Williams' Adm'R v. Union Bank & Trust Co.

• Decision Date: 26 April 1940
• Citation: 283 Ky. 644
• Court: United States State Supreme Court — District of Kentucky
• Parties: Williams' Adm'r et al. v. Union Bank & Trust Co. et al.

283 Ky. 644

Williams' Adm'r et al. v. Union Bank & Trust Co. et al.

Court of Appeals of Kentucky.

April 26, 1940.

1. Venue. — Action to recover an oil royalty involved an "interest in real estate," so that action was properly brought in county where realty was located rather than in county where defendant administrator qualified (Civil Code of Practice, sec. 62).

2. Mines and Minerals. — Minerals in place are "real estate," and

such minerals may be severed into distinct estates separate from the surface.

3. Mines and Minerals. — The usual oil and gas lease does not convey the absolute title to the minerals, but only gives the lessee the right to explore for them, and he does not acquire title to the oil and gas unless it is taken from the ground.

4. Mortgages. — Where oil royalty was reserved by original owner and was never severed from the surface, it passed to grantee as part of realty when owner conveyed grantee land in which royalty was reserved, so that mortgage executed by the grantee on the real estate from which oil was being produced included the royalty, even though the mortgage did not mention the royalty.

5. Mines and Minerals. — Where rules of pipe line company required division order to be executed so that it would have record showing to whom oil royalty should be paid, such division order did not operate as a conveyance of unaccrued royalty (Ky. Stats., sec. 494).

6. Lis Pendens. — Where oil royalty had been mortgaged with land, even if division order executed in compliance with rules of pipe line company so that it would have record showing to whom royalty payments should be made was sufficient as between parties to the division order to pass title to the royalty, the attempted conveyance of the royalty during pendency of suit to foreclose mortgages could not affect title of previous mortgage holders.

7. Mines and Minerals. — Where mortgage executed on real estate from which oil was being produced and in which mortgagor owned royalty interest did not mention the royalty which had not been severed from the surface, and where mortgage foreclosure judgment directed mortgaged land to be sold and property fell short of bringing enough to satisfy mortgage liens, the purchaser at foreclosure sale acquired title to land of mortgagor including title to the royalty.

8. Mines and Minerals. — Where purchaser at mortgage foreclosure sale knew some one was receiving oil royalty while it and others held realty mortgages which covered royalty interest, purchaser could not be held guilty of "laches" because it did not have proceeds from the royalty applied to payment of its debt, nor because it did not collect royalty after it became purchaser at foreclosure sale, in view of fact that delay was in nowise detrimental to defendants who collected the royalty.

9. Equity. — "Laches" is something more than delay, it is negligent delay which leads another to change his position to his detriment.

10. Limitation of Actions. — Purchaser of land, including oil royalty, at mortgage foreclosure sale was precluded from recovering oil royalty for more than five years prior to bringing of action against defendants, who collected royalty under an alleged conveyance from mortgagor (Ky. Stats., sec. 2515).

11. Mines and Minerals. — Where mortgage covering land included oil royalty, purchaser at mortgage foreclosure sale acquired equitable title and was entitled to recover oil royalty against defendants who had no title whatever to the royalty, notwithstanding purchaser did not have legal title because commissioner's deed to purchaser did not describe land involved.

12. Appeal and Error. — Where body of petition seeking to recover oil royalty stated amount of royalty, the fact that in the prayer the amount of royalty was left blank did not preclude recovery where objection was raised for first time in appellate court.

13. Appeal and Error. — A party cannot raise for first time in appellate court the failure of his opponent to fill a blank in a pleading.

14. Descent and Distribution. — In action by mortgagee, which purchased at mortgage foreclosure sale, to quiet title, mortgagee was entitled to decree adjudging it to have lien on mortgagor's interest in land which he willed to his wife and which his children, the defendants, inherited from her (Ky. Stats., secs. 2088, 2089).

Appeal from Estill Circuit Court.

Marcus C. Redwine, Hugh Riddell and D.L. Pendleton for appellants.

Shumate & Shumate for appellees.

Before Charles L. Seale, Judge.

OPINION OF THE COURT BY SIMS, COMMISSIONER.

Affirming on appeal and reversing on cross appeal.

The appellee, Union Bank & Trust Company, the plaintiff below, on March 5, 1937, filed this petition in equity in the Estill Circuit Court against the personal representative of George B. Williams, and of his widow, Julia C. Williams, and against their heirs-at-law, Thomas Williams and Eleanor Horseman, and their spouses, seeking to quiet its title to a 1/32 oil royalty interest in a large tract of land containing about 2,500 acres in Estill and Powell counties; also, to compel Thomas Williams and his sister, Mrs. Horseman, to account for so much of this royalty as was received by them and to account for such of the royalty as their parents received, within the limits of the value of the estate that they inherited from their parents. Defendants in their answers asserted title to this royalty interest and asked that their title thereto be quieted.

The pleadings are multitudinous, consisting of five amended petitions which necessitated numerous answers and replies; also, many preliminary pleadings are filed, such as general and special demurrers, motions to strike, elect, etc. As we gather from the pleadings, the following issues were raised: (1) The right of the plaintiff to maintain this action in Estill county when the personal representative qualified in Clark county where all the defendants resided; (2) plaintiff obtained no title to the royalty by virtue of purchasing the land at decretal sale enforcing the mortgage liens against the land, since these mortgages did not specifically mention the royalty, therefore it was not put in lien; (3) plaintiff's right of recovery is limited to five years next before the institution of the suit; (4) plaintiff's acquiescence in allowing defendants and their ancestors to collect the royalty for many years estop it from now asserting title to same, and plaintiff has been guilty of laches; (5) certain lands upon which plaintiff claims the oil royalty are not included in the deeds.

The chancellor sustained defendants' plea of limitation and confined plaintiff's recovery to five years, but decided all other issues adversely to defendants, hence this appeal. We will give a brief statement of facts.

George B. Williams and W.P. Williams were brothers, and in 1915 S.M. Maple and wife conveyed to them a one-half undivided interest in a tract of land in Estill and Powell counties. This conveyance appears to have been lost, and on Sept. 30, 1924, Maple and wife executed to George B. and W.P. Williams a conveyance in lieu thereof, whereby they conveyed to the Williams a one-half undivided interest in a tract of land in Estill and Powell counties described by metes and bounds and which appears to have contained about 2,000 acres. Included in their deed are the Cottage Furnace lands embraced in a circle with a two and a half mile radius. In these lands there was expressly conveyed to the grantees a one-half interest in the one-eighth oil royalty which was reserved under an oil and gas lease the grantors had executed to C.R. Dulin September 13, 1913. Then followed a general description of the Levy Lynch land and the Riddell 300 acres in Estill county, after which there is a recital in the deed that the grantees are conveyed "said interest as above set out" in the Lynch and Riddell lands. On the same day this deed was executed to George B. and W.P. Williams, a mortgage to secure a $7,000 note was executed by W.P. Williams and wife to W.B. Williams & Sons, bankers, on "one-fourth undivided interest in and to the real estate in Estill and Powell counties with the exception the Lunch and Riddell tracts where omitted from the mortgage (here follows same description contained in the deed) * * * and being the same land one-half interest in which was conveyed to George B. Williams and W.P. Williams by conveyances from S.M. Maple and wife, which same is not recorded." The $7,000 note and mortgage were afterwards duly transferred to the plaintiff. On February 4, 1926, W.P. Williams and wife to secure "money loaned" mortgaged to George B. Williams "all the one, undivided, fourth interest in and to a boundary of land in Estill county * * * known as the Cottage Furnace lands, being the lands embraced in a circle, the radius of which is two and a half miles, being the same property conveyed to the first party by S.M. Maple." It is alleged in a third amended petition, that by oversight or mistake, a description of the Lynch and Riddell lands was omitted from the mortgages executed to Williams & Sons, bankers, O.W. Witt and R.R. Friend, but that these lands were included in the mortgage W.P. Williams executed to George B. Williams. Both the Lynch and Riddell lands are included in the lease from Maple to Dulin.

There were other mortgages executed by W.P. Williams and wife on his one-fourth undivided interest in these lands and, so far as this record shows, no reference was made in any of these mortgages to the 1/32 royalty interest owned by the mortgagor, although oil was then being produced from the land in considerable quantities and the royalty was worth almost as much as the land. Kate C. Ray instituted a foreclosure proceeding on the mortgage she held and named as parties defendant in her suit all other mortgagees. George B. Williams filed his answer, counterclaim and cross-petition asking that his mortgage be reformed to show the amount of money it secured,...