Pond Creek Coal Co. v. Hatfield

• Decision Date: 06 February 1917
• Docket Number: 2841.
• Citation: 239 F. 622
• Parties: POND CREEK COAL CO. v. HATFIELD et al.
• Court: U.S. Court of Appeals — Sixth Circuit

239 F. 622

POND CREEK COAL CO. v. HATFIELD et al.

No. 2841.

United States Court of Appeals, Sixth Circuit.

February 06, 1917

[Copyrighted Material Omitted]

T. H Harman, of Pikeville, Ky., for appellant.

P. K Malin, of Ashland, Ky., for appellees.

Before KNAPPEN and DENISON, Circuit Judges, and McCALL, District judge.

KNAPPEN Circuit Judge.

Appellant filed its bill in equity, asking that appellees be declared to hold in trust for it the mineral rights in a tract of about 230 acres in Pike county, Ky., that plaintiff's title thereto be quieted, and for conveyance accordingly. The pertinent facts needing present statement are, in substance, these:

July 24, 1889, Arthur Bright, as trustee for others, purchased from the Maynard Brothers, and paid for, the mineral rights in a tract of 1,164 acres in Pike county, Ky. In this purchase Anderson Hatfield acted as agent for Bright, trustee, upon commission. He also took (as deputy clerk of the circuit court) the acknowledgment of the grantors, and, in connection with an attorney employed for the purpose, 'ran over the title at the courthouse,' finding no defects therein. This deed was at once recorded. It turns out that one Smith had sold to Williamson 230 acres of the 1,164-acre tract, making no conveyance, but giving title bond therefor. Williamson had sold the 230-acre tract to the Maynards, but, not having received conveyance from Smith, did not convey to the Maynards, but made agreement to do so.

About six months after the conveyance from the Maynards to Bright, trustee, of the mineral rights in the 1,164-acre tract, viz. February 10, 1890, Hatfield purchased from the Maynards the surface interest in the entire 1,164-acre tract. In the course of this purchase the situation as to the legal title to the 230-acre parcel was for the first time discovered by Hatfield. Neither Bright, trustee, nor any one representing him had discovered it. The Maynards accordingly conveyed to Hatfield the entire 1,164 acres, and arranged that Smith should deed direct to Hatfield the 230-acre parcel; a portion of the purchase price being held back until Smith's conveyance should be made. Four days later Smith, by deed reciting Williamson's direction so to do, conveyed the 230 acres to Hatfield, who then paid to the Maynards the portion of the purchase price which had been held back, and the deeds from the Maynards and Smith were at once recorded. Neither deed contained an exception of the mineral rights. The Maynards understood they were selling to Hatfield only the surface rights, Hatfield paid for such rights only, and had in mind that the mineral rights had been, as previously said, purchased through him for Bright, trustee. By deeds made in 1902 and 1903 Hatfield conveyed the 230 acres to his children, reserving the mineral rights. The surface rights were, by mesne conveyances, sold to Vinson, who makes no claim to the mineral rights.

About two months before this suit was begun (which was December 12, 1911) Hatfield conveyed in form to his sons the mineral rights in the 230-acre tract; the deed not having been recorded until after this suit was commenced. Defendant Anderson Hatfield still claims the mineral rights, notwithstanding the deed to his sons, and it was conceded upon the hearing in this court that no one had obtained from Anderson Hatfield any rights superior to his. Bright, trustee, in 1893, conveyed the mineral rights in the entire 1,164 acres to Nash, trustee, who in 1902 conveyed to the Blackberry Coal Company. The latter on June 13, 1911, conveyed to Beale, trustee, who on November 17, 1911 (less than one month before this suit was begun), conveyed to plaintiff.

It appeared upon the hearing below that as to 55 or 60 acres of the 230-acre tract the Maynards had title superior to that derived from Smith, and thus that the mineral rights therein passed to Bright, trustee, under the deed of the Maynards. The District Court accordingly gave plaintiff relief as to the 55 or 60 acres. The court was of opinion, however, that as to the remainder of the 230-acre tract the suit was essentially for the specific performance of Smith's contract to convey and that, as nearly 22 years had elapsed between Smith's conveyance to Hatfield and the commencement of this suit, an action in the state courts of Kentucky would be barred by section 2514 of the Kentucky Statutes, which provides, for an action upon a 'recognizance, bond, or written contract,' a limitation of 15 years after the cause of action accrues; and that, if not governed by section 2514, the case would fall within section 2522, which provides a limitation of 10 years for actions not specially provided for; and that the case fell within what was understood to be the rule that under ordinary circumstances relief will not be granted as against laches for a longer period than limited by state statutes, subject to exception in cases where by reason of fraud or concealment of the cause of action it has not been discovered, or where it would not have been discovered by reasonable diligence; and the court, being of opinion that Hatfield had not fraudulently concealed the right of action, that there was no showing of reasonable diligence on the part of plaintiff and its grantors in discovering the right of action, and that reasonable diligence would have disclosed it, dismissed the bill, except as to the 55 or 60 acres mentioned.

Plaintiff's petition for rehearing and for leave to file a proposed amendment to the bill, by way of excusing the charge of laches, was denied. Defendant has not appealed. While plaintiff's appeal covers a claim that another part of the 230-acre tract should have been awarded plaintiff, on the theory that Hatfield was estopped to deny the Maynard's title thereto, this claim is not discussed either in brief or orally, and must be treated as abandoned. The only question now reviewable, therefore, is whether the District Court rightly held that plaintiff's laches had been such as to bar recovery as to the remainder of the 230-acre parcel.

As the case is presented here, it is not made entirely clear that plaintiff had lost the right to relief in the state courts of Kentucky. By section 2505 of the Kentucky Statutes actions 'for the recovery of real property' are barred if not brought within 15 years after the right accrues. The District Court was of opinion that this action is not one for the recovery of real property. We are cited to no decisions to that effect. But as the question has not been discussed here, we content ourselves with these observations, for such bearing as they may have upon the ultimate question of laches:

The fact that the suit is in equity, rather than at law, cuts no figure; the Kentucky statutes of limitation apply to equitable as well as to legal actions. Clay's Adm'r v. Clay, 7 Bush, 95; Ferguson v. Railroad, 108 Ky. 662, 57 S.W. 460. The term 'real estate' includes all rights and interests in lands other than chattel interests (Ky. Statutes, Sec. 458; Anderson's Trustee v. Sterritt, 79 Ky. 499, 503), and necessarily embraces mineral rights. The section in question is not in terms confined to actions of ejectment. It is held applicable to an action for admeasurement of dower (Anderson v. Sterritt, supra; Bankston v. Mining Co., 95 Ky. 455, 25 S.W. 1105; McDanell v. Landrum, 87 Ky. 404, 9 S.W. 223, 12 Am.St.Rep. 500), which action by statute (Civil Code Ky. Sec. 499), as well as at common law (Waters v. Gooch, 6 J.J.Marsh. 587, 22 Am.Dec. 108), may be in equity. In the Kentucky dower proceeding, as well as in the action here, the remedy is by conveyance. The section has also been held applicable to a suit for the protection of an easement of burial (Hook v. Joyce, 94 Ky. 450, 22 S.W. 651, 21 L.R.A. 96), as well as an easement of light and air (Ray v. Sweeney, 14 Bush, 1, 7, 29 Am.Rep. 388), to an action to supply a lost deed (Brandenburg v. McGuire, 105 Ky. 10, 13, 44 S.W.

96), and (impliedly) to the foreclosure of a vendor's lien upon real estate (Hitt v. Pickett's Adm'r, 91 Ky. 644, 11 S.W. 9).

Hatfield took the legal title to the mineral rights with full knowledge that the equitable right thereto was in Bright, trustee, and so took such legal title subject to that equitable right in Bright and his successors in title, including plaintiff here. If section 2505 is applicable, action thereunder in the Kentucky courts would not be barred, for the statute does not begin to run until adverse possession (Ray v. Sweeney, 14 Bush, 1, 29 Am.Rep. 388); and the bar is not complete unless the adverse possession is continuous for the full statutory period (Wickliffe v. Ensor, 9 B.Mon. 253).

No such adverse possession was established, and the District Judge so held. Although we have no doubt that Hatfield, at the time of his purchase, or soon thereafter, formed the intention to hold the mineral interests, his claim thereto, unless open and notorious, was not adverse, within the meaning of the law of adverse possession; and the evidence of such open and notorious claim during the statutory period is not satisfactory. The mere use and possession of the surface of the land was not enough to constitute adverse possession of the mineral rights, after Hatfield's conveyance of the surface with reservation of such rights. Farnsworth v Barret, 146 Ky. 556, 561, 142 S.W. 1049. In fact, Anderson Hatfield never lived on the 230-acre parcel, and never improved it. Such residence and improvement as were had seem to have begun not earlier than 1902, which was only about 9 years before suit was begun. The mining of coal by Hatfield was not an assertion of adverse right to the minerals, for the coal was presumably mined for domestic purposes only, and the right to such mining was by the Maynards' deed...