Palmer v. Land & Power Co.

• Decision Date: 12 January 1957
• Docket Number: No. 40179,40179
• Parties: Anna M. PALMER, Appellant, v. The LAND AND POWER COMPANY, A Corporation, Appellee.
• Court: Kansas Supreme Court

Page 152

306 P.2d 152

180 Kan. 492

Anna M. PALMER, Appellant, v. The LAND AND POWER COMPANY, A Corporation, Appellee.

No. 40179.

Supreme Court of Kansas.

Jan. 12, 1957.

Syllabus by the Court

1. In an action to reform a deed on the ground of mutual mistake, the mistake relied on must, in the absence of fraud of one of the parties, be mutual.

2. In an action such as described in the foregoing paragraph of this syllabus, the record is examined and it is held there was no substantial evidence of any mistake or fraud of the grantee in the deed sought to be reformed.

3. While the statute of limitations does not bar an action to quiet title, where in order for the title to be quieted a deed must be reformed, the action will the treated as one to reform a deed and the statute will operate.

Robert Martin, Wichita, argued the cause, and D. Arthur Walker, Arkansas City, and George B. Collins, Oliver H. Hughes, K. W. Pringle, Jr., W. F. Schell and Thomas M. Burns, Wichita, were with him on the briefs, for appellant.

Donald Hickman, Arkansas City, argued the cause, and Kirke W. Dale, Arkansas City, and Harry O. Janicke and John A. Herlocker, Winfield, were with him on the briefs, for appellee.

The following opinion was prepared by SMITH, C. J., and approved by the court prior to his retirement from the court, and is now ordered filed as the opinion of the court.

This was an action for slander of title to real estate and to quiet plaintiff's title. Judgment was for defendant. Plaintiff has appealed. The real estate involved is an undivided one-half interest in the minerals under the ground in a tract of land.

The litigation was begun on September 7, 1950. The defendants were The Land & Power Company, a corporation, and A. L. Newman, its secretary and treasurer. It has been in this court once before. See Palmer v. Land & Power Co., 172 Kan. 231, 239 P.2d 960. There the trial court sustained defendant's demurrer to plaintiff's evidence. On appeal we reversed and sent the cause back to be tried. It has been tried now and this appeal is from a judgment in favor of the defendant.

The first cause of action began in 1950 and stated the plaintiff was the owner of the described tract; that about August 6, 1946, plaintiff and her husband entered into a contract with defendant for the purchase of the tract on payments and on full payments being made, defendant was to deliver a warranty deed, reserving to it for a period of ten years, or as long as oil or gas should be produced an undivided one-half interest in the minerals under the premises described; that about August 6, 1947, the parties entered into an oral contract; that in consideration of full payment of the purchase price then outstanding defendant would convey the tract to plaintiff and her husband without the reservation; that on the same date plaintiff and her husband did pay the full purchase price to defendant and defendant through its secretary did convey to them the tract by warranty deed without the reservation; that on November 6, 1947, plaintiff's husband died; that on December 15, 1946, plaintiff discovered an error in the description in the deed and through her attorney, George Templar, notified defendant and made an oral demand on defendant that the error be corrected; that on January 7, 1948, defendant, A. L. Newman, acting for himself and the company, executed a warranty deed to the premises and property and reserved the minerals to it for ten years; and Newman and the company knowingly, willfully and maliciously placed this deed of record well knowing the reservation to be a false and fraudulent incumbrance upon the premises; that plaintiff had refused to accept delivery of the deed and had so notified defendants; that by reason of the foregoing plaintiff was damaged in the amount of $7,500.

For her second cause of action plaintiff made the allegations of the first a part and alleged she was in peaceable and actual possession of the premises; that the power company claimed a one-half interest in the oil and gas under the premises for ten years and the claim was false and fraudulent; that due demand had been made that defendant desist from claiming such interest and it had refused to do so.

Judgment was asked for $7,500 and that plaintiff's claim be quieted.

The power company for its separate answer denied generally. It then admitted the identification of the parties, the execution of the contract, the execution of the deeds dated January 7, 1949, Exhibit 2, and August 6, 1947, Exhibit 3. It alleged that Exhibit 2 through a mistake of the scrivener and the mutual mistake was an oversight and error of defendant, the plaintiff and her husband, there was erroneously omitted the reservation from the deed; it then quoted the appropriate provisions of the contract and alleged that the covenants contained in it were obligatory upon heirs, executors or assigns of the parties; that as a result of such error, mutual mistake and oversight, the deed was erroneously prepared, executed and delivered and accepted without the mineral reservation; that at the time plaintiff notified it of an error in the description the defendant first discovered the mistake in failing to include the reservation and so notified plaintiff; that for the purpose of correcting the mutual mistake and the error in the description of the property, the defendants executed, recorded and delivered the second deed, Exhibit 3.

The prayer of the answer was that plaintiff recover nothing.

The reply was a general denial.

With the issues thus drawn, the case was tried and the trial court sustained defendant's demurrer to plaintiff's evidence. When the cause reached us on the first appeal we reviewed the pleadings; pointed out that the evidence of plaintiff to the effect that the contract was entered into and the plaintiff and her husband within less than a year after the contract was entered into paid all the balance, and defendants prepared and delivered to plaintiff a warranty deed free and clear of all incumbrances without exception or reservation; that Ernest Palmer died and in the settlement of his estate it was discovered there was a mistake in the description; that this suspected error was confirmed and counsel for plaintiffs approached Newman and demanded a corrective deed; that in the first conversation no mention was made by Newman of any failure to reserve mineral rights; that later Newman told counsel he would have his attorneys prepare another deed correctly describing the land but he would include in this deed a reservation of mineral rights as set forth in the original contract; that counsel informed Newman that Palmer had told him that the company had agreed to waive the reservation if Palmer would pay the contract off in 1947 and Newman replied there was nothing to that; that counsel refused to accept the deed because it contained such reservation; that notwithstanding the rejection of this by counsel, defendants caused it to be filed for record, which deed in addition to correcting the error in description reserved one-half of the minerals in the company and such deed was filed of record without the knowledge of plaintiff or her attorney; that defendants paid the recording fee and mailed it to plaintiff, stating it was the deed the attorney for plaintiff requested; the evidence showed plaintiff's counsel had refused to accept or approve the deed; that at the time the second deed was made there was oil play in the vicinity of the tract in question.

We then pointed out that plaintiff did not bring her action to reform an instrument and such was a matter of defense that the execution of the contract and the warranty deed had been admitted and consideration, or the lack of it, had not been pleaded. We then pointed out the general rule that prior stipulations and agreements were merged in the final and formal contract or deed executed by the parties and when a deed is delivered and accepted as performance of a contract to convey, the contract is presumed to be merged in the deed. With reference to the argument, there was no consideration, we quoted G.S.1949, 16-107, as follows:

'All contracts in writing, signed by the party bound thereby, or his authorized agent or attorney, shall import a consideration.'

We then pointed out plaintiff was entitled to this presumption. On the basis of the above we held the demurrer to the evidence of plaintiff should have been overruled. We reversed the judgment and ordered a new trial of the cause.

We go now to a consideration of the pleadings filed in the cause after it was returned to the trial court.

There on March 14, 1953, the defendants filed a motion for permission to file an amended answer and a cross petition. After a hearing, this motion was sustained. The amended answer was substantially the same as the original answer. In its cross petition the defendants included the allegations of their answer and alleged that the power company had for more than fifteen years been the owner in fee simple and in possession of an undivided one-half interest in the minerals under the tract; that the claim of the plaintiff to the mineral interest was without merit and cast a cloud upon the title of defendant; and that defendant was entitled to have its title quieted.

The prayer of the cross petition was plaintiff recover nothing; that defendant be adjudged to be the owner in fee simple of the described mineral interest and the title of defendant be quieted and the plaintiff or anybody claiming under her be barred. The plaintiff filed a motion asking that defendants be requested to make their answer more definite and certain, when, by whom and in what manner the deed, Exhibit 3, was delivered to plaintiff. This motion was sustained. In response the defendant alleged that it prepared a corrective deed for the purpose of correcting the legal description and for the additional purpose of correcting the mutual mistake in failing to insert...