Opinion
No. A-1330.
Decided February 11, 1948. Rehearing overruled March 17, 1948.
1. — Insanity — Guardian and Ward — Nonresident.
A state has the power to control the property of nonresident minors and persons of unsound minds situated within its borders, through guardians appointed for their estates, and the fact of the insanity of such person may be established upon the hearing of the application for the appointment of the guardian without a prior adjudication of insanity in the state of the residence of the person of unsound mind.
2. — Guardian and Ward — Statutes.
Article 4116, R.C.S., which provides that minors over fourteen years of age shall be personally served with citation in proceedings for the application for the appointment of a guardian of such minor, cannot be invoked where the application for the guardianship is for a person of unsound mind, even though Article 4172 does provide that the provisions of the former article shall apply "in so far as the same are applicable."
3. — Presumption — Citation — Discretion.
In the application of statutes relating to the service of citation upon the minor himself, in guardianship proceedings, it is presumed that a minor over the age of fourteen years would have some discretion as to whom he might prefer as his guardian. Such presumption cannot apply in case of a person of unsound mind, as his discretion does not grow with his increasing years.
4. — Service of Citation by Publication.
In the absence of a statute authorizing a method of service of citation upon a nonresident in a guardianship proceeding for a person of unsound mind, notice by posting provided by Articles 4114 and 4115, R.C.S., was mandatory.
5. — Jurisdiction — Citation — Proceeding in Rem.
Where a nonresident person of unsound mind, by a next friend, brings an action in the courts of Texas seeking a revision of an order of a county court appointing a guardian for his estate and for the cancellation of an oil and gas lease executed by said guardian upon the property of his ward, the proceeding is one in rem, or quasi in rem in which the court may acquire jurisdiction by means of substituted or constructive service.
6. — Leases — Courts — Guardian and Ward — Appeal and Error.
Where the guardian of a person of unsound mind has executed a lease on the land belonging to his ward for the development of oil and gas, and all of the transactions relating thereto were open and above board, and no fraud or damage shown, the courts will not set aside the order or annul the lease.
Error to the Court of Civil Appeals for the Second District, in an appeal from Clay County.
This suit arose when Hugh Henderson, a person of unsound mind and a resident of the State of Missouri through his next friend, Orson H. Lee, also a resident of Missouri who alleged that he was also the guardian and curator of the said Hugh Henderson, having been appointed by the probate court of Pike County, Missouri, in October, 1942, filed in the district court of Clay County, Texas, an application for a writ of certiorari to review certain orders of the probate court of Clay County, Texas. The orders sought to be reviewed was one appointing M.L. Henderson, a brother of Hugh Henderson, and a resident of Clay County, Texas, guardian of the estate of Hugh Henderson, a person of unsound mind, on Dec. 18, 1918, and another order reappointing him to said guardianship on April 17, 1937, and to annul a lease executed by him, as such guardian, upon the lands of his brother, in Clay County, to the Shell Oil Company for exploration of said land for oil and gas, which lease was made with the approval of the probate court. Plaintiff alleged that all of said orders were void, because the court issuing them had no jurisdiction of the estate and that the said M.L. Henderson had no authority to manage or lease any of the property of the plaintiff, Hugh Henderson, and asked that the orders be set aside and the oil lease annulled. The Shell Oil Company and M.L. Henderson were named as the defendants in the suit. M.L. Henderson, one of the defendants answered by asking that Orson H. Lee, whom he alleged was unfit to be guardian, be removed as the next friend of Hugh Henderson. This motion was granted and the court in the same order named J. Williard Gragg, a relative of Hugh Henderson, as his next friend in the further proceedings regarding the matter before the court. Hugh Henderson then filed a motion asking permission to conduct the case himself, alleging that he was of sound mind. This motion was overruled. Plaintiffs appealed and the Court of Civil Appeals, while deciding that the order was reviewable on appeal, found that no reversible error had been committed by the trial court and affirmed its orders, with one justice dissenting. 179 S.W.2d 386. On writ of error to the Supreme Court that judgment was reversed and the appeal dismissed on the ground that the order appealed from was interlocutory and not a final judgment, 143 Tex. 142, 182 S.W.2d 994. The case then proceeded in the trial court upon its merits with the court denying the plaintiff, through his next friend, any relief, but confirmed the orders of the probate court. The Court of Civil Appeals affirmed that judgment, 202 S.W.2d 492, and Hugh Henderson, through his next friend, J. Willard Gragg, has brought error to the Supreme Court.
The judgment of the Court of Civil Appeals which affirmed that of the trial court is affirmed.
Sanford, King, Estes Cantwell, Joe E. Estes and Conan Cantwell, all of Dallas, for petitioner.
The oil and gas lease executed by M.L. Henderson as guardian to the Shell Oil Company, and the order of and proceedings in the County Court upon which it was based are invalid and should be set aside, because the undisputed evidence and admission of Shell Oil Company show that such guardianship proceedings, though purported to be in behalf of Hugh Henderson were actually conducted in behalf of the Shell Oil Company and by an attorney who was at the time a broker in the pay of the said Shell Oil Company, employed by it on a contingent basis to procure this lease, and it was error for the Court of Civil Appeals to fail to vacate and cancel said lease and the orders upon which it was based. Nabours v. McCord, 100 Tex. 456, 100 S.W. 1152; Pearce v. Heyman, 158 S.W.2d 281; West v. Waddill, 33 Ark. 575. Clarson v. Ruiz, 108 S.W.2d 281.
George W. Cunningham and Jesse M. Davis, both of Tulsa, Okla., John E. Kilgore and W.D. Masterson, Jr., both of Dallas, for Shell Oil Co.; Stine, Bunting Stine, of Henrietta, for W.L. Mount, guardian succeeding M.L. Henderson, deceased; Allen Wight and Lief K. Frickstad, both of Dallas, for National Surety Co., all respondents.
The County Court of Clay County, Texas, had jurisdiction to appoint a guardian for the Texas estate of Hugh Henderson, a nonresident person of unsound mind, on constructive service, and having that jurisdiction, it was not error for the Court of Civil Appeals to approve the order authorizing the oil and gas lease. Redmon v. Leach, 130 S.W.2d 873, Chaloner v. Sherman, 242 U.S. 465; Horton v. Horton, 264 S.W. 293; Merchison v. White, 54 Tex. 78.
A very full statement of this case is made in the opinion of the Court of Civil Appeals, for which see 202 S.W.2d 492. We have concluded that each question of law presented to that court was correctly decided by it, but in the light of the contention presented here in the application, which reflects much diligence and earnestness, we have concluded to write on what we conceive to be the principal questions before us. Our statement, in the main, will be in the language of the opinion of the Court of Civil Appeals, but in a somewhat condensed form.
At all times mentioned in this opinion Hugh Henderson has been a person of unsound mind and has resided in the State of Missouri. Some time prior to 1918 he acquired a 220-acre tract of land in Clay County, Texas. In the year last mentioned the County Court of Clay County appointed his brother, M.L. Henderson, a resident of that county, as guardian of his estate. In 1939 Shell Oil Company proposed to the guardian to purchase an oil and gas lease on his ward's land. Shell's attorneys recommended that a new order of appointment be obtained, the validity of the former order being questioned on the ground that it did not contain an express adjudication that Hugh Henderson was of unsound mind. The recommendation was adopted, and M.L. Henderson again made application for appointment as guardian of that estate, and his application was granted. Notice of the application was given by posting. In addition, some sort of non-resident notice was served on Hugh Henderson in Missouri. Shortly after the 1939 appointment, the guardian, under order of the court, executed an oil and gas lease on Hugh Henderson's land in favor of Shell, and later executed a conveyance of one-half of the minerals in said land to the same company. Thereafter Shell drilled wells on the land, and has produced a large amount of oil therefrom. In 1943 Hugh Henderson, by next friend, filed an application for writ of certiorari in the District Court of Clay County, seeking a revision of the orders of 1918 and 1939 appointing M.L. Henderson guardian of his estate, and an annulment of the orders authorizing the oil and gas lease and the mineral deed. The case reached this Court on a contest over the question of who should act as next friend ( 143 Tex. 142, 182 S.W.2d 994), but no question was decided on that appeal which has any relevancy to the questions now before the Court. In a non-jury trial of the certiorari proceeding in the district court, judgment was rendered affirming the orders of the probate court and denying Henderson any relief. That judgment was affirmed by the Court of Civil Appeals. 202 S.W.2d 492.
We granted the application for writ of error for the purpose, primarily, of reviewing the holding of the Court of Civil Appeals with respect to the question of whether the orders of the county court authorizing the execution of the lease and the mineral deed were invalid because of the conflict of loyalties on the part of the attorney representing the guardian in those proceedings. Before discussing that question, we shall write briefly on the question of the jurisdiction of the probate court to enter the order of 1939 appointing M.L. Henderson guardian of the estate of Hugh Henderson. We find it unnecessary to consider whether or not the order of 1918 was valid, since the lease and deed under attack were executed after the order of 1939 was entered.
1 Article 4132, R.C.S., authorizes probate courts to appoint guardians for nonresident persons of unsound mind, and Article 4123, R.C.S., authorizes those courts to determine that the person for whom a guardian is to be appointed is of unsound mind. A State has the power to control the property of nonresident minors and persons of unsound mind situated within its borders, through guardians appointed for their estates. Hoyt v. Sprague, 103 U.S. 613, 26 L.Ed. 585; Neal v. Bartleson, 65 Tex. 478. The validity of an order appointing a guardian of the estate of a person of unsound mind does not depend upon a prior legal adjudication of insanity. The fact of insanity may be established upon the hearing of the application for the appointment of the guardian. Bearden v. The Texas Company (Com. App.), 60 S.W.2d 1031. Nor is it necessary that a prior adjudication of insanity in the state of the residence of the person of unsound mind be shown. Chaloner v. Sherman, 242 U.S. 455, 37 Sup.Ct. 136, 61 L.Ed. 427.
2, 3 Article 4116, R.C.S., provides that a minor fourteen years of age or over shall be personally served with citation to appear and answer an application for the appointment of a guardian of him or of his estate. Article 4274 provides that each provision in the title relating to guardianships of persons and estates of minors shall apply to guardianships of persons of unsound mind "in so far as the same are applicable." Petitioner takes the position that the Article last cited makes the Article first cited applicable to guardianship proceedings for insane persons. We are not in agreement with this view. Article 4116 is grounded upon the presumption that by the time the minor reaches the age of fourteen years he will have acquired some discretion and be capable of making a choice of guardian. No such presumption obtains in the case of a person of unsound mind. His discretion does not grow with the years. Article 4116 is, therefore, not applicable to him.
4 It was held in Storey v. Storey (Civ. App.) 105 S.W.2d 370 (writ of error refused) that personal service of citation on a person of unsound mind was ineffective to confer jurisdiction on a county court to appoint a guardian for such a person and that notice by posting provided by Articles 4114 and 4115 was mandatory. That requirement was met in this case. Prior to 1941 (47th Leg., p. 867, ch. 541) there was no statute in Texas authorizing nonresident notice in a guardianship proceeding for a person of unsound mind. One conclusion is that the Court of Civil Appeals correctly decided that the County Court of Clay County was acting within its jurisdiction in making the appointment of M.L. Henderson as guardian of the estate of Hugh Henderson in 1939.
5 It is our further view that due process within the meaning of the 14th Amendment to the Constitution of the United States was observed in the proceeding. Jones v. Prairie Oil Co., 273 U.S. 195, 71 L.Ed. 602, 47 Sup. St. 338; McKinley v. Salter (Civ. App.), 136 S.W.2d 615 (writ dismissed, correct judgment). Such a proceeding is one in rem or quasi in rem. McCormick v. Blaine, 245 Ill. 461, 178 N.E. 195, 77 A.L.R. 1215; In Re Sall, 59 Wn. 539, 110 P. 32, 626, 140 Am. St. Rep. 885; Wallace v. Tinney, 145 Iowa 478, 122 N.W. 936, 139 Am. St. Rep. 448. In a proceeding of that nature the court may acquire jurisdiction by means of substituted or constructive service. Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565; Re Sall, supra; Case note 77 A.L.R. 1227. A contrary holding would have the effect of depriving the courts of this State of control over lands situated within its borders.
6 We come now to consider the question upon which the application for writ of error was granted. Petitioner challenges the validity of the order authorizing the execution of the oil and gas lease to Shell and insists that it should be set aside and the lease annulled on the ground that such guardianship proceedings, though purporting to be in behalf and for the benefit of Hugh Henderson, were actually conducted in behalf of Shell. The primary basis for this contention is that the attorney who represented the guardian, and therefore the interest of Hugh Henderson, in those proceedings was at that time a broker employed by Shell on a contingent basis to procure for it an oil and gas lease on Hugh Henderson's land, and he was actually paid a commission by Shell for procuring such lease at the conclusion of the proceedings. The district court, after a full hearing, refused to vacate the order and annul the lease, and its judgment was affirmed by the Court of Civil Appeals. We should therefore view the evidence in the light most favorable to the respondent. Our statement of the facts bearing upon this question will be substantially in the language of the opinion of the Court of Civil Appeals.
In 1939 Shell carried on some explorations in the area in which Hugh Henderson's land is located. What information was derived from such explorations is not shown in the record, but as a result thereof representatives of Shell engaged Mr. Frank Bunting, an attorney who resides in Clay County and who was related by marriage to the Henderson family, to assist its leasing agent in obtaining leases on a block of land in that vicinity. It was agreed that for his services Mr. Bunting was to be paid a brokerage fee of 50¢ per acre on all leases which might be obtained in that block. Thereafter, Mr. Bunting informed the guardian, M.L. Henderson, and other members of the Henderson family of the offer made by Shell to him. With knowledge of that fact, leases on lands belonging to other members of the Henderson family were obtained and the guardian agreed to lease the ward's land to Shell on the same terms, subject to the approval of the county court. With full knowledge conveyed to the guardian by Mr. Bunting of the facts with respect to the brokerage fee which he expected to receive from Shell, the guardian suggested to Mr. Bunting that he act as attorney for him, the guardian, in conducting the proceedings in the probate court. Mr. Bunting again pointed out to the guardian that he expected to receive a brokerage fee from Shell, but the guardian, nevertheless, requested Mr. Bunting to act as his attorney in the matter. A part of the general arrangement was that Shell would pay the costs of the probate proceedings, including the attorney's fee. There was nothing concealed about the transaction; in fact, it was voluntarily entered into with full knowledge of all the facts. Pursuant to the agreement, Mr. Bunting conducted the proceedings and was paid an attorney's fee for such services by Shell, as well as the brokerage fee which had theretofore been agreed upon. The proceedings were not, strictly speaking, adversary. The guardian received the same bonus per acre for the lease as other landowners in the vicinity. There is no showing of fraud or damage. Notwithstanding this, we are asked to declare the proceedings and the sale of the lease thereunder invalid on the ground that the attorney was subject to divided loyalties. It is a sound public policy which exacts utmost fidelity of attorneys, and that policy should not be weakened by the whittling down process or the adding of numerous exceptions to the rules calling for its application. On the other hand, loyalty to that policy does not require the setting aside of court orders and the destruction of titles to valuable property when, as in this case, the transactions are open and aboveboard.
Petitioner places much emphasis on the fact that it appears that the county court was not informed of the fact that Mr. Bunting was being paid by Shell, but the district court before which the case was tried de novo had full knowledge of all the facts, and after a full hearing upheld the validity of the entire transaction. The Court of Civil Appeals, in a well-considered opinion, has found no grounds upon which to invalidate these proceedings, and we have concluded that a sound public policy does not require this court to do so.
We are unable to sustain any of the assignments brought forward in the application for writ of error, and it is accordingly ordered that the judgment of the Court of Civil Appeals affirming that of the trial court, be affirmed.
Opinion delivered February 11, 1948.
Rehearing overruled March 17, 1948.