Carter Oil Company v. Weil

• Decision Date: 28 January 1946
• Docket Number: 4-7798
• Citation: 192 S.W.2d 215,209 Ark. 653
• Parties: Carter Oil Company v. Weil
• Court: Arkansas Supreme Court

192 S.W.2d 215

209 Ark. 653

Carter Oil Company v. Weil

No. 4-7798

Supreme Court of Arkansas

January 28, 1946

Hearing Denied February 25, 1946.

Appeal from Miller Chancery Court; A. P. Steel, Chancellor.

Affirmed.

Smith & Sanderson, Arnold & Arnold and Gaughan, McClellan & Gaughan, for appellant.

Barney & Quinn and Shaver, Stewart & Jones, for appellee.

Smith J. Robins, J., dissenting.

OPINION

Smith, J.

On December 9, 1921, the Four States Lumber Company, a corporation, hereinafter referred to as the Company, was the owner of the 40-acre tract of land which is the subject of this litigation. The officers of the Company were: Leo Krouse, president; I. J. Kosminsky, secretary; Allen Winham, Jr., assistant secretary; and Fred Offenhauser was a stockholder and one of the directors. All of these persons except Winham were dead at the time the testimony was taken on which the case was submitted and decided in the court below. On the date mentioned the Company conveyed the land by warranty deed to Nick Harvey. Following the habendum clause in the deed appeared this separate paragraph: "It is expressly understood that a one-half undivided interest is reserved to the said Four States Lumber Company in all oil and mineral rights."

By mesne conveyances numerous persons have acquired various interests through Nick Harvey, the grantee in the deed, and this suit was filed against them by plaintiffs, who had acquired, and now own, the interest in the oil and minerals which the grantor reserved, to cancel the conveyances under which claims are asserted to the undivided one-half interest and for an accounting for the oil and gas produced from the land. The relief prayed was granted, and from that decree is this appeal.

Answers were filed, alleging the invalidity of the reservation of the undivided one-half interest in the oil and gas, and alleging also that its insertion in the deed was the result either of a mutual mistake or of an intentional fraud, and reformation of this deed was prayed, which relief was denied.

We consider first the question of the right to have the deed reformed. Harvey testified that he purchased the land for a cash consideration of $ 450, and that he refused to accept a deed containing the reservation, and that the Company's agent assured him that he would procure a deed which did not contain that reservation, and another deed was delivered to him which, like the first, contained the reservation, but he was assured that it did not; that he is an illiterate man, and did not know a fraud had been practiced when the second deed was delivered.

The testimony of Harvey is corroborated by that of one Arthur Gurley, who testified that he, as the agent of the Company, negotiated the sale and delivered both deeds; that he reported to the Company's officers that Harvey would not accept a deed containing the mineral reservation, and that he was assured that another deed would be prepared omitting it, and that he supposed this had been done, and that when he delivered the second deed he assured Harvey that this had been done.

The chancellor did not credit this testimony, nor do we. The Company surrendered its charter in 1923 after disposing of its lands. Winham testified that as assistant secretary he kept the Company's records from March 15, 1917, until the dissolution of the corporation, and that practically all the Company's records have been lost or destroyed. As assistant secretary he prepared practically all the deeds, and that he wrote the deed in question. It was the invariable practice of the Company to insert the mineral reservation in all the deeds it executed, and that this reservation was printed in the blank form of deeds used by the Company, but that the deed in question was typewritten on legal size paper, and he remembers the deed because of that fact, as he wrote the deed. He knew nothing about Harvey's refusal to accept the first deed, and so far as he was aware only one deed to Harvey had ever been written. Winham further testified that he had known Gurley for twenty-five years, and that Gurley never represented the Company, had never handled any business for the Company, was never its agent, and was never authorized to sell lands for the Company.

One Armstrong testified that he was employed by the Company in the sale of its lands from 1919 until the Company was dissolved, and that he never heard of Gurley representing the Company in any matter.

It appears highly improbable to us that Gurley, after promising Harvey to secure a deed which did not contain the mineral reservation, would deliver a deed which did contain it.

In view of the rule established by many decisions of this court that deeds will be reformed only upon testimony that is clear and convincing, we think the court properly refused reformation.

It appears that one of the grantees claiming not from but through Harvey procured an abstract of the title to this tract of land, and had the title examined by a highly competent attorney and title examiner, and on a page of the abstract containing a copy of the deed to Harvey the examiner made the notation: "Under the authority of Cole v. Collie, 131 Ark. 103, 198 S.W. 710, our opinion is that the reservation is void." This notation was signed by the examiner. The land was purchased in reliance upon this opinion.

It is insisted that, inasmuch as the case of Cole v. Collie had not been overruled at the time of this purchase, the parties had the right to rely upon that case as supporting the examiner's opinion, and that the case of Beasley v. Shinn, 201 Ark. 31, 144 S.W.2d 710, 131 A. L. R. 1234, which overruled the Cole case, does not apply under the facts in the instant case; and further that the Beasley case should be construed as operating only prospectively.

We think no valid distinction can be made between the instant case and the Beasley case, as the deed there construed had been executed subsequent to the Cole case and before that case had been overruled; and we are, therefore, of the opinion that the law as announced in the Beasley case applies here.

There remains, therefore, only the question whether the opinion in the Beasley case should be construed as operating only prospectively and as having no controlling effect upon deeds executed prior to its rendition.

It will presently appear that the Beasley case is not the only one which overruled the Cole case.

It must be confessed that this court has not been consistent in its holdings as to the effect to be given recitals found in the habendum or other clauses of a deed conflicting with those found in the granting clause.

It is urged that under the rule of stare decisis the authority of the Cole case should not be impaired, but that if this is done the impairment should operate only prospectively, having no effect upon titles acquired while the Cole case was the declared law.

It may be answered that, if the rule of stare decisis prevents a change in a holding of this court which affects rights acquired under a previous holding, the Cole case itself violates that rule, as it contravenes the first holding of this court on the question now under consideration announced in the case of Doe, Ex. Dem., Phillips' Heirs, v. Porter, 3 Ark. 18, 36 Am. Dec. 448. In the case just cited, it was held to quote from the headnotes, that "All deeds are to be construed favorably, and as near the intention of the parties as possible, consistently with the rules of law.

"The construction ought to be put on the entire deed, and every part of it, for the whole deed ought to stand together, if practicable, and every sentence and word of it be made to operate and take effect.

"If two clauses in a deed stand in irreconcilable conflict to each other, the first clause shall prevail, and the latter be regarded as inoperative; and the law will construe that part of a deed to precede which ought to take precedence, no matter in what part of the instrument it may be found."

This holding cannot be reconciled with the Cole v. Collie case, which did not indicate any intention of overruling the Doe case, supra. If the Doe case is sound law, and it has never been overruled, the Cole v. Collie case was unsound, and it would necessarily follow that the undivided half interest in the oil and mineral rights here involved were not conveyed, but were expressly reserved.

Now, it is true, of course, that the Cole case is a later case, and insofar as the cases are in conflict the last case would control; but the point is that cases, even those under which property rights were acquired, may be overruled.

Chancellor Kent, in his Commentaries, vol. 1, p. 477, warns against the use of this power, which inheres in courts of last resort for the reason that the law should be certain, and that rights acquired under earlier decisions should not be lightly disturbed; but he then proceeds to say: "But I wish not to be understood to press too strongly the doctrine of stare decisis, when I recollect that there are more than one hundred cases to be pointed out in the English and American books of reports, which have been overruled, doubted, or limited in their application. (This text was written more than a hundred years ago, and such cases now number, not hundreds, but thousands.) It is probable that the records of many of the courts in this country are replete with hasty and crude decisions; and such cases ought to be examined without fear, and revised without reluctance, rather than to have the character of our law impaired, and the beauty and harmony of the system destroyed by the perpetuity of error. Even a series of decisions are not always conclusive evidence of what is law; and the revision of a decision very often resolves itself into a mere...