Norris v. Vaughan, 6241
| Decision Date | 20 October 1952 |
| Docket Number | No. 6241,6241 |
| Citation | 256 S.W.2d 156 |
| Parties | NORRIS et vir. v. VAUGHAN. |
| Court | Texas Court of Appeals |
R. H. Cocke, Wellington, and Richard H. Cocke, Dallas, for appellants.
Culton, Morgan, Britain & White, Amarillo, for appellee.
On August 16, 1941, the appellee, Hal Vaughan, married Beulah Hunsaker. On May 17, 1947, Mrs. Vaughan died intestate. Other than her husband, she was survived by the appellant, Edith Norris, her daughter by a previous marriage.
This suit was brought by the appellant and her husband, C. R. Norris, for an accounting and to recover from the appellee the property, money and estate to which Edith Norris and her husband (both of whom being hereafter referred to as 'appellant') alleged she was entitled as her mother's only heir. She asked that the appellee itemize everything he owned at the time of the marriage, the receipts and expenditures made during the marriage and all the properties on hand at the time of his wife's death. The appellant alleged that the accounting would disclose that she owns an interest in the property in excess of $60,000, and she asked that judgment be rendered for title to and possession of the property, money and estate to which the court would find she is entitled. The appellee answered by pleading, in effect, that most of the property which the appellant alleged to be community was not community but separate since it either had been his before his marriage to the appellant's mother or had been acquired with separate funds after his marriage.
At the time of his marriage, the appellee was a member of three partnerships: (1) The Shamrock Gas Company, an organization which supplies natural gas to the City of Shamrock, Texas, through its own distributing system; (2) The Vaughan Well Company, an organization engaged in drilling gas wells and in the sale of gas to the Shamrock Gas Company; and (3) Pendleton and Vaughan, an organization engaged in the drilling of oil and gas wells and in the production and sale of these minerals. At the time of the marriage the appellee owned seven gas wells which throughout the record are referred to as the Pakan Wells.
After the case went to trial, the court, on its own motion, appointed an auditor and ordered him to prepare an audit and inventory of the disbursements and receipts of the Shamrock Gas Company, the Vaughan Well Company, Pendleton and Vaughan, and Hal H. Vaughan for the period August 16, 1941, to May 17, 1947. Later, this report was supplemented with one carrying the audit forward from May 17, 1947, to October 31, 1951.
After the audit was prepared and filed, the court entered its judgment. It found that all the gas wells in which the appellee owns an interest were his separate estate and property; that there was no commingling of the funds received by the appellee during his marriage but that all of the funds, both separate and community, could be traced by the audit. The court found that at the time of his marriage the appellee owned an undivided one-fourth interest in the Shamrock Gas Company, a partnership composed of W. S. Pendleton, B. F. Holmes, A. N. Holmes and the appellee; that the one-fourth interest was the appellee's separate estate and that the only interest the community had in this property was $28,100, the amount the appellee had withdrawn from the partnership during his marriage.
The court also found that the appellee owned an undivided one-fourth interest in the Vaughan Well Company, a partnership composed of W. S. Pendleton, B. F. Holmes, A. N. Holmes and the appellee; that the one-fourth interest is the appellee's separate property and that the only interest the community acquired in the partnership was in the amount of $2,311.25, which the appellee withdrew from the partnership during the marriage.
The court found that the appellee at the time of his marriage owned an undivided one-half interest in the partnership of Pendleton and Vaughan, an oil and gas drilling concern, and that all his interest in this partnership is his separate property. But the court found that the community had acquired in this partnership an undivided interest in wells produced by it during the marriage period-the McDowell Wells Nos. 1 through 7, the D'Arcy McDowell Well No. 1, and the Taylor Wells Nos. 1 and 2, the total community interest in these wells being 169/512 interest in the dry gas rights under the leases-and an undivided one-half interest in the net proceeds from the McDowell Wells Nos. 1 through 7, the D'Arcy McDowell Well No. 1, and the Taylor Wells Nos. 1 and 2 since the date of their production to October 31, 1951. (However, the McDowell Well No. 7, the D'Arcy McDowell Well and the Taylor Well No. 2 were either dry holes or plugged.) The court directed that the net income from these wells be calculated in this manner: the cost of drilling, plus the cost of operating them, plus the royalty payments were to be subtracted from the total receipts. By this method of calculation the court found the net income of the wells to be $52,948.63.
The court further found as community property the residence located in Shamrock, together with the sum of $1,237.00, the amount of salaries, dividends, and farm rents earned during the marriage period. The court, however, found that the seven gas wells referred to in the record as the Pakan Wells were the appellee's separate property, and the court also found that all the community expenditures amounted to $69,094.42. It found that the community earnings amounted to.$58,122.57 (the sum of $28,100, plus $2,311.25, plus $1,237, plus one-half of $52,948.63, the net earnings from the gas wells). The court then said: 'Since the total community expenditures during the marriage period amounted to $69,094.42, the total net community income of.$58,122.57 would leave a deficiency of.$10,971.85, which amount should be taken into consideration and deducted from whatever totals may be arrived at of the net community funds to be obtained from the community interest in the McDowell Wells Nos. 1, 2, 3, 4, 5 and 6; D'Arcy McDowell Well No. 1; and Taylor Well No. 1, after the date of the calculations hereinabove made, which date is October 31, 1951.'
The court decreed that the community existing between the parties owns an undivided 169/512 interest in the dry gas rights under the leases of these properties where are located the McDowell Wells Nos. 1 through 6; the D'Arcy McDowell Well No. 1; and the Taylor Well No. 1; but that this community estate and these wells are indebted to the appellee in the sum of.$10,971.85, which is to be paid him out of the gas runs from these wells. The court divided all costs in the case equally between the parties, including the auditor's fees and accounting fees. Both parties excepted to this judgment, and both have perfected their appeal to this court.
At the time the appellant married and all during the marriage period he was engaged in the business of procuring leases and drilling rights, in drilling oil and gas wells, and in producing and selling oil and gas.
In this case we are to determine what interest the community estate acquired in the income from the various enterprises operated by the appellee, to find what interest the community acquired in any of the various wells drilled during the marriage period, and to discover what amount of money the appellant is entitled to as her inheritance from the community property estate which had existed between the appellee and the appellant's mother.
Article 4613, Vernon's Annotated Civil Statutes, provides that: Our courts have held that property acquires a status of separate or community at the time of its acquisition, Van v. Webb, Tex.Civ.App., 237 S.W.2d 827, writ ref. n. r. e., and this status is not affected by any number of changes and mutations in its form. 23 Tex.Jur. 89; Farrow v. Farrow, Tex.Civ.App., 238 S.W.2d 255.
At the time of his marriage the appellee owned, and the court so found, as his separate property the seven gas wells known as the Pakan Wells. He also owned an undivided one-fourth interest in the O'Gorman Wells Nos. 1 and 2 and the Sims Well. (These gas wells are the property of the Vaughan Well Company.) The appellant contends that the receipts from the sale of gas from these ten wells constituted community income; but the appellee insists, and the trial court found, that the receipts from the sale of gas from these wells were the appellee's separate property.
It appears, however, that during the marriage period the appellee drilled twelve additional gas wells in which he owned an undivided interest. Ten of these-the McDowell Wells Nos. 1 through 7, and the Taylor Wells Nos. 1 and 2-were drilled by the partnership of Pendleton and Vaughan and were acquired by a farm-out arrangement; that is, the purchase, price of the well was the cost of drilling. Two other gas wells were also acquired in this fashion-the Hill Well and the Cantrell Well. The appellant contends that these twelve gas wells were community property, while the appellee insists they are separate property. The trial court found that the Hill and Cantrell Wells were separate property, but held that the McDowell and Taylor Wells were community property.
We shall now examine the audit and determine which of these wells and income therefrom are the appellee's separate property.
On the date of the marriage, August 16, 1941, the appellee owned the Pakan Wells. During the 5 years and 9 months of the marriage these wells produced a net income of $80,661.57. Is this income...
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Norris v. Vaughn, 6485
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