Shell Petroleum Corporation v. Howth, 3239.

• Decision Date: 27 July 1939
• Docket Number: No. 3239.,3239.
• Citation: 133 S.W.2d 253
• Parties: SHELL PETROLEUM CORPORATION et al. v. HOWTH.
• Court: Texas Court of Appeals

133 S.W.2d 253

SHELL PETROLEUM CORPORATION et al. v. HOWTH.

No. 3239.

Court of Civil Appeals of Texas. Beaumont.

July 27, 1939.

Rehearing Denied November 15, 1939.

On Motion to Retax Costs November 29, 1939.

See 135 S.W.2d 197.

COPYRIGHT MATERIAL OMITTED

Appeal from District Court, Jefferson County; Geo. C. O'Brien, Judge.

Action by C. W. Howth against the Shell Petroleum Corporation and others for cancellation of option agreement or contract to acquire 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. From the judgment, some of the defendants appeal.

Reversed and remanded for new trial, except as to some of the defendants.

J. P. Adoue, of Houston, Orgain, Carroll & Bell and Melvin Combs, all of Beaumont, Cain & Wheat, of Liberty, Stevens & Stevens and R. H. Whilden, all of Houston, Thompson, Mitchell, Thompson & Young, W. K. Koerner, and C. P. Berry, all of St. Louis, Mo., and A. E. Groff, of Houston, for appellants.

W. D. Gordon, Howth, Adams & Hart, and Gaston H. Wilder, Jr., all of Beaumont, for appellee.

COMBS, Justice.

On the 5th day of September, 1936, appellee, C. W. Howth, as plaintiff, filed his original petition in this cause, naming as defendants Shell Petroleum Corporation, Ford Clevenger, O. H. Noland, C. O. Wier and a group of parties which we shall designate as the "Gregory Heirs". For cause of action appellee alleged the following facts: (1) On the 12th day of January, 1931, appellee owned in fee simple, and was in possession of, a certain tract of land, a part of the A. Horton survey in Jefferson County. On that date he executed to the Shell Corporation, on the nominal consideration of $10 and certain other considerations named in the instrument "an option agreement or contract to acquire a mineral lease" on two subdivisions or tracts of his land in the A. Horton survey, tract No. 1 described as containing 45.56 acres of land, and tract No. 2 as containing 66.65 acres of land. By supplemental agreement, executed by appellee and Shell Petroleum Corporation on the 3d day of October, 1933, based upon an actual survey, the description was corrected so as to describe the land as containing 117.12 acres. By the terms of this agreement no title was invested in the Shell Petroleum Corporation, denominated in the contract as lessee, "but only the right to acquire a mineral estate or interest therein upon precedent conditions to be complied with by Shell Petroleum Corporation;" certain of these conditions were plead—the duty and right to pay "delay" rentals which were regularly paid, etc. (2) It was further alleged that Shell Petroleum Corporation had forfeited all interest in the contract by the following facts: In the latter part of July, 1936, Shell Petroleum Corporation discovered oil on a tract of land about a half mile from appellee's land by drilling thereon an oil well. After discovering this oil, Shell Petroleum Corporation entered into a conspiracy with the defendants Noland, Wier and Clevenger, to search out and find the heirs of Thomas W. Gregory, decd., who at one time held an executory contract under appellee's "predecessors in title," whereby Gregory had the right to purchase the land, and procure from the Gregory heirs a power of attorney, to be taken in the name of Noland, and also to secure "certain other conveyances and contracts"; this scheme originated with Shell Petroleum Corporation and its agents, and was financed by them. The Gregory heirs had no title; more than 15 years prior to the filing of this suit appellee had acquired all interest in the land from the owners of the legal title, and also from the Gregory heirs; he had fenced, claimed, cultivated, used and enjoyed the land more than 15 years, thereby perfecting title under the statutes of limitation; (3) Shell Petroleum Corporation and the other conspirators searched out and found the Gregory heirs, secretly and without knowledge of appellee, and induced them to assert a false and fraudulent claim to appellee's land, and induced them to enter into a contract whereby "the fruits and revenues of the land" were to be divided, seven-eighths to Shell Petroleum Corporation, and one-eighth to the other conspirators and the Gregory heirs. These things were done by the conspirators secretly and without the knowledge of appellee, and to his great injury. All expenses incurred in securing these contracts from the Gregory heirs were paid by Shell Petroleum Corporation and its fellow conspirators, for their joint benefit and behalf. The Gregory heirs were induced by the conspirators, acting jointly, to assert a false and fraudulent claim to appellee's land which they had never before asserted, though some of them had lived in the immediate neighborhood of the vicinity of appellee's land for more than 15 years; and all of the Gregory heirs knew that they had no title in the land, that appellee owned the fee simple title thereto, and during the 15 years had acquiesced in his title; (4) acting together, the conspirators secured a power of attorney from the Gregory heirs, and Noland, Wier and Clevenger, and the Gregory heirs, acting together, executed to Shell Petroleum Corporation a mineral lease on appellee's land "for a previously agreed large cash consideration." Asserting a claim under the contracts executed to it by the Gregory heirs, Shell Petroleum Corporation claimed a right to go upon appellee's land and develop it for oil, to the exclusion of the duty owed by it to appellee to develop the land for his benefit and, claiming under the contracts from the Gregory heirs, Shell Petroleum Corporation asserted a title to appellee's land as against the title it held under appellee; (5) by acting with the Gregory heirs and its fellow conspirators, in the manner detailed above, and by its bad faith towards appellee, Shell Petroleum Corporation "forfeited" all rights, title or claim "under its contract with appellee, executed on the 12th day of January, 1931"; (6) the acts committed by Shell Petroleum Corporation were fraudulent and to appellee's injury, and were within the provisions of Arts. 430 and 430a of the Penal Code, Vernon's Ann.P.C. arts. 430, 430a; (7) under its contract with the Gregory heirs, and its fellow conspirators, Shell Petroleum Corporation acquired no title or interest in appellee's land; it was not necessary for Shell Petroleum Corporation to make the contract with the Gregory heirs "in aid or protection of an estate which it did not own" or acquire under its contract with appellee; all interests in the land were owned by appellee and subject to its conditions conveyed by him to Shell Corporation by the contract dated the 12th day of January, 1931, that is to say, that contract was an optional contract and under its provisions Shell Corporation had the right to acquire all right, title and interest in the land covered by its provisions; (8) by instigating the Gregory heirs to assert a false and fraudulent claim to appellee's land and to trespass thereon, and to assert a false claim to his property, Shell Petroleum Corporation "has forfeited and abandoned all claims to further hold optional rights to acquire" appellee's property, and has "estopped" itself to assert any rights under that contract; (9) appellee alleged that "through these unlawful acts, his title has become clouded by the defendant, and its marketable value greatly impaired. That as a natural consequence of such fraudulent assertions so precipitated against him he is compelled to resort to otherwise needless expenses incidental to the remedies herein sought against them. Plaintiff therefore alleges that he has been damaged by reason of the premises in actual damages in excess of one hundred thousand ($100,000) dollars, and that there should be awarded against the promoters of this conspiracy, as hereinbefore alleged, exemplary damages in the sum of one hundred thousand ($100,000) dollars, particularly as to the defendant, Shell Petroleum Corporation, whose managing officials and executors are alleged to have authorized, participated in and procured the illegal acts and conduct herein complained of, whereby said corporation should be made to respond therefor."

Appellee prayed that the contract executed to Shell Petroleum Corporation by the Gregory heirs, and its fellow conspirators be cancelled as casting a cloud upon his title; that his contract with Shell Petroleum Corporation, dated the 12th day of January, 1931, be cancelled, and, in connection with this prayer, appellee offered "to do equity"; he prayed further for his actual and exemplary damages and for general and special relief, and for costs of suit. The defendants plead general and special demurrers, general denial and pleas of not guilty.

Appellee correctly summarizes the pleadings of the Gregory heirs, as follows:

"The Gregorys, through J. P. Miller and C. F. Stevens as counsel, filed formal answer October 13, 1936. Wier and Noland filed a similar answer December 11, 1936. The Gregorys then filed a first amended answer and cross-action on December 11, 1936. It consisted of the following namely, Exceptions 1, 2 and 3 to the plaintiff's petition as insufficient, and in the fourth and fifth paragraphs a general denial and plea of not guilty was made.

"In the sixth paragraph it is alleged that a deed signed by Sam Gregory, Mary Gregory and the other Gregory heirs, dated 3rd day of September, 1921, to Howth and O'Fiel, recorded in Jefferson County, was made pursuant to the employment of Howth and O'Fiel in the defense of Ralph Gregory to defend him against a charge of murder. The allegation is in this language:

"`That under said employment the said Howth and O'Fiel were to be paid the sum of one thousand ($1,000.00) dollars as attorneys' fees for defending Ralph Gregory, and whatever the form of the instrument signed by the parties above named, apparently in the...