Summary
In Wilson v. Gerard, 213 Miss. 177, 56 So.2d 471 (1952), the grantor conveyed certain tracts by warranty deed "[s]ubject to one-half interest in mineral and oil rights as conveyed to Wm. Henderson.
Summary of this case from Union Oil Co. of Cal. v. ColglazierOpinion
No. 38204.
February 4, 1952.
1. Deeds — reservation or exception in favor of fictitious person.
A deed to a described tract of land containing the words immediately following the description: "Subject to one-half interest in mineral and oil rights as conveyed to Wm. Henderson", conveys only a half-interest in the minerals and oil even though the person named as having been the grantee of the other half was a fictitious person; and the representation that such an interest had been conveyed did not amount to a legal fraud since if the representation had been true the grantee in the present deed would still have received only a half-interest in the minerals and oil.
2. Deeds — exceptions — reservations — title remains in the grantor.
In general a grantor who makes a reservation or an exception to his deed does not part with the title to that which is thus excepted or reserved, and where not already outstanding in another necessarily remains with the grantor; and such an exception or reservation will be good as to property recited to have been previously sold or conveyed, although the recital is false.
Headnotes as approved by McGehee, C.J.
APPEAL from the chancery court of Franklin County; R.W. CUTRER, Chancellor.
Torrey, Foreman Torrey, and Roach Jones, for appellant.
I. The attempted reservation in favor of Wm. Henderson was void for the reason that no such person as Wm. Henderson was in esse. Morgan, et ux. v. Collins School House, et al., 157 Miss. 295, 127 So. 565; Morgan, et al. v. Collins School House, et al., 160 Miss. 321, 133 So. 675.
The deed from the appellees, Gerard, to appellant was a warranty deed. The deed, therefore, conveyed everything except that which was legally reserved, and as the attempted reservation in favor of Henderson was not a legal one, it follows that said reservation failed. Therefore, the entire fee, including the minerals, passed to appellant.
We think the same rule is applicable in this case, however, regardless of whether the clause in favor of Henderson is a reservation or an exception.
In 26 C.J.S. 446 is found the following: "A reservation or exception is void where there is nothing for either to operate on." See also 16 Am. Jur. 610 and Brittain v. Dickson, 60 S.W.2d 1093.
II. The mineral reservations are void because of fraud.
The allegations of the bill show that the appellees falsely and fraudulently represented that a one-half interest in the minerals had been conveyed to Henderson when in fact they had not, and that said representation was made for the false and fraudulent purpose of preventing the appellant from acquiring title to all of the minerals in the land, described in his deed. These fraudulent representations were relied upon by appellant. As a result of the fraud and misrepresentation of the appellee, Gerard, the attempted mineral reservation in favor of Henderson is void. In the case of Hutson v. Miller, 148 Miss. 783, 114 So. 820, this Court held: "Fraud vitiates everything it enters into." This Court has held to like effect in numerous other cases.
The equitable maxim that "equity regards that as done which ought to have been done", is applicable to this case. If no such person as Wm. Henderson was in existence and if no mineral deed to him had been executed at the time appellees, Gerard, executed their deed to the appellant, then clearly said appellees have no legal right to fraudulently and untruthfully represent that a one-half interest in the minerals had been conveyed to Henderson and, therefore, their deed to appellant should not have contained any reservation in favor of Henderson but since said deed did, nevertheless, contain the reservation, the cited maxim should prevent it from having any legal effect.
Wall Allen, for appellees.
I. It cannot be contended that it was not the intention of the grantors to reserve a one-half interest in the minerals. Reservations and exceptions are construed as being interchangeable terms and the meaning must be determined by reference to the subject matter. In discussing a distinction between reservations and exceptions, in the case of Federal Land Bank of New Orleans v. Cooper, 190 Miss. 490, the Court stated: "While there is a distinction between reservations and an exception in the 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 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 as originated by the conveyance."
In discussing the meaning of a reservation which contains the words "subject to" we find that the Supreme Court of Illinois in the case of Harley v. Magnolia Petroleum Co., 37 N.E.2d 760, 137 A.L.R. 900, held that these words "subject to" are "words of qualification of estate granted".
II. Estoppel to deny validity of conveyances.
The appellees, according to the bill of complaint, certainly were undertaking at least to make a reservation of one-half of the minerals and they were selling the surface and one-half of the minerals only, and appellants understood that because nowhere in the bill of complaint do they say that they paid anything for this one-half of the mineral interest reserved. A fair construction of the bill of complaint is that the appellants paid only for the surface and one-half of the minerals and now apparently they propose to force the appellees to make them a present of the other one-half.
In vol. 5, Thompson on Real Property, Sec. 2607, it is stated: "A recital that the property granted is subject to a mortgaged described estops the grantee, and everyone claiming under him, from denying the validity of the mortgage, if such mortgage was in fact deducted from the amount of the consideration of the purchase. * * * A purchaser of land upon execution, `subject to whatever sum might be due upon the property by virtue of a certain mortgage', cannot dispute the fact of the mortgage or its validity. (Citing Conkling v. Secor Sewing Machine Co., 55 How. Prac. (N.Y.) 269). When one purchases land subject to a mortgage the land conveyed is as effectually charged with the encumbrance as if he had expressly assumed the payment of the debt secured, and he is not permitted to defend against the mortgage he has assumed to pay on the ground that it is not valid against his grantor, he is precluded from attacking its validity. * * * Failure or want of consideration as between the parties to a mortgage cannot be set up as a defense by a purchaser of the land `subject to the mortgage', which is in fact a part of the consideration, whether he has expressly assumed the mortgage as a part of the purchase money or not. A deed which recites that the property conveyed is subject to a mortgage in favor of a corporation estops a person claiming title through such deed from disputing the corporate existence of the mortgagee. * * * Recitals in a deed that the property conveyed is subject to encumbrances are binding upon a party claiming title under such deed."
III. Ratification.
The appellants, as shown by the bill of complaint, have ratified their deed of conveyance from the appellees with the reservation in it by their actions. The appellants entered into a lease contract, as shown by the bill of complaint, whereby they leased their one-half interest in a portion of the lands in 1945 to the Stanolind Oil Gas Company, and in 1947 to Sinclair Wyoming Oil Company in which they conveyed a leasehold interest in an undivided one-half interest in the minerals in the land described in their deed from the appellees and described in the bill of complaint. Koenig v. Calcote, et al., 199 Miss. 435; Crab, et al. v. Wilkinson, et al., 202 Miss. 774; Green v. White, (Texas), 143 S.W.2d 575.
This is an appeal from a decree which sustained a demurrer to a bill of complaint and finally dismissed the cause upon failure to amend the statement of the facts or grounds of the complaint.
The appellant, J.J. Wilson, purchased from the appellee J.A. Gerard, on May 8, 1939, by warranty deed, certain tracts of land for the sum of $1,750 in cash, and his deed of conveyance contained, immediately following the description of the lands, the following words: "Subject to one-half interest in mineral and oil rights as conveyed to Wm. Henderson." On May 14, 1949, the appellant filed his bill of complaint which alleged the foregoing facts, and further alleged that he had recently learned that the attempted exception was null and void for the reason that on the date of the conveyance from the appellee Gerard to him, no interest in the minerals and oil rights on the lands had ever been conveyed by his said grantor to Wm. Henderson, who, the bill of complaint alleges, was a nonexistent and fictitious person to whom a purported deed of conveyance was claimed to have been executed by the appellee Gerard on April 1, 1939, and for the purpose of cheating, wronging, and defrauding the appellant Wilson out of an undivided one-half interest in the oil, gas, and other minerals in, on, and under said land.
The purported conveyance from Gerard and wife of April 1, 1939, to said Henderson for an undivided one-half interest in and to all of the oil, gas, and other minerals under these lands appears to have been acknowledged on that date before the chancery clerk, but it was not filed for record until March 21, 1945. The conveyance from Gerard and wife to the appellant Wilson was executed on May 8, 1939, as aforesaid, and was filed for record on that date; and a deed of conveyance dated and recorded September 25, 1941, purports to have been executed by Wm. Henderson reconveying to the appellee Gerard the undivided one-half interest in said minerals which was claimed to have been purchased by him from Gerard under the date of April 1, 1939. Copies of these conveyances, together with a copy of the conveyance executed by Gerard and wife to the appellant Wilson on May 8, 1939, are all treated as being exhibits to the bill of complaint.
The bill of complaint further alleges that at the time of the execution of the deed from Gerard and wife to the appellant Wilson containing the words, "subject to one-half interest in mineral and oil rights as conveyed to Wm. Henderson," the said grantor, Gerard, knew that no such person as Wm. Henderson was in existence and that the deed executed by him to Henderson, and the subsequent deed from Henderson back to Gerard, were a part of a plan and scheme of the said Gerard to cheat, wrong, and defraud the appellant Wilson out of the said one-half undivided interest in the oil, gas and other minerals; that the appellant Wilson relied upon the representation as being true that his grantor, Gerard, had theretofore sold one-half of the minerals to the said Wm. Henderson; that the said Wm. Henderson being a fictitious person, the exception in the deed from Gerard to the appellant Wilson was null and void for the want of a grantee in esse, such as Henderson; and that, therefore, the title to all of the minerals under the land became vested in the appellant Wilson under and by virtue of the deed from Gerard to him of May 8, 1939.
The appellant relies in part upon the cases of Morgan v. Collins School et al., 157 Miss. 295, 127 So. 565, and Morgan v. Collins School House, 160 Miss. 321, 133 So. 675, which expressly hold that a deed having no grantee in esse is void.
The result of the well-settled rule as announced in the foregoing decisions is that if there were no such person in esse as Wm. Henderson when the conveyance of April 1, 1939, was executed by the Gerards to such a named fictitious grantee, as alleged in the bill of complaint, it would follow that the Gerards were not thereby divested of any part of the minerals under the lands thereafter sold to the appellant Wilson. But the point at issue on this appeal is whether or not the one-half undivided interest in the minerals which the Gerards purported to convey when they named Henderson as grantee became vested in their subsequent grantee Wilson under the deed of May 8, 1939, conveying to him the land "subject to one-half interest in mineral and oil rights as conveyed to Wm. Henderson" or remained in the Gerards as grantors of the said Wilson.
In the case of Morgan v. Collins School et al., supra [ 160 Miss. 321, 133 So. 675] J.W. Morgan and wife filed their bill of complaint to cancel as a cloud upon their title a deed from their grantors C.C. and C.E. Collins "to the Collins Graveyard and Collins School House", bearing date of August 13, 1904, and specifically describing about two acres of land by metes and bounds, under a legal description. The deed from the Collins to the Collins Graveyard and Collins School House contained a provision which read: "When the above described land and house thereon ceases to be used for school and church purposes said land to revert back to the parties making this deed." It appears that the Lebanon Baptist Church was located on the land but that no school house was ever established thereon. An examination of the original appeal record in the case, reported in 160 Miss. 321, 133 So. 675, discloses that on March 28, 1929, the said C.C. and C.E. Collins conveyed the same two-acre tract of land, without any exception or reservation, to J.W. Morgan and wife. The Court held on the first appeal in the Morgan case, as reported in 157 Miss. 295, 127 So. 565, that the trial court was in error in sustaining a demurrer to the bill of complaint filed by J.W. Morgan and wife to cancel the deed from their grantors to the Collins School House and the Collins Graveyard, since the deed to the Collins School House and Collins Graveyard was void for the want of any legal entity or person named therein as grantee, and therefore reversed and remanded the case, because J.W. Morgan and wife had alleged that they held a deed describing the entire property in question, and that the void deed theretofore executed by their grantors to the school house and graveyard was a cloud upon their title which they were entitled to have cancelled as such.
On the second appeal, as disclosed by the original appeal record hereinbefore mentioned, the deed from C.C. and C.E. Collins to the appellant J.W. Morgan and wife is fully set forth in the record, and, as heretofore stated, contains no reservation or exception. In other words, on the second appeal, the Court held in effect that the void attempt of C.C. and C.E. Collins to convey the land to the Collins School House and the Collins Graveyard resulted in leaving the title of the two acres of land in the said grantors, and that therefore the title thereto passed from the Collins to the Morgans under their subsequent deed of March 28, 1929. The Morgans obtained title to the land, however, by reason of their own deed from the Collins conveying the land to them, and not by reason of any exception thereof in their deed.
Moreover, it further appears from the record on the second appeal of the Morgan case that C.C. and C.E. Collins had on October 16, 1925, conveyed certain lands to W.D. English "less that portion of the said forty acres heretofore deeded to Lebanon church and graveyard". The exception in the deed to English of the land theretofore sold to the Lebanon Church and Graveyard — nonexistent legal entities — did not have the effect of conveying to English the land on which the Lebanon Church and Graveyard were located, and the Court expressly so held when it stated "This land was not conveyed to English by the conveyance of 1925, but was reserved to the owners, C.C. Collins and C.E. Collins." It would appear that W.D. English, who received a deed excepting land theretofore sold to the Lebanon Church and Graveyard, was in the same position that the appellant Wilson is now in in the present case. As above shown, English received his deed to certain lands, less that theretofore deeded to the Lebanon Church and Graveyard, on October 16, 1925, long prior to the receipt of the deed by the Morgans from the same grantors on March 28, 1929, but the Court held that the Morgans instead of English acquired the title to the land on which the church and graveyard was located, and of course on the theory that the title thereto had remained in the Collins unaffected by the void conveyance thereof to a school house and graveyard.
In the instant case the bill of complaint alleges that the appellant Wilson relied upon the representation that one-half of the minerals had been previously sold to Wm. Henderson at the time the Gerards sold the land to him subject thereto. In other words, Wilson alleges, in effect, in his bill that he understood that he was only purchasing the land and one-half of the minerals.
(Hn 1) If the allegations of the bill are true, and we must assume that they are true for the purpose of the demurrer, then the Gerards were guilty of unethical conduct in representing to the appellant Wilson that they had previously sold one-half of the minerals to Henderson, but this would not amount to a legal fraud since the grantee Wilson would have received only one-half of the minerals if the representation had been true that one-half thereof had been previously sold to Henderson. A different situation would be presented if this were a suit by the Gerards or their heirs at law to cancel their deed to Henderson as a cloud upon their title on the ground that the Gerards were fraudulently induced to execute a deed to a fictitious person, or if they had done so in the absence of fraud but through mistake as to the existence of such a person. In either event, the title would have remained in the Gerards and the conveyance to a nonexistent grantee would have left the title remaining in the said grantors.
In 26 C.J.S., Deeds, Section 140a, p. 451, it is stated: (Hn 2) "In general a grantor who makes a reservation or exception to his grant does not part with his full title or dominion. Property which is excepted is not granted; it does not pass to the grantee, but, where not already outstanding in another, necessarily remains with the grantor." In the same text, 26 C.J.S., Deeds, Section 140a, at page 450 it is stated that an exception will be good as to property recited to have been previously sold or conveyed, although the recital is false. And in a leading Texas case of Reynolds et al. v. McMan Oil Gas Company et al., Tex. Com. App., 11 S.W.2d 778, 781, it is stated, among other things, that "for the purpose of determining the extent of the grant, however, the distinction between exceptions and reservations is of no practical importance, since whether the one or the other the property excepted or the estate reserved is never included in the grant." Again in the case of Georgia Vitrified Brick Clay Company v. Georgia Railroad and Banking Company, 148 Ga. 650, 98 S.E. 77, it was held that "Where a deed excepts from its provisions certain land as conveyed in a specified deed recited to have been formerly executed by the grantor to another person, such grantee does not thereby acquire the land so excepted; * * *. It would not affect the case even if the former deed had not been delivered, or if the witnesses thereto were incompetent, * * * or if the grantee in the senior deed (a corporation) did not have charter power to own land."
In the case of Cook v. Farley, 195 Miss. 638, 15 So.2d 352, 354, it was held that a provision in a deed, excepting from the conveyance of land all minerals, which it recited that grantors had promised to convey to their son, was effective to retain title to minerals in the grantors, though no estate therein passed to the son; that an exception by deed in favor of a stranger thereto cannot operate as a conveyance of excepted land to him, though effectual to prevent title thereto from passing to grantee, whose acceptance of deed precludes him from asserting title to excepted land. It is recognized that a different factual situation prevailed in that case from that which exists in the case at bar, but we are of the opinion that the principles announced therein do have application to the question now before us. In that case, Mrs. Ettie C. Cook, and her husband, Dr. E.R. Cook, conveyed certain lands to B.L. Goss, and excepted from the conveyance "all oil, gas and mineral deposits on said lands, which the grantors hereto have promised to convey to Aquilla B. Cook," the latter being the son of the grantors therein. Thereafter, Aquilla B. Cook undertook to convey the minerals to the said Goss, who thereafter undertook to sell both the land and the minerals to Farley. The Court held that the title to the minerals remained in Mrs. Ettie C. Cook. In other words, the exception was held to have had the effect of causing the title to the minerals to remain in Mrs. Ettie C. Cook, and that the exception was invalid and ineffectual to vest the title to the minerals in her son. By analogy, the fact that no title passed to her son by virtue of the exception, it did not result therefrom that the title became vested in her grantee Goss. As stated above, that case is not directly in point here, but the principles therein announced are persuasive on the question at issue.
We are not unmindful that there is a statement in 16 Am. Jur. 610, Section 301, which tends to support the contention of appellant and that there are some to the contrary, but we are of the opinion that the Morgan cases, the case of Cook v. Farley and some cases from other jurisdictions are in support of the action of the trial court in sustaining the demurrer to the bill of complaint in the instant case, and that the decree appealed from should therefore be affirmed.
Affirmed.
Lee, Kyle, Arrington and Ethridge, JJ., concur.