Blumrosen v. Burke

296 S.W. 987

• Court: Court of Appeals of Texas
• Decided: June 9, 1927
• Docket: No. 537
• Status: Published

Opinion

BAR CUS, J.

This suit was instituted hy appellant to recover from appellees one-third of the funds which they had received in the sale of an oil and gas lease on 40 acres of land. It appears that the land was owned by Mrs. Blumrosen, appellant’s mother, and that appellant, acting under a supposed power of attorney, leased the same to appellee Burke, under an agreement whereby appel-lees Burke and Gottlief and appellant, Blum-rosen, were to be the joint owners of the lease; each having a one-third interest therein. Appellees paid appellant for Mrs. Blumrosen $2,000 for the lease; she retaining the usual one-eighth royalty. Immediately after appellant executed the oil lease to Burke, he (Burke) executed 'a lease conveying a one-third interest to appellant, which lease, however, was never recorded. It appears that the lease was made by appellant to Burke the day the discovery well came in in the Powell field. This land being only a short distance from said well, the value of the lease immediately became very much enhanced. Mrs. Blumrosen, who was living in Dallas, at once came to Corsicana, where appellant, her son, and the other parties were living, to make an investigation to see whether she had been in any way defrauded. She was then told by her attorney of the defect in the power of attorney held by her son and was advised by her attorney, that she could break the-lease which her son had made. She expressed her entire willingness to let the lease stand, with the full knowledge that her son was to retain in his individual capacity the one-third interest, provided she had not been in any way unfairly dealt with. Appellant and appellees, with their attorneys, urged her to ratify in writing the lease which her son had made. After she had made some investigation, she verbally claimed that the conditions had been falsely represented to her, in that she had been told that no additional development had been made in the oil field, and she had learned that at the time the lease was made the well was already in, and she refused to ratify in writing the lease as made by her son, and also failed to tender back the $2,000 which she had received from ap-pellees for the lease. Mrs. Blumrosen opened up negotiations with the parties, appellant, appellees, and their attorneys, seeking to obtain a compromise settlement. She at first offered to permit the lease to stand on 6 acres if they would release the other 34, and then offered to let it stand on 17 acres if they would release 23, and finally, on May 8th, four months after the original lease was executed by appellant for his mother to Burke, a compromise was effected, under the terms of which Mrs. Blumrosen, in addition to the $2,000 she had already received, was to receive one-half of the net proceeds ob-' tain'ed from the sale of the lease, and her son-in-law Garonzik, as agent for all parties, was to sell the lease and receive 10 per cent, commission for making the sales. During all the negotiations, appellees as well as appellant would not concede that the lease which' appellant had executed to Burke was not binding,'but they insisted and contended that same was valid, and that, if appellant did not have the authority under the power of attorney to make the lease, same was nevertheless binding, because Mrs. Blumrosen, with all the facts before her, had ratified the same. Garonzik sold the lease on the 40 acres in three separate tracts — 12 acres to the Gulf Refining Company for $30,000 in cash, 12 acres to the Humble Oil & Refining Company for $30,000 in cash, and the re'maining 16 acres to the Simms Oil Company for $28,800 cash and $52,800 to be paid from the oil as same was produced. Garonzik retained 10 per cent, commission, and one-half of the remainder he paid to Mrs. Blumrosen and one-half to Burke and Gottlief, and this suit was brought by appellant against Burke and Gottlief to recover one-third of the amount paid to them from the sale of said leases. .

The cause was tried to a jury, submitted on special issues, and resulted in a judgment being entered denying appellant any recovery. Appellees contend that appellant is not entitled to recover, because the lease as made by him for his mother to Burke on January 8th was void, since he did not have the right under his power of attorney to execute it, and further because he was acting in a dual capacity and could not reap any benefit from a contract which he made growing out of his fiduciary relationship to his mother. They further contend that in the final compromise settlement he was eliminated, and that under said compromise they were to receive one-half and Mrs. Blumrosen the other half of the proceeds of the sale. Appellant contends that the lease contract which he executed in his mother’s name to Burke was valid, and that, if the same was not valid, his mother ratified it after knowing all the facts. He further contends that, by reason of the agreement he had with ap-pellees and the execution of the lease made to him by Burke of a one-third interest in the mineral rights, he thereby became the owner of said one-third interest, and was entitled to one-third of the proceeds received from the sale thereof. He further contends that he had not at any time or in any way relinquished, surrendered, released, or transferred any portion of his interest in and to the mineral rights on said land, and he claims that, since Burke, the record owner of the lease, had transferred and sold all of the mineral rights, including the portion which he (Burke) had transferred to appellant, that he was entitled to recover from appellees one-third of the net amount which had been paid to them from the sale of said leases.

The testimony is rather voluminous. It appears without dispute, however, that, if the lease contract as made by appellant for his mother to Burke on January 8th, was valid and binding, appellees and appellant had an agreement and understanding that they were to own the lease one-third each, and, according to Burke’s testimony, were to be partners in the handling thereof. We do not agree with appellees’ contention that the lease as executed by appellant for his mother was absolutely void. It may have been voidable at the election of Mrs. Blumrosen. Since, however, she did not repudiate same, and agreed that one-half of the property should be subject to the lease as made by her son, the title to said portion remained- in appellant and appellees under the terms of their original agreement, unless appellant and appellees mutually agreed to somq change therein. Appellee Burke having transferred by regular written assignment a one-third interest of his mineral rights in said land, same became vested in appellant, and it is a • well-recognized principle of law that the owner of mineral rights has an interest in the land, and that to convey same it must be by an instrument in writing, properly executed and delivered. First State Bank v. Bland (Tex. Giv. App.) 291 S. W. 650, and authorities there cited. Mrs. Blumrosen, if she had seen fit, might have canceled the lease which her son had executed. All parties as well as their attorneys recognized that it was a debatable question whether the lease was valid and binding. It appears without dispute that, before appellant executed the lease, he called his mother over the telephone and explained to her fully that he was to get $2,000 for her for the 40 acres of land and that he was to have.as his individual property a one-third interest in the lease. The $2,000 was paid, and Mrs. Blumrosen did not at' any time offer to return same, and her main complaint seems to have been tbat tbe discovery well bad been brought in at tbe time tbe lease was made and tbat sbe bad been told tbat no new developments bad' taken place. Sbe did not .bring any suit to set aside tbe lease wbicb ber son made; neither did appellant or ap-pellee bring any suit to enforce said lease or test its validity. Appellant was actively engaged witb appellees in seeking to get tbe matter adjusted, and made one or more trips to Dallas witb appellees’ counsel, attempting to get Mrs. Blumrosen to in writing ratify tbe lease, or to make some adjustment. A number of conferences were beld wben appellant, appellees, and tbe attorneys and representatives for Mrs. Blumrosen were present, and until tbe compromise was finally agreed upon no suggestion was made tbat tbe compromise settlement was not being attempted for all parties. Appellees do not claim tbat appellant at any time transferred, assigned, sold, or released bis interest to tbem. Tbe compromise agreement finally made was tbat Mrs. Blumrosen would retain tbe $2,000 and receive one-balf of tbe amount for wbicb tbe leases were sold. We tbink tbe effect of this compromise settlement inured to tbe benefit of appellant equally witb each of appellees, and tbat tbe original contract as made between appellees and appellant, whereby they would own same one-tbird each, remained in existence; and, unless appellant surrendeted, released, or transferred his interest to appellees, he was entitled to one-tbird of the amount wbicb they received from tbe sale of tbe entire interest in tbe lease. It appears tbat, wben tbe first 12 acres were sold to tbe Gulf Refining Company, appellant and appellees joined in a transfer of their interest in tbe lease to Mrs. Blumrosen, reciting therein tbat they were the joint owners thereof, and Mrs. Blumrosen then executed a lease to said company for $30,000, and, after paying tbe commission to Garonzik, sbe received one-balf and Burke and Gottlief tbe other half thereof. Wben tbe second 12 acres were sold to the Humble Oil & Refining Company, it required Burke, tbe party to whom appellant bad transferred tbe lease, and Mrs. Blumrosen to execute the lease, thereby transferring tbe title to said company, and it paid $30,000, which was divided tbe same as tbe proceeds received from tbe Gulf Refining Company sale. When tbe last 16 acres were sold to tbe Simms Oil Company, appellant made an assignment to bis mother as was done in tbe sale of tbe 12 acres to tbe Gulf Refining Company, and Mrs. Blumrosen, Burke, and Gottlief joined in tbe lease to tbe Simms Company. It appears from tbe testimony that, as Garonzik, the agent of all parties, made sales, the title to tbe lessees was obtained in tbe manner and form as required by tbe respective attorneys representing tbe purchasers.

Tbe issues submitted by tbe trial court were all of an evidentiary nature, and did not, as contended by appellant, submit tbe real issues in tbe case. As we view tbe record, tbe real issue to be determined was whether appellant bad sold, transferred, assigned, surrendered, or in any way relinquished his right to bis portion of tbe proceeds received from tbe sale of tbe leases, and these issues were not .in any way submitted by tbe court, though same were requested by appellant. Tbe issues submitted by tbe court as to whether certain conversations occurred at certain places, or witb reference to who was attempting to make compromises and for whom, and as to whether appellees at any time told appellant they would not pay him any portion of the proceeds, or whether appellant claimed any portion thereof, were only evidentiary facts, and were not tbe controlling ultimate issues to be determined. We sustain appellant’s objections to tbe issue as submitted, as well as bis assignments because the court failed to submit tbe controlling issues in tbe case.

Appellant objected to tbe action of tbe trial court in permitting certain witnesses to testify to tbe good reputation for truth and veracity of appellee Gottlief. This testimony should have been excluded. Unless a witness’ reputation for truth and veracity has been attacked, tbe trial court should not permit testimony to be offered to prove bis good reputation. M., K. & T. Ry. Co. v. Williams, 63 Tex. Civ. App. 368, 133 S. W. 499; T. & P. Ry. Co. v. Raney, 86 Tex. 363, 25 S. W. 11; Tweed v. Western Union Telegraph Co., 107 Tex. 247, 166 S. W. 696, 177 S. W. 957; G., C. & S. F. Ry. Co. v. Younger (Tex. Civ. App.) 40 S. W. 423.

We have not attempted to discuss each of tbe numerous assignments of error raised by appellant. Appellant having requested tbe issues to be submitted, tbe trial court was not authorized to find tbat appellant had in any way relinquished, released, transferred, or surrendered bis claim to his third of tbe proceeds of the sale. We do not think appellees are in a position to complain of any invalidity in tbe lease contract wbicb was executed to tbem by appellant, because, if it was for any reason invalid, they would not have been entitled to recover or retain any benefits therefrom, and the record shows without dispute tbat they were fully cognizant of all tbe facts surrounding tbe fiduciary .relationship which existed between appellant and his mother. There is no evidence in the record of any fraudulent acts between appellant and his mother, and nothing to show tbat sbe was in any way overreached, except ber contention that tbe lease was much more valuable at tbe time of tbe sale than same was represented to ber to be, and the evidence seems to show beyond question that, if this fact were true, appellees were as fully cognizant thereof as- was appellant. Mrs. Blumrosen had. a right to waive the cancellation of the lease as made vby her son, and appellees and appellant had •a right to waive the full performance on her part of its terms. All of the parties at interest did by mutual consent compromise the •issues and matters between them, and agreed to divide the revenue received from the sale •of the lease on a fifty-fifty basis. The question of the cancellation of the lease and the ■repudiation thereof because of the dual capacity of appellant, and all kindred questions, were by virtue of the compromise eliminated.

For the errors indicated, the judgment of the trial court is reversed, and the cause remanded.