Hartman v. Sirgo Operating, Inc.

• Decision Date: 06 October 1993
• Docket Number: No. 08-93-00030-CV,08-93-00030-CV
• Citation: 863 S.W.2d 764
• Parties: Doyle HARTMAN, Appellant, v. SIRGO OPERATING, INC. and Sirgo Brothers, Inc., Appellees.
• Court: Texas Court of Appeals

Page 764

863 S.W.2d 764

Doyle HARTMAN, Appellant, v. SIRGO OPERATING, INC. and Sirgo Brothers, Inc., Appellees.

No. 08-93-00030-CV.

Court of Appeals of Texas,

El Paso.

Oct. 6, 1993.

Rehearing Overruled Nov. 3, 1993.

Steven C. James, Beck & James, P.C., El Paso, J.E. Gallegos, Gallegos Law Firm, P.C., Santa Fe, NM, for appellant.

Michael Short, Vann Culp, Shelby J. Bush, Stubbeman, McRae, Sealy, Laughlin & Browder, Inc., Midland, for appellees.

Before OSBORN, C.J., and KOEHLER and LARSEN, JJ.

OPINION

OSBORN, Chief Justice.

This appeal is from a judgment entered in a declaratory judgment suit concerning the validity of a contract for the sale and exchange of certain oil and gas properties in New Mexico. The trial court declared the contract void under the New Mexico Joinder Statute because the wife had not signed the contract. Attorney's fees were awarded to the Appellees. We affirm.

Facts

Sirgo Brothers, Inc. and Sirgo Operating, Inc. (Sirgo) began negotiating with Doyle Hartman in 1990 for the purchase of his interest in the Myers Langlie-Mattix Unit, an oil producing waterflood project in Lea County, New Mexico. Hartman's interest in the Unit was the community property of him and his wife, Margaret. Negotiations were conducted for Hartman by his landman, Bryan Jones. Jones and Sirgo signed a letter agreement in November 1990 which required Sirgo to obtain certain interest owned by Atlantic Richfield (ARCO) which was to be exchanged for the interest owned by Hartman. Sirgo and ARCO entered into an agreement in April 1991 for the exchange of properties. That agreement was mutually rescinded by the parties on May 14, 1991. Sirgo then filed this suit for a declaratory judgment to determine the rights of the parties under the November 1990 letter agreement. Hartman then filed suit in New Mexico seeking specific performance of the various contracts. That suit was dismissed following the entry of the judgment in this case.

Jurisdiction of Texas Court

Hartman initially asserts that the trial court erred in denying his plea to the jurisdiction. He contends the suit for a declaratory judgment is one affecting title to real property in New Mexico and also that the suit failed to join Margaret Hartman and ARCO who had an interest affected by the suit. Certainly, Texas courts are without power or jurisdiction to adjudicate title to land located in another state. Holt v. Guerguin, 106 Tex. 185, 163 S.W. 10 (1914); Carmichael v. Delta Drilling Co., 243 S.W.2d 458 (Tex.Civ.App.--Texarkana 1951, writ ref'd). But Texas courts may enforce an in personam obligation by ordering a party to convey land located in another state. McElreath v. McElreath, 162 Tex. 190, 345 S.W.2d 722 (1961); Brock v. Brock, 586 S.W.2d 927 (Tex.Civ.App.--El Paso 1979, no writ). The distinguishing factor between these two principles is whether the cause before the Court involves a naked question of title. Massie v. Watts, 10 U.S. (6 Cranch) 148, 3 L.Ed 181 (1810).

In this case, Sirgo sought a determination of the parties' rights and legal obligations under the letter agreement executed in November 1990. That agreement provided for the exchange of Hartman's interest in the waterflood unit for certain property to be acquired by Sirgo from ARCO. The exchange was conditioned upon Sirgo's acquisition of certain interest from ARCO. The trial court was not required to determine ownership of land in New Mexico nor was any relief sought requiring the transfer of title to land in New Mexico. The declaratory judgment suit was only seeking to determine obligations under a contract, which contract did involve an obligation to exchange land in New Mexico. Unlike the suit in Carmichael v. Delta Drilling Co., this suit was not filed seeking specific performance of the parties' agreement. And unlike Miller v. Miller, 715 S.W.2d 786 (Tex.App.--Austin 1986, writ ref'd n.r.e.), this suit did not seek to determine ownership of mineral rights located in another state. The trial court had jurisdiction to determine if certain conditions precedent had been met and if the contract was valid and if the parties' obligations were valid and enforceable.

The failure to join parties, even those necessary and indispensable, is not jurisdictional. Cooper v. Texas Gulf Industries, Inc., 513 S.W.2d 200 (Tex.1974); Tynes v. Mauro, 860 S.W.2d 168 (Tex.App.--El Paso 1993, n.w.h.). In Texas, fundamental error is a discredited doctrine. Cox v. Johnson, 638 S.W.2d 867 (Tex.1982). Since Sirgo sought a determination of its rights and obligations under the contract and not specific performance of any obligation involving the title to land, neither Margaret Hartman nor ARCO were necessary parties.

Hartman also claims that the trial court erred in denying his plea in abatement and that under principles of comity, the suit which he filed in New Mexico was the proper forum for determination of the rights of these parties. He also argues that Texas courts have disapproved the tactic of preemptively filing for declaration of nonliability. That has been the holding in tort cases. Abor v. Black, 695 S.W.2d 564 (Tex.1985); Texas Electric Utilities Company v. Rocha, 762 S.W.2d 275 (Tex.App.--El Paso 1988, writ denied). That rule has evolved from the Court's recognition that only a plaintiff may seek redress for a tort. But in a contract case, either party may breach the agreement and either party may sue for a breach or a judicial determination of rights under the contract.

Texas has recognized that where two cases are filed involving the same parties and the same issues, the court where the first case is filed shall retain jurisdiction to decide the issues and the second case should be abated. Curtis v. Gibbs, 511 S.W.2d 263, 267 (Tex.1974); Texas Employers' Insurance Association v. Alvarez, 656 S.W.2d 215 (Tex.App.--El Paso 1983, no writ); State v. T.C. Bateson Construction Company, 562 S.W.2d 538 (Tex.Civ.App.--El Paso 1978, no writ). We find no error in the Texas court proceeding to judgment prior to any decision by the New Mexico court. Points of Error Nos. Two and Three are overruled.

Summary Judgment

Having concluded that the Texas court had jurisdiction to decide the issues presented, the controlling question is whether the court erred in granting summary judgment.

Standard of Review

The movant has the burden of showing that there is no genuine issue of a material fact and that it is entitled to a judgment as a matter of law. Nixon v. Mr. Property Management Co., Inc., 690 S.W.2d 546 (Tex.1985). In deciding that issue, all evidence favorable to the nonmovant will be taken as true and every reasonable inference must be indulged in favor of the nonmovant and all doubts resolved in its favor. Id.; A.C. Collins Ford, Inc. v. Ford Motor Co., 807 S.W.2d 755 (Tex.App.--El Paso 1990, writ denied).

Analysis

Sirgo's motion was based upon the contention that Margaret Hartman did not join in the Sirgo-Hartman contract and since it involved community property, the contract was void under the New Mexico Joinder Statute. New Mexico Community Property Act of 1973, Section 40-3-13(A) provides:

Any transfer, conveyance, mortgage or lease or contract to transfer, convey, mortgage or lease any interest in the community real property ... attempted to be made by either spouse alone in violation of the provisions of this section shall be void and of no effect....

In construing this statute, the Supreme Court of New Mexico said:

Our decisions since the passage of the Community Property Act of 1973 have continued to follow our earlier precedents and have found all contracts to convey community real property not joined by both spouses 'void and of no effect,' absent a validly executed and recorded power of attorney.

English v. Sanchez, 110 N.M. 343, 347, 796 P.2d 236, 240 (1990).

The full extent of that Court's holding is best illustrated by the language of Justice Montgomery in his specially concurring opinion where he wrote:

In this state, then, a contract, conveyance or mortgage of community property without one spouse's joinder is void, void, void--no matter who raises the issue and no matter what the consequence on other parties' rights.

Id. at 244.

In our case, the contract was signed as follows:

DOYLE HARTMAN

/s/ Bryan Jones

Bryan E. Jones

Landman

AGREED TO AND ACCEPTED this 20th day of December, 1990.

SIRGO OPERATING, INC.

By: /s/ M.A. Sirgo II

President

Hartman contends that "Doyle Hartman" is the name of the operating company owned by him and his wife and that Bryan E. Jones as their agent signed for both spouses when he executed the agreement for the company. Accepting that contention as true in this summary judgment case, Jones could not bind the community assets in the absence of a valid power of attorney. N.M.STAT.ANN. § 40-3-13(B) (1978). In this case, there was no contention in the trial court that there was a valid power of attorney signed by either Mr. or Mrs. Hartman. Under the holding in City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671 (Tex.1979), the movant is not required to negate all possible issues of law and fact that could be raised by the nonmovant in the trial court but were not. "[T]he non-movant must now, in a written answer or response to the motion, expressly present to the trial court those issues that would defeat the movant's right to a summary judgment and failing to do so, may not later assign them as error on appeal." Id. at 679.

Hartman also argues that this contract was not one covered by the New Mexico Joinder Statute because it was not an attempt by one spouse to contract for or convey the community property but that the contract was by an agent and thus the statute does not apply. The argument urges that a person can do indirectly that which cannot be done directly under the statute. The contract was made by "Doyle Hartman." It is his name that is on the contract. To contend that he was not contracting to convey property is...