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REEVES ROYALTY CO., LTD., AND D. PRESTON REEVES v. ANB PUMP TRUCK SERVICE

SEPTEMBER 30, 1987

REEVES ROYALTY CO., LTD., AND D. PRESTON REEVES
v.
ANB PUMP TRUCK SERVICE



BEFORE HAWKINS, P.J., PRATHER AND ROBERTSON, JJ.

HAWKINS, PRESIDING JUSTICE, FOR THE COURT:

Reeves Royalty Company, Limited (Reeves Limited) and Preston Reeves (Reeves) appeal from a Hinds County Circuit Court ruling that denied their motion for vacation of default judgment under Mississippi Rules of Civil Procedure (MRCP) 60(b)(1). Default judgment was rendered against Reeves and in favor of ANB Pump Truck Service (ANB) in the 78th District Court of Wichita County, Texas. ANB then sought to have the foreign judgment enforced in Mississippi. At the hearing to vacate the judgment, Reeves put on uncontradicted evidence that the president of ANB had agreed to take no further action against Reeves, and, therefore, Reeves withdrew from its defense of the Texas case.

The circuit judge held that Reeves had not met his burden of clear and convincing evidence to show sufficient fraud to vacate the judgment. The lower court also held Reeves did not show a meritorious defense to the cause of action in the Texas proceeding. Finding the trial judge in error, we reverse.

 FACTS

 On July 26, 1984, ANB Pump Truck Service (ANB) secured a default judgment in the district court of Wichita County, Texas, against Federal Production and Drilling Corporation (Federal Production), Reeves Royalty Company, Ltd., and D. Preston Reeves for $5,154,12, together with prejudgment interest from September 1, 1982, to July 26, 1984, at 9% per annum interest, and also attorney fees of $3,000. Additionally, the judgment provided it was to bear interest at 10.92% from and after July 26, 1984.

 Acting under the Uniform Enforcement of Foreign Judgments Act, Miss. Code Ann. 11-7-301, et seq. (1986 Supp.), ANB on July 3, 1985, filed with the Hinds County circuit clerk the statutory affidavit and a duly authenticated copy of this judgment, in compliance with Miss. Code Ann. 11-7-303, - 305 (1986 Supp.).

 On July 19 Reeves Royalty and Reeves individually (Reeves) filed a lengthy motion to vacate and set aside the judgment. The basis of this motion was that these defendants did not owe ANB anything, and never had, and that the indebtedness, if any, was due by Federal Production; and further, that on or about March 11, 1983, ANB had informed Reeves it recognized Reeves owed it nothing, and no further action would be taken to proceed against Reeves. The motion alleged that because of this representation Reeves did not defend the Texas suit. Reeves also charged fraud in procurement of the judgment. No claim was made that the Texas court lacked jurisdiction of Reeves.

 The matter came on for hearing before the circuit court of the First Judicial District of Hinds County on September 6, 1985. Only David Preston Reeves, the individual defendant, testified. He was the agent and representative of Reeves Royalty, a limited partnership, in its Texas operations.

 Reeves testified Federal Production contacted him about selling an interest to the limited partnership in some nonproducing oil wells in Texas under lease to Federal Production, with the view that the limited partnership would re-work the wells, and if they produced, would own a thirty percent interest of the production. An agreement was then entered into between these two entities.

 Reeves learned there were several creditors, among them ANB. Fearing a lien might be impressed halting re-working of the wells, Reeves contacted the creditors and told them if

 production was obtained, Federal Production would start a pay-back program to them. He testified that he told them the limited partnership would not be responsible on its own for payment of the debt.

 On February 9, 1982, Reeves wrote the following letter to the creditors:

 Dear Sirs:

 This letter is concerning the W. P. Rogers lease with Reeves Royalty Company, through D. Preston Reeves acting as agent in conjunction with Federal Production and Drilling Corp. [sic] Enclosed is a copy of the contract we currently have binding.

 In order for us to proceed as planned in and through this agreement we must have your consent, by letter, to withhold filing any liens or judgments of any form. At such time as indicated above (August 1, 1982) a pay back program will be initiated to begin substantial payments to your company.

 s/D. Preston Reeves

 Lee Quick, president of ANB, replied by letter to Reeves individually on February 12, the body of which reads:

 As you request in your letter of February 9, 1982, concerning the above matter, the undersigned herewith agrees to withhold filing any liens or judgment of any form against Federal Production and Drilling Corporation until August 1, 1982. Such agreement is in consideration of your agreement to commence as of August 1, 1982 making substantial (i.e. at least in the amount of $800 per month) payments on the account involved monthly. Such account, it is agreed as part of this overall agreement, is $5,271.63, plus interest thereon at the rate of 15% per annum from February 1, 1982, until paid.

 Unless we hear from you to the contrary within 10 days from the date of this letter, we will assume that you have accepted the terms of this letter, such being in ...


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