Anderson v. Stockwell

285 P. 526, 130 Kan. 103, 1930 Kan. LEXIS 115
CourtSupreme Court of Kansas
DecidedMarch 8, 1930
DocketNo. 29,159
StatusPublished
Cited by3 cases

This text of 285 P. 526 (Anderson v. Stockwell) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Anderson v. Stockwell, 285 P. 526, 130 Kan. 103, 1930 Kan. LEXIS 115 (kan 1930).

Opinion

The opinion of the court was delivered by

Jochems, J.:

This action was brought by plaintiffs to foreclose a mortgage on 320 acres of land in so far as they claimed to own it through subrogation to the rights of the original holder. Plaintiffs were the owners of one-half the oil and gas royalty on the land. [104]*104Oil had been produced on the land and the royalties of plaintiffs had been applied by the holder of the mortgage to the payment of one-half the mortgage indebtedness. The other half of the mortgage indebtedness had been paid by applying the oil runs accruing to the credit of the one-half royalty interest owned by the defendant Shaffer. Plaintiffs sought to have the mortgage foreclosed against the surface rights of the land and in the alternative, in the event the surface did not bring a sufficient amount to reimburse them, against the other one-half royalty interest owned by Shaffer. Plaintiffs claimed they were entitled to invoke the doctrine of inverse alienation as against the defendant Shaffer, due to the fact that his royalty conveyance was made subsequent in time to the one under which plaintiffs claim, and that in neither royalty conveyance was the mortgage mentioned.

The case was tried to the court and findings of fact and conclusions of law entered. The facts are substantially as follows:

On May 8,1923, John Leffingwell and wife, being the then owners of the two quarter sections of land in controversy, executed a mortgage to the Wichita Joint Stock Land Bank for $16,000, which mortgage was subsequently assigned to the Kansas City .Joint Stock Land Bank. On September 20, 1923, Leffingwell and wife conveyed the land to J ohn Egan and wife, who assumed the mortgage. On May 6, 1924, Egan and wife conveyed a one-sixteenth royalty interest in both quarters to Amil A. Anderson, one of the plaintiffs. In this royalty conveyance the mortgage was not mentioned. On May 31, 1924, Amil A. Anderson conveyed to E. B. Shawver, a coplaintiff, the one-sixteenth royalty in so far as it covered the quarter section. Again in this royalty conveyance the mortgage was not mentioned. At the foregoing dates there were no producing oil wells on the lands. On .November 20, 1924, Egan and wife conveyed to the defendant C. B. Shaffer the remaining one-half of the oil and gas royalty on both quarter sections and on the same date they executed separate deeds to Dora B. Stockwell and John Leffingwell, conveying to each of them an undivided one-half interest in the above-described lands.

On December 9, 1925, Leffingwell and wife conveyed the one-half interest owned by them to the Moline National Bank. This bank failed and the defendant N. M. Dudley, receiver, appears as representative of that interest in this litigation. The mortgage above referred to contained the following clause:

“And to further secure the payment of said note the parties of the first part hereby assign to the party of the second part in whole or at the option of [105]*105the second party in such amounts or such proportionate part or parts as the second party may from time to time designate all of the rents, royalties, payments and delay moneys that may from time to time become due and payable on account of any and all oil and gas mining leases or mineral of any kind existing or that hereafter come into existence covering the above-described lands and all moneys received by the party by reason of this assignment shall be applied; first, to the payment of matured installments; and second, the balance if any to the principal remaining unpaid; provided that nothing herein shall be construed as a waiver of the priority of the hen created by this mortgage over any such lease made subsequent to the date of this mortgage.”

In addition to the foregoing facts the court further .found, in substance, that on November 19, 1924, Egan was indebted to the Moline bank in the amount of $8,100, and prior thereto he had executed and delivered to the bank a warranty deed for said land with the grantee’s name omitted, as security for his indebtedness to the bank; that on November 19, 1924, Egan entered into a written contract with the Moline National Bank and one A. H. Hamlin (which contract was introduced in evidence) by the terms of which it was agreed to sell Hamlin the one-half section of land, which at the time carried with it the remaining one-half royalty, for the sum of $28,800 to be paid by Hamlin assuming the mortgage of $16,000 and paying the indebtedness of Egan to the bank in the sum of $8,100, the balance of $4,700 to be carried back on the land and a mortgage given to Egan to secure the same. The court found that in the making of this contract Hamlin was cooperating with Leffingwell and Dora B. Stockwell with a view to their taking title to the surface of the land but intending to secure the remaining one-half royalty interest for the defendant, C. B. Shaffer, and that Hamlin was the agent of Shaffer in that transaction, having been connected with Shaffer for something like eleven years, but further found that Hamlin was not authorized in writing by Shaffer to execute the contract. This contract was introduced in evidence as exhibit 1.

Later, on December 1, 1924, under the foregoing circumstances the Moline bank, through its president, made another contract with Hamlin, which was introduced in evidence as exhibit 2, by which the bank agreed to convey the remaining one-sixteenth royalty interest on the half section of land for the sum of $32,000, which it was agreed should be paid by Hamlin by his assuming the $16,000 mortgage, by paying $11,300 to the Moline bank and the remaining $4,700 to be paid to John Egan when the abstract was furnished and title found merchantable. This latter contract, exhibit 2, was [106]*106dated, back to November 19, 1924, but was actually drawn and executed on December 1, 1924. The court further found that Hamlin was the agent of C. B. Shaffer in the making of exhibit 2, but that he so acted without any written authority from Shaffer. At the time of the execution of exhibit 2 the Moline bank still had in its possession the deed in blank from Egan and was trying to effect a sale so as to receive payment of its indebtedness from Egan. After the execution of the first contract, hereafter referred to as exhibit 1, Hamlin informed Shaffer that he had purchased for Shaffer the one-sixteenth royalty on the half section of land for $32,000, and Shaffer sent a draft for that amount to Hamlin, but on November 28 he wired Hamlin not to use the draft until he arrived there. Shaffer then came to Howard and Moline and on December 1, 1924, he met Hamlin and they went out to the property. On November 19, 1924, an oil well was being drilled on the land, and between that date and December 1 it came in as a producer. At the time this lawsuit was tried (May 17, 1929) there were thirty-two producing oil wells on the land.

After December 1, 1924, by mutual agreement of Hamlin, Egan and the bank, the blank deed previously executed by Egan and placed in escrow with copy of exhibit 1, was destroyed, and in lieu thereof there were substituted in place of the escrow with the bank, an oil and gas royalty deed in favor of Shaffer, a general warranty deed in favor of Dora B. Stockwell covering an undivided one-half interest in the surface rights,- and a general warranty deed in favor of Leffingwell for the other undivided one-half interest of the surface rights. The deed to Shaffer was for a one-sixteenth royalty. All of these instruments were dated back to November 20, 1924. The deeds to Stockwell and Leffingwell contained this clause:

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Related

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Bluebook (online)
285 P. 526, 130 Kan. 103, 1930 Kan. LEXIS 115, Counsel Stack Legal Research, https://law.counselstack.com/opinion/anderson-v-stockwell-kan-1930.