Buchanan v. Stinson

• Decision Date: 03 August 1976
• Docket Number: No. 48751,48751
• Citation: 335 So.2d 912
• Parties: Marion BUCHANAN et al. v. Charles Ray STINSON et al.
• Court: Mississippi Supreme Court

Page 912

335 So.2d 912

Marion BUCHANAN et al. v. Charles Ray STINSON et al.

No. 48751.

Supreme Court of Mississippi.

Aug. 3, 1976.

Rehearing Denied Aug. 24, 1976.

Wells, Gerald, Brand, Watters & Cox, A. Jerry Sheldon, Jackson, for appellants.

Joseph M. Stinson, Tylertown, for appellees.

Before PATTERSON, ROBERTSON and BROOM, JJ.

BROOM, Justice, For the Court.

This cloud suit was filed in the Chancery Court of Walthall County by complainants, Buchanan and Malvaney (appellants) against defendants and cross-complainants, Charles Ray Stinson and Marilyn F. Stinson (appellees), as to an undivided 1/7th mineral interest in certain lands situated in said county. The lower court applied the after-acquired title doctrine, and decreed that title to the subject mineral interest was in the appellees and canceled as a cloud on their title the claims asserted by appellants in their original bill. We reverse.

Evidence before the chancellor established these facts. When he died intestate, Shedrah Taylor (the common source of the title asserted by the litigants) owned the surface of the land and one-half of the mineral interest. Shedrah's widow and six children each inherited from him a 1/14th interest in the minerals. Two of his children were John W. Taylor and John Wendell Taylor, who each inherited a 1/14th interest (totaling 1/7th). After Shedrah's death, all of his children except John Wendell Taylor deeded the surface to his widow, Eula Mae Taylor, for her lifetime, with the remainder to one of Shedrah's sons, Hollis, but each grantor in that deed dated August 7, 1958, reserved his mineral interest. On September 3, 1958, Hollis deeded the land to his wife, Geraldine, subject to Eula Mae's life estate. On September 4, 1958, a deed of trust was executed by Hollis, Geraldine, and Eula Mae on the land. This instrument included the 6/7ths surface rights, and 1/7th of the minerals consisting of the individed 1/14th mineral interests that Eula Mae and Hollis each inherited from Shedrah. At a foreclosure of the deed of trust, appellant Malvaney purchased the property vesting in himself the 1/7th or 2/14ths mineral interest (formerly owned by Eula Mae and Hollis). Later (May 24, 1960), Malvaney purchased the remaining 1/7th surface interest from John Wendell Taylor, who at that time reserved his 1/14th mineral interest. On February 14, 1967, appellant Malvaney by warranty deed conveyed the land to the appellees (Mr. and Mrs. Stinson). No stated exceptions or reservations were in the warranty deed which effectively conveyed all surface rights and only the 1/7th mineral interest which Malvaney had previously acquired.

In 1972 Malvaney was employed by Freedom Oil Company to purchase the mineral interests then owned by Shedrah's heirs. Apparently, Malvaney was employed because his wife was one of the heirs and it was thought that because of that relationship he could deal with the other heirs who were out of state. Malvaney was authorized to pay each heir $25 per acre for leases, or purchase the minerals for $75 per acre. Inexperienced in oil and gas business and without expertise concerning value of leases and minerals, Malvaney stated that he sought advice from appellant Buchanan who advised that the minerals were worth $100 per acre instead of $75. Malvaney then got word to each heir that he had offers to purchase leases at $25 per acre or minerals at $100 per acre. He queried the heirs as to which ones were interested in the offers, and John Wendell Taylor and John W. Taylor responded that they would sell for $100 per acre.

The testimony shows that Buchanan suggested that the deeds from the two Johns (John Wendell and John W. Taylor) be taken in Malvaney's name, after which, by assignment, record title would be perfected in Buchanan. That procedure was followed whereby the aggregate 1/7th mineral interest (1/14th each) of the two Johns purported to vest in Buchanan. Sight drafts were used in the transaction, and Buchanan paid the consideration for the mineral conveyances by arrangements through Deposit Guaranty Bank where he paid the drafts in favor of the two Johns.

Buchanan and Malvaney filed this cloud suit against the appellees (Stinsons) seeking cancellation of any claim of the Stinsons as to the aggregate 1/7th mineral interest which the two Johns caused to vest in Malvaney who transferred to Buchanan.

This appeal presents one paramount question: Is appellant Buchanan not the owner of the 2/14ths or aggregate 1/7th mineral rights sold by the two Johns even though Buchanan furnished from his own funds the entire purchase price paid for the mineral rights, but for business reasons took title in Malvaney's name? The chancellor applied the after-acquired title doctrine together with Mississippi Code Annotated § 89-1-33 (1972), formerly § 843 of our 1942 Code, and dismissed Buchanan's and Malvaney's cloud suit. He sustained the Stinsons' claim by crossbill to the 1/7th mineral interest which the two Johns conveyed to Malvaney who transferred to Buchanan.

Crooker v. Hollingsworth, 210 Miss. 636, 46 So.2d 541 (1950), controls. Crooker pointed out that the after-acquired title doctrine is founded upon premises of equitable estoppel. It holds that the doctrine will not be applied absent extremely persuasive circumstances where the parties are equally well informed 'as to essential facts, or where the means of knowledge were equally open to them.' (Emphasis added). The opinion in Crooker points out another essential element of equitable estoppel: The party who 'invokes it must have lost something or has been placed at some disadvantage by the conduct of the other party.' An important aspect of the present case is that when he took title to the subject interest in his name, Malvaney knew that he was not purchasing anything for himself. He testified that he told the two Johns 'I was not buying this for my own...