Summary
In Federal Land Bank v. Cooper, 190 Miss. 490, 200 So. 729, 732, the language "One-half interest in all minerals is reserved to the Grantor" was held to mean just what it said.
Summary of this case from Salmen Brick Lbr. Co., v. WilliamsOpinion
No. 34434.
March 10, 1941.
1. DEEDS.
Although there is a distinction between a "reservation" and an "exception" in a conveyance of land, they are quite commonly used as interchangeable terms, and meaning intended must be determined by reference to subject matter and surrounding circumstances.
2. DEEDS.
An "exception" in a conveyance of land excludes some part of the thing from the conveyance and the title to that part remains in grantor by virtue of his original title, while a "reservation" creates a new right out of the subject of the grant and is originated by the conveyance.
3. DEEDS.
An exception in a conveyance of land, to be valid, must be by apt words; it must be a part of thing granted, and not of some other thing; it must be a part of the thing only, and not of all, the greater part, or the effect of the thing granted; it must be of such a thing as is severable from the thing which is granted, and not of an inseparable incident; it must be of such a thing as he that excepts may have and does properly belong to him; it must be of a particular thing, out of a general, and not of a particular thing or a part of a certainty; it must be certainly described and set down.
4. DEEDS.
The rule that if there is in a deed earlier clauses which are repugnant and inconsistent with the later ones the former ones shall prevail, is subject to qualification that an election cannot be made between repugnant and inconsistent clauses if they can be made to harmonize with the general purpose and scheme of the parties as derived from the whole instrument.
5. DEEDS.
The provision in deed, following description of realty conveyed, "one-half interest in all minerals is reserved to grantor" was not inconsistent with and repugnant to prior clause by which realty was conveyed, so as to be void, where it was manifest from face of deed that grantor intended thereby to convey the land described therein except a one-half interest in the minerals.
6. DEEDS.
An exception in a conveyance of land must be construed in connection with the context.
7. DEEDS.
The provision in a deed, following description of realty conveyed, "one-half interest in all minerals is reserved to grantor," which was intended as an "exception" of one-half interest in minerals, was not void on ground that it failed to certainly describe and set down interest intended to be excepted, where it clearly appeared that provision, when construed in connection with its context, referred only to minerals in the land conveyed.
8. BANKS AND BANKING.
The Federal Land Bank, created under Federal Farm Loan Act, after it acquired title to land, had right to reserve the minerals in land when selling it, and thereafter to sell mineral interests (Federal Farm Loan Act of 1916, sec. 1 et seq., sec. 13, subd. 4(b) and sec. 14, subd. 1, 12 U.S.C.A., sec. 641 et seq., sec. 781, subd. 4(b) and sec. 791, subd. 1).
9. CORPORATIONS.
A corporation's right to acquire and hold land, whether in violation of its charter or laws or public policy of state, can be questioned only by state in which land lies or sovereignty from which corporation received its charter.
10. BANKS AND BANKING.
A grantee in a conveyance of land executed by Federal Land Bank, which contained a provision excepting one-half interest in all minerals, could not challenge right of Federal Land Bank to hold excepted mineral rights, whether challenged as being in violation of bank's charter or laws or public policy of state (Code 1930, sec. 4150; Federal Farm Loan Act of 1916, sec. 1 et seq., sec. 13, subd. 4(b) and sec. 14, subd. 1, 12 U.S.C.A., sec. 641 et seq., sec. 781, subd. 4(b) and sec. 791, subd. 1).
11. BANKS AND BANKING.
The retention by Federal Land Bank of one-half interest in all minerals when selling remainder of land which it had acquired could not be regarded as either a "commission" or a "charge" for selling land, within statute prohibiting a Federal Land Bank from demanding or receiving any "commission" or "charge" not specifically authorized in statute (Federal Farm Loan Act of 1916, sec. 1 et seq., and sec. 14, subd. 5, 12 U.S.C.A., sec. 641 et seq., and sec. 791, subd. 5).
APPEAL from the chancery court of Amite county, HON. R.W. CUTRER, Chancellor.
Wells, Wells, Lipscomb, of Jackson, Gordon Gordon, of Liberty, and B.C. Adams, E.F. Steiner, and T.H. Hedgepeth, all of New Orleans, La., for appellant.
Oil, gas, clay and other minerals are realty, and they constitute land and are susceptible of separate ownership from the ownership of the surface of the land.
29 A.L.R. 586; Butterfield Lbr. Co. v. Guy, 46 So. 78, 92 Miss. 361, 15 L.R.A. (N.S.) 1123; 40 C.J. 981, Sec. 567; Fox v. Pearl River Valley Lbr. Co., 31 So. 583, 80 Miss. 1; Gulf Refining Co. v. Terry, 142 So. 457, 163 Miss. 869; Hancock County v. Imperial Naval Stores, 47 So. 177, 93 Miss. 822, 136 A.S.R. 561, 17 L.R.A. (N.S.) 693; Harrell v. Miller, 35 Miss. 700; McKenzie v. Shows, 12 So. 336, 70 Miss. 388, 35 A.S.R. 654; Moss v. Jourdan, 92 So. 689, 129 Miss. 598; 18 R.C.L. 1176, Sec. 84; Sec. 3146, Code 1930; Stern v. Great Southern Lbr. Co., 114 So. 739, 148 Miss. 649; Stokely v. State, 115 So. 563, 149 Miss. 435.
Federal land banks have full power to reserve and hold title to minerals, and their acts in so doing are not ultra vires.
17 Ann. Cas. 531; Bouvier's Law Dictionary (3 Rev.); 19 C.J.S. Corporations, Sec. 1113; H.O.L.C. v. Moore, 185 So. 253, 184 Miss. 283; 32 L.R.A. 295; 46 L.R.A. (N.S.) 81; Nat. Surety Co. v. Hall-Miller Decorating Co., 61 So. 700, 104 Miss. 626, 46 L.R.A. (N.S.) 325; 7 R.C.L. 569, Sec. 555; 4 Thompson on Corporations (3 Ed.), Sec. 2450; 12 U.S.C.A. 641 et seq., 276, 781, 831.
The reservation of an interest in minerals is not contrary to the purpose of the creation of federal land banks.
Fed. Land Bank v. Gaines, 290 U.S. 247, 54 S.Ct. 168, 78 L.Ed. 298; Preamble, Fed. Farm Loan Act; 12 U.S.C.A. 676 (7), 694, 733, 744, 744a, 761(1), 781(4), 841-886, 895-897, 901, 902, 921, 961; 19 C.J.S., Corporations, Sec. 1090.
The reservation of an interest in minerals is not an unauthorized charge or commission.
Fed. Land Bank v. Gaines, 290 U.S. 247, 54 S.Ct. 168, 78 L.Ed. 298; Fed. Land Bank v. Warner, 292 U.S. 53, 54 S.Ct. 571, 78 L.Ed. 1120, 92 A.L.R. 380; 12 U.S.C.A. 781 (Fourth, Ninth), 791 (Fifth), 983.
Appellees are estopped to assert that the reservation of minerals was ultra vires the corporation.
Com. Bank v. Nolan (Miss.), 7 How. 508; Grand Gulf Bank v. Archer, 8 S. M. 151; Groat v. Moak, 94 N.Y. 115; Long v. Ga. Pac. Ry. Co., 8 So. 706, 91 Ala. 519; Morse v. Smythe, 55 Fed. 981; N.O. N.E.R.R. Co. v. Jemison, 110 So. 785, 144 Miss. 890; Smith v. Fed. Land Bank of Columbia, 183 Ga. 816, 189 S.E. 828; Thompson on Corporations (3 Ed.), Secs. 2073-2099.
Appellees cannot question title of appellant to minerals reserved but only the United States may raise the question.
14a C.J. 559, Sec. 2499; Cook County Nat. Bank v. U.S., 107 U.S. 445, 27 L.Ed. 537, 2 S.Ct. 561; Fortier v. N.O. Nat. Bank, 112 U.S. 439, 5 S.Ct. 234, 28 L.Ed. 764; H.O.L.C. v. Moore, 185 So. 253, 184 Miss. 283; Knox Nat. Farm Loan Assn. v. Phillips, 300 U.S. 194, 57 S.Ct. 418, 81 L.Ed. 599, 108 A.L.R. 738; Middleton v. Georgetown Mercantile Co., 77 So. 956, 117 Miss. 134; Reynolds v. First Nat. Bank of Crawfordsville, 112 U.S. 405, 5 S.Ct. 213, 28 L.Ed. 733; 4 Thompson on Corporations (3 Ed.), Sec. 82; 12 U.S.C.A. 781 (4), 831 (j).
There is no public policy condemning the reservation of minerals by any individual or corporation.
Butterfield Lbr. Co. v. Guy, 46 So. 78, 92 Miss. 361, 15 L.R.A. (N.S.) 1123; Chap. 162, Laws of 1912; Chap. 185, Laws of 1932; Chapters 191 and 307, Laws of 1940; Fed. Land Bank of Columbia v. Gaines, 290 U.S. 247, 78 L.Ed. 298, 54 S.Ct. 168; Fed. Land Bank of St. Louis v. Priddy, 295 U.S. 229, 79 L.Ed. 1408, 55 S.Ct. 705; Hartford Fire Ins. Co. v. Chicago, Milwaukee St. Paul R.R. Co., 175 U.S. 91, 20 S.Ct. 33, 44 L.Ed. 84; Middleton v. Georgetown Mercantile Co., 77 So. 956, 117 Miss. 134; 18 R.C.L. 1176, Sec. 84; Roberts v. Fed. Land Bank of N.O. (Miss.), 196 So. 763; Sec. 2, Art. VI, Const. of U.S.; Secs. 3146, 4150, Code of 1930; Smith v. Kansas City Title and Trust Co., 255 U.S. 180, 65 L.Ed. 577, 41 S.Ct. 243.
Mineral interests owned by appellant do not constitute a monopoly.
Chap. 162, Miss. Laws 1912; Herriman v. Manzies, 115 Cal. 16, 44 P. 660, 46 P. 730, 35 L.R.A. 318; Middleton v. Georgetown Mercantile Co., 77 So. 956, 117 Miss. 134; Rafferty v. Buffalo City Gas Co., 56 N.Y.S. 288, 290, 37 App. Div. 618; 19 R.C.L. 7, Sec. 2; The Century Dictionary, "Monopoly"; U.S. v. Reading Co., 226 Fed. 229, 268; 27 Words Phrases, Perm. Ed. of 1940.
The fact that the reservation in the deed of minerals in question was not limited to any number of years in no wise affects the validity of such reservation.
Bodcaw Lbr. Co. v. Goode (Ark.), 54 S.W. 345, 29 A.L.R. 578; Butterfield Lbr. Co. v. Guy, 46 So. 78, 92 Miss. 361, 15 L.R.A. (N.S.) 1123; Liston v. Chapman and D. Land Co., 77 Ark. 116, 91 S.W. 27; Patterson v. Graham, 164 Pa. 234, 30 A. 247; Stokely v. State, 117 So. 563, 149 Miss. 435; 12 U.S.C.A. 781 (Fourth).
The reservation in the deed of the mineral interest in question was not repugnant to the general grant.
Massey v. Whittaker, 88 So. 518, 126 Miss. 99; Moss v. Jourdan, 92 So. 689, 129 Miss. 598; Summers on Oil and Gas (Perm. Ed.), Sec. 134.
The reservation of minerals is not ambiguous.
Moss v. Jourdan, 92 So. 689, 129 Miss. 598.
Watkins Eager, of Jackson, and Fred A. Anderson, Jr., of Gloster, for appellees.
The reservation by the Federal Land Bank of a one-half interest in minerals in land which it has foreclosed and sold is void as being entirely foreign to the purposes for which the bank was created.
Ala. Red Cedar Co. v. Tenn. Valley Bank (Ala.), 76 So. 980; Brown v. Sawmill Co., 119 Miss. 432, 81 So. 124; Calumet Chicago Canal Dock Co. v. Conkling (Ill.), 112 N.E. 982; Case v. Kelly, 33 L.Ed. 513; Central Transportation Co. v. Pullman Palace Car Co., 139 U.S. 24, 35 L.Ed. 55; 46 C.J. 1034; Cress v. Ft. Loramie (Ohio), 125 N.E. 112; Fed. Land Bank v. Gaines, 290 U.S. 247, 54 S.Ct. 168, 78 L.Ed. 298; First Nat. Bank v. Converse, 200 U.S. 425, 50 L.Ed. 537; G. S.I.R.R. Co. v. Laurel O. F. Co., 172 Miss. 630, 158 So. 778; Haynes v. Covington, 21 Miss. 408; H.O.L.C. v. Moore, 184 Miss. 283, 185 So. 253; Lusk v. Lewis, 32 Miss. 300; M. O.R.R. Co. v. Franks, 41 Miss. 494; Nat. Home Bldg. Loan Assn. v. Home Savings Bank, 181 Ill. 35; Pac. R.R. Co. v. Seeley, 45 Mo. 212, 100 Am. Dec. 369; Standard Livestock Co. v. Bank of Calif., Nat. Assn., (Calif.), 227 P. 962; State v. Alexander, 158 Miss. 557, 130 So. 754; Summers, Oil Gas, Vol. 1, p. iii; Teele v. Rockport Granite Co. (Mass.), 112 N.E. 498; Tex. and Pac. R.R. Co. v. Pottorff, Receiver of the First Nat. Bank of El Paso, 291 U.S. 245, 78 L.Ed. 777; 12 U.S.C.A., Secs. 761, 771, 781, 791; Wolwyn v. Apalachicola N.R. Co. (Fla.), 88 So. 310.
The reservation of minerals on the part of the Federal Land Bank in the manner complained of in the bill of complaint is contrary to the public policy of the State of Mississippi.
Beasley v. Tex. P.R. Co., 24 S.Ct. 164, 191 U.S. 492, 48 L.Ed. 274; Boston A.R. Co. v. Mercantile Trust Deposit Co. (Md.), 34 A. 778, 785, 38 L.R.A. 97; Cameron v. International Alliance, etc., 176 A. 692, 97 A.L.R. 594; Carroll v. City of East St. Louis, 67 Ill. 568, 16 Am. Dec. 632; Dean v. Clark, 30 N Y Supp. 45, 48, 80 Hun 80; Egerton v. Brownlow, 4 H.L. Cas. 1235; Fearnley v. De Mainville, 39 P. 73, 75, 5 Colo. App. 441; First M.E. Church v. Dixon, 178 Ill. 260, 52 N.E. 887; Forbes v. City of Ashland, 55 S.W.2d 917, 246 Ky. 669; Ga. Fruit Exch. v. Turnipseed, 9 Ala. 123, 62 So. 542; Maloney v. Pullman Palace Car Co., 51 N.E. 664; Md. Trust Co. v. Nat. Mechanic's Bank, 63 A. 70, 79, 102 Md. 608; McNamara v. Gargett, 36 N.E. 218, 221, 68 Mich. 454, 13 Am. St. Rep. 355; Sec. 4150, Code 1930; Pac. R.R. Co. v. Seeley, 45 Mo. 212, 100 Am. Dec. 369; People v. Chicago Gas Trust Co., 22 N.E. 798, 130 Ill. 268, 8 L.R.A. 497, 17 Am. St. Rep. 319; People v. Collins, 99 P. 1109, 9 Cal.App. 622; People's Bank v. Dalton, 37 P. 807, 808, 2 Okla. 476; Pittsburg, etc., R.R. Co. v. Kinney, 95 Ohio State 64, 115 N.E. 505, L.R.A., 1917D, 641; Pueblo A.V.R. Co. v. Taylor, 6 Colo. 1, 45 Am. St. Rep. 513; Robson v. Hamilton, 69 P. 651, 653, 41 Or. 239; 4 Words Phrases (2d Series), pp. 25, 26; Story v. First Nat. Bank Trust Co., 156 So. 101, 115 Fla. 436; Tarbell v. Rutland R. Co., 51 A. 6, 7, 73 Vt. 347, 56 L.R.A. 656, 87 Am. St. Rep. 734; Thompson on Corporations (3 Ed.), Vol. 4, Sec. 247; Thompson v. Waters, 25 Mich. 216, 12 Am. Rep. 243, Trenton Pass R. Co. v. Guarantors' Liability Ind. Co., 37 A. 609, 60 N.J.L. 246, 44 L.R.A. 213; Union Cent. Life Ins. Co. v. Champlin, 65 P. 836, 11 Okla. 184, 55 L.R.A. 109; Union Cent. Life Ins. Co. v. Spinks, 83 S.W. 615, 118 Ky. 261, 6 L.R.A. 264; U.S. Trust Co. v. Lee, 73 Ill. 142; Veazy v. Allen, 66 N.E. 103, 173 N.E. 359, 62 L.R.A. 362; Wakefield v. Van Tassell, 66 N.E. 830, 831, 202 Ill. 41, 95 Am. St. Rep. 207.
Mineral interests owned by appellant constitute a monopoly.
Anderson v. Gett, 89 Ky. 375, 6 L.R.A. 390; Anderson v. Shawnee Compress Co., 17 Okla. 231, 15 L.R.A. 846; Distilling Feeding Co. v. People, 156 Ill. 448, 41 N.E. 188, 47 Am. St. Rep. 200; First M.E. Church v. Dixon, 178 Ill. 260, 52 N.E. 887; Ga. Trust Co. v. State, 109 Ga. 736, 48 L.R.A. 520; Grogan v. Chaffee, 156 Cal. 611, 27 L.R.A. (N.S.) 395; Harding v. Am. Glucose Co., 82 Ill. 551, 5 N.E. 577; Love v. Kozy Theatre Co., 193 Ky. 336, 236 S.W. 243, 26 L.R.A. 366; 2 L.R.A. 34; 8 L.R.A. 500; Code 1930, Sec. 4150; 19 R.C.L., p. 7, Sec. 2, pp. 10, 130, 161-162; Richardson v. Buhl, 43 N.W. 1102; Twin City Pipe Co. v. Harding Glass Co., 283 U.S. 353, 74 L.Ed. 1112; U.S. v. Am. Food Co., 164 Fed. 700.
The reservation by the bank of an interest in the minerals is void as an unauthorized charge or commission.
The reservation in the deed of the mineral interest is void as repugnant to the general grant and is ambiguous.
Brown v. Eckhart (Tenn.), 129 S.W.2d 1122; Dunbar v. Aldrich, 79 Miss. 698; Fletcher v. Lyon, 123 S.W. 801; Mason v. Jackson, 106 S.W.2d 610; Moss v. Jourdan, 129 Miss. 598, 92 So. 689; Robinson v. Payne, 58 Miss. 690.
Complainants can bring this suit, being entitled to the relief provided for by Section 404, Mississippi, 1930, Code, and not being estopped.
Code 1930, Sec. 404.
A reservation or exception in a deed, which is contrary to law, or illegal, or uncertain, or merely inoperative, leaves the conveyance absolute and the grant effective.
Am. Oil Co. v. Williamson, 154 Miss. 441, 122 So. 488; Barksdale v. Elam, 30 Miss. 694; Beasley v. Beasley, 177 Miss. 552, 171 So. 680; 18 C.J. 362; McAllister v. Honea, 14 So. 264, 71 Miss. 256; Nunnery v. Ford, 92 Miss. 263, 45 So. 722; Weathersby v. Weathersby, 13 S. M. 685.
Where an act or a contract is contrary to public policy and entirely foreign to the purposes for which the corporation performing it, or contracting, was created, the same is absolutely void and no life can be breathed into it.
Anderson v. Assurance Co. (Mich.), 254 N.W. 171; Application of Mazzone, 4 N.Y.S.2d 1; Central Transportation Co. v. Pullman Palace Car Co., 35 L.Ed. 55, 139 U.S. 24; Fritts v. Palmer, 132 U.S. 282, 33 L.Ed. 317; Gilliam v. Brown, 43 Miss. 641; Hanna v. Kelsey Realty Co. (Wis.), 129 N.W. 1080; 33 L.R.A. (N.S.) 355; Haynes v. Covington, 13 S. M. 408; H.O.L.C. v. Moore, 184 Miss. 283, 185 So. 253; Peoples Bank v. Lamar County, 107 Miss. 852; R.R. Co. v. Jemison, 144 Miss. 890, 110 So. 785; Sch. Dist. v. State Bank, 14 P.2d 967; Tex., etc., R.R. Co. v. Pottorff, 291 U.S. 245, 78 L.Ed. 777; Woodson v. Hopkins, 85 Miss. 171.
Even if the attempted reservation of mineral interest was only ultra vires, complainants are entitled to bring and recover in this suit.
Beasley v. Beasley, 177 Miss. 522, 171 So. 680; Bush v. Marshall, 12 L.Ed. 440; Calvert v. Mathers, 149 Miss. 671, 115 So. 780; 19 C.J.S., Secs. 970-980; 21 C.J. 1067; 51 C.J., p. 115, par. 24, pp. 196-197, pars. 121, 122, pp. 138-139, p. 233, par. 188; Cook v. Friley, 61 Miss. 1; Dockery v. Zerkowsky, 189 So. 797, 186 Miss. 31; Gulf Refining Co. v. Cleveland Trust Co., 166 Miss. 759, 108 So. 158; Long v. Stanley, 79 Miss. 298; Midkiff v. Colton (C.C.A. 4), 252 Fed. 420; Code 1930, Secs. 404, 405; Morse v. Smythe, 255 Fed. 981; N.O. N.E.R.R. Co. v. Jemison, 144 Miss. 890, 110 So. 785; Nunnery v. Ford, 92 Miss. 263, 45 So. 722; People's Bank v. West, 67 Miss. 729, 7 So. 513; Plaza Amusement Co. v. Rothenberg, 131 So. 350, 159 Miss. 800; Prairie Lodge v. Smith, 58 Miss. 301; R.R. Co. v. Quigley (Idaho), 80 P. 401; R.R. Co. v. Ragsdale, 54 Miss. 200; R.R. Co. v. Tel. Co., 58 L.Ed. 1356, 234 U.S. 369; Restatement of the Law of Contracts, Topic 12, Sec. 598; Southern Realty Co. v. Co-Operative Stores, 75 So. 121, 114 Miss. 309; Stevenson's Heirs v. McReary, 12 S. M. 9, 20 Miss. 9, 51 Am. Dec. 114; Thompson on Corporations, Sec. 2480; Trust Savings Bank v. Miss. Power Co., 167 Miss. 876, 150 So. 381; Watts Mercantile Co. v. Buchanan, 92 Miss. 540; Webber v. Austin (Maine), 121 A. 673; Gambrell Lbr. Co. v. Saratoga Lbr. Co., 87 Miss. 773, 40 So. 485.
Argued orally by W. Calvin Wells and Beverly C. Adams, for appellant, and by Tom Watkins, Mrs. Elizabeth Hulen, and F.A. Anderson, Jr., for appellees.
The appellant is a corporation created under the Federal Farm Loan Act of July 17, 1916, Chapter 245, 39 Stat. at Large 360, U.S.C.A. Title 12, Sec. 641 et seq. On July 25, 1935, a deed of trust given it on certain land in Amite County to secure a loan made by it to the grantor therein was foreclosed, and the land was purchased at the foreclosure sale by the appellant. In November 1937, T.E. Cooper offered in writing to purchase the land "Less and except any mineral rights or underlying minerals which may heretofore have been sold, leased, or reserved, if such there be, it being understood that only one-half of such mineral rights as may be legally vested in the grantor are to be conveyed to the undersigned. The appellant accepted this offer, and on the 6th day of December, 1938, conveyed the land to Cooper by a deed reciting that "The said grantor does hereby convey and warrant unto T.E. Cooper, hereinafter called Grantee, the following described real estate situated in the County of Amite of Mississippi, to-wit: (Description of land omitted) One-half interest in all minerals is reserved to the Grantor." Afterwards, Anderson and Latimer acquired an interest from Cooper in the minerals in this land, and, together with Cooper and his wife, filed an original bill of complaint against the appellant, praying that its claim to a one-half interest in the minerals in the land reserved by it in the deed to Cooper be cancelled. This bill was met by an answer and a cross-bill praying that the complainants' claim to a one-half interest in the minerals in the land be cancelled. The court below, after hearing evidence, dismissed the cross-bill and granted the prayer of the original bill.
The appellees' contention is that the reservation or exception of the minerals in the deed from the appellant to Cooper is void, and consequently the minerals in the land passed to Cooper under the deed unaffected by the reservation therein thereof. While there is a distinction between a reservation and an exception in a conveyance of land "they are quite commonly used as interchangeable terms, and the meaning intended must be determined by reference to the subject matter and the surrounding circumstances . . . an exception excludes some part of the thing from the conveyance and the title to that part remains in the grantor by virtue of his original title, while a reservation creates a new right out of the subject of the grant and is originated by the conveyance." 16 Am. Jur., Deeds, Sec. 298; 2 Tiffany Real Property (2 Ed.), Sec. 436. It is manifest from this deed that the clause thereof here under consideration was intended to and does exclude therefrom a one-half interest in the minerals in the land conveyed. It is therefore an exception and is valid if it meets the legal requirements therefor. "In every good exception, these things must always concur: 1. The exception must be by apt words. 2. It must be of part of the thing granted, and not of some other thing. 3. It must be a part of the thing only, and not of all, the greater part, or the effect of the thing granted. 4. It must be of such a thing as is severable from the thing which is granted, and not of an inseparable incident. 5. It must be of such a thing as he that doth except may have, and doth properly belong to him. 6. It must be of a particular thing, out of a general, and not of a particular thing, or a part of a certainty. 7. It must be certainly described and set down." Moore v. Lord, 50 Miss. 229. The first, fifth and seventh of these components of a "good exception," while not specifically referred to by counsel for the appellees, are the ones to which we are led by the reasons given by them in support of their contention that the exception is void.
As to the first. The appellees say that the exception of the minerals from the conveyance is inconsistent with and repugnant to the prior clause therein by which the land is conveyed. This contention is ruled adversely to the appellees in Moss v. Jourdan, 129 Miss. 598, 92 So. 689, 690, wherein the Court said, in dealing with an exception similar to the one here, that the rule here invoked is subject to the "well-settled qualification that an election cannot be made between repugnant and inconsistent clauses `if they can be made to harmonize with the general purpose and scheme of the parties as derived from the whole instrument.' . . . This qualification of the rule controls here, for it is manifest from the face of the deed that the grantors intended thereby, and the legal effect of the language they employed is, to convey the land described therein except all mineral that may be therein or thereon."
As to the seventh, which will be disposed of before coming to a discussion of the fifth, the appellees say "that this attempted exception is as vague as it could have possibly been drawn. It does not state whether it refers or is limited to the property that had been conveyed by the deed or not." The exception must be construed in connection with its context, and when this is done it clearly appears that it is limited, and refers only, to the minerals in the land conveyed.
This brings us to the fifth of these component elements of an exception. The appellees' argument here is that this appellant is without the right under, (1) its charter, and (2) the public policy of the State of Mississippi to except minerals from deeds to land made by it and retain the ownership thereof.
As to the claimed violation of the appellant's charter. We will assume for the present, but for the purpose of the argument only, that the appellees have the right to challenge the appellant's power under its charter to hold the minerals in this land, but to which we will return later. Under Paragraph (b) of the fourth subdivision of Section 781, Title 12 U.S.C.A. of the Federal Farm Loan Act, the appellant had the right to purchase the land conveyed by it to Cooper at the sale thereof under its deed of trust thereon and to hold it and any separable portion of it for five years, and longer with the approval of the Farm Credit Administration, which purchase ex necessitate carried with it all minerals in the land and vested the title thereto in the appellant. After the appellant acquired title to the land, it had the right to sell it without the minerals therein to one and the minerals to another, either contemporaneously or at different times. This we do not understand counsel for the appellees to controvert, but they say that the purpose for which the appellant was organized was to "set up a rural credit system by which credit, not adequately provided by commercial banks, should be extended to those engaged in agriculture, upon the security of farm mortgages" (Federal Land Bank v. Gaines, 290 U.S. 247, 54 S.Ct. 168, 169, 78 L.Ed. 298); that Section 791 of the Farm Loan Act prohibits it from transacting "any banking or other business not expressly authorized by the provisions of this sub-chapter" (italics ours), and that the exception in this deed is pursuant to a policy adopted by the bank of placing similar exceptions in all of the deeds conveying land owned by it for the purpose of engaging "in the mineral or oil and gas business" — a business not authorized by the appellant's charter, but in which it is prohibited from engaging. In support of this, attention is called to a resolution appearing on the minutes of the appellant's board of directors providing for exceptions of this character in all deeds to land executed by it pursuant to which it now claims to own an interest in all minerals in 1,259,059 acres of land in Mississippi, to look after which it maintains a special staff of employees.
As hereinbefore said, the appellant had the right to reserve the minerals in this land when selling it, and to thereafter sell them. Should it go further than this and enter actively into the mineral, oil and gas business, its right so to do will be for determination when but not until it is challenged either by the Government from which it received its charter, or by someone injured thereby, and who has the right so to do.
In support of their contention that by excepting minerals from land conveyed by the appellant, it has violated the public policy of this State, the appellees say (1) it is "against the public policy of a state to allow corporations to hold real estate beyond what is necessary for the transaction of the business or special corporate purposes of such corporation;" and (2) that the spirit if not the letter of Section 4150, Code of 1930, is violated; and (3) the retention by the appellant of the ownership of the minerals in land sold by it will result in its having a monopoly of the mineral, oil and gas business in Mississippi. In support of these contentions, the appellees call attention to the fact that under such exceptions the appellant now claims an interest in all minerals in 1,259,059 acres of land in the State — one out of every 23.57 acres in the State.
We assumed for the purpose of the argument, when discussing the appellant's right, under its charter, to hold this land, that the appellees had the right to challenge its power so to do; but to which we now return. One of the well-settled rules developed by the courts in dealing with claimed ultra vires acts of corporations is that a corporation's right to acquire and hold land — whether in violation of its charter or laws or public policy of the State — can be questioned only by the state in which the land lies or the sovereignty from which the corporation received its charter. Nicholson v. Myres, 170 Miss. 441, 154 So. 282, and authorities there cited; Taylor v. Alliance Trust Company, 71 Miss. 694, 15 So. 121; Union National Bank v. Matthews, 98 U.S. 621, 25 L.Ed. 188; Fritts v. Palmer, 132 U.S. 282, 10 S.Ct. 93, 33 L.Ed. 317. A legion of other cases so holding will be found collated in 4 Thompson on Corporations (3 Ed.), Sec. 2478, Note 19, and note to Puget Sound National Bank v. Fisher, 52 Wn. 246, 100 P. 724, 17 Ann. Cas. 526. Whether the appellant is without the right to hold these minerals cannot be here challenged by the appellees.
Finally, it is said by the appellees that the retention of title by the appellant to this mineral violates the provision of Section 791 of the Federal Farm Loan Act that "No Federal land bank shall have power . . . To demand or receive, under any form or pretense, any commission or charge not specifically authorized in this subchapter." We are unable to perceive how the retention by the appellant of one of the separable ingredients of land, here the minerals therein, when selling the remainder of the land, is in any way affected by this statute. It is neither a commission nor a charge for selling the land, no more so than if the minerals had been sold and the remainder of the land retained.
The decree of the court below will be reversed, a decree will be rendered here dismissing the appellees' bill of complaint and cancelling their claim to the one-half interest in the minerals excepted from the deed to this land from the appellant to Cooper.
So ordered.
Roberds, J., did not participate in the decision of this case.