Holliday v. Erwin

MURRAY, Justice. This suit was instituted by defendant in error, A. C. Erwin, to cancel a release or receipt for the sum of $10,000, alleged to have been executed by him as a result of duress and fraud. He also sought a decree declaring him to be the owner of one-fourth of seven-eighths of the first oil produced from a well upon a certain 50 acres of land located in Nueces county, Tex., or from any other well, or wells, that might be drilled upon said 50 acres of land, until the full sum of $16,250 had been paid to him. Plaintiffs in error are A. F. Holliday, Bendum & Trees, Inc., and J. C. Trees. They are all nonresidents of the state of Texas. They were served in this case by notice to serve nonresidents. They did not appear herein, and judgment by default was entered against them by the trial judge canceling the purported re [356] ceipt for $10,000, and further decreeing that Erwin is the owner of and is entitled to receive one-fourth of seven-eighths of the first oil produced from the said SO acres of land until the full sum of $16,250 has been paid to him therefrom. Plaintiffs in error present but one assignment of error, which is as follows: “The judgment rendered by the trial court in favor of defendant in error against plaintiffs in error is erroneous because it is a judgment in personam against nonresidents of this State upon service had without the State.” It is quite clear that a suit to cancel a release of this nature is an action in personam and cannot be maintained against nonresident defendants served only by notice to nonresidents. The only difficult question is whether or not the fact that Erwin prayed in his petition that he be decreed to be the owner of a one-fourth of seven-eighths interest in the oil produced from the 50 acres described in his petition, and the further fact that such relief was granted to him, would be sufficient to render this a suit in rem or quasi in rem, so as to make it maintainable against nonresident defendants served only by out of state process. The pertinent part of the assignment executed by Erwin is as follows: “Now, therefore, for and in consideration of the sum of Five hundred and No/100 dollars ($500.00) cash in hand paid, the receipt of which is hereby acknowledged, and the further sum of sixteen thousand two hundred fifty and No/100 dollars ($16,250.00) payable out of one-fourth (l/4th) of seven-eighths (7/8ths) of the first oil only as, if and when produced, saved and sold from the above described land, which sum is exclusive and in addition to the sum of seventy-five and No/100 dollars ($75.00) per acre payable to the original lessor under the terms of the original lease, the undersigned, the present owner of said lease and all rights thereunder or incident thereto, does hereby bargain, sell, transfer, assign and convey all rights, title and interest of the original lessee and present owner in and to said lease and rights thereunder, insofar as it covers the above described land, together with all personal property used or obtained in connection therewith to Walter D. Caldwell and his heirs, successors and assigns.” It is clear to our minds that in this assignment Erwin conveyed all rights, title, and interest which he held in said 50 acres of land for the consideration of $500 in cash and the further conditional promise to pay him the sum of $16,250, payable out of one-fourth of seven-eighths of the first oil, only, as, if, and when produced, saved, and sold from said 50 acres of land. The assignment does not contain a provision that Erwin is entitled to receive one-fourth of seven-eighths of the first oil produced, nor does it contain a provision that the title to such oil shall remain in Erwin until he is paid. He simply conveys all his rights in the lease for so much cash and a conditional promise to pay $16,250. Regardless of this, however, this suit is primarily a suit to cancel this purported receipt for $10,000. The fact that Erwin asked for a decree declaring what his rights would be after the purported receipt was canceled would not change the nature of the suit. It is apparent that there is no controversy between the parties except as to the validity of this receipt. If the receipt was valid, Erwin could collect nothing further under the assignment, as he had been theretofore paid approximately $6,250. If the receipt was invalid, Erwin would be entitled to receive payment of $10,000 more, and would be entitled to receive it under the terms of the assignment. The court decreeing what Erwin’s rights were under the lease after the cancellation of the receipt would be merely an incidental matter. The decree would have to 'be based upon the provisions of the assignment, as there was no attack made upon the assignment and no attempt made to nullify any of its provisions. In other words, the only issue presented by the pleadings and the evidence was the cancellation of the receipt on the grounds of fraud and duress, which clearly constituted a suit in personam not maintainable against nonresident defendants served only by out of state process. Accordingly, the judgment of the trial court will be reversed and the cause remanded.