Hushaw v. Kansas Farmers' Union Royalty Co.

• Decision Date: 28 January 1939
• Docket Number: 34012 to 34017.
• Citation: 86 P.2d 559,149 Kan. 64
• Parties: HUSHAW v. KANSAS FARMERS' UNION ROYALTY CO. et al. and five other cases. [*]
• Court: Kansas Supreme Court

86 P.2d 559

149 Kan. 64

HUSHAW

v.

KANSAS FARMERS' UNION ROYALTY CO. et al. and five other cases. ^[*]

Nos. 34012 to 34017.

Supreme Court of Kansas

January 28, 1939

Syllabus by the Court.

A statute of limitations may give title, and does not thereby take property without due process. U.S.C.A.Const. Amend. 14 § 1; Const.Kan. Bill of Rights, §§ 1, 17, 18; art. 11, § 1.

Possession during the full period of limitation destroys original owner's title to land and amounts to an investiture of title which may be actively asserted in ejectment in all respects as if acquired by deed.

The statute avoiding instruments conveying mineral rights when not recorded within 90 days after execution and not listed for taxation is constitutional, whether viewed as a recording act or as a statute of limitations. Gen.St.1935, 79-420; U.S.C.A. Const. Amend. 14, § 1; Const.Kan. Bill of Rights, §§ 1, 17, 18; art. 11, § 1.

It is common knowledge that Kansas contains vast reservoirs of oil and gas.

The statute avoiding instruments conveying mineral rights not recorded within 90 days after execution and not listed for taxation creates a condition precedent to the vesting of title in transferee, not a forfeiture of vested title Gen.St.1935, 79-420; U.S.C.A. Const. Amend. 14, § 1; Const.Kan. Bill of Rights, §§ 1, 17, 18; art. 11, § 1.

The statute avoiding instruments conveying mineral rights if not recorded within 90 days after execution and not listed for taxation was applicable to mineral deeds conveying interest in land which was then under oil and gas lease, where mineral rights were owned separately. Gen.St.1935, 79-420; U.S.C.A.Const. Amend. 14, § 1; Const.Kan. Bill of Rights, §§ 1, 17, 18; art. 11, § 1.

1. Statute avoiding instruments conveying mineral rights which instruments are not recorded within 90 days after execution if not listed for taxation, is valid. G.S.1935, 79-420. Such statute does not violate the Fourteenth Amendment of the Constitution of the United States, U.S.C.A., nor the Constitution of the State of Kansas.

2. Statute avoiding mining instruments not recorded within 90 days after execution, if not listed for taxation, applied whenever mineral rights in land are owned separately from other portion of land. G.S.1935, 79-420.

Appeal from District Court, Scott County; Fred J. Evans, Judge.

Separate actions, consolidated and presenting the same issues, by Samuel P. Hushaw, by George H. Mulch and another, by Gertrude M. Jackman, by Charles N. Jackman, by Beatrice L. Wilson, and by William Carpenter and another, against the Kansas Farmers' Union Royalty Company and another, to set aside and cancel instruments and to quiet title. From judgments for plaintiffs, defendants appeal.

ALLEN J., dissenting.

C. W. Burch, B. I. Litowich, LaRue Royce, L. E. Clevenger, E. S. Hampton, and R. E. Haggart, all of Salina, and S. H. King, of Blackwell, Okl., for appellants.

R. D. Armstrong and D. B. Lang, both of Scott City, for appellees.

ALLEN Justice.

These cases were consolidated and present the same issue. The record in case No. 34,012 is here considered. This was an action to set aside and cancel an instrument denominated a "mineral deed" and to quiet title. From a judgment in favor of plaintiff, defendants appeal.

The petition alleged that on December 10, 1930, the plaintiff was the owner in fee simple of certain land in Scott county; that on that date plaintiff executed the mineral deed in question to defendants; that the deed was delivered to defendants on December 11, 1930; that the deed was not filed for record in the office of the register of deeds within ninety days thereafter, and that the mineral interest so conveyed has never been listed for taxation. The petition recites that plaintiff tenders a redelivery of the stock certificate received from defendant, the Kansas Farmers' Union Royalty Company; asserts the deed is illegal and void; prays for cancellation and that his title be quieted.

The deed in question reads as follows:

"Know All Men by These Presents, That Samuel P. Hushaw, a single man of Scott City, State of Kansas, for and in consideration of the sum of One Dollar, cash in hand paid by the Kansas Farmers' Union Royalty Company and Flag Oil Company, hereinafter called Grantees and other good and valuable considerations, the receipt of which is hereby acknowledged, have granted, sold, conveyed, assigned, and delivered, and by these presents do grant, sell, convey, assign and deliver unto said Grantees an undivided one-half interest in the proportion of three-fourths (3/4) and one-fourth (1/4) interest therein respectively to the said Grantees in and to all of the oil, gas, and other minerals in and under, and that may be produced from the following described lands situated in Scott County, State of Kansas, to-wit: (description of land) together with the right of ingress and egress at all times for the purpose of mining, drilling and exploring said lands for oil, gas and other minerals and removing the same therefrom.

"Said land being now under an oil and gas lease, executed in favor of Not Leased it is understood and agreed that this sale is made subject to the terms of said lease and covers and includes -- of all of the oil royalty and gas rental or royalty due and to be paid under the terms of said lease insofar as it covers the lands above described.

"It is understood and agreed that 1/2 of the money, or other bonus, which is paid for any future oil and gas lease or leases which may be placed upon the above described land and 1/2 of the money rentals which may be paid to extend the terms within which a well may be commenced under the terms of said lease, or leases, shall be paid to and be the property of the grantees.

"To have and to hold the above described property, together with all and singular the rights and appurtenances thereto in anywise belonging unto the said Grantees herein, their respective successors and assigns, for a period of fifty years and as long thereafter as oil and gas may be produced therefrom; and I do hereby bind myself and my heirs, executors and administrators to warrant and forever defend all and singular the said property unto the said grantees herein, their respective successors and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof.

"It is hereby further expressly agreed that the Grantees accept this conveyance subject to any mortgage loan now existing against the above described land or any renewal thereof on the same, or on new, modified or qualified terms and conditions and that this grant of mineral and royalty rights shall at all times be subject to inferior and subordinate to any future mortgage loan which may be applied for and placed on the land by the grantor herein, and the same shall have the same force, effect, validity and priority as if executed, delivered and recorded prior to the date of execution, delivery and recording of this mineral grant."

The action is based on our statute, G.S. 1935, 79-420, which provides:

"Surface and mineral rights taxed separately, when; duty of register of deeds and county clerk. That where the fee to the surface of any tract, parcel or lot of land is in any person or persons, natural or artificial, and the right or title to any minerals therein is in another or in others, the rights to such minerals shall be valued and listed separately from the fee of said land, in separate entries and descriptions, and such land itself and said right to the minerals therein shall be separately taxed to the owners thereof respectively. The register of deeds shall furnish to the county clerk, who shall furnish on the first day of March each year to each assessor where such mineral reserves exist and are a matter of record, a certified description of all such reserves: Provided, That when such reserves or leases are not recorded within ninety days after execution, they shall become void if not listed for taxation."

In the answer of defendants it is asserted that the statute violates the last clause of section 1 of the Fourteenth Amendment of the Constitution of the United States, U.S.C.A.; that it violates Article 11, Section 1, and also Sections 1, 17 and 18 of the Bill of Rights of the Constitution of the State of Kansas.

The case was tried to the court upon the following agreed statements of facts:

"Come now the plaintiff and defendants, by their attorneys of record and hereby agree that the facts in the above case are as follows:

"1. The defendant, the Kansas Farmers Union Royalty Company is a corporation organized under the laws of the State of Kansas, and its Charter was approved and filed with the Secretary of State on October 16, 1929. It was organized for the purpose of pooling certain mineral rights and interests. The plan of organizing the pool was that a landowner executed and delivered to the company an instrument, such as that attached to the plaintiff's petition on file herein, covering an undivided one-half of the oil, gas and other minerals 'in, under and that may be produced from' the land in exchange for which the landowner received one share of stock in the company on account of such mineral rights covering each 160 acres so pooled. This was the only manner in which the stock of the company could be issued and sold. In order to finance the organization of the company and the expense of forming the pool, an arrangement was made with one Aldrich Blake of Oklahoma City, Oklahoma, whereby he paid such organization and pool expense in consideration for which one-fourth of the mineral rights and interest acquired were conveyed to the defendant, Flag Oil Company. The defendant, The Kansas Farmers Union Royalty Company could not dispose of the...