Smith v. Olin Industries

• Decision Date: 14 February 1955
• Docket Number: No. 5-598,5-598
• Citation: 224 Ark. 606,275 S.W.2d 439
• Parties: Sam G. SMITH and Winnie D. Smith, Appellants, v. OLIN INDUSTRIES, Inc., et al., Appellees.
• Court: Arkansas Supreme Court

Page 439

275 S.W.2d 439

224 Ark. 606

Sam G. SMITH and Winnie D. Smith, Appellants, v. OLIN INDUSTRIES, Inc., et al., Appellees.

No. 5-598.

Supreme Court of Arkansas.

Feb. 14, 1955.

Wootton, Land & Matthews, Hot Springs, for appellants.

Gaughan, McClellan & Laney, Camden, for appellees.

MILLWEE, Justice.

This is a suit by appellants, Sam G. Smith and Winnie D. Smith, his wife, to reform a quitclaim deed and quiet their title to a four-ninths interest in the minerals under a 40-acre tract of land in Lafayette County, Arkansas.

Appellant, Sam G. Smith, was the owner of a 320-acre tract, including the tract in controversy, in 1926 when said lands forfeited to the state for the 1925 general taxes. Mary D. Hudgens acquired the 320 acres from the state by Clerk's tax deed and conveyed an undivided two-thirds interest therein to Hamp Williams who thereafter conveyed an undivided one-third interest to appellant, Sam G. Smith. Appellant, Winnie D. Smith, is the daughter of Hamp Williams and, upon his death, became the owner of a one-ninth interest in said lands.

On May 29, 1936 Mary D. Hudgens, Sam G. Smith, Winnie D. Smith and the other heirs of Hamp Williams executed a warranty deed of said 320-acre tract to F. E. Monzingo in which the minerals were reserved, one-third to Mary D. Hudgens, one-third to Sam G. Smith, one-ninth to Winnie D. Smith and two-ninths to the other heirs of Hamp Williams. This deed was filed for record June 8, 1936.

On June 5, 1936 appellants executed a regular quitclaim deed of the aforesaid lands to F. E. Monzingo and said deed was filed for record the next day. This is the deed which appellants seek to reform so as to show a reservation of a four-ninths mineral interest in the 40 acres in controversy.

On May 14, 1937 F. E. Monzingo conveyed the lands in question along with other lands to Union Sawmill Company. This deed excepts coal and other mineral deposits reserved by certain named railroads, 'or any other mineral reservations or exception in this chain of title insofar as same affect [the described lands].' On October 9, 1944 Union Sawmill Company conveyed the lands to J. W. Anthony, et al., reserving the oil, gas and minerals. Appellants executed separate oil and gas leases covering the 40-acre tract to Carter Oil Co. on July 10, 1947 and July 23, 1947 which were filed for record on the dates of July 19, 1947 and July 25, 1947, respectively.

F. E. Monzingo and wife executed a mineral deed to appellant, Sam G. Smith, on July 23, 1947 conveying all grantors' interest in the minerals under said 40-acre tract and this deed was filed for record on July 25, 1947. On October 16, 1951 Union Sawmill Company executed a 'Disclaimer' to appellants releasing and quitclaiming any interest in the minerals under 120 acres of the original 320-acre tract but the 40 acres involved here were not included in that conveyance. Union Sawmill Company sold all its assets to appellee, Olin Industries, Inc., on July 31, 1952 and same were duly conveyed by deed on September 30, 1952 which was filed for record on December 9, 1952.

In the latter part of 1952 and early part of 1953 McAlester Fuel Oil. Co., assignee of Carter Oil Co., requested that appellee execute to it a quitclaim deed to the 40 acres in controversy and the request was refused. A producing oil well was brought in on the 40 acres offsetting the tract in controversy on January 25, 1953. Appellants filed the instant suit on May 4, 1953 to reform the quitclaim deed which they executed to F. E. Monzingo on June 5, 1936.

Appellant, Sam G. Smith, testified that he signed the quitclaim deed to Monzingo in 1936 without reading it and then had his wife sign it. He was not very interested in the transaction and paid little attention to it. He admitted receiving the partial consideration of $5.00 recited in the deed but did not remember whether he was requested to execute the instrument by Monzingo or some party representing him. However, the person making the request represented that the deed contained the same reservations as were in the warranty deed executed a week earlier, and that it was only for the purpose of clearing the title to the two-thirds outstanding equitable interest remaining in Smith in the event that the validity of the 1926 tax deed should be successfully challenged.

Francis Scott was manager of the land department and represented Union Sawmill Company in the purchase of the lands from Monzingo in 1937. He testified that he had no information or knowledge of the transactions between appellants and Monzingo other than those appearing of record, and was never apprised of appellants' present contention that they did not intend to convey the minerals when they executed the quitclaim deed. The 1937 purchase by Union Sawmill Company involved 13,000 acres of timber, the fee title to 600 acres, and a sawmill. Similar testimony was given by Lewis E. Fitch, head of the land department of appellee, Olin Industries, Inc. He stated that when appellee acquired the assets of Union Sawmill Company it had no knowledge of any rights claimed by appellants except those with which it was charged in the chain of title.

On the foregoing testimony and documentary proof the chancellor entered a decree dismissing appellants' complaint and holding that their action was barred by limitations, laches and the intervention of the rights of third parties against whom appellants would have no right of reformation.

Appellants first contend that they did not intend to sell and Monzingo did not intend to buy the four-ninths mineral interest in the lands in controversy, and that the quitclaim deed which they executed to Monzingo in 1936 was the result of a mutual mistake of the parties. In is further insisted that appellee, Olin Industries, Inc., took title from Union Sawmill Company in 1952 with sufficient notice of said mutual mistake to preclude it from claiming as a bona fide purchaser of said mineral interest. Appellants say all this is conclusively shown by the testimony of Sam G. Smith and the documentary proof which includes the various deeds, leases and other conveyances affecting not only the 40 acres in question but other lands included in the original 320-acre tract. Before taking up these contentions we deem it appropriate to consider certain principles applicable in cases of this nature.

It is well settled by our decisions that before the jurisdiction of equity may be invoked to reform a written instrument by parol evidence, the proof must be clear, unequivocal and decisive. Hicks v. Rankin, 214 Ark. 77, 214 S.W.2d 490. It is also the rule in this state that a quitclaim deed is a substantive mode of conveyance, and is as effectual to carry all the right, title, interest, claim and estate of the grantor as a deed with full covenants. Bagley v. Fletcher, 44 Ark. 153. Our cases also hold that mere ignorance of one's rights does not prevent the running of the statute of limitations or laches against him unless his ignorance is due to the fraudulent concealment or misrepresentation on the part of those invoking the benefit of the statute or the doctrine of laches. Landman v. Fincher, 196 Ark. 609, 119 S.W.2d 521. Also, if a purchaser shows he has paid a valuable consideration in good faith,...