Court Opinion

ID: 9638027
Source: CourtListenerOpinion
Date Created: 2023-08-22 15:30:37.820442+00
Date Added: 2024-06-11T15:00:00.940448
License: Public Domain

McCORD, Circuit Judge
(dissenting).
S. M. Halley owned 9288 acres of land in Texas. He and his wife executed an oil and gas lease on this tract for a primary term of ten years. This lease by its terms provided that it would expire on July 14, 1935, unless prior .to that time oil, gas, potash or other minerals were discovered and produced from the lands by the lessee.
Near the expiration date of the primary term of the lease, and after Halley had enjoyed rents from the lands for ten years, he wrote to the elderly lady, the plaintiff here, as to the termination of the primary-term of the lease with reference to the ten acres which she held under- assignment. This plaintiff was far removed from Texas residing in South Norwalk, Connecticut. Not hearing from her he thereupon wrote a second letter in which he enclosed $1 and a quitclaim deed made to himself and with a request that she sign and acknowledge it and return it to him. In his last letter we find this veiled threat: “Will appreciate your immediate attention to this matter, since the primary term on your lease was for a term of ten years and expired July 14, 1935, unless you had developed the property prior to that date also this will aid immensely and avoid possible other procedures in getting my titles on my land cleared up.” (Italics mine.)
S. M. Halley was a County Judge and Ex-officio Superintendent of Education of Winkler County, Texas. The two letters mentioned above, and which are set out in the majority opinion, were written on stationery with a printed letterhead showing that Halley was County Judge and Ex-officio Superintendent of Education. The standing, power and influence of Judge Halley was suggested to the plaintiff by the stationery, and as she read his letters she thought he was a lawyer and a judge and that- he was writing the truth. She relied on his statements and signed and returned to him the quitclaim deed. Either just before or shortly after the quitclaim deed was signed and delivered, Judge Halley leased the 10' acres in dispute to his son-in-law, one Estill.
Judge Halley’s statement in the first letter, the lease “which you hold under assignment will expire on July 14, 1935, unless on or before said date you have drilled and secured commercial production on your portion of this covered by your assignment”, was not true. The statement *973in his second letter, “your'lease was for a term of 10 years and expired on July 14, 1935, unless you had developed the property prior to that day”, was also not true.
, From Judge Halley’s own lips we can find out his intent as he wrote these letters and sought to secure the quitclaim deeds: “Before I sent these letters out to Miss Meacham and Miss Beckert I consulted an attorney in Fort Worth, for the simple reason that I was going to notify them and just wanted a kind of opinion what we thought about it would be all right. They knew what the terms of the Grant lease were. They (the lawyers and Cummings) knew the Skelley well had already come in on the Grant lease. I did not have to tell them. Mr. Cummings, the Southern Royalty Company, had a one-thirty-second royalty interest over the entire pasture, and they were all acquainted with it. * * * I did not consult the lawyers. I went to Mr. Cummings and we wrote that out (the letters to Miss Meacham and Miss Beckert) and he showed it to Smith & Smith, and they changed the wording a very little, just a few words”. The fact of the matter is that Judge Halley did not consult a lawyer, but Mr. Cummings, who with him was interested in the lands, did consult a lawyer for him and thereafter changes were made in these letters which were mailed out.
It is not for me to decide that Judge Halley was guilty of misleading this appellant. His letters and his testimony speak out his conduct and intent. Over four months elapsed between the writing of the first and second letters and I think that he knew or should have known that his statements in the first letter were untrue and might mislead Miss Meacham. Certain it is that he followed it up with the second letter which again carried, untrue and misleading statements. But, yielding the point as to his knowledge of misrepresentation and permit him to stand dry-cleaned before the world, this does not permit him to escape liability for his wrong. It is here admitted that his statements, however honestly made, were untrue, and misleading, and I think that under the Texas law he should be made to answer for his wrong. It is the settled law in Texas “that in actions for fraud a person is responsible to the party deceived for what he represents to be true, regardless of his lack of intent to deceive”. Stowe v. Wooten, Tex.Com.App., 62 S.W.2d 67, 68. It is likewise well settled in Texas that “material misrepresentations, though innocently made, ’ relied and actea on by the party to whom made, constitute legal fraud”. Poindexter v. Davis et al., Tex.Com.App., 27 S.W.2d 139, 141, and cases cited.
In Texas an unqualified expression of title is an affirmation of fact. In this case Halley represented to Miss Meacham that she did not have a good title and I think the converse of the rule should apply. See Buchanan v. Burnett, 102 Tex. 492, 119 S.W. 1141, 132 Am.St.Rep. 900; 20 Texas Jurisprudence Sec. 45.
I do not agree with the majority opinion that Judge Halley’s representations were nothing more than “innocent and non-actionable representation of law”. His representations that the lease “will expire on July 14, 1935, * * * ” and that “your lease was for a term of 10 years and expired on July 14, 1935 * * *” were misrepresentations as to matters of fact and of law and under the great weight of authority of the Texas decisions he was guilty of actionable fraud. See Poindexter v. Davis, Tex.Com.App., 27 S.W.2d 139, 141; Buchanan v. Burnett, 102 Tex. 492, 119 S.W. 1141, 132 Am.St.Rep. 900; Stowe v. Wooten, Tex.Com.App., 62 S.W.2d 67; Stroud v. Pechacek, Tex.Civ.App., 120 S.W.2d 626; Black on Rescission and Cancellation, 2d Ed., Secs. 70, 71; Pomeroy’s Equity Jurisprudence, 4th Ed., Secs. 877, 878.
When Judge Halley, by misrepresentation, caused this elderly lady to part with her right and title to the property, he was enriched thereby. Right and justice demand that he should be made to compensate her for her loss. The evidence and the laws of Texas speak for her and he ought to be made to pay.
I think the majority opinion which holds that Halley was not guilty of actionable fraud and that the quitclaim deed was valid, makes it unnecessary to discuss the question whether or not Weaver, Ploffman and Page were bona fide purchasers.
I respectfully dissent.