Cornelison v. First Nat. Bank of San Angelo

218 S.W.2d 888, 1949 Tex. App. LEXIS 1620
CourtCourt of Appeals of Texas
DecidedMarch 2, 1949
DocketNo. 9759
StatusPublished
Cited by6 cases

This text of 218 S.W.2d 888 (Cornelison v. First Nat. Bank of San Angelo) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cornelison v. First Nat. Bank of San Angelo, 218 S.W.2d 888, 1949 Tex. App. LEXIS 1620 (Tex. Ct. App. 1949).

Opinions

HUGHES, Justice.

This suit involves the right of appellant,. Jean Cornelison, to compel the First National Bank of San Angelo, as Receiver, to execute and deliver to him an oil and gas lease upon certain lands in Coke County.

J. F. Johnston owns a life estate in the lands and the remainder is owned by his children, children of a deceased child, and unborn children of J. F. Johnston.

Appellee Bank is Receiver of the lands, and Trustee for the life tenant and re-maindermen who are co-appellees with the Bank.

For an historical background of this receivership we refer to the opinion of the Dallas Court of Civil Appeals in the case of Johnston v. Johnston, 276 S.W. 776.

The validity of the receivership is not questioned and to the facts set out in the above opinion we need only add here that property in Dallas County was sold, the receivership transferred to Tom Green County and the Coke County lands purchased with receivership funds.

Appellant, desiring to buy an oil and gas lease on the Coke County lands, approached J. F. Johnston, and after some discussion appellant was told to see Mr. Lee Upton, at[889]*889torney for the Receiver Bank, who would prepare the papers. This he did and a week or two later the following' letter, dated March 25, 1947, was sent by the law firm of Upton, Upton and Baker to appellee Bank, J. F. Johnston, Henry Tyler (husband of one of the remaindermen), and appellant, Cornelison:

“Gentlemen: We understand that it has been agreed with Jean Cornelison that the Coke County Ranch belonging to the J. F. Johnston Estate, containing about 7-½ sections of land, will be leased to him for a primary term of ten years, with a -bonus or down payment of $2.00 per acre, and an annual rental of 50⅞⅞ per acre, with a provision that if drilling is commenced upon any of this land, it will only suspend the annual rentals on the tract or tracts where drilling is being done, and the remainder of the land will be paid upon annually, or forfeited.

“By reason of this ranch land being in trust, the effect of which is a life estate in J. F. Johnston with the remainder to his children or the descendants upon his death, the bank being the Trustee, the bonus and annual rentals will be divided equally; that is, J. F. Johnston will receive ½ of the bonus and ½ of the annual rentals and the Bank as Receiver and Trustee will receive the other ½, and after paying the expenses, it will take out its commissions and deposit the remainder as part of the capital estate.

“The reason Henry Tyler is named as representing the children of J. F. Johnston is that it will be necessary to procure the consent of the children and descendants of the children of J. F. Johnston in order to insurance a primary term of ten years should J. F. Johnston die before the expiration of ten years.

“Before the proceedings are started, to obtain the order of the Court, I will be glad if all parties concerned will see if I have correctly named the terms and conditions of the agreement.”

On March 31, 1947, the Bank, as Receiver and Trustee, filed an application in the receivership case for authority to execute and deliver an oil and gas lease to appellant reciting that appellant was desirous of leasing the lands for oil and gas purposes for a primary term of ten years with a bonus of $2 per acre and a fifty-cent delay rental. The application further stated that J. F. Johnston had possession and control of the surface of the lands for life and he would not execute or permit an oil or gas lease to be executed unless he received part of the consideration and that the Bank, as Receiver and Trustee, had agreed that J. F. Johnston was to receive one-half of the -bonus, one-half of the delay rentals and one-half of the usual one-eighth royalty, and that the Bank as Receiver and Trustee, after paying all expenses, was to receive and deposit the remainder for the benefit of the capital of the trust.

On April 1, 1947, the above application was granted, the order providing that the Bank, as Receiver and Trustee, joined by J. F. Johnston “is hereby authorized, empowered and instructed to execute and deliver to Jean -Cornelison an oil and gas lease” for the consideration stated in the application, to he distributed as follows:

“It is Further Ordered, Adjudged and Decreed that if and when the bonuses and rentals above set out are paid, then and at that time the Bank as Receiver and Trustee will receive one-half of such bonuses and rentals, and the said Jas. F. Johnston will receive the other -one-half, and the Bank is hereby relieved from any and all duties to account for the one-half interest in such money after it is turned over to the said Jas. F. Johnston, but that part of said moneys received by it as rentals, etc., after the payment of the expenses, etc., is to- be deposited as part of the capital of said Trust Estate.

“It is further ordered that if and when production is had, then -the royalty is to be divided one-half (½) to Jas. F. Johnston and the other one-half to the Bank, and accounted for as above set out.”

On July 24, 1947, the Bank filed a motion in the receivership proceedings to vacate the order of sale dated April 1, 1947, for the reason “that the parties concerned failed to reach an agreement and were unable to consummate the oil and gas lease as set out in said order.”

This motion was granted August 28, 1947.

The evidence shows that appellant was ready, able and willing to purchase the [890]*890lease on the terms set out in the order of sale.

The trial court, unaided by a jury, rendered judgment denying appellant any relief.

Appellant’s single point is that the trial court erred in refusing to render judgment decreeing performance of his contract for purchase of the oil and gas lease.

In our opinion this point embraces the following questions: (1) Does the law require confirmation of a sale made by a receiver acting under orders of the court? (2) If so, did the trial court err in refusing to confirm a sale to appellant?

We consider an affirmative answer to the first question required by the following authorities: Baumgarten v. Frost, 143 Tex. 533, 186 S.W.2d 982, 159 A.L.R. 428; Miesch v. Anderson, Tex.Civ.App., Texarkana, 90 S.W.2d 314. If the case of Yount v. Fagin, Tex.Civ.App., Beaumont, 244 S.W. 1036, Writ Dis. WOJ., is in conflict with this holding, it must yield to the decision of the Supreme Court in the case above cited.

.Confirmation of a receiver’s sale is a matter of discretion depending upon the facts and circumstances of each case and only an abuse of discretion will be reversed on appeal. Gardner v. Union Bank & Trust Co. of Ft. Worth, Tex.Civ.App., Ft. Worth, 176 S.W.2d 789; Russell v. S. & M. Amusement Co., Tex.Civ.App., Waco, 198 S.W.2d 944, Writ Ref. NRE.

The application made to the court for authority to lease the lands to appellant reflects an agreement made between the Receiver and J. F. Johnston as to division of the bonus, delay rentals and royalty which the Receiver had no power to make. This same agreement carried forward in the order of sale is no less impotent.

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218 S.W.2d 888, 1949 Tex. App. LEXIS 1620, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cornelison-v-first-nat-bank-of-san-angelo-texapp-1949.