George v. Manhattan Land & Fruit Co.

• Court: U.S. Court of Appeals — Fifth Circuit
• Writing for the Court: BRYAN, SIBLEY, and HUTCHESON, Circuit
• Citation: George v. Manhattan Land & Fruit Co., 51 F.2d 28 (5th Cir. 1931)
• Decision Date: 29 June 1931
• Docket Number: No. 6079.,6079.
• Parties: GEORGE et al. v. MANHATTAN LAND & FRUIT CO. et al.

51 F.2d 28 (1931)

GEORGE et al. v. MANHATTAN LAND & FRUIT CO. et al.

No. 6079.

Circuit Court of Appeals, Fifth Circuit.

June 29, 1931.

S. L. Herold, of Shreveport, La., for appellants.

Edwin C. Hollins and Philip S. Gidiere, both of New Orleans, La., and Tinsley Gilmer, of Shreveport, La., for appellee.

Before BRYAN, SIBLEY, and HUTCHESON, Circuit Judges.

HUTCHESON, Circuit Judge.

This appeal presents the question whether the trial court erred in finding as it did, that appellee, Manhattan Land & Fruit Company, plaintiff below, was the owner of the mineral rights involved in this suit, and as such entitled to its decree against George and Nigh, appellants here, defendants in the court below.

Much testimony, both documentary and oral, was offered. The District Judge found that appellee had conveyed to George its land alone, reserving the mineral rights, and that Nigh was in no better position than George to claim the minerals, because the purported contracts and deeds of purchase between him and George to the mineral interest involved represented not a real, but a simulated, purchase.

It is contended here on the part of Nigh that these findings of the court are without evidence to support them, that George actually bought the minerals from the plaintiff, and that Nigh having purchased in reliance upon the record title to the minerals being in George, whether George did not in fact intend to buy the minerals, and whether Nigh knew that in fact he did not so intend, is equally immaterial. That the instrument in reliance upon which Nigh bought effecting a conveyance of the mineral interests of the appellee to George, Nigh's binding contract with George for their purchase vested him with a right in them which no prior unrecorded facts and no after occurring facts or transactions could affect.

Appellees on their part contend (1) that the court was right in finding as it did, that the minerals were not conveyed to George, and that the Nigh transaction was not real, but simulated. They further contend that if Nigh's purchase was real and not simulated, it yet is not effective to make his position better than that of George, because the instrument on which he relied was neither as to the consideration, nor the description, such an instrument as would support the plea of purchase on the faith of the public record. And, third, they contend that the instrument on which George and Nigh rely as a conveyance of the mineral interests is so wanting in description and consideration as that the interveners Harry and the Humble Oil & Refining Company, who purchased the mineral rights from plaintiff in reliance upon their reservation in the deed to George, would be protected as against the instrument under which Nigh claims, as purchasers from the plaintiff upon the faith of a record showing the mineral interests in it.

It will be noted that no contention is here made that Nigh was a bona fide purchaser within the meaning of that term as understood in equity, nor under the statutes and decisions of Louisiana could such a contention be made. Appellant is right in his claim that it is absolutely settled under the jurisprudence of Louisiana that one dealing with lands in Louisiana may look alone to, and fully rely upon, the public records, Dalbey v. Continental Supply Co., 165 La. 636, 115 So. 807; Breaux v. Royer, 129 La. 894, 57 So. 164, 38 L. R. A. (N. S.) 982; McDuffie v. Walker, 125 La. 152, 51 So. 100; and that under this rule knowledge or notice of the true status of the title or of the existence of contracts or understandings affecting it, but not of record, in no manner prevents the acquisition of full title to the realty by one who is a real purchaser on the faith of the public record. John T. Moore Planting Co. v. Morgan's L. & T., 126 La. 840, 53 So. 22.

It is also true that the same principle applies with equal force in favor of him who acquires a real right, such as a contract of sale, as of the one who buys the legal title itself, Herndon v. Wakefield-Moore Realty Co., 143 La. 724, 79 So. 318; Coyle v. Allen, 168 La. 504, 122 So. 596, for in the state of Louisiana the authorities give to him who holds a contract of sale with the right to specifically enforce it, to all intents and purposes the rights of him who holds a deed, Barfield v. Saunders, 116 La. 136, 40 So. 593; Lehman v. Rice, 118 La. 975, 43 So. 639; Girault v. Feucht, 117 La. 276, 41 So. 572; Baldwin v. Morey, 41 La. Ann. 1105, 6 So. 796.

Appellant correctly states the law of Louisiana upon a purchase on the faith of the record, when he says in his brief: "The question is not what kind of a right the defendant has, or what are the equities of his situation; the question is whether the plaintiff has a right which was spread upon the record, since it is settled, as a matter of public policy of the State, that in the absence of record such rights are wholly non-existent as to third persons. This nullity is not relative; it is absolute. It is not in favor merely of the holder of the legal title, it is in favor of third persons. Accordingly any one claiming any right in immovable property in Louisiana is protected against interference on the part of a plaintiff asserting a right not of record." Baker v. Atkins, 107 La. 490, 32 So. 69.

If therefore the instrument on which Nigh relies as a conveyance of the mineral rights to George had in law that effect, and if Nigh's purchase was real and not simulated, the decree was wrong, though the fact be as the record plainly shows that it was, that the instrument upon which he relied was not intended to have the effect he claims for it, and he knew it was not so intended. On the other hand, it is perfectly plain that one who has a claim of right recorded is protected against any dealings which others may attempt to have in derogation of that right, and that those who would assert against a clear reservation of mineral interests duly recorded, as was the case here, the claim of having dealt on the faith of a public record with another as the owner of those interests, must point to a record which by clear and definite description conveys them, and must prove either by the record or aliunde that this conveyance was upon a real consideration, not one merely nominal.

Since it is our view that the instruments executed and delivered by the plaintiff to and recorded by George as integral parts of one transaction construed together make it perfectly plain that the record title to the mineral interests at the time of Nigh's purported purchase was not in George but in plaintiff, we find it unnecessary to determine whether the District Judge was right in finding the transaction not real, but simulated, though the facts in evidence, particularly the telegram of George, dated June 7, to the president of the land company, "Did you retain eighth royalty in Plaquemines property; If so, will you sell all or part. Answer collect," sent twelve days after May 25th, the date on which Nigh claims to have contracted for the mineral rights from George, nine days after May 28th, the date on which Manhattan had sold the mineral rights to Harry, and on the very day Nigh claims to have made the purchase from George, strongly tend to support his finding. This view makes it also unnecessary to determine the effect upon Nigh's rights of the mineral lease from Manhattan to Harry.

We may assume, without deciding, that the Nigh purchase was a real transaction. We declare it ineffective as to plaintiff, because the instrument on which, if real, it was based was wholly ineffective both when construed by itself, and especially when construed with the instrument which was executed along with it, to vest George with any title of record in the minerals involved. Since upon the assumption that Nigh was a real purchaser he cannot be affected by any oral understandings or...