Rowland v. Griffin

• Court: Arkansas Supreme Court
• Writing for the Court: WOOD, J.
• Citation: Rowland v. Griffin, 16 S.W.2d 457, 179 Ark. 421 (Ark. 1929)
• Decision Date: 29 April 1929
• Docket Number: 274
• Parties: ROWLAND v. GRIFFIN

16 S.W.2d 457

179 Ark. 421

ROWLAND v. GRIFFIN

No. 274

Supreme Court of Arkansas

April 29, 1929

Appeal from Union Chancery Court, First Division; J. Y. Stevens Chancellor; reversed.

Reversed.

Robert A. Kitchen, for appellant.

Joe Joiner, for appellee.

OPINION

WOOD, J.

On September 5, 1919, John Alderson and wife executed to James A. Rowland an oil and gas lease on eighty acres of land in Union County, Arkansas, for a period of ten years and as long thereafter as oil and gas, or either of them, were produced from the land under the terms of the lease. This was before oil and gas were discovered in Union County. On October 2 1920, Alderson and wife executed a deed of trust to Finn Craig, as trustee, in favor of J. A. Rowland, on the tract of land above mentioned. This deed of trust was to secure an indebtedness to Rowland in the sum of $ 648.68, bearing interest at the rate of ten per cent. per annum, evidenced by note of that date. On April 28, 1920, Rowland sold the lease above mentioned, and same passed by mesne assignments to the Sun Company. On February 4, 1921, Alderson and wife executed a deed of conveyance to A. G. Griffin, conveying to him "an undivided one-eighth of, and an interest in and to, all the oil, gas and other minerals in, under, and upon" the lands above mentioned, subject to the lease executed on the land to Rowland on September 5, 1919. The deed gave to Griffin the right to collect "such undivided one-eighth part and interest due us [Alderson and wife] or that may become due, as royalties under the aforesaid lease, should oil, gas or other minerals be produced thereunder." The deed warranted the title to the lands and such part of oil, gas and other minerals and royalties therein conveyed, and gave to Griffin the right to enter upon the lands for the purpose of producing, saving and removing oil, gas, and other minerals, and for collecting and receiving the royalties under the terms of the lease. This deed to Griffin was filed for record in Union County on December 23, 1921. On December 10, 1923, Rowland and Craig foreclosed the mortgage on the lands above mentioned against John Alderson and wife. Rowland became the purchaser thereof at the foreclosure sale, and received the commissioner's deed on February 9, 1924. In the foreclosure proceedings mentioned Griffin was not made a party. The makers of the deed of trust did not redeem.

In August, 1926, this action was instituted by A. G. Griffin against Rowland and W. M. Coates, to whom Rowland had executed a deed conveying an undivided one-half interest in the oil, gas, and other minerals in and under the lands covered by the deed of trust. The trustee, Craig, and also Alderson and wife, makers of the deed of trust, were made parties. In his complaint Griffin alleged, in substance, that he was the owner of one-eighth interest in the oil, gas, and other minerals in, under, and upon the lands described in his complaint, and be asked to be allowed to redeem from Rowland the title he acquired by the foreclosure of the deed of trust mentioned. He alleged that Rowland refused to permit plaintiff to redeem, and refused to accept the mortgage indebtedness with interest. Plaintiff offered to pay into court the amount of the mortgage indebtedness with interest, and any other amounts the court might find necessary to enable plaintiff to redeem. Plaintiff also asked that the mineral deed from Rowland to Coates be canceled; and in an amendment to his complaint he asked for an accounting by Rowland for rents received by him and the $ 1,200 paid him by Coates as the consideration for the deed from Rowland to him. Griffin in his pleadings contended that his deed from Alderson and wife gave him the right to redeem the entire property sold, and to be subrogated to the rights of Rowland, the mortgagee. He asserted that, before he obtained his deed from Alderson, he required Alderson to secure a written statement from Rowland authorizing Alderson to convey to Griffin all the minerals then owned by Alderson. He prayed to be permitted to redeem as set forth, and that his title to the undivided one- eighth interest in all the oil, gas, and other minerals in the lands mentioned be quieted in him, and for all other legal and equitable relief.

The pleadings on the part of the defendants admitted the facts as alleged in the complaint with reference to the instruments referred to therein and made exhibits thereto, but set up that, under the facts stated and as shown by the several conveyances, the plaintiff, Griffin, did not have the right to redeem from Rowland the entire interest, as claimed by Griffin. They admitted the right of plaintiff in the minerals to the extent of a one-sixty-fourth interest, but denied the right of the plaintiff to redeem the entire property covered by the deed of trust. They conceded that he had a right to redeem a one-sixty-fourth interest in the minerals, and asked the court to determine the amount to be paid in order to redeem said interest. Defendants denied the right of plaintiff to an accounting from J. A. Rowland of the sum collected from the sale of mineral interest to Coates, and denied that the plaintiff had the right to have title quieted to a one-eighth interest in the oil, gas, and other minerals in, under and upon said tract of land, and denied the right of plaintiff to have the mineral deed to Coates canceled. Defendant Rowland denied that he had signed a written statement authorizing Alderson to sell to Griffin all the minerals owned by Alderson, as alleged by Griffin.

The plaintiff demurred to the answer and cross-complaint, and the demurrer was overruled.

The trial court found, among other things, that, a short time after the tenth day of January, 1921, J. A. Rowland leased said land to the Sun Company for the sum of $ 1,200; "that the lease taken upon the said land by the defendant J. A. Rowland from John Alderson and wife, on the 5th day of September, 1919, was, on the execution of the deed of trust to the defendant J. A. Rowland by John Alderson and wife, merged into the estate created by the deed of trust; that, when the defendant leased the land to the Sun Company for the sum of $ 1,200, the debt due and owing to J. A. Rowland by John Alderson and wife, evidenced by the deed of trust, was settled, and the one-eighth interest in the land owned by A. G. Griffin became freed of the lien of said deed of trust."

The court further found: "That, when the defendant Rowland sold and executed the deed to W. M. Coates to one-half interest in the minerals in and under said land, one-eighth interest in and to said minerals was in the plaintiff, A. G. Griffin." The court thereupon entered a decree canceling the commissioner's deed to J. A. Rowland, which was executed pursuant to the foreclosure of the deed of trust, in so far as it affected the title of Griffin, and also canceling the deed from Rowland to Coates in so far as same affected the title to Griffin. The court further decreed that all the right, title and interest in and to an undivided one- eighth part and interest in and to all the oil, gas and other minerals in and under the lands described in the complaint be confirmed and forever quieted in A. G. Griffin, so far as the defendant Rowland is concerned. On the question of damages in favor of the plaintiff Griffin against the defendant Rowland, on account of the latter's interference with the one-eighth royalty interest of the plaintiff in the land, the court found the facts had not been sufficiently developed, and retained jurisdiction of that question for further consideration. From the decree of the court is this appeal.

The pleadings are lengthy and the testimony voluminous, but the above statement is sufficient to show the issues. Such other facts from the record as are necessary will be stated as we proceed to consider the questions presented by counsel in the order set forth in their briefs.

1. The court's decree was predicated upon its finding and conclusion of fact that the lease of Alderson and wife to Rowland was merged in the deed of trust. The court erred in its finding and holding that there was a merger. It is alleged by the appellee, and not denied by the appellants, that Rowland and wife assigned the lease to J. Edgar Pugh on April 28, 1920, and that Pugh assigned the same to the Sun Company on May 27, 1921. It is alleged by the appellee, and admitted by the appellants, that the deed of trust mentioned was executed on the second day of October, 1920. Counsel for appellee in his brief admits that the appellee alleged in his answer to appellants' cross-complaint that the lease was assigned by Rowland and wife to Pugh on April 28, 1920, and transferred by Pugh to the Sun Company, as alleged, but he says there was no proof of such allegations. Since the allegations were not denied, it was not necessary to prove them, and there was no issue joined on such allegations and no attempt to prove or disprove them. Kenney v. Streeter, 88 Ark. 406, 114 S.W. 923. True, Rowland testified, when being questioned concerning the value of the lease at the time it was sold to the Sun Company, that he sold the same about 1920 or 1921, and, upon further questioning, he stated as follows: "The gasser which was spraying oil was brought in in 1920. My recollection is I sold this lease to the Sun Company after the gasser or the first well which was spraying oil." But this testimony does not tend to controvert the undenied allegation of the appellee that the lease was sold in April, 1920. Therefore it is conclusively established that the lease to Rowland was transferred by him to another, and that the title to such lease was not in Rowland at the time the deed of trust was executed to him on October 2, 1920.

Jones, in his...