Shell Oil Co. v. Howth

• Decision Date: 21 January 1942
• Docket Number: No. 7705.,7705.
• Parties: SHELL OIL CO., Inc., v. HOWTH et al.
• Court: Texas Supreme Court

159 S.W.2d 483

SHELL OIL CO., Inc., v. HOWTH et al.

No. 7705.

Supreme Court of Texas.

January 21, 1942.

Rehearing Denied March 4, 1942.

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COPYRIGHT MATERIAL OMITTED

Error from Court of Civil Appeals for Ninth Supreme Judicial District.

Suit by C. W. Howth against Shell Oil Company, Inc., and others for cancellation of a mineral lease and for other relief, wherein some of the defendants filed a cross-action. To review a judgment of the Court of Civil Appeals, 133 S.W.2d 253, reversing a judgment of the district court, Shell Oil Company, Inc., brings error.

Judgment in accordance with opinion.

See, also, Tex.Civ.App., 135 S.W.2d 197.

Thompson, Mitchell, Thompson & Young and Truman Post Young, all of St. Louis, Mo., Calvin A. Brown, of DuQuoin, Ill., C. P. Berry, W. K. Koerner, and Thos. L. Croft, all of St. Louis, Mo., A. E. Groff, J. P. Adoue, and Barksdale Stevens, all of Houston, and Thos. B. Greenwood, and Greenwood, Moody & Robertson, all of Austin, and Orgain, Carroll & Bell, of Houston, for plaintiff in error.

W. D. Gordon, M. G. Adams, Gaston H. Wilder, and Howth, Adams & Hart, all of Beaumont, and Cofer & Cofer, and T. H. McGregor, all of Austin, for defendant in error Howth.

Cain & Wheat and Thos. A. Wheat, all of Liberty, Stevens & Stevens, of Houston, and M. M. Combs, of Beaumont, for defendant in error Gregory.

Turner, Rodgers & Winn and Frank J. Scurlock, all of Dallas, amici curiæ.

SHARP, Justice.

C. W. Howth filed this suit against the Shell Petroleum Corporation, now by change of name Shell Oil Company, Inc., and others, for cancellation of a mineral lease, and for actual and exemplary damages arising out of the assertion of an adverse claim to mineral land. Some of the defendants filed a cross-action. Based upon the answers to the special issues submitted to the jury, the trial court rendered judgment in favor of C. W. Howth against the Shell Petroleum Corporation, Ford Clevenger, O. H. Noland, and C. O. Wier, jointly and severally, for the following items: attorney's fees, $15,000; expenses, $1,000; damages to his credit, $10,000; actual damages, $65,000; exemplary damages, $50,000. An appeal was taken to the Court of Civil Appeals, and that court held that counsel fees, expenses in preparing the case for trial, and the loss of credit were not recoverable as actual damages. An appeal was perfected to the Court of Civil Appeals by all the defendants, except Ford Clevenger. The judgment of the trial court was reversed and the cause remanded for a new trial as between the parties, except as to the Gregory heirs, other than Ike Gregory and Billie Gregory Bourgeois. 133 S.W.2d 253. A writ of error was granted.

The Shell Oil Company will be referred to in this opinion as Shell Company, C. W. Howth as Howth, and the ten children of T. W. Gregory as the Gregory heirs. The parties will also be designated as they were in the trial court, Howth as plaintiff, and Shell Company, the Gregory heirs, C. O. Wier, O. H. Noland, and Ford Clevenger as defendants.

The pleadings are very voluminous, and the Court of Civil Appeals in its opinion has set out in detail quotations from such pleadings, as well as the general outline of same, and we refer to such opinion for a detailed statement of the pleadings. We shall, however, refer to the pertinent parts of such pleadings as relate to the questions discussed in this opinion.

A summary of Howth's pleadings is substantially as follows: In 1931 he owned two tracts of land, containing 117.12 acres, part of the A. Horton Survey in Jefferson County; that in that year he executed an oil and gas lease on the land to Shell Company; that although there had been no drilling on the land in controversy, the Shell Company brought in a producing well about half a mile from this land in July, 1936; that in August, 1936, the Shell Company obtained and placed of record an oil and gas lease on the same land from the Gregory heirs and Mary Gregory; that in 1921 Howth had secured an instrument, a deed absolute on its face, purporting to convey this land from Mary Gregory and the Gregory heirs; that the obtaining of the Gregory lease by the Shell Company was the result of a studied scheme on the part of that Company and other defendants; that it sought out the Gregorys and induced them to make a claim to the land; that this was done for the purpose of asserting an adverse claim to its original lessor, Howth, in repudiation of Howth's title to the land; that the Shell Company in so doing was actuated by malice; that such acts slandered Howth's title, or gave Howth a cause of action for the conspiracy or repudiation; that as a result his interest in the land was greatly damaged; that he was unable to make a sale of any part of the land; and that he was entitled to actual and exemplary damages.

The background of this lawsuit is as follows: The land in controversy is a part of two tracts, known as the J. S. Ward tract and the M. L. Ward tract. These tracts were conveyed to Thomas Gregory in 1917 by two deeds, one from M. L. Ward and wife, and one from J. S. Ward and others. In both these deeds vendor's liens were retained to secure the payment of the purchase price. Both tracts became the community property of T. W. Gregory and his wife, Mary Gregory. T. W. Gregory died intestate in 1918, survived by his wife and ten children; and Mary Gregory qualified as administratrix of his estate. Under the laws of descent and distribution the property would pass one-half to Mary Gregory and one-half to the Gregory heirs. Article 2578, Vernon's Annotated Texas Civil Statutes.

On September 23, 1921, Mary Gregory, the surviving widow of T. W. Gregory, and seven of the Gregory heirs signed an instrument which purported to be a general warranty deed to Howth and O'Fiel, in consideration of their defending Ralph Gregory, one of Gregory's adult sons, against a murder charge which had been filed against him. As to many of the heirs, the instrument was defective as a deed. Three of the children, Billie Bourgeois, Ralph Gregory, and Susie Summers, did not sign the instrument. Ike was a minor when he signed. Ruth Wills and Sarah Blevins signed but did not acknowledge the instrument, and their husbands did not join with them in the execution of the deed. Annie Nolte signed and correctly acknowledged the instrument, but the acknowledgment of her husband is defective. Everett, Sam, and Hazel signed, but did not acknowledge the instrument. The signature and acknowledgment of the surviving wife, Mary Gregory, is in due form.

J. S. Ward and others, who conveyed one of the tracts in 1917 to T. W. Gregory, reserved a vendor's lien, and the following is a history of that lien: The vendor's lien of J. S. Ward and others was assigned in 1917 to one Broussard. Subsequently, on November 3, 1921, Broussard assigned the vendor's lien notes which remained unpaid to Violet O'Fiel. Broussard had previously filed suit to foreclose the vendor's lien, and in the assignment to Violet O'Fiel he also assigned his cause of action. The style of the case was Broussard v. Mary J. Ward et al., and it was tried in the District Court of Jefferson County. Judgment was rendered on December 20, 1921, ordering a foreclosure, and on February 17, 1922, a constable's deed was executed to Mrs. Violet O'Fiel, who bought the land in at the foreclosure sale. The fact that the land was sold by the district court, rather than by the probate court, made the sale void under Gregory v. Ward, 118 Tex. 526, 18 S.W.2d 1049.

We shall now refer to the vendor's lien on the M. L. Ward tract. In February, 1923, M. L. Ward filed suit against Mary Gregory, Administratrix, and others, to foreclose the vendor's lien on the M. L. Ward tract. This suit was styled Ward v. Gregory, and was filed in the district court, even though administration was still pending in the probate court. The district court ordered foreclosure, but, because an appeal was taken, no foreclosure was ever had. This Court, in Gregory v. Ward, supra, held that the judgment and foreclosure of the district court should have been certified to the probate court for observance. This was not done. No foreclosure was ever had in the probate court of the M. L. Ward vendor's lien or judgment. It therefore appears that the sale made under the judgment obtained in the district court was insufficient to divest title; yet it clearly appears that such suit constituted an election of remedies by the then holder of the notes, and to whose rights Howth succeeded by purchase.

Since the vendor's lien holders of the M. L. Ward and J. S. Ward tracts had attempted foreclosure proceedings (Gregory v. Ward, and Broussard v. Ward), they have exercised their option of remedies, and cannot later rescind the sale. Therefore, the right of rescission was lost when the suit for foreclosure of the lien was instituted, under the doctrine of election of remedies. Hill v. Preston, 119 Tex. 522, 34 S.W.2d 780; 43 Tex.Jur., 342. Consequently the Gregorys still retain their rights under the M. L. Ward and J. S. Ward deeds; and they therefore still have their interest in the land, subject to the payment of their pro rata part of the vendor's lien notes and interest which they tendered to Howth as mortgagee in possession; unless they lost such interest by the subsequent deed or mortgage to Howth and O'Fiel. Should the conveyance from Mary Gregory and some of the Gregory heirs be found to be a deed, Howth would nevertheless have his claim of title by limitation against certain of those Gregory heirs not bound by such deed because of their failure to sign, or because of defective acknowledgments. Hendron v. Yount-Lee Oil Co., Tex.Civ.App., 119 S.W.2d 171, writ refused.

In October, 1928, M. L. Ward assigned the vendor's lien to W. L. Pondrom; and in November, 1928, Pondrom executed a release of the vendor's lien to C. W. Howth, the instrument reciting that Howth had paid off the vendor's lien...