SHELL OIL COMPANY v. Jones
| Decision Date | 10 October 1960 |
| Docket Number | Civ. A. No. 13120. |
| Citation | 191 F. Supp. 585 |
| Parties | SHELL OIL COMPANY, a corporation, Plaintiff, v. M. Carl JONES et al., Defendants, and The United States of America, Intervener. |
| Court | U.S. District Court — Southern District of Texas |
W. G. Winters, Jr., Houston, Tex., for plaintiff.
John H. Baumgarten, Asst. U. S. Atty., Houston, Tex., for the United States and Chester A. Usry, District Director of Internal Revenue.
Marcus F. Vascocu, Longview, Tex., Guardian of the Estates of Rebecca, Charlene Jones and Sharon Eugenia Jones, minors, pro se and as attorney for Rebecca Charlene Jones and Sharon Eugenia Jones, minors.
John M. Smith, Longview, Tex., for Mrs. Rebecca Charlene Willoughby Jones, individually and as dative testamentary executrix of the Estate of Winston Albert Jones, Deceased, and as temporary administratrix of the Estate of W. A. Jones, Deceased, and as Tutrix of the Estates of Sharon Eugenia Jones and Rebecca Charlene Jones, minors.
Joseph H. Jackson, Shreveport, La., pro se.
Frank S. Kennedy, Shreveport, La., pro se.
Angus G. Wynne, Dallas, Tex., pro se.
Caroline Walters, Shreveport, La., pro se.
Fred Walters, Shreveport, La., pro se.
L. F. Burke, Longview, Tex., Marion K. Smith, Shreveport, La., H. P. Smead, Longview, Tex., for M. Carl Jones and others.
This is an interpleader action filed by Shell Oil Company to determine the rights of the defendants and intervener to certain funds which it has in its possession.
On July 9, 1931, Lawson Lacy and husband, Rogers Lacy, as lessors, executed and delivered to Winston Albert Jones, trustee, an oil, gas, and mineral lease covering 21½ acres in the Mary Van Winkle Survey in Gregg County, Texas. This lease is known as the Lawson Lacy-T. L. James Production Company lease. Subsequently, on September 16, 1931, Winston Albert Jones, trustee, conveyed an undivided ½ interest in this leasehold estate to F. B. James and later, on April 22, 1932, he conveyed the remaining undivided ½ interest in said leasehold estate to Ruston Drilling Company, Inc. The former interest, which is not in dispute here, was subsequently acquired by T. L. James Production Company who is the present operator of the lease; and the latter interest, which is the basis of the dispute here, was acquired by M. Carl Jones under an assignment executed by Ruston Drilling Company, Inc., on March 9, 1933.
Winston Albert Jones died on April 2, 1952. At the time of his death he was domiciled in the State of Louisiana and left a will dated September 12, 1951, in which he devised his interest in the Lawson Lacy lease as follows: Henry E. Linam, Trustee for Rebecca Charlene Jones, a minor, ¼; Henry E. Linam, Trustee for Sharon Eugenia Jones, a minor, ¼; Mrs. Rebecca Charlene Jones, 3/20; Mrs. Allie Jones, 1/10; Mrs. Lillie Maud Evans, 1/10; Mrs. Bess Bridges, 1/10; and Mrs. Caroline Walters, 1/20. This will was filed for probate by Mrs. Rebecca Charlene Willoughby Jones in the First Judicial District Court of Caddo Parish, Louisiana, in Cause No. 111,533 on May 6, 1952, and said will was admitted to probate by an order of said First Judicial District Court rendered on the same day.
Winston B. Linam who was named as successor trustee in said will resigned and W. P. Leonard, Jr., was appointed co-trustee under said will by the First Judicial District Court of Caddo Parish, Louisiana.
There next followed a series of suits in the Louisiana and Texas courts between the devisees under the said will of Winston Albert Jones, deceased, and M. Carl Jones and his children over the validity of said will, the title to an undivided ½ interest in said leasehold estate and the right to ½ of 7/8 of the proceeds realized from the sale of production from the Lawson Lacy lease. See: Jones v. Jones, Tex.Civ.App., 301 S.W.2d 310; Jones v. Jones, 236 La. 52, 106 So.2d 713; Jones v. Jones, La.App., 119 So.2d 643; Jones v. Jones, La.App., 119 So.2d 644. In addition, the United States filed a notice of tax lien in the Deed Records of Gregg County, Texas, for delinquent income taxes due by Winston Albert Jones and wife, Mrs. Rebecca Charlene Jones, in the amount of $6335.56 and it issued 30-day and 90-day letters asserting a $197,184.41 estate tax liability deficiency against the Estate of Winston Albert Jones, deceased.
The plaintiff, Shell Oil Company, has been purchasing the crude oil produced from the Lawson Lacy lease for many years. Confronted by the various conflicting claims of the defendants and intervener, Shell filed its complaint for interpleader in this action and deposited $547,185.23 in the registry of this court on April 26, 1960. This sum represents ½ of 7/8 of the value of the crude oil purchased by Shell from the Lawson Lacy lease between October 1, 1953, and March 31, 1960. Shell claims no interest in these funds and seeks only to have the conflicting claims of the defendants and intervener to these funds resolved.
The defendants have all answered setting forth their respective claims to these funds and the United States has intervened asserting its tax claims. The matter is now before the Court for a determination on the merits.
The plaintiff, Shell Oil Company, is a Delaware corporation with its principal office and place of business in the State of New York. All of the defendants are citizens of the State of Louisiana except Angus G. Wynne, Marcus F. Vascocu, Guardian of the Estates of Rebecca Charlene Jones and Sharon Eugenia Jones, minors, and Lillie Maud Evans and husband, Allen Croswell Evans, who are citizens of the State of Texas. Lillie Maud Evans and husband, Allen Croswell Evans, are residents of Harris County, Texas. The amount of the fund in controversy exceeds $500, exclusive of interest and costs, and this Court has jurisdiction of this action under the Federal Interpleader Act, 62 Stat. 931; 28 U.S.C.A. § 1335; United States v. Sentinel Fire Ins Co., 5 Cir., 1949, 178 F.2d 217.
A suit styled Mrs. Rebecca Charlene Jones et al. v. M. Carl Jones et al., No. 26099-B, in the District Court of Gregg County, Texas, was one of the many actions commenced between the defendants following the probate of the will of Winston Albert Jones in 1952. All of the parties hereto except the plaintiff, the defendant-intervener United States of America and the defendant Chester A. Usry, were parties to No. 26099-B. On July 18, 1960, final judgment was rendered in No. 26099-B. In this judgment the District Court of Gregg County, Texas, determined that the undivided ½ interest in the Lawson Lacy lease which passed under the assignment dated March 9, 1933, executed by Ruston Drilling Company, Inc., to M. Carl Jones was acquired by M. Carl Jones with the understanding and agreement that said undivided ½ interest would be owned ½ by M. Carl Jones and ½ by Winston Albert Jones.
The District Court of Gregg County, Texas, in No. 26099-B also found that the interest which M. Carl Jones acquired in said leasehold estate was the community property of M. Carl Jones and his first wife, Frances Ball Jones. Frances Ball Jones died intestate on July 21, 1946, and her community interest in said lease passed by descent and distribution to James Marshall Jones, Carl Wylie Jones and Mrs. Martha Jones Rice who are the children of M. Carl Jones and Frances Ball Jones. The interest which Winston Albert Jones owned in said lease was his separate property and it passed to the devisees under his will upon his death. The District Court of Gregg County, Texas, accordingly decreed in No. 26099-B that the said undivided ½ interest in the Lawson Lacy leasehold estate is now owned as follows:
Henry E. Linam and W. P. Leonard
Jr., Trustees for Rebecca
Charlene Jones, a minor 1/8
Henry E. Linam and W. P. Leonard
Jr., Trustees for Sharon
Eugenia Jones, a minor 1/8
Mrs. Rebecca Charlene Willoughby
Jones 3/40
Mrs. Allie Jones 1/20
Mrs. Lillie Maud Evans 1/20
Mrs. Bess Bridges 1/20
Mrs. Caroline Walters 1/40
M. Carl Jones 1/4
James Marshall Jones 1/12
Carl Wylie Jones 1/12
Mrs. Martha Jones Rice 1/12
and that, inter se, the above-named persons were entitled to the same interest in the proceeds representing ½ of 7/8 of 8/8 of the value of crude oil produced and sold from the Lawson Lacy lease. However, the said devisees' right to their share of such proceeds was made subject to the expenses of administration, the debts of the Estate of Winston Albert Jones, deceased, and the payment of $73,842.98 in operating expenses which M. Carl Jones paid on their behalf between December 1, 1954, and May 31, 1960. In addition, the District Court of Gregg County, Texas, awarded Angus G. Wynne, Joseph H. Jackson and Frank S. Kennedy judgment for $36,301.211 against Mrs. Jones, the Trustees and Mrs. Walters as follows:
Mrs. Rebecca Charlene Willoughby Jones $ 7,134.54
Henry E. Linam and W. P. Leonard, Jr
Trustees for Rebecca Charlene Jones
a minor $14,027.78
Henry E. Linam and W. P. Leonard, Jr
Trustees for Sharon Eugenia Jones,
a minor $14,027.78
Mrs. Caroline Walters $ 1,111.11
M. Carl Jones has also paid $2025.002 in Texas estate and inheritance taxes and $242.50 in other expenses for the benefit of said Estate and devisees. In addition to the operating expenses awarded him in No. 26099-B M. Carl Jones is entitled to be reimbursed by said Estate and devisees for these taxes and other expenses.
M. Carl Jones also advanced Mrs. Rebecca Charlene Willoughby Jones the sum of $5,000 for the support of herself and children. He is entitled to be reimbursed by her for this sum out of her share of the funds...
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