author: BREWSTER, Justice.

text:
    C. H. CHRISTIAN et al., Appellants, v. Don HOWETH et al., Appellees.
    No. 17595.
    Court of Civil Appeals of Texas, Fort Worth.
    April 18, 1975.
    Rehearing Denied May 16, 1975.

      McDonald, Sanders, Ginsburg, Phillips, Maddox & Newkirk, Fort Worth (on appeal only), and Stark & Barnhart, and Richard S. Stark, Gainesville, for appellants.
    Henry & Hatcher, John Atchison, Gainesville, Witherspoon, Aikin, Langley, Woods, Kendrick & Gulley, and Thomas W. Kendrick, Hereford, for appellees.
   OPINION

BREWSTER, Justice.

This suit is an action brought by several of the testator’s children seeking to set aside a County Court decree that admitted an instrument to probate as the last will of Hill Christian, deceased. It is an action to contest the will and to oppose its admission to probate.

The County Court of Cooke County had admitted the will to probate on January 17, 1973. This action to set aside that order admitting the will to probate was filed in County Court on February 12, 1973. A trial of the case was thereafter held in the County Court on November 6, 1973, following which trial the case was taken under advisement by the Judge. The record shows that on November 26, 1973, the trial court did sign and render judgment affirming its prior order admitting the will to probate. This order further denied the contestants’ opposition to the probate of the will.

From this judgment of the County Court the contestants perfected an appeal to the District Court. No effort was at that time made to appeal directly from the County Court to the Court of Civil Appeals.

The case was later tried in the District Court which rendered judgment on April 4, 1974, denying the will contest and affirming the County Court order admitting the will to probate.

From that District Court decree the contestants have taken this appeal to this Court of Civil Appeals.

Before us for consideration now is the motion filed by the appellees (proponents of the will) to dismiss this appeal for want of jurisdiction.

We sustain the appellees’ motion contending that this Court lacks jurisdiction over the merits of this case on appeal.

The County Court of Cooke County is a constitutional County Court.

One question presented to us in deciding this matter is whether a district court has appellate jurisdiction of an appeal from a constitutional county court of a contested probate proceeding that was decided after the effective date of Section 5 of the Probate Code, V.A.T.S., which effective date was November 23, 1973? See Boyd v. Dean, 515 S.W.2d 753 (Beaumont, Tex.Civ.App., 1974, no writ hist.) (footnote No. 1 at page 754) as to effective date.

Prior to the amendment of Section 5 of the Probate Code, that section provided that district courts did have appellate jurisdiction of such cases.

By amendment of Section 8 of Article 5 of the Texas Constitution, Vernon’s Ann. St., adopted November 6, 1973, that section was amended to provide: “The legislature may provide that all appeals in such matters (referring to probate matters among others) shall be to the courts of (civil) appeals.”

Section 5 of the Texas Probate Code was also amended effective November 23, 1973.

Two Court of Civil Appeals cases have recently been decided that have held that as a result of the 1973 amendment to Section 5 of the Probate Code, a district court does not in cases decided after November 23, 1973, have appellate jurisdiction of contested probate matters. They hold that only the Courts of Civil Appeals, in cases decided after the effective date of that statute, have jurisdiction to hear and determine appeals in such cases. See Boyd v. Dean, supra, and Butts et al. v. Ailshie, Independent Executrix, 521 S.W.2d 155, which was decided by the El Paso Court of Civil Appeals on March 12, 1975.

We agree with the conclusion that those courts reached on that point.

We therefore hold that only the Court of Civil Appeals, in an appeal direct to it, had appellate jurisdiction over the County Court’s judgment of November 26, 1973.

The District Court to which the appeal of the County Court’s decree was perfected had no jurisdiction over that appeal, and because the District Court had no jurisdiction this Court of Civil Appeals has no jurisdiction over the merits of this case on this subsequent appeal from the District Court. See Lewis v. Lewis, 333 S.W.2d 436 (Amarillo, Tex.Civ.App., 1960, no writ hist.) and 3 Tex.Jur.2d 318 (1974 Rev.), Appeal and Error, Sec. 27.

In seeking to avoid the conclusions that we have hereinabove reached, the appellants argue that instead of being rendered on November 26, 1973, the judgment in this case was rendered on November 12, 1973, which was before the effective date of the amendments to the Probate Code and Constitution that are above discussed. They say that since this is true the law in effect prior to the amendments is controlling, and cites as authority Atkins v. Rayburn, 506 S.W.2d 208 (Tex.Sup., 1974). Under the old law the appeal of the County Court decree to the District Court would have been proper.

We disagree with appellants’ contention that the judgment of the County Court was rendered on November 12, 1973. There is nothing in the transcript that indicates that this is true. The judgment itself recites in substance that the case came on to be heard on November 6, 1973, and that at the conclusion of the evidence the Court announced that he would render a decision within one week. Its recitals then read: “IT IS THEREFORE, on this 26th day of November, 1973, duly ORDERED, ADJUDGED AND DECREED by the Court that said opposition to probate said will is hereby in all things denied; . . . .” And above the signature of the judge was the following: “Signed this the 26th day of November, 1973.”

The recitals in this judgment control our decision as to when the judgment in this case was rendered. It shows that the judgment was rendered on November 26, 1973, after the amendments to the Constitution and Probate Code that are involved here went into effect. Hamilton v. Empire Gas & Fuel Co., 134 Tex. 377, 110 S.W.2d 561 (Tex.Com.App., 1937) and cases cited on this point in Tejas Trail Property Owners Association v. Holt, 516 S.W.2d 441 (Fort Worth, Tex.Civ.App., 1974, no writ hist.).

Because the District Court from whose judgment this appeal was taken did not have jurisdiction of the case it is this Court’s duty to reverse and thus vacate the judgment that the District Court had rendered that is presently on appeal to this Court and to here render judgment dismissing the appeal that appellants undertook from the County Court’s decree to the District Court. Lewis v. Lewis, supra, and 3 Tex.Jur.2d 318 (1974 Rev.), Appeal and Error, Sec. 27. The effect of such action would be to leave in effect as a final judgment the County Court’s decree that admitted the Hill Christian will to probate and denied the opposition to the probate of such will.

The District Court decree from which this appeal was taken is reversed and judgment is here rendered dismissing the appeal in this will contest case that appellants took from the County Court decree dated November 26, 1973, to the District Court.

All costs incurred in this will contest case, including both those incurred in the courts below and on this appeal, are taxed against appellants.


source: Caselaw Access Project

author: YOUNG, Justice.

license: Public Domain

text:
    NAFCO OIL & GAS, INC., et al., Appellants, v. TARTAN RESOURCES CORPORATION et al., Appellees.
    No. 904.
    Court of Civil Appeals of Texas, Corpus Christi.
    April 24, 1975.
    Rehearing Denied May 15, 1975.

      James S. Robertson, Jr., Roach & Robertson, Dallas, C. Kinnear Earl, El Campo, Irvin Moore, Jr., Ingram & Moore, Wharton, for appellants.
    Chas. R. Porter, Jr., Porter, Taylor, Gonzales, Thompson & Rogers, Corpus Christi, L. L. Duckett, Duckett, Bouligny & Collins, El Campo, Joseph A. Cohn, Jr., Corpus Christi, for appellees.
   OPINION

YOUNG, Justice.

This is an action in trespass to try title to an oil, gas and mineral leasehold estate which was brought by the lessees under a top lease executed in 1969 against the lessees under a prior lease executed in 1945 based upon the contention by the plaintiffs that the 1945 lease has terminated except as to one well (called the B-l well) and the oil rights in 20 acres around such well. No question is raised by the plaintiffs with respect to the continuation of the 1945 lease as to the B-l well and such 20 acres. The defendants filed a plea of not guilty and a general denial. The land in question is situated in Wharton County, Texas.

The plaintiffs in the trial court were Tartan Resources Corporation; Edward M. Carmouche; Charles Carmouche, Trustee for the Edward M. Carmouche Trust No. 1; E. M. Carmouche and Cletus Cribbs, Trustees for Capitol Towing Company, Inc., Trust No. 1. Coastal States Gas Producing Company intervened and adopted the position of the plaintiffs.

The defendants in the trial court were Nafco Oil & Gas Inc., Rio Gas Gathering Company, Inc. and Matagorda Oil Company. C. Kinnear Earl, Trustee for the J. A. Halamicek Trust, was also named as a defendant but adopted the position of the plaintiffs.

Following a trial to the court without a jury, the trial court entered judgment that the plaintiffs and intervenor recover from the defendants the title and possession of the mineral leasehold estate in question. The trial court filed findings of fact and conclusions of law. The record herein includes a Statement of Facts. The defendants (except C. Kinnear Earl, trustee) appeal.

Although the 1945 lease covered two tracts of land (160 acres and 384.5 acres respectively), this action focuses primarily upon the 384.5-acre tract.

J. A. Halamicek is the common source of title of the appellants and appellees. On January 31, 1945, J. A. Halamicek, as lessor, executed an oil, gas and mineral lease to J. B. Ferguson, (appellees’ predecessor in title) as lessee, covering the two tracts, heretofore mentioned, from the surface down to a depth of 7,500 feet. The lease was for a primary term of one year from the date of the lease, “and as long thereafter as oil, gas or other minerals” are being produced from land covered by the lease. Paragraph 5 of the lease provided that the lessee would drill two wells to a stated depth on the leased premises during the calendar year 1945. Paragraph 6 provided that after the completion of such wells the lease would terminate except as to 20 acres around each producing well on such land, unless the lessee continued to drill wells until the land covered by the lease was “developed”.

Paragraph 6 of the 1945 lease was amended by instrument dated March 17, 1947. This amendment completely deleted the original paragraph and substituted a new paragraph 6 which provided that after the completion of the two wells to be drilled in 1945, the lease would terminate except as to oil and oil rights in 20 acres around each producing oil well and gas and gas rights in 160 acres around each producing gas well, unless the lessee maintained a continuous drilling program as therein provided until the land covered by the lease was “developed”.

The 1945 lease was amended a final time April 15, 1954. By this amendment, lessee agreed to commence within 10 days the drilling of a well on the 384.5-acre tract to a specified depth. The 1954 amendment also deleted paragraph 6, as it read after the 1947 amendment. In lieu thereof, a new paragraph 6 was made a part of the 1945 lease. The new paragraph provided that if more than 90 consecutive days elapsed between the completion of a well, whether a producer or a dry hole, and the commencement of another well on such land, the lease would terminate at the end of such 90-day period as to all land covered by the lease except:

“(a) The oil and oil rights ... in 20 acres, . . . around each well theretofore completed as an oil well; and
(b) The gas and gas rights ... in 160 acres, . . . around each well theretofore completed as a gas well, down to and including the sand from which such well produced gas.”

The meaning of the new paragraph 6 is the central issue involved in this action.

The well which was to be drilled pursuant to the 1954 amendment was completed in May 1954 as an oil well (called the B-6 well). No well was drilled upon the leased premises within 90 days after that completion. At the expiration of the 90-day period, there were, however, four wells (B-l, B-4, B-5, B-6) producing oil from the 384.5-acre tract and two wells (B-2, B-3) producing gas.

On October 22, 1954, the predecessors in title of appellant Nafco Oil & Gas, Inc. executed a release covering all of the 1945 lease except oil and oil rights in and to 20 acres around each oil well (B-l, B-4, B-5 and B-6) and gas and gas rights in and to 160 acres around each gas well (B — 2 and B-3).

The B-5 well is located on the same 160-acre tract as the B-2 well. Wells B-4 and B-6 are both located on the same 160-acre tract as well as B-3. Well B-l is not located on either of the 160-acre tracts.

Well B-l has continuously produced oil in paying quantities. Well B-2 ceased production of gas in 1966. The B-3 well ceased production of gas in 1965. The B-4 well ceased production of oil in 1968. Well B-5 produced oil until 1964. It also produced gas in paying quantities from October 1958 through December 1971. B-5 was recompleted in October 1972 as a gas well and has produced gas in paying quantities since that date. B-6 produced oil in paying quantities until 1968.

Appellants executed a release of all oil rights in the twenty acres around well B-5 in February of 1966.

On December 31, 1969, C. Kinnear Earl, as Trustee of the J. A. Halamicek Trust, as lessor, executed two oil, gas and mineral leases to appellee Tartan Resources Corporation, one of which covered the oil rights down to 7,500 feet in the 20-acre tracts on which the B-l, B^l and B-6 wells are located, and the gas rights down to and in-eluding the Greta Sand in the two 160-acre tracts on which the B-2 and B-3 wells are located; and other rights not involved in this litigation.

Appellants contend that the production of oil from well B-l is sufficient to keep the 1945 lease, as amended, alive as to the gas rights in the two 160-acre tracts discussed above and as to the oil rights in the three 20-acre tracts discussed above; and that the habendum clause of the 1945 lease provides that production from any tract will hold the lease as to all other tracts.

On the other hand, appellees contend that paragraph 6 of the 1945 lease, as amended in 1954, clearly amends the ha-bendum clause. The effect of said amendment is that the mineral rights under each tract of land must be held by production of the reserved mineral on each respective tract. Appellees argue that the gas rights to the two 160-acre tracts and the oil rights to two of the 20-acre tracts (B-4 and B-6) terminated when the production of gas and oil, respectively, ceased on those tracts. We agree.

Appellants and appellees agree that the 1945 lease, as amended, is not ambiguous, but they disagree about its application.

The trial court concluded that the haben-dum clause had been modified so that oil rights were retained only by continuous production of oil as to each well theretofore completed as an oil well and gas rights were retained only by continuous production of gas as to each well theretofore completed as a gas well. The court further concluded that the lease terminated as to each well as production ceased therefrom. Finally, the trial court concluded that the lease remained effective as to the 20-acre tract around well B-l because such well has continuously produced oil in paying quantities.

In their appeal, appellants raise nine points of error. We will discuss points 1-6 together.

Points 1-6 complain of the trial court’s ruling that the habendum clause of the 1945 lease was modified by the 1954 amendment to paragraph 6 to the extent that the mineral rights in the respective tracts in question would terminate as to each tract when the production of the reserved mineral thereunder ceased. This complaint assails the trial court’s finding of fact # 15 and conclusions of law # 2, # 3, # 4 and #5. As appellants state in their brief, “the effect of the 1954 amendment upon the 1945 lease is the crux of this case.” The material portions of the amendment to paragraph 6 are as follows:

“. . . the following shall be substituted as and shall be paragraph 6 of said lease and binding on the parties hereto:
‘6. If more than ninety (90) consecutive days shall elapse between the completion of a well on said land, either as a producer or as a dry hole, and the commencement of operations for the drilling of another well on said land, this lease shall terminate at the end of such ninety (90) day period as to all of said land except:
(a) The oil and oil rights (including the rights in casinghead gas produced with oil) in 20 acres, as nearly in the form of a square as practicable, around each well theretofore completed as an oil well; and
(b) The gas and gas rights (including the rights in distillate and condensate) in 160 acres, as nearly in the form of a square as practicable, around each well theretofore completed as a gas well, down to and including the sand from which such well produced gas.”

As we have noted, the lease provides for a primary term of one year and then states that it will remain in effect “as long thereafter as oil, gas, or other minerals are being produced from said land.” So absent paragraph 6, the lease would remain in effect so long as well B-l produced oil in paying quantities. Mathews v. Sun Oil Company, 425 S.W.2d 330 (Tex.Sup.1968); Orive v. Sun Oil Company, 346 S.W.2d 383 (Tex.Civ.App.—San Antonio 1961, writ ref’d).

Clearly, paragraph 6 amends the haben-dum clause. Paragraph 6 plainly declares that production in paying quantities will not, in and of itself, hold the entire leased premises. Appellants must comply with the continuous drilling program established in paragraph 6. Upon appellants’ failure to do so, the lease terminates by its own terms as to the entire leased premises except “the oil and oil rights . . . in 20 acres, . . . around each well theretofore completed as an oil well; and the gas and gas rights ... in 160 acres, ., around each well theretofore completed as a gas well, down to and including the sand from which such well produced gas.” The conflict between the parties centers around the issues of whether the oil wells and gas wells referred to in paragraph 6 must have been producing oil or gas at the time that the continuous drilling operations required by the new paragraph 6 ceased and whether or not production on each tract must continue in order to keep the lease in effect as to the oil or gas rights reserved under the respective 20-acre and 160-acre tracts.

We hold that paragraph 6, when read in • conjunction with the habendum clause (paragraph 2) requires that gas be produced from each 160-acre tract in paying quantities and that oil must be produced from each 20-acre tract in paying quantities in order that the lease remain in effect as to each tract.

At the outset, it must be noted that the instrument distinguishes between gas wells and oil wells. Further, the parties did not intend that a well “theretofore completed” as a dry hole would hold any acreage upon the cessation of the continuous drilling program. We fail to see how a well which produces neither oil nor gas can be “a well theretofore completed” as an “oil well” or “gas well”. As noted in Struss v. Stoddard, 258 S.W.2d 413 (Tex.Civ.App.—Fort Worth 1953, writ ref’d n. r. e.) :

“When speaking of completed or abandoned locations where drilling operations occurred in a search, the general intent and leading purpose of which was to produce oil or gas, oil-field terminology denotes such as ‘oil wells,’ ‘gas wells’ and ‘dry holes.’ A ‘dry hole’ will therefore never be considered a well of any kind or character with respect to a contract for the drilling of a ‘well’ for oil or gas, unless by express wording of the contract, or by necessary implication from the general intent and leading purpose to be accomplished thereby, it must be so considered. . . . Likewise, the term ‘well’ will never be considered to be and designate a ‘dry hole’ unless it must be so considered after application of the same tests. . . . ”

Also, see Vernon’s Tex.Rev.Civ.Stat.Ann. Art. 6008 §§ 2(d), 2(e) (1962). There is no express provision that a dry hole will hold acreage either as an “oil well” or “gas well”. The purpose of the 1945 lease is production of oil, gas, or other minerals. The instrument appears to be particularly designed to compel the lessee to produce oil, gas or other minerals. The lease contains no delay rental provision which might allow the lessee to delay drilling operations, nor does it contain a shut-in royalty clause which would allow a lessee to find oil or gas in paying quantities and then cap the well without obtaining production. The lease requires continuous drilling, if the lease is to remain in force as to the undeveloped portion of the leased premises. These facts do not demonstrate an intent of the parties that a dry hole be contemplated in the terms “gas well” or “oil well”.

In addition, the provision in paragraph 6 that only gas rights are retained by gas production and that only oil rights are retained by oil production further demonstrates that it was the intent of the parties that each of said minerals be fully exploited and that the habendum clause (paragraph 2) he modified to the extent that gas production will hold only gas rights and oil production will hold only oil rights. See Hunt Oil Company v. Dishman, 352 S.W.2d 760 (Tex.Civ.App.—Beaumont 1961, writ ref’d n. r. e.).

In light of the provisions of this lease discussed above, it is evident that the well must be producing oil, or gas, at the date that lessee ceases permanent drilling operations required in paragraph 6, as amended, and the mineral (oil or gas) produced as of that date determines the acreage and mineral rights therein which said well will hold under the lease.

It is also clear that oil or gas production will hold only oil or gas rights limited in area: 20 acres around each oil well and 160 acres around each gas well. Paragraph 2 (habendum clause) operates independently upon each tract. Under this lease oil production will not hold ’ gas rights, nor will gas production hold oil rights as to this lease. Production of one mineral allows the lessee, under this lease, to retain only the right to produce that mineral within a limited acreage surrounding that well. It is apparent that the ha-bendum clause, when read in conjunction with paragraph 6, applies to each individual tract. Production of gas on one 160-acre tract will not maintain the lease as to gas rights in another 160-acre tract, because the right to production of gas is limited to a designated 160-acre tract around each gas well.

Well B-l has continuously produced oil in paying quantities. Therefore the 1945 lease, as amended, is still in effect as to the oil rights in the 20-acre tract on which B-l is located.

Wells B-4 and B-6 have ceased to produce oil; the 1945 lease, as amended, has terminated as to the 20-acre tracts held by B-4 and B-6 respectively. Well B-3 ceased to produce gas; the lease has terminated as to the 160-acre tract on which B-3 is located.

Well B-2 ceased producing gas in 1966. In 1958, however, Well B-5 (which is located on the 160-acre tract held by B-2) began producing gas. B-5 continuously produced gas from 1958 through December 1971 and ceased production from January 1972 through September 1972. Thus, the lease has terminated as to the 160-acre tract around Well B-2. Appellants’ points 1-6 are overruled.

This brings us to a consideration of points 7 and 8 wherein the appellants complain of fact finding # 15. In this finding, the trial court said that it was the intention of the parties to the 1947 and 1954 amendments to amend the habendum clause of the 1945 lease so that thereafter oil and oil rights were held by oil production only and gas and gas rights were held by gas production only.

Although the trial court did not expressly conclude that the 1945 lease, as amended, was unambiguous, neither party complains of such failure. Indeed, both parties agree that the instrument is unambiguous and we hold that it is not ambiguous. We further conclude that, despite its designation, finding of fact # 15 is a conclusion of law. Shirey v. Albright, 404 S.W.2d 152 (Tex.Civ.App.—Corpus Christi 1966, writ ref’d n. r. e.).

Because the instrument in question is, as a matter of law, unambiguous and finding #15 is a conclusion of law, appellants’ points 7 and 8 which allege that finding of fact # 15 is not supported by any evidence and that such finding is contrary to the great weight and preponderance of the evidence cannot be sustained. Even so, if we consider the lease as ambiguous, the trial court’s finding of fact # 15 is supported by the release executed by appellants’ predecessors in title in October of 1954 and by the release by appellants in 1966 of all oil rights in the twenty acre tract on which B-5 is located. These documents are some evidence that the parties to the lease intended to amend the habendum clause of the 1945 lease so that oil rights were held by oil production only and gas rights were held by gas production only. Thus, for these additional reasons appellants’ point 7 must be overruled. In Re King’s Estate, 150 Tex. 662, 244 S.W.2d 660 (1951).

As for point 8, when we view the evidence both favorable to and contrary to the trial court’s finding we find the only contrary evidence to be: 1) the self serving testimony of appellant Nafco’s employee, Mr. Havard that the appellant Naf-co had always treated the B-l, B-2, B-3, B-4, B-5 and B-6 tracts as “one lease”; 2) a memo prepared by Mr. Havard that “Only the B-l well is still in production and holding the Halamicek Lease”. Therefore, the trial court’s finding is not so contrary to the great weight and preponderance of the evidence as to be clearly wrong and unjust. O’Neill v. Craig, 493 S.W.2d 898 (Tex.Civ.App.—Corpus Christi 1973, writ ref’d n. r. e.); In Re King’s Estate, supra. Appellants’ points 7 and 8 are overruled.

By their ninth point, appellants allege that the trial court’s finding (14d) that appellant Nafco’s failure to attempt to restore gas production to the B-5 well from January 1, 1972, through October 1972 was unreasonable and that Nafco did not act as' a reasonably prudent operator is contrary to the great weight and preponderance of the evidence.

Although we feel that such a finding is supported by sufficient evidence, the issue of whether or not Nafco conducted itself as a “reasonably prudent operator” is not involved in this case, because there was a total and voluntary cessation of production. Wainwright v. Wainwright, 359 S.W.2d 628 (Tex.Civ.App.—Fort Worth 1962, writ ref’d n. r. e.). The issue of the reasonableness of Nafco’s conduct is material only insofar as it shows that the cessation of production from Well B-5 was not “temporary” in the sense that it would permit Nafco to hold the 160-acre B-2 gas well tract, on which B-5 is located, by renewal of gas production from B-5 after an eight month cessation of production. Normally where production in paying quantities ceases after the end of the primary terms, the lease automatically terminates. Watson v. Rochmill, 137 Tex. 565, 155 S.W.2d 783 (1941). The application of this rule has been modified, however, where there has been temporary cessation of production due to a sudden stoppage of the well or some mechanical breakdown of the equipment or other similar circumstances. Watson v. Rochmill, supra; Scarborough v. New Domain Oil & Gas Co., 276 S.W. 331 (Tex.Civ.App.—El Paso 1925, writ dism’d). The evidence establishes that no production was obtained from the B-5 well in the month of October 1971 and no production for the months of February through October of 1972. The reason for this cessation of production was the depletion of the 4200 foot Miocene sand. The cessation of production was not brought about by any mechanical failure, nor was it sudden or unexpected. Some reworking did take place between October 1971 and December 1971. But this did not achieve continuous production. No further work was done from January 1972 through September 1972. Subsequently, in October 1972, the well was recompleted as an associated gas well in the Magnet Withers gas cap. The existence, however, of the Magnet Withers gas cap was known to appellants in January of 1972. The recompletion work done in October of 1972 could have been easily done in January 1972. The decision to let the well sit without production was simply based on economics.

We feel that this evidence clearly shows that the cessation of production for a period of approximately eight months was not such a “temporary cessation” as would allow appellants to keep the lease in effect by renewed production in October of 1972 from Well B-5. See Watson v. Rochmill, supra. After considering the entire record, we hold that the finding of fact # 14d is not so against the great weight and preponderance of the evidence as to be clearly unjust. Appellants’ ninth point is overruled.

The judgment of the trial court is affirmed.


author: COULSON, Justice.

text:
    Shearn MOODY, Jr., Appellant, v. The MOODY NATIONAL BANK OF GALVESTON et al., Appellees.
    No. 1146.
    Court of Civil Appeals of Texas, Houston (14th Dist.).
    April 23, 1975.
    Rehearing Denied May 14, 1975.

      Frank G. Newman, Dallas, W. James Kronzer, Jed Robinson, Kronzer, Abraham & Watkins, Houston, for appellant.
    Griffith D. Lambdin, Bedford, Lambdin & Schwab, V. W. McLeod, McLeod, Alexander, Powel & Apffel, Preston Shirley, Mills, Shirley, McMicken & Eckel, Galveston, for appellees.
   COULSON, Justice.

This is an appeal from a summary judgment entered against the plaintiff, Shearn Moody, Jr. (hereinafter Moody or plaintiff). Moody brought suit seeking a declaratory judgment, or in the alternative, the reformation of certain written instruments.

Moody is named as a beneficiary under the will of Libbie Shearn Moody which was admitted to probate on May 12, 1943. He was bequeathed during his life time ⅛⅛ of the income of the trust created by the will. The Moody National Bank of Galveston (hereinafter Trustee), a defendant in this suit, was named by the will as trustee over the assets in the Libbie Shearn Moody Trust (hereinafter the Trust).

On September 28, 19S9, an agreed judgment was entered by the District Court of Galveston County in the case styled “The Moody National Bank of Galveston v. W. L. Moody, III, et al.” That judgment construed and interpreted certain terms and provisions of the last will and testament of Libbie Shearn Moody.

The relevant portions of The Last Will & Testament of Libbie Shearn Moody are as follows:

10.Neither the corpus nor the income from the trust shall be liable for the debts of any beneficiary nor shall the same be subject to seizure by any creditor of any beneficiary under any writ or proceedings at law or in equity and no beneficiary shall have the power to sell, assign, transfer, encumber or in any manner anticipate his or her or its interest in the trust or the income produced thereby and no beneficiary shall be permitted to appoint any agent or attorney in fact to receive, collect or receipt for any principal or income, except as may be specifically permitted by the Trustee.

The relevant portions of the agreed judgment in the case of The Moody National Bank of Galveston v. W. L. Moody, III, et al., are as follows:

ORDERED, ADJUDGED, DECREED and DECLARED, that the terms and provisions of Paragraph IV, subpara-graph 10 of the Last Will and Testament of Libbie Shearn Moody, Deceased, dated August 22, 1942, as relates to the issues involved in this action, mean, and are hereby construed to mean, that although neither cross-plaintiff, Robert Lee Moody, nor any of the other life income beneficiaries in the Libbie Shearn Moody Trust Estate of their own volition are allowed to sell or assign their respective life estate interests without the consent and specific permission of the Trustee, and although Trustee may in its discretion withhold its consent and specific permission and thereby prevent such sale or assignment, nevertheless, if any of the plaintiffs as life income beneficiaries under the Trust Estate desire to sell or assign all or part of their said life estate interests, and if in the discretion and judgment of the Trustee such sale or assignment ought specifically to be permitted, and by the Trustee it is specifically permitted, then such sale or assignment by that cross-plaintiff as life income beneficiary of all or part of his or her entire life estate interest in the said Trust Estate and the income produced thereby is authorized, permitted and valid within the terms, provisions, intent and purpose of the said sub-paragraph 10; it is further
ORDERED, ADJUDGED, DECREED and DECLARED that the intent of the Testatrix expressed in Paragraph IV, subparagraph 10 of her said Will dated August 22, 1942, and the actual, lawful and proper meaning thereof is that the phrase, “except as may be specifically permitted by the Trustee”, modifies and applies to the provision that “no beneficiary shall have the power to sell, assign, transfer, encumber or in any manner anticipate his or her interest in the Trust or the income produced thereby”, so that such a sale or assignment by cross-plaintiff, Robert Lee Moody, or any of the other life income beneficiaries of said Trust Estate of all or part of his or her entire interest in the Trust Estate or the income produced thereby as may specifically be permitted by the Trustee is not prohibited by the provisions of said subparagraph 10, but it is thereby permitted, authorized and approved. It is further
ORDERED, ADJUDGED, DECREED and DECLARED that in the event of sale or assignment by any of the present life income beneficiaries of the Libbie Shearn Moody Trust Estate, said present life income beneficiaries being Mary Moody Northern (⅛⅛), W. L. Moody, IV, (½6⅛), Shearn Moody, Jr., (⅛⅛), and Robert Lee Moody (⅛⅛), of all or part of their respective entire life estate interests in the said Trust Estate and the income produced thereby with the consent and specific permission of the Trustee, The Moody National Bank of Galveston, insofar as any provision of the Last Will and Testament of Libbie Shearn Moody, Deceased, dated August 22, 1942, is concerned, said sale or assignment will be, and is hereby decreed and declared to be in all respects valid and authorized by said Will, and thereafter any payments in proper amount made by said Trustee to the purchaser or assignee of said respective life estate interests out of the Trust Estate and the income produced thereby on account of said sale or assignment will be, and are hereby DECREED and DECLARED to be, in all respects, authorized and valid under the terms of said Will, and the Trustee will have, and it is hereby so DECREED and DECLARED, no further liability, obligation or duty as Trustee or otherwise as relates to any of said life income beneficiaries so selling or assigning, to the extent and degree so sold or assigned, on account of said Trust Estate or the income produced thereby.

On July 10, 1963, the Moody National Bank of Galveston, as trustee of the trust estate of Libbie Shearn Moody, approved a transfer and assignment made by the plaintiff of an undivided two-fifths (%ths) part or interest of his undivided one-eighth life interest in the income of the Trust. The assignment, as set out below, was to the Empire Life Insurance Company of America (hereinafter Empire), an Alabama corporation and a defendant in this case. At the time of the assignment, Moody was the sole voting shareholder of Empire Life Insurance Company. The assignment states in relevant part:

NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that I, SHEARN MOODY, Jr., of the City and County of Galveston, State of Texas, for and in consideration of the sum of TEN DOLLARS ($10.00) cash to me in hand paid by the EMPIRE LIFE INSURANCE COMPANY, a life insurance corporation, duly organized and existing under the laws of the State of Alabama, with its principal offices in Birmingham, Alabama, and its executive offices in Galveston, Texas, and other good and valuable consideration, do hereby grant, sell, transfer, assign and convey into the said EMPIRE LIFE INSURANCE COMPANY an undivided two-fifths (%) part or interest in and to the estate of LIBBIE SHEARN MOODY, deceased, given, granted and bequeathed to me under the hereinabove mentioned Last Will and Testament of LIBBIE SHEARN MOODY, deceased, and in and under the construction and interpretation thereof by the hereinabove mentioned judgment of the District Court of Galveston County, Texas, 56th Judicial District, together with all of my right, title, interest, estate or claim in and to such interest therein together with such proportionate portion of the income to be produced thereby, (subject only to the reservation hereinafter contained) and I do hereby fully authorize and empower the said EMPIRE LIFE INSURANCE COMPANY to demand, receive and receipt for any and all payments, distribution or divisions, arising out of the interest conveyed hereby accruing to me thereunder as fully and completely as I might do and for and in my name, place and stead and I do hereby vest in my said assignee full power in its or in my name to ask, demand, sue for, collect, receive, compound and give acquittances for any and all payments, distributions, benefits or interests accruing hereunder
There is hereby expressly reserved to me all income accrued to said Trust Estate of LIBBIE SHEARN MOODY at any time during my minority and held for and in my name by the Trustee under the provisions of Paragraph IV, subpar-agraph 8 of said Last Will and Testament of LIBBIE SHEARN MOODY, deceased, and no part of such income or funds shall ever be subject to the terms of this assignment ....
Galveston, Texas
July 3, 1963
Receipt is acknowledged of a copy of the above and foregoing transfer and assignment and same is approved by THE MOODY NATIONAL BANK OF GALVESTON in its capacity as Trustee under the estate of LIBBIE SHEARN MOODY, deceased.
THE MOODY NATIONAL BANK OF GALVESTON
By s/ W. J. Campbell
Trust Officer

In return for the interest in the Trust which he conveyed, Moody received a debenture in the amount of $221,000. In his petition, Moody alleges that no part of the principal or interest of the debenture has ever been paid to him.

Subsequent to Moody’s acquisition of the voting interest of Empire Life Insurance Company, and under his direction, Empire embarked upon a vigorous program of expansion through merger. The course which that program took is documented in the summary judgment evidence. For our purposes, it suffices to note that at no time was the Trust interest which had been conveyed to Empire ever assigned by Empire to any other party. Ultimately, Empire fell into an insolvent position due to the decrease in valuation assigned to the Empire interest in the Libbie Shearn Moody Trust by the Insurance Department of Alabama.

As a result of the insolvency, the States of Alabama, Texas, Montana, Nebraska, Oklahoma, and Arkansas suspended the operations of Empire Life Insurance Company and proceeded with plans for reinsuring the outstanding Empire insurance policies. The reinsurance plan has been approved by the Circuit Court for the Tenth Judicial District of Alabama. The Court of Civil Appeals for the Third Supreme Judicial District of Texas has held that the Alabama judgment, binding Empire to the reinsurance plan, must be accorded full faith and credit in the courts of the State of Texas. The reinsurance program worked out by the Insurance Commissioners of Alabama, Texas, and Arkansas provides, among other things, that Empire is to transfer and convey to the reinsurer, Protective Life Insurance Company of Birmingham, Alabama, its interest in the Lib-bie Shearn Moody Trust. It is the proposed assignment of the Trust interest from Empire to Protective Life Insurance Company of Birmingham, Alabama, which is now before this Court.

The plaintiff seeks declaratory relief under the provisions of Vernon’s Tex.Rev.Civ.Stat.Ann. art. 2524-1 (1965). He would show that the assignment of July, 1963, gave Empire the right to receive, collect or receipt for two-fifths of Shearn Moody’s income from the Trust and that it did not give Empire the right to assign or convey such interest. Alternatively, plaintiff contends that, irrespective of the assignment, Empire stands, at best, in the shoes of the plaintiff under the terms of the will, and that Empire, therefore, cannot assign or convey the interest in the Trust without the consent of the Trustee, the Moody National Bank of Galveston.

The plaintiff’s second count seeks a reformation of the assignment of July 10, 1963, under the theory of mutual mistake. The plaintiff contends that it was the intent of the plaintiff and Empire that the assignment of the interest in the Trust was to Empire alone, without any right in Empire to convey said interest to a third party.

The Moody National Bank of Galveston filed an answer stating that it was the trustee of the Libbie Shearn Moody Trust, but, that its only interest in the outcome of the law suit was in such decrees as might affect the Bank’s administration of the Trust. The Bank asserted that no action on its part had caused or encouraged the plaintiff to bring the law suit, and asserted its impartiality as between the competing interest of the plaintiff and any other claimant to the disputed interest in the Trust.

The Empire Life Insurance Company, through its Temporary Ancillary Receiver, filed an answer generally denying the plaintiff’s assertions and urged that the plaintiff was estopped to deny the unconditional transfer of interest to Empire Life. The alleged estoppel is based upon actions taken and statements made by the plaintiff warranting to the policyholders, shareholders, public, and regulatory agencies of the insurance industry, that the asset in question was the unrestricted property of Empire. Empire further asserted that the plaintiff’s causes of action were barred by the four year statute of limitations; that it held clear and free title by virtue of the assignment dated July 10, 1963; and that no permission or consent by the plaintiff or Moody National Bank, as Trustee, is needed to perfect any sale or transfer.

Empire filed a motion for summary judgment. As summary judgment evidence, Empire attached copies of the 1959 judgment interpreting the Last Will and Testament of Libbie Shearn Moody; the 1963 assignment by the plaintiff to Empire; various documents and pleadings made by the plaintiff and referring to Empire’s asserted interest in the Trust; and documents from the Circuit Court of the Tenth Judicial District of Alabama appointing a receiver and approving the reinsurance program above described.

On November 20, 1974, the trial court granted Empire’s summary judgment based upon its interpretation of the assignment of July 3, 1963, and the will of Libbie Shearn Moody. The plaintiff has appealed from that judgment.

In reviewing the trial court’s summary judgment denying the plaintiff’s request for a declaratory judgment, this Court must determine that Empire demonstrated that there were no questions of material fact. Rice v. Nu-Ray Electric Company, Inc., 514 S.W.2d 86 (Tex.Civ.App.—Fort Worth 1974, no writ).

The trial court properly found that the action for declaratory judgment involved questions of law alone. The controversy is over the proper construction which is to be given two documents, a will and an assignment. The instruments are complete on their face and unambiguous. Therefore, rendition of a summary judgment was proper in this case. State v. Rubion, 158 Tex. 43, 308 S.W.2d 4 (1957).

The trial judge correctly held that, as a matter of law, the plaintiff assigned and transferred to Empire full and complete title and interest to two-fifths of plaintiff’s right to receive during his lifetime an undivided one-eighth of the income from the Libbie Shearn Moody Trust; and that Empire acquired the absolute and unconditional power to transfer, assign, or convey all or any part thereof without the permission of the plaintiff or the Trustee.

It is an elementary principle of property law that conditions in restraint of alienation are not favored in the construction of a will. Such conditions are strictly construed to avoid extending the restraint. The conditions will not be implied, but must be stated in unequivocal terms. 96 C.J.S. Wills § 994a.

Libbie Shearn Moody’s will clearly evidences the testator’s intent that the beneficiaries under the Trust established by the will, be restricted in their ability to assign their trust interest. In order for a named beneficiary to assign an interest, the permission of the Trustee must be obtained. That restriction was obviously intended to protect the beneficiaries. However, no specified testamentary purpose would be served by carrying over that restriction to a beneficiary’s assignee. Once a valid assignment (one approved by the Trustee) had been made, the effects of the restrictive provisions on the interest assigned were exhausted.

The assignment made by the plaintiff to Empire purported to transfer all of the plaintiff’s “right, title, interest, estate or claim to such interest” in two-fifths of the plaintiff’s life estate in one-eighth of the income from the Libbie Shearn Moody Trust. The plaintiff contends that the assignment to Empire did not include the unrestricted right in Empire to alienate the property. This is argued on two grounds.

The plaintiff’s first contention is that the assignment did not transfer an unrestricted right of alienation because the plaintiff had no such right to transfer. The basis for this argument is the principle that a grantor can convey only so much interest in property as he himself has. The plaintiff argues that because his power to alienate the asset was restricted, then that of the assignee must also be restricted. However, that argument assumes that the restrictions on the plaintiff’s power of alienation affected the plaintiff’s title to the interest. That is not the case. The restrictions contained in the Libbie Shearn Moody will were personal to the plaintiff. They were designed to protect the plaintiff and affected his enjoyment of his life estate. However, upon meeting the requirement that the Trustee approve any trans-ferral, the plaintiff had the power to completely convey his interest in the Trust or any portion thereof. The restriction on alienation was not such as would run with title to the asset. Billington v. Riffe, 492 S.W.2d 343 (Tex.Civ.App.—Amarillo 1973, no writ).

The plaintiff’s second contention is that, even if he could have granted Empire the power to convey the interest in the trust, the language used in the assignment did not grant such power. The assignment conveys “into the said EMPIRE LIFE INSURANCE COMPANY.an undivided two fifths (⅜) part or interest in and to the estate of LIBBIE SHEARN MOODY .” Nowhere in the assignment are the heirs or assigns of the Empire Life Insurance Company included in the grant. At common law the use of words of inheritance such as “heirs and assigns” was essential in the conveyance of a fee simple estate to a natural person. However, even under the strictures of the common law, such was not the case in conveyances to corporations. 26 C.J.S. Deeds § 109 a.

The severe effects of these common law doctrines have been remedied by statute. Tex.Rev.Civ.Stat.Ann. art. 1291 (1962) requires that any limitations upon an estate in land must be expressly made rather than implied from the presence or absence of common law formulas. The statute applies only to estates in land, but it expresses the public policy of the State of Texas with respect to conveyances of this nature as well. The absence of words of inheritance in this case did not preclude the assignee from assigning the interest in the Trust.

As a part of its judgment the trial court generally denied all relief sought by the plaintiff. With that denial of relief the trial judge refused the plaintiff’s petition seeking reformation of the assignment.

The trial court properly concluded that the plaintiff should be denied a reformation of the assignment as a matter of law. Such a reformation would defeat the purposes and policies of the State of Texas as embodied in the insurance laws of this State.

In this case, the Empire Life Insurance Company has been involuntarily placed in the hands of a receiver. The right to receive %ths of the ⅛⅛ share of Shearn Moody, Jr. to the income from the Libbie Shearn Moody Trust during his life time has always been considered the absolute property of Empire regardless of the right to assign that interest. That right to the income has been used by the plaintiff and by Empire to obtain the right to legally operate as an insurance company in the States of Alabama and Texas. This is evidenced by the 1964 annual financial statement of Empire Life Insurance Company which states:

Shearn Moody, Jr., President, being duly sworn . . . deposes and says . . . that on the thirty-first day of December last, all of the herein described assets were the absolute property of the said insurer free and clear from any liens or claims thereon, except as herein stated ....
/s/ Shearn Moody, Jr.
President-

Among the assets listed as the absolute and unencumbered property of Empire is the “Moody trust life interest” which is valued at $5,813,440.

Vernon’s Tex.Ins.Code Ann. art. 21.28, § 2(g) (1963) states that: “The receiver may, subject to the approval of the court, (1) sell or otherwise dispose of the real and personal property, or any part thereof, of an insurer against whom a proceeding has been brought under this Article . .” Although the insolvency proceedings against Empire originated in Alabama, we are to give those proceedings full faith and credit in Texas. Under the laws of this State regulating insurance companies, the receiver has the power to sell or dispose of the assets of the insolvent insurer. Any reformation of the assignment between these parties would be irrelevant and against public policy when considered in the light of their present status. They have represented to the regulatory agencies of these states that the “Moody trust life interest” stood available to make good the debts of the Empire Life Insurance Company. The parties now cannot attempt to undo that representation by reformation.

The plaintiff has applied to this Court for a writ of injunction to preserve 'the status quo pending the outcome of this litigation. Because of our holding in the principal case that application has become moot.

Affirmed and application for writ of injunction denied.

CURTISS BROWN, J., not participating.


author: SHANNON, Justice.

text:
    STATE BANKING BOARD et al., Appellants, v. PROPOSED CENTRAL PARK BANK OF DALLAS, Texas, et al., Appellees.
    No. 12229.
    Court of Civil Appeals of Texas, Austin.
    April 30, 1975.
    Rehearing Denied May 21, 1975.

      John L. Hill, Atty. Gen., John H. Banks, Asst. Atty. Gen., Austin, for State Banking Board, and others.
    Larry Temple, Austin, for North Park National Bank of Dallas.
    Arthur Mitchell, Austin, Kirk Patterson, Mitchell & Stewart, San Antonio, and Mitchell, George & Belt, Austin, for Proposed Central Park Bank of Dallas.
   SHANNON, Justice.

The question for decision is whether the order of the State Banking Board of Texas, denying an application for a proposed bank in Dallas upon the basis of no public necessity and insufficient volume of business to indicate a profitable operation, is supported by substantial evidence. Vernon’s Tex.Rev.Civ.Stat.Ann. art. 342-305, subd. A(1), (3). As we are of the opinion that the order is supported by substantial evidence, the judgment of the district court will be reversed.

Jack Diamond and others, appellees, filed an application with the State Banking Board of Texas for a proposed bank in Dallas, to be designated The Central Park Bank of Dallas. After hearing, the Board entered an order denying the application.

Appellees filed suit in the district court of Travis County to set aside the order of the Board and to require the Board to issue a charter. The trial court granted the relief sought. We will reverse the judgment of the trial court. Appellants are Robert Stewart, State Banking Commissioner of Texas; Jesse James, Treasurer of Texas; James Lindsey, member of the State Banking Board of Texas; and North Park National Bank of Dallas.

The Board’s refusal of appellees’ application was grounded upon its negative findings relating to Tex.Rev.Civ.Stat.Ann. art. 342-305, subd. A(1), (3). Those provisions read as follows:

“(1) A public necessity exists for the proposed bank;
“(3) The volume of business in the community where such proposed bank is to be established is such as to indicate profitable operation of the proposed bank;”

The trial court concluded that the negative findings of the Board were not supported by substantial evidence.

An appeal from an order of the State Banking Board of Texas is governed by the substantial evidence rule. Chemical Bank & Trust Company v. Falkner, 369 S.W.2d 427 (Tex.1963). As the Board’s order is presumed to be supported by substantial evidence, it was appellees’ burden to overcome that presumption. City of San Antonio v. Texas Water Commission, 407 S.W.2d 752 (Tex.1966); Isbell v. Brown, 196 S.W.2d 691 (Tex.Civ.App.1946, writ ref’d). To set aside the order, it was appellees’ burden to demonstrate that the evidence, as a whole, was such that reasonable minds could not have concluded to deny the application. Trapp v. Shell Oil Co., 145 Tex. 323, 198 S.W.2d 424 (1946). Substantial evidence need not be much evidence, and though “substantial” means more than a mere scintilla, or some evidence, it is less than is required to sustain a verdict being attacked as against the great weight and preponderance of the evidence. Southern Methodist University: Reavley, “Substantial Evidence and Insubstantial Review in Texas,” 23 S.W.L.J. 239, 241 (1969). If there existed substantial evidence which would have supported either the grant or the denial of the application, the Board’s order is entitled to be given full effect. Texas Aeronautics Commission v. Braniff Airways, Inc., 454 S.W.2d 199 (Tex.1970).

In the case at bar the Board refused to find affirmatively with respect to subsections (1) and (3), but instead found that there was no public necessity for the proposed bank and that the volume of business in the community was insufficient to indicate a profitable operation. Before the judgment of the trial court may be affirmed, we must hold that the order of the Board is not supported by substantial evidence and that the evidence so conclusively required an affirmative finding that the Board’s refusal to make it was arbitrary or capricious. Gerst v. Cain, 388 S.W.2d 168 (Tex.1965). To the contrary, we are of the opinion that there existed substantial evidence at the time of the entry of the order which would have supported either the grant or the denial of appel-lees’ application. The posture of the record being such, is follows that the order of the Board denying the application should be given effect. Texas Aeronautics Commission v. Braniff Airways, Inc., supra.

Appellees called Edward DeSpain, an expert witness, who testified that he had prepared an economic study concerning the feasibility of the proposed bank. DeSpain testified that Dallas and Dallas County had experienced a sustained population growth greater than that of the state as a whole for the period from 1960 to 1970. His testimony was that the population growth in the “primary and secondary” trade areas of the planned bank between 1970 and 1972 was even higher than that of the city and county of Dallas. The levels of income in the primary and secondary trade areas of the said proposed bank were higher than other areas of Dallas. Appellees’ evidence was that over 44% of the families in 1970 in those service areas had incomes over $15,000. Their evidence was also that the increase in deposit of area banks was greater than the increase in Dallas as a whole, and that the profitability of area banks had increased steadily.

Appellees’ exhibits showed continuous new construction of “housing units” in the primary service areas between 1969 and 1972. Appellees also produced evidence of the traffic count on the North Central Expressway as being in excess of 75,000 each day.

Four of the directors of the proposed bank testified as to the substantial demand deposits which they could, and would, cause to be placed into the new bank. DeSpain was of the view that upon those demand deposits being added to the capital contributions of the stockholders and to the expected accounts in the bank, the profitability of the bank was “absolutely guaranteed.”

DeSpain concluded that a public necessity existed for the proposed bank, and that the volume of business in the community where the proposed bank was to be located was such as to indicate a profitable operation.

In opposition to the intended bank, appellant North Park National Bank called Donald F. Jackson, an associate professor of finance at Southern Methodist University and an associate director of the Southwest Graduate School of Banking. He testified as to the reasons for his opinion that there was no necessity for the proposed bank and that the volume of business in the community in which the proposed bank was to be located was not such as to indicate a profitable operation.

The proposed bank was to be located at 10300 North Central Expressway at the intersection of Meadow Road and the expressway. Jackson was well acquainted with the proposed bank and the surrounding geographic area since he had lived in that area for about seventeen years. Jackson testified concerning certain geographic impediments to the successful operation of the bank at the proposed location. He noted that a sizable portion of the land east of the site of the proposed bank is used by a country club and is a flood plain which cannot be developed. Another geographic impediment to further growth of the area is a large gravel pit at the corner of the expressway and Forest Lane and a vacant area which would probably remain so because of its rough topography.

Another negative factor as to the profitability vel non of the bank is the lack of easy accessibility of the site of the proposed bank to the area it proposed to serve. Jackson testified that the more inaccessible property is, the slower it is to develop. He commented that there is not a good road network from. the west to the eastern part of the service area. For example, Meadow Lane, the primary east-west artery, is a one-way street for a period of time in the mornings and again in the afternoons on school days.

Jackson was of the opinion that the North Central Expressway, the major north-south artery going in front of the proposed site, is an artificial barrier which discourages persons in the western part of the primary trade area from going to the eastern part where the proposed site is located.

According to Jackson there are no significant numbers of employees and no significant pockets of employment within the primary trade area of the proposed bank. Also of significance to Jackson is that there is no retail or commercial activity within the primary trade area to serve to draw potential customers into the area.

Jackson observed that most of the developed portion of the primary trade area is closer to an existing bank than to the site of the proposed bank. Also of significance to the availability of deposits, Jackson testified that a significant number of persons who live in the area still maintain their business connections with downtown banks.

Also a relevant factor for consideration, according to Jackson, is whether or not the subscribing stockholders reside within the area to be served by the bank. In this connection the record shows that most of the subscribers to the proposed bank do not live in Dallas.

In their original brief and by a supplementary brief, appellees claim that the Board’s denial of their application for the proposed bank was arbitrary and capricious as demonstrated by the Board’s entry of an order four months later permitting Green-ville Avenue State Bank to relocate near the site of the proposed bank. In passing on Greenville’s application for relocation appellees say that the Board necessarily must have found the existence of public necessity and profitability of operation, whereas four months previously the Board had denied the existence of those requirements in appellees’ application.

To understand appellees’ position some factual statement is necessary. On August 8, 1972, appellees filed their application for their proposed bank at North Central Expressway and Meadow Road. About eight months later and on April 23, 1973, Green-ville Avenue State Bank filed an application for a change of domicile to Abrams Road at Fair Oaks. Greenville’s application was denied by the Board on July 25, 1973. On September 12, 1973 the Board denied appellees’ application. After that denial, and on September 27, 1973, Green-ville filed another application for change of domicile to be located at Greenville Avenue and Walnut Hill Lane, seven-tenths of a mile from the location of appellees’ proposed bank. On January 16, 1974, the Board approved Greenville’s second application for change of domicile.

Appellees argue that the later grant of the Greenville application showed, as a matter of law, arbitrariness by the Board in denying their application “ . . - by the fact that the economic studies in support of the two Greenville applications were virtually identical, even though one of these studies was submitted before the order on the Central Park application and one was submitted after the State Banking Board entered such order on Central Park Bank.”

By attacking the Board’s grant of Greenville’s second application in January of 1974, appellees seek to bolster their argument that the Board’s denial of their application in September of 1973, was arbitrary and capricious. Appellees’ argument is bottomed upon the unstated premise that the Board was bound in the second Green-ville hearing by its findings of no necessity and lack of profitability in its order denying appellees’ application. Though not articulated, appellees’ argument is that the September, 1973, order was res judicata of the second Greenville application. The res judicata argument might be more appropriate if this were an appeal from the order of the Board granting the second Green-ville application.

Aside from the propriety of appel-lees’ argument, that argument necessarily assumes an identity of issues, which assumption, we think, does not bear examination. More than four months had elapsed between the date of appellees’ application and the granting of Greenville’s second application. This record does not show what the economic facts were as of January 16, 1974, the date of the approval of Green-ville’s application. Also, the site of appel-lees’ proposed bank was different from the site of Greenville’s relocation. Nothing in the record reflects the accessibility to the Greenville relocation, whereas Jackson testified that appellees’ proposed site was not a likely one. See 2 Cooper, State Administrative Law, § 5, p. 521; § 8, p. 527, 2 Amer.Jur.2d Administrative Law, § 502 (1962).

We reverse the judgment, and here render judgment affirming the order of the State Banking Board of Texas.

Reversed and rendered.


author: PER CURIAM. GUITTARD, Justice.

text:
    FANDEL, INC., Appellant, v. FIRST OF DENVER MORTGAGE INVESTORS et al., Appellees.
    No. 18583.
    Court of Civil Appeals of Texas, Dallas.
    April 3, 1975.
    Rehearing Denied May 1, 1975.

      Khent H. Rowton, Dallas, G. C. Butler, Bonham, for appellant.
    Eldon L. Youngblood, Robert M. Roller, Bruce W. Claycombe, Coke & Coke, Thomas L. Case, Johnson, Bromberg, Leeds & Riggs, Dallas, for appellees.
   MEMORANDUM OPINION ON MOTION TO AMEND ORDER

PER CURIAM.

On January 6, 1975, we heard and considered petition for injunctive relief filed by appellants Fandel, Inc., a Texas corporation and Leonard A. Renfrow, in which appellants sought a temporary injunction preventing appellees First of Denver Mortgage Investors, and/or Eldon L. Young-blood, Trustee, from conducting a sale of realty on January 7, 1975, pursuant to authority of a deed of trust. After due consideration of the motion we granted same and entered an order providing:

It is therefore ordered, adjudged and decreed that appellees First of Denver Mortgage Investors and Eldon L. Youngblood, Trustee, be andftthe same are hereby enjoined and restrained from conducting the foreclosure sale of the real property described in Plaintiff’s Original Petition in Cause No. 74-8399-J/A in the 14th District Court of Dallas County, Texas, pending final determination of the appeal of this cause in this Court.

Thereafter, Eldon L. Youngblood, Trustee, posted notices pursuant to the terms of the deed of trust in which it was announced that sale pursuant to the deed of trust would be conducted on Tuesday, February 4, 1975, such date being prior to the time this court has set this case for oral argument on the merits of the appeal. In a hearing before this court on a motion to hold appellant Youngblood, Trustee, in contempt for violating the court’s order of January 6, 1975, the said appellant Young-blood contended that since the court’s prior order did not specifically enjoin him, as Trustee, from posting notices that he was not in contempt of such order by his action in posting same. At the same time appellant Youngblood, Trustee, announced in open court that he had no intention of violating the court’s order concerning sale of the property and that he would not sell the same pursuant to the terms of the deed of trust prior to the time this court rendered its decision on the appeal now pending.

Appellants Fandel, Inc. and Leonard A. Renfrow now file their motion asking us to enlarge our order of January 6, 1975, so as to expressly prohibit appellees from posting notices or taking any other steps which might constitute a part of the sale of the property under the terms of the deed of trust. We sustain this motion to enlarge our order for the following reasons.

(1) The act on the part of the Trustee in posting notices for the required number of days prior to sale on the first Tuesday of any month is, in our opinion, a necessary and integral part of the sale itself. Without the giving of notice as required by the deed of trust, such sale eventually made would be invalid.

(2) The existence of an injunction restraining the sale at the time of posting notice would cast doubt upon the validity of the entire process and thereby invite an attack on the sale, even though the injunction may be dissolved before the sale is made.

(3) The existence of an injunction restraining the sale at the time of posting notices would be likely to cause prospective purchasers to refrain from bidding upon the property and thereby stifle open and competitive bidding as contemplated by law.

(4) Notice of sale prior to final resolution of the question of the validity of the sale by this court could possible result in confusion and disturbance of the orderly processes of motions for rehearing, applications for writs of error, etc.

It is therefore ordered, adjudged and decreed that the order of this court made on January 6, 1975, be and the same is hereby amended, as follows:

Appellees First of Denver Mortgage Investors and Eldon L. Youngblood, Trustee, be and the same are hereby enjoined and restrained from conducting the foreclosure sale of the real property described in plaintiff’s original petition in cause no. 74-8399-J/A in the 14th District Court of Dallas County, Texas, and are further restrained from taking any steps whatsoever, including the posting of notices of sale, giving notice to any parties herein or third parties of any such proposed sale, or taking any further action which might in any manner be construed as a step in the direction of a sale pursuant to the deed of trust in question, pending final determination of the appeal of this cause in this court.

GUITTARD, Justice.

This appeal is from an order denying a temporary injunction. The vendor of approximately twenty acres of land, and a corporation to which he later conveyed the land, sought restraint of a trustee’s sale under a deed of trust given by the original purchaser to secure a loan. Plaintiffs allege that the deed-of-trust lien was extinguished by voluntary rescission of the original sale, and, therefore, that the deed of trust is a cloud on their title. Plaintiffs also seek to avoid an agreement subordinating the vendor’s lien to the deed of trust. We hold that the trial judge did not abuse his discretion in denying the temporary injunction because plaintiffs have not established grounds for avoiding the subordination agreement, and, consequently, they have failed to show a probable right to final injunctive relief.

The material facts are undisputed. The land formerly belonged to plaintiff Leonard Renfrow. On August 4, 1971, he conveyed it to defendant Modular Communities, Inc. by a deed reserving a vendor’s lien to secure a promissory note in the amount of two hundred thousand dollars. This note was also secured by a deed of trust. On September 19, 1972, Renfrow and Fannin National Bank, to which he had pledged the note, signed an agreement purporting to subordinate the lien evidenced by his deed of trust to another deed of trust to be executed by Modular Communities for the benefit of defendant First of Denver Mortgage Investors. Thereafter, on October 19, 1972, First of Denver and Modular Communities entered into an agreement for a loan to Modular Communities of not more than three hundred fifty thousand dollars, covering an earlier unsecured advance of forty-five thousand dollars and further advances to be made for construction of a mobile-home park on the property in question. Pursuant to this agreement, Modular Communities executed a deed of trust to defendant Eldon Young-blood as trustee securing a note for three hundred fifty thousand dollars payable to First of Denver. In addition to the forty-five thousand dollars previously advanced, First of Denver made further disbursements in favor of Modular Communities, which brought the total of the advancements secured by its deed of trust to approximately ninety-five thousand dollars.

This controversy arises as a result of default by Modular Communities in its indebtedness to both Renfrow and First of Denver. The transaction which plaintiffs allege to be a rescission is evidenced by a deed dated January 22, 1974, by which Modular Communities reconveyed the land to Renfrow.

After accepting this deed, Renfrow conveyed the land by general warranty deed to plaintiff Fandel, Inc., of which Renfrow was president. This deed recites consideration of ten dollars and certain shares of stock in Fandel.

Plaintiffs filed this suit in September 1974, alleging that defendant First of Denver had requested the trustee, Eldon Youngblood, to sell the land under the power granted in the deed of trust of October 19, 1972, and that this deed of trust should be cancelled and removed as a cloud from plaintiffs’ title because the lien evidenced by the deed of trust was extinguished by rescission of the original sale. They also attacked the subordination agreement on various grounds. The trial judge issued a temporary restraining order, but, on hearing evidence, denied plaintiffs’' application for a temporary injunction. We granted a temporary injunction to preserve the matter for review. Fandel, Inc. v. First of Denver Mortgage Investors (Tex.Civ.App.—Dallas, February 20, 1975, no writ). We now dissolve that injunction and affirm the order of the trial court.

Plaintiffs’ right to injunctive relief depends on their attack on the subordination agreement. The grounds of this attack are fraud, lack of consideration, and failure to comply with the terms of the agreement. None of these grounds is supported by the record.

We have examined the record and find no evidence of fraud. Neither do we find evidence of lack of consideration. The evidence would justify a finding that a substantial part of the funds lent by First of Denver to Modular Communities was advanced in reliance on the subordination. Although plaintiffs allege that Renfrow received no benefit from the subordination because the funds advanced were not actually used to improve the property, we hold that plaintiffs cannot avoid the subordination agreement after First of Denver advanced funds in reliance on it unless they show failure to comply with the terms of that agreement. Accordingly, the controlling question is whether plaintiffs have shown such a failure.

Plaintiffs’ allegation of failure to comply with the terms of the subordination agreement depends upon construction of the agreement itself. Plaintiffs contend that it incorporates a provision of the original purchase-money deed of trust which provides that this deed of trust is “hereby subordinated to any interim or permanent financing obtained by Maker thereof for the sole purpose of establishing improvements, and the holder of this note shall execute such further instruments as requested by the Lender providing such financing in order to confirm such subordination.” (Emphasis added.)

Plaintiffs further contend that as a result of incorporation of this limitation in the later subordination agreement, the subordination was ineffective with respect to any lien claimed by First of Denver because no construction work was ever done on the property. We reject this contention because we find no language in the subordination agreement which can reasonably be interpreted as incorporating this limitation. The only language of incorporation appears among the recitals in the agreement. After a reference to the purchase-money deed of trust, the following recital appears:

Said Deed of Trust conveys the following described real property situated in the County of Dallas, State of Texas:
As per Exhibit “A” attached hereto and incorporated herein by reference.

The “Exhibit ‘A’ ” attached is a copy of the purchase-money deed of trust.

The operative language of the agreement provides that for the express purpose of inducing First of Denver to make a loan to Modular Communities, Renfrow and the bank as “holders” of the purchase-money note, agree to subordinate their deed of trust to a certain deed of trust to be given by Modular Communities for the benefit of First of Denver to secure a promissory note in the amount of three hundred fifty thousand dollars. The agreement further provides:

That for all purposes, the Deed of Trust given by Borrower [Modular Communities] for the use and benefit of First to secure payment of the above-described indebtedness by Borrower to First shall be superior to the lien and encumbrance of Holders’ Deed of Trust, to the same extent and with the same effect as though such Deed of Trust given for the use and benefit of First had, in effect, been executed, delivered and recorded in Dallas County, Texas, prior to the execution, deliver and recording of the Holders’ Deed of Trust.

We hold that the trial court was justified in construing the subordination agreement as not incorporating the limiting language of the purchase-money deed of trust. Consequently, so far as the present record shows, regardless of whether the original sale was rescinded as between Renfrow and Modular Communities, the subsequent deed of trust was a valid lien on the property, and plaintiffs have no right to have it cancelled as a cloud on their title or to restrain a sale by the trustee pursuant to its terms.

The temporary injunction granted by this court is dissolved and the trial court’s order is affirmed.