Rue v. Merrill

• Citation: 297 P. 379,42 Wyo. 511
• Decision Date: 31 March 1931
• Docket Number: 1650
• Parties: FRANK I. RUE, ET AL. v. L. B. MERRILL, ET AL. (P. W. Metz, et al., Interveners)
• Court: Wyoming Supreme Court

297 P. 379

42 Wyo. 511

FRANK I. RUE, ET AL. v. L. B. MERRILL, ET AL. (P. W. Metz, et al., Interveners)

No. 1650

Supreme Court of Wyoming

March 31, 1931

APPEAL from the District Court, Park County; HARRY P. ILSLEY, Judge.

Action by Frank I. Rue and another, against L. B. Merrill and others, to quiet title to royalty interest accruing under an oil and gas permit, and to vacate and set aside a purported transfer thereof, in which P. W. Metz and others intervene.

From a judgment in favor of defendant, G. A. Brown, plaintiffs appeal.

Affirmed.

For the appellants there was a brief by C. A. Zaring, of Basin Wyoming, and William E. Mullen, of Cheyenne, Wyoming, and oral argument by Mr. Mullen.

Brown failed to prove any interest in the royalty accruing under the Rue permit. He claimed under an alleged assignment of royalty interests from Rue to Merrill, assignments by Merrill to Shupak, and by Shupak to him, but there was no evidence that Merrill ever assigned to Shupak, so there is a missing link in the chain of assignments under which Brown claims. Durken v. Ward, (Ore.) 133 P. 345; Dorris v McManus, (Calif.) 87 P. 287, 32 Cyc. 1370. The pretended assignment, while executed on paper was assigned by Rue to Merrill under duress, and was without consideration. It is therefore void. Empire Surety Co. v. Hansen, 184 F 54; Baltimore Ref. & H. Co. v. Wetzel, 162 F. 117; Haskins v. Powder Co., (Ore.) 176 P. 124; 1 Williston Conts., Sec. 130, pp. 275, 276. When a party merely does what he is obligated by his contract to do, he cannot demand or recover, additional compensation therefor. Lingfelder v. Wainwright Co., 103 Mo. 578, 15 S.W. 844; Mainstreet Co. v. Los Angeles Co., 129 Cal. 301, 61 P. 937; Goldsborough v. Gable, 140 Ill. 269, 29 N.E. 722, 15 L. R. A. 294; Ayres v. Railway Co., 52 Iowa 478, 3 N.W. 522; Wescott v. Mitchell, 95 Me. 377, 50 A. 21; Railway Co. v. Grafton, 51 Ark. 504, 11 S.W. 702, 14 Am. S. R. 766; Vanderbilt v. Scheyer, 91 N.Y. 392; Carpenter v. Taylor, 164 N.Y. 171, 58 N.E. 53; In re Riff, 205 F. 409. One of the most carefully considered cases on the point is reported from Alabama, involving a bonus, promised to a contractor to induce him to perform his contract. McDonough v. Saunders, 201 Ala. 321, 78 So. 160, 11 A. L. R. 428. A written agreement reciting payment of consideration may be disproven by parol evidence. Kay v. Spencer, 29 Wyo. 382. A promise to render, by one already under legal obligation to render, is without consideration. Benedict v. Co., (Calif.) 147 P. 486; Schriner v. Craft, (Ala.) 28 L. R. A. (N. S.) 450. Where one party makes the entire concession and receives nothing in return, the transaction is not binding. Lumbr. Co. v. Beall, (Ga.) 62 S.E. 1056; Robison v. Glendale, 187 P. 741; Oliver v. Enriquez, 124 P. 798. Brown had knowledge of the invalidity of the Merrill assignment. Piccolo v. Tanaka, (Mont.) 253 P. 890; 2 Pom. Eq. Jur. 626; Lombardi v. Sinanides, (Cal.) 235 P. 455, 20 R. C. L. 353. One purchasing lands is chargeable with recitals in the title record, casting doubt upon the title. Knowles v. Williams, (Kans.) 48 P. 856; Frazier v. Jeakins, 68 P. 24; Hancock v. Gumm, (Ga.) 16 A. L. R. 1003; Cooper v. Flesner, (Okla.) 103 P. 1016. When a person has sufficient information to lead him to a fact, he will be deemed conversant with it. Whayne v. Seamans, (Okla.) 217 P. 859; Ken. Co. v. Trust Co., 5 A. L. R. 391; Balch v. Arnold, 9 Wyo. 17. The Merrill assignment was procured under circumstances and threats constituting duress of goods. 9 R. C. L. 12, page 723; Hackley v. Headley, 45 Mich. 569; Fuller v. Roberts, 35 Fla. 10; Cooley on Torts, 507; Adams v. Shiffer, (Colo.) 17 P. 21; Rwy. Co. v. Gorman, (Kans.) 100 P. 647; 3 Williston on Conts. 2847; Barry v. Co., 59 N.Y. 587; Bank v. Bryan, (Ia.) 17 N.W. 165; Berry v. Berry, (Kans.) 47 P. 837; Fowler v. Fowler, (La.) 60 So. 694. An assignment of royalty interests accruing under an oil permit will not survive the expiration of the permit itself, nor extend to royalty interests that may accrue under an extension of such permit. And this is especially true where the assignment of the old permit was not approved by the Secretary of the Interior. Hodgson v. Mtn. Gulf Oil Co., 297 F. 269, 273; Departmental Rules 2, 7, 9, 12 1/2; Oil Co. v. Carter Oil Co., 31 Wyo. 462. Where a prospector's oil permit expires without any work whatsoever having been done thereunder, it creates no rights that may be made the subject of assignment. The subject matter must have an actual or potential existence at the time the assignment is made. O'Neil v. Kerr, (Wis.) 102 N.W. 573; 1 Williston's Conts. 440; In re Bader's Est., (Pa.) 73 A. 915; Emerson v. R. R. Co., (Me.) 24 Am. Rep. 39; Runnels v. Co., 60 N.H. 38, 39; Herbert v. Bronson, 125 Mass. 475; Eagen v. Luby, 133 Mass. 543, 5 C. J. 871; Edwards v. Peterson, (Me.) 14 A. 936; Stromberg v. Hill, 170 Ill.App. 323; Heyer v. Kaufenberg, 40 Wyo. 367. Conveyances not entitled to record because of defective execution, are not constructive notice, even though recorded. Frank v. Hicks, 4 Wyo. 513; State v. Cowhick, 9 Wyo. 93; Whalon v. Canal Co., 11 Wyo. 348; Doering v. Selby, (Mont.) 244 P. 485. The judgment in favor of Brown is erroneous, unsupported by evidence, and contrary to law.

For the respondent there was a brief by D. L. O'Hern, of Miles City, Mont., and C. R. Ellery, of Cheyenne, Wyoming, and oral argument by Mr. Ellery.

Plaintiff failed to establish want of consideration, fraudulent alteration or duress, so the judgment below was sustained. Black on Rescission and Cancellation, Vol. 1, p. 602; Connelly v. Bouck, 174 F. 312-315, (8th Cir.); Ives Co. v. Stock Co., 169 N.Y.S. 104; Bank v. Holling, (Minn.) 202 N.W. 20-23; Burandt v. Burandt, (Ill.) 149 N.E. 306-309; Worland v. Davis, 31 Wyo. 108-113; Perko v. Co., 37 Wyo. 98-106; Baylies v. Vanden Boom, 40 Wyo. 411-428. Brown paid full value for the royalty in question. The burden was upon plaintiffs to bring home to Brown, knowledge of the alleged invalidity of the Rue-Merrill assignment. Fly v. Cline, (Cal.) 193 P. 615-619; Sheney v. Phipps, (Ark.) 224 S.W. 393; Jones v. Ainell, (Ark.) 186 S.W. 65; Cassidy Co. v. Terry, (W. Va.) 73 S.E. 278; Steinman v. Clinchfield Coal Corp. (Va.) 93 S.E. 684; Kruse v. Collins, (Kans.) 108 P. 856; Hatter v. Quinn, (Ala.) 113 So. 47; Bank v. Abbott, 216 P. 700. Rue's delay in attacking the assignment, operates as an estoppel, from now seeking its cancellation. Myers v. Grey, 122 N.Y.S. 1079-1083; Eberstein v. Willetts, (Ill.) 24 N.E. 967; Guinn v. Sumpter Valley Ry. Co., (Ore.) 127 P. 987; Meyer v. Barde, (Ore.) 229 P. 121; Black on Rescission and Cancellation, Vol. 1, p. 591; Royal v. Goss, (Ala.) 45 So. 231; Church v. Swetland, (2nd Cir.) 243 F. 289-292; Huiller v. Ryan, (Ill.) 137 N.E. 484-486; Taylor v. Co., 285 F. 532, (8th Circ.); Patterson v. Hewitt, (N. M.) 66 P. 852-857; Black on Rescission and Cancellation, Vol. 2, p. 1141. The fact that Rue made a new assignment of the permit to Brown after its renewal, and that Brown conveyed back to Rue 7 1/2% royalty therein, did not prejudice Brown's right acquired under an assignment of royalties reserved by Rue under the original permit. Rights acquired by Brown under an assignment of royalties accruing under the original permit, extended over to royalties accruing under the renewed permit. Tendolle v. Eureka Oil Syndicate, (Wyo.) 268 P. 185.

BLUME, Justice. KIMBALL, Ch. J., and RINER, J., concur.

OPINION

BLUME, Justice.

This action was brought in February, 1928, by Frank I. Rue and Faie O. Sinclair, as plaintiffs, against the defendants Merrill, Shupak and Brown, to quiet title to certain royalty interests hereinafter mentioned, and to declare a transfer of part thereof, hereinafter also mentioned, to be null and void. Merrill, not being served with process did not appear. Shupak and Brown filed a cross-petition asking that the title to the royalty interests here in dispute be quieted in Brown. The court found in favor of Brown as against the plaintiffs, from which judgment the latter have appealed. A summary of the facts is as follows:

On March 14, 1921, an oil and gas prospecting permit was issued to Frank I. Rue covering Sections 21, 22, 27 and 28, Twp. 51, R. 100, in the so-called Oregon Basin in Park County, Wyoming. Other permits were issued to other parties and an association of joint adventure or partnership was formed by them--with the interveners herein--finally evidenced by a document dated December 22, 1921, wherein it was agreed that each of them should have a one-ninth interest in and to various permits issued, including the one to Rue, and that they should share equally in the money realized from the sale, lease, royalties and other revenues derived therefrom. This one-ninth interest of Rue was reduced somewhat by transfer made to some of his associates in 1927--aside from the transfer to Merrill hereinafter mentioned--but the details of the transfers to the associates need not be set out. Some changes also occurred among the associates, but that, too, is not important herein.

On January 16, 1923, the plaintiff Rue entered into a contract with the defendant Brown, whereby the former's permit above mentioned was assigned to the latter, Brown agreeing to explore the lands covered by the permit for oil and gas paying Rue the sum of $ 1000.00 as a bonus, and reserving to Rue certain royalties, the principal part of which was a royalty of 7 1/2 per cent of all oil and gas produced from the land. The permit was subsequently renewed and extended and finally assigned to one Orchard who developed the land for oil and gas. On the date above mentioned, namely, January 16, 1923, the plaintiff Rue also made a transfer to one L. B. Merrill, of part of his rights in the...