Howard v. Sun Oil Company

• Decision Date: 15 January 1969
• Docket Number: No. 25829.,25829.
• Parties: Andrew H. HOWARD and Mrs. Inez Howard, Appellants, v. SUN OIL COMPANY, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

404 F.2d 596 (1968)

Andrew H. HOWARD and Mrs. Inez Howard, Appellants, v. SUN OIL COMPANY, Appellee.

No. 25829.

United States Court of Appeals Fifth Circuit.

December 3, 1968.

Rehearing Denied January 15, 1969.

Michael R. Eubanks, Lumberton, Miss., for appellants.

E. M. Cage, Dallas, Tex., John T. Armstrong, Hazlehurst, Miss., for appellee.

Before DYER and SIMPSON, Circuit Judges, and CABOT, District Judge.

Rehearing En Banc Denied January 15, 1969.

DYER, Circuit Judge:

Asserting legal title to ten acres of land through adverse possession, the Howards brought this action against Sun for trespass and wrongful conversion of oil taken by Sun under a lease to Sun from the record owners of the land, the Moody heirs. The District Court entered summary judgment for Sun, finding that the question of title to the land and oil thereunder had been settled between the record owners and the Howards, that no concealed fraud on the part of Sun had induced that settlement, and that in any event the Mississippi Limitation of Actions statute barred the suit. 294 F.Supp. 24. The Howards appeal and we affirm.

Some historical facts are necessary to pinpoint the issues on appeal. In 1920 Howard purchased some property on which to build a home. The following year he hired labor to construct a house, directing that it be built on a designated location on his property, and while he was away working, the house was built. Unfortunately, upon his return he discovered that it had erroneously been constructed upon land belonging to one Pierce.

Howard planned to move the house or purchase the land from Pierce, but about a year later Pierce sold this and other property to J. S. Moody, Sr. Shortly thereafter (in 1923 or 1924), Howard informed Moody of his dilemma, and Moody agreed that Howard's house might remain on the property without charge. Moody also indicated that some day he would execute a deed to Howard for the small tract of land where the house stood so that it would not have to be moved in the future, but, again unfortunately, Moody later died without doing so.

In 1942 the Moody heirs, the record fee owners, executed and delivered to Sun an oil, gas and mineral lease covering a large tract of land, including that occupied by Howard. In 1944 when Sun's surveyor discovered Howard's occupation of a small part of its leasehold tract, Sun made inquiry of Howard concerning the nature of his use and occupation and obtained an affidavit from him in which he disavowed any claim to the land in question and acknowledged that it belonged to the heirs of J. S. Moody, Sr.¹ There is no suggestion that the affidavit was obtained through fraud or misrepresentation by Sun.

In September, 1945, consistently with Howard's 1944 affidavit, the Howards accepted and recorded a deed prepared by counsel for the Moody heirs, conveying to Howard the surface ten acres (where their homesite was located) together with one non-participating royalty acre, all subject to the 1942 oil lease to Sun. Expressly reserved in the deed were nine mineral acres of the oil, gas and minerals on and under the ten acres.² For aught that appears from the record, Sun had no representative or counsel present at the time the deed was executed and delivered to and accepted by the Howards.

In December, 1945, the Howards conveyed their one royalty acre to a Mrs. Lott by a deed which contained a defective description of the interest conveyed.

Sun drilled an oil well on the ten acres in question in 1947. When the well was brought in, but before making a distribution of the royalties, Sun, on January 21, 1948, obtained from all parties in interest an instrument known as a division order, which pooled their interests in the land and set forth the amount of royalty owned by each. From the production Sun was directed to make payments of the royalties to the parties in the proportions set out in the division order. The Howards joined in the execution of this instrument in which they acknowledged that they had no royalty interest in the property — Howard's royalty interest having been blocked out and initialed by both the Howards. On the same date, January 21, 1948, the Howards executed and delivered to Mrs. Lott a deed correcting the faulty description of the one royalty acre contained in their prior deed.

Thus by the end of 1948 the following had occurred: The Pierce land, upon which Howard's house erroneously had been constructed, was conveyed to Moody, who died before giving any record interest to the Howards. Moody's heirs then leased the oil, gas and mineral rights to Sun. Upon discovery of the Howards' possession, Sun procured an affidavit from Howard disavowing any past or present claim to the land. As a settlement, the Moody heirs then deeded the surface ten acres and one non-participating royalty acre to the Howards, reserving to themselves nine mineral acres, all subject to the oil lease to Sun. The Howards then deeded their royalty acre to Mrs. Lott, although the deed had a defective description. Then Sun drilled and struck oil. Before distributing any proceeds, Sun obtained from all parties (the heirs, the Howards and Mrs. Lott) a division order in which the Howards acknowledged that they had no royalty interest, and on the same day the Howards again deeded the one royalty acre to Mrs. Lott, this time correctly describing the interest.

The Howards did nothing from 1948 until 1967 when they retained a lawyer to handle a salt water damage claim. Apparently during the settlement of this matter the lawyer advised the Howards that they had owned the land in question and the oil thereunder in 1933 and that they had never been divested of their title. The Howards filed suit against Sun for $1,225,000 damages, alleging that the Howards were the owners of the land and that a representation had been made by Sun that if the Howards would accept a deed drawn by counsel for the Moody heirs Sun would pay the Howards $5,000 when a producing well was brought in, but if they did not accept the deed no well would be drilled. The complaint further alleged that the Howards accepted the deed, but after a producing well was completed Sun refused to pay the five thousand dollars. The Howards allegedly did nothing about it because they believed that the recordation of the deed terminated their oil rights.

Upon cross motions for summary judgment supported by affidavits the District Court held that, even if it be assumed that the Howards could have proved adverse possession prior to 1945, there was no genuine issue concerning the material fact which was dispositive of the case, that there was a settlement made between plaintiffs and the record owners of this property, and that Inez Howard participated therein. Furthermore, the court found nothing to show any fraud or concealed fraud by Sun in connection with the settlement deed of 1945 and concluded that in any event Howards' tort claim would have been barred by Mississippi's six year statute of limitations.³

We must admit to some difficulty in discerning just what the Howards rely upon for reversal. They first attempt to eliminate the effect of the 1945 settlement deed, beginning their imaginative argument with an extended and lengthy claim of ownership of the land through adverse possession. The Howards then seem to argue, although rather obliquely, that the settlement deed did not settle the dispute at all because it conveyed the surface estate and one non-participating royalty acre to the Howards who already owned this by adverse possession, and reserved nine participating acres in the Moody heirs who couldn't make such a reservation since Howard already owned this by adverse possession. In essence, they argue that one cannot convey owned property to its owner nor reserve to one's self ownership in someone else's property.

The Howards' claim of ownership by adverse possession was assumed arguendo by the trial judge to have been established until the settlement deed was executed. The Howards' interpretation of the effect of the settlement deed requires a talismanic ability — now you have it, now you don't — that we neither have nor find persuasive. It would...