Carr v. Preslar

• Decision Date: 17 April 1951
• Docket Number: No. 9142,9142
• Citation: 73 S.D. 610,47 N.W.2d 497
• Parties: CARR et al. v. PRESLAR.
• Court: South Dakota Supreme Court

Page 497

47 N.W.2d 497

73 S.D. 610

CARR et al. v. PRESLAR.

No. 9142.

Supreme Court of South Dakota.

April 17, 1951.

Davenport, Evans, Hurwitz & Smith Sioux Falls, for plaintiffs and appellants.

Manson & Delzer White River, M. Q. Sharpe, Kennebec, for defendant and respondent.

SMITH, Judge.

The complaint of plaintiffs, Jay R. Carr and Louie Krogman, prays for a judgment declaring their right to 5% of the oil and gas royalty reserved in a lease of Texas land owned by defendant, Benjamin F. Preslar. On the ground that plaintiffs' cause of action merged in a judgment entered in a previous action between the parties and is res judicata, the trial court entered judgment for defendant. The validity of that conclusion of law of the trial court is presented for decision by this appeal of the plaintiffs.

The facts which gave rise to the litigation between the parties are largely undisputed. They live in Mellette county, South Dakota. In January 1948 the defendant, Preslar, received a telegram from one Robert M. Payne of Midland, Texas, offering to buy an oil and gas lease of the Texas land in question for a primary term of ten years for $9,600 cash and $1 per acre annual rental. Thereafter defendant and plaintiffs entered into a contract in writing by which they agreed that plaintiffs should transport defendant to Texas, and there employ their best efforts and ability to assist defendant in disposing of the oil and gas rights in his land for a commission of 5% of the consideration received over and above the original offer of Mr. Payne. Thereupon the parties journeyed to Texas and negotiated a royalty lease with Mr. Payne. The lease provided for a primary term of ten years, a bonus or cash consideration of $11,165, a delay rental of $1 per acre per annum, and one-eighth royalty of the oil and gas produced thereunder. While the parties were in Texas defendant executed and delivered to plaintiffs an instrument entitled a 'Mineral Deed' which in terms granted, conveyed and transferred to plaintiffs an undivided one-twentieth interest in all of the oil, gas and other minerals in and under the Texas land in question.

Thereafter in April 1948 the previous action was commenced by Preslar, the defendant herein, against Carr and Krogman, plaintiffs herein. The complaint set forth the factual background we have recited and alleged in substance that the defendants therein, Carr and Krogman, had procured the above-described mineral deed from him by falsely and fraudulently representing to him that it was the compensation due them under the written agreement of the parties. That complaint further alleged that $78.25 was due to Carr and Krogman for their services, and tender was made of that amount as payment in full of their services. The prayer of the complaint was for cancellation of the above described mineral deed, and that the defendants therein be required to reconvey by like instrument.

The answer of Carr and Krogman in the previous action denied plaintiff's allegation of fraud, alleged the undisputed facts we have stated supra, and then continued in words as follows: 'That in compliance with the contract made and entered into by and between plaintiff and defendants hereinbefore mentioned, the said plaintiff thereupon made, executed and delivered to the defendants a Mineral Deed conveying to the defendants five per cent (5%) of his one-eighth royalty, hereinbefore mentioned, and promised to pay to defendants the further sum of $78.25, being the amount due them for the cash received by plaintiff over and above the $9600.00 offered by telegram, which said sum of $78.25 is now due and no part of which has ever been paid.' The prayer of the answer was for judgment against Preslar for $78.25 and costs.

Thereupon Preslar served a motion for judgment on the pleadings. In substance he requested that the court enter judgment (a) for Carr and Krogman against him for $78.25, (b) for him against them cancelling the described mineral deed and (c) requiring them to reconvey by like deed.

At the same time Carr and Krogman moved to amend that portion of their answer quoted supra so as to substitute therefor words as follows: 'That in compliance with the contract made and entered into by and between plaintiff and defendants, hereinbefore mentioned, the said plaintiff thereupon made, executed and delivered to the defendants a Mineral Deed conveying to the defendants five per cent (5%) of the mineral rights in the said land hereinbefore described; that the execution of the said mineral deed was a mutual mistake of all parties concerned in the matter; that it was intended that the said plaintiff make, execute and deliver to the defendants a Royalty Deed conveying to the said defendants five per cent (5%) of the royalty reserved to the said plaintiff by the terms of the oil and gas lease hereinbefore described, and the defendants tender into Court, for the benefit of the plaintiff, a Mineral Deed reconveying the five per cent (5%) of the mineral rights in the said land to the plaintiff, which deed is duly executed by the defendants, and that the plaintiff be required to make, execute and deliver to the defendants a Royalty Deed conveying to the said defendants five per cent (5%) of the royalty reserved to the plaintiff in the said oil and gas lease heretofore mentioned, in compliance with the contract made by and between plaintiff and defendants, wherein the said plaintiff agreed to convey to the defendants five per cent (5%) of any royalty reserved to the plaintiff as alleged in paragraph 2 of defendants answer.' The motion also sought to amend the prayer of the answer so as to pray for judgment requiring the delivery of such a royalty deed as the amendment describes.

These two motions were heard and considered together. The motion to amend the answer was denied and the motion for judgment on the pleadings was granted. Accordingly judgment was entered for Preslar against Carr and Krogman cancelling the mineral deed and requiring them to reconvey by like deed, and for Carr and Krogman against Preslar for an amount equal to $78.25 less the costs taxed for Preslar.

Carr and Krogman reconveyed and they did not appeal from the judgment so entered. Preslar deposited the amount of the money judgment with the clerk where it remains.

The present action was thereafter commenced by Carr and Krogman as plaintiffs. In their complaint they allege that Preslar agreed to compensate them for their services above described by paying them 5% of all of the consideration received by Preslar for the lease of the described gas and oil rights in excess of $9,600; that under the terms of their contract they are entitled to a 5% interest in the royalty reserved in the lease to Mr. Payne; and that Preslar refuses to recognize that right. They pray for a judgment declaring the right alleged as aforesaid.

Among other defenses Preslar by his answer alleges that the cause of action of Carr and Krogman merged in the judgment in the previous action and is res judicata. The trial court sustained that defense.

In substance, it is the position of Carr and Krogman that the court in the previous action refused to consider and determine the merits of their claim to 5% of the royalty reserved by the lease to Mr. Payne, and therefore the doctrine of res judicata is not invoked by the record. We sustain that contention.

The doctrine of res judicata was under consideration in Keith v. Willers Truck Service, 64 S.D. 274, 266 N.W. 256, 257, 104 A.L.R. 1471. It was there written: 'First, a final judgment or decree of a court of competent jurisdiction upon the merits is a bar to any future action between the same parties or their privies upon the same cause of action so long as it remains unreversed; and, second, a point which was actually and directly in issue in a former action and was there judicially passed upon and determined by a domestic court of competent jurisdiction cannot be drawn in question in any future action between the same parties or their privies whether the cause of action in the two actions be identical or different. Black on Judgments (2d Ed.) vol. 2, Sec. 504. Under the first rule the res which is judicata is the cause of action. Under the second, the res which may be judicata is the particular issue or fact common to both actions.'

In that case this court quoted the words of Mr. Justice Fields in Cromwell v. County of Sac, 94 U.S. 351, 24 L.Ed. 195. It serves our present purposes to reproduce that passage. 'There is a different between the effect of a judgment as a bar or estoppel against the prosecution of a second action upon the same claim or demand, and its effect as an estoppel in another action between the same parties upon a different claim or cause of action. In the former case, the judgment, if rendered upon the merits, constitutes an absolute bar to a subsequent action. It is a finality as to the claim or demand in controversy, concluding parties and those in privity with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose. * * * 'Where it is sought to apply the estoppel of a judgment rendered upon one cause of action to matters arising in a suit upon a different cause of action, the inquiry must always be as to the point or question actually litigated and determined in the original action, not what might have been thus litigated and determined."

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