Texas Pacific Coal Oil Co v. Hamil , 238 S.W. 672 ( 1922 )

I can and do very readily agree to much that has been said in the well-written opinion of Mr. Justice DUNKLIN, but have, on the whole, been unable to concur in the final conclusion announced therein. In the effort to suggest the lines of thought which have influenced me to the contrary, I wish to briefly refer to a number of facts clearly shown in the evidence that do not appear in the opinion of Mr. Justice DUNKLIN, nor in the trial court's conclusions of fact.

It is true that the record shows that the 160 acres of land in controversy was applied for and awarded to C. M. Hamil on the 20th day of June, 1908, after the death of the mother of the interveners, which act doubtless induced the trial court's conclusion that the land was not subject to the parol partition between C. M. Hamil and the interveners. But the appellee Oscar J. Hamil, among other things, himself testified, in reference to the land in question (and I find no contradiction of his testimony in the particulars noted), that —

"Prior to 1908 I put the fence around the biggest part of it myself. That was when my father lived on the home place and before there was any division made of the estate. I put the fence on the west and north. I worked for my father when I put the fence there. * * * I fenced this land for my father when I was a very small boy, but in 1900, I believe, I came back in the fall — I had been away, and I came back and spent the winter and repaired all the fences around the place. That included this 160 acres. It was like this; I helped build this fence when I was a boy, but, of course, father and the rest of them taken part. I understood my father bought the claim on this land about this time and gave a shotgun for it. I understood he gave it to a fellow named Phillips."

The evidence shows that the period covered by the testimony quoted was during the marriage of C. M. Hamil and the mother of the interveners, and hence whatever right, if any, that C. M. Hamil acquired by his purchase from Phillips, must have been considered as belonging to C. M. Hamil and his then wife. The evidence does not show whether or not Phillips had theretofore made an application to the state for the purchase of the 160 acres so sold to Hamil, or whether he had merely settled thereon under some claim or right with a view of acquiring title, and while in that condition sold to Hamil, Hamil purchasing, as stated by appellee, in the loose and ineffective way so frequently done by pioneer settlers in the early history of the country when a writing was not considered more sacred than the spoken word. But however this was, it is evident that C. M. Hamil asserted a claim to the land prior to the time of the application to purchase he made in 1908, and hence furnished reasons in conscience and the early faith actuating C. M. Hamil to treat the land as community property and to include it with lands to be partitioned between himself and his children, who are the interveners in this case.

The evidence further shows without dispute that in addition to the lands partitioned, certain cattle were also divided between C. M. Hamil and the interveners. The number of cattle received by each heir and what became of them, or the number of acres of land received by the several heirs in the partition, does not appear, save that it does appear that two daughters received 200 acres of land each, and that deeds by the parties to the partition were passed to confirm the titles thus acquired; the land in controversy not appearing to have been conveyed, presumably for the reason that the title was supposed to be in the state. Nor does it appear that C. M. Hamil ever left the country, or on any occasion from the time of the partition until the date when appellee secured a deed from him, ever claimed the land in controversy or contested John Hamil's or his surviving wife's right to possession thereof. On the contrary, there is uncontradicted evidence tending to show that he remained in the country and on more than one occassion distinctly declared that he had given that land to John Hamil. Nor does it appear that he claimed the land or objected to its continued possession by John Hamil after its forfeiture in July, 1910. Nor does it appear that the wife of C. M. Hamil, living at the time the land was applied for in July, 1908, has ever asserted any right or claim thereto. It further appears without dispute that since the partition C. M. Hamil has conveyed to others all the land by him acquired in the partition, as has also been done by one or more of the children participating therein.

The evidence also shows without dispute that the land, as expressed by one of the witnesses, "was rough, broken land, not subject to cultivation," of little worth at the time, but which later, together with other lands in the vicinity, greatly increased in value.

In view of the circumstances above referred to, and of those found by the trial court and recited in the opinion of Mr. Justice DUNKLIN, I do not think sufficient emphasis has been given to the evidence in support of the interveners' plea of limitation. If the transaction between C. M. Hamil and his children be construed as a gift, as it seems appellee insists, and as there is perhaps evidence tending to show, there is high authority to the effect that the possession of John Hamil and his surviving wife and children ripened into good title long before this suit was filed, on October 16, 1920. Indeed, more than ten years elapsed between the date of forfeiture, July 26, 1910, and the filing of this suit. In Wood on Limitation, vol. 2, p. 651, it is said:

"An entry under a parol gift of certain lands, the extent of which is definitely fixed, is adverse to the donor, and ripens into a title after the lapse of the requisite statutory period. There are cases in which a contrary doctrine is held; but the weight of authority, as well as common sense and the principles applicable to adverse possession, seem to support the rule as stated, because a person entering under such circumstances enters as owner, and occupies under a claim of ownership, and every attribute requisite to acquire a title by adverse possession exists."

Nor am I inclined to the view that the forfeiture, upon which so must stress is laid, was such as to interrupt the peaceable and adverse possession of the interveners. Article 5423, V. S. Tex.Civ.Statutes, provides, so far as pertinent, that —

"If upon the first day of November of any year any portion of the interest due on any obligation remains unpaid, the Commissioner of the General Land Office shall endorse on such obligation, `Land forfeited,' and shall cause an entry to that effect to be made on the account kept with the purchaser; and thereupon said land shall thereby be forfeited to the state without the necessity of re-entry or judicial ascertainment, and shall revert to the particular fund to which it originally belonged, and be resold under the provisions of this chapter, or any future law."

Forfeitures are not favored, and it was not affirmatively shown that there was an actual default in the payment of the interest, and that because thereof the Commissioner not only indorsed on C. M. Hamil's obligation, "Land forfeited," but also caused "entry to that effect" to be entered on his account so as to completely reinvest the title in the state. It was only after performance by the Commissioner of the particular steps prescribed by the statute that the state reacquired its title, unaffected by C. M. Hamil's application and obligation. That the forfeiture was so grounded and of such effect is a mere inference from the agreement of counsel which is quoted in Mr. Justice DUNKLIN'S opinion. But I submit that such construction of the agreement, while plausible, is a harsh one and seems to be rebutted by the admission and finding that —

"J. W. Hamil and Lizzie Hamil paid to the state of Texas each and every year all of the interest due the state."

As found by the trial court, the forfeiture was on the 26th day of July, 1910, and was reinstated on the 5th day of August, 1910, and construing the record as a whole, it seems evident to me that if on the 26th of July, 1910, there was a default of interest, it was one of those inadvertent or accidental omissions to pay that have so frequently occurred with purchasers of school and university lands, and which omission was promptly rectified within a few days after notice. It is difficult for me to see why, if the forfeiture reinvested title in the state, the rescission of the forfeiture by the Commissioner and reinvestment of the account did not have the effect of rendering the forfeiture as if it had never taken place, for article 5423 of the statutes provides that in event of forfeiture it shall thereafter be resold under the provisions of the chapter, which was not done. It further provides that in case of reinstatement without the intervention of another's right, "the original obligations and penalties shall thereby become as binding as if no forfeiture had ever occurred." So that, as a whole, I think the state should be reciprocally bound, and that the forfeiture relied upon is of no effect in the consideration of this case.

The cases of Browning v. Estes, 3 Tex. 463, 49 Am.Dec. 760, Gilbough v. Runge, 99 Tex. 539, 91 S.W. 566, 122 Am. St. Rep. 659, and Hardy v. Wright (Tex. Civ. App.) 168 S.W. 462, cited in the opinion of Mr. Justice DUNKLIN in opposition to the interveners' plea of limitation, were cases of sale in which the vendors held the legal title, and the vendees were in default in the payment of the purchase money. But such is not the case here, nothing was due to C. M. Hamil by John Hamil. C. M. Hamil was shown to only have the right to acquire title by fulfilling the conditions of payment to the state. The legal title was in the state and not in C. M. Hamil, and it has a number of times been decided that the fact that the legal title remains in the state will not defeat the right to acquire land by limitation against one to whom it has been awarded upon an application for its purchase under our laws. See Parker v. Brown,80 Tex. 555, 16 S.W. 262; Dutton v. Thompson, 85 Tex. 115, 19 S.W. 1026; Thompson v. Dutton, 96 Tex. 205, 71 S.W. 544; Paterson v. Rector (Tex. Civ. App.) 127 S.W. 561.

Browning v. Estes, 3 Tex. 462, loc. cit. 476 (49 Am.Dec. 760), after confirming the general rule that one who takes possession by the consent of another may not plead limitation as against such other, has this to say on the subject:

"There are exceptions to the general rule; as for instance, where the whole of the purchase money has been paid, and the stipulations imposed on the vendee by the contract have been fulfilled, he may hold adversely to the vendor; and other circumstances may be imagined, which might impress an adverse character on the possession."

As I construe the undisputed facts and findings, John Hamil acquired possession of the land in controversy under a contract that as such is conceded to be perfectly valid. By the terms of the agreement in consideration thereof, C. M. Hamil, in the nature of an exchange of properties, received lands of equivalent value in the partition, and that by virtue of such contract John Hamil secured the right, which C. M. Hamil ought not to be permitted to breach, to pay to the state of Texas all sums of money necessary to its protection and to its full and final acquisition from the state, and that when this was done, as in this case, the interveners' equitable right to the land became perfect, not only by the terms of the agreement between C. M. Hamil and his children, but also because the adverse possession of John Hamil and his surviving wife and children related back to the inception of their possession, and hence the patent in the name of C. M. Hamil was thereafter held in trust for John Hamil and those claiming in his right.

As illustrating my conception of the right acquired by John Hamil in the partition agreement, I wish to refer to what, among other things, was said in Browning v. Estes, supra:

"The possession of the vendee, who entered with the assent of the vendor, is lawful, nor can it be disturbed so long as he performs with fidelity the obligations imposed by the stipulations of the contract, and those which flow from the relation subsisting between the vendor and vendee."

And I know of no case where a vendor has been permitted to disaffirm a sale where the vendee has so complied with the conditions under which he purchased and took possession. The only condition under which John Hamil took possession of the land in controversy was that he should pay the state of Texas principal and interest due by the terms of C. M. Hamil's obligation. This, as already stated, I think he acquired the right to do, and these conditions having been fully complied with, equitable title became fully vested in the interveners in this case.

But aside from the issue of limitation and the effect of the partition agreement, as above discussed, and further considering the case as affected by the statute of frauds, I do not think sufficient force has been given to the character of Improvements made on the land in controversy. It is uniformly held in this state that a verbal sale or gift of land, followed by delivery of possession and valuable improvements made thereon, will take the gift or sale out of the statute of frauds, upon which the appellee in this case relies. And whether the transaction between C. M. Hamil and his son John Hamil be treated as a gift or a sale, there was undoubted delivery of possession and long-continued recognition of the right thereto by C. M. Hamil and all other interested parties, and while such gift and possession, followed by insignificant improvements, such as building a chicken coop at a cost of $15 (see Cobb v. Johnson,101 Tex. 440, 108 S.W. 811), or a small smokehouse, of inconsiderable value (see Eason v. Eason, 61 Tex. 225), or a small hogpen, of no value (see Bradley v. Owsley, 74 Tex. 69, 11 S.W. 1052), will not take the parol gift or sale out of the statute; yet I find no decision which undertakes to define the precise ratio that the value of improvements must bear to the value of the land.

The case of Wells v. Davis, 77 Tex. 636, 14 S.W. 237, was an action in trespass to try title against Mrs. Nellie Davis to recover a house and two adjoining lots. She introduced evidence of a parol gift of the property and that she had expended about $187 improving it. The evidence showed that the original cost of one of the lots was $250 and of the other $150. A decree in favor of Mrs. Davis was affirmed. In the case now before us it is to be remembered that the land was of no considerable value at best, that it was rocky, rough land, unsuited for cultivation, and that the fencing built by John Hamil was the only character of improvement to which the land was adapted, and all that was required in order to segregate it from all other lands and to give notice to the world that it was claimed and possessed by John Hamil. While the evidence fails to show in dollars and cents the value of the board of the hand who the court recites built the fence, the evidence nevertheless undoubtedly does show that John Hamil himself, and perhaps others also, assisted in building the fence, and it is not unfair to presume that such board and assistance in labor was also of value. There was also further evidence that the building of the fence was by agreement with the adjoining owner considered the equivalent of the cost of the material paid for by him, to wit, $100. So that, as it seems to me, it ought not to be said that the improvements were of such insignificant value as to be wholly disregarded. Nor do I think the fact that the use and rentals of the land exceeds the value of the improvements should be held to destroy their effect. In the case of Wells v. Davis, supra, the court, after referring to cases, said on this subject:

"These cases cannot, however, be invoked as authority for the proposition that specific performance of parol contracts for the sale of land will not be enforced in any case where the evidence may show that the value of the use and occupation of the premises have been greater than the cost of the improvements.

"To hold in such cases that the purchaser under a parol sale or gift must be held to account for the value of the use and occupation of the premises is to treat him as a renter or trespasser instead of as a purchaser, and is inconsistent with the theory upon which specific performance has been decreed in such cases."

But if it should be said that the improvements in this case of themselves were insufficient to take the case out of the statute of frauds, nevertheless such improvements, together with the other circumstances, may be considered in determining whether or not it would be now inequitable to refuse to give effect to the gift, if it must be so termed.

True, there is a school of thought referred to, perhaps with approval, in the cases of Ann Berta Lodge v. Leverton, 42 Tex. 25, and the recent case of Hooks v. Bridgewater (Tex. Sup.) 229 S.W. 1114, 15 A.L.R. 216, that seems reluctant to favor any exception to the statute of frauds; but the eminent judges who wrote the opinions in those cases were not considering, nor called upon to consider, whether, in the absence of permanent and valuable improvements, other equities might not exist that would take the case out of the statute. In the Ann Berta Lodge Case, the court found that, as alleged and proven, there were no improvements of value that could be considered, and the authorities were discussed with a view of supporting the conclusion reached that mere delivery of possession and tender of the purchase money under a parol contract was insufficient; nor did the other case, Hooks v. Bridgewater, so much relied upon, involve the proposition I seek to support. That was a suit against an administrator to enforce a parol agreement by a deceased owner to devise his property to the plaintiff in consideration of care and services to be performed. It was shown that plaintiff had performed as agreed upon, and the ruling was merely to the effect that the performance of service was but an equivalent for the payment of purchase money, and that in accordance with the authorities the parol agreement with payment of the consideration would not be enforced as against the statute of frauds. But there were no improvements shown in that case, and in neither case is there a distinct declaration that equities other than what arises out of delivery of possession and improvements in good faith may not be shown with the same effect.

In support of the principle that I think should be applied in this case, the following quotations from the authorities are presented:

"The court of equity has, from a very early period, decided that even an act of Parliament shall not be used as an instrument of fraud and if in the machinery of perpetrating a fraud an act of Parliament intervenes, the court of equity, it is true, does not set aside the act of Parliament, but fastens on the individual who gets a title (or right) under that act, and imposes upon him a personal obligation, because he applies the act as an instrument for accomplishing a fraud. In this way the court of equity has dealt with the statute of frauds." Devlin on Deeds, p. 130, § 139.

"And it has been decided that where the circumstances of the parties had become so changed that the purchaser would suffer a great loss, such as the insolvency of the party, or enhanced value of the property, a court of equity would decree a specific performance." Wood v. Jones,35 Tex. 65.

"It is stated, however, in Wells v. Davis, 77 Tex. 636, 14 S.W. 237, that, if other circumstances of a case entitle the vendee or donee to a decree of specific performance, the question of improvements must be treated as immaterial." Altgelt v. Escalero, 51 Tex. Civ. App. 108,110 S.W. 989.

"If the * * * circumstances of the case are such as to entitle the vendee or donee to a decree for specific performance the question of improvements must be treated as immaterial." Wells v. Davis, 77 Tex. 636,14 S.W. 237.

"The rule in this state is well established that verbal contracts for the sale of land will not be enforced without proof of possession and valuable improvements permanent in character, or of other facts making the transaction a fraud on the purchaser, if not enforced. * * * Such possession, with payment of the purchase money and improvements of a permanent character enhancing the value of the premises, or such possession without improvements, connected with other circumstances making the transaction a fraud upon the purchaser if the agreement is not enforced, will take the case out of the statute of frauds." Bradley v. Owsley, 74 Tex. 69, 11 S.W. 1052.

"The doctrine is well established that where either party, in reliance upon the verbal promise of the other, has been induced to do or to forbear to do any act, and thereby his position has been so changed for the worse that he would be defrauded by a failure to carry out the contract, equity will enforce a performance." Morris v. Gaines, 82 Tex. 255, 17 S.W. 538.

"The doctrine is well established that where one party, relying upon the verbal promise of another, has been induced to do an act whereby his position has been so changed for the worse that he would be defrauded by a failure of the other to comply with his contract, equity will enforce a performance at his instance. Morris v. Gaines, 82 Tex. 255, 17 S.W. 538; Hand v. Nix (Tex. Civ. App.) 87 S.W. 204." McKinley v. Wilson (Tex. Civ. App.) 96 S.W. 112.

"From an early time it has been the rule of this court, steadily adhered to, that to relieve a parol sale of land from the operation of the statute of frauds, three things were necessary: (1) Payment of the consideration, whether it be in money or services. (2) Possession by the vendee. And (3) the making by the vendee of valuable and permanent improvements upon the land, with the consent of the vendor; or, without such improvements, the presence of such facts as would make the transaction a fraud upon the purchaser if it were not enforced." Hooks v. Bridgewater (Tex. Sup.) 229 S.W. 1114, 15 A.L.R. 216.

"While a parol sale or gift of land may be sustained in equity when it is followed by the possession of the grantee or donee who makes valuable improvements thereon in good faith (Wootters v. Hale, 83 Tex. 563,19 S.W. 134), yet it does not follow that the validity of such sale or gift may not be sustained in the absence of valuable and permanent improvements." Ryan v. Lofton (Tex. Civ. App.) 190 S.W. 752.

"Upon whatever grounds, however, parol sales of real estate have been upheld in other jurisdictions, we are satisfied that in this state they are upheld on the theory of estoppel. We do not pause to discuss the point, but content ourselves with the citation of representative cases. Wooldridge v. Hancock, 70 Tex. 21, 6 S.W. 818; Lodge v. Leverton,42 Tex. 18 ." Bringhurst v. Texas Co., 39 Tex. Civ. App. 509, 87 S.W. 897.

"Mr. Justice Lipscomb, in the case of Love v. Barber, remarks, quoting in part from Lord Denman: `The doctrine of an estoppel, not of record or under seal, called an estoppel in pais, was left for a considerable time in a state of perplexity and uncertainty. It is, however, believed that various adjudications have settled the doctrine on principles easy to be understood. Nowhere has it been more concisely and clearly laid down than by Lord Denman in the case of Pickart v. Sears, Eng. C. L. Rep. vol. XXXIII, p. 117. He says, "that the rule of law is clear that when one, by his words or conduct, willfully causes another to believe the existence of a certain state of things, and induces him to act on that belief, so as to alter his own previous position, the former is concluded from averring against the latter a different state of things, as existing at the same time; and the plaintiff in this case might have parted with his interest in the property by a verbal gift or sale, without any of those formalities that throw technical obstacles in the way of legal evidence." (See Walker's Administrator v. Livingston et al., 3 Tex. R. 93.) This rule is much to be admired for its simplicity, its briefness, and it yet being expressive of the whole doctrine on the question.'" Ragsdale v. Gohlke, 36 Tex. 286.

Bearing in mind the principles so announced, I can but think that C. M. Hamil and those claiming under him with notice of the facts, as is the case of appellee Oscar Hamil, are estopped from now claiming the land in controversy. Whether or not it was, strictly and legally speaking, the community property of C. M. Hamil and the mother of the interveners, it was nevertheless so treated by all parties. It was placed in hotch-potch with other lands and property of that community estate with the undisputed declaration that the child to whom the home place should be allotted should have the land in controversy.

Reasoning from the ordinary impulse that actuates humanity in the care of their own, it is but fair to assume that C. M. Hamil so placed the land in controversy, together with the other lands to be divided among his children, in order to equalize the value of the children's part with the value of that taken by himself; in other words, it is fair to assume that C. M. Hamil, in accepting the land he did accept in the partition, received in values more than he otherwise would have received, and the children, in making the partition among themselves and in awarding to John Hamil the home place, also acquired greater values by the addition of the land in controversy to the home place. There is nothing to show that if the land in controversy had been excluded from that partition, either John Hamil or C. M. Hamil or any of the others would have estimated the value of the old home place equal to the value of the shares received by the other participants. It is evident, as it seems to me, that by the parol gift, if it must be so termed, together with the delivery of possession, John Hamil was induced to alter his position, and inasmuch as C. M. Hamil and a number, if not all, of the other participants in the partition, have sold their lands, now of largely increased value, it is now impossible for John Hamil, or his heirs who succeeded to his right, to be given any part thereof.

There is no equity to invoke in behalf of appellee. He is the son of C. M. Hamil and C. M. Hamil's first wife, and he testified that he was 42 years old. C. M. Hamil had eight sons and daughters, three at least of lawful age, by his second wife, at the time of the partition, and must have been a very old man at the time appellee procured the deed from his father. Appellee testified that he had been in Montana and in other places occupied as a stockman, hotel keeper, a barber, and bar keeper, and that upon his last return to Texas he learned that the land in controversy was still in his father's name, and that —

He "went to him (C. M. Hamil) and asked him if he had deeded it away or given it away, and he said, `No,' he had forgotten all about it. I asked him if I could have it, and he said, `Yes.' I said, `Make me a deed,' and he said, `Come on.' That was all that was said. My father had forgotten all about that land out there. He said he had gotten him in such an uproar and said he had forgotten, in fact, didn't know it was out there; didn't know he had any claim to it. And I asked him to make me a deed."

On cross-examination, he said, among other things:

"I paid my father this $5 to make it legal; that is the way the deed was drawn. * * * Nobody told me to pay him. I had made trades before. You ask if in my opinion it would not have been legal if I did not pay the $5. What is the use of mentioning if I was not to pay it. My only reason for paying it was to make it legal."

There is no testimony which furnishes a reason for the old father to favor the appellee over his son John, or the interveners. The execution of the deed in favor of appellee was certainly not because of any failure on the part of John Hamil and interveners to comply with the conditions under which they took possession of the land. The only pretext that could be assigned for such action is the failure, if any, to pay the interest due the state in 1910, but no complaint on the part of C. M. Hamil was made of that failure, if any, for long years thereafter, which in any view of the case should be deemed waived. The conditions under which John Hamil took possession were in the nature of conditions subsequent, and it is well established that a vendor may not re-enter upon a breach of a condition subsequent without notice thereof. It certainly could not operate, ipso facto, as full reinstatement of his original right.

Without further discussion, I conclude that John Hamil, by an agreement not invalid in equity, acquired the land in controversy (subject to the condition of payments of dues to the state, of course), in a parol partition, and that thereafter his possession and improvements, and the long-continued and final payments, were such as to authorize and require the enforcement of such agreement and take this case out of the statute of frauds, or that if the improvements and payments of themselves are insufficient to have this effect, nevertheless such improvements, together with such possession and payments, the largely enhanced values, and all other circumstances, raise such an equity in the interveners in this case as to estop either C. M. Hamil or appellee Oscar J. Hamil from pleading the statute. To hold otherwise, as it seems to me, is to make the statute pleaded by appellee work an irreparable fraud upon the appellants, and to enable appellee to use the statute as an instrument to despoil the surviving widow and children of his deceased brother.

I therefore think the judgment below should be reversed and the cause remanded.