Summary
holding there was no "visible" circumstance pointing to claimant as possessor of field and noting that "all authorities agree" that the possession must be "open, visible, and unequivocal" to impute notice to a potential purchaser
Summary of this case from Madison v. GordonOpinion
No. 4162.
April 21, 1932. Rehearing Denied May 5, 1932.
Appeal from District Court, Smith County; Walter G. Russell, Judge.
Suit by Johnnie Jackson against M. C. De Guerin and others. From judgment for plaintiff, defendants appeal.
Affirmed in part, and reversed and rendered in part.
The suit was instituted by Johnnie Jackson on March 18, 1931, against M. C. De Guerin, J. C. Falvey, J. S. Rushing, and J. B. Blanchard. The action, as respects the defendant M. C. De Guerin, was in the aim and purpose of having a decree of specific performance of a contract of conveyance of 50 ares of land, divesting the apparent legal title out of M. C. De Guerin and vesting it in the plaintiff, claiming that M. C. De Guerin held the title in trust for the plaintiff's benefit. In the alternative, the plaintiff sought to recover of M. C. De Guerin the value of the mineral interests conveyed to the other three defendants mentioned in case the plaintiff was not entitled to recover against such other defendants. As respects the remaining three defendants, the plaintiff sought the cancellation of an oil and gas lease of the land by M. C. De Guerin to the defendants, claiming they purchased with notice of the plaintiff's rights and as casting a cloud upon the plaintiff's title to the land.
The defendant M. C. De Guerin entered a general denial, plea of not guilty, and specially pleaded in substance, that the agreement was unilateral and never accepted, and the proposal of agreements therein was withdrawn before acceptance of the same by Johnnie Jackson; estoppel to enforce the agreement; consent and acquiescence of Johnnie Jackson in the making of the lease in suit by M. C. De Guerin.
The defendants pleaded not guilty and adopted the answer of M. C. De Guerin. The defendants J. C. Falvey and J. S. Rushing further pleaded that they were innocent purchasers for value without notice, having taken the lease relying on the record title with no one in visible actual possession of the premises.
The statement of the evidence more clearly outlines the case and the controversy between the parties:
The 50 acres of land in suit, a part of the Dugald Shaw headright in Smith county, was owned by Jack Cole as community property. At his death he left surviving him his wife, Eliza Cole, and seven children. The wife, Eliza Cole, died in 1928. Johnnie Jackson's mother was a surviving daughter and heir of Jack and Eliza Cole. In December, 1929, all of the heirs of Jack and Eliza Cole duly executed and acknowledged a general warranty deed conveying to M. C. De Guerin the fifty acres of land reciting the consideration to be "Two Hundred and Thirty-five ($235.00) Dollars to us paid by M. C. De Guerin, cash in hand, the receipt of which is hereby acknowledged." The deed bears no date, but the dates of each of the several acknowledgements of the different heirs show dates from December 17, 1929, to February 1, 1930. The deed was duly filed for registration in the county clerk's office on February 7, 1930. So far as the deed records show, the title to the land, as evidenced by this deed, reposed in M. C. De Guerin to the date of this suit and the trial of the case. It appears practically without dispute that some six weeks before this deed was made in December, 1929, Johnnie Jackson approached Mr. De Guerin to have him advance the money and pay to each heir the purchase price of and acquire by deed their interest in the land. Mr. De Guerin thereupon paid the heirs the agreed upon purchase price for their respective interests and paid some several years back taxes due on the land, and notary fees in the execution of the deed to him, all aggregating $609.40. On December 19, 1929, M. C. De Guerin signed and delivered to Johnnie Jackson the written instrument reading:
"J. O. Tucker, Agent "M. C. De Guerin, Manager "General Merchandise"Overton, Texas, Dec. 19, 1929.
"This is to certify that I have this day agreed to sell the fifty acre tract of land bought of the Eliza Cole heirs to Johnnie Jackson for the purchase price that I had to pay for same plus all expense that I am out on said place, including interest and other expense, and I further agree to make said Jackson a deed to same as soon as he can make me a payment on same to the amount of $100.00 cash, this will hold good for three years. I am to hold all mineral rights to same for this length of time.
"M. C. De Guerin."
This instrument was not recorded. The evidence in behalf of Johnnie Jackson is, in effect, that the heirs of his grandmother Cole wanted him for sentimental reasons to acquire the 50 acres and offered to sell it to him; that Mr. De Guerin agreed to advance the purchase price and pay the back taxes and to take the deed in his own name and to give Johnnie Jackson three years within which to pay such consideration for the land and to execute a deed to him as soon as he could make payment of as much as $100 cash of the amount advanced. Johnnie Jackson at the time was residing with his wife and children, and cultivating as a share-cropper, upon a portion of the farm of some 500 acres, known as the Mayfield farm, managed and controlled by Mr. De Guerin, and was being furnished supplies out of the store being operated by Mr. De Guerin. Johnnie Jackson has continued to live and has not removed from the Mayfield farm. The 50-acre tract in suit appears to adjoin the survey in which the Mayfield farm is located, and has no buildings or improvements Upon it. Johnnie Jackson and his family, as he says, "lived on the Mayfield tract something like a quarter of a mile from this land" (the 50 acres). A small part of it had been cultivated by some of the Eliza Cole heirs or their tenants prior to the deed to M. C. De Guerin. According to the evidence in behalf of Johnnie Jackson, following the deed to Mr. De Guerin, he cleaned up the hedges and underbrush on about 10 acres of the land, reconstructed a part of the old fence on the west side of the tract that was dilapidated, and put into cultivation about 30 acres in cotton. He raised five and one-half bales of cotton during that year of 1930. No one else but Johnnie Jackson and his family worked on the land or had any part of it in cultivation, and he claimed the land as his own. There is evidence that the people of the neighborhood generally understood that Johnnie Jackson had bought out the interest of the heirs in the land, and that the land belonged to Johnnie Jackson. The evidence shows, as testified by Johnnie Jackson, that "some three sides of that land in controversy was not fenced last year (1930)."
The evidence in behalf of Mr. De Guerin goes to show the absolute and outright purchase of the land by him from the heirs of Eliza Cole, and the execution and delivery of the instrument to convey the land to Johnnie Jackson and that Johnnie Jackson as his tenant used and cultivated some of the land in cotton in 1930, paying as rent one-fourth of the cotton.
In November, 1930, Johnnie Jackson offered to pay to Mr. De Guerin $371, being interest and expenses of the purchase, and asked for a deed, and Mr. De Guerin offered to make the deed, but with reservation to him of the minerals of the land. Johnnie Jackson refused to take the deed to the surface alone of the land and without the mineral rights. Again, in 1931, before this suit was filed, Johnnie Jackson tendered $100 cash payment to Mr. De Guerin and asked for a deed to the land, and Mr. De Guerin offered, and Johnnie Jackson refused to accept, a deed to the surface only of the land with reservation of mineral rights of the land.
On October 4, 1930, M. C. De Guerin executed a lease of the land for a term of ten years to J. C. Falvey and J. S. Rushing for exploration for oil and gas. The defendant Blanchard acquired a fourth of the one-eighth oil royalty through M. C. De Guerin. There is evidence showing that Johnnie Jackson aided Mr. De Guerin in procuring curative deeds from the heirs of Eliza Cole in the purpose to lease the land. There is evidence going to show, and there is affirmative evidence to the contrary, making an issue of fact for the jury, that Johnnie Jackson authorized Mr. De Guerin to lease the premises for oil and gas, and acquiesced in the execution and delivery of the lease by Mr. De Guerin.
The jury made answers to the following issues submitted to them:
"Question No. 1: Did Johnnie Jackson accept the terms of the written contract introduced in evidence, signed by M. C. De Guerin, and agree to pay the consideration therein named, at the time said contract was delivered to him? Answer: Yes.
"Question No. 2: Did Johnnie Jackson take possession of the land in question immediately or soon after the execution of the written instrument executed by De Guerin? Answer: Yes.
"Question No. 3: At the time M. C. De Guerin executed the oil and gas lease to J. C. Falvey and J. S. Rushing, introduced in evidence, was Johnnie Jackson in possession of the land in question? Answer: Yes.
"Question No. 4: At the time M. C. De Guerin executed the royalty conveyance to J. B. Blanchard, introduced in evidence, was Johnnie Jackson in possession of the land in question? Answer: Yes.
"Question No. 5: Was the possession of said land, if any, by Johnnie Jackson, actual, visible and notorious? Answer: Yes.
"Question No. 6: Did Johnnie Jackson at the time he aided M. C. De Guerin to procure correction deed from some of the heirs of Eliza Cole agree that M. C. Guerin alone should lease the land? Answer: No."
"Question No. 8: Did Johnnie Jackson, on or about the 14th of March, 1931, agree with M. C. De Guerin that M. C. De Guerin could thereafter have the right to hold and sell all mineral interest and royalty respecting said land, and that Johnnie Jackson could have the right to hold and keep all the surface of said land, and as consideration for said agreement M. C. De Guerin would mark paid the account of Johnnie Jackson and convey him the surface rights of said land? Answer: No."
"Question No. 10: What is the present market value, if any, as shown by the evidence, of an oil and gas lease covering the land in question? Answer by stating the amount. Answer: $37,500.00.
"Question No. 11: What is the present market value, if any, of one-fourth of the minerals in and under said land subject to an oil and gas lease? Answer by stating the amount. Answer: $15,000.00."
Special issue requested by the plaintiff and submitted by the court, Nos. 1 to 4, inclusive, were as follows:
"Special Issue No. 1: Was it agreed by Johnnie Jackson and M. C. De Guerin that M. C. De Guerin would advance the money necessary to purchase the land from the Eliza Cole heirs, and take the deed in his own name, and that Johnnie Jackson would, within three years, pay to M. C. De Guerin the amount so advanced, and such other expenses as he incurred on the place, with ten per cent interest per annum thereon? Answer: Yes.
"Special Issue No. 2: Did M. C. De Guerin acting upon the agreement, if any found in the answer to the foregoing question, purchase said land and take the deed in his own name? Answer: Yes.
"Special Issue No. 3: Was it the agreement of Johnnie Jackson and M. C. De Guerin that M. C. De Guerin should advance the money necessary to purchase the land from the Eliza Cole heirs, and that Johnnie Jackson would, within three years, pay said De Guerin the amount so advanced and for expenses incurred together with interest thereon at the rate of ten per cent per annum, and that he, M. C. De Guerin, take the deed in his own name to secure such payment? Answer: Yes.
"Special Issue No. 4: Did M. C. De Guerin acting under the agreement, if any you find in answer to question three, purchase said land, and take the deed in his own name as security? Answer: Yes."
Special issues and answers thereto requested by the defendants and given by the court were as follows:
"Special Issue (a): Did the plaintiff and the defendant M. C. De Guerin on or about March 14, 1931, agree substantially that the plaintiff should have his store account with the said De Guerin cancelled and receive the surface rights to the land in suit, and that De Guerin should have the right to sell the royalty? Answer: No."
"Special Issue (c): Did the plaintiff, before the oil and gas lease introduced in evidence was delivered to Falvey and Rushing, agree to and acquiesce in M. C. De Guerin executing and delivering an oil and gas lease on the land in question? Answer: No."
"Special Issue (g): Did the plaintiff accept delivery from defendant M. C. De Guerin of the memorandum dated December 19, 1929, respecting the sale of the land to plaintiff by said De Guerin, in the manner and form that said instrument was written? Answer: Yes."
In keeping with the verdict of the jury, the judgment was rendered in favor of the plaintiff, decreeing, namely (1) that Johnnie Jackson pay into court for the benefit of M. C. De Guerin the purchase price of $609.40 and he have specific enforcement of the contract of conveyance of the land by M. C. De Guerin, and (2) such decree have the force and effect of a conveyance from M. C. De Guerin to Johnnie Jackson, and (3) canceling and removing the cloud from the title to the land of the leases and conveyance to the several defendants. The defendants have timely appealed from the judgment.
Saye, Smead Saye, of Longview, Lasseter, Simpson Spruiell, of Tyler, and W. Ernest West, of Canton, for appellants.
Warren Warren, of Tyler, for appellee.
The appellant M. C. De Guerin predicates error in refusing to enter judgment in his favor because (1) the agreement as respects the sale and conveyance of the land to Johnnie Jackson expressly provided that M. C. De Guerin should hold and retain the mineral rights to the land during the period of three years, and (2) the evidence established that M. C. De Guerin timely tendered and Johnnie Jackson refused a conveyance of the land with the reservation for three years of the minerals in the land, and (3) the suit was prematurely brought and cannot be maintained in specific performance. There is involved in the points made the construction of the written instrument in evidence executed on December 19, 1929. The only point of doubt is as to the meaning of the following part, namely: "I am to hold all mineral rights to same for this length of time." The appellant insists that the provision was intended, and should be given the meaning, as absolutely excepting and reserving from the sale for the period of three years of all mineral privileges or rights, exclusive of the estate in the surface, in the land. In such case, in the circumstances, there could not be predicated a present failure of compliance by M. C. De Guerin with the terms of the agreement, for the fact was established by the evidence that a timely tender was made and refused of a deed to the estate in the surface, exclusive of the estate in the minerals. There is doubt, though, that the meaning contended for can be given to that part of the agreement when the whole agreement is duly considered. By the terms of the agreement M. C. De Guerin was "to sell" and to make "a deed to same" to Johnnie Jackson, not alone of the estate in the surface of the land exclusive of the estate in the minerals, but "the fifty acre tract of land bought of the Eliza Cole heirs." The time limit beyond which the agreement "to sell" and make "a deed" would not extend was expressly fixed, namely, "for three years." Within the period of such time limit, Johnnie Jackson was expressly required to make full payment of the consideration, and, if done then, he was entitled at once to absolute conveyance of the entire tract of land, but, in case he wanted a deed to the land before payment of the full consideration, it was allowable to him to have M. C. De Guerin execute and deliver the deed by paying as much as "the amount of $100.00 cash," and making provision for the timely payment of the balance. It is believed, from the review of the agreement, that the absolute conveyance in fee simple of the land and the minerals lying thereunder and the payment of the purchase money were intended to be concurrent acts and dependent promises. There was not intended to be a separation of the estate in the minerals from the estate in the surface, and a reservation from sale of the mineral rights for the entire three years, with a conveyance only of the surface, exclusive of the minerals, on any day within the three years' time limit that the consideration or as much as $100 may be paid. The words, as used, of "hold all mineral rights" for three years, merely fixes, as intended should be, the time limit beyond which the agreement to sell and convey the land inclusive of minerals would not go. This construction gives effect to every part and harmonizes the entire instrument. In this construction as given the instrument, Mr. De Guerin was obligated to perform its terms. The jury found, and the evidence supports the finding, that Johnnie Jackson accepted the agreement and made timely tender of the required consideration and demanded a deed. His refusal to accept a deed to the estate in the surface exclusive of and with reservation of the mineral rights was not tantamount to a refusal to accept and abide by the written agreement evidenced by the written instrument of December 19, 1929.
The appellant J. B. Blanchard presents the same points, based on the same assignments in the brief, as has the appellant M. C. De Guerin, and, for the same reasons given above, the points and assignments are likewise overruled. The trial court having correctly construed the instrument in evidence, his conclusion, it is thought, should be sustained, and the decree as entered, as respects the appellants De Guerin and Blanchard should be in all things affirmed, with the modification of such decree and additional terms of adjudication so far as respects the appellant M. C. De Guerin, that Johnnie Jackson do have and further recover, as prayed for, of M. C. De Guerin the sum of $37,500, the value, as found by the jury, of the lease executed by M. C. De Guerin to J. C. Falvey and J. S. Rushing on October 4, 1930.
The appellants J. C. Falvey and J. S. Rushing present the points that (1) Johnnie Jackson authorized M. C. De Guerin to execute the lease to them, and (2) Johnnie Jackson is estopped to question the validity of the lease, and (3) they are innocent purchasers for value without notice, as shown in the circumstances.
The verdict of the jury, upon conflicting evidence, was a finding adverse to the contention made by, and in legal effect conclusively determines, the points first mentioned.
As respects the third point, it was established by the evidence that the record title to the 50-acre tract reposed, as it had since February, 1930, in M. C. De Guerin on October 4, 1930, the time he executed the lease to the appellants Falvey and Rushing. The agreement of M. C. De Guerin of December 19, 1929, to convey the land to Johnnie Jackson was an unrecorded instrument. There is no pretense in the evidence that these appellants had actual notice of any claim to the land or rights therein of Johnnie Jackson. The possession of the land on the part of the appellant Johnnie Jackson is relied upon as being sufficient to serve the purpose of notice to appellants as against the legal record title in M. C. De Guerin. These circumstances of possession are without conflict. It was proven that following the execution of the agreement of December 19, 1929, Johnnie Jackson, in the view of planting a cotton crop on the land, cleaned up the hedges and underbrush on about 10 acres, reconstructed a part of the old dilapidated fence on the west side of the tract, and plowed and put into cultivation about 30 acres in cotton. He had planted and cultivated some part of the land in 1929 after his grandmother Cole died in 1928, and before the deed was made by the heirs to De Guerin. Three sides of the land were not fenced, and there was no house nor any character of improvements on the land. Johnnie Jackson and his family resided on the Mayfield farm, and his residence was located "about one quarter of a mile from this land." The Mayfield farm is a distinct tract of land from the 50 acres in suit, although it adjoins the D. Shaw survey in which the 50 acres is located. He was living on this Mayfield farm with his family as a tenant before his grandmother died in 1928, and has continuously lived thereon since that time. Johnnie Jackson made no tender of the purchase money to M. C. De Guerin until November, 1930, after the execution of the lease on October 4, 1930. The only evidence or mark of possession of the land by Johnnie Jackson on October 4, 1930, was the bare fact of a growing cotton crop on 30 acres which he planted and raised during the year 1930. In the circumstances, was there sufficiency of acts of actual possession of the land to affect a bona fide purchaser with notice of the title or interest of Johnnie Jackson? The question must be determined as a matter of pure law, for otherwise the verdict of the jury would be decisive as a question resting in pure fact. The doctrine of constructive or implied notice effected through possession of land rests upon the theory, not of constructive possession, but of actual possession of the land. All the authorities agree that possession, in order to constitute notice, must be actual possession of the party, or his agent or tenant, consisting of acts of occupancy which are open, visible, and unequivocal, and in nature sufficient upon the observation of a subsequent purchaser to put him on inquiry as to the rights of the possessor. Blankenship v. Douglas, 26 Tex. 225, 82 Am.Dec. 608; Ramirez v. Smith, 94 Tex. 184, 59 S.W. 258; Aurelius v. Stewart (Tex.Civ.App.) 219 S.W. 863; Evans v. Foster, 79 Tex. 48, 15 S.W. 170; 2 Pomeroy Eq.Jur. (4 Ed.) § 620; 46 C.J. § 38, p. 547. It must not be equivocal or casual. Murphy v. Welder, 58 Tex. 235; Fuentes v. McDonald, 85 Tex. 132, 20 S.W. 43; Vineyard v. Brundrett, 17 Tex. Civ. App. 147, 42 S.W. 232. In the light of the doctrine it is difficult from a practical standpoint to say that the present situation, as seen by a person at the time the lease was taken, disclosed an actual possession or occupancy of the land sufficient to constitute constructive notice. There was no actual occupation of the land by anybody, and there was no visible possession or control, except as could be inferred from the bare fact of the cotton crop being on the land. The cotton crop, which was the only mark of ownership or actual possession set on the land, was consistent with the physical possession by the owner of the record title, and not compelling of observation that there was some other possessor different from the owner of the record title. A person examining the appearance on the ground would have noticed a tract of land, distinct from any other farm, unfenced on three sides, without structures and with no person residing on or by it. The only act of visible possession of the land that he could see would be the cotton patch in such state as it ordinarily appears in the fall of the year in October. It is believed that such bare fact would not be such a visible state of things as would in any wise be inconsistent with a perfect right in the grantor who executed the lease. The appellants were not under obligation to make inquiry of persons living near the land in the absence of actual notice to appellents that such persons had knowledge of facts in reference to the title. Bounds v. Little, 75 Tex. 320, 12 S.W. 1109. The cases cited of Stewart v. Polk, 26 Tex. Civ. App. 565, 64 S.W. 818, and Collum v. Sanger Bros., 98 Tex. 162, 82 S.W. 459, 83 S.W. 184, have factual elements differentiating them from the present case. In the Polk Case there was a visible occupancy and possession both present. The outside gates of the lot were nailed up and the gateway was opened up in the cross-fence between the lot and Stewart's premises on which he resided. In the Collum Case, Mrs. Collum set up corner stones and built a fence between the tracts, and, although she never lived on the land, yet her tenants occupied and were in actual possession of the same.
The judgment, as respects the appellants Falvey and Rushing, should be and is reversed and here rendered as to deny the plaintiff Johnnie Jackson a cancellation of the lease to J. S. Rushing and J. C. Falvey executed by M. C. De Guerin on October 4, 1930, but vest in J. S. Rushing and J. C. Falvey the rights provided therein by its terms and conditions to explore for gas, oil, and other minerals, and absolutely vest in Johnnie Jackson all rights therein provided of one-eighth royalties, rentals, and other emoluments, against J. S. Rushing, J. C. Falvey, M. C. De Guerin, and J. B. Blanchard.
The costs of appeal will be taxed one-half against M. C. De Guerin and J. B. Blanchard, jointly and severally, and one-half against Johnnie Jackson.
Judgment affirmed in part, and reversed and rendered in part.