Singer-Fleischaker Royalty Co. v. Whisenhunt

• Decision Date: 22 December 1964
• Docket Number: SINGER-FLEISCHAKER,No. 40323,40323
• Citation: 402 P.2d 886
• Parties: ROYALTY COMPANY, a partnership, successor to Provident Royalties Corporation, Plaintiff in Error, v. Everett WHISENHUNT, Blanche M. Whisenhunt, Sinclair Oil and Gas Company, Cabot Corporation, survivor of Cabot Carbon Company, Eason Oil Company, Sinclair Crude Oil Company, and Michigan Wisconsin Pipe Line Company, Defendants in Error.
• Court: Oklahoma Supreme Court

Page 886

402 P.2d 886

1964 OK 268

SINGER-FLEISCHAKER ROYALTY COMPANY, a partnership, successor to Provident Royalties Corporation, Plaintiff in Error, v. Everett WHISENHUNT, Blanche M. Whisenhunt, Sinclair Oil and Gas Company, Cabot Corporation, survivor of Cabot Carbon Company, Eason Oil Company, Sinclair Crude Oil Company, and Michigan Wisconsin Pipe Line Company, Defendants in Error.

No. 40323.

Supreme Court of Oklahoma.

Dec. 22, 1964.

Rehearing Denied May 25, 1965.

Syllabus by the Court

1. Where A mortgages his land and thereafter conveys all the mortgaged premises to B, and B becomes obligated to satisfy the mortgage, if B fails to satisfy the mortgage indebtedness and foreclosure proceedings are had, and the property sold, B may not invoke the doctrine of estoppel by deed against A if A reacquires the property.

2. Every person who has actual notice of circumstances sufficient to put a prudent man upon inquiry as to a particular fact, and who omits to make such inquiry with reasonable diligence, is deemed to have constructive notice of the fact itself.

Appeal from the District Court of Beaver County; Robert L. Hert, Judge.

Plaintiff in error commenced proceedings to quiet title to a mineral interest by virtue of the equitable doctrine of estoppel by deed. The trial court sustained the demurrers of defendants in error to the pleadings and on plaintiff in error's election not to further plead, the cause was dismissed. Plaintiff in error perfected its appeal to this Court. Judgment affirmed.

Rosenstein, Mesirow & Fist, Foster V. Phipps, Tulsa, for plaintiff in error.

Angus A. Davidson and Thomas H. Galey, Tulsa, for Sinclair Oil & Gas Co. and Sinclair Crude Oil Co.

Tom Hieronymus, Woodward, for Everett Wisenhunt and Blanche H. Wisenhunt.

Lytle, Soule & Emery, by Robert J. Emery, Oklahoma City, for Eason Oil Co.

R. E. Batson, Jr., Pampa, Tex., for Cabot Corp.

IRWIN, Justice.

Singer-Fleischaker Royalty Company, successor to Provident Royalties Corporation The trial court sustained defendants' demurrers to plaintiff's amended petition and on plaintiff's election not to further plead, the cause was dismissed. Plaintiff perfected the present appeal.

hereinafter referred to as plaintiff, commenced proceedings against defendants in error, referred to as defendants, to quiet title to an undivided one-half interest in the minerals under a 120 acre tract of land in Beaver County, Oklahoma, and for other relief in connection therewith. In such proceeding plaintiff sought to invoke the equitable doctrine of estoppel by deed and asserted its title by virtue of Title 16 O.S.1961, § 17.

FACTS

Provident Royalties Corporation, plaintiff's predecessor in title, acquired its mineral interest in 1927, and such interest was subject to a mortgage executed by William A. Mulberry and his wife in 1916, which was due and payable in 1921. The time for paying the mortgage indebtedness had been extended in 1921 and 1926, by written extensions after the Mulberrys had conveyed the property in 1921, and the mortgage was foreclosed in 1935. A Sheriff's Deed was issued in 1936, and in 1943 the original grantor-mortgagor, William A. Mulberry, re-acquired title to property. It is by virtue of the re-acquisition of the property by the original grantor-mortgagor, William A. Mulberry, that plaintiff sought to invoke the doctrine of estoppel by deed and quiet its title against the defendants who deraign their title through William A. Mulberry after he reacquired the property in 1943.

Plaintiff's action is based on the covenants of warranty contained in the deed when William A. Mulberry conveyed the property in 1921. Plaintiff's theory is that by virtue of Title 16 O.S.1961, § 17, title to plaintiff's mineral interest accrued and inured to the benefit of and became immediately vested in Provident Royalty Corporation, plaintiff's predecessor, by operation of law, upon re-acquisition of the property by William A. Mulberry in 1943.

In order to clarify the facts and issues, a summary of the conveyances affecting title to the premises is set forth.

On November 25, 1916, William A. Mulberry, the then owner of the fee simple title to 160 acres of land, and his wife, executed a mortgage for $1400.00 covering the 160 acres. This mortgage was filed for record on November 26, 1916, and was due and payable on November 25, 1921.

On April 2, 1921, William A. Mulberry and his wife, conveyed the 160 acre tract to W. G. Flint by warranty deed and the mortgage was excepted from the covenant against encumbrances.

On July 30, 1921, W. G. Flint, conveyed the premises to Alexander Heinz and Mary K. Heinz, by warranty deed and the mortgage was excepted from the covenant against encubrances.

On November 25, 1921, the day the mortgage indebtedness was due and payable, Alexander Heinz and Mary K. Heinz, the then owners of the property, entered into a written extension agreement with the assignee of the mortgage and the interest on the coupons was increased from six per cent to seven per cent per annum. In this extension agreement the time for payment of the mortgage was extended five years and Alexander Heinz and Mary K. Heinz assumed and agreed to pay the debt secured by the mortgage. This extension agreement was not filed for record and William A. Mulberry was not a party thereto.

On July 9, 1924, Alexander Heinz conveyed the premises to Mary K. Heinz by warranty deed and the mortgage was excepted from the covenant against encumbrances and Mary K. Heinz assumed and agreed to pay the mortgage indebtedness.

On January 17, 1925, Alexander Heinz and Mary K. Heinz, conveyed the premises to George Merrett by warranty deed and the mortgage was excepted from the covenant against encumbrances.

On May 26, 1925, George M. Merrett conveyed the premises to Clarence E. Still by warranty deed and the mortgage was excepted from the covenant against encumbrances.

On June 10, 1925, Clarence E. Still conveyed the premises to Ellen Sanger by warranty deed and the mortgage was excepted from the covenant against encumbrances.

On February 4, 1926, Ellen Sanger conveyed the premises to Walter Mulberry by warranty deed and the mortgage was excepted from the covenant against encumbrances. It is to be noted that Walter Mulberry is not the same as William A. Mulberry, the original mortgagor.

In December, 1926, Walter Mulberry conveyed the premises to Seneca Shelinbarger by warranty deed. The mortgage was excepted from the covenant against encumbrances and Seneca Shelinbarger assumed and agreed to pay the mortgaged indebtedness.

On December 2, 1926, Seneca Shelinbarger and his wife, entered into a written extension agreement with the assignee of the mortgage. In the extension agreement the time for payment of the mortgage was extended five years from November 25, 1926, and Seneca Shelinbarger and his wife assumed and agreed to pay the debt secured by the mortgage. This extension agreement was not filed for record and William A. Mulberry was not a party thereto.

On December 8, 1926, Seneca Shelinbarger and his wife conveyed an undivided one-half interest in the minerals under the 160 acre tract to Walter Mulberry by warranty deed. The mortgage was not mentioned.

On October 4, 1927, Walter Mulberry conveyed to Provident Royalties Corporation (plaintiff's predecessor) by warranty deed an undivided one-half mineral interest in and to 120 acres of the 160 acre tract. The mortgage was not mentioned. The interest conveyed in this deed is the interest to which plaintiff asserts its title by virtue of the re-acquisition of the property by William A. Mulberry.

In 1935, mortgage foreclosure proceedings were commenced. In this foreclosure proceeding, the assignee of the mortgage sought personal judgment only against the Shelinbargers who had entered into the last extension agreement for payment of the mortgage and who had assumed and agreed to pay the mortgage indebtedness.

In 1936, a Sheriff's Deed was issued and in 1943, William A. Mulberry re-acquired the premises. The defendants have an interest in the premises acquired from or through William A. Mulberry after he reacquired the property in 1943. The validity of the foreclosure proceedings, the sale and the issuance of the Sheriff's Deed are not questioned.

CONCLUSION

A terse definition of the doctrine of estoppel by deed, which plaintiff seeks to invoke, is found in Section 6, 19 Am.Jur., Estoppel, page 603, wherein it is stated:

'Estoppel by deed is a bar which precludes one party to a deed and his privies from asserting as against the other party and his privies any right or title in derogation of the deed or from denying the truth of any material facts asserted in it. * * *'

This familiar doctrine, while of common-law origin, was fused into our jurisprudence by enactment of Title 16 O.S.1961, § 17, which provides that 'All rights of a * * * grantor in and to the premises described in the instrument and existing at the time or subsequently accruing, shall accrue to the benefit of the * * * grantee * * * or conveyed by his deed, * * *.'

In construing the above statutory provision in Lucus v. Cowan, Okl., 357 P.2d 976, where the doctrine of estoppel by deed was invoked, we said:

'It is settled law in Oklahoma that a grantor who conveys a mineral interest in land under warranty of title, which land is subject to a mortgage and which the grantor is obligated to satisfy, but thereafter permits the property to be sold at a mortgage foreclosure, subsequent reacquisition of such property by said grantor operates to revest immediately the after-acquired title in grantee and will inure to his benefit. Grisham v. Southland Royalty Company, supra (332 P.2d 1099); Marx v. Beard, supra (302 P.2d 132); Equitable Royalty Corp. v. Hullet, supra (206 Okl. 233, 243 P.2d 986); Hanlon v. McClain, 206 Okl. 227, 242 P.2d 732; Bliss v. Wilcox Oil Co., 206 Okl. 232, 242 P.2d 739; Triangle Royalty Corp. v. Graves, supra (206 Okl. 409,...