Pauly v. Pauly
| Decision Date | 10 December 1946 |
| Docket Number | 32292. |
| Citation | 176 P.2d 491,198 Okla. 156,1946 OK 336 |
| Parties | PAULY et ux. v. PAULY et ux. |
| Court | Oklahoma Supreme Court |
Rehearing Denied Jan. 21, 1947.
Appeal from District Court, Oklahoma County; Clarence Mills, Judge.
Action to quiet title to realty and to remove a cloud therefrom by William M. Pauly and Dorothy C. Pauly, his wife, against Frank R. Pauly and Grace M. Pauly, his wife. From a judgment for the plaintiffs, the defendants appeal.
Judgment reversed in part with directions and affirmed in part.
Syllabus by the Court.
Prior to the delivery of a deed to real estate the grantees orally agreed that, if the grantor would not insist upon a reservation of the oil and gas, the grantees would, if oil or gas were thereafter found on the land, pay to the grantor a stated portion of the royalty payments received. Grantor delivered the deed, and thereafter, and on the same day, the oral agreement was reduced to writing, and signed by the grantees. Held, that the deed and written agreement were parts of the same transaction, and should be construed together, and the agreement given the same force and effect as if written into, and made a part of, the deed. Held further, that when so construed the promise contained in the agreement was a covenant running with the land.
Elton B. Hunt and W. L. Eagleton, both of Tulsa, and James R Eagleton, of Oklahoma City, for plaintiffs in error.
Everest McKenzie & Gibbens, of Oklahoma City, for defendants in error.
This is an action to quiet the title to real estate, and to remove a cloud therefrom, brought by William M. Pauly and Dorothy C Pauly, plaintiffs, against Frank R. Pauly and Grace M. Pauly, defendants. The cause was tried to the court, and judgment was for plaintiffs. Defendants appeal.
The essential facts are undisputed. William M. Pauly and Frank R. Pauly are brothers, and on February 19, 1941, they and their sister, Nell Wheatly, were the owners of the Northwest Quarter of Section 27, Township 14 North, Range 4 West of I. B. & M., in Oklahoma County. Prior to February 19th the two brothers had negotiated for a sale of the interest of Frank to William for a consideration of $5,150. Frank lived at Tulsa, and William at Lawton, and they met in Oklahoma City to close the deal.
Frank brought with him from Tulsa two quitclaim deeds made to his brother, both executed and acknowledged by himself and his wife. They were identical in form, except that one contained a clause reserving to Frank one third of the oil, gas, and other minerals, with the right of ingress and egress. When they were ready to close the deal he presented this deed to William, who refused to complete the transaction with the reservation in the deed, but offered to do so if Frank would agree to a deduction of $10 per acre, or $533.33 from the purchase price originally agreed upon, stating that he was advised that the mineral interests were worth $10 per acre. Frank refused to make any deduction, but urged that he was entitled to his share of the oil if the land was productive. The testimony as to what was then verbally agreed upon is slightly divergent. William testified:
Frank testified: 'He said, 'If there is any oil there you can have your one-third of it.' I said, 'All right, it is a deal'.'
After this verbal agreement had been made Frank produced and delivered the quitclaim deed which did not reserve any mineral interest, and William paid him the full consideration therefor, and the deed was placed of record.
Thereafter, and on the same day, Frank suggested that the verbal agreement should be put in writing. William agreed, and told Frank to write it out and he and his wife would sign it. Thereupon Frank, with pen and ink, wrote upon the bottom of the quitclaim deed containing the mineral reservation, which deed William had refused to accept, the following memorandum which was signed by William and his wife:
At William's request, Frank wrote across the face of the deed the word 'void'. Shortly thereafter the parties separated, and returned to their respective homes. William and his sister made an oil and gas lease on the land, and on Auguat 15, 1944, Frank placed of record a mineral deed, made by him individually to himself and his wife, purporting to convey a one third mineral interest in the land. This deed was recorded shortly after Frank had received a letter from William indicating that he did not consider himself bound by the 'gentleman's agreement'. Sometime in the fall of 1944 oil was discovered upon the land. Apparently the pipeline taking the oil refused to pay plaintiffs for the full production, but held one third in suspense, and on January 11, 1945, this action was brought.
The trial court found the facts substantially as state above; concluded that the so-called 'gentleman's agreement' that Frank should share in the production if oil or gas was produced from the land was not enforceable, and rendered judgment for the plaintiffs, denying the defendants any relief. In so doing we think the trial court erred.
Defendants contend that the quitclaim deed from Frank to William, and the memorandum thereafter signed by plaintiffs, are to be construed together as parts of the same transaction; that by the memorandum plaintiffs acknowledged that Frank had and retained a one third interest in the minerals; that this interest was held in trust by William, and that when oil or gas was discovered it was the duty William to convey such interest to Frank, and that the trial court should have required him to do so.
Plaintiffs contend that the oral agreement was superseded by the quitclaim deed conveying to plaintiffs all of the interest of defendants in and to the land, and that in any event such oral agreement was void as violative of the statute of frauds; that the written memorandum, having been executed and delivered after the delivery and recording of the quitclaim deed, was a separate agreement, and was wholly without consideration, so that plaintiffs were not bound thereby, and defendants could not successfully assert any rights thereunder.
We think that the evidence clearly establishes that the deed and memorandum were parts of the same transaction, and should be construed together. The whole agreement between the parties was that defendants would deed their interest in the land to plaintiffs without any reservation, and if oil or gas should be discovered on the land plaintiffs would give defendants one third of the money paid to them as royalty for their part of the oil and gas produced and sold. The fact that the part of the agreement contained in the memorandum was not reduced to writing until after the delivery of the deed does not preclude its consideration as a part of the transaction. Plaintiffs do not deny that the memorandum correctly states the oral agreement made by them before the deed was delivered, and that by such agreement defendants were induced to deliver to plaintiffs their quitclaim deed without any reservation of mineral interests.
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CHAPTER 1 ROYALTY INTERESTS IN THE UNITED STATES: NOT CUT FROM THE SAME CLOTH
...206 Okla. 696, 246 P.2d 757, 1 O.&G.R. 1264 (1952), they have not found that the Rule invalidates such transfers. Pauly v. Pauly, 198 Okla. 156, 176 P.2d 491 (1946). For other articles criticizing the application of the Rule to oil and gas conveyances in general, see Joe Morris, Future Inte......