DeWitt v. Republic Nat. Bank of Dallas

168 S.W.2d 710
CourtCourt of Appeals of Texas
DecidedJanuary 8, 1943
DocketNo. 13313
StatusPublished
Cited by5 cases

This text of 168 S.W.2d 710 (DeWitt v. Republic Nat. Bank of Dallas) 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
DeWitt v. Republic Nat. Bank of Dallas, 168 S.W.2d 710 (Tex. Ct. App. 1943).

Opinions

LOONEY, Justice.

R. B. DeWitt, as Receiver of the Centennial Oil & Gas Company, a Texas corporation, appointed by the District Court of Coleman County, brought this action against the Republic National Bank, the Republic National Company, the North South Oil Company, corporations, and a number of individuals, to have adjudged null and void the sale of certain properties by a former receiver of said Company, appointed by and acting under the orders of a District Court of Dallas County; also to recover the amount of revenues derived from the operation of the properties, and $200,000, double the amount of alleged usurious interest collected from the Company. Plaintiff declining to amend, after the court sustained special exceptions to his petition, the suit was dismissed, from which this appeal was prosecuted.

Plaintiff’s petition is lengthy, consisting of a chronological detail of transactions between the parties, beginning in 1931, the dominant features of which are: That on and prior to February 18, 1931, the Texas American Syndicate, an unincorporated association managed by H. H. Tucker, sole trustee, was engaged in drilling oil wells on lands — 68 separate tracts, situated in Coleman and Runnels Counties. Being indebted and desiring additional capital to prosecute its drilling enterprise, the Syndicate employed Mr. Smithdeal, an attorney, one of the defendants, to negotiate a loan of $200,000, and, after a time, Smithdeal reported that he had succeeded in negotiating the loan with Republic National Bank & Trust Company (name later changed to Republic National Bank), and advised Tucker, trustee, that the loan would have to be evidenced by notes aggregating $300,-000, of which $200,000 was to be secured by a mortgage on the leases and oil drilling accessories belonging to the Syndicate; and $100,000 (alleged to be interest) was to be secured by an overriding royalty. Thereafter, the Syndicate, through Tucker, trustee, executed three notes payable to Mr. Smithdeal, one for $117,000, one for $83,-000, both secured by a mortgage on the leases and drilling accessories, and another for $100,000, secured by an assignment of an overriding royalty. Mr. Smithdeal transferred the note for $117,000 to E. P. Greenwood and the other two were transferred to Republic National Company, a corporation; it being alleged that nothing was advanced or paid for the $100,000 note; that the Syndicate did not obtain possession of any of the money borrowed, but same remained in the Bank, and that, prior to July 1, 1931, the Republic National Company caused the Centennial Oil & Gas Company to be chartered, and named a majority of its directors, being Smithdeal, W. F. Tyree and W. H. Shook; Tucker, trustee of the Syndicate, also became a director; that the Bank and Republic National Company demanded that all properties of the Syndicate be transferred to the Centennial, and on July 21, 1931, Tucker, trustee of the Syndicate, transferred said properties to the Centennial in consideration of a block of its stock and the assump*tion by the grantee of the payment of the outstanding notes, aggregating $300,000; that thereafter, the other directors refused to permit Tucker to have any part in the management of its affairs, but assumed full control, with the end in view of eventually obtaining title to its properties; that defendants Florence and Davis, who controlled the Bank and the Republic National Company, caused the Bank to advance $83,-000 on the outstanding note for that amount, and to acquire from Greenwood, at its face value, the note for $117,000; also to ac[713]*713quire ihe note for $100,000, — all for the consideration of $200,000; the petition characterized said transactions as ultra vires, usurious, and a fraud by the Bank and the Republic National Company upon the Centennial; and that, while said officers purported to act for the Bank and the Republic National Company, at the same time they acted for and controlled the Centennial, for the purpose of defrauding the latter Company in the interest of the Bank and Republic National Company.

Plaintiff alleged further that on June 29, 1934, in cause No. 9S33-D, Vojnar et al. v. Centennial Oil & Gas Co., pending in the 95th District Court of Dallas County, George B. Ray was appointed receiver .of all and singular the assets of the Centennial and qualified as such, and that thereafter, on June 26, 1936, the court ordered the receiver to sell at public auction said properties; the sale to be made on November 3, 1936, at the court house door of Coleman County, after due advertisement; that on November 1, 1936, by an order entered, the court extended the time of sale to February 2, 1937; that on December 31, 1936, by an order duly entered, the court transferred said cause to the 14th Judicial District Court of Dallas County, and that on February 1, 1937, the latter court, by an order duly entered, postponed the sale of the properties to March 2, 1937, being the first Tuesday, and on March 1, the day previous thereto, George B. Ray’s resignation as receiver of the Centennial having been accepted, the court appointed John C. Harris receiver in lieu, who immediately qualified and was ordered by the court to consummate the sale on March 2, 1937, as previously advertised by Ray; and accordingly, on March 2, 1937, in accordance with the previous orders of court, and as advertised by receiver Ray, Mr. Harris, as receiver, sold the properties at public auction at the court house door of Coleman County, the Republic National Bank becoming the purchaser thereof; and later, on March 22, 1937, the sale was duly confirmed by the 14th Judicial District Court of Dallas County; and that, by virtue of said proceedings, receiver Harris conveyed all and singular said properties to the Republic National Bank by two deeds, one dated March 25, 1937, reciting a consideration of $241,000 paid, and the other dated August 6, 1937, reciting $50 paid; alleging that, as a matter of fact, neither of said amounts nor any part thereof was ever paid (at this juncture in the petition, certain allegations characterizing the proceedings mentioned as being void and without legal effect, for reasons not mentioned here, but will appear later in this opinion).

It was also alleged that on August 10, 1939, the Bank conveyed the properties purchased at the receiver’s sale to the North South Oil Company, for the recited consideration of $235,000; that since said conveyance, the grantee has operated the properties and has taken therefrom oil and gas in excess of the value of $500,000; alleging further that said Company was organized on July 19, 1939, by defendants Smith-deal, Shook and Oscar Cooper for the purpose of taking title to said properties, and that said Company has paid to the Bank in excess of $235,000; that the Bank and individual defendants have appropriated all the oil and gas produced from said properties; characterizing said acts as illegal, by reason of the invalidity of the receiver’s sale.

Plaintiff then alleged, although not in proper sequence, that Florence and Davis, by conniving (acts constituting conniving not alleged), after securing the appointment of George B. Ray receiver of the Centennial, assisted by Smithdeal and Tyree (officers of the Centennial), caused Ray, receiver, to permit leases on various tracts of land to become forfeited for nonpayment of rentals, solely to enable the parties to repurchase the leases from the landowners, and that, thereafter, a son of Mr.

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Bluebook (online)
168 S.W.2d 710, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dewitt-v-republic-nat-bank-of-dallas-texapp-1943.