source: Caselaw Access Project

author: GRAVES, Justice.

license: Public Domain

text:
    BERGER et al. v. TIEMANN.
    No. 10873.
    Court of Civil Appeals of Texas. Galveston.
    Oct. 26, 1939.
    Rehearing Denied Nov. 29, 1939.
    Charles Fertsch, of Hallettsville, for appellants.
    C. L. Stavinoha, of Hallettsville, for appellee.
   GRAVES, Justice.

This appeal by Adolph Berger, Jr., Emil Fiedler, Herbert Fiedler, J. J. Morris, and William Pietsch, is from a judgment of the county court of Lavaca County, whereby Adolph M. Tiemann was awarded respective recoveries as growing out of a promissory note, together with a chattel-mortgage securing it, which Berger, Jr., had given to Tiemann, in these sums: $566.69 against Berger, Jr., $220 against the two Fiedlers jointly, $127.50 against Emil Fiedler individually, and $42.50 each against Morris and Pietsch; foreclosure in appellee’s favor against the named appellants of the lien upon all the property, as described and called for in the chattel-mortgage, was also decreed.

It is made to appear from the record in this court that the appellee’s suit was upon the note alleged to have been given him by Berger, Jr., in the sum of $475.84, with 8% -interest and 10% attorney’s fees provided for, secured by a chattel-mortgage lien upon certain livestock, together with all the cotton and corn raised by Berger upon a farm in Lavaca County for the year 1937, less small exceptions for landlord’s rentals; the stock were described and the value thereof duly alleged as totaling $455, a sum well within the jurisdiction of the court, but it was further averred that there were also 11 bales of cotton covered by the mortgage grown upon the place for that year, which the two Fiedlers were charged to have converted to their own use and benefit, the value of which was in no way alleged nor shown; it was likewise so with reference to a certain amount of corn, alleged to have been grown upon the premises along with the cotton.

It thus indisputably appears upon the face of the proceedings that the ap-pellee in his petition failed to affirmatively show that the county court of Lavaca County had jurisdiction to entertain the cause at all; the appellants duly protested on that ground, as well as in other ways by further presenting and urging a general demurrer to the appellee’s trial petition, but their objections were overruled, and the court, after submitting special issues of fact to the jury and receiving its verdict thereon, rendered the judgment stated against them. That was error requiring a reversal. Brown v. Peters, 127 Tex. 300, 94 S.W.2d 129; Parsons v. John Deere Plow Co., Tex.Civ.App., 113 S.W.2d 970; Constitution of Texas, Art. 5, Sec. 16, Vernon’s Ann.St.; Campsey v. Brumley, Tex.Com.App., 55 S.W.2d 810; Thompson v. Dailey, Tex.Civ.App., 95 S.W.2d 1007; Bishop & Babcock Sales Co. v. Haley, Tex.Civ.App., 115 S.W.2d 772, 774.

It is true that appellee alleged the 11 bales of cotton, and the corn grown along with it, to have been sold and disposed of by the two Fiedlers, and that the proceeds thereof — without alleging the amount or the value — had been converted to their own use and benefit, without his consent or knowledge; but nevertheless he further, as recited supra, also alleged in his petition a right to a foreclosure upon all the property described in the mortgage • — -inclusive of such cotton and corn — -and he, in addition, obtained a judgment of foreclosure thereupon against all of the appellants; so that, the relief thus sought and obtained was had without anywhere showing that the court pronouncing the judgment had jurisdiction, since the amount in controversy in such a case, as the cited authorities* make manifest, is governed by the value of the personal property sought to be foreclosed upon. Indeed, while ap-pellee’s petition thus definitely failed to show the amount in controversy not to exceéd the maximum for the county court of $1000, the answers of the appellants as definitely showed it to be well over that sum.

Without further discussion, the judgment will be reversed and the cause dismissed.

Reversed and dismissed.


author: CODY, Justice.

text:
    HANSEN v. CHRISTIE et al.
    No. 10840.
    Court of Civil Appeals of Texas. Galveston.
    Oct. 26, 1939.
    Rehearing Denied Nov. 16, 1939.
    Kemper, Hicks & Cramer, of Houston,, and Albert G. Avery, of New York City (F. Warren Hicks, of Houston, and Albert G. Avery, of New York City, of counsel),, for appellant.
    Kayser, Liddell, Benbow & Butler, Cecil-N. Cook, and Frank A. Liddell, all of Houston, for appellees H. Merlyn Christie, Clayton N. Smith, F. L. Luckel, A.- F. Engel,. Thoburn Taggart and W. G. Blanchard.
    Vinson, Elkins, Weems & Francis and I. M. Wilford, all of Houston, for appellee-City Nat. Bank of Houston, trustee.
    Cole, Patterson & Cole, of Houston (Robert L. Cole, Sr., of Houston, of counsel), for appellee Herbert Roedenbeck.
   CODY, Justice.

This is a suit for cancellation of a deed; brought by the grantor, and for the recovery from the grantee, and certain others who were associated with the grantee, of the consideration which they had received from the Humble Company for an oil and gas lease given to the Humble Company, covering the land conveyed by the deed' sought to be cancelled. The ground relied on by the grantor, who has resided in Germany since 1923, is the alleged fraudulent concealment from him of the value of the land for oil purposes when the deed was-procured from him. The grantor, who was plaintiff below and is appellant here, expressly recognized that the Humble Company occupied the status of an innocent purchaser for value, and its rights to.a seven-eighths working interest under its lease-was expressly recognized.

It has been finally determined, since the institution of this suit, that appellant actually owned no interest in the land at the time he gave the deed which he seeks to have cancelled. Roedenbeck Farms, Inc. et al. v. Broussard et al., Tex.Civ.App., 124 S.W.2d 929, error refused in Tex.Sup., 127 S.W.2d 168. But no contentión is made that appellant’s claim of ownership of the land was not a valuable right, or that such claim of ownership, if proved abortive, would be any obstacle to appellant obtaining the relief he seeks, if he is otherwise entitled to it. The evidence relating to the course of the title to the property involved is set forth in such detail in the Broussard case that the following statement will suffice here:

On June 22, 1909, Herbert Roedenbeck, one of the appellees, owned Section 63, and other sections, in H. & T. C. Ry. Survey, in Chambers County. On December 10, 1915, he gave a deed of trust to Section 63, and the other sections, to secure Brous-sard in the payment of four notes of even date, each for $2,880. Thereafter, on July 2, 1917, Roedenbeck conveyed the N.E. quarter of section 63 to appellant, and during the same year conveyed the N.W. quarter and S. half of Section 63 to one Harms and one Miller. These conveyances were made subject to the Broussard deed of trust.

On March 29, 1924, Roedenbeck rescinded the sale to Harms and Miller by conveying Section 63 to Roedenbeck Farms, Inc. The inclusion of the N.E. quarter of the section was made by a mistake, which was subsequently corrected. The foreclosure of the Broussard deed of trust lien, at which Broussard bought in Section 63, which occurred in 1931, cut off the rights of appellant therein.

On June 29, 1933, Broussard gave an oil and gas lease on Section 63 to the Humble Company.

, During 1930 to 1932 the Humble Company conducted extensive geophysical work in Chambers County and took up leases upon some 12,000 acres, including the lease on Section 63, from Broussard, just men-' tioned. On December 10, 1934, the Humble Company started drilling on a location in the S.W. corner of Section 58, adjoining the northern boundary of Section 63, and continued until February 19, 1935, when a depth of 7,052 feet had been reached. Until then the well had been drilled as a closed one. The Humble Company then gave out the information as to the depth and formation of the well, and this information was published in the Anahuac Progress, a newspaper in Chambers County. The Humble Company continued its drilling of the well with showings of gas and oil, and on March 11, cored an oil sand, and on March 18 the well produced 646 barrels, and was shut in for want of storage facilities. The three Houston papers and the Oil Weekly after February 19 covered the drilling operations, and announced the discovery of a new. oil field.

Clayton N. Smith, one of the appellees, in examining the records in Chambers County early in 1935, discovered what he believed to be a fatal defect in the foreclosure of the deed of trust lien securing the Brous-sard loan to Roedenbeck. He got in touch with appellee Roedenbeck, and after the drill stem test, on February 20, and met the appellees, Roedenbeck, Luckel and Christie, and it was agreed to try to get deeds from those who would be the owners of Section 63, if the foreclosure of the Broussard deed of trust lien were fatally defective. Roedenbeck furnished the addresses of such owners and was to assist in getting deeds. The deeds were to be taken in Christie’s name, and Luckel and Smith were to furnish the money. Roedenbeck was to get 30% of the profits, but was not to share in the leases, Luckel and Smith 20% each, and Christie 30%. After such meeting, Roedenbeck and Christie left for Illinois and Indiana to get deeds from those to whom Roedenbeck had conveyed the N. W. one-fourth and S. one-half of Section 63 in 1917, paying something like $2000 apiece therefor.

On March 12, 1935, Christie cabled appellant in Germany as follows:

“I offer you $2000.00 for your title and land northeast quarter Section 63 in Chambers County, Texas, you reserving ½2 royalty interest. Cable reply great Southern Building, Houston, Texas.”

Appellant replied on the same day:

“I accept your offer.”

Christie then cabled appellant:

“Confirming your acceptance, Major Roe-denbeck of Shelde will call upon you within few days bringing proper deed and will pay money to you there.”

On March 28, 1935, Major Roedenbeck, who was a brother of Herbert Roedenbeck, met appellant at Hamburg, and delivered the money to appellant, and took appellant’s deed, without making representations of any kind.

Going back now to February 27, 1935, while Herbert Roedenbeck and Christie were getting the conveyances to the N.W. quarter and S. half of Section 63, Smith and Luckel saw Mr. Rex G. Baker, an attorney for the Humble Oil Company, and offered to lease his Company the land under the titles which they and their associates were getting.- Mr. Baker stood on the validity of the lease his Company held from Broussard, though he' did offer $10,-000. The executive department overruled the legal department, and on March 11, the Humble Company agreed to pay them for a lease on the N.W. quarter and the S. half of Section 63, $100,000 in cash, and an oil payment of $384,000 out of a ½2 overriding royalty that might be produced from any interest held by the Humble Company in such land. And during the negotiations, when it became known that Smith and Lu-ckel were on a trade for the N.E. quarter of Section 63, Mr. Baker, for the Humble Company, demanded an option to purchase a lease on such property 'on the same basis, that is, the cash consideration of $33,333.33, and an oil payment of $128,000, payable in the same way.

Much other evidence was submitted. Indeed, the statement of facts is in excess of 1,200 pages. . But there is no dispute as to the foregoing facts.

The case was submitted to the jury on numerous special issues, upon the answers to which the court entered a judgment for appellees and against appellant.

Appellant presents numerous assignments of error.

He contends: That under the undisputed facts the purchase of the property by Christie and his associates from appellant was an unconscionable contract as a matter of law, and the deed should have been can-celled.

That the knowledge of Christie and associates of the sale and option of sale which they had made to the Humble Company, whereby they were to get $100,000 and an oil payment of $384,000 on the N.W. quarter and the S. half of Section 63, and $33,-333.33 and an oil payment of $128,000 on the N.E. quarter of Section 63, and appellant’s ignorance of such facts, made it the duty of Christie and associates to reveal such facts to appellant, the failure to do which constituted in law fraudulent concealment, which required the court to cancel the deed, etc.

That if it was not the duty of Christie and associates to impart to appellant their knowledge of the value of the land for oil purposes, that nevertheless, having pled they intended by the wording of the offer and the provisions of the deed to inform appellant they were buying the land for oil purposes, and having testified to such effect, such appellees having made a voluntary partial disclosure were bound to make a full and complete disclosure of all material facts-affecting the value of the land.

The disposition we make of this case renders it unnecessary to pass on the numerous other assignments of error relating to special issues which were submitted to the jury, to argument of counsel, to remarks of the court, and the like; for it is our opinion that not only was appellant not entitled to an instructed verdict,, but that, under the undisputed facts, he was as a matter of law not entitled to the relief he sought.

In the case of Hyde v. McFaddin, 5 Cir., 140 F. 433, upon which appellant relies, the owners of land in Beaumont, who lived in the East, had executed a deed to land before the original Lucas discovery of oil near Beaumont in 1901, and had forwarded such deed to an attorney at Beaumont to represent them in making a sale of it to the vendee. Before the deed was delivered to the grantee, the Lucas “gusher” came in, and the proof showed that the attorney at Beaumont representing the landowners knew, before he delivered the deed, that the market value of the land was several hundred times the $1.50 per acre it was being sold for by the deed. The possession of the deed by their attorney was the possession of it by the owners, and his fiduciary relationship imposed upon him the duty to advise his clients of the changed situation which had transpired to their great enrichment. The grantee in the deed, with full knowledge that the attorney had failed in his duty, took the deed and paid the $1,500 consideration called for in the deed. It was of course unconscionable for the grantee in the deed to take the deed when he knew that it was the duty of the grantors’ attorney to advise the landowners of the changed conditions brought about by the discovery of oil.

There was no fiduciary relationship existing between Christie and his associates which imposed upon them the duty to subordinate their interest to the service of appellant’s interest. On the same day that Christie cabled him an offer to buy, appellant cabled back his acceptance. We quote at some length from Cleaveland v. Richardson, 132 U.S. 318, 329, et seq., 10 S.Ct. 100, 103, 33 L.Ed. 384:

“In a case very like the one before us, Dambmann v. Schulting, 75 N.Y. 55, it was held that a party can commit a legal fraud, in a business transaction with another, only by fraudulent misrepresentations of fact, or by such conduct or artifice, for a fraudulent purpose, as will mislead the other party, or throw him off his guard, and cause him to omit inquiry or examination which he would otherwise make; that where there is no such relation of trust or confidence between the parties as imposes Upon one an obligation to give full information to the other; the latter cannot proceed blindly, omitting all inquiry and examinartion, and then complain that the other did not volunteer to give the information he had; that ignorance of a fact extrinsic and not essential to a contract, but which, if known, might have influenced the action of a party to the contract, is not such a mistake as will authorize equitable relief; and that, as to such facts, the party must rely upon his own vigilance, and, if not imposed upon or defrauded, will be held to his contract. * * * The court says in its opinion :
‘“A party buying or selling property, or executing instruments, must, by inquiry or, examination, gain all the knowledge he desires. He cannot proceed blindly, omitting all inquiry and examination, and then complain that the other party did not volunteer all the information he had.1” (Emphasis ours).

We quote from 20 Texas Jurisprudence, Section 21, page 41, as follows:

“Sec. 21. Absence of Duty to Disclose Facts. — One is not to be charged with fraud in suppressing information which he is not legally bound to volunteer. When, therefore, the parties are dealing at arm’s length, there being no confidential relationship, mere silence is not fraud, either actual or constructive.”

From 12 R.C.L., subject “Fraud and Deceit”, page 306, Section 67, we quote as follows:

“67. Distinction between Silence and Concealment. — The law distinguishes between passive concealment and active concealment, or, in other words, between mere silence and the suppression or concealment of a fact; the difference consisting in the fact that concealment implies a purpose or design, while the simple failure to disclose a fact does not. As a general rule, to constitute fraud by concealment or suppression of the truth there must be something more than mere silence, or a mere failure to disclose known facts. There must be a concealment, and the silence must amount to fraud. Concealment in this sense may consist in withholding information asked for, or in making use of some device to mislead, thus involving act and intention. The term generally infers also that the person is in some way called upon to make a disclosure. It may be said, therefore, that, in addition to a failure to disclose known facts, there must be some trick or contrivance intended to exclude suspicion and prevent inquiry, -or else that there must be a legal or equitable duty resting on the party knowing such facts to disclose them. It is generally held that the failure, to disclose material facts may be a good defense to a suit for specific performance even where it does not amount to fraud and would not be the basis of an action of deceit, because equity compels the specific performance of a 'contract only where it is fair and open, and where all material matters known to each party haye been communicated to the other. There is authority, however, to the effect that mere silence is not a defense to such an action where there was no duty to speak.”

Also from the same authority on the subject of “Value”, which is the particular matter involved in this case, we quote Section 75, page 314, as follows:

“75. Value Generally. — It is generally held that where the parties are dealing at arm’s length, and there is no confidential relation existing between them, and no request for information, or any other peculiar circumstances calling for such disclosure, and in the absence of actual fraud, a party to a transaction is under no legal obligation to disclose the reasons influencing him to enter into it, such as his views as to value, or a secret intrinsic value belonging to it, of which he knows and of which the other is ignorant, or extrinsic circumstances within his knowledge which affect value, or the sources of information at his disposal. Nor is either party obliged, under such circumstances, to answer the inquiries of the other.”

We quote from Vol. 26, Corpus Juris, subject “Fraud”, Section 12, page 1069, as follows:

“(Sec. 12) (d) Silence — (a) In General. Mere silence is not representation. In the absence of a duty to speak, silence as to a material fact does not of itself constitute fraud.”

7 Texas Jurisprudence, 927:

“To authorize a cancellation on the ground of concealment there must, it seems, have been an intentional suppression of a fact which the defendant was bound to disclose.”

' 7 Texas Jurisprudence, 931:

“Generally speaking, cancellation may not be had because of a unilateral mistake, unless it appears that there was some special ground accompanying or inducing it, such as fraud — which may have consisted of false or fraudulent representations — or that the mistake was brought about by the conduct of the other party, as where one of the parties was under an obligation to inform the other of the facts known to him, and failed to do so. A mistake which authorizes a decree of cancellation is not disclosed by proof of a mistake by one of the parties as to the contents of the instrument, or as regards the cost of his performance of the agreement, whether arising from miscalculation or changed circumstances. Nor will relief be accorded because of mistake in estimating the value of the property, without fault on the part of the other party.”

Appellant insists that he and Roedenbeck had been close friends for a long time, and that, he trusted Roedenbeck. The undisputed evidence showed that there had been passages between them which seldom leave men friends. But accepting appellant’s conception of the state of friendship between himself and Herbert Roedenbeck, it still has nothing to do with the rights of the parties. He accepted Christie’s offer for his land without any knowledge that Herbert Roedenbeck was in any way connected with the transaction. But even if he had known Roedenbeck was connected with the transaction when he accepted Christie’s offer, the mere fact that they were friends would not constitute a fiduciary relationship which would impose the obligation upon Christie and his associates of turning over to appellant the fruits of their industry, enterprise and skill. It is a matter of common knowledge that some men are good traders, and some are not. No one can read the record in this case and remain unaware that Smith and Luckel were good traders. It is by no means certain that had appellant been in Houston with the knowledge that Christie and his associates had that he would have had such a standing and reputation as a trader, or such skill and knowledge in trading in oil rights, that he could have made any such trade with the Humble Company as did Smith and Luckel. And appellant seems not to have proved that there was a market value for his land whereby, without effort, ingenuity and skill he could have leased his property for a fraction of what Christie and associates got. That appellant knew there were prospects of an oil field on his land appears from a letter written by him April 2, 1935 to Herbert Roedenbeck; but if he had not so known, the result would be the same under his acceptance, made as pointed out. This is not a case where the principle of a partial disclosure required a fuller or more complete disclosure; there was nothing done or said calculated to induce appellant not to investigate the value of his land for oil value.

Appellant has filed original and reply briefs containing some three hundred pages discussing numerous authorities.' But since we take the view that he failed as a matter of law to submit evidence which showed any fraudulent concealment, it would serve no useful purpose to further extend this opinion.

What we have said necessarily disposes of the cause of action asserted by appellant against appellee, The City National Bank of Houston, Texas, whom appellant concedes to have the standing of a bona fide lien-holder without notice of the equities asserted by appellant. In his action appellant seeks to force the Bank to proceed first against other security that it holds for a debt owed it by Luckel, and secured by some of the consideration given by the Humble Company for the lease of the N.E. quarter of Section 63. So, if appellant is not entitled to prevail against Luckel, he obviously cannot assert rights in the security which Luckel has given the bank.

The judgment of the trial court is affirmed.

Affirmed.


author: BROWN, Justice.

text:
    EVANS v. MISSOURI-KANSAS-TEXAS R. R. OF TEXAS.
    No. 13978.
    Court of Civil Appeals of Texas. Fort Worth.
    Oct. 27, 1939.
    Carpenter & Carpenter, of Dallas, for appellant.
    Touchstone, Wight, Gormley, Strasburger & Price, of Dallas, for appellee.
   BROWN, Justice.

Appellant brought suit in the Justice of the Peace Court against appellee Railroad Company for the recovery of damages on two counts. The first is for the killing of several sheep on its right-of-way, by one of appellee’s trains, and the second, for cutting down a number of valuable pecan trees growing on appellant’s land.

The case being tried to a jury, it was developed that appellant contracted with appellee Railroad Company as follows: that if appellee would furnish the materials and clear out a right-of-way for a fence, appellant would build a stock-proof fence, separating his lands from appellee’s right-of-way and property.

Appellant wanted to pasture sheep on his farm, and could not do so with the old, inadequate fence that was then in existence along the right-of-way.

Before the fence was completed by appellant, he turned in his sheep and they strolled upon the right-of-way and several were found dead. Under such circumstances the Railroad Company could not be held liable for killing the sheep, uh-less it could be shown that the Railroad Company was guilty of negligence in killing them. No effort was made to show any act of negligence.

As to the damages occasioned by cutting the pecan trees, it was shown by undisputed evidence that the clearing made for the building of the fence was about six feet wide, and that the Southwestern Bell Telephone Company maintains a line of posts and wires that run along the said right-of-way line about two to two and one-half feet beyond and outside of the Railroad Company’s right-of-way.

The evidence is meager and unsatisfactory concerning the number of pecan trees that were cut. No attempt was made to show how many of such trees were cut that were not within such an area as was reasonably necessary for the erection of the fence; nor was any attempt made to show how many such trees were cut that were not on the strip of land being used by the said Telephone Company, nor that the Telephone Company did not cut all or some of the trees. In other words, the testimony adduced was insufficient to support the giving of issues covering damages to the trees and a verdict for the plaintiff.

We hold that in a case of this kind, it was incumbent upon the plaintiff to adduce evidence showing how wide a strip was reasonably necessary for the building of the fence, and that the Railroad Company cut down pecan trees that were not growing upon such reasonably necessary space, and the number of such trees so destroyed. Appellant made no such proof and 'neither the court nor the jury could have found the necessary facts, under the proof m'ade.

The trial court gave the jury a peremptory instruction to find for the defendant, and the plaintiff has appealed.

The judgment is affirmed.


author: WALTHALL, Justice.

text:
    HARBISON v. McMURRAY et al.
    No. 3843.
    Court of Civil Appeals of Texas. El Paso.
    Sept. 28, 1939.
    Rehearing Denied Nov. 2, 1939.
    McEntire & Shank and Eckford & McMahon, all of Dallas, for appellant.
    Wilbur T. Knape, of Longview, for ap-pellees.
   WALTHALL, Justice.

The statement of the nature and result of the suit appearing in ' appellant’s brief is stated in substance here and adopted by this Court as a sufficient statement of the nature and result of the suit.

This is an appeal from an order of the Fourth Judicial District Court of Rusk County, Texas, entered in a habeas corpus proceeding remanding relator B. G. Har-bison to the custody of W. L. McMurray, Sheriff of Rusk County.

B. G. Harbison was fined and ordered placed in jail by G. S. Jones, a Notary Public of Rusk County, Texas, on the 7th day of June, A.D. 1938. Said Jones fined the said Harbison $100 and sentenced him to jail because the said Plarbison declined to testify by deposition before said Notary.

A habeas corpus proceeding before the district court to free one from imprisonment and fine imposed by a notary public holding a commission from said court to take a deposition of a witness for refusal to answer questions propounded by the notary to the witness in a civil case, is not a civil case over which the Court of Civil Appeals has appellate jurisdiction. The order of the District Court remanding the applicant to custody of the sheriff is likewise not an order in a civil case over which this Court has appellate jurisdiction. Article 5, Section 6, Constitution, Vernon’s Ann.St.; Article 1819, Revised Statutes of 1925, Vernon’s Ann.Civ.St. art. 1819; Article 2249, Revised Statutes, 1925, Vernon’s Ann.Civ.St. art. 2249; Beverly v. Roberts et al., Tex.Civ.App., 215 S.W. 975; Hudgens v. Yancey, Tex.Civ.App., 284 S. W. 347.

It may be that the Supreme Court would have, by virtue of Article 1737, Vernon’s Ann.Civ.Stats., jurisdiction to grant relief by the way of habeas .corpus. See Ex parte Wolf, 116 Tex.Cr.R. 127, 34 S.W.2d 277.

The Supreme Court has frequently exercised the jurisdiction conferred by Article 1737 to review orders of the district court in contempt cases which grew out qf proceedings incident to a civil suit. Ex parte Scott, Tex.Sup., 123 S.W.2d 306.

In any event, no such authority is conferred upon this Court.

It is, therefore, ordered that this cause be dismissed for want of jurisdiction.


author: BOND, Chief Justice.

text:
    PYLE v. YANTIS.
    No. 12948.
    Court of Civil Appeals of Texas. Dallas.
    Oct. 21, 1939.
    Baskett & Parks, of Dallas, for appellant.
    M. E. Kramer, of Dallas, for appellee.
   BOND, Chief Justice.

The attempted appeal in this case is predicated on the filing of an appeal bond in the court below on September 2, 1939; the judgment was entered on May 18, 1939, motion for new trial was filed on May 30, 1939, and, without a written agreement to postpone hearing, the motion was not acted on by the trial court until August 14, 1939, one hundred and seven days after its filing.

The motion for rehearing having been filed, but not presented within thirty days after the date of its filing, and not determined within forty-five days, under subdivision 28 of article 2092, R.S., as amended by the 41st Legislature, 1930, 5th called session, p. 227, c. 70, § 1 (Vernon’s Ann.Civ.St. art. 2092, subd. 28), it was overruled by operation of law at the expiration of such thirty days, which was June 29, 1939. Under article 2092, in order to perfect an appeal to, and invoke the jurisdiction of, the Court of Civil Appeals, the appeal bond should have been filed within thirty days after June 29, 1939. Solomon v. Harrison et al., Tex.Civ.App., 81 S.W.2d 164.

Accordingly, this court being without jurisdiction of the appeal, appellee’s motion to affirm on certificate is overruled; the alternative motion to dismiss the appeal is sustained.

Appeal dismissed.


author: GRAVES, Judge.

text:
    A. C. BELL, Appellant, v. STATE of Texas, Appellee.
    No. 20833.
    Court of Criminal Appeals of Texas.
    Nov. 22, 1939.
    Conner Scott, of Brownwood, for appellant.
    Lloyd W. Davidson, State’s Atty., of Austin, for the State.
   GRAVES, Judge.

Appellant was convicted of theft of property of the value of over $50, and assessed a penalty of ten years confinement in the penitentiary.

Since his appeal was perfected the appellant has filed a written request, verified by his affidavit, asking for the privilege of withdrawing his appeal. The request is granted and the appeal ordered dismissed.


author: KRUEGER, Judge.

text:
    George BLANKENSHIP, Appellant, v. STATE of Texas, Appellee.
    No. 20522.
    Court of Criminal Appeals of Texas.
    Oct. 25, 1939.
    Bruce & Bruce, of Orange, for appellant.
    Lloyd W. Davidson, State’s Atty., of Austin, for the State.
   KRUEGER, Judge.

The conviction is for driving an automobile upon a public highway while intoxicated. The punishment assessed is confinement in the state penitentiary for a term of one year.

The appellant has filed an affidavit to dismiss this appeal, duly verified as required by law. The motion is granted as prayed for and the appeal is dismissed.

PER CURIAM.

The foregoing opinion of the Commission of Appeals has been examined by the judges of the Court of Criminal Appeals, and approved by the court.


author: HAWKINS, Presiding Judge.

text:
    William H. COBB, Appellant, v. STATE of Texas, Appellee.
    No. 20781.
    Court of Criminal Appeals of Texas.
    Nov. 22, 1939.
    Wallace B. Moore, of Dallas, for appellant.
    Lloyd W. Davidson, State’s Atty., of Austin, for the State.
   HAWKINS, Presiding Judge.

Conviction is for misdemeanor theft, punishment being one year in the county j ail.

Since perfecting his appeal appellant has filed in this court his affidavit advisingthat he does not desire to further prosecute his appeal, and at his request the same is dismissed.


text:
    Eddie FELDER, Appellant, v. STATE of Texas, Appellee.
    No. 20518.
    Court of Criminal Appeals of Texas.
    Nov. 1, 1939.
    W. C. Wofford, of Taylor, for appellant.
    Lloyd W. Davidson, State!s Atty., of Austin, for the State.
   KRUEGER, Judge.

The conviction is for an assault with intent to murder. The punishment assessed is confinement in the state penitentiary for a term of two years.

The appellant has filed an affidavit to dismiss this appeal, duly verified as required by law. The motion is granted as prayed for and the appeal is dismissed.

PER CURIAM.

The foregoing opinion of the Commission of Appeals has been examined by the judges of the Court of Criminal Appeals and approved by the court.


author: BEAUCHAMP, Judge.

text:
    B. B. GOLDMAN, Appellant, v. STATE of Texas, Appellee.
    No. 20803.
    Court of Criminal Appeals of Texas.
    Nov. 8, 1939.
    H. G. Woodruff and H. E. Lobdell, both of Decatur, for appellant.
    Lloyd W. Davidson, State’s Atty., of Austin, for the State.
   BEAUCHAMP, Judge.

The conviction is for prescribing whisky for other than medicinal purposes in a dry afea; penalty assessed at a fine of $100.

Appellant has filed a written motion, duly verified by his affidavit, requesting the dismissal of the appeal. The request is granted and the appeal is ordered dismissed.


text:
    Homer MARTIN, Appellant, v. STATE of Texas, Appellee.
    No. 20854.
    Court of Criminal Appeals of Texas.
    Nov. 22, 1939.
    Floyd Jones, of Breckenridge,- for appellant.
    Lloyd W. Davidson, State’s Atty., of Austin, for the State.
   HAWKINS, Presiding Judge.

• Conviction is for driving an automobile upon a public highway while appellant was intoxicated, punishment being a fine of $75 and five days in jail.

Since perfecting his appeal appellant has filed his affidavit advising that he does not desire to further prosecute his appeal, and at his request same is dismissed.


text:
    Sherman MATLOCK, Appellant, v. STATE of Texas, Appellee.
    No. 20820.
    Court of Criminal Appeals of Texas.
    Nov. 15, 1939.
    Wm. E. Davenport, of San Angelo, for appellant.
    • Lloyd W. Davidson, State’s Atty., of Austin, for the State.
   HAWKINS, Presiding Judge.

Conviction is for burglary, punishment being two years in the penitentiary.

Since perfecting his appeal appellant has filed his affidavit advising that he does not desire to prosecute his appeal, and at his request same is dismissed.


text:
    Guy NABORS, Appellant, v. STATE of Texas, Appellee.
    No. 20771.
    Court of Criminal Appeals of Texas.
    Nov. 15, 1939.
    Baskett & Parks, of Dallas, for appellant.
    Lloyd W. Davidson, State’s Atty., of Austin, for the State.
   HAWKINS, Presiding Judge.

Conviction is for murder, punishment being nine years in the penitentiary.

Since perfecting his appeal appellant has filed with this court his affidavit advising that he does not desire to prosecute said appeal, and at his request same is dismissed.


text:
    Hayden TERRELL, Appellant, v. STATE of Texas, Appellee.
    No. 20807.
    Court of Criminal Appeals of Texas.
    Nov. 1, 1939.
    Gray & Pope, of Tyler, for appellant.
    Lloyd W. Davidson, State’s Atty., of Austin, for the State.
   GRAVES, Judge.

The conviction is for driving an automobile upon a public highway while under the influence of intoxicating liquor; penalty assessed at confinement in the penitentiary for one year.

Since his appeal was perfected, the appellant has filed a written request, verified by his affidavit, asking the privilege of withdrawing his appeal. The request is granted and the appeal ordered dismissed.


text:
    Z. G. TUCKER, Appellant, v. STATE of Texas, Appellee.
    No. 20808.
    Court of Criminal Appeals of Texas.
    Nov. 1, 1939.
    Gray & Pope, of Tyler, for appellant.
    Lloyd W. Davidson, State’s Atty., of Austin, for the State.
   GRAVES, Judge.

Upon appellant’s plea of guilty of the ofifense of theft, and the waiver of a trial by jury, the court assessed his penalty at five years in the penitentiary.

Since his appeal was perfected, the appellant has filed a written request, verified by his affidavit, asking the privilege of withdrawing his appeal. The request is granted and the appeal ordered dismissed,


author: COMBS, Justice.

text:
    Jesse HOOPER, Appellant, v. L. W. WOMACK et al., Appellees.
    No. 3532.
    Court of Civil Appeals of Texas. Beaumont.
    Oct. 5, 1939.
    Davis, Avery & Wallace, of Center, for appellant.
    Sanders & McLeroy, of Center, for ap-pellees.
   COMBS, Justice.

This suit for $286 originated in the County Court of Shelby County. We have examined the record and find no reversible error. The judgment of the trial court is affirmed without written opinion. See Texas & N. O. R. Co. v. Futch, Tex. Civ.App., 127 S.W.2d 1040.

Judgment affirmed.


author: WALKER, Chief Justice.

text:
    STANDARD INVESTMENT COMPANY, Appellant, v. R. T. NUTT, Appellee.
    No. 3533.
    Court of Civil Appeals of Texas. Beaumont.
    Oct. 26, 1939.
    Rehearing Denied Nov. 8, 1939.
    H. B. Houston, of Dallas, and Sanders & McLeroy, of Center, for appellant.
    E. B. Lewis and C. E. Avery, both of Center, for appellee.
   WALKER, Chief Justice.

This appeal was prosecuted from the judgment of the county court of Shelby county, overruling appellant’s plea of privilege to be sued in Dallas county.

The briefs show no error. The judgment of the lower court is affirmed without written opinion. Texas & N. O. R. Co. v. Futch, Tex.Civ.App., 127 S.W.2d 1040.


author: CRITZ, Justice.

text:
    FIDELITY UNION INS. CO. et al. v. HUTCHINS et al.
    No. 7376.
    Supreme Court of Texas.
    Nov. 22, 1939.
    Rehearing Denied Jan. 24, 1940.

      Wagstaff, Harwell, Wagstaff & Douthit and Cox & Hayden, all of Abilene, and Malone, Lipscomb, White & Seay, of Dallas, for plaintiffs in error.
    Kirby, King & Overshiner, of Abilene, for defendants in error.
   CRITZ, Justice.

It appears from the record before us that, prior to February 23, 1926, G. B. Hutchins and Eula E. Hutchins were husband and wife, living together in Dawson County, Texas. They had two children, Tate and G. B. Hutchins, Jr., both boys, aged 11 and 9 "years, respectively. On the date above mentioned Eula E. Hutchins died intestate, leaving as her only heirs at law the two boys above named, and her surviving husband, G. B. Hutchins.

On August 4, 1928, G. B. Hutchins filed in the probate court of Dawson County, Texas, his application to qualify as community survivor of the community estate of himself and his deceased wife, as provided. for by Article 3663 et seq., R.C.S. 1925. After the filing of the above application, the probate court of Dawson County entered an order appointing three appraisers to appraise the community estate of Eula E. Hutchins, deceased, and her surviving husband, G. B. Hutchins, as authorized by Article 3665, R.C.S.1925.

In due time there was returned into the probate court of Dawson County the inventory and appraisement of the estate here involved, together with a list of community debts due such estate, and a list of all debts due by such estate to other parties, as required by Article 3666, R.C.S. 1925.

As shown by the inventory and ap-praisement and list of claims and list of debts above mentioned, the community estate here involved consisted of properties and values as follows:

Assets

320 acres of land, Dawson County, Texas, valued at. $ 8,000.00

3 lots in Lamesa, Dawson County, Texas, valued at 3,000.00

Í A. H. Merrick note. 870.00

5 A. H. Merrick notes for total sum of. 8,700.00

1 Herring note .. 900.00

1 Herring note. 300.00

5 M. L. Standifer notes for total sum of. 1,000.00

Total assets. $22,770.00

Liabilities

Due State on 320 acres of land $ 468.00

Due on 3 lots in Lamesa, supra 1,000.00

Total liabilities. $ 1,468.00

Taking the $1,468 liabilities from the $22,770 of assets, we have $21,302 net value of the community estate, as shown by the inventory and appraisement and list of claims and list of debts, supra.

It appears that in due time G. B. Hut-chins filed in the probate court his community bond in the sum of $23,000, conditioned as required by law. This bond was signed by G. B. Hutchins as principal and Fidelity Union Casualty Company as surety. This bond in all things complies with Article 3667, R.C.S.1925.

It also appears that on August 6, 1928, the above inventory, appraisement, list of claims, and list of debts, and said above bond were all examined by the court and duly approved by him, by an order to that effect entered on the minutes of the court. Simply stated, it appears that G. B. Hut-chins duly qualified as community survivor in the manner and form provided by the statutes of this State on August 6, 1928.

It appears that the estate owned a note for $2,500 executed by one Hamilton, not listed in the list of claims. Also, it appears that the estate had on deposit in bank $833, which was not listed.

As we gather from the record, G. B. Hutchins realized from the money and notes of the estate as follows :

Herring notes . $1,200.00

Standifer notes. 1,000.00

Merrick notes for $8,700.00 and $870.00 . 125.00

Hamilton note for $2,500 (not listed) . 1,056.00

Cash in bank (not listed). 833.00

Total . $4,214.00

We shall not attempt a full detailed statement of all the transactions G. B. Hutchins had with regard to the several properties of this estate, or of the properties acquired by him from some of its proceeds, as, under the view we take of the law, that would serve no purpose. We do, however, make the following statement of what became of the properties of this estate:

(a) The 320 acres of land listed in the inventory was mortgaged by Hutchins for $5,500. This mortgage was never paid. The lien was foreclosed, and the land thereby lost to the community estate.

(b) Hutchins borrowed $3,000 from a bank, and gave as security therefor the community notes above set out.

(c) Hutchins traded the estate’s equity in the three lots set out in the inventory, supra, as part of the purchase price for a tract of 158 acres of land purchased by him. These lots were thus lost to the community estate.

(d) Hutchins bought the 158 acres of land mentioned in (c), supra. He paid thereon the three lots in Lamesa and most of the $5,500 borrowed on the 320 acres of community land and the $3,000 borrowed on the community notes, and some additional cash.

(e) Hutchins paid the community debts amounting to $1,468. We understand that the $468 due on the 320 acres of land was paid by G. B. Hutchins. The $1,000 due on the 3 Lamesa lots was assumed by the purchaser thereof.

(f) The 158-acre tract of land was conveyed to Hutchins for a recited consideration of $15,800, of which $10,200 was recited in the deed as paid in cash, and the balance, $5,600, was represented as liens against the land assumed by Hutch-ins. Hutchins seems to have paid some part of this assumed indebtedness, but in the end the lien held by the holder of the assumed indebtedness was foreclosed, and the land sold, and thus was entirely lost by Hutchins.

(g) All the money in bank and that derived from the community notes, supra, was appropriated by Hutchins to his own use, except as shown above.

(h) As a final result of Hutchins’ management and dealings with the community estate, the whole thereof was entirely dissipated and lost. The heirs of the deceased spouse have never received one penny therefrom.

After the entire community estate here involved had been lost to these minor plaintiffs, and even to the qualified community survivor, in the manner above detailed, these plaintiffs, who are the minor sons of G. B. Hutchins and his deceased wife, Eula E. Hutchins, by next friend, sued G. B. Hutchins, the survivor, and the surety on his official bond, Fidelity Union Casualty Company, a corporation, to recover a money judgment for the value of their one-half interest in the community estate here involved. Commercial Casualty Company, a corporation, is also sued. As shown by the opinion of the Court of Civil Appeals, the two corporations just named were consolidated after this bond was executed and approved. The corporation last named took over all the assets of the corporation first named, and assumed all its liabilities, except no liability was assumed for any loss accruing prior to January 1, 1931. We will deal with this matter later in this opinion.

We will not attempt a detailed statement of the pleadings of the several parties to this action. It is enough to say that we regard the pleadings of the plaintiffs as sufficient to entitle them to recover under the law, as we will announce it in this opinion. Also, we regard the pleadings of the defendants, the two insurance companies, as sufficient to raise the issues of law and fact involved in their defense to this action. We here pause to remark that the defendant, G. B. Hutchins, waived service and made his appearance in this cause in writing. He, however, appeared no further, and offered no defense to the plain tiffs’, alleged cause of action.

The case was finally tried in the district court before the court without the intervention of a jury, and judgment rendered for the two minor plaintiffs against G. B. Hutchins as principal and the two above-named corporations as sureties for the sum of 6,873. This sum was arrived at by the trial court as follows: The court valued the 320 acres of land, supra, at $8,000. He valued the Lamesa lots at $3,000. The money in the bank was valued at the amount thereof, $833. The notes belonging to the estate were valued at the amount realized thereon by G. B. Hutchins, $3,-391. Thus it appears that the trial court valued the estate at $15,214. The court found the total of the community debts was the sum of $1,468. These debts had, in effect, been paid by G. B. Hutchins shortly after he qualified as community survivor. The trial court deducted from the total value of the community estate the total amount of the community debts. A net community estate of $13,746 was thus shown. Judgment was then rendered in favor of these minor plaintiffs for one-half this last-named sum, — $6,873. The trial court’s judgment provides for interest on this last-named sum at 6 per cent, per annum from October 18, 1928. We will later refer to this matter of interest.

The two corporate defendants duly appealed . to the Court of Civil Appeals at Eastland. On final hearing in that court it was held that the judgment of the trial court was correct for the principal amount thereof, $6,873, but that interest thereon should have been allowed only from the date of the filing of the suit on December 8, 1934. The judgment of the trial court was so modified, and as so modified, was affirmed. The opinion of the Court of Civil Appeals was written by Associate Justice Grissom, and finally concurred in by Chief Justice Leslie. On rehearing, Associate Justice Funderburk filed a “minority opinion.” 111 S.W.2d 292. The case is before this Court on writ of error granted on application of the two corporations. For further statement of the facts of this case we refer to the opinion of the Court of Civil Appeals.

We think that it goes without saying that the rights, powers, and liabilities of the qualified community survivor are fixed and determined by pertinent statutes. Without qualifying under any statute the surviving spouse may sell the community property to pay community debts. On the other hand, it is not required that there be any community debts to enable the survivor in community to qualify, as such, under Article 3663 et seq., R.C.S. 1925. Brunson v. Yount-Lee Oil Co., 122 Tex. 237, 56 S.W.2d 1073. It is thus evident that the community survivor can qualify as such under applicable statutes and exercise all rights and powers defined by such statutes, whether there be any community debts or not. Also, under the same conditions, he is subject to all the liabilities defined by such statutes. It must follow that his rights, powers, and liabilities are purely and absolutely statutory.

We shall not attempt to discuss or construe all the articles contained in the chapter on community administration, as it is not necessary to do so to arrive at a correct disposition of this case. It is provided by Article 3667 that the survivor shall make and file a good and sufficient bond, conditioned that “he will faithfully administer such community estate, and pay over one-half the surplus thereof after the payment of the debts with which the whole of such property is properly chargeable to such person or persons as shall be entitled to receive the same.” It is provided by Article 3668 that the county judge shall examine and approve such bond, and that the order of approval shall authorize the survivor to control, manage, and dispose of such community estate in accordance with the provisions of the chapter of which such article is a part. Articles 3667 and 3668 also deal with the inventory, appraisement, etc. It is provided by Article 3669 that when the order provided by Article 3668 has been entered, the qualifying survivor shall, without any further action of the court, have the right to control, manage, and dispose of the community property as may seem for the best interest of the estate, and of suing and being sued with regard to the same, in the same manner as during the lifetime of the deceased spouse.

It will be noted that the liabilities of the survivor are fixed by the conditions of the bond. There are two general conditions contained therein. The first of these is that the survivor will faithfully administer the community estate. The second condition is that the survivor will pay over one-half the surplus, after the payment of debts, to those entitled to receive- it. Of course, Article 3667 must be read and construed with Article 3670. This last-mentioned article provides that the survivor shall “keep a fair ahd full account and statement of all community debts and expenses paid by him, and of the disposition made of such community property; and, upon final partition of said estate, shall account to the legal heirs of the deceased for their interest in such estate, and the increase and profits of the same, after deducting therefrom all community debts, unavoidable losses, necessary and reasonable expenses, and a reasonable commission for the management of the same.” Thus it appears from a reading of Articles 3667 and 3670 together that the qualified community survivor must account to the heirs for the net community estate. The net estate is defined in particular detail by Article 3670. Under the express terms of Articles 3668 and 3669 the qualified survivor has the absolute right and power to sell or otherwise dispose of the entire community estate. It must follow that when all pertinent statutes are construed together the heirs of the deceased spouse have an action on the bond in cases where the community estate, or any part thereof, has been dissipated by the survivor. If this is not the purpose of the bond, then it can have no purpose whatever. It is also clear to us that the effect of the above statutes is to give the heirs a right to stand on the property constituting the community estate at the time the survivor qualifies. It follows that they rest under no obligation or duty to follow the proceeds of such property after it is sold, qr otherwise disposed of.

We often refer to the qualified community survivor as a community administrator. Strictly speaking, he is not an administrator at all. He is a statutory trustee of a very unique character, and of very extraordinary powers. These powers, however, are defined by statute. When either the husband or wife dies leaving community property, the surviving spouse can qualify as community survivor, regardless of whether or not there are community debts, and in spite of the fact that the deceased spouse has left heirs entitled, under the law, to take as.such. The surviving spouse is the owner of one-half of the community property. By qualifying under the statute he acquires the right not only to manage, control, and dispose of his one-half, but of .the other one-half as well. Simply stated, the qualified survivor has the right, to the exclusion of the heirs, to take charge of the entire community estate, and manage, control, and dispose of it as he sees fit. The law makes no attempt to direct the qualified survivor how to administer, the community estate. As already stated, his liability is fixed by the bond construed in the light of Article 3670. He must faithfully administer and finally account. The statutes absolutely define the object to be accomplished, but leave the means of such accomplishment to the discretion of the survivor. He may sell or otherwise dispose of all or any part of the community property. He may do this regardless of whether or not thére are any community debts. He may use the proceeds of such sale as he sees fit. He makes no report to the probate court. As a general rule, the ordinary trustee must account for the trust estate by items; but, as already stated, a qualified community survivor is only responsible for . results. He may even give away the community property, provided he has extinguished, or thereafter extinguishes, the community interest in the property given away. Leatherwood v. Arnold, 66 Tex. 414, 1 S.W. 173; Huppman v. Schmidt, 65 Tex. 583.

When the community estate has been wasted, the bond takes the place of the wasted property, and a cause of action exists in favor of the heirs of the deceased spouse on the bond of the qualified survivor for a money judgment in any court of competent jurisdiction. Brown v. Seaman, 65 Tex. 628. In the case just cited it was held that an administrator appointed to succeed a qualified survivor shall be a representative of the estate, the heirs, and the creditors; and that as such representative he could properly bring suit on the bond where the survivor had wasted the estate. Certainly, if the representative of an heir can# sue for his benefit, the heir can' sue for himself.

From the undisputed evidence in this record, G. B. Hutchins, in legal effect, sold- 'the land of this estate and invested the proceeds thereof in other lands in his own name. Also, from the undisputed evidence it appears that he’ appropriated all the net property belonging to this estate, except that invested in other lands, to his own use and benefit. In these ways he has dissipated or wasted the entire community estate. He was the statutory trustee of the properties of this estate. He has failed to account to the heirs as the law directs. He. is therefore guilty of devastavit. A trustee who fails to apply the funds of his trust estate as the law directs, or who wastes such estate, is guilty of a devastavit. 18 C.J. 1031.

It is evident from the provisions of Article 3670 that a qualified survivor is not liable on his bond for unavoidable losses. It is also very plain to us that where a qualified community survivor manages the estate in a careful and prudent manner, but in spite of such management losses occur, such losses a.re unavoidable within the meaning of the statute. It is further evident to us that should losses occur from a cause, or causes, beyond the reasonable control of the survivor, such losses should be regarded as unavoidable. None of the rules of law offer any comfort to those liable on this bond. This estate was dissipated by sales and conversions by the qualified survivor, and no issue of prudent management or unavoidable losses has been here presented. Simply stated, under the undisputed facts in this record, this survivor simply used the assets of this estate in engaging in business for himself, or activities for his own use, and thereby lost them all. These children are therefore entitled to recover on this bond.

It is the general rule that a trustee is not an insurer of results. 65 C.J. 650. As already stated, however, a qualified community survivor is not an ordinary trustee. He is a statutory trustee whose duties and liabilities are defined by statute. It is true that he is not an absolute insurer of results in all instances. In this regard the statute simply requires that he keep an- account and a statement, and on final partition account to the heirs of the deceased spouse for their net interest in the property. In spite of this, we think that the pertinent statutes contemplate that the heirs of the deceased spouse have a right to stand on the property received by the qualified survivor and demand that it be accounted for. We think further that such statutes contemplate that when such property is sold, and the proceeds invested in other property, no duty or obligation rests on the heirs of the deceased to follow the newly acquired property, but, to the contrary, in such instances such heirs have a right to stand on the bond and regard it as the estate. Of course, if there is no duty to follow the property acquired from the proceeds of the property of the community estate, there can be no duty to be concerned in how the newly acquired property is managed, or what becomes of it.

From all that has been said, it is evident that we hold that, under the facts reflected by this record, G. B. Hutchins and those bound as sureties on his bond are, as a-matter of law, liable to the plaintiffs for one-half the value of the properties of this estate with legal interest from the date of demand, which is the date of the filing of this suit. It is provided by Article 3670 that the survivor, on final partition, shall account to the heirs of the deceased spouse for their interest in the estate with “increase and profits.” It strikes us that if we compel Hutchins and his sureties to account for the value of one-half of this estate with legal interest from the date of demand, we have, in legal effect, charged him with one-half the value of the estate plus “increase and profits.” While the statute 'just mentioned charges the survivor with “increase and profits,” it also credits Tiim with “all community debts, unavoidable losses, necessary and reasonable expenses, and a reasonable commission for the management of the same.” It appears that Hutchins performed services in collecting the notes of this estate. It also appears that we have treated this case as though Hutchins- sold its landed assets. We therefore think that if Hutchins is to be charged with the value of the properties sold and -moneys collected with interest, as increase and profits, he should be credited with reasonable commissions for management, which would include a reasonable commission for making sales and collections.

We agree with the Court of Civil Appeals .as to the date from which interest should run, and also as to the liability of the two corporations here involved. In regard to .these matters, we adopt the following from such opinion [111 S.W.2d 300] :

“The defendants (appellants here) •complain of the judgment for interest at 6 -per cent, from October 18, 1928, on the value of the heirs’ interest in the estate. ■Certainly, in so far as the judgment is based upon the administrator’s failure to account, there is error. The heirs could not compel an accounting until twelve months after the qualification of the survivor. Article 3681. No demand is shown prior to the bringing of this suit. We think interest on the value of the heirs’ interest in the estate after deduction of community debts, to wit, $6873, could not be charged prior to the demand evidenced by filing of this suit on the 8th day of December, 1934. 33 C.J. § 123, pp. 233, 234 and § 130, p. 236; Lipsitz v. First Nat. Bank of Gordon (Tex.Com.App.) 296 S.W. 490, 491.
“The insurance company defendants are Fidelity Union Insurance Company and Commercial Casualty Insurance Company. The Fidelity Union Casualty Company signed Hutchins’ bond as surety. In, 1930 Fidelity Union Casualty Company and Fidelity Union Insurance Company were consolidated and Fidelity Union Insurance Company took over all of the assets of Fidelity Union Casualty Company and assumed all its liabilities and agreed ‘to discharge as its own all of the liabilities of Fidelity Union Casualty Company of every character whatsoever.’
“January 1, 1931, a contract was entered into between Fidelity Union Insurance Company, referred to in the contracts as ‘Fidelity,’ and Commercial Casualty Insurance Company, therein referred to as ‘Commercial.’ For the sake of brevity we shall refer to said companies as they are referred to in said contract.
“In the contract it is provided: ‘Commercial hereby assumes * * * all of the real net policy liability of Fidelity on the following classes of business * * * surety.’
“ ‘Commercial agrees to fulfill all of the obligations of “Fidelity” under the policies or contracts reinsured by virtue hereof, and to adjust all claims thereunder at its own expense, and to pay all claims thereunder as therein provided.’ It provided that it was intended that ‘Commercial’ might act ‘therein in all respects as if it had issued said policies or contract’ ‘it being the intention of this agreement that “Commercial” shall take the place of “Fidelity” as to said policies and contracts in all respects.’
“The contract provided, however, that ‘Commercial’ had no liability for any loss occurring prior to January 1, 1931.
“With reference to said last-mentioned clause, it is our view that the community survivor’s duty to account was a continuing duty and that it would continue if not from the execution of the bond, then from the expiration of the twelve months’ period thereafter, until barred by limitation, unless sooner discharged by compliance with the statutes.”

G. B. Hutchins did not appeal from the judgment of the trial court, but the two insurance companies so perfected their appeals as to bring up all parties to the district court judgment.

Because we think that credit should be allowed Hutchins for the commissions indicated by this opinion, the judgments of the Court of Civil Appeals and district court are both reversed, and the cause remanded to the district court for further proceedings in accordance with this opinion.


author: SMEDLEY, Commissioner.

text:
    STATE et al. v. QUINTANA PETROLEUM CO. et al.
    No. 7634.
    Supreme Court of Texas.
    Nov. 22, 1939.
    Gerald C. Mann, Atty. Gen., George W. Barcus, and A. S. Rollins, Asst. Attys. Gen., and Hobart Huson, of Refugio, for the State.
    Crain, Vandenberge & Stofer, of Victoria, for plaintiff in error O’Connor.
    Harry Holmes, of Houston, for defendant in error Quintana Petroleum Co.
    K. W. Gilmore, of Houston, for defendant in error Humble Oil & Refining Co.
    Sanders & Scott, of Amarillo, amicus curiae.
   SMEDLEY, Commissioner.

The State of Texas filed this suit against plaintiff in error Thomas O’Connor in Refugio County for the recovery of state and county ad valorem taxes, together with interest and penalties, due for the year 1936 on account of his alleged ownership of an interest in the oil, gas and other minerals in 4000 acres of land in Refugio County and for foreclosure of lien. The petition describes the property; as being a mineral interest reserved by O’Connor in an oil and gas lease of said land executed by him to Quintana Petroleum Company on January 19, 1934, and sets out the paragraph in the lease reserving the said interest, which is as follows:

“In addition to the foregoing reserved interests, (the usual one-eighth royalties) there is furthermore reserved to the grantor one-fourth (½) of the remainder of any oil, gas or minerals produced from said land after the reservations above set forth are made, until the proceeds of the sale (such sale to be made at not less than the market price) by grantor of said one-fourth of the remainder shall aggregate Two Million Dollars ($2,000,000.00) whereupon this reservation of title to said ½ interest shall terminate and this interest shall vest in; grantee and its assigns”.

The interest described in the quoted paragraph is generally referred to in the| petition and in the briefs as being a ⅝2 (⅛ of ⅞) interest in the minerals in the 4000 acres of land. The petition alleges that the said interest was owned by O’-Connor on January 1, 1936, that it was duly and legally assessed to him for ad valorem taxes for said year at a valuation of five hundred thousand dollars and the taxes lawfully levied and that O’Connor became personally liable and obligated to pay the taxes on said interest with penalties and interest. Quintana Petroleum Company and Humble Oil & Refining Company, the owners of the leasehold estate, were made parties defendant, and the petition alleges that if plaintiff is mistaken as to said O’Connor having been the owner of said reserved interest on January 1, 1936 and it is held that the title thereto was owned on said date by Quintana Petroleum Company and Plumbic Oil & Refining Company, nevertheless the taxes assessed against the said interest, together with penalties, interests and costs, are due and collectible and are a charge upon and secured by a paramount and superior lien upon the said mineral interest. The prayer is that the State have judgment against O’Connor for the taxes, penalties, interest and costs, with foreclosure of lien, and in the alternative in the event the court should hold that O’Connor was not the owner of the mineral interest and is not personally liable for the taxes, that the court determine the amounts which the plaintiff is entitled to recover and that it have judgment against all the defendants fixing and foreclosing its lien on the said interest.

The trial court sustained O’Connor’s general demurrer to the State’s petition, holding that the petition, specially pleading the lease contract, affirmatively disclosed that O’Connor owned no taxable interest in the ⅞2 interest in the minerals reserved in the lease. The case as between the State as plaintiff and Quintana Petroleum Company and Humble Oil & Refining Company as defendants was tried on an agreed statement of facts and judgment was rendered in favor of the State in accordance with the alternative prayer in the petition.

The Court of Civil Appeals in its first decision of the case held that Quintana Petroleum Company and Plumble Oil & Refining Company are the owners of the )%2 interest in the minerals as a part of the leasehold estate and affirmed the judgment 'of the trial court. On rehearing, however, it held that O’Connor is the owner of the said mineral interest, reversed the trial court’s judgment, rendered judgment in favor of Quintana Petroleum Company and Humble Oil & Refining Company, and remanded the cause as between the State and O’Connor. 127 S.W.2d 354.

Both plaintiffs in error O’Connor and the State, in their applications for writs of error, take the position that ownership of the ⅞2 interest in the minerals passed in the execution of the lease to the lessee and that the paragraph in the lease, by which O’Connor as lessor reserved ⅞2 of the oil, gas and other minerals produced from the land until the proceeds of the sale thereof by him should aggregate two mih lion dollars, had the effect of reserving the title or interest in the minerals only by way of security for the payment of the said sum. The State’s application for writ of error presents the theory that O’Connor reserved a right to receive oil, gas or other minerals of the value of two million dollars out of the ⅝2 interest and that such right is distinct and apart from the ownership of the ⅞2 which forms a part of the lessee’s ⅞> the working interest, while in a supplemental brief filed in behalf of the State it is contended that the lessor O’-Connor sold and conveyed ⅞ of the mineral estate to the lessee and retained a lien on ¾, of the ⅞ to secure the payment of two million dollars out of the proceeds received from the sale of the minerals as produced.

The question presented for decision is: Does the reservation to the lessor of ⅞2 of any oil, gas or other minerals produced from the land, until the proceeds of sale by the lessor of said ⅞2 shall aggregate two million dollars; constitute an interest in land taxable as such against the lessor as its owner?

The question stated is to be answered, and the sufficiency of the petition on general demurrer is to be determined, by examination and construction of the lease, which is set out in full in the petition. The petition contains allegations, in addition to those hereinbefore copied and stated, sufficient at least against general demurrer, showing that the mineral interest under consideration was subject to ad valorem taxation in Refugio County for the year 1936, that the same was not rendered to the assessor by O’Connor or by any of the other defendants, that it was duly and legally rendered by the tax assessor and assessed to O’Connor for ad valorem taxes for said year at a valuation of five hundred thousand dollars, and that the taxes thereon in the amounts set out in the petition were lawfully and regularly levied and are past due and unpaid. The petition further alleges that a short time after the execution of the lease the lessee Quintana Petroleum Company and Humble Oil & Refining Company, to which an interest in the leasehold was conveyed, entered upon the land and drilled a great number of producing oil wells thereon which have continued to produce oil in paying quantities, and that the lessor O’Connor from the proceeds of the sales of the ⅞2 interest in the oil produced had received on January 1, 1936 only a small part of the two million dollars specified in the lease.

The lease, which designates the lessor as grantor and the lessee as grantee, does not purport to convey to the lessee ⅞ of the oil, gas and other minerals. It grants and leases the land to the lessee for the purpose of drilling, mining for and producing oil, gas and other minerals, with the added provision that in case of any discovery of any of such products “there is expressly reserved to grantor certain interests therein hereinafter set forth, full title to such reserved interests being retained by the grantor”. It is provided that in the event of discovery and production of oil in paying quantities in any well the lease shall continue in effect so long as gas, oil or other minerals are produced and marketed in paying quantities.

Section VI of the lease contains the reservation of interests to the lessor in the following language:

“In case of'discovery and production by grantee of any oil, gas or other minerals upon and from the leased premises, interests in all of such products and full title thereto are retained by grantor as follows:
“(a) One-eighth (⅛) of all oil produced and saved from said land as long as any production is maintained; provided, however, that as to any unmerchantable oil derived from the wells, containing more than two per cent B. S. and water, such one-eighth shall bear its proportionate expense of treating such unmerchantable .oil to make it merchantable as crude.
“(b) One-eighth (⅛) of the gas produced from the land and sold or used off the land, or in manufacturing gasoline, including casing head gas or other gaseous substances.
“(c) One-eighth (⅜) of all other minerals mined and marketed, except should sulphur be produced, then grantee may buy grantor’s interest, paying therefor at the rate of One Dollar per long ton.
“(d) In addition to the foregoing reserved interests, there is furthermore reserved to grantor one-fourth (¼) of the remainder of any oil, gas or minerals produced from said land after the reservations above set forth are made, until the proceeds of the sale (such sale to be at not less than the market price) by grantor of said one-fourth of the remainder shall aggregate Two Million ($2,000,000.00) Dollars, whereupon this reservation of title to said ½ interest shall terminate, and this interest shall vest in grantee and its assigns.
“All gas or oil to which grantor is entitled under this contract shall be delivered to him at the wells into any pipe line to which producing wells may be connected, and his interest in any other minerals produced shall be delivered to him at the wells or mines. Grantee is hereby given the option of purchasing at the wells or mines all or any part of grantor’s reserved rights in such products by paying the market price therefor at the wells on the day it is run into the pipe line or storage tanks.
“Accountings to grantor for all his reserved interest in products shall be made to him at Victoria, Texas, on or before the 20th day of each month for the preceding calendar month, and all payments due grantor then and there made.”

We have reached the conclusion after careful consideration that the ■ %2 interest reserved to the lessor O’Connor by subdivision (d) of Section VI above set out is an interest in land taxable as such against O’Connor as its owner. The lease, as has been stated, does not purport to convey, and it does not presently convey, tO' the lessee ⅞ of the minerals in the land. It grants and leases the land to him with provision that the certain interests in the minerals thereinafter set forth are expressly reserved to the grantee, “full title to such reserved interests being retained by grantor”. Such interests so reserved are described in Section VI of the lease and are ⅛ of all oil produced and saved, ⅜ of the gas produced and sold or used off the land or in manufacturing gasoline, ⅝ of all other minerals mined and marketed, except sulphur, and, in addition to the said reservations, the further reservation of ⅞2 of the oil, gas or other minerals produced from the land until the proceeds of sale thereof by the grantor shall aggregate two million dollars. Thus the particular interest under consideration is reserved to the lessor by the same language as that used in the reservations of the ⅜ royalties. This reservation is as full, complete and unconditional as the others, with the single limitation that it shall remain in effect only until the stated amount has been realized by the lessor from proceeds of sales made by him, whereupon the said reservation shall terminate and the interest shall vest in the lessee and its assigns. Under this reservation, as under the reservation of the ⅛, the oil or gas to which the lessor is entitled is to be delivered to him at the wells into the pipe line as it is produced, free of charges or expenses of production or operation. Thus the lessor during the life of this reserved interest has the unqualified right to a part of all minerals that may be produced and taken from the land. Such right or interest may or may not continue in effect during the entire life of the lease, its duration depending upon the amount produced, the rate of production and the market value of the minerals.

It is not necessary for decision of the question under consideration to hold that the lessor is by reason of the reservation of the ⅞2 interest the owner, subject to limitation, of ⅞2 of the minerals in place, that is, that he reserved or excepted a possessory or corporeal estate in a portion of the* minerals. The reserved right is at least an incorporeal or nonpossessory interest and comes within the definition of real property for the purpose of taxation given in Article 7146 of the Revised Civil Statutes of 1925 as follows:

“Real property for the purpose of taxation, shall be construed to include the land itself, whether laid out in town lots or otherwise, and all buildings, structures and improvements, or other fixtures of whatsoever kind thereon, and all the rights and privileges belonging or in any wise appertaining thereto, and all mines, minerals, quarries and fossils in and under the same”.

See Sheffield v. Hogg, 124 Tex. 290, 310, 77 S.W.2d 1021, 80 S.W.2d 741; Evans v. Ropte, 128 Tex. 75, 79, 96 S.W.2d 973; Bracken v. Van Zandt County, Tex.Civ.App., 74 S.W.2d 540, application for writ of error refused; Summers Oil & Gas, Permanent Edition, Vol. 3, § 583, pp. 388-389.

The conclusion which we have expressed as to the nature of the reserved interest is supported by decisions, holding that similar interests reserved in the execution of mineral leases or conveyed out of leasehold estates are interests in land. In Sheffield v. Hogg, supra, it was held that oil and gas royalty interests, whether the royalties are payable in oil or in kind, are present interests in land rather than mere rights in personalty. The ⅝2 interest reserved in the lease executed by O’Connor is not different in nature from the ordinary ⅜ royalty interest. The only difference is that it may not endure for as long a period as does the royalty reserved without limitation. Associate Justice Greenwood’s opinion in the Hogg-Sheffield case does make mention of the fact that the ordinary ⅛ royalty continues throughout the duration of the leasehold estate, a determinable fee, which may be perpetual, and is therefore a fee simple interest in land. The opinion, however, contains nothing to suggest that a royalty interest, subject to a limitation which may cause it to terminate before the expiration of the leasehold estate, is not an interest in land. The case holds that the y§ oil and gas royalties usually reserved in leases are interests in land, because they are profits arising out of land and further because such classification, which accords with the practice in the oil and gas industry, furnishes a stability highly important, if not essential, to the structure of that business.

In Tennant v. Dunn, 130 Tex. 285, 110 S.W.2d 53, it was held that a conveyance by the owner of an oil and gas lease of his interest in the lease in so far as it covered $25,000 worth of oil out of ¾8 of ⅞ of the oil produced from a well on the leased land invested the grantee with title to an interest in land. The contention that the instrument evidenced merely an obligation to pay $25,000 out of the proceeds of the oil was rejected. This for the reason that the conveyance gave the grantee the absolute right, without charges for production or operation, to a fractional part of the oil as and when produced from •a well on the leased land until the grantee should have received oil of the total value of $25,000. The interest involved in that ■case is of the same character as that under ■consideration in the instant case. The two differ only in source, the one arising from a conveyance out of the leasehold estate and the other from reservation or exception by the lessor in the execution of the lease. See also Thomas v. Perkins, 301 U.S. 655, 57 S.Ct. 911, 81 L.Ed. 1324.

This court by its refusal of application for writ of error evidenced its approval both of the judgment and of the-determination of the principles of law declared in the opinion of the Court of Civil Appeals in Sheppard v. Stanolind Oil & Gas Co., 125 S.W.2d 643, 649. That was a suit by the Stanolind Company against the State for the recovery of oil production taxes paid under protest, the controlling question being whether the State, as to sums due it under a clause in leases from the State to Stanolind Company, providing for payment of a stated sum out of ⅝ of % of the first oil and gas produced, was an interested party within the meaning of Subdivision (6) of Section 2 of Chapter 162, Acts Regular Session of the 43rd Legislature, 1933, Vernon’s Ann.Civ.St. art. 7057a, § 2 (6). That subdivision provided that the tax levied should be borne ratably by all interested parties, including royalty interests. The court, after • careful discussion of the nature of the right or interest reserved by the State, under which it was entitled to the payment of a stated sum out of a fractional part of oil and gas produced, held that “the interest here involved, by whatever name it may properly be called, is an interest in real estate, an interest in production under the leases, and such an interest as imposes upon its owner the burden of the production tax under the statute we are considering.” In demonstrating that such reserved right to payment out of production is essentially the same as the royalty ordinarily reserved, Chief Justice McClendon, writing the opinion in that case, said:

“Inherently, therefore, these sums possess every characteristic of the royalty payments, save only that the former are limited to the quantity of oil actually produced up to the amount equal in value to the stated sums. Both are conditional absolutely upon the fact of production, and both are limited to the amount of production; the former continuing' so long as there is production, the latter ceasing when the production reaches the stated amount. For all practical purposes, and viewed in the light of every practical consideration, the interest of the State in the production of of ⅝ of the oil, up to the full amount of the stated sums, is essentially and actually in nowise different from its interest under its retained royalty.”

We cannot give to the reservation the meaning that plaintiffs in error insist should be given it, that is, that it does not reserve an interest in land but amounts to nothing more than' the reservation of title by way of security for the payment of $2,000,000 and that the lease should be construed as a conveyance of the entire ⅞ of the mineral estate-to the lessee with reservation of a lien on ¾. of the ⅞ to secure payment of the stated sum out of the proceeds of sale of the minerals. Such construction would disregard the intention of the parties as disclosed by the lease in unambiguous language. The lease does not purport to convey to the lessee ⅞ of the minerals. It grants and leases the land for the purpose of drilling for and producing minerals, carefully stating in this connection that there are expressly reserved, however, to the grantor certain interests in the minerals that may be produced, full title thereto being retained by the grantor. In the same plain and positive language, when the reserved interests are described in detail in paragraph VI of the lease, the full title thereto is retained by the lessor. The same paragraph requires that the gas or oil to which the lessor is entitled under the reservation shall be delivered to him as it is produced. The reservation is unlike the vendor’s lien for two reasons, first, because no lien is retained on any part of what is cónveyed to the lessee — the ⅞2 is not conveyed, and second, because no obligation is imposed upon the lessee to pay the $2,000,000 — the lessor obtains.payment only out of a part of the oil if and when produced. It is our opinion, stated in expressive terms taken from the opinion in Sheppard v. Stanolind Oil & Gas Company, supra, that under the reservation of the ⅞2 of the minerals produced from the land the lessor has a “direct or immediate interest” in the minerals actually produced as distinguished from the interest of a lienor which is “collateral as security for a personal obligation of absolute liability”.

Plaintiffs in error express apprehension that part of the mineral interest in the land will escape taxation unless the % interest is assessed against defendants in error as a portion of the leasehold estate. They argue that if the %2 interest is assessed against O’Connor it can never be valued for taxation at a sum in excess of the remainder of the two million dollars yet to be realized out of the proceeds of the sale of the ⅞2 of the minerals, that when most of the two million dollars shall have been realized by the lessor all the remaining value will then have inured to the benefit of the two oil companies, the owners of the lease, and that however enormous the taxable value might then be they would not be liable for taxes on any part of the ⅞2. The apprehension and the argument arise out of and proceed from the erroneous assumption that in order to reach the value of ⅞2 of the minerals for ■taxation all of such fractional interest, as if it were owned without limitation, must be assessed either as the property of the lessor or as the property of the lessee.

It is provided in substance by Article 7174, Revised Civil Statutes of 1925, that real property, or an interest in real property, shall be valued for taxation at what it is fairly worth in money or at such price as it would bring at a fair voluntary sale for cash. It is apparent that, where there is substantial production, as here, the right to a part of the minerals as they are produced, subject to the limitation that the right ceases when a certain sum has been realized from the proceeds thereof, is not of as great value as would be the right to an equal part of the minerals not subject to limitation; and it is further apparent that the value of the lessor’s right or interest so limited, assuming continued production, will decrease each year. These facts must be taken into consideration in valuing such interest for taxation. Likewise it is apparent that the leasehold estate under this lease has a greater value on account of the limitation imposed upon the reserved ⅞2 interest, with the provision that upon the termination of title under the reservation the ⅝2 shall vest in the lessee, than it would have if the ⅞2 interest had 'been reserved without limitation; and it is further apparent, still assuming continued production, that the leasehold estate will become more valuable each year as the time approaches when the ⅞2 interest will -vest in the lessee. And these facts must be taken into consideration in valuing the leasehold estate for taxation. When this method of valuing the property is used no part of the ⅞2 of the minerals escapes taxation. Its value for taxation is represented by the valuation placed upon the lessor’s reserved and limited ⅞2 interest, together with the increased valuation placed upon the leasehold estate by reason of the limitation and the provision for the vesting of the interest in the lessee upon the satisfaction of the limitation.

The record discloses that when rendering the leasehold estate in the four thous- and acres for taxation for 1936, Quintana Petroleum Company in its written rendition, after the description of the land, thus described the leasehold estate: “The above being the leasehold estate covering 2%2 of minerals”. This rendition seems to indicate that the taxpayer voluntarily undertook to exclude from its rendition both the ⅜ royalty interest and the ⅞2 of the minerals as if the ¾ interest, like the ⅛ royalty interest, were owned by the lessor without the limitation and without the provision for the vesting of the %2 in the lessee upon the satisfaction of the limitation. (Quintana Petroleum Company had theretofore assigned interests aggregating ⅛2 out of its leasehold estate). The owner of the leasehold estate has not only the right to take and dispose of 2%2 of the minerals, but he is at the same time and presently the owner of the additional right to have, take and dispose of ⅞2 of the minerals upon termination of the lessor’s right thereto under the reservation. Such additional right, even though it may be, as we believe it is, an integral part of the lessee’s property, may not escape taxation by the taxpayer’s voluntary exclusion thereof from his rendition sheet. Victory v. Hinson, 129 Tex. 30, 102 S.W.2d 194. If such additional right was in fact excluded by the lessee in making its rendition, it may be assessed for taxation at its fair value in the manner provided by the statutes.

The Court of Civil Appeals correctly rendered judgment in favor of defendants in error Quintana Petroleum Company and Humble Oil & Refining Company, as the State in its suit sought judgment against them for foreclosure of lien only in the event it should be held that the ⅞2 interest reserved in the lease was not owned by the lessor O’Connor on January 1, 1936 but by the said defendants in error. The judgment of that court was correct also in its remanding the cause to the district court for trial as between the State and O’Connor, on account of the trial court’s error in sustaining O’Connor’s general demurrer to the State’s petition.

The judgment of the Court of Civil Appeals is affirmed.

Opinion adopted by the Supreme Court.