Equitable Royalty Corp. v. Hullet, 34784

• Decision Date: 01 April 1952
• Docket Number: No. 34784,34784
• Citation: 206 Okla. 233,243 P.2d 986
• Parties: , 1952 OK 129 EQUITABLE ROYALTY CORP. et al. v. HULLET et al.
• Court: Oklahoma Supreme Court

Page 986

243 P.2d 986

206 Okla. 233, 1952 OK 129

EQUITABLE ROYALTY CORP. et al. v. HULLET et al.

No. 34784.

Supreme Court of Oklahoma.

April 1, 1952.

Rehearing Denied May 6, 1952.

Syllabus by the Court.

1. Estoppel by deed is distinct from the doctrine of equitable estoppel or estoppel in pais in that estoppel by deed may be invoked where there is a complete absence of false representations or concealment of material facts, or of the other four essential elements to create ordinary equitable estoppel or estoppel in pais, as announced by this court in Rosser v. Texas Company, 173 Okl. 309, 48 P.2d 327.

2. Where a grantor conveys an interest in land, already incumbered with lien which grantor has created and is obligated to satisfy, and his deed of conveyance contains unconditional covenants of warranty, and grantor permits foreclosure of lien and sale of land to satisfy foreclosure judgment, and subsequently re-acquires title stemming from foreclosure sale, such after-acquired title will inure to the benefit of the grantee in deed from original grantor under the equitable doctrine of estoppel by deed.

Houts & Houts, Alva, for plaintiffs in error.

Mauntel, Spellman & Doolin, Alva, for defendants in error.

HALLEY, Vice Chief Justice.

Equitable Royalty Corporation and others claiming to own an undivided one-half interest in the minerals in a tract of land in Woods County, Oklahoma, filed this action to quiet title to their mineral interests against Pauline M. Hullet, the Federal Land Bank of Wichita, Kansas, and Stephens Petroleum Company, a corporation. Stephens Petroleum Company has filed in this court an application to dismiss as to it, on the ground that the only interest claimed by it was an oil and gas lease, which has expired. A stipulation of the parties shows that this concern has no further interest in this litigation and is not obligated in any manner to the other parties, and this appeal is hereby dismissed as to Stephens Petroleum Company.

The facts out of which this controversy arose are covered by stipulation, the pertinent portions of which are as follows:

On September 1, 1925, Leo C. Hullet and Cleo E. Hullet owned the land involved, and on that date were joined by their wives in the execution of two mortgages to Monarch Loan Company: one a first mortgage for $7,000, and the other a second mortgage for $700.

On June 29, 1927, the above named Hullets and their wives conveyed by mineral deed containing unconditional covenants of warranty an undivided one-half of the minerals in the land in question to B. H. Rowlett and L. E. Regan, and by mesne conveyances the present plaintiffs acquired that mineral interest. Pauline Hullet, who joined in the execution of the mineral deed as the wife of Cleo E. Hullet, is one and the same person as Pauline M. Hullet, a defendant in this action.

On November 19, 1927, Leo C. Hullet and wife conveyed all of their interest in the land to Cleo E. Hullet, subject only to the two mortgages above mentioned.

On September 10, 1932, the Monarch Loan Company brought an action to foreclose its second mortgage. Judgment foreclosing that mortgage was rendered subject to the first mortgage. All of the plaintiffs, then owners of the one-half mineral interest, were made parties to the foreclosure action. They appeared and prayed for a marshaling of assets, and the land was offered first subject to their mineral interest, but no bids were received, and upon being offered free from such mineral interest it was bid in by Monarch Loan Company. Sheriff's deed was issued August 14, 1933, conveying the entire interest in the land, subject only to the first mortgage and an agricultural lease in favor of Cleo E. Hullet, the husband and Pauline M. Hullet, and it was agreed that they had been in actual possession of the land since November 19, 1927. Cleo E. Hullet died September 2, 1939. It was agreed that the above foreclosure proceedings were regular and not subject to collateral attack.

On August 28, 1933, Monarch Loan Company conveyed the land by warranty deed to Connecticut General Life Insurance Company, the holder of the first mortgage, and on November 8, 1933, that mortgage was released.

On July 9, 1941, the Connecticut General Life Insurance Company, for valuable consideration, conveyed the land to the defendant Pauline M. Hullet, reserving an undivided one-fourth interest in the minerals. Plaintiffs had no actual knowledge of said deed or negotiations leading to the acquisition of said land by Pauline M. Hullet prior to August 1, 1949.

On February 9, 1949, Pauline M. Hullet mortgaged the land to the Federal Land Bank of Wichita, Kansas, to secure a loan of $5,400, which constitutes a valid first lien upon her interest in the land.

The mineral deed from Leo C. Hullet and Cleo E. Hullet and their wives, conveying a one-half interest in the minerals, contained the following clause:

'To have and to hold the above described property, together with all and singular the rights and appurtenances thereto in any wise belonging unto the said Grantees herein, their heirs and assigns forever; and we do hereby bind ourselves and our heirs, executors, and administrators to warrant and forever defend all and singular the said property unto the said Grantees herein, their heirs and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof.'

It was agreed that all conveyances above mentioned were for a good and valuable consideration, regular in form, and free from fraud. The case was tried to the court, who rendered judgment for defendants, and plaintiffs have appealed. The parties will be referred to as they appeared in the trial court.

Plaintiffs first contend:

'That owner of land subject to mortgage lien who issues mineral deed containing unconditional covenants of warranty may not permit lien to be foreclosed, and subsequently acquire title and claim adversely to the grantees in his mineral deed.'

Plaintiffs claim that when Pauline M. Hullet received the deed from Connecticut General Life Insurance Company on July 9, 1941, their interest in the land immediately reattached under the common-law doctrine of estoppel by deed, defined in Sec. 16, 19 Am.Jur., Estoppel, p. 603, as follows:

'Estoppel by deed is a bar which precludes one party to a deed and his privies from asserting as against the other party and his privies any right or title in derogation of the deed or from denying the truth of any material facts asserted in it. Estoppel by deed is technical in nature, and such an estoppel may conclude a party without any reference to the moral qualities of his conduct.

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'To constitute an estoppel by deed, a distinct and precise assertion or admission of a fact is necessary. Hence, an estoppel by deed or similar instrument can arise only where a party has conveyed a precise or definite legal estate or right by a solemn assurance which he will not be permitted to vary or deny. Such estoppel should be certain to every intent.'

This doctrine has been adopted into our statutes as Sec. 17, 16 O.S. 1951, as follows:

'All rights of a mortgagor or grantor in and to the premises described in the instrument and existing at the time or subsequently accruing, shall accrue to the benefit of the mortgagee or grantee, and be covered by his mortbage or conveyed by his deed, as the case may be.'

Our attention is called to the case of United States National Bank v. Miller, 122 Or. 285, 258 P. 205, 58 A.L.R. 339, wherein extensive annotations show that the doctrine of estoppel by deed is recognized by the courts of the vast majority of states. At page 350 of the annotations, sub. (b), it is said:

'It is a general rule, supported by many authorities, that a deed purporting to convey a fee simple, or a lesser definite estate in land, and containing covenants of general warranty of title or of ownership, will operate to estop the grantor from asserting an after-acquired title or interest in the land, or the estate which the deed purports to convey, as against the grantee and those claiming under him. One of the more frequent ways of expressing the rule is that the subsequently acquired title inures to the benefit of the grantee, this form of expression usually meaning apparently that the title passes by way of estoppel, or at least that, whether...