Carter Oil Co. v. McQuigg

• Decision Date: 18 April 1939
• Docket Number: No. 876-D.,876-D.
• Citation: 27 F. Supp. 182
• Parties: CARTER OIL CO. v. McQUIGG et al.
• Court: U.S. District Court — Eastern District of Illinois

27 F. Supp. 182

CARTER OIL CO. v. McQUIGG et al.

No. 876-D.

District Court, E. D. Illinois.

April 18, 1939.

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Walter Davison and Craig & Craig, all of Mattoon, Ill., and William M. Acton, and Harold F. Lindley, both of Danville, Ill., for plaintiff.

John J. Baker, of Shelbyville, Ill., and Barber & Barber, of Springfield, Ill., for defendants.

LINDLEY, District Judge.

Plaintiff objects to the master's report recommending that its complaint be dismissed and seeks a decree enjoining defendants from interfering with its rights as oil lessee of a certain 80-acre tract in Fayette County, Illinois, received by its assignor from Leander J. Wood, on June 9, 1936, by virtue whereof plaintiff ostensibly received the right to mine for and take from the premises oil and gas, a freehold property right under the laws of Illinois. Its prayer in this respect is resisted by defendants, who insist that Wood, the grantor in the lease, had only a life estate in the premises leased and that the remainder was at the time of the execution of the grant vested in his children and grandchildren by virtue of a quit claim deed executed by him and his wife on January 30, 1919, whereby they conveyed the said premises to their children, adding, however, this clause, "provided this deed is not to take effect during the life time of either of the grantors." This, defendants say, amounted to a reservation of a life estate only and granted in fee the remainder to the children. Plaintiff contends the effect of the clause was to make the deed testamentary in character and, inasmuch as it did not conform to the statutes of wills in Illinois, to make it wholly void so that title remains in the grantor or, in the alternative, if grantor retained a life estate, that there was coupled therewith and reserved in the grantors, the power to dispose of the remainder during their lifetime, even though such disposition might annul entirely the vested remainder.

The master found in favor of defendants with respect to these contentions and held that plaintiff had a valid lease only as to the life estate; that such a grant was of no effect as against the remaindermen and that the bill should be dismissed. Plaintiff insists that, even should the court find against it upon its contentions as to the proper interpretation of the Leander J. Wood deed, yet it has a valid lease from the life tenant under the decisions of Illinois and that against it, as lessee of the life tenant, the remaindermen and their lessee have no right to produce oil from the land as in so doing they are preceding in face of the fact that the right to enjoy and possess the property has not yet passed to the remaindermen, and that the master was wrong in recommending a dismissal of the bill but should have recommended a decree enjoining defendants from producing oil from the premises.

Plaintiff claims also to be the lessee of one-fifth of the remainder from one Hogge, grantee of Lemuel F. Wood, a son of Leander J. Wood. But defendant Lemuel F. Wood insists and the master found that his conveyance to Hogge, though apparently conveying the full title, was merely security for a debt and was, therefore, under the law of Illinois, a mortgage, and that though plaintiff, at the time it took a lease from Hogge, had no notice of the equity in Lemuel F. Wood, it was not such a bona fide purchaser for value as would validate its lease from Hogge as against Lemuel F. Wood. Plaintiff insists that, even if the court finds that the conveyance from Wood to Hogge should be interpreted as a mortgage, it was, under the legal standards abiding in Illinois, a bona fide purchaser for value without notice, and, therefore, is lessee in a valid lease as against Lemuel F. Wood.

Plaintiff further claims to be the owner of a valid oil and gas lease of one-fifth of the remainder executed by Arthur M. Wood and his wife, on March 31, 1937. The lease is valid unless impeached by a material alteration as defendants assert and the master found. In this respect plaintiff contends that the master was in error and that its lease from Arthur M. Wood should be decreed by the court to be valid.

Plaintiff also originally set up in its bill a lease from George Gregg upon one-fifth interest in the remainder. The master found that Alice L. Gregg, one of the children of Leander F. Wood, died before her right to enjoy the premises came into existence; that her husband, therefore, had no dower or other interest and that the lease is invalid. Plaintiff apparently does not now insist that he was in error in this respect.

Defendants asserted as against plaintiff a voluntary partition between the remaindermen which, if effective, would allocate to plaintiff, if it had any valid leases, a portion of the premises apparently unproductive in character. The master found that this partition was incomplete and that it was undertaken for a fraudulent purpose and was wholly invalid. Defendants insist that if there is any valid interest in plaintiff by virtue of its several leases mentioned, the partition should control.

The court will treat these questions in the order mentioned.

Leander J. Wood and his wife on January 30, 1919, executed a quitclaim deed to their five children. The instrument contained this language: "provided this deed is not to take effect during the life time of either of grantors." Apparently the instrument was delivered and recorded. Plaintiff contends that the proper construction of this language is that the conveyance was not to become effective or pass any title to any part of the property therein described until the death of each of the grantors; that, consequently, the instrument was testamentary in character and void, inasmuch as it did not comply with the statute of wills of the State of Illinois, and that, therefore, no title passed to the grantees under the conveyance.

If this question were undecided in Illinois, I would be inclined to follow the decisions in various jurisdictions, cited in Tiffany on Real Property, Vol. 2, p. 1814, and 68 Corpus Juris, 612, 614. In many jurisdictions, perhaps the majority, it is held that such language cannot be said to apply simply to the enjoyment or possession of the property, but that it applies equally to the entire force and effect of the instrument and is repugnant to and inconsistent with the creation of any present legal estate. However, I am bound by the laws of Illinois, and there, beyond question, a contrary rule controls. In Bullard v. Suedmeier, 291 Ill. 400, 126 N.E. 117, 118, the conveyance provided that it should not "take effect during the lifetime of the grantors." In Harshbarger v. Carroll, 163 Ill. 636, 45 N.E. 565, the grant was "only to take effect at the death of the grantor." In Bowler v. Bowler, 176 Ill. 541, 52 N.E. 437, 439, the instrument contained a provision that it should not be "of any force or effect until after the death of" the grantor. In Venters v. Wickens, 224 Ill. 569, 79 N.E. 946, 947, the limiting language was "at the death of the survivor of said grantors the title and interest in said lands shall vest in said grantee, but not before." In Shackelton v. Sebree, 86 Ill. 616, the grantor said that the deed should not "take effect until after my decease — not to be recorded until after my decease." In Latimer v. Latimer, 174 Ill. 418, 51 N.E. 548, 550, these words were contained in the conveyance: "After my decease to deliver it to James Latimer." In White v. Willard, 232 Ill. 464, 83 N.E. 954, 957, the grantor provided that the "title of said grantees * * * shall become absolute only on the death of" the grantors. The language in some of these conveyances obviously was more strongly persuasive of an intent to postpone the vesting of any title as well as the enjoyment of possession until the death of the grantors than in the present case. Yet in each of the cases, beginning with Shackelton v. Sebree, supra, the Supreme Court of Illinois interpreted the conveyance as a valid grant of a vested remainder with a reservation only of a life estate. This was upon the reasoning that livery of seizin has been abolished by the statute of the State of Illinois and modern tenures thereby "happily * * * freed from the ancient restraints" and that the legal effect is to vest at once the title of the remainder in the grantee subject to the life estate of the grantor. In various of these cases the court considered the suggestion that the deed postponed the vesting of title as well as of the right of possession and, therefore, was testamentary in character and in violation of the statute on wills and in each instance the suggestion was disapproved. It follows that the interpretation of such a conveyance as confronts us is settled by the decisions of the Supreme Court of Illinois and that it is not within the power of this court to entertain or announce any conclusion inconsistent therewith.

Plaintiff relies upon Steinke v. Sztanka, 364 Ill. 334, 4 N.E.2d 472, where the Supreme Court concluded that a certain warranty deed constituted an ineffective attempt to make a testamentary disposition of property. The court found from all the evidence submitted that the grantor did not intend to make an absolute disposition of her estate before her death but intended the conveyance to be a testamentary devise. However, there was no indication that the court meant to reverse or modify its holdings in the cases above cited, and the case is clearly distinguished from them. There was evidence that the grantor was of advanced age, able to read but little or write; that she never intended to part with control over her property and that she was illy advised. From this extraneous evidence, and that alone apparently, the court concluded as it did.

As an alternative the plaintiff suggests that if the conveyance be properly construed as a valid grant of the remainder, yet under the evidence, the grantor intended to retain full power of...