Hardy Oil Company v. Burnham

This is an appeal from an interlocutory order appointing a receiver, on petition of appellees, of certain land in Matagorda County embracing an oil field upon which appellants were operating. Appellees, sole heirs of Emily Louise Burnham, sued in trespass to try title and for partition, claiming to be owners of 21/96 of the Henry Parker league, and alleged that defendants, of whom there was a large number, many of them nonresident corporations, were engaged in taking oil from the land and disposing of the same, and alleged certain facts which it was claimed rendered an injunction and the appointment of a receiver necessary. The petition was presented to the judge of the 23d judicial district, who set the application down for hearing, and ordered that notice be given to the defendants, which was done. Afterwards the matter came up for hearing at a regular term of the District Court of Matagorda County, upon the petition, answers of defendants, and affidavits in support of each. The court appointed a receiver with certain powers, not necessary to be here specially set out further than to say that he was authorized to take charge of 21/96 of the output of the oil field, and to keep or dispose of the same, and to keep a strict account of oil produced. From this order the defendants appeal.

The facts established by the affidavits and record evidence with regard to the title of the respective parties are, briefly, as follows:

The Parker league was granted to Henry Parker, as his headright, by the government of Coahuila and Texas on February 5, 1833. Both in the grant and in the application therefor it is stated that Parker was at the time a married man. His wife was Henrietta Parker, who died in 1835. There survived her, her said husband, Henry Parker, and four children, W. E., F. A., Emily Louise, ancestress of appellees, and an infant, never named, who survived the mother only about four or five weeks. F. A. died unmarried and without issue in 1867. Emily Louise married James G. Burnham and died in 1859 intestate, and appellees are her sole heirs. In 1866 Henry Parker, who died in 1869, conveyed to his son, W. E. Parker, the league of land in controversy. W. E. Parker sold and conveyed it to Vanham in 1899. From Vanham it has passed by various mesne conveyances to the appellants, who are in possession of same, some of them claiming title in fee, and some leasehold interests, most of them being engaged in producing oil, which was discovered on a part of the league in 1908. The suit was filed October 15, 1908, shortly after such discovery.

It will be seen that appellees' claim rests upon the fact that the land was community property of Henry Parker and his wife, Henrietta; that upon the death of the said Henrietta her one-half passed to her children, and that the interest of Mrs. Burnham, one of the children, was not affected by the subsequent sale of the entire league by Henry Parker, but now belongs to appellees, her heirs. Appellants claim to be innocent purchasers without notice of the adverse title here asserted, and also set up title under the three, five and ten years statutes of limitation, and stale demand, supporting such claim by affidavits in opposition to the appointment of a receiver.

The court was in error in holding, as was practically done in the powers given to the receiver, that appellees' interest in the land was 21/96 thereof. This error was caused by not giving consideration to the fact that when the unnamed infant child of Henry Parker and wife died in 1835, under the law then in force, the share of such child in the mother's estate passed wholly to the surviving father, and not, as under our statutes of descent and distribution, one-half to him and one-half to the surviving brothers and sisters. (Schmidt Civil Law of Mexico, arts. 1230-1235 et seq.; Hardy v. Hansom, 82 Tex. 102 [82 Tex. 102].) That this is the law is not denied by appellees, but they seek to avoid the effect of it by the contention that the court was authorized by the evidence to find that upon the death of Mrs. Parker she only left three children, W. E., F. A. and Mrs. Burnham. In the face of the positive statement in the sworn petition, based, in so far as it related to the family history as stated in the affidavit, upon reliable information, and the affidavit of W. E. Parker, one of the children, introduced by appellees in support of their claim, in both of which it is positively stated that Mrs. Parker left four children, and particularly stated that one of them was an infant never named, who survived the mother only four or five weeks, the mother in fact dying in child-birth, a contrary conclusion, based only upon the statement of one of the plaintiffs, a grandson born ten years after the death of this child, that there were only three children, this contention can not be sustained. W. E. Parker, who was six or seven years old when this infant sister was born and died, could not be mistaken, while the grandson, all of whose knowledge of the family history was gained from others many years after these occurrences, might very well be. His informant may very well have forgotten the existence of this unnamed infant whose life was so brief. No other conclusion can be supported by the evidence of appellees than that there were four children as stated in the petition. Under this finding their interest, if any, would not be more than 5/32, and in no event should the power of the receiver have been extended further than necessary to protect this interest instead of 21/96 claimed by appellees. The first assignment of error presenting this objection to the decree must be sustained, but of itself would not require more than a modification of the order, and the taxation of the costs of the appeal against appellees.

Under the assignments of error from two to eight inclusive and propositions thereunder, objection is made to the order appointing the receiver, that plaintiffs had failed to show probable title to any interest in the land, upon several grounds separately set out. As we have concluded that the judgment appealed from should be reversed upon the ground set out in the ninth assignment, a full discussion of these assignments from two to eight will be pretermitted. We are constrained to follow the doctrine, which we understand to have been laid down by the Supreme Court in Hill v. Moore (85 Tex. 339 [85 Tex. 339]), and to hold that the statements and recitations in the grant to Henry Parker were notice to all purchasers from or under him that the land was community property of himself and a then living wife, and this was sufficient to put such purchasers upon inquiry as to the death of the wife and the existence and rights of her heirs and affect them with notice of the true facts with regard to such matters, which could only be rebutted by showing that such inquiry was prosecuted with reasonable diligence and failed to disclose these facts. There was no evidence of such inquiry by any of the subsequent purchasers. None of them could rely upon the presumption that his predecessors in the title had made such inquiry as was required to rebut the presumption of notice.

The existence of the outstanding title in Mrs. Parker's heirs was a bar of any claim of appellants that they had title or color of title to the interest claimed by appellees, under the three years statute of limitation. (Veramendi v. Hutchins, 48 Tex. 531; Cole v. Grigsby, 89 Tex. 229; Thompson v., Cragg, 24, Texas, 582.) This would logically follow from the holding that the title to Mrs. Parker's half interest descended at her death to her children, and that there was left to Henry Parker no right to dispose of the same, except upon such conditions as are shown not to have existed in this case.

We will not enter upon any discussion of the question of the nature of the title of Mrs. Parker under the grant or of the title which descended to appellees, whether legal or equitable. The reports are full of conflicting statements upon this proposition. At all events, so far as this case is concerned, we think that it makes no difference whether it be called legal or equitable. (Edwards v. Brown, 68 Tex. 331; Wiess v. Goodhue, 98 Tex. 280.) If it be an equitable title, with the result that appellees would have the burden of showing notice to the purchasers of the legal title under the deed from Henry Parker, such burden was fully met by the recitals in the grant. Indeed, in Hill v. Moore, supra, it was held that it was fully met by the naked fact that the grant was for a league of land, which in that case was held to affect the purchaser from the husband with notice that the land was community, of the death of Mrs. Parker, of the existence of children of the marriage, and of every other fact necessary to protect appellees against appellants' claim, in the absence of evidence showing that such inquiry as a prudent man ought to have made had failed to develop the facts as they are shown to have existed. The distinction that appellants seek to make between that case and the one presented here, arising from the fact that in the present case there was much greater lapse of time between the date of the grant and the deed from Henry Parker conveying the entire league, but adds force to that case in its application to this, in that the great lapse of such time in the present case only increased the probability of Mrs. Parker's death between the issuance of the grant in 1833 and the conveyance by Henry Parker in 1866, and called for more diligent inquiry and greater caution on the part of purchasers under that title.

In so far as the defense of stale demand is concerned, we think that question as here presented is foreclosed by the following authorities: Duren v. Houston T. C. Ry. Co.,86 Tex. 291; New York Texas Land Co. v. Hyland, 8 Texas Civ. App. 601[8 Tex. Civ. App. 601]; Sleicher v. Gutbrod,34 S.W. 657; Mason v. Bender, 97 S.W. 715; Tinsley v. Magnolia Park Co., 96 Tex. 364; Trinity Lumber Co. v. Pinckard, 4 Texas Civ. App. 671[4 Tex. Civ. App. 671]; Owens v. N.Y. Texas Land Co., 11 Texas Civ. App. 284[11 Tex. Civ. App. 284]; Lockridge v. Corbett, 31 Texas Civ. App. 682[31 Tex. Civ. App. 682]; Betzer v. Goff, 35 Texas Civ. App. 408[35 Tex. Civ. App. 408]; Lyster v. Leighton, 36 Texas Civ. App. 62[36 Tex. Civ. App. 62], and many others.

We have carefully examined the aforesaid assignments of error and the various propositions thereunder and they are severally overruled.

The ninth assignment presents the objection that under the evidence as presented at the hearing upon the defense of limitation under the statute of five years, it did not appear that appellees had probable title, and that therefore on this ground the court erred in appointing a receiver. Under all the authorities upon this question, both reported cases and statements of the law in text writers, it seems to be essential to the proper exercise of the power to appoint a receiver in actions for the recovery of real estate or an interest therein such as the present one, before final hearing, that the persons seeking such relief must show that they will probably succeed in establishing their right upon a final trial. It is stated in High on Receivers that "the relief will be granted only when there is a strong probability of recovery." Such relief is limited, according to Beach on Receivers to cases where "the plaintiff's right is so clear that there is reasonable possibility of his success." (High on Receivers, secs. 556-7, p. 543; sec. 558, p. 545; Beach on Receivers, p. 481; Cofer v. Echerson, 6 Iowa 502; Chicago A. O. M. Co. v. U.S. Petroleum Co., 57 Pa. St., 83.)

That this is the law as applicable to this case does not seem to be denied by appellees. If we refer to our statute on the subject of the appointment of receivers this seems to be recognized as the rule. (Sec. 1, art. 1465, Rev. Stats.) Independently of the evidence introduced by appellants in support of their plea of title under the statute of limitation of five years, it is, we think, not to be disputed under the principles of law herein stated, that appellees showed at least a probable title to the interest claimed by them, such as to authorize, in connection with the other facts pleaded and proved, the appointment of a receiver, and their case is not rebutted by the showing made by appellants in support of their defenses, except as to that of five years limitation. We are not deciding an appeal from a final judgment in favor of appellees on their title, and do not desire to go further than is absolutely necessary in passing upon the rights of the parties as involved in this appeal, but the question of the probable title of appellees and their right to recover, as presented by the whole record, is before us and must be decided. It is essential to the proper determination of this appeal.

We have examined very carefully the affidavits presented by appellants, of which there are quite a number, all tending to show, or showing with positiveness, the possession for five years before suit filed of the league of land by appellants and their predecessors in title under deeds duly recorded, of the entire league, accompanied by payment of taxes; in short, such possession as will bar appellees' right. If the rebutting affidavits had contradicted the possession as it is set up by appellants we would not disturb the conclusion of the trial court upon such contradictory statements. But we do not think the statements of appellants' witnesses are in fact contradicted upon the essential facts by those of appellees' witnesses whose statements are directed to actual settlement upon and enclosure of the Parker league or a part thereof to itself, and they do not deny the enclosure of the league in a large pasture (of probably 30,000 acres) under the exclusive control of appellants and their predecessors in title, and used by them for pasturing their cattle. The whole case as presented by the record leaves little doubt that it was not thought necessary by appellees, nor by the learned trial judge, to rebut the case of appellants resting upon such possession. The hearing was had January 5, 1909. At that time the learned trial judge and the appellants may very well have been under the impression that the Act of 1891 (art. 3346, Sayles' Revised Statutes), applied to the claim of limitation resting upon five years possession, as was in fact stated by the court in Flack v. Bremen, 45 Texas Civ. App. 473[45 Tex. Civ. App. 473], in which writ of error was refused, and by the Court of Civil Appeals of the Fourth District in Kent v. Cecil, 25 S.W. 715, and probably in other cases. The case of Dunn v. Taylor was decided by the Supreme Court on November 11, 1908, and did not appear in the published volumes of the Southwestern Reporter until after the hearing in this case, and we are led to believe that the hearing was had without regard to the law as laid down in that case, that in so far as title under the statute of limitation of five years is concerned it is not affected by the fact that the defendants' possession is held by enclosure of the lands claimed along with others in an enclosure of any size, the size of the enclosure having nothing to do with the question. (Dunn v. Taylor, 102 Tex. 80.) In the Act of 1891 there were certain exceptions having relation to cultivation or enclosure to itself of part of the tract held under enclosure of 5000 acres or more, and the affidavits of appellees' witnesses upon this point seem to be particularly directed to the matter of showing that there was no such cultivation or separate enclosure of the Parker league as would bring it under the exceptions of the statute, and not to a rebuttal of appellants' showing of the enclosure of the Parker league in a pasture of more than 5000 acres along with other lands, all under the exclusive control of appellants' vendors and used for pasturage of their cattle.

Eliminating the exception in the statute as to enclosure of 5000 acres, which has no application, it can not be said, from the case made out, that appellees' right to recover is probable, in view of the defense of five years adverse possession under the statute. The statements of appellees' witnesses that the whole country, including the Parker league, was an open range, is not inconsistent with the fact that the league was enclosed in a 30,000-acre pasture, with no fences separating the Parker league from the balance of the land.

The case is not analogous to one of unenclosed land upon which the claimant pastures his cattle. Pasturing the owner's cattle upon land enclosed for that purpose and under his exclusive control, is such use and enjoyment of it as would be sufficient under the five years statute.

Nor do we think that the appellants can be held to have been in joint possession with appellees as tenants in common, so as to prevent the running of the statute, notwithstanding the rather extraordinary statement of W. E. Parker that he did not hold or claim in opposition to the claim of Mrs. Burnham. Henry Parker conveyed to him the whole league, he in turn sold and conveyed the whole league to Vanham, and all the subsequent vendees in appellants' chain of title dealt with the whole league without the slightest recognition of Mrs. Burnham's title or that of appellees. They paid taxes on the entire league, and not until the discovery of oil on the land in 1908 was there a whisper of appellees' claim. The possession of appellants was an ouster of appellees of which the various deeds, payment of taxes, and actual possession afforded ample notice. Their claim of the entire league was open and notorious.

Appellants were in actual and exclusive possession by their enclosure of the land. By this, of which appellees must take notice, they were put upon inquiry as to appellants' right or title. Such inquiry necessarily would have led to an investigation of the records which furnished indubitable evidence of their title under a chain of recorded deeds each conveying the entire league, and prosecution of the inquiry would have necessarily led to the knowledge that they were paying taxes on the whole league. This evidence was undisputed, and constituted ouster and notice thereof to appellees, notwithstanding their nonresidence and actual ignorance; and even if, under this evidence, it be an issue to be submitted to the jury, as contended by appellees, this was not in itself sufficient to show probable right in them. If it were only necessary for appellees to raise an issue as to their right, the whole doctrine that they must show probable title falls to the ground, and, without speculating as to what a jury might find if the issue were submitted to them, it is sufficient for the court to say that the evidence on the issue throws so much doubt upon its ultimate determination, that it can not be said that appellees' right, in so far as it depends upon this issue, is probable. (Parker v. Newberry, 83 Tex. 431; Church v. Waggoner, 78 Tex. 203; Stubblefield v. Hanson, 94 S.W. 406.)

But for the objection set out in the ninth assignment of error, which must be sustained, we think that the facts pleaded and shown authorized the appointment of a receiver, but we are not inclined to agree that it was necessary to the protection of appellees' rights, in any event, that such receiver should have had the extensive powers conferred by the court's order. There was no showing as to the insolvency of any of the defendants, but it does appear that there are a great many of them, corporations and others, many nonresidents of the State, holding and claiming various interests. We can readily see how, even if none of them are insolvent, appellees would be greatly embarrassed in the prosecution of their rights to the oil taken if they succeed in establishing their title. We are inclined to think, however, that if appellants execute a bond, as they offered to do, in a sufficient amount and with proper security, for the value of 5/32 of the oil, appellees will need nothing further for their protection than the appointment of a receiver, as an auditor, to keep track of all oil that is extracted and the disposition that is made of the same, to the end that upon final trial there may be accurate and unquestioned evidence of the amount of appellees' claim for such oil against each defendant. Such receiver, or auditor, should of course be given such powers as would be necessary or proper to enable him to do this.

The appellants' case under the five years statute of limitation was not met by appellees' evidence. It may be that this was because of an excusable misapprehension of the law, as it is now settled in Dunn v. Taylor, supra. For this reason we will remand the cause. If appellants' case is not rebutted by other and additional evidence, we think the application for receiver should be refused. If it is so rebutted, in the judgment of the trial court, we are of the opinion that a receiver should be appointed with such limited powers as above suggested, provided appellants execute the bond as offered by them. Otherwise, it would be proper to empower the receiver to take charge of 5/32 of the output, under appropriate instructions as in the order appealed from. The authority of such receiver, however, should go no further than is necessary for the protection of the rights, if any, of appellees.

Other assignments of error are overruled. The judgment is reversed and the cause remanded.

Reversed and remanded.