Great Western Petroleum Corporation v. Samson

• Decision Date: 18 November 1921
• Citation: 234 S.W. 727,192 Ky. 814
• Parties: GREAT WESTERN PETROLEUM CORPORATION v. SAMSON ET AL.
• Court: Kentucky Court of Appeals

234 S.W. 727

192 Ky. 814

GREAT WESTERN PETROLEUM CORPORATION v. SAMSON ET AL.

Court of Appeals of Kentucky.

November 18, 1921

Appeal from Circuit Court, Barren County.

Action by T. J. Samson and others against the Great Western Petroleum Corporation. Judgment for plaintiffs, and defendant appeals. Reversed, with directions to dismiss the petition.

S. E Jones and V. H. Jones, both of Glasgow, for appellant.

Basil Richardson, of Glasgow, for appellees.

THOMAS J.

On May 23, 1917, J. W. Henderson and wife executed an oil lease on 700 acres of land in Barren county to J. N. Thompson, which was to remain in force for a term of 10 years and as long thereafter as oil or gas is produced from the premises by the lessee, his heirs or assigns. It was stipulated therein:

"That this lease shall become null and void, and all rights hereunder shall cease and terminate unless a well shall be commenced on the premises within (6) six months from the date hereof, or unless the lessee shall pay at the rate of ten (10) cents per acre yearly in advance when such operations are delayed from the time above mentioned for the commencement of each well. * * * Such payments may be made direct to the lessor or deposited to his credit in Trigg National Bank, Glasgow, Ky."

On June 30 thereafter Thompson, by writing duly executed and acknowledged, sold and transferred the lease to the appellant and defendant below, Great Western Petroleum Corporation which was incorporated under the laws of the state of Delaware, but had its principal office in the city of Chicago, Ill., where the sale and transfer to the lease to it, by Thompson, was executed. On January 5, 1918, the lease, and the written transfer thereof to defendant, were each recorded in the Barren county clerk's office, but it appears that through oversight or mistake the recording of neither paper was indexed.

There was no well bored or commenced within the six months stipulated therefor in the lease, but at the expiration of that time a check for $70, covering the agreed advance rentals to be paid in that event, was deposited by defendant in the Trigg National Bank of Glasgow, Ky. in accordance with the terms of the lease, which extended the privileges of the lessee thereunder to November 23, 1918, and on that day it deposited a similar check in the bank in payment of the following year's rental, and which extended the lease to November 23, 1919. On February 5, 1919, Henderson and wife sold the 700 acres of land by deed duly executed and acknowledged to the appellees and plaintiffs below, T. J. Samson, L. A. Depp, J. J. Nuckols, and Stanley Warder, and they filed this action on May 30, 1919, against defendant, as assignee of the Thompson lease, seeking to cancel it as a cloud upon their title upon the grounds that: (1) They were innocent purchasers of the land without actual or constructive knowledge of the lease; (2), that it was procured by fraud on the part of Thompson, the lessee; (3), that Henderson had notified defendant that he would no longer accept rentals in lieu of development, and he demanded it; and (4), that defendant had not complied with section 571 of the Statutes by filing with the Secretary of State the statement therein required. Those grounds were controverted, and upon final submission the court rendered judgment sustaining the prayer of the petition, from which defendant appeals. Neither the judgment, nor any part of the record, informs us of the ground or grounds upon which the court acted, and we will therefore determine each of them in the order named.

1. The duty of indexing deeds, leases, and other instruments conveying an interest in land is imposed by section 513 of the Statutes upon the county court clerk in whose office the record of such instruments is kept, and there is no duty anywhere imposed upon the purchaser or conveyee in such instruments to see that the index is made by the clerk. When a recordable instrument is lodged for record with the clerk and the fees paid, the one to whom it is made has performed all the duty required of him by law, and his rights under the instrument cannot be affected by a subsequent purchaser or lienholder, because of any failure on the part of the clerk to properly index his muniment of title, especially so after the instrument was recorded in a book properly provided for the purpose. This court so held in the case of Webb v. Austin, 58 S.W. 808, 22 Ky. Law Rep. 764, and cases in point are Smith v. Chapman, 153 Ky. 70, 154 S.W. 915, and others therein referred to. As heretofore seen both the lease and its transfer were of record in the proper office at the time of plaintiffs' purchase, and this furnished to them constructive notice, although neither record was indexed as required by the statute, supra.

2. This ground, relied on for the relief prayed, is bottomed on the fact that on the same day, but after the lease was executed a...