Dallas Joint Stock Land Bank of Dallas v. Harrison

• Decision Date: 19 November 1941
• Docket Number: No. 7711.,7711.
• Citation: 156 S.W.2d 963
• Parties: DALLAS JOINT STOCK LAND BANK OF DALLAS v. HARRISON et al.
• Court: Texas Supreme Court

Page 963

156 S.W.2d 963

DALLAS JOINT STOCK LAND BANK OF DALLAS v. HARRISON et al.

No. 7711.

Supreme Court of Texas.

November 19, 1941.

Motion for Rehearing Overruled December 17, 1941.

Error to Court of Civil Appeals of Second Supreme Judicial District.

Action by M. E. Harrison and another against the Dallas Joint Stock Land Bank of Dallas for damages for alleged fraud and deceit in inducing plaintiffs to purchase land. To review a judgment of the Court of Civil Appeals, 135 S.W.2d 573, affirming a judgment for plaintiffs, defendant brings error.

Judgments of the trial court and the Court of Civil Appeals reversed, and judgment directed for defendant.

Lawther, Cramer, Perry & Johnson, of Dallas, for plaintiff in error.

Stine, Bunting & Stine, of Henrietta, for defendant in error.

SHARP, Justice.

This is an action for damages, brought by M. E. Harrison and W. B. Allen against the Dallas Joint Stock Land Bank of Dallas, for alleged fraud and deceit in inducing them to purchase 440 acres of land, situated in Clay County, under the alleged misrepresentation that only the north 100 acres of said land were under an oil and gas lease; whereas in fact the whole 440 acres were covered by said lease. It was alleged that the value of the land without the lease was $35 per acre; whereas the value of the land with the lease thereon was $25 per acre. The case was submitted to the jury on special issues; and, based upon the findings of the jury, the trial court entered judgment in favor of plaintiffs, and against the defendant, in the sum of $3,863.53. This judgment was affirmed by the Court of Civil Appeals. 135 S.W.2d 573. This court granted a writ of error to review the opinion of the Court of Civil Appeals.

We shall refer to the defendants in error as plaintiffs, and to the Dallas Joint Stock Land Bank of Dallas as the Bank.

Plaintiffs base their right of recovery against the Bank on the ground that they were induced to purchase the 440 acres of land in controversy because of the statements that the oil lease was on only a part of the land. Plaintiffs pleaded in detail the sales contract and the deed hereinafter described.

When plaintiffs closed their case the Bank requested the trial court to instruct the jury to return a verdict for the Bank. This request was refused, and such refusal was urged as error in the lower courts and it is urged here.

As a basis for the judgment entered in the trial court, the jury found: (1) That J. A. Mounts, the agent of the Bank, represented to plaintiffs that only a portion of the 440-acre tract was under an oil and gas lease; (2) that Mounts represented that 100 acres were under an oil and gas lease; (3) that Mounts in making such statements was acting within his authority; (4) that plaintiffs believed such statements to be true; and (5) that the statements made by Mounts were an inducing cause for plaintiffs' buying said land.

The Bank urged many objections to the issues submitted. One of the main objections was that of all the issues submitted to the jury none of them constituted an ultimate issue upon which a judgment could be based.

The Bank owned 440 acres of land situated in Clay County, and the plaintiffs were tenants on the land in controversy prior to the negotiations for the sale thereof. Plaintiffs claimed that they had negotiations for such sale with several agents and representatives of the Bank, and that it was represented that only the north 100 acres of the land were under an oil and gas lease.

It is also undisputed that thereafter, on June 23, 1936, J. A. Mounts, an agent of the Bank, sent a letter to plaintiffs, setting out a price of $15,000 for the land and specifying the manner of payment; and in such letter it was stated, as one of the conditions of such sale, as follows: "Sale would also be subject to outstanding oil and gas lease dated October, 1932."

On July 15, 1936, the Bank, acting by and through its officers, as seller, and the plaintiffs as buyers, executed a sales contract, by the terms of which the Bank agreed to sell, and plaintiffs agreed to buy, the land for $15,000, of which $1,500 was to be paid in cash and the balance in deferred payments. The material portion of the contract pertinent to the issue involved here specifically provided: "The seller agrees to furnish an abstract of title showing a marketable title to said land free of all liens not specifically mentioned in the consideration for use in examining the title to said land. The buyer agrees to submit in writing his objections, if any, to said title within fifteen days from receipt thereof, and the seller agrees to perfect said title within a reasonable time thereafter. In the event the seller does not own all the minerals, it shall not be required to warrant the title to more than it owns, but the purchaser shall have the option to accept the title without all the minerals or reject the title if the seller does not acquire all the mineral rights within a reasonable time. The abstract shall be returned to the seller to be retained until all the purchase price is paid." (Emphasis ours.)

It was stipulated by the parties in the trial court that the Bank on or about July 14, 1936, furnished the plaintiffs a complete abstract, which showed all instruments of record affecting the title to the land, including a copy of the oil and gas lease from the Bank to the Texas Company, dated October 13, 1932; that such lease covered the entire 440 acres for a primary period of ten years, with the delay rentals for one year after its date in the amount of $110, payable semi-annually, and that the lease was of record at the time the Bank deeded the land to plaintiffs.

It was also admitted by plaintiffs that each of them read the contract of sale carefully before signing it. It was further admitted that the abstract which was furnished was not examined by plaintiffs, and that plaintiffs did not have an attorney to examine it for them. It is also undisputed that the abstract was kept by plaintiffs for at least the full fifteen days, and then returned to the Bank without any requirements or objections. In fact, plaintiffs did nothing to determine whether or not the title to the land was good.

Thereafter, as a consummation of said written contract, the Bank executed to Harrison and Allen its deed, dated August 4, 1936, but not delivered until September 21, 1936, stipulating that for the consideration expressed in the sales contract it "has granted, sold and conveyed, and by these presents does grant, sell and convey unto the said W. B. Allen and M. E. Harrison, of the County of Clay, State of Texas, except as below stated, all that certain lot, tract or parcel of land situated in the County of Clay, State of Texas, and described as follows: (Here follows description of the 440 acres of land.)

"To have and to hold the above described premises, together with all and singular the rights and appurtenances thereto in anywise belonging unto the said W. B. Allen and M. E. Harrison, their heirs and assigns forever, and said grantor does hereby bind itself, its successors and assigns, to Warrant and Forever Defend, all and singular the said premises unto the said W. B. Allen and M. E. Harrison, their heirs and assigns, against every person whomsoever lawfully claiming or to claim the same, or any part thereof, except any mineral interest which grantor does not own." (Italics ours.)

Grantor conditionally reserved in the deed one-fourth of the minerals in the land.

After the execution of the deed, plaintiffs paid to the Bank $1,500, and executed notes and a deed of trust to cover the deferred balance. It is undisputed that the plaintiffs read the deed and that same was accepted by them.

The controlling facts involved here are: The Bank sent a letter to the plaintiffs in which it was stated that the sale would be made on condition that "sale would also be subject to outstanding oil and gas lease dated October, 1932." Subsequently the contract of sale was executed, which required the seller and the buyers to do certain things. The Bank was to furnish an abstract showing the condition of the title. The buyers agreed to submit in writing objections to the title, if any, within fifteen days from the receipt of the abstract; and the seller agreed to perfect the title within a reasonable time thereafter. It was further agreed that if the seller did not own all of the minerals, it would not be required to warrant the title to more than it owned; but the buyers should have the option to accept the title without all the minerals, or to reject the title if the seller did not acquire all the mineral rights within a reasonable time.

It is undisputed that the abstract was furnished, showing the existence of the oil lease to the Texas Company, and that the buyers did not make any objections to the title. Thereafter the deed above described was executed by the Bank; and same was received, read, and accepted by the buyers, and they made the...