141 F.2d 934 | 5th Cir. | 1944
Brought by Magnolia Petroleum Company, claiming to be the owner of record and by limitation,
Defendant’s whole case against plaintiff’s showing of record title by deed from Mainardj trustee, and of limitation title by adverse possession was (1) that the property was restricted property of an Indian, and under the federal statutes
The District Judge, on evidence fully supporting his findings, found in plaintiff’s favor every fact it had pleaded and relied on to support its claim for judgment.
Appellant is here urging upon us that the judgment may not stand. Confronted with the court’s finding that plaintiff was a bona fide purchaser of the lease and its conclusion that under the Texas Statute, Art. 7425a, as construed in Gulf Production Co. v. Continental Oil Co., 139 Tex. 183, 132 S.W.2d 553, 164 S.W.2d 488, it took good title unimpeachable by defendant, appellant argues (1) that the finding of innocent purchase is not supported by the evidence and is contradictory of the special finding the court made that Mainard, the trustee, after making the lease to Shunatona had himself conducted the negotiations for its sale to plaintiff, and (2) that if it is supported, this would not avail plaintiff for the statute in terms and by construction applies only to express trusts and the trust here was not an express but a resulting trust. Confronted with the further finding on undisputed evidence that plaintiff has had open, notorious, hostile and adverse possession under a deed duly recorded, paying all taxes as they accrued, for more than five years, and therefore has acquired title by limitation, the appellant lamely urges upon us (1) that her adjudication as an incompetent has prevented the Texas statute from running and (2) that the property is restricted Indian property, and though it is Texas land and subject to Texas laws, the restriction removes it from the operation of the Texas statutes of limitation. Confronted with the finding that she was not of unsound, but of sound, mind, that she knew that plaintiff had a lease on the property and that, so understanding, she had received royalties from the lease and had acted so as to ratify it and to estop herself from objecting to it, she insists that the property was restricted and she was an incompetent and therefore she could not do by ratification or assent what she could not have done directly without compliance with the formalities the Oklahoma statutes required.
Taking these points up in order, we think it clear that the finding that plaintiff was an innnocent purchaser is fully sustained by the evidence and that there is nothing in the finding that Mainard conducted the negotiations for the sale of the lease which is in any manner in conflict with this view. The statute governing dealings with trustees expressly provides that persons may deal with a trustee of this sort without inquiry as to the beneficiaries and without concern or responsibility as to the application of the proceeds. If this statute applied, plaintiff was entitled to deal with the trustee here in respect of the sale of the lease, whether he purported to be acting for himself or for Shunatona, his lessee, in full reliance upon his power to act, and with complete freedom of accountability to the beneficiary.
Upon the issue of whether the statute applied, we need not canvass the authorities appellant cites, or determine whether the limitation she seeks to put upon the statute is in fact contained in it. It is sufficient to say that under the findings of the court and under the facts as the record presents them, it is quite clear that the trust in question here was neither resulting nor constructive, but an express trust created for the purpose of enabling Mainard, as trustee, to deal freely with the Texas lands, and that in terms and in fact it is directly within both the purpose, and the language of the statute.
Of appellants’ contention that the land is restricted and because restricted, neither the invoked Texas statute as to dealing with trustees, nor the statutes of limitation, can affect the title to it, it is sufficient to say that the District Judge, on facts fully supporting his finding, found that the land in question was not and never had been restricted land. But if we should assume that the land was restricted, nothing in the federal statutes nor in the decisions construing them gives warrant for appellant’s claim that they operate to remove land in Texas from the operation of Texas laws, and particularly nothing in them operates as a barrier to the running of the Texas Statutes of Limitation.
As to her claim that because she had been adjudged incompetent, the statutes of limitation may not run against her, it is sufficient to say that the disability which prevents the Texas statutes from running is not an adjudication of incompetency, but the disability of an unsound mind, and that not only did the District Judge find as a fact that defendant was not of unsound but of sound mind, but it is not even contended that her adjudication as an incompetent is an adjudication that she was of unsound mind. Section 16, Title 15, Oklahoma Statutes 1941, provides:
In Oklahoma Natural Gas Corp. v. Lay, 175 Okl. 75, 51 P.2d 580, 582, it is said: “ ‘Unsoundness of mind’ has been judicially declared to be synonymous with ‘insanity’ ”, while in In re Nitey’s Estate, 175 Okl. 389, 53 P.2d 215, it was determined that an adjudication of incompetency is not an adjudication of unsound mind. Cf. Shelby v. Farve, 33 Okl. 651, 126 P. 764.
Her final contention that because she had been adjudged incompetent, her acts and conduct could not effect a ratification of the lease or raise an estoppel against her, we need not discuss or consider, for we think it plain that whether this contention be sound or unsound, it is quite clear that the judgment must be affirmed on the •showing and findings made of record and limitation title in plaintiff. The judgment was right, it is affirmed.
As the cause stood for trial, plaintiff alleged: that though defendant, Amey Thlocco, had been adjudged by the County Court of Seminole County, Oklahoma, under a statute authorizing such adjudication, to be an incompetent person to the extent that she cannot properly handle her business affairs, she was not an insane person or a person of unsound mind; that the defendant Kenneth Mainard, had originally been appointed her guardian, that he had now resigned and Loren Ray had been appointed to succeed him; that the lease in question was executed Feb. 14, 1936, by Kenneth Mainard, Trustee, to Bat Shunatona, and recorded Feb. 29, 1936, in the Deed Records of Titus County; that plaintiff had acquired the lease from Shunatona, by written assignment dated Feb. 20, 1936, recorded on March 5, 1936, in said deed records; that at the time of the execu
Defendant, Amey Thlocco, answered: admitting that she had been adjudged an incompetent and that she was claiming to be the owner of the lands described in the petition; and alleging that she was the real and beneficial owner of the lands which stood in Kenneth Mainard’s name as trustee; that the oil and gas lease to Shunatona, executed by Mainard, was not executed by lawful authority; and that plaintiff, in taking the lease, knew of her ownership, or knew, or was acquainted with facts that put it on knowledge, that she was incompetent, that Mainard was her guardian, and that he was without authority to execute a lease as trustee, and that it, therefore, acquired nothing by its purchase of the lease. She prayed that the action be dismissed for want of jurisdiction over her, or, in the alternative, if it be not dismissed, that she have a cancellation of the oil and gas lease and an accounting as to, and recovery of, all proceeds resulting from the drilling of the wells less the actual cost of said drilling and operations.
In reply, Magnolia Petroleum Co. filed a general denial, and pleaded, to the claim to cancel and for an accounting, the statutes of limitation of four and two years, and to the claim of title, that it had had peaceable, continuous and adverse possession under title from the State and under deed duly recorded, with payment of taxes, and therefore had title of limitation under the three and five year statutes of limitation of the State of Texas. In addition, it pleaded that Amey Thlocco for a period of more than five years, with knowledge that plaintiff was operating the property under lease and was spending thousands of dollars in operating it, had taken no action to dis-affirm it but on the contrary had accepted royalties thereunder, and was now es-topped to claim that the lease was invalid. Her acceptance and receipt of royalties, her other acts and conduct and especially the suit and judgment in Amey Thlocco v. Mainard, wherein plaintiff allowed a judgment to go in favor of royalty owner owning one-half of the royalty under said lease were also pleaded as a ratification and acceptance of the lease.
The 8th finding of the District Judge Was: “No fraud has been pleaded or charged against the plaintiff, Magnolia Petroleum Co., and none has been proved”, and the record fully supports this finding.
Act of May 27, 1908, 35 Stat. 315, as amended by Act of May 10, 1928, 45 Stat. 495; Act of March 2, 1931, 46 Stat. 1471, as amended by Act of June 30, 1932, 47 Stat. 474, 25 U.S.C.A. § 409a; Act of Jan. 27, 1933, 47 Stat. 777; Act of May 19, 1937, 50 Stat. 188, 25 U.S. C.A. § 412a. Cf. Murray v. Ned, 10 Cir., 135 F.2d 407; United States v. Williams, 10 Cir., 139 F.2d 83; Ward v. United States, 10 Cir., 139 F.2d 79.
Included in the findings were one find
“An Act for the Protection of Those Dealing With Trustees”. “Be it enacted by the Legislature of the State of Texas:
“Section 1. Where a trust is created, but is not contained or declared in the conveyance to the trustee, or when a conveyance or transfer is made to a trustee without disclosing the names of the beneficiary, or beneficiaries, the trustee shall be held to have the power to convey or transfer or encumber the title and whenever he shall execute and deliver a conveyance or transfer or encumbrance of such property, as trustee, such conveyance or transfer or encumbrance shall not thereafter be questioned by any one claiming as a beneficiary under such trust or by anyone claiming by, through, or under an undisclosed beneficiary, provided that none of the trust property in the hands of said trustee shall be liable for personal obligations of said trustee.
“Sec. 2. Whenever one shall actually and in good faith pay a sum of money to a trustee, which the trustee is authorized to receive, he shall not be responsible for the proper application of the money, according to the trust; and any right or title derived from the trustee in consideration of such payment. shall not be impeached or called in question in consequence of a misapplication by the trustee of the money so paid.
“Sec. 3. The fact that there is no statutory law of the State of Texas safeguarding the interest of those who deal With trustees, and the further fact that there is a question as to whether beneficiaries under trusts may hold those who purchase from trustees, responsible for the application of money paid to trustees, creates an emergency, and an imperative public necessity which requires that the •constitutional rule providing that bills be read on three separate days in each House be suspended, and the said rule is hereby suspended and this Act shall take effect and be in force from and after its passage, and it is so enacted.”
Approved March 28, 1925. Acts Tex. 1925, c. 120.