Knight v. Tannehill Bros., Inc.

140 S.W.2d 552, 1940 Tex. App. LEXIS 374
CourtCourt of Appeals of Texas
DecidedMay 6, 1940
DocketNo. 5154
StatusPublished
Cited by12 cases

This text of 140 S.W.2d 552 (Knight v. Tannehill Bros., Inc.) 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
Knight v. Tannehill Bros., Inc., 140 S.W.2d 552, 1940 Tex. App. LEXIS 374 (Tex. Ct. App. 1940).

Opinion

Stokes, justice.,

Plaintiffs in error, R. L. Knight, Jr., Martha E. Davis, joined by her husband, G. E. Davis, Eva Ruth Weiss, joined by her husband, J. R. Weiss, and Alton E. Knight, a minor, appearing by his next friend and legal guardian, Martha E. Davis, filed this suit against L. B. Tan-nehill and wife, Lillian B. Tannehill, C. C. Tannehill, John Q. Tannehill, Mrs. Lillian Hink’le and her husband, Clarence E. Hinkle, Martha E. Tannehill, a feme sole, and Maud E. Tannehill, a feme sole, who appear here as defendants in error. Plaintiffs in error, except G. E. Davis and J. R. Weiss, are the surviving children and heirs at law of R. L. Knight, who died intestate May 9, 1928, and his wife, Susanna Knight, who died intestate April 10, 1934. The defendants in error constitute all of the former stockholders of Tannehill Brothers, Inc., a family corporation, which was dissolved after the negotiations involved in the suit were inaugurated. L. B. Tannehill managed all of the affairs of the corporation and also all of the affairs of the defendants in error pertaining to the corporation and its properties after its dissolution. When in this opinion reference is made to Tannehill, therefore, it alludes either to the corporation before its dissolution or the defendants in error as successors to its rights and properties after its dissolution, there being no difference as far as the matters here involved are concerned whether the incidents referred to happened before or after the dissolution of the corporation.

The suit is in the statutory form of trespass to try title and it is shown by other allegations and proof that R. L. Knight, at the time of his death, was seized and possessed of real estate consisting of twelve sections of land in Yoakum County, Texas, and six sections in the State of New Mexico. At the time of his death R. L. Knight was indebted to Tannehill Brothers, Inc. in the sum of $104,804.47, evidenced by a promissory note dated December 1, 1926, and due three years after date. The note was secured by a deed of trust on the Yoakum County land, a lien on the land in New Mexico, and a chattel mortgage lien on several hundred head of cattle, being all of the cattle owned by him. He was also indebted to F. B. Collins Investment Company in the sum of $8,000, secured by a lien on the New Mexico land; to H. E. Trippett $1,246.32, and tp the State of Texas for original purchase money on part of the Yoakum County land in the sum of $8,453.25. All of this indebtedness was secured by valid liens on the whole or portions of the-land.

Although the Yoakum County land was community property, after the death of R. L. Knight his surviving wife, Susanna Knight, agreed with L. B. Tannehill, acting for the corporation of Tannehill Brothers, that general administrations should be taken out in Texas and New Mexico upon the estate; waived her right to be appointed administratrix, and agreed that administrators selected by Tannehill should be appointed. This plan.seems to have been agreed upon in view of the large amount of indebtedness owing by the estate, and in order, through an administrator’s sale, ultimately to place the legal title in Tannehill so that he could make sales of oil and gas leases and royalty interests in the land and apply the proceeds to the payment of the indebtedness owing by the estate. Plaintiffs in error alleged that this agreement encompassed the provision that Tannehill would [555]*555take and hold the legal title in trust for Mrs. Knight and her children and that when the indebtedness of the estate, including that held by Tannehill, was paid, the portion of the lands and oil interests that had not been sold by Tannehill would be reconveyed to Mrs. Knight or her heirs or legal representatives.

The record shows that administrations, both in Yoakum County, Texas, and in New Mexico, were duly perfected; that Wm. Q. Boyce of Amarillo, in Potter County, was duly appointed administrator in Texas, and J. J. Lane was appointed administrator in New Mexico, both of whom were selected by Tannehill. Soon after his appointment, Wm. Q. Boyce made application to the probate court for an order to sell all of the twelve sections of land located in Yoakum County, Texas. The application was granted and the twelve sections were sold to Tannehill for a recited consideration of $63,580; the assumption of the taxes against the land for the year 1928, and the assumption of the balance of the original purchase price due the state of Texas.

Without going into detail as to the administrations and the manner in which the property of the estate was disposed of, it will suffice to say that, after sale of all of the cattle and after Tannehill had sold a considerable number of leases and oil interests in the Texas land and applied the proceeds to the indebtedness of the estate, it still was indebted to Tannehill in excess of $50,000. The debts to Trip-pett and the Collins Investment Company had been paid and the total indebtedness then amounted approximately to $60,000.

All of the property belonging to the estate located in Texas was disposed of and the Texas administrator filed his final account with an application that he be discharged. On August 19, 1929, the account was approved, the Texas administrator discharged, and the estate in Texas closed.

After Tannehill had purchased the Texas land through the administration, a well was drilled on a portion of it in an effort to discover and develop oil. About the same time a similar well was drilled near the New Mexico land. Both of these wells resulted in “dry holes” which had the effect of condemning the entire properties as potential oil lands, destroyed their value as oil properties, and put an end to further revenue from that source.

On or about October 16, 1929, after the administration in Texas had been closed and after the oil wells had been drilled and resulted in failures to discover oil, and while the estate was still indebted in the sum of approximately $60,000, Mrs. Knight and Tannehill made an agreement to the effect that Tannehill would retain and hold as his own property all of the Texas land and one section in New Mexico, in consideration of which he agreed to cancel all of his indebtedness against the estate, and the administrator of the estate in New Mexico would convey to Mrs. Knight the remaining five sections of land in New Mexico. This agreement was in parol and consummated in a conversation and negotiations between Mrs. Knight and L. B. Tannehill conducted in the office of the attorney for the New Mexico administrator at Roswell. Shortly thereafter J. J. Lane, the administrator of the estate in New Mexico, conveyed the five sections in that state to Mrs. Knight, the deed reciting a consideration.of $17,-600, which, the testimony shows, was not paid nor intended to be paid.

The record is voluminous, the statement of facts alone consisting of 620 pages, but it will be seen from the foregoing summary that the result of the administrations and negotiations between the parties was that all of the indebtedness of the estate, amounting approximately to $130,000, was discharged and the property, both real and personal, disposed of, leaving the estate in possession of five sections of land in New Mexico, free and clear of all encumbrance.

Mrs. Knight died April 10, 1934, and this suit was filed March 14, 1936, by plaintiffs in error as the surviving children and heirs at law of R. L. Knight and his wife, Susanna Knight, its purpose being to recover of the Tannehills the twelve sections of land in Yoakum County.

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Cite This Page — Counsel Stack

Bluebook (online)
140 S.W.2d 552, 1940 Tex. App. LEXIS 374, Counsel Stack Legal Research, https://law.counselstack.com/opinion/knight-v-tannehill-bros-inc-texapp-1940.