133 F.2d 69 (5th Cir. 1943), 10055, Atwood v. Kleberg

Docket Nº:10055.
Citation:133 F.2d 69
Party Name:ATWOOD et al. v. KLEBERG et al.
Case Date:January 27, 1943
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

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133 F.2d 69 (5th Cir. 1943)

ATWOOD et al.


KLEBERG et al.

No. 10055.

United States Court of Appeals, Fifth Circuit.

January 27, 1943

Rehearing Denied April 6, 1943.

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Thomas Hart Fisher, of Chicago, Ill., and Brady Cole, of Houston, Tex., for appellants.

Robt. W. Stayton, of Austin, Tex., Leroy G. Denman, of San Antonio, Tex., Leroy G. Denman, Jr., of Houston, Tex., B. D. Tarlton, and Marcellus G. Eckhardt, both of Corpus Christi, Tex., Felix A. Raymer, R. E. Seagler, and Robert F. Campbell, all of Houston, Tex., and Jacob S. Floyd, of Alice, Tex., for appellees.

Before SIBLEY, HUTCHESON, and HOLMES, Circuit Judges.

HUTCHESON, Circuit Judge.

Appellants are three of the legatees under Mrs. King's will. Appellees are the other legatees, the trustees under her will, and the Humble Oil Company, holding an oil and gas lease executed by them.

An action to quiet title to all the minerals in the 1, 000, 000 acre King ranch, the suit had two branches or aspects, each relating to, but not identical with, the other. One of these was to establish the existence of a trust of the minerals, fix plaintiffs' undivided interest therein and secure the appointment of a successor trustee. The other was to cancel the lease.

On the first branch of the case, the claim was: that Mrs. King had by an instrument 1 creating a mineral trust and conferring large powers on the grantee, severed all the minerals from her lands, conveying

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29/32 of them in trust for the benefit of herself and the other beneficiaries designated in her will; that by such instrument, the trustee became vested with both the legal and the equitable title to the minerals with powers enabling him to completely convert the mineral interests of the beneficiaries, their only right in them being the cash from such conversion; that these severed interests passed under the provisions of Mrs. King's will in undivided interests; that the devisees of specific tracts of land and the distributees under the residuary trust clause thereof took their devises and distributions burdened with an undivided mineral interest outstanding under the trust; that Kleberg, the named trustee, remained until his death trustee of these interests; and that since his death, though no trustee has been named, the severance of the minerals from the land and the trust as to them has continued. There was a further claim that plaintiffs' interest under the will instead of being 9/64 as contended by the defendants, was 3/16, and the still further claim that the 3/32 mineral interest conveyed to Kleberg had lapsed, and plaintiffs were entitled to their proportionate part of that 3/16.

On the second branch of the case, the claim was: (1) that the minerals having been severed and placed in a mineral trust, the trustees under Mrs. King's will had no title to them which would support the lease they made to the Humble Oil & Refining Co.; (2) that if they did have title, the lease was invalid because they had no power under the will to make a lease of property lasting beyond the ten year term for which they were appointed trustees, and (3) the lease was to grossly improvident in its terms and conditions as to amount to an abuse of their trust.

There were voluminous pleadings and, in addition to the two controlling documents, the mineral trust and Mrs. King's will, a mass of evidence, oral and documentary. The district judge, because the same matters were at issue in another suit then pending in the same court, reserved all questions as to whether the trustees under Mrs. King's will had fairly selected and distributed the particular properties partitioned under the residuary clause of her will, and decided all of the other questions against plaintiffs. They have appealed and here present two primary and eight subordinate questions for decision. 2 To an understanding of the questions thus raised, two instruments are of prime importance, the mineral trust, summarized in the note above, and Mrs. King's will. The important

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provisions of the will executed in 1918, and probated in 1925, when she died at the age of 92 years, are (1) a provision appointing executors and providing for the payment of debts and expenses of administration; (2) specific devises and bequests of lands; (3) a residuary devise of all the rest and residue of her estate, real, personal and mixed, consisting of approximately 1, 000, 000 acres, cattle, ranch houses, equipment, etc., to eight trustees, R. J. Kleberg, Sr., and seven others, for a period of ten years from the date of her death, and until the final partition and distribution by them of all of her residuary estate. Directed to make due provision for the payment of taxes and expenses, and if they have sufficient funds left, to make the monthly payments provided for in the will, the residuary trustees were granted the broadest powers: to possess, hold, have, conduct, manage and control, lease, bargain, sell, convey and deliver or exchange the trust estate, or any of the properties, and to invest their proceeds as in their judgment they deem best; to borrow any monies upon and execute and deliver all necessary notes, mortgages and deeds of trust to secure the payment of same; to vest the trust estate; and generally do any and all things in the premises which Mrs. King would or could do if living and personally present and acting. They were particularly authorized to keep up and make all necessary improvements or changes in the lands, to employ any and all necessary persons to carry on the business and do all such acts in reference to the trust estate or any part of it as an owner similarly situated might do, not inconsistent with the provisions of the will. Upon the expiration of the trust period, the residuary trustees were mandatorily directed to partition and distribute the entire residuary trust estate to her children and grandchildren, as follows: To her son, Richard King, and to her daughter, Alice Kleberg, or their descendants, if deceased, each, the whole, and to her granddaughter, Henrietta Welton Page, or if deceased, to her descendants, and to...

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