Mellette v. Hudstan Oil Corp.

243 S.W.2d 438, 1951 Tex. App. LEXIS 1734
CourtCourt of Appeals of Texas
DecidedApril 25, 1951
Docket4791
StatusPublished
Cited by19 cases

This text of 243 S.W.2d 438 (Mellette v. Hudstan Oil Corp.) 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
Mellette v. Hudstan Oil Corp., 243 S.W.2d 438, 1951 Tex. App. LEXIS 1734 (Tex. Ct. App. 1951).

Opinions

PRICE, Chief Justice.

This is an appeal'from a judgment of the District Court of Crockett County, Texas, by F. D. Mellette. Mellette, as plaintiff, sued to recover from the Hudstan Oil Corporation, Defendant, a one-half interest in two certain oil and gas leases, the legal title to which stood in the name of said defendant company. The trial was to the court with a jury, but at the close of all the evidence the court instructed the jury to return a verdict in favor of defendant, and in pursuance of such instructed verdict, entered a judgment that the plaintiff take nothing. Plaintiff claimed an equitable title to an undivided one-half interest in two leases. One count was in the form of trespass to try title, another set up the facts relied on to establish the title asserted.

In this latter count plaintiff alleged in substance that in the latter part of 1947 or the first part of 1948, he made a contract with one T. S. Stanfield that he would point out lands in Crockett County wherein oil and gas was to be probably found. In the event that said Stanfield elected to drill on [440]*440same, Stanfield would at his expense acquire a lease or leases thereon and furnish the money for drilling as to such lease or leases; that plaintiff and Stanfield should be partners, each having an undivided one-half interest therein, and to share equally in any profit arising from the operations. By the way of inducement plaintiff alleged his extensive and accurate knowledge of oil land in Crockett County and the chances for production thereon; and further in pursuance of his agreement he pointed out to Stanfield various lands in Crockett County and explained to him the chances for production of oil thereon; further that acting on said information Stanfield and Hill D. Hudson secured from the Gulf Oil Corporation a farmout lease on part of said gas lease or leases covering among other land the sought 80 acres of the west ⅝ of Section 85 in Block OP, G. C. & S. F. Ry. Survey, Crockett County, Texas, subject to an overriding royalty of ⅛ of the full ⅝ reserved by Gulf. The working interest acquired was a three-fourths working interest; the assignment was taken in the name of Stanfield. By the lease Stanfield bound himself to drill certain wells and pay the drilling cost thereof; that certain wells were drilled at the cost and expense of Hudson and Stanfield; that Hudson took said interest in the farmout lease with notice of plaintiff’s interest therein; that subsequently Hudson and Stanfield caused the said lease to be transferred to defendant; that the defendant was caused to be incorporated by Hudson and Stanfield; it was a closed corporation, Stanfield and his wife owning fifty per cent therein and Hudson' and his wife owning the other fifty per cent; further that at the time said defendant took over the partnership assets Stanfield and Hudson each had notice of the interest held by plaintiff in the leases; that on or about April 20, 1949, Stanfield acting in his own behalf and as a partner of Hudson attempted to repudiate his contract with plaintiff; that the leases on September 15, 1949 were conveyed to defendant; that Stanfield was President of the defendant corporation and Hudson Secretary and Treasurer; that at the time of the transfer defendants had full notice of the rights of plaintiff in and to the leases and the defendant corporation holds one-half the title as a constructive trustee for plaintiff.

Defendant plead not guilty and general denial; the 4th Section of our Statute of Frauds, Art. 3995, V.R.C.S., and Art. 7425b-7, Vernon’s Revised Civil Statutes, known as the Texas Trust Act.

Each party herein moved for summary judgment under Rule 166-A, Texas Rules of Civil Procedure. The trial court overruled the motion of each. In our opinion a denial of a motion for summary judgment is not a final judgment supporting an appeal. A motion for a summary judgment involves an application of law to the facts established as a matter of law; a judgment entered on an instructed verdict involves the application of law to the facts. If in favor of defendant it involves the finding that plaintiff’s facts are insufficient to establish or put in issue facts necessary to sustain a judgment in his favor, it, the same as a motion for a summary judgment is in the nature of a demurrer to the evidence.

In passing on a motion to instruct the court must assume as true the evidence introduced by the opposing party and all evidence tending to establish his cause of action. There is perhaps this exception, which it is true has no application here— that the court is not required to assume as true facts shown by the record to be false or facts judicially known to be false.

The complaint of plaintiff charging error as to the court overruling his motion for summary judgment will be passed upon in the assignment charging error in sustaining the defendant’s motion for an instructed verdict. At the close of all of the evidence the court should be able to judge as to whether or not a cause of action or defense had been established.

Defendant’s motion for an instructed verdict in substance urged that the effect of the evidence of plaintiff was to establish a parol trust in land, which was barred by Section 4 of Art. 3995, R.S., the Statute of Frauds. Also invoked was Section /, Art. 7425b, known as the Texas Trust Act, declaring an express parol trust in land invalid; further because the evidence was too indefinite to [441]*441■establish an enforceable trust in the lands in question; because the evidence failed to establish that defendant was not an innocent purchaser.

Plaintiff asserts that the evidence was at least sufficient to raise the issue of a constructive trust. Defendant urges that on the contrary the only tendency of plaintiff’s evidence was to establish an express parol trust, barred by Section 7 of Art. 7425b. By Sec. 2 of this same Article, the Article has application only to an express trust.

Prior to the effective date of this Statute, either an express, resulting or constructive trust might be established by parol, hut since the Statute an express trust may not arise by a parol contract or he evidenced thereby. Sections 2-7, Art. 7425b, Vernon’s Texas Civil Statutes; James v. Fulcrod, 5 Tex. 512; Fitz-Gerald v. Hull, Tex., 237 S.W.2d 256.

In determination of the issue as to whether the plaintiff was entitled to have the cause submitted to the jury, the evidence must he viewed most favorably to the plaintiff. The verdict was instructed against him. Stevens et al. v. Karr, 119 Tex. 479, 33 S.W.2d 725; White v. White, 141 Tex. 328, 172 S.W.2d 295. Authorities might 'be multiplied sustaining the above proposition. As has been stated before, a motion is in the nature of a demurrer to the evidence. The evidence in his favor for the purpose of passing on the motion to instruct must be assumed to be true.

A determinative and material issue on this appeal is as to whether or not the testimony raised the issue as to the existence of a constructive trust in favor of plaintiff to an undivided one-half interest in these leases. The alleged agreement beyond question was oral.

The farmout lease assigned by the Gulf Oil Company to Stanfield was in Stanfield’s name only. It was assigned by Stanfield to the Hudstan Oil Corporation. There were two of these farmout leases and each was assigned by Stanfield to the Hudstan Corporation.

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Mellette v. Hudstan Oil Corp.
243 S.W.2d 438 (Court of Appeals of Texas, 1951)

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Bluebook (online)
243 S.W.2d 438, 1951 Tex. App. LEXIS 1734, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mellette-v-hudstan-oil-corp-texapp-1951.