Buist v. Connell

• Decision Date: 22 September 1950
• Docket Number: No. 2816,2816
• Parties: BUIST v. CONNELL et al.
• Court: Texas Court of Appeals

Page 458

233 S.W.2d 458

BUIST v. CONNELL et al.

No. 2816.

Court of Civil Appeals of Texas, Eastland.

Sept. 22, 1950.

Rehearing Denied Oct. 13, 1950.

Jack W. Frost, Eastland, Walker F. Means, Grand Saline, K. M. Geddes, El Dorado, Kan., for appellant.

Turner & Seaberry, Eastland, O. J. Connell, Jr., El Dorado, Kan., Gale Moss, El Dorado, Kan., Conner & Conner, Eastland, Marshall Newcomb, Warren J. Collins and E. H. Selecman, all of Dallas, for appellees.

COLLINGS, Justice.

This suit was brought by appellant, F. J. Buist, in trespass to try title. He sought to recover the mineral interest in 118 acres of land, more or less, situated in Eastland County, Texas, and to recover payments for oil and gas alleged to be due from the Premier Oil & Refining Company of Texas, and the Lone Star Gas Company. Appellees, O. J. Connell, Jr., Sarah Lou Stone, John R. Connell and Mary Jo Higgins and their respective spouses, real parties defendant in the trial court, filed a general denial, a plea of not guilty and a verified plea of non est factum as to the two purported mineral deeds under which appellant, F. J. Buist, claims title. Appellees also filed a cross action for the title and possession of said minerals and oil and gas runs accruing therefrom, and in such cross action, again denied under oath the execution of the mineral deeds to appellant. The case was tried before the court without a jury and judgment rendered on January 21, 1950, decreeing appellees to be the owners of the mineral interest involved and that they were entitled to be paid for the oil and gas received by Premier Oil Refining Company of Texas and the Lone Star Gas Company as such payments have been tendered into court in the sum of $9,645.24 and denying to appellant, F. J. Buist, recovery of the title and possession of such mineral interest and oil and gas payments. F. J. Buist has appealed.

There is no controversy between any of the parties and the defendants, Premier Oil Refining Company of Texas and the Lone Star Gas Company, who have no interest in the cause other than as stake holders.

At the request of appellant, the court filed findings of fact, the substance of which is hereinafter set out. Portions thereof not essential as a basis for the judgment rendered are, for the sake of brevity, omitted.

The plaintiff and cross-defendant, F. J. Buist, is a resident of Kansas. At all times mentioned herein, from March 26, 1931, to the date of this trial, M. M. Buist was and is the wife the plaintiff. At all times pertinent hereto, during the lifetime of O. J. Connell, Sr., M. M. Buist was the confidential secretary of O. J. Connell, Sr., and had access to all of his books and records and had personal knowledge of all the facts surrounding the purchase of the properties herein involved by O. J. Connell, Sr., from Diana Oil Company, Inc., in October, 1945.

O. J. Connell, Sr., and wife, Clara R. Connell, were married once and once only; each died intestate and left as their sole surviving heirs at law the defendants and cross-plaintiffs, viz., O. J. Connell, Jr., John R. Connell, Sarah Lou Stone and Mary Jo Higgins. Clara R. Connell died intestate in Kansas on June 25, 1940, and O. J. Connell, Sr., died intestate in Kansas on August 3 1947. O. J. Connell, Sr., became seriously ill in February, 1947, and he did not fully regain his health after said time. He was under the care of doctors and was hospitalized at various times after said time. He lapsed into coma and unconsciousness on July 8, 1947, and died on August 3, 1947.

The subject matter of this suit is certain oil, gas and mineral rights and royalty interest under certain lands located in Eastland County, Texas. Oil and gas are being produced from said properties. The oil is being purchased by the defendant Premier Oil Refining Company of Texas, which was held in suspense the payment for oil received for the past several months. The gas from said premises is being purchased by Lone Star Gas Company, which has held in suspense the payment for gas received for the past several months. Lone Star Producing Company has a valid oil and gas lease on said land, and the validity of said lease is not involved in this suit.

A. J. August is the common source of title.

On August 22, 1929, A. J. August and wife, for a valuable consideration, as grantors, executed to O. J. Connell, Sr., and C. C. Sheldon, two instruments by which they conveyed a full, undivided one-half interest in and to all the oil, gas and other minerals in and under the two described tracts of real property situated in the County of Eastland and the State of Texas, being the property here in question, for a term of fifteen years from date thereof and as long thereafter as oil or gas might be produced from said land, subject to an oil and gas lease then existing upon said land.

That the above two conveyances were placed in the name of O. J. Connell, Sr., and C. C. Shelden for convenience only and that they, in fact, held said properties in trust for the Diana Oil Company, Inc., a corporation organized under the laws of the State of Kansas, now dissolved. At the time of the dissolution of Diana Oil Company, Inc., O. J. Connell, Sr., was the rightful owner and holder of more than fifty-one per cent of its capital stock. That on October 31, 1945, O. J. Connell, Sr., and M. M. Buist were officers of the Diana Oil Company, Inc.

Prior to October 31, 1945, the stockholders and directors of the Diana Oil Company, Inc., determined to dissolve said corporation and sell its assets. At that time the mineral interests involved herein had a nominal value only. That during the last illness of O. J. Connell, Sr., the above described properties became more valuable by reason of the deepening of existing oil and gas wells located thereon and the drilling of new wells, but that O. J. Connell, Sr., during his lifetime had no personal knowledge of such increase in value.

On October 31, 1945, the stockholders and directors of the Diana Oil Company, Inc., unanimously agreed to sell said mineral interests by having O. J. Connell, Sr., and Elizabeth Shelden, sole devisee and beneficiary under the will of her husband, C. C. Shelden, execute a valid conveyance. Two such valid conveyances were, in fact, executed on said October 31, 1945, conveying the same interests here in question. That O. J. Connell, Sr., became the purchaser in good faith, for a valuable consideration, of said mineral interests. That instead of inserting the name of O. J. Connell, Sr., as the grantee in said deeds, the name of P. H. Harris was inserted therein as grantee at the special instance and request of O. J. Connell, Sr., for his convenience and with the knowledge of M. M. Buist, his confidential secretary. That P. H. Harris, purchaser, was not, is not and never was an actual, physical person, but at all times was a fictitious person and his name was used by O. J. Connell, Sr., lawfully for the purpose of evidencing ownership of the above described properties in O. J. Connell, Sr. That the Board of Directors and the stockholders of the Diana Oil Company, Inc., knew and discussed and approved said sale. That the purchase of said property and interests by O. J. Connell, Sr., using lawfully and for convenience only the name of P. H. Harris, was a bona fide, lawful and binding transaction. That O. J. Connell, Sr., paid a valuable consideration to Diana Oil Company, Inc., for said conveyance, which consideration was equal to or in excess of the reasonable market value and true worth of said property and that the directors of the Diana Oil Company Inc., authorizing said sale constituted a majority of the Board without counting the vote of O. J. Connell, Sr., as a director. That the books and records of O. J. Connell, Sr., show that his personal funds were used in paying the consideration to Diana Oil Company, Inc., for said conveyance. That a check was issued by O. J. Connell., Sr., to Diana Oil Company, Inc., for the purchase price of said interests. That M. M. Buist has had possession of all the cancelled checks of O. J. Connell, Sr., and this particular cancelled check could not be found and was not produced upon the trial of the case.

That subsequent to October 31, 1945, transfer orders were prepared by Premier Oil Refining Company of Texas and Lone Star Gas Company evidencing the ownership of said interests in P. H. Harris. That said transfer orders were executed by O. J. Connell, Sr., using the name of P. H. Harris, a fictitious person, and that the signature of P. H. Harris on each of said transfer orders is in the genuine handwriting of O. J. Connell, Sr.

From October 31, 1945, up to and including May, 1947, O. J. Connell, Sr., received the proceeds and profits from the operations for oil and gas production on the above described interests, received checks from the pipe line companies issued to P. H. Harris, endorsed or had endorsed said checks with the full knowledge and consent of M. M. Buist, and the proceeds thereof were deposited to the personal account of O. J. Connell, Sr. During the same time, O. J. Connell, Sr., paid the taxes and assessments levied upon said property and the income therefrom and reported the same as a part of his annual income to the United States Government.

That income from said property and interests above described for the period from May, 1947, to September, 1947, in the amount of $399.83, paid during the illness and incapacity of O. J. Connell, Sr., and shortly after his death, was appropriated from O. J. Connell, Sr., and his heirs by plaintiff, F. J. Buist, by and though M. M. Buist, his wife, and that said income so appropriated was the property of O. J. Connell, Sr., and/or his heirs above named.

That by two purported instruments of conveyance bearing date of July 22, 1947, and bearing the purported signature of P. H. Harris, the above interests were attempted to be conveyed to F. J. Buist, who claims ownership thereunder. That...