Reaugh v. McCollum Exploration Co.

• Citation: 163 S.W.2d 620
• Decision Date: 24 June 1942
• Docket Number: No. 7857.,7857.
• Parties: REAUGH et al. v. McCOLLUM EXPLORATION CO. et al.
• Court: Supreme Court of Texas

163 S.W.2d 620

REAUGH et al. v. McCOLLUM EXPLORATION CO. et al.

No. 7857.

Supreme Court of Texas.

June 24, 1942.

Rehearing Denied July 22, 1942.

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

Action by G. O. Reaugh and others against the McCollum Exploration Company and others. Judgment for plaintiffs was reversed and case remanded by Court of Civil Appeals, 146 S.W.2d 1109, and plaintiffs bring error.

Judgment of Court of Civil Appeals affirmed and cause remanded for new trial.

B. D. Kimbrough and Edward B. Ward, both of Corpus Christi, for plaintiff in error.

Strickland, Ewers & Wilkins, of Mission, R. D. Cox, of McAllen, and Baker, Botts, Andrews & Wharton and Gaius G. Gannon, all of Houston, for defendants in error.

ALEXANDER, Chief Justice.

This suit was brought to remove cloud from title to land caused by the recording of a purported oil and gas mining lease, and to recover actual and exemplary damages for slander of title. The material question to be determined is the measure of damages to be applied in such a case.

In brief, two of the four joint owners of a tract of land signed an oil and gas mining lease to the defendant on the land and delivered it to the defendant's agent, with the understanding that it was not to become binding until signed and acknowledged by all joint owners of the land. Without securing the signatures of the other owners the defendant had the purported lease recorded and refused to release the same. The four owners had an opportunity to sell the lease on the land at $250 per acre and certain royalties, but were unable to close the trade because of the cloud cast on the title by the recording of the purported lease and defendant's refusal to release same. The trial court upon the verdict of the jury entered judgment removing the cloud and awarding actual damages in the sum of $250 per acre and exemplary damages in the sum of $5,000. The Court of Civil Appeals held that the trial court had applied an incorrect measure of damages, and as a consequence reversed the judgment and remanded the cause for a new trial, but the members of the court were not in full accord among themselves as to the measure of damages to be applied upon another trial. 146 S.W.2d 1109. Hence this Court granted a writ of error.

The trial court was of the opinion, and so held, that the measure of damages for the slander of title resulting in the loss of the sale of the oil and gas mining lease was the full amount for which the lease could and would have been sold but for the recording of the purported lease. In other words, the trial court refused to allow credit for the value of the lease, or the amount for which it could have been sold, at the time of the trial. We are not in accord with this view. It should be noted in the outset that the plaintiffs elected to combine in one suit their action to remove cloud and also to recover damages for the slander of title.

The fundamental purpose underlying all rules of damages, other than punitive damages, is to indemnify the injured party for the pecuniary loss suffered by him, placing him as nearly as possible in the position that he would have occupied but for the injury in question. Sabine & E. T. R. Co. v. Joachimi, 58 Tex. 456; Burr's Ferry, B. & C. R. Co. v. Allen, Tex.Civ. App., 149 S.W. 358; Davis v. Standard Rice Co., Tex.Civ.App., 293 S.W. 593, writ dismissed; 13 Tex.Jur. 73; 17 C.J. 728; 25 C.J.S., Damages, § 17.

There was evidence that at the time of the trial of this case leases on land in the neighborhood of the land in question were worth from $400 to $600 per acre. In other words, if this evidence be true, at the time of the trial when the purported lease on the land in question was cancelled by the judgment of the court, and the cloud created thereby removed, the market was such that the plaintiffs could have sold another lease on the same land for as much, or more, than they would have sold the lease in question in the first instance had not the sale been frustrated by the unlawful recording of the purported lease. But regardless of whether this evidence be true or false, it is evident from the record that a lease on the land could have been sold for something at the time of the trial. It is readily apparent that to allow the plaintiffs to recover the full amount for which they could and would have sold the lease, and to permit them to retain the land with the cloud removed therefrom, would be to allow them to recover more than they were actually damaged. This would be allowing the plaintiffs to "have their cake and eat it too." It is very clear, we think, that in assessing the damages there should have been deducted from the amount for which the lease would have been sold, had the sale not been frustrated, the amount for which the lease could have been sold at the time of the trial. We have found no adjudicated cases directly in point, but the following have been found helpful on the question: Cawrse v. Signal Oil Co., 164 Or. 666, 103 P.2d 729, 129 A.L.R. 174; Stroud v. Smith, 194 Pa. 502, 45 A. 329; Manitoba Free Press Co. v. Nagy, 39 Can. Sup.Ct. 340, 6 B.R.C. 497, 9 Ann.Cas. 816; Dent v. Balch, 213 Ala. 311, 104 So. 651; Butts v. Long, 94 Mo.App. 687, 68 S.W. 754; Young v. Geiske, 209 Pa. 515, 58 A. 887.

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