First Nat. Bank in Dallas v. Kinabrew

• Court: Texas Civil Court of Appeals
• Writing for the Court: McKAY
• Citation: First Nat. Bank in Dallas v. Kinabrew, 589 S.W.2d 137 (Tex. Ct. App. 1979)
• Decision Date: 20 September 1979
• Docket Number: No. 1219,1219
• Petition History: writ ref'd n.r.e.
• Parties: FIRST NATIONAL BANK IN DALLAS, Independent Executor of the Estate of John Weldon Murchison, Deceased, Appellant, v. E. R. KINABREW, Appellee.

Page 137

589 S.W.2d 137

FIRST NATIONAL BANK IN DALLAS, Independent Executor of the Estate of John Weldon Murchison, Deceased, Appellant, v. E. R. KINABREW, Appellee.

No. 1219.

Court of Civil Appeals of Texas, Tyler.

Sept. 20, 1979.

Rehearing Denied Oct. 18, 1979.

Joe Gray, C. Taylor Ashworth, Jenkins & Gilchrist, Dallas, for appellant.

James W. Knowles, William C. Lowrey, Wilson, Miller, Spivey, Sheehy, Knowles & Hardy, Tyler, for appellee.

McKAY, Justice.

This is a declaratory judgment action brought by appellee seeking a determination of the rights of the parties under a purported assignment to appellee of an overriding royalty interest in seven mineral leases.

Appellee alleged that J. W. Murchison, acting by and through his agent and attorney-in-fact, R. L. Van Cleave, duly authorized by a power of attorney dated January 23, 1961, executed and delivered to appellee on May 5, 1961, an assignment of an overriding royalty, thereby assigning to appellee one-eighth of eight-eighths of all the oil, gas, and other minerals produced, saved, and marketed from a 120.3-acre tract of land comprising an oil unit identified as the Cely-Henderson Unit and now identified as being Tract No. 846 in the Fairway (James Lime) Unit (being the Field Wide Unit). Said assignment was allegedly made as compensation for services rendered to the community estate of John W. Murchison and wife, Gertrude B. Murchison. Appellee further alleged that an oil well was completed on said tract, that appellant had recovered the costs of drilling, and that after the recovery of such costs, appellee was entitled to receive his overriding royalty. Appellee prayed for an accounting, for a declaration that he was entitled to one-eighth of eight-eighths of the production of oil, gas, and other minerals from the land following appellant's recoupment of drilling costs, and for judgment against appellant for the value of one-eighth of eight-eighths of the production of oil, gas, and minerals from the date appellee became entitled thereto.

Appellant answered by general denial, and specifically that if the purported assignment was in fact executed by Van Cleave, said act was unauthorized by J. W. Murchison and was beyond the scope of authority of Van Cleave, for the reason that the power of attorney was a special power of attorney, not authorizing the assignment of any overriding royalty interest. Appellant further alleged that, the purported assignment having been made after the death of Gertrude Murchison (which occurred on April 25, 1961), J. W. Murchison no longer had authority to make a conveyance of community property; that even if the purported assignment would affect only the community interest of J. W. Murchison, it was invalid in that after the death of Gertrude Murchison, the only authority to pay debts and claims against the community estate of the Murchisons vested in J. W. Murchison as Independent Executor of the estate of his wife, and that the special power of attorney did not purport to authorize Van Cleave to act for the Independent Executor of the Estate of Gertrude Murchison; that the condition precedent to the assignment (that J. W. Murchison recover drilling costs) has not been met in that Murchison was entitled to recover more than $200,000 in costs and had recovered only $75,000; that Murchison did not own an entire one-eighth interest in all of the seven leases described in appellee's petition; that the assignment does not purport to convey an overriding royalty of one-eighth of eight-eighths, but for various reasons, merely purports to convey an interest in a fractional part of the oil, gas, and other minerals; and that appellant was entitled to a $22,543.89 credit on any amount due appellee, because of a payment made in that amount by appellant to appellee. Appellant also stated a counterclaim for the return of the $22,543.89.

Originally appellee's petition complained of J. W. Murchison individually and as Independent Executor and Trustee under the Will of Gertrude Murchison. Subsequently, C. W. Murchison, Jr., was substituted as Guardian of the Estate of J. W. Murchison. Then, upon the suggestion of the death of J. W. Murchison on February 28, 1974, the present appellant, as Independent Executor of the Estate of J. W. Murchison, was substituted as defendant. Previously, appellee had dropped J. W. Murchison, as Independent Executor and Trustee under the Will of Gertrude Murchison, as a party.

The trial court, following a hearing without a jury, rendered judgment in favor of appellee, declaring that appellee was entitled to an overriding royalty interest of one-eighth of eight-eighths in all the oil, gas, and other minerals produced, saved and sold from the tract of land, and ordering appellant to render a complete and full accounting of all income and expenses from the oil production from said tract. Appellant has duly perfected its appeal to this court, bringing fifteen points of error.

At the outset we are met with a counterpoint by appellee, urging that we overrule appellant's first nine points of error, all of which concern the validity of the assignment, for the reason that appellant had judicially recognized that appellee has a legal interest in the property at issue. There is in the record a document entitled "Stipulation and Agreement," which states:

"WHEREAS, the above entitled and numbered cause (the present suit) is an action for declaratory judgment and involves a dispute between the parties thereto as to the ownership interest of the said W. R. KINABREW in and to certain oil and gas interest in Anderson County;

"WHEREAS, there is no dispute between the parties that the said J. W. MURCHISON is indebted to said W. R. KINABREW in some amount of money, the controversy involving only an accounting of the amount of money due Plaintiff, and the basis of calculation of what additional monies Plaintiff may be entitled to;

"WHEREAS, the said W. R. KINABREW desires to receive so much of said monies as are not indispute (sic) now being held by the said J. W. MURCHISON;

"NOW THEREFOR (sic), by and in consideration of the premises, the said W. R. KINABREW does hereby acknowledge receipt of the sum of TWENTY TWO THOUSAND FIVE HUNDRED FORTY THREE, AND 89/100 DOLLARS ($22,543.89) of and from the said J. W. MURCHISON. It is understood and agreed by and between the parties that by the payment of such sum and the acceptance of such sum, neither party makes any admission or declaration against interest and the payment and acceptance of said sum or the method of arriving at same, shall not be entitled to any probative force in determining the controversy between the parties, save and except that it shall be offset against judgment (sic) to which the said W. R. KINABREW might otherwise be entitled.

"WITNESS the hands of the parties, by and through their respective attorneys of record this ____ day of June, 1973."

The document is signed by attorneys for both parties.

It is appellee's contention that, by virtue of the above quoted stipulation, appellant has judicially admitted that appellee owns an interest in the property pursuant to the assignment and that the only controversy between the parties is the amount of money due appellee. Therefore, appellee urges that appellant has admitted the validity of the assignment.

In reply, appellant emphasizes the language of the document denying the making of any admission or declaration against interest by either party.

A judicial admission is a formal act, done in the course of judicial proceedings, which dispenses with the production of evidence and takes the matter out of the domain of proof so that neither court nor jury is required to make any finding in regard to it. Valdes v. Moore, 476 S.W.2d 936 (Tex.Civ.App. Houston (14th) 1972, writ ref'd n. r. e.); 2 Texas Practice Series, McCormick and Ray, Evidence sec. 1127 at p. 24 (1956). A stipulation, similarly, is an agreement, admission, or concession made in a judicial proceeding by the parties thereto or their attorneys in respect to some matter incident thereto. 53 Tex.Jur.2d Stipulations sec. 1 at p. 313 (1964). Such a stipulation constitutes a contract between the parties and between the parties and the court. Id. A stipulation may relate to the matter of the issues to be tried, i. e., to fix, limit, or modify them. Id., sec. 5 at p. 317; Smith v. Leach, 70 Tex. 493, 7 S.W. 767, 768 (1888); W. T. Carter & Brother v. Ruth, 275 S.W.2d 126, 129 (Tex.Civ.App. Beaumont 1955, no writ). State v. McHard, 432 S.W.2d 182, 183 (Tex.Civ.App. Houston (14th Dist.) 1968, writ ref'd n. r. e.). Inasmuch as a stipulation is a contract, the general rules for interpreting ordinary contracts are applied in construing stipulations, resort being had to the entire instrument, rather than to any specific part. 53 Tex.Jur. supra, sec. 14 at p. 327.

Appellant contends that the stipulation in no way acknowledges the validity of the assignment. It is true that the stipulation does not expressly state that the assignment is valid. That is immaterial, however, if the effect of the stipulation is to eliminate the validity of the assignment as an issue in the case. As noted, a stipulation clearly may limit the issues to be tried. The same point may be repeated in answer to appellant's contention that the stipulation may not be used to determine the legal issues raised by its points of error. This is not a stipulation relating to a matter of law, but rather one which limits the issues to be tried.

Appellant emphasizes the language of the document denying the making of any admission or declaration against interest. The disclaiming language, however, refers to the Act of paying the sum of money and not to the entire document itself. It is not the entire document that is not to be taken as an admission or declaration against interest, but merely the Payment of the amount indicated that is not to be so taken. The disclaiming language makes no reference...