Stephen C. Cole and Robert Strack v. Michael McWillie, Wanda Juanita Phillips, and Delvonne Burke
464 S.W.3d 896
Tex. App.2015Background
- Rosa Van Huss owned an undivided 35/640 nonparticipating royalty interest (NPRI) tied to an oil & gas lease.
- Van Huss executed a non-durable power of attorney in favor of her daughter Wanda Phillips on April 1, 1980; Van Huss was competent then but became mentally incompetent in June 1982 and died in 1986.
- On March 21, 1985, Phillips, acting as Van Huss’s attorney-in-fact, executed a quitclaim deed conveying Van Huss’s NPRI to Stephen C. Cole and Robert Strack; the deed was recorded March 29, 1985.
- Van Huss’s will (probated as a muniment of title) left her interest to Phillips, Delvonne Burke, and Scherry Reindollar; those heirs later assigned interests to Michael McWillie.
- In 2010 Henry Resources filed an interpleader over proceeds; after deposit into court registry, competing claimants litigated title.
- The trial court granted Appellees’ partial summary judgment holding the deed void because Van Huss was incompetent when the deed was executed; the court later entered final judgment for Appellees. The court of appeals reversed, holding the deed was voidable (not void) and that Appellees’ claim was time-barred.
Issues
| Issue | Plaintiff's Argument (Appellees) | Defendant's Argument (Cole & Strack) | Held |
|---|---|---|---|
| Whether a deed executed by an attorney-in-fact after the principal becomes incompetent is void or voidable | Agent’s acts after principal’s incapacity are void absent durable-power language under former Tex. Prob. Code §36A | Follows Williams: acts by attorney-in-fact while principal incompetent are treated as acts of the principal and thus the deed is voidable, not void | Deed is voidable (not void); Williams governs |
| Whether a power of attorney without §36A language automatically terminates on principal’s incapacity | Yes — absent durable-language, agent lacks authority once principal is incapacitated, making post-incapacity acts void | No — §36A only provides a mechanism to create durability; absence of that language does not automatically render all subsequent acts void | §36A does not automatically void post-incapacity acts; deed can be effective but voidable |
| Whether Appellees’ claim to disaffirm the deed is barred by the statute of limitations | Section 16.069 or other equitable doctrines prevent limitations from barring their claim | Four-year limitations to disaffirm a voidable deed bars the claim because deed recorded in 1985 and suit not filed until 2011 | Appellees did not preserve or plead §16.069; statute of limitations bars their claim |
| Whether summary judgment and final judgment in favor of Appellees should stand | Trial court’s void ruling was correct; title should be quieted in Appellees | Deed is voidable and Appellees’ right to disaffirm is time-barred; Cole & Strack entitled to judgment | Summary judgment reversed; judgment rendered that Appellees take nothing |
Key Cases Cited
- Williams v. Sapieha, 61 S.W. 115 (Tex. 1901) (deed executed for an incapacitated person is voidable, not void)
- Ford v. Exxon Mobil Chem. Co., 235 S.W.3d 615 (Tex. 2007) (statute of limitations applies to actions to avoid voidable deeds)
- Travelers Ins. Co. v. Joachim, 315 S.W.3d 860 (Tex. 2010) (standard of review for summary judgment)
- Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) (summary judgment evidence and inferences)
- Neill v. Pure Oil Co., 101 S.W.2d 402 (Tex. Civ. App.—Dallas 1937) (capacity rule: contracts by incapacitated persons are voidable)