Opinion filed August 29, 2014

In The

Eleventh Court of Appeals __________

No. 11-12-00265-CV

__________

STEPHEN C. COLE AND ROBERT STRACK, Appellants

V.

MICHAEL MCWILLIE, WANDA JUANITA PHILLIPS, AND

DELVONNE BURKE, Appellees

On Appeal from the 238th Judicial District Court

Midland County, Texas

Trial Court Cause No. CV47686

M E M O R A N D U M O P I N I O N

The dispositive issue in this case is whether a deed is void or voidable when 

it is executed by an attorney-in-fact who is acting on behalf of one who was 

competent at the time of the execution of the power of attorney, but who was

incompetent at the time of the execution of the deed. The trial court determined

that such a conveyance was void as a matter of law. We reverse and remand.

This case concerns the ownership of an undivided 35/640 nonparticipating 

royalty interest (the NPRI) in a tract of land located in Andrews and Martin 
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Counties. The summary judgment evidence shows that Rosa Van Huss was the 

owner and common source of title to the NPRI. The NPRI is subject to and 

covered by an oil and gas lease in which the lessor reserved a one-fifth (1/5) 

royalty.

Van Huss executed a power of attorney in favor of her daughter, Wanda 

Juanita Phillips, on April 1, 1980. The parties agree that Van Huss was competent 

at the time she executed the power of attorney. The power of attorney was not 

durable as provided for in Section 36A of the Texas Probate Code. Section 36A 

was in effect at the time of the execution of the power of attorney. Although Van 

Huss was never adjudicated to be incompetent, the parties do not dispute that she

became mentally incompetent in June 1982 and remained so until her death in 

1986.

In 1985, Phillips executed a quitclaim deed with respect to the NPRI. She 

executed the conveyance in her capacity as Van Huss’s attorney-in-fact. In that 

conveyance, Phillips conveyed all of Van Huss’s interest in the NPRI to Stephen 

C. Cole and Robert Strack.

Van Huss died on June 11, 1986, leaving a Last Will and Testament. The 

will was admitted to probate as a Muniment of Title. In the will, Van Huss

provided that her estate was to be distributed one-half to Phillips, one-fourth to 

Delvonne Burke (Van Huss’s granddaughter), and one-fourth to Sherry Jackson 

a/k/a Schiara Reindollar (Van Huss’s granddaughter). Therefore, Phillips, Burke, 

and Reindollar acquired all of Van Huss’s interest in the NPRI upon her death. 

They subsequently executed a number of assignments of the interest to Phillips’s 

son, Michael McWillie. 

Henry Resources, L.L.C. held certain proceeds related to the NPRI. Because 

it was uncertain as to the ownership of the proceeds, Henry Resources filed an

interpleader action in 2010. In an agreed partial order, the trial court ordered that 
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the proceeds held by Henry Resources were to be deposited into the registry of the 

court. Henry Resources complied with the order, and the trial court dismissed it 

from the lawsuit.

Phillips, Burke, and McWillie (Appellees) later filed a motion for partial 

summary judgment in which they sought a declaration from the trial court that the 

deed executed by Phillips in her capacity as Van Huss’s attorney-in-fact was void 

as a matter of law. Cole and Strack responded that the deed was voidable, not 

void, and that the statute of limitations had expired on any suit to avoid the deed. 

After a hearing, the trial court granted the motion for partial summary judgment 

and concluded that the deed was void; the trial court determined that, because Van 

Huss was incompetent when Phillips executed the deed, Phillips lacked the 

authority to transact business on behalf of Van Huss at that time.

At a bench trial, the parties entered into stipulations of fact relating to the 

chain of title and other matters. After the trial, the trial court entered its final 

judgment. In that judgment, the trial court incorporated the previous order 

granting partial summary judgment, rendered judgment that the deed was void and 

that title was held by Appellees, awarded the proceeds of production to Appellees, 

denied the requests for attorneys’ fees, and denied all relief requested by Cole and 

Strack. This appeal followed.

We review de novo an order granting summary judgment. Travelers Ins. 

Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). When reviewing a summary 

judgment, we take as true all evidence favorable to the nonmovant, and we indulge 

every reasonable inference and resolve any doubts in the nonmovant’s favor. 

Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). 

The party moving for summary judgment has the burden of showing that there is 

no genuine issue of material fact and that it is entitled to judgment as a matter of 

law. TEX. R. CIV. P. 166a(c); Haase v. Glazner, 62 S.W.3d 795, 797 (Tex. 2001). 
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The parties agree that the ultimate issue in this case is whether the deed was 

void as a matter of law, or simply voidable. Because a voidable contract continues 

in effect until active steps are taken to disaffirm the contract and because a void 

contract is wholly ineffective from the outset, the distinction is significant. Mo.

Pac. Ry. Co. v. Brazil, 10 S.W. 403, 406 (Tex. 1888); Country Cupboard, Inc. v. 

Texstar Corp., 570 S.W.2d 70, 74 (Tex. Civ. App.—Dallas 1978, writ ref’d n.r.e.). 

The right to disaffirm a contract survives the death of the incompetent person and 

descends to her heirs or her personal representative. See Bennett v. Ramos, 252 

S.W.2d 442, 448–49 (Tex. 1952); Fuller v. Middleton, 453 S.W.2d 372, 375 (Tex. 

Civ. App.—Fort Worth 1970, writ ref’d n.r.e.). Additionally, the right to disaffirm 

is subject to a four-year statute of limitations. TEX. CIV. PRAC. & REM. CODE ANN.

§ 16.051 (West 2008); see also Ford v. Exxon Mobil Chem. Co., 235 S.W.3d 615, 

618 (Tex. 2007); Slaughter v. Qualls, 162 S.W.2d 671, 674 (Tex. 1942). In this 

case, Cole and Strack claim that, if this court holds that the deed was voidable, 

rather than void, the statute of limitations on Appellees’ right to disaffirm the deed 

has expired.

It is settled law in Texas that a contract executed by a person who lacks

mental capacity is voidable, not void. Williams v. Sapieha, 61 S.W. 115, 116 (Tex. 

1901); Neill v. Pure Oil Co., 101 S.W.2d 402, 404 (Tex. Civ. App.—Dallas 1937, 

writ ref’d); see also In re Morgan Stanley & Co., 293 S.W.3d 182, 193 (Tex. 2009) 

(Hecht, J., dissenting) (“The rule in Texas and most other jurisdictions is that the 

contract [of a party who lacked mental capacity] exists and can be ratified or 

avoided.”). In Williams, a landowner executed a power of attorney by which he 

authorized his attorney-in-fact to sell land and to execute a deed on the 

landowner’s behalf. The landowner lacked the mental capacity to manage his 

affairs at the time that he executed the power of attorney. Id. Thereafter, the 

attorney-in-fact executed a deed to the property on the incompetent landowner’s 
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behalf. The validity of that deed became the subject of a subsequent lawsuit. Id. 

The Williams court likened the deed of an insane person to that of an infant. It 

held that the power of attorney executed by the incompetent landowner, as well as 

the deed executed by the incompetent landowner’s attorney-in-fact pursuant to that 

power of attorney, was not void but, rather, was voidable. Id. The court reasoned,

“We can see no difference in principle between the act of making a deed which 

passes the title and making an instrument which authorizes another person to do 

the same thing.” Id. 

Cole and Strack, in turn, rely on Williams to argue that, when a principal 

becomes incompetent after having executed a valid power of attorney, any 

subsequent action of the attorney-in-fact on the principal’s behalf is voidable as 

well. Cole and Strack suggest that the subsequent action amounts to action taken 

by the incompetent principal. Therefore, they argue that Williams is controlling in 

this case and that the deed executed by Phillips as attorney-in-fact for Van Huss is 

not void but, instead, is voidable.

Appellees frame their response under principles of agency law. They argue

that the actions of a purported agent who lacks authority to bind the principal are

void as to the principal. According to Appellees, an agent has no authority to bind 

his principal upon the principal’s incapacity unless he has been authorized to do so 

pursuant to former Section 36A of the Probate Code or its progeny.1

 Thus, their 

argument goes, when a principal becomes incompetent and his power of attorney 

lacks the specific language from Section 36A that is required to establish a durable 

power of attorney, any subsequent action by the agent on the principal’s behalf is 

void as a matter of law.

 1

See Act of May 5, 1971, 62nd Leg., R.S., ch. 173, § 3, 1971 Tex. Gen. Laws 967, 971, amended 

by Act of May 29, 1989, 71st Leg., R.S., ch. 404, § 1, 1989 Tex. Gen. Laws 1550, repealed by Act of 

April 15, 1993, 73rd Leg., R.S., ch. 49, § 2, 1993 Tex. Gen. Laws 102, 112 (current version at TEX. EST.

CODE ANN. §§ 751.002, 751.051 (West 2014)). Although Section 36A has been amended and repealed, it 

remains in effect for powers of attorney executed prior to its amendment and repeal.
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Agency is a consensual relationship between two parties where one, the 

agent, acts on behalf of the other, the principal, subject to the principal’s control. 

Bhalli v. Methodist Hosp., 896 S.W.2d 207, 210 (Tex. App.—Houston [1st Dist.] 

1995, writ denied); Lone Star Partners v. NationsBank Corp., 893 S.W.2d 593

(Tex. App.—Texarkana 1994, writ denied); Herschbach v. City of Corpus Christi, 

883 S.W.2d 720 (Tex. App.—Corpus Christi 1994, writ denied). For an agency 

relationship to exist, there must be both a meeting of the minds between the parties 

and some act constituting the appointment of an agent. Lone Star Partners, 893 

S.W.2d at 600. 

The appointment of an attorney-in-fact creates an agency relationship. 

Dernick Res., Inc. v. Wilstein, 312 S.W.3d 864, 877 (Tex. App.—Houston [1st 

Dist.] 2009, no pet.); Smith v. Lanier, 998 S.W.2d 324, 334 (Tex. App.—Austin 

1999, pet. denied). Under the common law, the agency authority created in a 

power of attorney existed only when the principal was capable of acting on his or 

her own behalf and terminated upon the death or incapacity of the principal. 

Comerica Bank-Texas v. Tex. Commerce Bank Nat’l Ass’n, 2 S.W.3d 723, 725 

(Tex. App.—Texarkana 1999, pet. denied) (citing Harrington v. Bailey, 351 

S.W.2d 946, 948 (Tex. Civ. App.—Waco 1961, no writ)).

In 1971, the legislature enacted Section 36A of the Probate Code, 

establishing durable powers of attorney. At the time Van Huss executed the power 

of attorney, Section 36A provided in relevant part:

When a principal designates another his attorney in fact or 

agent by power of attorney in writing and the writing contains the 

words “this power of attorney shall not terminate on disability of the 

principal” or similar words showing the intent of the principal that the 

power shall not terminate on his disability, then the powers of the 

attorney in fact or agent shall be exercisable by him on behalf of the 

principal notwithstanding later disability or incompetence of the 

principal.
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This was the first codification of a law that gave a principal the ability to provide 

specifically that a power of attorney would not terminate upon the death of the 

principal. See Comerica Bank-Texas, 2 S.W.3d at 726.

However, we disagree with Appellees’ assertion that a power of attorney

automatically terminates upon the disability of the principal in the absence of a 

durable power of attorney executed in accordance with Section 36A. To the 

contrary, we interpret Section 36A to merely provide a method for a principal to 

enable his attorney-in-fact to continue to act on the principal’s behalf subsequent to 

the incapacity of the principal, regardless of whether that incapacity is temporary 

or permanent. We do not interpret Section 36A to establish that, in the absence of 

the durable-power-of-attorney language, any deed executed by an attorney-in-fact 

subsequent to the principal’s incapacitation is rendered void as a matter of law. 

See Campbell v. U.S., 657 F.2d 1174, 1177–78 (Ct. Cl. 1981) (interpreting former 

TEX. PROB. CODE § 36A as providing a method for a principal to enable a durable 

power of attorney rather than providing that, without such language, the power 

immediately terminates upon the incapacity of the principal). 

In the cases relied upon by Appellees, the courts address an agent’s authority 

to act on behalf of an incapacitated principal, but those courts did not address the 

specific issue in this case and stopped short of holding that a deed executed by an 

attorney-in-fact on behalf of an incompetent principal is void as a matter of law. 

See Comerica Bank-Texas, 2 S.W.3d at 725–26 (addressing validity of power of 

attorney that contained Section 36A language); Jensen v. Kisro, 547 S.W.2d 65, 

66–67 (Tex. Civ. App.—Houston [1st Dist.] 1977, no writ) (addressing effect of 

temporary incapacity on agency relationship); Harrington v. Bailey, 351 S.W.2d 

946, 948 (Tex. Civ. App.—Waco 1961, no writ) (addressing effect of gift by agent 

following legal declaration of principal’s incapacitation); Scroggins v. Meredith, 

131 S.W.2d 195, 195 (Tex. Civ. App.—Beaumont 1939, no writ) (deed—executed 
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by attorney-in-fact after power of attorney had been revoked by marriage—

considered void); Wall v. Lubbock, 118 S.W. 886, 888 (Austin 1908, writ ref’d)

(deed—executed by agent after principal’s death—considered void).

We believe that Williams is controlling in this case. As we stated above, 

Williams provides the settled rule that a deed executed by a person who lacks the 

capacity to do so is voidable as a matter of law, not void. See Williams, 61 S.W. at

116.

An important principle of agency law is that one who authorizes another to 

act for him acts as if he himself had personally acted. “To this extent, both the 

principal and the agent are only one person; thus, a [deed] executed by an agent for 

and with that authority from his principal is as if executed by the principal 

himself.” Lucas v. Whiteley, 550 S.W.2d 767, 769 (Tex. Civ. App.—Amarillo 

1977, writ ref’d n.r.e.) (citing Julian Petroleum Corp. v. Egger, 15 S.W.2d 36, 39 

(Tex. Civ. App.—Fort Worth 1928, writ ref’d)). Given this relationship between 

an agent and principal, we believe that the proper approach in this case is to import 

the principal’s lack of capacity to the agent who acts on the principal’s behalf. 

Thus, an attorney-in-fact who was appointed in a power of attorney that did not 

contain the language of Section 36A and who executes a deed on behalf of an 

incompetent principal, even when the principal was competent at the time he 

appointed the attorney-in-fact to act on his behalf, creates an effective and valid 

deed that is voidable at the election of the principal or the principal’s estate.

Appellees’ argument likens a principal’s incapacity to a principal’s death;

the law is clear that an agent’s authority to bind his principal terminates upon the 

principal’s death. See Cleveland v. Williams, 29 Tex. 204, 213 (1867); 

Crawford v. Morris, 228 S.W.2d 364, 366 (Tex. Civ. App.—Eastland 1950, writ 

ref’d n.r.e.). But this approach is contrary to the approach in Williams, where the 

Texas Supreme Court analogized the incapacity of a principal to the incapacity of a 
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minor. See Williams, 61 S.W. at 116–17. When a contract is executed on behalf of 

an incapacitated person—whether by infancy or by mental incompetence—the 

party in danger of unfair disadvantage in the transaction is, in fact, the 

incapacitated party. The party who transacts with the incapacitated party suffers 

no potential detriment in the bargaining process. The protections offered by our 

laws should benefit the incapacitated party by allowing him to disavow the 

contract upon his return to sufficient capacity. This benefit extends to the heirs of 

a deceased principal or the guardian of a permanently incapacitated principal. In 

such a case, the benefitted party can secure the advantage of a good bargain by 

ratifying the contract or he can relieve himself of a bad bargain by electing to 

disavow the agreement. To hold such an agreement void as a matter of law would 

deprive the disadvantaged party of the benefit of an advantageous contract. 

Furthermore, our conclusion best comports with the need to facilitate the 

resolution of title disputes in a reasonable amount of time. If deeds executed by 

attorneys-in-fact on behalf of incompetent principals were considered void as a 

matter of law, a claimant could seek to invalidate a deed many years after its 

execution. Such is the case here, where Appellees have sought to invalidate the 

deed approximately twenty-five years after its execution. To the contrary, a claim 

against a voidable deed is subject to a statute of limitations. See CIV. PRAC. &

REM. § 16.051; see also Ford, 235 S.W.3d at 618. Given these considerations, in 

addition to the precedent set forth in Williams, we hold that the deed at issue in this 

case was voidable at the option of the incompetent principal, rather than void as a 

matter of law.

Appellees argue that, even if we hold that the deed at issue was voidable, the 

statute of limitations does not operate to bar the counterclaims made by Appellees. 

To support this contention, Appellees rely on Section 16.069 of the Texas Civil 

Practice and Remedies Code. CIV. PRAC. & REM. § 16.069 (WEST 2008). Cole and 
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Strack respond that Section 16.069 cannot be used to revive Appellees’ claim to 

disaffirm the deed. Cole and Strack also claim that Appellees have waived this 

argument on appeal because Appellees did not specifically plead Section 16.069 as 

grounds for avoiding the affirmative defense of statute of limitations and because

Appellees did not assert Section 16.069 as an alternative ground in their motion for 

summary judgment.

Section 16.069(a) provides: “If a counterclaim or cross claim arises out of 

the same transaction or occurrence that is the basis of an action, a party to the 

action may file the counterclaim or cross claim even though as a separate action it 

would be barred by limitation on the date the party’s answer is required.” In such a 

case, “[t]he counterclaim or cross claim must be filed not later than the 30th day 

after the date on which the party’s answer is required.” Id. § 16.069(b).

However, a party seeking to avail itself of a rule in avoidance of a statute of 

limitations must affirmatively plead its theory of avoidance in its original petition 

or a supplemental petition. TEX. R. CIV. P. 94; Woods v. William M. Mercer, Inc., 

769 S.W.2d 515, 518 (Tex. 1988); see also Proctor v. White, 172 S.W.3d 649, 652 

(Tex. App.—Eastland 2005, no pet.). Moreover, a party seeking summary 

judgment must include in its motion the specific grounds on which relief is 

requested. See TEX. R. CIV. P. 166a(c). An appellate court may not affirm a 

summary judgment on grounds not expressly set out in the motion for summary 

judgment. State Farm Lloyds v. Page, 315 S.W.3d 525, 532 (Tex. 2010); Stiles v. 

Resolution Trust Corp., 867 S.W.2d 24, 26 (Tex. 1993).

After the interpleader was filed in this case, Cole and Strack filed their

original cross-claim against Appellees on January 6, 2011. In that cross-claim, 

they sought a declaration from the trial court regarding title to the NPRI based on 

the legal determination of the viability of the deed. They also asserted the 

affirmative defense of the four-year statute of limitations. Appellees timely filed a
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counterclaim in which they requested that the trial court declare the deed void and 

confirm their title to the NPRI. We have found no instance in the trial court in 

which Appellees asserted Section 16.069 as grounds for avoiding Cole and 

Strack’s affirmative defense of statute of limitations. All of Appellees’ claims 

rested on the trial court’s determination that the deed was void. Accordingly,

Appellees did not preserve for appeal their argument that Section 16.069 precludes 

the application of the statute of limitations. 

Having determined that the deed was voidable, rather than void, and that the 

period of limitations to disaffirm the deed has elapsed, we hold that the trial court 

erred when it entered summary judgment in favor of Appellees. Cole and Strack’s

sole issue on appeal is sustained.

We reverse the judgment of the trial court, and we remand this cause to the 

trial court for further proceedings consistent with this opinion.

JIM R. WRIGHT

CHIEF JUSTICE

August 29, 2014

Panel consists of: Wright, C.J.,

Willson, J., and Bailey, J.