Terry Et Ux. v. Humphreys Humphreys v. Terry Et Ux.

• Decision Date: 24 January 1922
• Docket Number: Nos. 2490, 2508.,s. 2490, 2508.
• Citation: 203 P. 539,27 N.M. 564
• Parties: TERRY ET UX.v.HUMPHREYS ET AL.HUMPHREYS ET AL.v.TERRY ET UX.
• Court: New Mexico Supreme Court

27 N.M. 564

203 P. 539

TERRY ET UX.

v.HUMPHREYS ET AL.HUMPHREYS ET AL.

v.TERRY ET UX.

Nos. 2490, 2508.

Supreme Court of New Mexico.

Jan. 24, 1922.

Syllabus by the Court.

Assignments of error not argued in the brief are deemed abandoned. Alvarado Mining & Mill Co. v. Warnock, 25 N. M. 694, 187 Pac. 542, followed.

Where it is sought to cancel an instrument on the ground that its execution was obtained by false pretenses, statements, and promises, the complaint must allege that the plaintiff relied on such false representations, statements, and promises, and, if not so alleged, evidence thereof at the trial is properly excluded.

Any transactions by the plaintiff with the defendant relating to the subject-matter of the contract or agreement, inconsistent with an intention to rescind, amount to “ratification” of such contract or agreement.

An oil and gas lease for a period of five years, or as long thereafter as oil and gas, or either of them, is produced from said land by the lessee, conveys “real property,” and under chapter 84, Laws 1915, requires that the husband and wife join in such instrument.

Appeal from District Court, Eddy County; Bratton, Judge.

Suit by J. D. Terry and wife against S. G. Humphreys and the Artesia Oil & Gas Company. From the judgment, plaintiffs appeal, and from part of the judgment defendants file cross-appeal. Reversed and remanded, with directions.

An oil and gas lease for a period of five years, or as long thereafter as oil and gas, or either of them, is produced from said land by the lessee, conveys “real property,” and under chapter 84, Laws 1915, requires that the husband and wife join in such instrument.

J. B. Atkeson, of Artesia, for plaintiffs.

J. H. Jackson, of Artesia, and W. W. Arnold, of Robinson, Ill., for defendants.

RAYNOLDS, C. J.

This is a suit brought by appellants, J. D. Terry and Elmyra N. Terry, his wife, in the district court of Eddy county, to cancel an oil lease executed by J. D. Terry, the husband of the appellant Elmyra N. Terry, on the grounds that the execution and delivery of said lease were induced by false and fraudulent representations, promises, and statements made to the appellant J. D. Terry by S. G. Humphreys.

Plaintiff below alleged that the representations and promises were not carried out in whole or in part; that the land in question was a homestead, and community property of the appellants, husband and wife; that the appellant Elmyra N. Terry had not signed nor consented to the execution of the lease. The defendant below, S. G. Humphreys, disclaimed all interest in the lease, having assigned it to his codefendant, the Artesia Oil & Gas Company, the appellee and cross-appellant herein. The defendant, the Artesia Oil & Gas Company, admitted the execution of the lease and filed a general denial as to the other allegations in the complaint. It also pleaded that plaintiffs were estopped by reason of having received an annual rental for an extension of such lease, which annual rental was to be paid in case the lessee did not begin work within the time specified in the lease. By way of new matter the appellee and cross-appellant, the Artesia Oil & Gas Company, alleged that it had spent large sums of money in an effort to discover oil and carry out the provisions of the lease. The case was tried before the court, which decided in favor of the defendant, the Artesia Oil & Gas Company, finding that two-thirds of the property leased was community property, but that the other one-third was the separate property of the wife, Elmyra N. Terry, and, as to the wife's interest in the property, the lease was void and of no effect.

Appellant J. D. Terry assigns error as follows: (1) That the court erred in finding the husband had a right to execute a valid oil lease on the community property in question without the joinder of the wife; (2) that the court erred in finding that the 40 acres of land in question was not a part of the homestead of the plaintiff; (3) the court erred in refusing to admit and consider the testimony of the plaintiff J. D. Terry as to the false statements and representations made by the defendant S. G. Humphreys in order to induce him to execute and deliver the lease in question; (4) the court erred in not finding that the plaintiff was induced to execute and deliver the lease in question by the statements, promises, and representations made to him by the defendant S. G. Humphreys, which were never performed and carried out, and that by reason thereof the lease was not binding on the plaintiffs; (5) the court erred in not finding that the lease was to be placed in the First State Bank of Artesia to await the development of oil, and that, by reason of its not being so placed in escrow, it became null and void; (6) the court erred in not finding that the land in question was a homestead, and the lease could not be made without the wife's consent, and that, being so made, it was not enforceable, and should be canceled.

The defendant the Artesia Oil & Gas Company, in case No. 2508, also appeals from that portion of the court's decision finding that one-third of the land leased was the separate property of Elmyra N. Terry. The two cases were consolidated for the purpose of argument and submission to this court.

[1] As to assignments 2 and 6 regarding the homestead, they are not argued in appellant's brief, and are therefore deemed abandoned. Alvarado Mining & Mill Co. v. Warnock, 25 N. M. 694, at page 695, 187 Pac. 542.

[2] Assignments 3 and 4 are to the effect that the court erred in refusing to find that the plaintiff Terry was induced to execute and deliver the lease in question because of false statements, promises, and representations. As to these two assignments, it is sufficient to say that the complaint does not allege that the plaintiff relied upon such statements, promises, and representations, and the court properly excluded evidence of such promises and representations.

“The bill or complaint should show that the misrepresentations made were material, and that the complainant believed that the misrepresentations made by the defendant were true, and acted in reliance thereon.” 9 C. J. “Cancellation of Instruments,” par. 151, subd. 5, p. 1235, and cases cited.

Assignment of error No. 5, in which it is alleged the court erred in finding that the lease was to be placed in escrow, and that the escrow agreement was not carried out, is not well taken. The record shows that the plaintiff is estopped, having under the terms of the lease received an annual rental which by the terms of the lease was to be paid, and was paid, because the work contemplated was not begun within the time specified in the lease. The annual rental received was the consideration under the terms of the contract of the delay in starting the development work contemplated by the lease, and amounted to ratification.

[3] “Any transaction with the defendant relating to the subject-matter of the contract and inconsistent with an intention to rescind” amount to ratification. 9 C. J. “Cancellation of Instruments,” par. 78, subd. 2, p. 1199, and cases cited. See, also, 4 R. C. L. “Cancellation of Instruments,” § 26, and New American Oil & M. Co. v. Troyer, 166 Ind. 402, 76 N. E. 253, 77 N. E. 739.

[4] The proposition offering the greatest difficulty in this case is contained in the first assignment of error, to wit, that the court erred in finding that the husband had a right to execute a valid oil lease on community property without the wife joining therein. The answer to this question involves a construction of chapter 84, Laws 1915, which is as follows:

“Section 1. That section 16 of chapter 37 of the Laws of the Thirty-Seventh Legislative Assembly of the territory of New Mexico, (par. 2766) be amended so as to read as follows:

‘Sec. 16. Power of the Husband over Community Property. The husband has the management and control of the personal property of the community, and during the coverture the husband shall have the sole power of disposition of the personal property of the community, other than testamentary, as he has of his separate estate; but the husband and wife must join in all deeds and mortgages affecting real estate: Provided, that either husband or wife may convey or mortgage separate property without the other joining in such conveyance or mortgage: And provided, further, that any transfer or conveyance attempted to be made of the real property of the community by either husband or wife alone shall be void and of no effect.’

Sec. 2. All acts or parts of acts in conflict herewith are hereby repealed.”

In most jurisdictions which have adopted the so-called community system of property, the husband, as the head of the community, has the control and disposition of the community property.

“By virtue of the husband's sole right to control the community property, he may, in most jurisdictions where the community system obtains, alienate, during the coverture, even without the consent or joinder of the wife, any of the property belonging to the community. He must, however, act in good faith toward the wife, and, if he disposes of property with intent to defraud her of her rights, his conveyance or disposal will be voidable on that ground.” 21 Cyc. “Husband and Wife,” subd. 11, p. 1666, and cases cited.

The control of the husband over the community property in this state has been the subject of frequent legislative enactments, and his right and control of such property have been modified from time to time. It is not necessary for the decision of this case to enter into the history and course of legislation on the subject, and we will confine our attention to the enactment above set out, as it represents the state of the law in this jurisdiction at the present time. It will be noted that, by the terms of chapter 84, Laws 1915--

“any transfer or conveyance attempted to be made of the real property of the community by either husband or wife...