Hall v. Mullen, 55768

Decision Date18 February 1984
Docket NumberNo. 55768,55768
Citation234 Kan. 1031,678 P.2d 169
PartiesEdith HALL, Appellant, v. Fred H. MULLEN, et al., Appellees.
CourtKansas Supreme Court

Syllabus by the Court

1. When a case is submitted to the trial court on an agreed stipulation of facts and documentary evidence, this court has the same opportunity to consider and evaluate the evidence as the trial court.

2. Regardless of the construction of a written instrument made by the trial court, on appeal the instrument may be construed and its legal effect determined by the appellate court.

3. Where parties have carried on negotiations, and have subsequently entered into an agreement in writing with respect to the subject matter covered by such negotiations, the written agreement constitutes the contract between them and determines their rights.

4. Where two or more instruments are executed by the same parties at or near the same time in the course of the same transaction and concern the same subject matter, they will be read and construed together to determine the intent of the parties.

5. Where the description of the land in a deed is uncertain or ambiguous as to the quantity conveyed, which is latent in character, it is proper for courts to resort to parol evidence, not to contradict the instrument but to explain the ambiguity or uncertainty, in order to show the situation and condition existing upon the property conveyed, the circumstances under which the conveyance was made and the practical construction put upon the conveyance by the parties for the purpose of ascertaining their intention. The inquiry should be confined to the time of the execution of the deed without reference to subsequent circumstances.

6. In an action to quiet title to certain real property the record on appeal is examined and it is held: The series of agreements entered into and instruments executed by the appellees' predecessors in title culminating in the conveyance of the property to the appellant's predecessor in title terminated the appellees' rights under a prior pooling agreement to share in royalties subsequently derived from production of oil or gas on the property.

Dennis R. Davidson, of Thompson, Arthur & Davidson, Russell, argued the cause, and Marvin E. Thompson and Mark Arthur, Jr., Russell, of the same firm, were with him on the brief for appellant.

Norbert R. Dreiling, of Dreiling, Bieker & Kelley, Hays, argued the cause for appellees Fred H. Mullen, Rose Mullen, Frances Polly Hall, William M. Hall, Thelma Walters, and Shirley Z. Hall a/k/a Shirley Hall. Glenn R. Braun, Hays, was with him on the brief as guardian ad litem.

Edward Larson, of Jeter & Larson, Hays, argued the cause and was on the brief for the appellees William Johnson, Jr., a/k/a Wm. Johnson, Jr., Elsie Hall, Harold E. Hall, T. Warren Hall, and Dorothy H. Hall Shumaker.

SCHROEDER, Chief Justice:

This is an action by Edith Hall (plaintiff-appellant) to quiet title to oil, gas and mineral interests, including royalty interests, in a quarter section of land located in Ellis County, Kansas. The defendants-appellees claim an interest in royalties derived from oil and gas production on this quarter section under a royalty pooling agreement entered into by the parties or their predecessors in title on May 6, 1942. The appellant contends the appellees' interests under the pooling agreement have expired, or, in the alternative, that the appellees' interests were terminated by the execution of a prior quitclaim deed. The trial court rejected the appellant's arguments and denied her request to quiet title. The appellant challenges the construction given various written instruments by the trial court. She also contends the court erred in considering parol evidence to interpret these instruments.

The case was submitted to the trial court on facts stipulated by the parties. The North Half (N/2) of Section Two (2), Township Twelve (12) South, Range Seventeen (17) West of the 6th P.M., Ellis County, Kansas (hereinafter referred to as the N/2 of Section Two), was owned in fee simple by John Hall who died testate on December 8, 1927. At the time of John Hall's death he owned approximately 4,320 acres of real estate in Ellis County. He was survived by his wife, Sarah, and six children. The will of John Hall provided that the N/2 of Section Two, along with his other land, be left to his wife for her lifetime, with the remainder in fee to the executors of the estate, in trust, with directions that the real estate be sold at its appraised value for the benefit of the children. The will also directed that two of the decedent's sons, Robert Hall and Frank Hall, be given the privilege of buying a quarter section each of the N/2 of Section Two at the appraised value.

The widow and six children entered into three successive agreements for the pooling of oil and gas royalties received from the production of oil and gas on the tracts of land covered by the agreements, which included the N/2 of Section Two. The first agreement was of limited duration and was expressly cancelled and rescinded by the second agreement. The second agreement was also limited in duration, but insofar as it was perpetuated by production of oil, its provisions were incorporated into the third pooling agreement. The last of these agreements was entered into on May 6, 1942. At that time oil was being produced on the Northwest Quarter (NW/4) of Section Two under a base lease with Cities Service Oil Company entered into in 1937 which covered the entire N/2 of Section Two. Production on the NW/4 has been continuous to the present date. Although many dry holes were drilled on the NE/4 of Section Two, no production of oil or gas was obtained until November 1980. The oil and gas lease of April 29, 1937, covering the NE/4 was released by Cities Service on December 3, 1958. The oil discovered in 1980 on the NE/4 of Section Two was under an entirely new oil and gas lease.

The 1942 pooling agreement provided that royalties received or payable from the land covered by the agreement would be divided in seven equal parts during the lifetime of Sarah Hall, and after her death divided in six equal parts among the children. The agreement provided it was to remain in effect for a period of ten years for all the land covered by the agreement, and thereafter would continue to be in force as to each quarter section of land from which oil or gas is being produced. These provisions were modified by the last paragraph of the agreement, which reads:

"It is further agreed and understood by and between the parties hereto that should more than one quarter section of any of the real estate hereinbefore described be included in and held by a single basic oil or gas lease thereon, then production of oil or gas from any one of such quarters shall be deemed production from all of the real estate from said basic oil and gas lease." (Emphasis added.)

The agreement stated it was the express intent of the parties to make an equal division of oil and gas royalties derived from production on the property covered thereby, and to abide by the terms and conditions of the will of John Hall, modified only by the pooling of the oil and gas interests. In reference to the specific provisions of the will the agreement provided:

"In the event that during the life of this contract, Robert Lee Hall and Frank Hall, or either of them, exercises the option of purchase of any of the land hereinbefore described as provided for in the will of said John Hall, deceased, and in accordance with the terms of said will, at the appraised value of said lands, it is expressly understood and agreed by and between the parties hereto, that the appraisal of said lands shall be on the basis of the agricultural and grazing value only thereof, and that the value of said lands as fixed by said appraisal shall not be enhanced or increased to any degree or extent by reason of any value of said lands for royalty or leases for oil or gas purposes and that in such appraisal no oil or gas rights in said land shall be taken into consideration."

Following the death of Sarah Hall the Probate Court of Ellis County on August 18, 1950, approved the purchase of the NE/4 of Section Two by Robert Hall and the purchase of the NW/4 by Frank Hall. These purchases were made pursuant to a family agreement entered into by the remaining six children of John Hall, after the death of Sarah Hall, wherein they consented to the exercise of the options to purchase the real estate by Frank and Robert Hall as provided for in the will of John Hall. The amounts paid by Robert Hall and Frank Hall for the purchase of the two quarter sections were acknowledged by this family agreement as being the value of the surface rights. This family agreement also provided that in further consideration for the right to purchase the property Robert Hall and Frank Hall would each convey to the other five children by mineral deed a five-sixths ( 5/6) interest in the oil, gas and other minerals in and under his respective quarter section for a period of fifteen years and as long thereafter as oil, gas or other minerals are being produced. This provision was adopted by the probate court in its decree which directed that upon delivery of "a good and sufficient deed" conveying the quarter sections, and its approval by the court, Robert Hall and Frank Hall were required to execute and deliver the mineral deeds as agreed upon in the family agreement.

On August 19, 1950, three of John Hall's children, Belle Bellman, Grace Lightner and Lizzie Johnson, executed a quitclaim deed conveying the NE/4 of Section Two to Robert Hall. On August 22, 1950, John Hall's remaining three children Robert Hall, Frank Hall and William Hall, acting as executors of the estate of John Hall, executed a warranty deed conveying the NE/4 to Robert Hall. On September 27, 1950, Robert Hall and his wife, the appellant, executed and delivered an instrument entitled "Sale of Oil...

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