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State v. Durham
860 S.W.2d 63
Tex.
1993
Check Treatment

*1 Texas, Petitioner, STATE of

Lynn D. DURHAM Clarence Schar

bauer, Trustees Under the ofWill Turner, Respondents.

Fred

No. D-0992. Supreme Court of Texas.

March *2 64 royalties of its share of

defraud State deposits gas from oil which underlie and fund review permanent school lands. We respondents established whether the take-nothing their sum- their entitlement to mary judgment against the State. court appeals summary judgment. affirmed judgment of 804 S.W.2d 312. We reverse the and to the trial appeals the court remand

proceedings. for court further applies Act Relinquishment of 1934 land dedicated to the Permanent School

all Act, retains Fund. Under this ownership underlying perma- of the minerals Morales, Rangel, Dan Jose Manuel David property, the surface nent school fund while Durst, Richards, Philip M. Hube- R. Priscilla the State’s owner becomes Austin, nak, Bills, petitioner. Liz for authority negotiate execute oil sole and Worth, Munn, Barry E. Fort N. Cecil gas The surface leases on said lands.2 Small, Beck, Midland, Austin, Carter Ed H. gets keep the lease one-half of owner Burdette, Worth, Bledsoe, C. Fort Robert compensation his or her consideration for for Midland, Blair, Worth, B. Gene Sloan Fort damages to es- services and for the surface Dallas, McCoy, Yarbrough, L. Jack Fletcher 764, Corp., Scott Exxon 763 S.W.2d tate. Austin, Corby Maroney, Tighe, L. D. Charles (Tex.1988).3 766 Midland, Considing, Vaughan, E. Julia 5,1930, Land office March the General On Small, Jr., Austin, respondents. for C.C. of land Reid a 101.35 acre tract awarded Bob County, in known as the in Pecos what is OPINION Relinquish- Yates Oil Field. Pursuant to Act, GONZALEZ, owner Justice. ment Reid became the surface gas oil to the and the was reserved ease, gas In this oil the State seeks to day, conveyed 3.97 same Reid State. impose fiduciary duties on surface owners Jr.; Turner, Tur- to Fred acres tract permanent fund The State school lands. until June 1933. ner did file deed against and enti- filed suit several individuals 1933, 18, an oil and May Reid executed damages and a constructive On seeking ties tract, acre entire 101.35 Relinquishment Act of 1934.1 lease trust under the acres, Bryant. On including to M.D. alleged conspiracy to the 3.97 It that there existed a Tex.Gen.Laws, 167, 5.01(a)(31), notes, § at Relinquish- 1987 1359, ch. 1.As the court of 912, Tex.Gen.Laws, complex: history ch. by ment Act’s 1919 Tex.Gen. amended 1987 81, Laws, C.S., 249, by 6, 3086, 1-3, 2d at 1921 by ch. amended §§ 1987 Tex.Gen. at amended 112, C.S., 38, Tex.Gen.Laws, repealed 30-31, 1st ch. at Laws, 948, §§ at 3176. ch. 2, (1925), § by at recodi- Tex.Rev.Civ.Stat. 2419 5367-5379, 1,§ arts. at as Tex.Rev.Civ.Stat. fied currently According are there Tex.Gen.Laws, (1925), by 1939 tit. 1512 amended 1,444 Act still effect. Relinquishment leases 3, 4-a, 474, Lands-Public, by § at amended ch. 474, 880, Tex.Gen.Laws, by ch. at amended 1949 provides in return Act 559, 1096, Tex.Gen.Laws, ch. amended 1949 at leasing agent, surface acting 1938, Tex.Gen.Laws, 635, as the State's repealed by ch. 1975 at all Code, Tex.Gen.Laws, oil granted an undivided owners are !5/i6 by Natural Resources 1977 However, 871, 2689, I, 2(a)(1), we gas underlying the lands. at ch. art. sec. recodified Tex.Gen.Laws, Code, portion 1977 ch. Act does not vest Natural Resources have held that the 52.171-.185, 2457, 871, rather, owner; §§ at art. 1 I. sec. in the surface of minerals 384, 860, Tex.Gen.Laws, by at ch. 1979 ownership, amended surface and the full State retains 81, Tex.Gen.Laws, 21(k), § ch. amended 1983 given right in the to share owner is Tex.Gen.Laws, 624, 405, ch. at 1985 amended Corp., 763 S.W.2d Exxon Scott v. consideration. 44-45, 2319, §§ Laws, amended 1985 Tex.Gen. at 516, Robison, 766; 8 Tex. at Greene v. 652, 2407, by 1985 Tex. ch. at amended 655, (1928). Gen.Laws, § at amended ch. 4, 1933, 27, 1937, conveyed trespass November filed a November Fasken On remaining Reid, his entire to Turner. try Bryant, title suit Thus, years three after the and others who claimed an interest Reid, nearly fifty-percent Turner owned sought appoint- tract. The State also Meanwhile, Midland’s interest the tract. receiver, alleging drainage from oil ment of *3 tract, completed Midland two wells on the gas adjacent and wells on tracts. major producers. It is both of which were appointed The trial court a receiver. On undisputed ac- the additional interest 26, 1934, March an Turner executed quired by the Turner was not shared with gas provided lease to A. Fasken which for a State. $20,000bonus, per acre annual rental and $2 early employee In the 1960’s a former one-eighth royalty equally by a to be shared Turner, Knickerbocker, Andrew wrote the the State and Turner. lease also stated Attorney claiming General of Texas knowl- any party assign could his interest at edge irregularities regarding the transac- any time. Fasken intervened the 1933 Attorney tions. A first assistant General asserting lawsuit his property interest the reviewed the information and concluded that under the lease. pursuing there was “no basis under law” for 3, 1934, April On the trial court rendered alleged cause of action. judgment simple that Turner held fee title to later, Twenty-five years brought subject the 3.97 acres to the mineral interest al., against Lynn this suit D. Durham et and of the State. The also confirmed groups alleging three other of defendants subsisting Fasken had “a valid and oil approved by that the Turner-Fasken lease gas Turner, lease executed Fred Jr. the court in 1934 was a sham transaction as individually and as of the State of part conspiracy of a to defraud State of Texas, lessor_,” as conflicting set aside its share of Turner’s interest under the Re- interests, receiver, discharged the and denied linquishment Act. The filed a suit a nn gave royalty all other relief. The lease against successors to the interests of Turner to Turner and the provided State and a original and the other shareholders Mid- $20,000 payment. day bonus On the same as Corporation, seeking accounting, land an judgment, Fasken transferred the east past damages, impose and to a constructive half of Bryant, reserving the lease to M.D. requested trust. The State million in $162 overriding royalty a interest. %6ths punitive damages, plus actual and interest attorney’s groups Each of fees. the four Turner, Fasken, Hunt, Brian and the law take-nothing of defendants moved for a sum- Cantey, Hanger firm of & McMahon entered mary judgment. agreement 14, 1934, April into an dated to corporation, form a to be named Midland facts, In addition to the above Producing Company, purpose for the of drill- summary judgment evidence included ing short, on the west half of the In lease. Knickerbocker, testimony of Andrew to incorporation agreement called for Tur- the effect that the lease between Turner and convey ner and Fasken to their oil and sham, Fasken was a and that Fasken was a company, mineral interests the tract to the through which strawman Turner could obtain which was to redistribute mineral interests provided an interest excess of that for along company signatories with respondents stock to the Act. The agreement. a 10- presented previous received Knick evidence claims year management brought against contract services erbocker had Turner and his estate, disgruntled characterizing Midland.4 him as a ½6 n agreement convey parties company’s royalty, called for Turner to his base 3/i6ths interest, field, royalty provide management overriding royalty his in the east half of the expertise developing Additionally, overriding royalty the lease. and a free in the west %ths n n half, Fasken, Turner, agreement convey required Fasken to his to to to the law fioths firm, working Bryan company interest in the west half and his reserved Hunt. The '/ioth return, override in the east half of the lease. In distributed its stock to the in the same company convey signatory proportions. was to Marmaduke, (1855).6 14 Tex. 109 employee pursuing a The Shannon former vendetta. Also, interpretation regard their common-law respondents also offered without acquired agency that the duty, transactions which Turner we have held Relin- ordinary quishment prohibits an lease as the surface additional Act owner not a developments, preconceived working interest acquiring business from a by the plan argued underlying State. Well-estab minerals permanent fund school Standard, summary preclude rules of property. lished (Tex.1967). Standard, arguments of this evidence and consideration In the sur- respondents. weight negotiated Relinquishment offered Act face owner (but testimony given be a witness’s is a matter gave lease which the surface owner State) fact, acquire working the trier of option *4 on an attack of a witness’s cannot be based the lease interest. The Court held was inval- R. credibility. Great Am. Ins. Co. v. San provided id because it for substantial consid- Co., Plumbing Supply 391 S.W.2d partici- Antonio in the could not eration which (Tex.1965). 41, favoring the Evidence pate. 47 Id. If the Turner-Fasken at 153. true, give taken as and all non-movant must be Tur- lease was intended as a vehicle indulged in inferences must be reasonable ner consideration not available to additional Prop Act, Nixon Mr. duty the non-movant’s favor. v. him then he breached his under the (Tex.1985). 546, Mgm’t, 549 erty compensation 690 S.W.2d for the to obtain fair State. on Thus cannot be based appeals of concluded that The court respondents the that would have inferences the drainage appoint the occurrence of the evidence. Ameri us draw from Great of a terminated Turner’s sta ment receiver can, at 47.5 891 S.W.2d leasing agent. 804 tus as the S.W.2d State’s appeals rested its decision on The court of litigation, v. Reid the at 318-19. In the State scope of the owed the and duration duties appointing orders temporary State obtained State, concluding the the owner to surface of the allegations a receiver failure based on fiduciary duty, if he no or that Turner owed appeals in drainage. to offset The court of upon either did it terminated the occurrence present Turner owed no the case concluded receiver, appointment of drainage, of the the holding in our Norman v. duties because of 804 at 315. or of the lease. S.W.2d execution Giles, the surface owner allow that should days drainage for 100 without the to continue agree with court of

We well, agency any beginning the an offset owner not the State’s that the surface terminates, may existing and the State purposes. the lease general agent for all Within however, Act, property. undertake the Norman to re-lease scope the of 678, Giles, 21, 219 684-85 148 Tex. S.W.2d agent the is the State’s to the surface owner (1949). fact reasoning overlooks the This the assets are entrusted extent that to act as an owner, that in fact continued must Turner of the surface who the control receiver, he, executed the agent, and not the It is well that trust. settled abuse himself and selling behalf of charged with an asset for agent an in 1934 incorporated fiduciary duty acknowledged and to the own owner owes Furthermore, temporary er, by judgment. while duty that the violates this allegation on the orders based for his benefit. were obtained acquiring the asset own admissibility this should unsigned copies not decide the issue of presented State also proceeding. further purporting to show Turner and letters evidence be offered $20,000 actually gave Fasken he law firm lease, was paid half of which alleges as a bonus for Tur- exactly the State 6. This is what paid State also the testi- interest, to Turner. The offered ner, respondents’ predecessor did Ralph Yarborough, mony who was of Senator Turner, the claims that this case. The State general representing attorney the State assistant owner, effect into a scheme surface entered litigation, that he not have Reid would in the true, If this is to himself. lease minerals judgment if agreed 1934 he had known to the duty agency to the was a of Turner's breach plan. alleged preconceived State. does presence or absence this evidence case, do disposition of the and we our not affect

67 drainage, final estoppel. makes no or See Texas Co. v. 154 Tex. (1955); 494, 83, 89 McNutt v. determinations that 281 S.W.2d conditions existed (Com. Cox, 409, 129 626, agency; contraiy, 133 Tex. S.W.2d 627 termination of the to the App.1939); Crawford, State v. 771 S.W.2d judgment expressly recognizes Turner’s 624, 1989, (Tex.App. writ de agency subsisting.7 status as valid and —Dallas nied); Son, High Lewis Cox & Inc. v. Plains Nothing State Reid or the Underground No. Water Conservation Dist. resulting would allow (Tex.Civ.App.— 662-663 contrary to obtain a lease on terms to the n.r.e.). Amarillo writ ref'd We are interests of the State. sympathetic plight respondents appeals’s In addition to the court of accept judicata but if we were to the res upholding summary judg reasons for opinions, perpe dissenting views of the all a ment, respondents argue present that the keep trator of fraud needs do is the scheme represents impermissible suit signs judg concealed until the trial court collateral judgment. attack on the 1934 matter, ment a related then declare that sought judg State has not to set aside the he and his successors interest are home ment; alleged it has fraud extrinsic to the free. judgment, equity powers and invokes the recently We held that the doctrine of res *5 impose the court to a trust. constructive judicata subsequent involving will bar a suit Consequently, the State’s claim is not a col subject prior the same matter as a suit lateral example, attack. For in Dilbeck v. through diligence, the of “which exercise Blackwell, 126 (Tex.Civ.App.- S.W.2d 760 litigated prior could have in a been suit.” 1939, ref'd), Texarkana writ a heirs of dece Corp., Barr v. Resolution Trust 837 S.W.2d brought dent alleging suit that the executor (Tex.1992). According 627 to the facts al- by obtaining probate committed fraud court leged by rendering the the trial court approval of a sale to parties, third who in fact judgment the 1934 did not and could not purchasing were it on behalf of the executor. adjudicated the issue of an undisclosed remedy court held that the of construc Thus, plan acquire improper to an interest. tive “is against trust authorized as relief the that the lease was “valid and extraneous fraud and is in not conflict with subsisting” against did not inoculate it the the rule upon collateral attack the alleged adjudi- fraud the trial court did not probate orders of the court involved.” Id. at cate, way knowing indeed had no of about.8 761; generally see Hodges, Collateral At The circumstances of State v. Standard as 164, Judgments, tacks on 41 Tex.L.J. 187 they judicata relate to res are similar to the (1962). Standard, alleged ease. In facts the Although ju- couched terms of res litigation first between the involved dicata, principal argument the of the dissent covering particular which of leases a two ing just Justices is that it is not fair to be controlling: tract would the one be executed owner) litigating sixty (the events that occurred almost by B.L. Standard surface to years However, ago. the Mining Company, State its sover Trace or the one executed eign capacity, ordinary litigants, unlike is not the Commissioner of the General Land limitations, laches, subject Refining Company. to the defenses of to Humble Office Oil judgment provides: consistency positions judicata "2. The intervenor. of these two on res Fasken, readily apparent. subsisting is not A. has valid and Turner, Jr., individually lease executed Fred Hecht would make much of the State’s Justice Texas, and as of the State of as lessor ...” stipulation the a valid In lease is lease. added). (emphasis context, the "admission” of the State is that nothing irregular there is about the lease other Cornyn willing give judica- 8. plan Justice is not to res acquire than the secret for Turner to judgment's ta effect to the 1934 determination benefit from the minerals he should have shared agent, position that Turner was the State's a matter State. The State’s not incon Standard, squarely litigation. holding at issue in that Yet he would with the v. 414 sistent (Tex. 1967), judicata preclude use res of matters S.W.2d 148 that a lease which con not, not, litigated. veys improper that were and could be an interest is invalid. 68 Later, place a on the non-movant to in favor of Standard. tions burden Court held through present support the non-mov-

after the State learned the recorda- evidence defense, had tion of an amended lease Standard ant’s claim or “we never shift working, option acquire part of Trace’s proof unless burden of non-movant lease, argu- the State sued to invalidate has ‘establish[ed] the movant until fiduciary ing that Standard had breached its to a on the entitlement obligation. judicata held that The Court res presented to the trial court expressly issues bar suit “[a]s did not the second because by conclusively proving all elements essential parties, [the shown later acts of action or a matter of his cause of defense as ” suit] at issue in the first did not reflect Brand, 551 v. 776 law.’ Casso S.W.2d true was never intended contract and (Tex.1989), quoting City Houston Clear issues (Tex. to be such. The now be Auth., them 589 678 Creek Basin S.W.2d legal arise of matters resolved out whose 1979). summary judgment may not be A could have been or effect considered based a weakness the non-movant’s prior proceeding, there is decided proof unless pleading or it establishes res application no basis for doctrine of insur right of action or an absence of judicata.” at S.W.2d recovery. Swilley v. bar mountable (Tex.1972). Hughes, 488 66-67 S.W.2d

Finally, argue respondents by accepting ratified the lease bene acknowledge respon- We difficulties knowledge of acquiring fits after the facts defending that oc- dents face transactions 1960 n late from Knickerbocker. This However, nearly sixty years ago. curred by estoppel. A argument is ratification simi supported cannot summary be argument in Texas lar was made Co. respon- any of advanced in the the reasons (1955). In that 154 Tex. dents’ therefore reverse motions. We held: case court *6 judgment of remand appeals of the court and in this is well settled state that [I]t proceedings.9 for to the trial court further public holds lands in trust for state school people of the benefit all the the state of HECHT, J., by joined Dissenting Opinion sovereign in its ca- and administers them ENOCH, PHILLIPS, C.J., by and J. The conduct of officers pacity. acts and recovering agents estop it from and cannot CORNYN, Dissenting Opinion J. of those lands or the value the minerals Justice, HECHT, dissenting. produced Relinquishment The therefrom. conveyance of a a mineral Act authorized County In district court in Travis 1934 a only by estate in the land here involved Turner, gas that Fred Jr.’s declared lease, by estoppel. sale or not of the State of Texas was lease on behalf at Id. 89. subsisting”. gist The of “valid and that Turner complaint this case is Separate respon from the other State’s dents, duty Relinquishment under his are the successors violated defendants who arranging n. to of at 64 Act ante in interest to Hunt claim their motion working part acquire the benefit of summary judgment because for should stand royalty. If his own produce any interest in addition to has failed to evidence the State duty, then the lease any conspiracy or Turner violate his part Hunt did was adjudi- the lease has been Again, argument not valid. Since preconceived plan. valid, res summary cated claim is barred State’s misperceives the role of judicata. dissent. jurisprudence. jurisdie- I therefore in our While some record, trial therefore the prayer not and the State that we included In its for relief asks proper to grant remand the court of determine is not to to motion court’s refusal summary judgment. Vordenbaum, We to State’s entitlement ly Ackerman v. before us. See complaints the State's do not reach the merits of 1966) (Tex. may (appellate court express opinion thereon because the and no only if consider denial any question preserve not for review. State did preserved). point properly has been summary judgment was State’s motion facts, undisputed, accepted all it material are because it did not want these. In 1930 Turner a 3.97- drilling complaint was deeded a risk of well. State’s acre tract of land in the Yates Field in Oil is not that it received less than it was enti- County. property per- Pecos transaction, Since was tled to from the but that Turner land, manent fund school the State reserved and Fasken received more. The State’s ownership Leasing of the minerals. of the had, something claim is not for it should have appears delayed by minerals to have been something argues but for it Turner and conflicting claims to the tract. In 1933 the Fasken should not have had. The basis for being concerned that the tract was this claim is that Turner breached his statu- adjacent property, drained wells filed duty tory by obtaining to the State for him- quiet suit Turner and others to title associates, through self and his Midland Pro- appointment to the tract and for of a receiver ducing Company, portion of a benefit develop to the minerals. The district court working interest under the lease. appointed gave a receiver and him exclusive The State is correct in its contention that if possession and control of the tract with Turner executed lease Fasken order “complete power authority manage, and portion working to obtain a of the develop control and the same.” The receiver which was not to be shared with the develop solicited bids to the minerals and authority then Turner exceeded his as the report plead- filed a with the court. In their Relinquishment under the Act. ings Turner and Fasken asked the court to a similar We faced contention approve a lease of the minerals between Standard, (Tex.1967), 414 S.W.2d 148 which them. In 1934 the district court rendered reserving involved lease to the surface judgment vesting title to the tract option acquire portion owner an subject minerals, to the State’s reservation working interest. We held that the surface amending validating and the Turner-Fasken authority owner “the exceeded because lease, discharging the receiver. The leasing power of the surface [under owner one-eighth royalty reserved is limited to the Act] $20,000 bonus, payment called for aof both bonus, execution of oil lease for equally by of which were shared royalty rental less considerations expressly and Turner. The lease allowed the statutory than the minimum and consistent interests, assign shortly their prevailing values.” Id. at 153. We also rendered, after was Turner as- *7 held, however, that because the surface own- interest, signed royalty his and Fasken as- authority, er had exceeded his the lease was signed interest, large part working of the words, In invalid. other when a surface own- Producing Company exchange to Midland in acquire portion arranges er a lease to of past years for stock. Over the Midland working not with the the interest shared Producing Company and its successors have is It therefore fol- the lease invalid. received more than million from wells $100 that a claim that a surface owner ex- lows drilled on the Turner tract. authority is inconsistent with an ceeded his indisputably The Turner-Fasken lease is adjudication If the that the lease is valid. this, judgment valid. The 1934 establishes authority, the surface owner exceeded his any contrary claim to the would be valid, invalid; if the is the lease is judicata. by only barred res The not State authority. did not exceed his surface owner authority acknowledges judg- the of the 1934 The rule in bars the State’s ac- Standard ment, it asserts that the Turner-Fasken Although the re- tion this case. State judgment independent lease is valid of the validity peatedly affirms the of the Turner- any challenge and disavows to it. The State lease, principal it Fasken as a is nevertheless only the fair on concedes not lease was complain agent’s conduct. permitted to of its royalty its face and the it received was all it however, judicata judgment, is res to, The per acre was entitled but the bonus arranged to complaints. If Turner had paid largest of its for the lease was the the State working from the inter- acquire some benefit had ever did not seek obtained. State judgment signed, the 1934 was part working of the and would not est before consideration, that there is no lease would have been invalid. The court’s evi- then the duty judgment that the lease was “valid sub- dence that Turner breached whatever necessarily had, sisting” precludes the State’s and that is no evidence that he there subsequent claim that Turner exceeded his in concert Turner’s successors acted with authority. judgment After was rendered and claim that the him. Defendants also State validated, indicates that the lease Standard the Turner-Fasken lease transaction ratified ended, duty to the so that if Turner’s Attorney the office investi- when General’s arranged from acquire then a benefit he and found no gated it late 1960’s duty working interest he violated no the view, my In wrongdoing involved. actionable implausible the State. State’s somewhat necessary any it to determine whether is perpetual argument that was under arguments merit. of these duty never to obtain benefit from the judgment I affirm Since would working interest conflicts with Standard. appeals, I court of dissent. lease, validity of the Turner-Fasken adjudicated in 1934 and reaffirmed PHILLIPS, ENOCH, J., join C.J., and. case, completely precludes in this dissenting opinion. assertion that Turner exceeded his State’s authority duty under CORNYN, or breached his Justice, dissenting. Act. if ar- Even status as the I dissent. Because Turner’s fraudulently, which it gued that Turner acted leasing agent terminated under State’s was Court, any to do in this action has not chosen (Act), Relinquishment Act pre-judgment Turner for conduct against his correct appeals the court of was judicata, by res and after is barred Further, agree I should be affirmed. longer rendered Turner was no was conclusion JUSTICE HECHT’s agent. This case flaw the State’s State’s judicata; are res State’s claims barred irrefutable fatal. It involves no both judgment of the should be court The trial genuine issues material fact. affirmed on that basis well. judg- right granting summary was court the Reid The State initiated and the court of ment seeking appoint- primarily November right affirming it. The appeals was bids for an oil ment of a receiver to solicit response sole is that the State has Court’s subject tract. A gas lease on receiv- regarding Tur- fact raised sufficient issues Turner’s status as the er was needed because ner’s actions to entitle it to a trial. Besides leasing agent1 was terminated being unnecessary, a trial in this case is an timely law failure to drill operation of heavy parties be- especially burden for all July Act of property. well on an offset time, passage the death of cause of the C.S., 3-5, § 31, 1919, ch. Leg., 36th 2d witnesses, impossibility and the most of response to In 1919 Tex.Gen.Laws 250. reconstructing than half a events more *8 appointed request, court a the district State's sim- century This is occasioned old. burden receiver, possession granted him exclusive argu- by the refusal to meet the ply Court’s tract, of the and ordered him to and control raised. ments drilling for a or contract. solicit bids lease many other issues. parties have raised claim, legal proceed- things, During the those among that course of other Defendants pro- and submitted ings, not that Fasken duty Turner owed the State was under of which Fasken fiduciary, appointment posed lease the terms that of a on gas lease any deprived in him of authori- would obtain receiver 1934 $20,000 bonus and exchange in for a propose property for the trial ty except to a lease Rudder, Giles, Shell v. since. See first character carried forward ever this court 1. In Noman (refer 686, (1957) 618, agency 299 689 156 Tex. S.W.2d the nature of the surface owner's ized "leasing rights”); ring by referring to the surface owner's relationship to the own to State Standard, 148, (Tex. 21, 153 "leasing” agent. 414 S.W.2d 148 Tex. er as the State's 1967) 678, (referring "statutory (1949). to surface owner 684 As the court of S.W.2d 219 state”). observed, leasing agent for the has been this characterization

71 n terminated, royalty automatically any equally to be shared subse reforming and Turner. After the lease to quent executed the surface owner lease advantageous make its terms even more purporting capacity to be in the as the approved the district court agent leasing State’s is “without effect.” lease, judg- Turner-Fasken and rendered Giles, 21, 219 Norman v. 148 Tex. incorporating ment the lease terms. (1949). 678, Indeed, it was Turner’s drainage precipitated that failure to offset specifically permitted party The lease interest, assign following ap the Reid and resulted in the his a series transactions, assignments pointment and other Tur- of a receiver. Once Turner’s eventually acquired part ner terminated, of what became agency legal impediment no was extremely profitable working prevented acquiring him from an interest Although the mineral estate. Turner’s deal- Act to the excess of that afforded ings Attorney came to the General’s atten- agency surface owner. And as as the soon 1960s, legal tion took no filed, power was all was terminated suit seeking ap- action until it filed suit in 1988 convey rights to the oil and interests proximately damages. million in $162 resided with the district court. The fact that The essence of the State’s claims is that Turner executed the lease under the court’s lease, although the Turner-Fasken its terms authority approval sup cannot essentially approved by were dictated and port agency as a conclusion Turner’s Reid, the district court in State v. was the surface owner under the Act was somehow product of a sham transaction and a breach Moreover, ques if resurrected. even some fiduciary duty of Turner’s as the State’s leas- tion remained about Turner’s continued au ing agent ap- under the Act. The court of thority leasing agent, as the peals affirmed in favor of appointment superseded court’s of a receiver interest, holding Turner’s successors in any authority might that Turner have re leasing agent Turner’s status as the State’s tained act behalf the State. See carry general fiduciary duty did not with it a Marshall, 152, Kirby v. Dilworth & 260 S.W. did, and that even if it (Tex.Comm’n App.1924, judgm’t agency any duty status and flowing from that Morris, adopted); Alworth v. 19 S.W.2d status were terminated under the terms of writ). no (Tex.Civ.App.-Eastland agree the Act. I appeals’ with the court of resolution of this issue. The recital in the that the Reid by Tur- Turner-Fasken lease was executed agency Turner’s was terminated as a mat- State,” “individually ner and as of the ter of law under the Act his failure to legal significance has no context. The drainage offset pro- from the tract. The Act court, receiver, through the assumed district agency vides that a surface owner’s status is complete authority to decide to a lease whom if terminated a well is not drilled within 100 granted 1,000 would be and under what terms. days discovery of the of oil within feet 31,1919, recognize Reid did July Leg., the tract. Act of 36th C.S., 3-5, agency § Turner’s was valid and subsist- 2d ch. status 1919 Tex.Gen.Laws ing, valid and We held that under such circum- but that Fasken’s was agency subsisting.2 stances the Nor is the of other surface owner is absence judgment provides part: parcel All that certain tract and of land situ- Texas, County, having ated in Pecos about 57 miles agreed open All Court to jury being waive a the town of Fort Stockton and to submit the matters of facts East from *9 Court, thereupon Survey as well as of law to the part Reid as of the Bob described pleadings, Court heard the the evidence and [legal description vest- tract] follows: counsel, being fully argument ad- follows; ed as premises, vised in the does render the follow- simple title is vested as 1. The fee ing judgment, to-wit: Turner, Jr., subject all hereto in Fred ORDERED, IT IS ADJUDGED AND DE- the reservation of minerals in and under the following CREED that the title described same as set forth in the Patent from the State land, Texas, County, tract of situated in Pecos of Texas to Bob Reid.... to-wit: language con- affirmative

cerning legal relationship to Turner’s determinative; automatic termi- agency Turner’s was one of nation of status protect sought the reasons by filing the interests Reid place. first the judgment I would affirm of the court of appeals. TV, INC., Ca CABLE Warner HOUSTON Communications, Inc., ble Warner Cable County, Inc., Communications Harris Inc., Communications, Peti and Warner , tioners ASSOCIATION, WEST INWOOD CIVIC al., Respondents. et

No. D-3190. Supreme Court of Texas.

May Taylor, Bruch Ben Ronald Hogan, Jennifer Wiesenthal, Houston, petitioners.

G. for Johnston, Holman, Cheryle R. David W. Houston, respondents. George, H. Kevin REHEARING ON MOTION FOR PER CURIAM. neighborhood clubs civic Seventeen and/or (Plaintiffs) sued

homeowners’ associations1 (Cable TV, and others2 Houston Cable Inc. Club, intervenor, Fasken, Forest Civic has a valid Tower Oaks Civic Association, Ponderosa A. Association, subsisting executed Westa- Oakwood Glen Turner, Jr., individually Association, and as Sequoia Fred Estates Civic dor Civic Texas, lessor, Club, Club, to the said A. as The Hunt- North Hill Civic Estates 26, 1934, lessee, Fasken, as dated March Association, Improvement Cutten Green As- wick sociation, to-wit_ follows, substantially being Association Homeowners Tallowood then sets out all the terms Improvement Associa- Windfem Forest Civic Turner-Fasken lease. tion. Asso- include Inwood West Civic 1. The Plaintiffs Commu- Association, include Warner ciation, 2. The other defendants United Dis- Oak Creek Civic Communications, nications, Inc., Association, Club, Warner Cable Civic Grantwood Civic trict Fund, Inc., of Har- Communications Inc. and Warner Cable Village Hill Maintenance Turtle *10 Club, C.I.A., County, ris Inc. McKamy Belmar Civic Meadows

Case Details

Case Name: State v. Durham
Court Name: Texas Supreme Court
Date Published: Mar 31, 1993
Citation: 860 S.W.2d 63
Docket Number: D-0992
Court Abbreviation: Tex.
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