to a sale. It might be that if an oil and gas well was in five miles thereof the surface was not to be sold. A lease of the underlying minerals constitutes a sale. There was no express law forbidding the survey. A survey of the surface was necessary if the minerals alone were to be sold.

When plaintiff applied to lease with the privileges conferred by Section 8, the land at least did not come within the literal provisions of Section 3 as to what constituted unsurveyed lands. Construing Section 3 literally, it did come within the provision as to what constituted surveyed land. The land was delineated on the map of the General Land Office; it was included in an approved survey on file in the General Land Office. This survey had been’made by a licensed surveyor. The Land Office register showed the -land as mineral and dry grazing land belonging to the public school fund. See Sibley v. Robison, 110 Tex. 1, 212 S.W. 932; Frank v. Robison, 117 Tex. 512, 8 S.W.2d 653, loc. cit. 654.

After the filing and approval of the Mealy - Johnson’s field notes, the Commissioner at all times regarded this land as a part of the public school land. - The patent to Mealy Johnson evidences this, and the State holds the purchase price paid hy Mealy Johnson of something over $350 as part of the school funds.

It was not the application of plaintiff that discovered this area as public school land. The application of Mealy Johnson accomplished the discovery.

In view of the definition given as to surveyed and unsurveyed school lands by Section 3 of Article 5421C, Acts 1931, c. 271, § 3, and the purposes of the passage of Section 8 of that Article, Acts 1931, c. 271, § 8, as declared by the cases of Stanolind Oil & Gas Co. v. State, supra, and Short v. W. T. Carter & Bro., supra, we hold that the plaintiff was not a discoverer of the area in question within the meaning of Section 8 of Article 5421C, Acts 1931, c. 271, § 8. Further, not being a discoverer, and the land not being unsurveyed school land at the time of his application under Section 8 of said Article, his application gave him no right to purchase an oil and gas lease on the land in question. On the filing and approval of the Mealy Johnson field notes and the notation of the survey on the map, the land ceased to be unstfr-veyed public school land within the meaning of Section 8.

Our holding on the issues discussed disposes of the case, but we will briefly discuss two other assignments presented by plaintiff.

In paragraph nine of the court’s findings of fact, supra, it was found in substance by the court from a preponderance of the evidence that there was no vacancy between the surveys surrounding the 18 acres in question. We take it that plaintiff does not seriously contend' that the burden did not rest upon him to establish such vacancy.

Plaintiff asserts that the action of the Land Commissioner in accepting the Mealy Johnson field notes was some evidence of the vacancy. This contention is unquestionably sound insofar as defendant claims under the title emanating from the. Mealy Johnson patent. Insofar as defendant cláims title emanating from the State prior to the Mealy Johnson patent, we do not believe this contention sound. The prior rights, if any, of Mealy Johnson, except as to the surface, were vested in defendant prior to the Mealy Johnson patent. Suppose the State, prior to the Mealy Johnson patent, had sued defendant to recover the land, the burden then would have been upon the State to establish the.vacancy. If it be conceded that all proceedings leading up to and culminating in the Mealy Johnson patent were void, as contended by plaintiff, defendant’s claim thereunder would be some evidence against it as to the existence of the vacancy, but not. conclusive. We have, however^ heretofore held that the acceptance of the field notes, together with the alteration of the map and the listing of the land are sufficient to constitute the land. a surveyed area claimed by the State as public school land within the meaning of Section 3 of Article 5421C, Acts 1931, c. 271, § 3.

Plaintiff asserts that the field notes contained in the patents to the senior surveys alleged to surround the vacancy in and of themselves are sufficient to establish the vacancy. The doctrine is invoked that in some cases, in the construction of the field notes, a call for course and distance may-control over the call for the line of another survey. State v. Sullivan, 127 Tex. 525, 92 S.W.2d 228; Humble Oil & Refining Co. v. State, Tex.Civ.App., 104 S.W.2d 174, writ refused, and authorities there cited.

'If vacancy there be, it is bounded by the Joe Lee survey on the north, by the Hollingsworth on the south, the George Berry survey on the east, and the John Evans survey on the west. Insofar as the question is as to the relative position of these four surveys as established on the ground, we are left to a deduction from the descriptions contained in the patents. These four surveys were all senior to the Mealy Johnson survey. No expert witness for either party interpreted the calls in these patents.

The Berry patent was senior to the patent for the John Evans survey. The east to west call in the patent of the John Evans survey is as follows: “Thence E. with the N.B. Line of same (Hollings-worth) 48 vrs. to cor. on W.B. Line of George Berry’s 640 acre Su'r.” In fact to extend the line called for to the other survey would require 282 instead of 48 varas. The variance is so great that we are led to the conclusion that the survey- or did not know the true location of the Berry line, and the call was made by mistake. See authorities supra.

We sustain this attack on the findings for the purposes of this case and hold that under the evidence here presented a vacancy at the time of the Mealy Johnson application was established.

Plaintiff vigorously assails paragraphs ten and eleven' of the trial court’s findings in substance that there was no evidence to show that there was an oil well within five miles of this land at the time of the Mealy Johnson application producing, or capable of producing, oil and gas in paying quantities. Further contention is made that, under Section 6 of Article 5421C, Acts 1931, c. 271, § 6, a producing well in five miles of an unsurveyed area is all that is required to withdraw such unsurveyed area from sale as distinguished from lease. The opinion in Caples v. Cole, supra, is cited as drawing this distinction as between a surveyed area and an unsurveyed area. The deduction we drew from that case was that the expression “producing oil or gas in commercial quantities” and “producing oil or gas well,” [129 Tex. 370, 102 S.W.2d 176] meant substantially the same thing. We think the same deduction might reasonably be made from Humble Oil & Refining Co. v. State, supra.

Witnesses W. T. Williams and J. M. Wood testified as to the production of oil wells within five miles of the land. The witness Williams, by reason of representing parties interested in the same locality, and having exact knowledge of the distances involved, testified that there was, during the month of September, 1931, more than one well within five miles of the land producing oil in commercial quantities. On cross-examination he named several wells. He spoke of one well about forty yards easterly from the land which caught fire while he was there and flowed large quantities of oil into the flame for about two weeks. His testimony that the wells were producing oil in commercial quantities was perhaps a conclusion and as such was properly disregarded by the trial court. His testimony, however, was not without probative effect. Witness Wood, the County Surveyor, in June, July and August, testified he had production on the Lindley tract; that one of his wells would make as much as you wanted- it to make. In response to a question, “Would they (referring to his production on the Lindley tract) make as much as 1000 barrels per day?” responded, “I imagine 5000.” The Lindley tract was certainly within five miles of the land in controversy. The testimony of these two witnesses was not controverted. This land, under the testimony, is part of the great East Texas oil field. Under the testimony, in September, 1931, there were oil wells all around it. We think and find, under the evidence, that at the time of the sale to Mealy Johnson there were wells producing oil in commercial quantities within, five miles of the land.

Except as hereinbefore indicated, we adopt the findings of the trial court as our own.

It is ordered that the judgment of the trial court be affirmed.

On Motions for Rehearing.

Both appellee and appellant have filed motions for rehearing herein. We shall first dispose of the motion of appellee.

Appellee has briefed one ground of his motion; that is, that we were in error in the original opinion in holding that the evidence, including the maps introduced and the field notes contained in the surrounding and adjacent surveys established the vacancy in question as a matter of fact. Our holding that the east to- west call of the Evans’ patent to west line of George Berry’s survey being only 48 varas and the call in the Hollingsworth survey, its north line, gave this distance as 282 varas, demonstrated that the position of the west line of the Berry’s survey was unknown to the surveyor making the Evans’ survey, and the call for that ad-joinder was a mistake, was perhaps erroneous. The maps and field notes contained in the patent are perhaps in and of themselves insufficient to establish the vacancy claimed. This discrepancy may have been an element influencing the Land Commissioner in his decision on the Mealy Johnson application that there was in fact, a vacancy. Its influence on the Commissioner’s action may have been small or great. In reality the extent of its influence, if any, is only conjectural.

It is our opinion the field notes contained in the various patents and maps introduced are, as we have stated, insufficient in and of themselves to establish the vacancy. We think the converse of the proposition is likewise true: In and of themselves they are insufficient to establish that the vacancy does not exist. In fact, the evidence above mentioned considered alone does not raise the issue.

The approval of the Mealy Johnson field notes prima facie established the vacancy. Weatherly v. Jackson, 123 Tex. 213, 71 S.W.2d 259. The field notes in the Mealy Johnson patent and in the survey made for plaintiff are practically the same. The evidence failed to overcome this prima facie showing. Our holding is not based upon the fact that defendant holds under the Mealy Johnson patent. Defendant claims under title emanating from Mealy Johnson prior to the patent. Mealy Johnson’s subsequently acquired rights may have vested in the defendant by virtue of the warranty clause in the lease and the judgment in the case of Byrne v. Meco Production Company, but no adoption of this survey is shown by the defendant further than to introduce same in evidence.

Our construction of the opinion in Weatherly v. Jackson, supra, is that where the Land Commissioner approves the field notes and awards the land to the applicant as school land the presumption is that the facts existed that made the action lawful. The fact necessary here to justify the action was that prior to the application and award the land was unappropriated, un-surveyed public school land. It is true that this presumption is but prima facie and subject to rebuttal. Under the evidence here we do not believe this presumption has been overcome.

Appellant in his motion for rehearing vigorously assails the holding that he was not a discoverer of the area in question within the meaning of Section 8 of Article 5421c, Vernon’s Ann.Civ.St., Acts 1931, c. 271, § 8. Landry v. Robison, supra, discussed in the original opinion, is cited as authority establishing that the award to Mealy Johnson was utterly void. Further, that under that case the first Dellis survey and the approval thereof by the Land Commissioner and classification of the land as public school land were likewise insufficient to constitute this land a surveyed area within the meaning of Article 5421c, Acts 1931, c. 271. It is, however, contended by the appellant, as we understand his position, that the action on the Mealy Johnson application and the survey in connection therewith were sufficient to establish the vacancy claimed by plaintiff. To our minds the distinguishing feature of Landry v. Robison is that there the survey showed on its face it was made in defiance of existing law. At the time of the survey neither the surface nor the mineral thereunder was subject to sale. The survey lines crossed the bed of a navigable stream. In this case the area involved was subject to sale, if a mineral lease be considered a sale. It was unquestionably public school land.

If this area was unsurveyed public school land it was discovered to the State through the Mealy Johnson field notes which were approved by the Land Commissioner. It was shown on the record and official map as public school land thereafter ; the Land Commissioner had dealt with it as school land; Dellis,- the licensed State surveyor, was in a certain measure an agent of the State when he made the Mealy Johnson survey. We cannot believe that the Polk Spring application constituted a discovery within the meaning of Section 8 of Article 5421c, Acts 1931, c. 271, § 8, as same has been construed by the Supreme Court. In our opinion a discovery within the meaning of said Section 8 means something more than the discovery of a defective title to a tract of surveyed land, the title to which has at least been attempted to be conveyed by the State. Suppose the State had instituted suit prior to plaintiff’s application and recovered this land for the school fund. Could then plaintiff make an application to lease the land as undiscovered school land and obtain a preference right to lease same? The answer to the question is too obvious for discussion. The opinion on rehearing in Caples v. Cole, discussed in the original opinion, was handed down April IS, 1937. The motion for rehearing in Humble Oil & Refining Co. et al. v. State, supra, was denied April 14, 1937, writ refused June 23, 1937. The two cases both appear in 104 S.W. Second Series. Appellant’s application for survey was filed on the Sth day of July, 1937. The situation mentioned in our question might have, but did not, arise.

Short v. W. T. Carter & Bro., Tex.Sup., 126 S.W.2d 953, and Stanolind Oil & Gas Co. v. State, Tex.Civ.App., 114 S.W.2d 699, are unquestionably authority on the point in question that in order there be a discovery and a discoverer that the area need not be shown on the official Land Office map as unsurveyed school land. We do not construe them as authority for the proposition that there may be a discovery of land shown on the official map as surveyed school land and which the' State has at least attempted to sell.

Caples v. Cole, 129 Tex. 370, 102 S.W.2d 173, 177, was decided on subdivision 4 of Article 5329, Vernon’s Ann.Civ.St. As to the question as to whether the land was surveyed or unsurveyed school land, it says: “Therefore, for the purposes of this opinion, it is immaterial whether the land involved here is classed as surveyed or un-surveyed school land.”

The motions of appellee and appellant for rehearing are overruled and likewise appellant’s motion to certify.


source: Caselaw Access Project

author: STOKES, Justice.

license: Public Domain

text:
    FEDERAL RESERVE BANK OF DALLAS v. SMYLIE et al.
    No. 5090.
    Court of Civil Appeals of Texas. Amarillo.
    Dec. 11, 1939.

      Griffin & Morehead, of Plainview, for plaintiff in error.
    Clyde Wright, of Silverton, and Frank B. Potter and Clyde O. Eastus, both of Fort Worth, for defendants in error.
   STOKES, Justice.

This suit originated by the institution of a proceeding under an application for certiorari file'd by plaintiff in error in the district court to revise an order of the probate court in the matter of the estate ■of Ben G. Smylie, deceased. The record shows that Ben G. Smylie was indebted'to plaintiff in error in the sum of $5771.97, evidenced by a promissory note bearing interest at the rate of 6% per annum and providing for 10% attorney’s fee. The note was secured by a chattel mortgage on livestock consisting of cattle, horses and sheep. Plaintiff in error filed its claim with J. C. Smylie, the administrator of the estate, in which it sought to have the mortgaged property set aside to it in satisfaction of the debt, free and clear of any and all liens, charges and expenses under the provisions of sub-section (b), Sec. 1 of Art. 3515a, Vernon’s Annotated Civil Statutes. The mortgaged property was sold by the administrator for the sum of $2500, of which amount $1600 was paid to plaintiff in error and the balance was used by the administrator in the payment of funeral expenses, expenses of administration and other claims of the first and second class under Art. 3531, Vernon’s Ann.Civ.St. The application of a portion of the proceeds of the sale of the livestock to the first and second class claims was made by the administrator with the knowledge and consent of all the creditors of the estate, including plaintiff in error, and exhausted the funds then in his hands. The record indicates that at the time these claims were paid, it was known by all of the parties that there was a possibility of some money being received by the estate from the Agricultural Adjustment Administration but its receipt was recognized as being doubtful and it. seems that all of the parties, including the administrator, the creditors of the estate and the probate court, proceeded as though no amount would be so received.

After some $900 of the proceeds of the sale of the livestock had been applied to the payment of- first and second class claims by the administrator with the knowledge and consent o.f plaintiff in error, the administrator received from the Agricultural Adjustment Administration a remittance in the form of a cheque in the sum of $702, whereupon plaintiff in error filed in the district court its application for a writ of certiorari, which was granted by the district court, in which it complained of the approval by the county judge of its claim as a third class claim under the provisions of Art. 3531 and sought to have it adjudicated as a preferential claim against the ’property upon which it held a mortgage as provided by sub-section (b), Sec. 1 of Art. 3515a, Vernon’s Ann.Civ. St., which, if insisted upon before the sale of the property, would have entitled it to all of the proceeds of the sale of the mortgaged property and denied it the right to participate in any other assets of the estate.

Mrs. B. G. Smylie, the surviving wife of Ben G. Smylie, deceased, appeared upon the hearing and, by proper pleading, sought to have the court adjust and allow her claim for the sum of $500 which had theretofore been properly allowed by the probate court as widow’s allowance, contending that her allowance should take precedence over any claim of plaintiff in error upon any funds, including the Agricultural Adjustment Administration’s re-' mittance, then in the hands of the administrator.

The United States Government filed in the cause in the district court a plea of intervention wherein it claimed a preferential right to so much of the fund in the hands of the administrator as was necessary to discharge an indebtedness of approximately $500 and interest, which it alleged was due it for money loaned through the Farm Credit Administration to Ben G. Smylie for the purpose of assisting him in planting, harvesting and producing his crops under the provisions of the Act of Congress appropriating from the Treasury of the United States certain sums of money for the relief of agriculture.

The cause was submitted to the court without the intervention of a jury and the court decreed that plaintiff in error, was entitled to the proceeds of the sale of the mortgaged 'property but that it take nothing out of the unencumbered assets belonging to the estate. Inasmuch as the proceeds of the sale of the ‘mortgaged property had already been exhausted through the orders of the probate court under which, the claims of the first and second class against- the estate were paid and the balance of $1600 paid to plaintiff in' error, the effect of this decree was to deny plaintiff in error any material relief.

The court further decreed that Mrs. B. G. Smylie, the widow, was entitled to receive the sum of $500 as an allowance for herself and the two minor children, this sum to be paid out of the unencumbered assets of the estate. At this time the administrator had no funds in hand except the $702 he had received from the Agricultural Adjustment Administration and this allowance to the widow had the effect only of decreeing to her the balance of the $702 after discharging the claim of the, United States Government which on the date the judgment was rendered amounted to $667.36.

The court further decreed that the claim of the United States Government should be allowed in the sum of $667.36 as a first and superior claim against the fund in the hands of the administrator to be first paid out of the unencumbered assets of the estate and directed the administrator to pay the claims in the order decreed to the extent of the funds in his hands.

Plaintiff in error duly excepted to the judgment, gave notice of appeal, and has brought the case to this court by means of a writ of error.

The case is submitted here upon an agreed statement in which it is agreed that three questions are involved in the appeal, first, whether or not the Farm Credit Administration is such an agency of the United States Government as entitles the government to priority under the provisions of Sec. 3466, U.S.R.S., Title 3R Sec. 191, United States Code Annotated. Secondly, whether or not plaintiff in error is entitled to the entire fund in the hands of the administrator, which consists only of the $702 received by him from the Agricultural Adjustment Administration, as a reimbursement to it of the amount appropriated by the administrator under the order of the probate court to the first and second class claims against the estate and, thirdly, whether or not the claim of Mrs. B. G. Smylie for widow’s allowance is superior to either or both of the other claims involved.

Sec. 3466, U.S.R.S., Title 31, Sec. 191, United States Code Annotated, provides that whenever any person indebted to the United States is insolvent or whenever the estate of the deceased debt- or, in the hands of executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due to the United States shall be first satisfied. The estate being insolvent, the first question presented by the briefs and agreed statement involves, therefore, the nature of the Farm Credit Administration of the United States from which the, deceased Ben G. Smylie procured what is commonly termed a crop loan. The indebtedness thus incurred by him, or a substantial portion of. it, was outstanding and unpaid at the time of his death. If that indebtedness was an obligation due by him to the United States as distinguished from some other entity, it constituted a first and superior claim to so much of the unencumbered funds in the hands of the administrator as was necessary to discharge it. A glance at the history and organization of the Farm Credit Administration will, we think, throw sufficient light upon the question to reveal its exact nature. The Federal Farm Board was created by Act of Congress on June 15, 1929, which was near the inception of the general economic depression which is commonly known to have menaced the welfare of the people of the entire country for a number of years. Sec. 1141a, Title 12, United States Code Annotated. It was an unincorporated agency of the Government to carry out the purposes of the statute and had no identity separate from the government. North Dakota-M. W. G. Ass’n v. United States, 8 Cir., 66 F.2d 573, 92 A.L.R. 1484. Its purpose, as indicated by the title, was to administer the Agricultural Marketing Act, 12 U.S. C.A. § 1141 et seq., which was an Act to promote the effective merchandising of agricultural' commodities in inter-state and foreign commerce and to place agriculture on a basis of economic equality with other industries. The Farm Credit Administration is a continuation of the Farm Board thus created by the Act of Congress and substituted by executive order. On March 27, 1933, the President of the United States, under authority of the Act of Congress, substituted the Farm Credit Administration for the Federal Farm Board and, by executive order No. 6084, made a complete readjustment of administrative agencies of the government, including the Federal Farm Board, and the money advanced to farmers by the Farm Credit Administration was appropriated by Congress out of the United States Treasury. No provision was made for the incorporation of the Farm Credit Administration but it was, and still is, an agency through which the United States Government, in addition to other functions provided by the act of Congress, loans to farmers money to enable them to plant, cultivate and harvest their crops.

In connection with a number of relief funds which have been provided by Congress for the relief of certain lines of industry and business activity, provision has been made for the organization of what is commonly termed “stabilization corporations.” Provision has been made whereby private citizens, as well as the Government, may own capital stock in these corporations. Where they have advanced their money in the form of loans it has generally been held that they are not the United States Government nor such agencies of the government as would entitle them to the benefits of the provisions of Sec. 3466, supra, which is here invoked. The distinction made by the courts between an agency of the government under whose operations the government is entitled to the benefits of the section mentioned and those agencies created by the government which are not entitled thereto, depends upon whether or not a separate and distinct legal entity is created. Sloan Shipyards Corp. v. United States Shipping Board, 258 U.S. 549, 42 S.Ct. 386, 66 L.Ed. 762; North Dakota-M. W. G. Ass’n v. United States, 8 Cir., 66 F.2d 573, 92 A.L.R. 1484; In re: Wilson (In re Dowell-Willis Chevrolet Co.), D.C., 23 F.Supp. 236.

In the North Dakota-M. W. G. Ass’n v. United States case, supra, the Circuit Court of Appeals said [66 F.2d 577]: “The moneys advanced by the Farm Board under the Act of Congress providing a revolving fund of $500,000,000 were government funds to be devoted to the advancement of a public purpose. * * * The argument is not at all appealing that the government had no authority to bring this action merely because the Agricultural Marketing Acts did not so provide, and that it must be brought by the Farm Board. We have pointed out that the Farm Board had no such authority. The government being the proper party to bring the suit, it follows that the Attorney General, the head of the Department of Justice with broad powers and responsibilities in respect to all legal matters of the government * * * had authority to initiate this action.”

As we have shown, the functions of the Farm Credit Administration, under the laws enacted by Congress, are of the same nature as those of the original Federal Farm Board. It has no legal entity but exists as an agency of the United States Government to administer and disburse the funds appropriated by Congress out of the United States Treasury. Money thus distributed or loaned to farmers, when repaid by, or collected from, them necessarily is paid back into the Treasury of the United States from whence it was taken. That the United States Government had the right to collect it cannot be questioned nor can the conclusion that it was a debt due to the United States be assailed. The government having a first and superior claim upon the unincumbered property and funds of the estate of Ben G. Smylie, and having the right to enter the courts of the country and assert the rights given it under Sec. 3466 of the Code, the trial court could not have rendered a valid and legal judgment containing provisions other than those included in his decree.

Plaintiff in error contends that it had a first claim upon the fund of $702 in the hands of the administrator because the proceeds from the sale of property upon which it had a valid lien were used by the administrator to pay the claims against the estate falling in the first and second class. It asserts, therefore, that, when the $702 afterwards came into the hands of the administrator, plaintiff in error had the right to demand that it be placed in the vacancy created by the expenditure of the proceeds of the mortgaged property thus, in effect, placing its chattel mortgage lien upon the fund which came from the Agricultural Adjustment Administration. The suggestion is made that it is entitled to this under the principles of subrogation. We have been cited to no authority which lays down such a legal principle, nor have we been able to find one. Plaintiff in error did not have a lien of any kind upon the fund created by the payment of the $702. It is quite true that if it had such a lien upon the fund, the claim of the government would be subordinate to it, for, it is held that there are exceptions as to the funds out of which its claim is to be satisfied. If, prior to the accrual of its rights, the debtor has made a bona fide conveyance or mortgage to a third person, the property is divested out of the debtor and cannot he made liable to the claim of the United States. Thelusson et al. v. Smith, 2 Wheat. 396, 4 L.Ed. 271. When the $702 came into the hands of the administrator it was, however, unencumbered funds. If plaintiff in error acquired a lien thereon, it must have been, as suggested by it, through the principles of subrogation. The record shows that a portion of the proceeds of the sale of the property upon which it had a mortgage was paid by the administrator in discharge of first and second class claims by and with the consent of plaintiff in error. It is well established law in • this state that money advanced or funds paid without an understanding or agreement that the owner of the funds or party making such payment shall have a lien to secure his reimbursement or that he shall be subrogated to the rights of prior holders of the debt thus discharged, is not entitled to be subrogated as a matter of contract and where the money is not furnished under compulsion or for the purpose of protecting a subordinate right, he is not subrogated as a matter of law. Hatton v. Bodan Lumber Co., 57 Tex.Civ.App. 478, 123 S.W. 163; Davidson v. Bodan Lumber Co., Tex.Civ.App., 143 S.W. 700; Batson v. First Nat. Bank, Tex.Civ.App., 60 S.W.2d 551. Plaintiff in error does not contend it had an agreement with any one that it should be reimbursed or that it should be subrogated to the rights of any other person when it consented that a portion of its funds should be used by the admifiistrator in the manner stated. It did not consent that its fund be so used because of any compulsion under which it was laboring nor were any of its rights under, the necessity of being protected ..by such payment. It is, therefore, in no position to claim subrogation under any theory of the law. We find no merit in the first and second contentions presented by the briefs and the assignments of error in connection therewith must be overruled.

The third contention is presented and urged by defendant in error, Mrs. Smylie. She contends that her claim for widow’s allowance is superior to all of the claims of all the parties to the suit. What we have said in disposing of the first and second contentions disposes of her contention here that her claim is superior to that of the United States Government. Under the provisions of Sec. 3466, U.S.R.S., Title 31, Sec. 191, United States Code Annotated, the government’s claim must first be paid before any other unsecured claims are discharged by the administrator. The statute is broad enough to, and does, cover Mrs. Smylie’s claim for widow’s allowance and the latter must be postponed and subordinated to the government’s claim.

As to the relative standing of Mrs. Smylie’s claim for widow’s allowance and the claim of plaintiff in error, we hold that plaintiff in error has a valid claim against the estate of Ben G. Smylie, deceased, but under the provisions of Art. 3533, R.C.S.1925, it takes the fourth place and is subordinated in standing to the allowance made to the widow and children. The article, mentioned provides that executors and administrators, when they have funds belonging to the estate, shall pay, first, funeral expenses, expenses of last sickness, second, allowance made to the widow and children, third, expenses of administration, and fourth, other claims against the estate in the order of their classification. By consenting to the appropriation of a portion of the proceeds from the sale of the mortgaged property, plaintiff in error permitted the dissipation of all of the fund in the hands of the administrator upon which it had any claim other than one of the fourth class under Art. 3531, R.C.S. We have held that it had no lien on the fund now in the hands of the administrator and, having no lien, it is entitled to be paid -only after the funeral expenses, allowance to the widow and children, and the expenses of administration have been paid. Art. 3533, supra.

What we have said demonstrates that we are in accord with the conclusions of the court below in disposing of the case and finding no error in the judgment, it is in all respects affirmed.

FOLLEY, J., not sitting.


author: JACKSON, Chief Justice.

text:
    GULF REFINING CO. v. NABERS et al.
    No. 5092.
    Court of Civil Appeals of Texas. Amarillo.
    Dec. 11, 1939.
    . John Deaver and Sam J. Hamilton, both of Memphis, David W. Stephens and P. O. Settle, both of Fort Worth, and John E. Green, Jr., of Houston, for appellant. .
    J. O. Fitzjarrald, of Memphis, R. H. Templeton, of Wellington, and J¡ V. Wheat and Carl Runge, both of Houston, for ap-pellees.
   JACKSON, Chief Justice.

On May 25, 1936 the appellee, W. L. Na-bers, et al., instituted this suit in the District Court of Hall County against the appellant to recover $4,000 damages alleged to have been caused to the land and crop of appellee by the negligence of appellant, the Gulf Refining Company, in permitting oil to escape from its pipe line on June 2, 1934 and be carried by the flood waters of Oakes Creek to appellee’s property.

On October 4, 1938 W. L. Nabers filed his fourth atnended original petition in which he claimed ownership of the land and crops he asserts were damaged and destroyed, alleged that appellant was a corporation engaged in the transportation of crude oil by pipe lines, one of which crossed Oakes Creek about seven or eight miles, north of his property over which the water of said creek flows; that on the night of June 2, 1934. Oakes Creek overflowed, appellant’s pipe line was broken and great quantities of oil escaped therefrom and accompanied the overflow of water down the creek to and upon appellee’s land, remained there until 110 acres thereof were saturated and soaked with crude oil and the fertility of the land destroyed; that the land inline-diately preceding the overflow was of the reasonable market value of' $16,000; that the oil overflow killed seventy-five growing trees and decreased the market value of his land to less than $15,000, which resulted in damages to him in the sum of $1,000.

The plaintiff then pleaded the loss of certain crops for 1934, 1935, 1936 and 1937 which he asserts was all caused by the oil which overflowed to and upon his land on June 2, 1934. The petition also contains these allegations: “Plaintiffs would further show to the court that while it was apparent immediately after the flooding of his land in June, 1934 that it might be impossible to grow crops on said lands for several years thereafter, it was impossible to determine the full extent of the damage to. the crops of any year until the end of each succeeding crop year and that plaintiff’s cause of action for damages for the loss or partial loss of crops for each successive year could not be determined until the end of each year; and that the cause of action for the crops damaged for the year 1935 did not accrue until the last month and last day of said year; that the cause of action for crop damages for the year 1936 did not accrue until the last month and last day of that year, and that the crop damages for the year 1937 did not accrue until the last month and last day of that year.”

The Federal Land Bank of Houston held a lien against the appellee’s land, was made a party, and filed a cross-action in the suit against appellant but later voluntarily dismissed its suit and no further consideration is given to such cross-action.

The appellant answered by demurrers, general denial, alleged that the damages, if any, to plaintiff’s land and crops were caused by excessive rains and flood waters on Oakes Creek which constituted an act of God; it also pleaded the two years’ statute' of limitation.

In response to special issues, the jury, in effect, found’ that the damage was not due to an act of God; that 110 acres of ap-pellee’s land was overflowed with oil on May 23, 1934; that appellant was guilty of negligence in the construction and maintenance ,of its pipe line and such negligence was the proximate cause of the oil overflow and the damage to plaintiff’s land and crop's; that the land had a market value prior to the oil overflow; that the oil overflow killed seventy-five trees on the land which depreciated its market value $75. The jury found crop damages for the year 1934 aggregating $510 and for the year 1935 aggregating $415- On these findings judgment was rendered for appellee for $1,000, and this action of the court is before us for review.

The appellant challenges as error, because immaterial and not warranted by the pleadings, the action of the court in submitting to the jury special issue No. 11, which is as follows: “How long after the overflow do you find from a preponderance of the evidence could plaintiff in the exercise of ordinary care have determined the ex- . tent of damages to his trees. Answer length of time. Answer: Thirty days.”

There is no allegation in appel-lee’s petition to the effect that he was unable to determine that his trees had been damaged promptly after the overflow occurred. He alleged that it was apparent immediately thereafter that the flooding of the land might make it impossible to grow crops for several years and sets out the dates when he was able to determine the full extent of his damages to the crops. In view of the failure of the petition to contain any allegation authorizing the submission of this issue to the jury the submission thereof was error; however, were the pleadings sufficient to authorize the submission of such issue it was immaterial. It will be noted that neither accident, fraud nor mistake are alleged and the law is settled that when an injury is inflicted by reason of the invasion of another’s rights the statute of limitation begins to run from the date of such invasion.

In Houston Water-Works Co. v. Kennedy, 70 Tex. 233, 8 S.W. 36, 37, Chief Justice Stayton says: “The arch was cut on July 24, 1884, and this action was not brought until September 21, 1887, but it was brought within two years after the settling of the corner of the house and cracking of the walls. The cutting of the arch and placing of the water-pipe was- done at the request of a tenant of the appellee, and was at a place not open to view and was unknown to appellee until inquiry was made as to the cause of injury to the walls. It is urged that the cause of action accrued at the time the arch was cut, and that' the plea of limitation presented a good defense. * * * If it be true that the cause of action accrued at the time the arch was cut, then the action was barred." The action was one that would be barred in two years after the cause of action accrued, and the inquiry is, when did the cause of action accrue? The arch and house alleged to have been injured were the property of the appellee at the time the arch was cut. This was an act wrongful towards the owner of the property, for which an action might have been maintained as soon as the tort was committed. * * * The appel-lee’s action is based on the act of the agent of the appellant through which the property of the former is alleged and proved to have been injured in July, 1884. For the injury then done to the arch the appellee could have maintained an action at once, and, having failed to do so for a period longer than two years, his action is barred.”

See also American Indemnity Co. v. Ernst & Ernst, Tex.Civ.App., 106 S.W.2d 763.

The fact that appellee was unable to ascertain with certainty the amount of his damages would not suspend the operation of the statute of limitation. Collins et al. v. Griffith, Tex.Civ.App., 125 S.W.2d 419.

It has been announced in numerous decisions that an action for damages for permanent injuries to real estate is barred by the two years’ statute. Tietze v. International & G. N. R. Co., 35 Tex.Civ.App. 136, 80 S.W. 124; Nix v. Ellis County et al., Tex.Civ.App., 93 S.W.2d 212.

The appellee filed his first original petition in this case on May 25, 1936. He filed his fourth amended original petition October 4, 1938. He alleged in each that the overflow which resulted in his damage occurred June 2, 1934 but the jury found on sufficient testimony that the overflow causing the damage occurred May 23, 1934, which was more than two years before the institution of the suit. There is no claim or contention that there were any oil overflows subsequent to May 23, 1934 causing damage.

In Morton Salt Co. v. Lybrand, Tex.Civ.App., 292 S.W. 264, the court says: “Our courts have uniformly held, in cases where it is shown that, by overflow, fire, or other agency, the roots or sod of'native or other perennial grasses, fruit or other trees, grape or berry vines, or the productivity of the soil are impaired or destroyed, that the injury is permanent in nature, for which, the owner is entitled to recover, as damages, the difference in the market value of the land before and after the injury.”

In 28 Tex. Jur. para. 66, pages 150, 151, the author says: “Generally speaking, limitation runs upon a cause of action for damages resulting from the seepage, percolation, discharge or pollution of water from the time of the infliction of the injury complained of; and a similar rule prevails as to a cause of action for discharging oil upon another’s land.” This text is sustained by the holdings in Cosden Oil Co. v. Sides et al., Tex.Civ.App., 35 S.W.2d 815 and Abilene & S. R. Co. v. Herman, Tex.Civ.App., 47 S.W.2d 915.

In Powers v. Schubert, Tex.Civ.App., 220 S.W. 120, 121, the court holds: “A cause of action for negligence or misappropriation by an agent accrues at" the time of the wrongful act, and the statute commences to run at that time, and not from the time of ascertaining the damages. Wood on Limitations (4th Ed.) §§ 123 and 200; Meechem on Agency, § 1346; Boyd v. Beebe, 64 W.Va. 216, 61 S.E. 304, 17 L.R.A.,N.S., 660, and note; Fortune v. English, 226 Ill. 262, 80 N.E. 781, 12 L.R.A.,N.S., 1005, and note, 117 Am.St.Rep. 253, 9 Ann. Cas. 77.”

Under this record and the findings of the jury the appellant was entitled to a judgment on his motion non obstante vere-dicto.

The judgment is reversed and here rendered in favor of the appellant.


author: JOHNSON, Chief Justice.

text:
    OLVEY et al. v. JONES et al.
    No. 5388.
    Court of Civil Appeals of Texas. Texarkana.
    Dec. 2, 1939.
    Rehearing Denied Dec. 14, 1939.

      Saye & Saye, of Longview, for appellants.
    W. B. Chauncey, of Wichita Falls, and Bramlette & Levy, of Longview, for ap-pellees.
   JOHNSON, Chief Justice.

Mrs. Minnie Jones and the heirs of her deceased husband, G. H. Jones, were plaintiffs and J. W. Olvey, Gladys Olvey Sample, and Clark Sample were defendants in the trial court. The suit is an action in trespass to try title and to reform a mineral deed previously executed by plaintiffs to defendant Olvey, and for recovery of certain oil royalty collected by defendants under the contract. Trial to a jury resulted in a verdict and judgment for plaintiffs. On a former appeal to this court the cause was reversed and remanded upon the ground that plaintiffs’ pleadings did riot authorize all the relief awarded in that judgment. Olvey et al. v. Jones et al., Tex.Civ.App., 95 S.W.2d 980. After the case was reversed and remanded plaintiffs filed their third amended original petition conforming to the matters pointed out by this court. Sufficient of the terms of the mineral deed sought to be reformed are copied in the opinion above referred to and it will not be necessary to repeat them here. The grounds alleged upon which and the particular in which the mineral deed is sought to be reformed are, in substance, that the actual trade, agreement and intention of the parties was that the vendors sold and the vendee purchased, by the acre,' an undivided interest of 27⅞ full royalty acres in the tract of land described in the deed, for a consideration of $100 per acre; that through mutual mistake of the parties, in believing that the tract of land described contained only 55 acres, when in fact it contained 83.23 acres, they erroneously described in the deed said interest so purchased and intended to be conveyed as an undivided “one-half” interest in the tract of land described, thus causing the deed to convey an undivided interest of 41.615 full royalty acres instead of fhe undivided interest of 27½ • full royalty acres purchased and intended to be conveyed; that an undivided “27.50/83.23” interest in the tract of land correctly describes the interest purchased and intended to be conveyed. Plaintiff prays that the instrument be reformed so as to effect the actual purchase, sale and conveyance mutually intended, by inserting the figures “27.50/83.23” in lieu of the words and figures “one-half (½)” in each of the places in the instrument where such words and figures “one-half (½)” appear.

Plaintiffs further állege that great quan-, tities of oil have been and are being produced from said 83.23 acres of land and that by reason of the facts above' stated defendants have been paid and have received from the leaseholders as royalty large sums of money to which plaintiffs were entitled; that the amount so wrongfully paid to and received by defendants to which plaintiffs were and are entitled is the sum of $5,-, 449.98, for which they also ask judgment against defendants.

Defendants’ answer contains a general demurrer, special exceptions, general denial, plea of. not guilty, and an affirmative plea alleging that the plaintiffs had, by their acts after knowledge of the alleged mistake, ratified the mineral deed as originally written and are now estopped to seek its reformation.

The cause was again tried to a jury and submitted upon special issues. The issues submitted, and the jury’s answers thereto, are as follows:

“Special Issue No. 1: Find, from a preponderance of the evidence how many acres the grantors in the mineral deed in question and the Grantee J. W. Olvey believed were in the tract of land in question at the time the contract and mineral deed were signed by the parties. Answer by giving the number .of acres.”

Answer: “55 acres.”

“Special Issue No. 2: Do you find from a preponderance of the evidence that the grantors in said mineral deed sold the min-, erais in question and that the grantee J. W. Olvey purchased the minerals in question' on a per acre basis? Answer ‘Yes’ or •‘No.’ ”

Answer: “Yes.”

“Special Issue No. 3: Do you find from .a preponderance of the evidence that the’ grantors in said mineral deed -in question intended to sell and that the grantee J. WV Olvey intended to buy one-half (-%) of the .minerals under said tract of land for a consideration of Two Thousand, Seven Hun--■dred and Fifty ($2750.00) Dollars regardless of the' number of acres contained in the tract? Answer ‘Yes’ or fNo;’” '

Answer •' “No.”

..“Special Issue No. 4: Do,you find from .a preponderance of the evidence that the-.grantors in.said mineral de.ed intended-.to. •sell and that the grantee J. W. .Olvey .intended to buy all of the oil, gas and 'other mineral rights in and under an undivided interest of 27⅜ acres under the tract of land in question subject to the terms and conditions of the oil arid gas leases made to B. A. Skipper and Clark Sample? Answer ‘Yes’ or ‘No.’ ”

Answer: “Yes.”

“Special Issue No. 5: Do you find from a'preponderance of the evidence that the plaintiff Mrs. Minnie Jones intended at the time she signed the division order to the Stanolind Crude Oil Purchasing Company on September 27, 1935, to ratify the mineral deed in question to J. W. Olvey regardless of the fact that the tract of land contained 83.23 acres? Answer ‘Yes’ or ‘No.’”

Answer: “No.”

“Special Issue No. 6: Do you find from a preponderance of the evidence that the grantors in said mineral deed, other than Mrs.'Minnie Jones, knew on September 27, 1935, that the plaintiff Mrs. Minnie. Jones signed the division order dated September 27, 1935 to the Stanolind Crude Oil Purchasing Company? Answer ‘Yes’ or ‘No.’ ”

Answer: “No.”

Upon the verdict of the jury and findings of the court based upon undisputed evidence, judgment was entered for plaintiffs reforming the instrument as prayed for and awarding plaintiffs recovery of defendants, in the sum of $5,449.98. Defendants have appealed.

Appellants’ first proposition complains of the action of the trial court in overruling defendants’ general demurrer to the second count (being the count alleging the facts upon which reformation of the deed is sought) in plaintiffs’ third amended original petition because, It- is contended, the facts alleged fail to state a cause "of action in equity authorizing the relief of reformation, in that'the facts alleged show that the deed was executed pursuant to a' written contract of sale, by the terms of which defendant Olvey purchased and plaintiffs sold and became obligated to convey an undivided “one-half” interest in the tract of land described. The proposition is. not sustained.. The petition alleges that said-written contract of sale was executed under, like mutual-mistake as-was the deed in the -description of the undivided interest purchased and sold. .The’ following excerpts from • the petition are sufficient to show that plaintiffs . pleaded that the alleged mutual mistake was .present at the. time of executing the sales contract, as well as at the time of executing the deed:

“ * * * that the plaintiffs actually soid and the defendant actually bought an undivided interest of twenty-seven and one-half (27½) acres in and to the oil, gas and other minerals in and undei said 83.23 acres of land first hereinabove described, and it was intended by the plaintiffs and the defendant, J. W. Olvey, that plaintiffs should convey and assign to the said J. W. Olvey, an undivided interest of twenty-seven and one-half acres in and to the oil, gas and other minerals in and under said 83.23 acre tract of land hereinabove described, as well as transfer, convey and assign unto said defendant, J. W. Olvey, an undivided interest of twenty-seven and one-half acres of all of the oil royalty, gas rental, or royalty due and to be paid under the terms of an oil, gas and mineral lease theretofore executed in favor of B. A. Skipper and Clark Sample, insofar, and insofar only, as said oil, gas and mineral lease affected an undivided interest of twenty-seven and one-half acres of the tract hereinabove described; and it was also intended and agreed that of all of the money rental which may be paid to extend the term within which a well may be begun under the terms of said lease insofar, and insofar only, as said lease affected an undivided interest of twenty-seven and one-half acres of said tract; should be paid to said grantee, J. W. Olvey; and it was also intended and agreed that in the event said oil and gas lease became cancelled or forfeited, then and in that event, an undivided interest of twenty-seven and one-half acres of the lease interest and all future rentals on, said'tract of land, for oil, gas and other minerals privileges, should be owned by said grantee, J. W. Olvey, owning all of all oil, gas and other minerals in and under an undivided interest of twenty-seven and one-half acres of said tract of land, together with the same interest in all future rents due and to be paid on said undivided twenty-seven and one-half acre interest of said tract.
“The plaintiffs and grantors in said contract and deed and the defendant, J. W. Olvey, at the time of the execution of said contract of sale', and at the' time of the execution and delivery of said mineral deed hereinabove referred to, all believing that said tract of land described in said contract of sale and said mineral deed, contained only 55 acres, and not having reason to know or discover, nor having information to put an inquiry that there was actually 83.23 acres, they delivered to defendant, J. W. Olvey, said mineral deed. * * *
“The plaintiffs further represent that ■ the mistake zvhich caused the plaintiffs to purportedly contract to convey, and to purportedly convey more than an undivided interest of 27½ royalty acres to the defendant, J. W. Olvey, Grantee in said deed, and to purportedly transfer, assign- and convey under said mineral deed one-half of the oil royalty, gas rental and royalty due, and to be paid under the terms of said oil and gas lease, and to purportedly transfer and assign to said J. W. Olvey one-half of the money rentals which may be paid to extend the term within which a well may be begun under the terms of said lease, and to purportedly grant and convey unto the said grantee, J. W. Olvey, one-half of the lease interest and all future rentals on said land for oil, gas and other minerals privileges, in the event said lease became forfeited or cancelled, in and under more than an undivided interest of 27½ acres of the 83.23 acre tract, was a mutual mistake, and was made prior and at the time of the execution of said written contract and mineral deed, and at the time that said consideration was paid.” (Italics ours).

The petition as a whole is sufficient to authorize the relief prayed for and granted in reforming the deed so as to effectuate the actual purchase and sale between the parties. Barclay v. Falvey, Tex.Civ.App., 100 S.W.2d 791; Findlay v. State, 113 Tex. 30, 250 S.W. 651.

Appellants’ second proposition complains of the action of the trial court in refusing their motion for a directed verdict because plaintiffs did not allege and did not prove that the phrase “and includes any excess, if any,” following the description of the land in the contract of sale and in the deed was inserted by mutual mistake of the parties. In the written contract of sale as well as in the deed the metes and bounds description of the land is followed by the phrase “containing 55 acres of land; more or less.” That phrase is followed by further identification of the land described by reference to certain deeds and records, and concludes with the phrase “and includes any excess, if any.”' Plaintiffs did not plead or prove that the phrase “and includes any excess, if any,” was inserted in the deed by mutual mistake of the parties. We do not agree with the contention that such pleading and proof was essential to plaintiffs’ case. The construction most favorable to appellants that can be given the phrase is, that by its use the grant is made to apply to all of the tract of land described in the deed, regardless of whether it contained “fifty-five” acres or an amount greatly in excess thereof. Assuming, without affirming, that such is its correct meaning, the reformation asked by appellees does not tend to annul, alter or affect the phrase. Appellees do not seek to have the grant apply to any area less than all of the land described in the deed. They ask only to correct the alleged erroneous description of the proportionate, or amount of undivided interest actually and admittedly granted in all the land described in the deed. The deed as reformed by the judgment of the court below applies the grant to all the land and, except as to the description of the undivided interest granted, it retains all its original language, including the phrase in question, unaffected.

In the third proposition appellants complain of the action of the trial court in overruling their motion for directed verdict because, it is contended, the undisputed evidence shows that appellees acquiesced in, ratified, and confirmed the deed after discovering the mistake therein, by executing certain division orders for the distribution of royalty payments by the lessees operating the leasehold interest. The deed is dated January 19, 1931. There was introduced in.evidence a division order executed by appellees Yount-Lee Oil Company of July 26, 1931. Ap-pellees testify that the mistake in the deed was not discovered until long after execution of this division order. The present suit was filed in October 1934. On September 27, 1935, appellee Mrs. Minnie Jones for herself and purporting to act for the other appellees, her children, under a power of attorney authorizing her to receive their part of the royalty, signed a division order to Stanolind Crude Oil Purchasing Company. Mrs. Jones testified that she signed the division order so she could collect the one-half of the royalty not in dispute. That she could not collect it without signing the division order. That she notified the oil company and had payment stopped on that part of the royalty in dispute and that she did not in signing the division order intend to ratify the deed. We think the issue of alleged ratification was sufficiently disputed in the testimony to make a jury question. There was no error committed by the trial court in refusing •to direct a verdict in favor of appellants on that account.

Appellants’ fourth proposition alleges that the trial court erred in overruling their motion for a directed verdict, because, it is contended, the judgment so reforming the deed as to reduce the undivided interest conveyed from a one-half to 27.50/83.23 is without support in the pleadings and in the proof, in that the pleadings and proof show that the agreement between plaintiffs and Olvey was that plaintiffs contracted to sell Olvey an undivided “one-half” interest in the land. We think the excerpts which we have above quoted from the petition are sufficient to show that the real purchase and sale between the parties was an undivided interest of 27½ acres in the land, which is the same as an undivided 27.50/83.23 interest described in the judgment reforming the deed. We are also of the opinion that the testimony raises the issue pleaded, that Olvey actually purchased and plaintiffs actually sold, an undivided interest of 27½ acres for $100 base in the land described in the deed. Vernon Jones, one of the plaintiffs, who acted as an agent or spokesman for the other plaintiffs in making the sale, testified in part as follows:

“The Witness: We told Mr. Olvey we would take $100.00 per acre for one-half the leasehold and he says, T will give you $100.00 per acre for the lease provided you will sell the royalty on the same basis, $100.00 per acre.’
“Q. How many acres? A. One-half of 55 acres, 27½ royalty acres.
“Q. Well, what was done? A. Well, right at that time we couldn’t close the trade with him because Hoyler (Jones) and myself were kinda acting agents for the other children.
“Q. Did you say anything to Mr. Olvey and Mr. Sample about having to take it up with the other members of the family? A. I.told them we would have to see the other members of the family and see if agreeable if we would sell it at that price and it would be the next morning before we could let him know.
“Q. Did you see the rest of the members of the family? A.' Yes, sir, contacted them all that evening- and that night and went back to the hotel the next morning to see Mr. Olvey.
“Q. What did you tell him the next morning? A. We told him we wouldn’t take $100.00 an acre for the lease because’ we had been offered $3,000.00.
“Q. What did he say? A. He said,' ‘I will give you $3,000.00 for the lease provided you will still sell one-half of the 55 acres of the royalty, 27½ acres for $100.00 base,’ that was $2750.00 for the royalty and $3,000 for the lease.”

The jury determined the issue in favor of plaintiffs and against defendants in answer to special issues Nos. 2, 3 and 4, above copied.

We have examined each of appellants’ remaining propositions, and not finding any reversible error presented, they are respectfully overruled.

The judgment of the trial court is affirmed.

HALL, J., not sitting.