Summary
involving lease for oil and gas and an acknowledgment by telephone
Summary of this case from Baer v. HendrenOpinion
No. 20297
Decided June 22, 1927.
Landlord and tenant — Lease, acknowledged over telephone, cannot be challenged by lessor, when — Lessor, acknowledging lease over telephone, cannot quiet title against lessee — Subsequent lessee, with knowledge, cannot quiet title against first lessee, when.
1. A lessor of a lease, who admits signing it and who makes no complaint that his signature was procured or induced by deception or fraud, cannot, after delivering to the lessee such lease which has a regular statutory certificate of acknowledgment appended thereto by the officer taking it, claim that the lease is invalid, on the sole ground that the acknowledgment of his signing was procured by telephone. Baldwin v. Snowden, 11 Ohio St. 203.
2. In a cross-action to quiet title against his lessee, the lessor admitted signing a lease for oil and gas in the presence of one witness; he also admitted that, over the telephone, he acknowledged his signing to a justice of the peace, who thereupon attested such signing by subscribing his name as a witness thereto. The justice of the peace also certified to such acknowledgment in a statutory certificate regular upon its face. No complaint was made by the lessor that any deception, fraud or duress was exercised in the procurement of his signature or in the acknowledgment. For the period of nearly four years thereafter said lessor, under the terms of the lease, received from the lessee, quarterly payments of rentals for delayed drilling, amounting in the aggregate to the sum of $376.00, none of which has been tendered back to the lessee.
Held: Under the facts thus developed, the lessor cannot successfully maintain his action to quiet title against his lessee, on the sole ground that such acknowledgment was taken by telephone.
3. Where such lease bears a statutory certificate of acknowledgment regular upon its face, and the lease, together with the acknowledgment, has been duly recorded, a subsequent lessee, who obtains from the game lessor a later lease for oil and gas upon the same premises knowing that the prior lease had been recorded and knowing also the circumstances set forth in the second proposition of this syllabus, cannot maintain an action to quiet title against the lessee of the recorded first lease.
ERROR to the Court of Appeals of Guernsey county.
In the common pleas court, the Logan Gas Company brought suit against defendants in error, seeking the quieting of its title, and asking an injunction preventing defendants from drilling for oil and gas on lands which the gas company alleged it held under lease for oil and gas. It alleged that M.K. Wells, who was the owner of said land, joined by his wife, Eva K. Wells, on October 26, 1922, executed to the predecessor of the Logan Gas Company a lease in writing, and thereby granted to it all the oil and gas thereon on certain terms which are here unimportant; that this lease was placed on record in the recorder's office of the proper county on _____ day of _____, 1922; that the lease was assigned in writing, by the lessee, to this plaintiff in error, and this assignment was also recorded, on January 13, 1923. It alleged that the defendant Keith and others have entered upon the lands and are threatening to drill thereon for oil and gas owned by the Logan Gas Company; and that the gas company has itself surveyed and marked a location for its drilling of an oil and gas well thereon, but that defendants are refusing the plaintiff's right to enter, and are resisting it from. so doing.
To the petition of the gas company was attached an exhibit, a copy of its lease of October 26, 1922, and purporting to have been signed by Wells and wife and witnessed by one E.J. Weiss and Thomas McMullen. The lease also bore on its face an acknowledgment, purported to have been executed by one McMullen, as justice of the peace, reciting that "personally came the within named M.K. Wells and Eva K. Wells, the lessors in the within lease, and acknowledged the signing thereof to be their voluntary act and deed," etc. McMullen signed the acknowledgment as said justice of the peace.
To this petition Keith and the other defendants interposed an answer and cross-petition, alleging that the lease of October 26, 1922, was not signed by Wells and wife, or either of them, in the presence of two witnesses, and that the lease was not "acknowledged by said Wells and wife, or either of them in the presence of two or more witnesses," that the said witnesses did not attest the signatures of said lessors, and "that one Thomas McMullen, claiming to have certified such acknowledgment as a justice of the peace in and for said county, certified thereto without said M.K. Wells having appeared before him in person and acknowledging said alleged lease, or its signing, and without they two having been in the presence of each other at any time or place for such purpose."
The cross-petition alleged that said Wells and wife on August 11, 1926, executed a lease of the premises for oil and gas to the cross-petitioner, the defendant Keith, who entered on said lands and took possession for the purpose of drilling for oil and gas. Defendants admit plaintiff entered upon the lands for survey and location, but allege that this was done about two years prior to the beginning of the suit, and that the only marking was the driving of a stake upon the premises. The cross-petitioners alleged that the plaintiff's lease, and its record, was a cloud upon Keith's title, and they asked the court for the quieting of their title and possession, for an injunction, and for other proper relief.
The plaintiff replied, traversing the cross-petition. The cause was heard in the trial court, which found the issues in favor of plaintiff, and held that plaintiff's lease was a valid one. It quieted plaintiff's title to the leasehold, and enjoined the defendants from setting up any claim to the premises adverse to plaintiff's title. The cause was then appealed by defendants to the Court of Appeals, and that court, finding in favor of Keith's lease, held that the gas company's lease was "ineffectual at law to confer any rights or interest claimed by plaintiff, because the same was neither witnessed in the manner required by law nor acknowledged before an officer in the manner required by law." The appellate court quieted the title and possession of the leased premises in the defendants below and enjoined plaintiff from asserting or exercising any right, estate, or interest in the oil and gas on and about the premises. It also canceled the plaintiff's lease.
From this judgment, the gas company prosecutes error to this court.
Mr. Charles S. Sheppard, for plaintiff in error. Mr. Fred L. Rosemond, and Mr. George D. Dugan, for defendants in error.
Section 8510, General Code, contains the following provision:
"A deed, mortgage, or lease of any estate or interest in real property, must be signed by the grantor, mortgagor, or lessor, and such signing be acknowledged by the grantor, mortgagor, or lessor in the presence of two witnesses, who shall attest the signing and subscribe their names to the attestation."
The section then provides that the signing must be acknowledged by the lessor before certain officials named therein, included among whom is a justice of the peace.
It is claimed by the defendants in error that the lease of October 26, 1922, to the gas company was invalid, because it was improperly executed; that it was not signed and acknowledged by the lessors in the presence of two witnesses, as required by statute; and, especially, that the acknowledgment of the husband, Wells, taken by the justice of the peace over the telephone, was not in compliance with the statute, since it was not taken in the physical presence of said lessor.
McMullen, one of the witnesses to the lease and the justice of the peace who took the purported acknowledgment, was not a witness at the trial. The Wells, both husband and wife, as well as Weiss, one of the witnesses, did testify. The manner in which the signing and acknowledgment were done is substantially without dispute. Weiss took the paper to the home of the Wells. Both of the lessors admitted having signed the lease in the presence of Weiss, who signed and attested the paper as one of the two witnesses. McMullen, the justice of the peace, lived about three miles from the Wells home. After the paper had been signed by the husband and wife, and by the witness Weiss, McMullen appeared at the Wells home and saw the wife, and it is very evident from the testimony that her acknowledgment was taken at that time, since she admits that McMullen came to her house to take the acknowledgment, that she supposed he was coming there for that purpose, and that the lease signed by her was mentioned in the conversation relating thereto. However, she did not see the paper writing at the time McMullen was there. As to the attestation and acknowledgment of the husband, the testimony discloses that he admitted that he signed the lease as stated in the presence of Weiss. The husband testified that, within a week thereafter, McMullen, the justice of the peace, called him over the telephone, and that he thought he knew his voice; that McMullen asked him over the phone, "Have you signed the paper?" Wells testified that he answered that he had, and that he knew that McMullen was referring to the lease at the time.
For the purpose of this decision, therefore, it is substantially without dispute that both Wells and his wife signed the lease in the presence of one witness; and both admit their signatures. The appearance of the justice of the peace at the home of Wells, and his interrogating of Mrs. Wells with respect to the lease which she had signed, is, we think, sufficient acknowledgment of her signature before that officer. However, the signing and acknowledging of the lease, while admitted by the husband, were not actually done in the presence of McMullen, the justice of the peace; but there is no doubt that the acknowledgment was taken by telephone.
It has been held in this state that "a regular statutory certificate of the acknowledgment of a deed of conveyance, made by husband and wife, is, in the absence of fraud, conclusive evidence of the facts therein stated." Baldwin v. Snowden, 11 Ohio St. 203, 78 Am. Dec., 303.
If it appeared that there was any fraud or imposition exercised upon Wells in the telephonic acknowledgment made by Wells, and taken by the justice of the peace, or that Wells had in some way been misled or deceived to his injury, he might, in that event, rely upon a full compliance of the statute requiring acknowledgment to be taken in his presence. However, both Wells and his wife admit the signature; they admit their intention to execute this lease to the gas company; no fraud or deception was practiced upon either of them. It is therefore difficult to see why, under the facts thus developed and the circumstances which will be noted hereafter, either of them could evoke the aid of a court of equity in order to escape the consummation of the purposes they actually intended. Wells and his successor in title sought the aid of a court of equity. Obviously, for reasons assigned later in this opinion, if Wells cannot obtain relief, neither can Keith, who obtained the second lease from Wells and his wife. Although Wells and his wife had executed the lease to the gas company in October, 1922, they did nothing to advise their grantee of the claimed invalidity by reason of the alleged defective acknowledgment. On the contrary, they waited for a period of nearly four years, until a short time before the suit was brought. Wells admitted that shortly before executing the lease to Keith he saw McMullen and told him that he could receive more rental compensation for his land if he had not acknowledged the lease over the telephone. Furthermore, it appears from this record, without dispute, that from October 25, 1922, to October 26, 1926, Wells and his wife had received the sum of $23.50 in quarterly payments for delayed operations under the terms of their lease to the gas company. This sum amounted to a total of $376, which Wells received during the four-year period. He also admits that he has neither tendered nor offered to tender any of this money back to the gas company.
As stated heretofore, the cross-petition of Wells and his codefendants was for the quieting of title, which this court has held to be a chancery proceeding. W. C. McBride, Inc., v. Murphy, 111 Ohio St. 443, 145 N.E. 855; Lust v. Farmers' Bank Savings Co., 114 Ohio St. 312, 151 N.E. 189. It therefore very clearly appears that even under his own admissions Wells, the holder of the fee, did not come into court with clean hands, and that the exaction of the pound of flesh which he now demands would be contrary to the principles of morality and fair dealing. His grantee, Keith, occupies no better position. For not only did he have constructive notice of the gas company's recorded lease, regular upon its face, but he admitted that he had learned from Wells of the latter's claim regarding the invalidity of the gas company's lease. Keith himself testified that he knew that the prior lease was recorded; that he learned from M.K. Wells "just what he [Wells] claimed was the matter with it;" and that he also had learned from Wells that the latter "had received the royalties up until October last [1926]."
It is argued by counsel for the defendants in error that the petition and proof of plaintiff below were insufficient to sustain an action to quiet title, because of failure to plead and prove possession. A complete answer to that contention is that Wells and Keith in their cross-petition asked for the same relief, and the cause was actually heard upon their cross-petition. The defendants thereby sought to sustain their own affirmative action to quiet title, which plaintiff resisted successfully in the trial court, but unsuccessfully in the appellate court.
The judgment of the Court of Appeals is reversed, and final judgment rendered for plaintiff in error.
Judgment reversed.
MARSHALL, C.J., ALLEN, KINKADE, ROBINSON and MATTHIAS, JJ., concur.
DAY, J., concurs in propositions 2 and 3 of the syllabus and in the judgment.