Culver v. Pickens

Decision Date05 February 1943
Docket NumberNo. 13309.,13309.
PartiesCULVER et al. v. PICKENS et al.
CourtTexas Court of Appeals

Appeal from District Court, Dallas County; Sarah T. Hughes, Judge.

Action by Elizabeth Culver and others against W. L. Pickens and others to establish a constructive trust based on alleged fraud perpetrated by named defendant as administrator of the estate of George L. Culver, deceased, and for the restitution of certain oil and gas leases and other properties fraudulently acquired, and for an accounting and general relief. From a judgment of dismissal entered after special exceptions to portions of their petition had been sustained, plaintiffs appeal.

Judgment affirmed.

H. L. Anderton, of Birmingham, Ala., Lawther, Cramer, Perry & Johnson, of Dallas, and J. S. Grisham and Thomas Y. Banks, both of Tyler, for appellants.

Prentice Wilson and Bromberg, Leftwich, Gowan & Schmucker, all of Dallas, for appellees.

LOONEY, Justice.

Appellants, surviving inheriting heirs and claimants under inheriting heirs of George L. Culver, deceased, brought this action, to establish a constructive trust, based upon alleged fraud perpetrated by W. L. Pickens, administrator of the estate of deceased, and for the restitution of certain oil and gas leases and other properties fraudulently acquired, for an accounting, and general relief. Appellants' original petition was filed February 28, 1941, and the pretrial was had on their second amended petition filed November 22, 1941. The court having sustained certain special exceptions to vital and controlling portions of appellants' petition, and they having failed to amend, the suit was dismissed, from which this appeal was prosecuted.

The material facts revealed by the allegations are that, on February 16, 1936, George L. Culver died intestate in Dallas County, Texas, leaving as his sole heirs at law, his father G. C. Culver and his mother, Elizabeth Culver; that on the following day, the mother and father waived their right to administer on the estate of their son, in favor of W. L. Pickens, who, on February 17, 1936, was appointed by the Probate Court of Dallas County temporary administrator of said estate; that he immediately qualified as such and entered upon the discharge of his duties; and that later, on March 11, 1936, was appointed by said court permanent administrator, qualified and acted as such until finally discharged on May 14, 1938.

It was alleged that on March 3, 1936, G. C. and Elizabeth Culver, parents of the deceased, duly executed and acknowledged a conveyance in which they distributed said estate to be owned as follows: Elizabeth Culver, the mother, an undivided one-fourth interest, G. C. Culver, father, a one-eighth undivided interest, Olive May Wilson (wife of M. H. Wilson) and Mary Edith Culver (feme sole) (sisters of the deceased), each one-eighth undivided interest; Nathan Culver and Arlin W. Culver (brothers of deceased) each one-eighth undivided interest therein; and to Olive May Wilson and Arlin W. Culver was conveyed one-eighth interest, as trustees for certain named nieces and a nephew of the deceased, each to own and be entitled to one-sixth of one-eighth interest in said estate.

At the time of his death and for several years prior thereto, the deceased was and had been actively engaged, individually, in association with others, and as stockholder, director and officer of corporations chartered for the purpose, in operating, buying, selling and dealing in oil, gas and mineral lands and leases, and in producing, refining and marketing oil and gas.

It was alleged that prior to March 3, 1937, under orders of the Probate Court, Pickens, as administrator, had sold and disposed of all assets belonging to the estate, except 998 shares of the capital stock of Nathan Oil Company, Inc. (being all the capital stock of said corporation except two shares, owned, one each, by M. H. Wilson and Nathan Culver, appellants herein); also three-fourths interest in 350,000 barrels of crude petroleum and petroleum products stored in earthen pits and steel tanks; also some real estate of negligible value, and some notes and accounts receivable.

That on March 3, 1937, appellants duly executed an instrument in writing, by which, among other things, they (quote) "agree, consent to and authorize the directors of Nathan Oil Company, Inc., including the said W. L. Pickens as its president and W. L. Pickens as administrator of the estate of George L. Culver, deceased, to make and consummate sale to the said E. L. Wilson and/or to the said E. L. Wilson and W. L. Pickens of all of the properties and assets owned or claimed to be owned by Nathan Oil Company, Inc., of whatsoever kind and character (save and except cash on hand, accounts and notes receivable and the house and lot at Gladewater, Texas, now occupied by Nathan Culver); and all of the properties and assets now owned or claimed to be owned by the estate of George L. Culver, deceased, of whatsoever kind and character (save and except cash on hand, notes and accounts receivable, two vacant lots in the City of Fort Worth, Texas, and five (5) acres of vacant land near Gladewater, Texas, conveyed by Mrs. E. L. Walker to the said George L. Culver), at and for a total sales price of Two Hundred Thirty-five Thousand Dollars ($235,000.00), effective as of February 1, 1937."; and it was also specially stipulated in said written instrument that the properties and assets so authorized to be sold should include crude petroleum and products of crude petroleum stored in pits and tanks belonging to the estate. That after the execution of the instrument, Pickens, as administrator of the estate and as president and director of the Nathan Oil Company, Inc., acting in conjunction with the defendant Wilson, in furtherance of a fraudulent and collusive scheme entered into between them, proceeded to liquidate, wind up, dispose of and close out the affairs and assets of said estate and the affairs and assets of Nathan Oil Company, Inc.; that by means of a series of assignments, deeds and conveyances, all bearing date of February 1, 1937, though actually executed on and after March 3, 1937, Pickens, as president of Nathan Oil Company, Inc., in the name and on behalf of said corporation, conveyed to defendant Wilson certain real properties belonging to the Oil Company, describing said properties; alleging that such assignments and instruments were collusive and fraudulent, in that, the defendant Wilson was not the true and actual purchaser of the properties, but was the stooge and alter ego of defendant Pickens and was merely the conduit through which Pickens sought to gain and hold title for himself, he being the actual and real purchaser and beneficiary of said assignments and instruments of conveyance; same being an indirect and circuitous manner adopted by Pickens to acquire for his own benefit the properties of the Nathan Oil Company, Inc., which, indirectly, were assets belonging to the estate of George L. Culver, deceased. Appellants allege further that, in order to induce them to execute the instrument dated March 3, 1937, Pickens falsely and fraudulently represented that the properties of the estate and of the Nathan Oil Company, Inc., were in grave danger of being lost, that the cash on hand and liquid assets of the estate were insufficient to pay the debts against it; that the properties would be subject to forced sale after March 17, 1937, unless the debts were paid, and that the value of these assets did not exceed $235,000; that Pickens, as administrator and as president of the Oil Company, possessed the books and records and had a superior knowledge as to the affairs of the estate and of the Company; that appellants were wholly uninformed as to such affairs, had a right to rely, and did rely, upon Pickens for information as to matters affecting the estate and the Company; that he concealed the true value of the properties and the fact that the cash on hand and the liquid assets were sufficient to pay the debts and obligations of the estate and the Oil Company; that these representations were untrue, and known by Pickens to be untrue, and the same were made to induce appellants to execute said written instrument and did in fact induce them to execute the same; that in truth and in fact, Pickens was the real purchaser of the properties; that Wilson was the conduit through which Pickens sought to gain title; that the consideration pretended to be paid for the properties by appellees out of individual funds, in fact was paid out of funds belonging to the estate and the Company; that after March 3, 1937, the remaining assets and properties belonging to Nathan Oil Company, Inc., as well as the remaining assets and properties of the estate, including the crude petroleum and products of crude petroleum, located in pits and tanks as before-mentioned, the cash on hand, accounts and notes receivable, were taken charge of and appropriated by appellees, and they proceeded to dissolve the Nathan Oil Company, Inc., and surrender its charter, alleging that the estate of George L. Culver, deceased, was closed by order of the County Court of Dallas County, the administration thereon terminated, and Pickens discharged as administrator.

Appellants' allegations referring to the administration (and, even without this, the nature of the suit) brought under review the entire proceedings in so far as the same should be considered pertinent in reviewing the action of the court on the demurrers. See Cochran County v. Boyd, Tex.Civ.App., 26 S.W.2d 364 (writ refused); Bickle v. City of Panhandle, Tex.Civ.App., 43 S.W.2d 640 (writ refused); Griffith v. Tipps, Tex.Civ.App., 69 S.W.2d 846; Davis v. Donalson, Tex.Civ. App., 91 S.W.2d 763, 766 (Appeal dismissed); Butler v. Church, Tex.Civ.App., 110 S.W.2d 145; Barrow v. Stroud, Tex. Civ.App., 125 S.W.2d 365. The final report of...

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