Jennings v. N.Y. Petroleum Royalty Corp.

• Decision Date: 27 November 1934
• Docket Number: Case Number: 23389
• Citation: 1934 OK 676,169 Okla. 528,43 P.2d 762
• Parties: JENNINGS et al. v. NEW YORK PETROLEUM ROYALTY CORP.
• Court: Oklahoma Supreme Court

1934 OK 676

43 P.2d 762

169 Okla. 528

JENNINGS et al. v. NEW YORK PETROLEUM ROYALTY CORP.

Case Number: 23389

Supreme Court of Oklahoma

Decided: November 27, 1934

Syllabus

¶0 1. Frauds, Statute Of--"Party to Be Charged" Defined.

The words "party to be charged," as used in section 5034, C. O. S. 1921 (9455, O. S. 1931), relating to contracts for sale of real property, or an interest therein, mean the party against whom the contract is sought to be enforced, whether vendor or vendee.

2. Same--Essentials of Complete Contract by Connected Letters or Other Writings.

A complete contract binding under the statute of frauds may be entered into by letters, telegrams, or other writings between the parties, relative to the subject-matter of the contract, and so connected with each other that they may be fairly said to constitute one paper relating to the contract, but in order to be sufficient the letters, telegrams, and writings relied upon must, by reference to each other, disclose every material part of a valid contract, and must be signed by the party sought lo be charged, must set out the parties, the subject-matter. the price, the description of the property. terms, and conditions, and leave nothing to refit in parol.

3. Vendor and Purchaser--Abstract Held not to Show Merchantable Title.

An abstract which discloses a recorded mortgage unsatisfied of record and an existing oil and gas lease unreleased of record does not show a merchantable title.

Appeal from District Court, Tulsa County: Harry L. S. Halley, Judge.

Action by William P. Jennings, Walter R. McClellan, and Rufus C. Lillard against New York Petroleum Corporation, with S. D. Butcher intervening. From an adverse judgment, the plaintiffs and S. D. Butcher, intervener, appeal. Judgment affirmed.

I. C. Saunders and Neal E. McNeill, for plaintiffs in error.

Roscoe E. Harper and Gentry Lee, for defendant in error.

PER CURIAM.

¶1 This case was tried in the district court of Tulsa county, upon an amended petition and an amendment to the amended petition filed by William P. Jennings, Walter R. McClellan. and Rufus C. Lillard, as plaintiffs. The suit is for specific performance of contract for the purchase of a five-acre mineral interest in certain lands in Pottawatomie county, Okla., and to recover the sum of $ 8,000 as the alleged purchase price.

¶2 The amended petition contains this clause:

"The plaintiffs and defendant with its duly authorized agents entered into an oral contract and agreement, whereby the plaintiffs agree to sell and the defendant agreed to purchase from said plaintiffs the oil and gas royalty and mineral rights situated in, to and under the following property, situated in Pottawatomie county, state of Oklahoma, to wit:

"A full five (5) acre oil and gas royalty and mineral interest in the east three-fourths (E.3/4) of the east half (E.1/2) of the northwest quarter (N.W.1/4) and the northwest quarter (N.W. 1/4) of the northeast quarter (N.E.1/4) and lots two (2) three (3) and four (4) in section twenty-one (21) township eight (8) north, range live (5) east.

"For the stipulated and agreed consideration of $ 8,000."

¶3 The amended petition contains copies of the following telegrams, to wit'

"Tulsa, Okla. Jan. 20-28

"W. P. Jennings

"Shawnee, Okla.

"We agree to purchase from you and you agree to sell and deliver to us a full five-acre mineral interest in east three-fourths of east half of northwest and northwest northeast of lots two, three, and four twentyone eight five one hundred forty five acres more or less for total consideration of eight thousand dollars subject to approval of title by our attorneys please confirm by wire.

"New York Petroleum Royalty Corpn.

"By A. H. McCreery."

"New York Petroleum Royalty Corporation,

"Tulsa, Okla.

"This is to confirm your purchase through W. P. Jennings, five acre undivided royalty interest east three fourths of east half northwest quarter and northwest quarter of northeast quarter and lots two, three, and four all in section twenty-one township eight north range five east for a total consideration of eight thousand dollars subject to title being merchantable.

"Walter R. McClellan."

¶4 Attached to the amended petition as exhibit A is a mineral or royalty deed executed on the 20th day of January, 1928, by Walter R. McClellan, which was duly acknowledged and appears to be in legal form and in favor of the defendant for a full five-acre oil and gas royalty and mineral interest in the land described in said amended petition. This mineral deed contained this exception clause:

"Said land being now under an oil and gas lease executed in favor of Indian Territory Ill. Oil Co., it is understood and agreed that this sale is made subject to the terms of said lease, but covers and includes 5/145.19 of all of the oil royalty, and gas rentals or royalty due and to be paid under the terms of said lease."

¶5 Attached to the amended petition as exhibit B is a copy of a draft as follows'

"The State National Bank

"Shawnee, Okla. Jan. 20, 1928.

"Payable on or before Jan. 23. 1928. Pay to the Order of State National Bank, Shawnee, Oklahoma, -- $ 8,000.00 Eight Thousand & no/100 -- Dollars

"With exchange and collection charges.

"Walter R. McClellan.

"To' New York Petroleum Royalty Corp.,

"Exchange National Bank,

"Tulsa, Oklahoma.

"Customer's Draft."

¶6 The amendment to the amended petition of the plaintiffs further alleges that a certain mortgage appearing of record against the land involved in this suit in the sum of $ 2,300 had been paid, but that plaintiffs did not know whether the release of said mortgage properly executed had been placed of record, and that the plaintiffs informed the defendant of this fact and the defendant company, through its agent. A. H. McCreery, had frill knowledge of said fact, and agreed that if the title was merchantable with the exception of said mortgage he would accept the same. This alleged agreement, if made, seems to have been oral and not in writing. The amended answer and the amendment to the amended answer of the defendant in brief consists of'

"1. General denial.

"2. Denies that the plaintiffs were the owners on January 20, 1928, of the oil and gas property described in plaintiff's petition.

"3. Denies that the defendant entered into any oral agreement as alleged in plaintiffs' petition, or any agreement for the purchase of said property.

"4. That such purported agreement, if any was in fact made, was illegal, unenforceable and void tinder the statutes of fraud of the state of Oklahoma, for the reason that such purported agreement was for the purchase of an interest in realty and the same was not reduced to writing nor was there any such memorandum of said contract reduced to writing and signed by the defendant.

"5. That such purported agreement, if made, required the plaintiffs to furnish to the defendant a complete abstract of title to said property, showing merchantable title in the party or parties offering to convey the same and that the abstract of title submitted to the defendant was not complete and did now show merchantable title to said property and the defendant was justified in refusing the same."

¶7 To the amended answer and the amendment to the amended answer of the defendant. the plaintiffs anti the intervener filed reply briefly as follows:

"1. A general denial of all new matter set up in the answers of the defendant.

"2. An oral agreement by the defendant that if the abstract disclosed that the mortgage had not been released, the defendant would waive the same or accept evidence that the mortgage had been paid.

"3. That the defendant did not refuse the title on account of the said mortgage and set up a telegram addressed to W. P. Jennings as follows:

"'Tulsa, Okla. 149 P. Jan. 22, 1928.

"'W. P. Jennings

"'Well known Shawnee Okla.

"'We hereby withdraw, revoke and rescind our offer to purchase five acres mineral interest in east three quarters of east half of northwest quarter and northwest quarter and northwest quarter northeast quarter and lots two, three and four of section twenty-one township eight north range five east Pottawatomie county, Oklahoma contained in our telegram of January twentieth nineteen twenty-eight.

"'New York Petroleum Royalty Corp.

"'By A. H. McCreery.

"'420 P.'

"4. That the defendant having refused to carry out said contract on the ground other than that title was not merchantable thereby waived the fact of merchantability of the title."

¶8 On these issues the case went to trial before a jury. The trial judge, after hearing all the evidence of the plaintiffs and intervener and the evidence of the defendant, and at the close of all the evidence, sustained the motion of the defendant for a directed verdict upon the grounds that the evidence was wholly insufficient to entitle the plaintiffs to any relief in the premises. Thereupon, the jury returned a verdict in favor of the defendant. The trial court then rendered a judgment in favor of the defendant and adjudged and decreed that the plaintiffs and the intervener take nothing by their suit; to all of which the plaintiffs and intervener duly excepted.

¶9 The plaintiffs and intervener filed their motion for a new trial in due time, and the case is now before this court on appeal from the said judgment of the district court of Tulsa county.

¶10 The petition in error alleges as grounds for reversal that the court erred in instructing the jury to return a verdict in favor of the defendant; that the court erred in admitting certain evidence on the part of the defendant; that the court erred in refusing to admit competent and legal evidence in favor of the plaintiffs; that the court erred in overruling their motion for a new trial.

¶11 It appears to the court that the two vital issues involved in this case are, first, whether there was an enforceable contract entered into between the plaintiffs and the defendant; and, second, whether the plaintiffs furnished an abstract showing a merchantable title.

¶12 The record shows that all writings passing...