Court Opinion

ID: 3959313
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:19:58.965648+00
Date Added: 2024-06-11T07:43:44.031436
License: Public Domain

Appellants answered the suit for foreclosure with both pleaded and directly testified-to facts which, if true, entitled them to have the deed of trust, the note it secured, and their forerunning but cognate optional lease (had the latter not already expired by its terms), all set aside as having been procured from them by representations amounting in law to fraud whether or not so intended, Wilson v. Jones (Tex.Com.App.)45 S.W.2d 572; they neither denied the utterance nor sought the reformation or construction of any one of them, hence this sole ground for the avoidance thereof in toto from the beginning could not be overcome by marshalling intrinsic provisions of the instruments themselves evidencing contrary agreements on their part, but had to be met on the facts, Cearley v. May, 106 Tex. 442, 167 S.W. 725; Guilder v. Boonton-Pine Brook-New York Bus Co., 110 N.J. Law, 103, 164 A. 316; this was done by appellee's agents flatly denying that any such things as were so charged to have been done by them ever occurred, wherefore an issue of fact that only the jury could resolve was raised, the court being without power to control it through the peremptory instruction given.
There having been a jury in attendance, the findings of fact and law by the court were ineffective because unauthorized. R.S. Article 2208; Rothchild Co. v. Moore (Tex.Com.App.) 37 S.W.2d 121; Arlington Heights Realty Co. v. Citizens' Ry.  Light Co. (Tex.Civ.App.) 160 S.W. 1109; Driscoll v. Morris (Tex.Civ.App.) 275 S.W. 196; Robinson v. Lynch Davidson  Co. (Tex.Civ.App.) 1 S.W.2d 677.
On the appeal, therefore, under the instructed verdict, the evidence must be viewed in the light most favorable for the appellants, discarding all that is adverse, and if there be left in the record enough of probative force to have justified a finding in their favor, a reversal must follow. Thomas v. Postal Telegraph-Cable Co. (Tex.Com.App.)65 S.W.2d 282.
Moreover, they having raised no question as to the legal purport of the instruments as written, but only asserting them to have been fraudulently obtained — in that, contrary to the prior promises and contemporaneous representations of the appellee's agents in inducing them, they failed to reflect the actual agreement that only the mineral interest in the land should be security for the $6,500 advanced for appellants by the appellee in order to procure a good title thereto — there having further been neither such production nor effort to obtain it on the latter's part, the appellants were not required to return or offer to return this money as a condition precedent to their action to set the instruments aside for the fraud charged. McDonald v. Simons (Tex.Com.App.) 280 S.W. 571; 7 Texas Jur., § 47, pp. 961, 962; *Page 881 
Conn v. Hagan, 93 Tex. 334, 55 S.W. 323; Cearley v. May, 106 Tex. 442,167 S.W. 725.
While the lease, in terms, ran in favor of Meyer and Sorelle and antedated the other two papers, the evidence aliunde conclusively shows it to have been in effect nothing more than a part of one and the same transaction between Stein and the appellee they evidenced, in order to give the appellee an optional period of ninety days within which to make the geophysical tests it accordingly did of the 80 acres; that in so procuring it Meyer and Sorelle were the leasing agents of, and, as Meyer then advised Stein, acting directly for the appellee, pursuant to its written requests; that no consideration whatever was paid for it at the time obtained, nor any at all until the $6,500 was so paid under all three documents together, after these tests had shown it to be potentially valuable oil land, "in order to protect appellee's leasehold title," obviously, therefore, the fact that the appellee subsequently took a formal assignment of this paper from its two specially empowered agents to thus procure it, and that with at least presumptive knowledge of their having induced it by telling Stein their principal would look alone to its own development thereunder for reimbursement for this $6,500.00 — sum then agreed to be paid him — could not convert it into an independent and disassociated undertaking.
As concerns the quantum of proof required to raise an issue over whether or not the fraudulent representations were made as alleged, it was not the province of the lower court — nor is it of this tribunal — to pass upon the weight of the supporting testimony, or the credibility of the witnesses giving it; the authorities relied upon by the appellee on this feature relate to actions on contract rather than those on tort, as was the one at bar; when this distinction is made, it will be perceived that the rule in Texas is as stated; indeed, it is explicitly so declared in the Texas case of American Freehold Land Mortgage Co. v. Pace, 23 Tex. Civ. App. 222, 56 S.W. 377, 391, cited and relied upon by the appellee, in this declaration: "Under the test given, as before stated, the question is whether his evidence was satisfactory; or, in other words, whether he was worthy of belief. The determination of this question was solely the province of the jury. Where his evidence was explicit and to the point, showing that a mistake had been made, the weight to be given such evidence was a question for the jury. They had the right to believe him or disbelieve him, and, having believed him, it is clear that for the purposes of this case the testimony furnished by him was from a credible source."
So in this instance appellants were "explicit and to the point" in testifying that appellee's agents had first represented to Mr. Stein alone with reference to the lease and later to both with reference to the deed of trust, as inducements to their execution of these instruments, that repayment of this $6,500 loan would be and had been provided for out of royalties only; that they had relied upon such statements when made and in consequence entered into the transactions thereby evidenced and executed the instruments as presented to them, which otherwise they would not have done; since the instruments, as pointed out supra, are merely different spokes in the same wheel, the two must stand or fall together in the light of the respective representations whereby they were thus obtained. These may now be in part recapitulated:
Mr. Stein testifying, first, as to how the lease was obtained from him on October 2, 1924, by Mr. Meyer, leasing agent for the appellee, said:
"He, Meyer, asked: `Max, in what shape is your eighty acres of land what you own at Long Point?' and I told him that the land was involved; he says: `If you give me a ninety days optional lease on this certain land, we are going to use, the Gulf Company is going to use their geophysical instruments on it, and if their findings show that it is valuable land,' he says, `I will get you all the money to clear that indebtedness on that land.' So I believed Meyer, what he said, and I says: `All right, Henry'; he never did ask me how much he was going to pay me rent; so I asked Meyer: `How do you expect to get your money back?' and he says: `We are going to develop the land and take it out from the royalties what will be produced under the land.' I says, `All right, Henry, give me that lease'; so I went and signed him a lease.
"So, it was the latter part of November, and Meyer says: `Max, for God's sake, go and make a settlement with the Davis Bank for that land; you have got a valuable piece of land.' I says: `Henry, you know our agreement what we had before I signed the lease.' He says: `All right, go ahead and settle it, and I will get you this money.'"
Next, testifying as to what occurred between himself and Messrs. Meyer and Proctor, appellee's leasing agent and attorney, respectively, with reference to the $6,500 loan *Page 882 
and its repayment, in February of 1925, Stein further swore: "So I waited there at Houston at Henry Meyer's office, and Meyer got back, and he says: `Well, I got you the $6500.00'; he says: `You telephone to your wife to come over here from Rosenberg,' and he says: `Then you will both go down to the Gulf office and they will have a deed of trust prepared for you and your wife to sign it.' I told him, I says: `Henry, I am not going to sign no kind of an instrument unless you put in a clause in there that this money should be paid out from the royalties, and that's the only way I will ever be able to pay that indebtedness,' and he says: `That's all right; they will fix it up.' So I went down to the Gulf office, and I was inquiring for a lawyer by the name of Gustine, and he wasn't there at that time, and I asked some lady there if they knew if he left any papers to be executed; so she went in at Mr. Proctor's office and introduced me to Proctor and Mr. Proctor says: `Yes, I have got all the papers here ready for you to excoute,' and he handed me a deed of trust, and I read the deed of trust, and I says: `Judge, I am not going to sign that deed of trust.' He says: `Why not?' and I says: `This is not with the agreement which I had with Meyer, before I executed the lease,' and he says: `I don't know a thing in the world about that, what your agreement was with Meyer; that's all they told me — was to prepare a deed of trust.' So I told him the agreement I had with Meyer before I executed the lease, that this money what should be advanced to pay out that indebtedness should be repaid from the royalties which would be realized from the lease, that otherwise I would not sign it. Well, he said: `I could not put that kind of a provision in a deed of trust unless I am authorized to do so by Mr. Garrett or someone else, and I will talk it over with Mr. Meyer and find out if that was the agreement, and if it was, I will put it in the deed of trust,' and he said: `Come back next day.' So, on the following day, I went over there with my wife, and he says: `Well, I talked with Mr. Meyer and I talked with Mr. L. P. Garrett, and they told me that it was perfectly satisfactory to them to put that clause in the deed of trust,' and he went on then and read it to me, and he says: `It is absolutely a fact that this money should be paid out from the royalties only,' and I says: `That's the only way I ever could repay that money,' and he said further: `One good well will pay the indebtedness in one week,' and on these statements, I went ahead and signed the deed of trust."
Mrs. Stein fully corroborated all material features of these statements by her husband as to what occurred in Mr. Proctor's office with reference to the deed of trust involved, adding as to her having signed it: "I didn't know what kind of a paper I signed; the lawyer, Mr. Proctor, before I signed, he never read anything to me or nothing, but he says: `That's the paragraph what says this money will come out from the royalties.'"
Mr. Proctor, on the other hand, after first denying generally that he had ever made such statements as the Steins alleged to anybody, thus further responded to inquiries touching the preparation and execution of this deed of trust:
"Q. It is possible that it was the second draft or the third draft as well as it is possible it was the first draft? A. I have no recollection.
"Q. Do you remember how many times Stein came to your office about the matter? A. I don't remember him coming at all.
"Q. If the instrument was signed in your office, you have no independent recollection of it? A. No, sir.
"Q. And you have no independent recollection of his wife coming either, I presume? A. No, sir.
"Q. Now, with reference to Stein, do you remember him at all? A. No, sir.
"Q. You can't remember then whether he was apparently able to know what he was dealing about or not; in other words, Stein is just a name to you, is that right? A. That is all."
Likewise, Mr. Meyer made denials of the specific representations attributed to him by Stein, but admitted the various meetings and negotiations between them concerning this transaction, including one in the interval between Stein's alleged refusal to sign the first deed of trust tendered him in Mr. Proctor's office and his return there that resulted in his signing the one in suit, at which he said of Mr. Stein: "He also insisted on some clause he wanted in this new deed of trust by which he would be permitted to pay off this obligation."
Intrinsically there is nothing impossible or illegal, against public policy, nor, when the surroundings are looked to, anything even incredible about the representations thus testified to. The question is simply whether or not they were true, and, under our system *Page 883 
it was the exclusive province of the jury to choose between the witnesses so differing about it; it does not answer them to say that appellants were interested witnesses, since the appellee's agents were likewise so, as corporations may only act in that way; neither is appellee's contention that the untutored Stein, whose broken English emphatically tended to corroborate his positive testimony that he had never been to school in his life, was dealing at arm's length with and on an equality in understanding of the transactions he was having with its able attorney and experienced leasing agent; further, both sides at all times material not only knew of Stein's insolvency but of the fact that the land itself was not worth for any other purpose more than one-fourth of the $6,500 advanced upon it, hence neither party could have had from the beginning any reasonable contemplation that the money could ever be returned by him except from the production of oil, and the geophysical showing as to the outlook for that was exclusively in the appellee's possession before it advanced a dollar on Stein's account, or took over any of the papers attending this whole transaction, other than the optional lease it first so obtained as a basis for all the others. 12 R.C.L. p. 295, § 60; 26 C.J. p. 1208; 1 Black on Rescission, p. 197, §§ 80 and 82; Lehman v. Shackleford, 50 Ala. 437.
The lease not having expired by its terms until on or about October 2, 1929, and the appellee not having sought to collect upon the note otherwise than by looking to its payment alone from royalties to be produced from its own development of the land until filing of this foreclosure suit, appellants could not be held to have sooner discovered that it did not intend to abide by the contrary agreement they so alleged and testified it had made with them and secured their execution of these papers upon.
For these reasons the statute of limitation interposed by the appellee was inapplicable. Port Arthur Rice Milling Co. v. Beaumont Rice Mills,105 Tex. 514, 143 S.W. at page 929, 148 S.W. 283, 150 S.W. 884,152 S.W. 629.
Two other material errors seem to be apparent upon the face of the record: First, the sustaining of a special exception — thereby cutting off proffered testimony in support of it — of this portion in both appellants' answer and cross-action: "Between the time when said optional lease was obtained and the time when said deed of trust was executed, the said Stein had other opportunities to lease said land at a bonus of $250.00 per acre, had he been free to have done so; that during said time there was great activity in oil, gas and sulphur leases in that vicinity, and that oil then commanded good prices in the market, and that such activity continued for some time thereafter. That the fact that it was generally known that the said 80 acres was tied up with the Gulf Production Company prevented these defendants from considering or negotiating with any other prospective lessees; but other less desirable lands were leased to other major oil companies, Humble, Texas, and others, in that vicinity at a bonus of $150.00 to $250.00 per acre, and that due to the relative location with reference to the Dome, a bonus of $250.00 per acre for the land herein involved would at such time have been a very reasonable bonus and readily obtained."
When these averments are taken as true, as they must be under the sustaining of the exception thereto (Barton v. Farmers' State Bank [Tex.Com.App.] 276 S.W. 177), it affirmatively appears therefrom that appellants, in so executing the written instruments in reliance on the asserted assurances so given them by the appellee, were deprived of the opportunity of leasing this property to others for an aggregate bonus of $20,000; wherefore, whether or not these averments were otherwise relevant, a good cause of action for at least one element of consequent damages was thus alleged.
Second, the exclusion of the testimony of the witness Weinzierl, who had qualified as an expert in geophysical methods, to investigations of that character he had made on the Stein 80 acres during the ninety-day optional period here involved, and of which this appellee had advantage prior to making Stein the $6,500 loan thereon; such testimony being relevant as tending to indicate that drilling on the tract would have produced oil in paying quantities, that Stein might have obtained the declared-upon bonus from others, and that, in the circumstances obtaining at that time, an agreement then made to look to its potential oil value alone as security for a $6,500 advancement was a very favorable one for the appellee.
Under these conclusions the judgment should have been reversed and the cause remanded; this dissent from the affirmance is respectfully entered. *Page 884