Beren Corp. v. Spader

255 N.W.2d 247, 198 Neb. 677, 1977 Neb. LEXIS 988
CourtNebraska Supreme Court
DecidedJune 22, 1977
Docket40854
StatusPublished
Cited by27 cases

This text of 255 N.W.2d 247 (Beren Corp. v. Spader) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beren Corp. v. Spader, 255 N.W.2d 247, 198 Neb. 677, 1977 Neb. LEXIS 988 (Neb. 1977).

Opinions

Brodkey, J.

This is an appeal from a District Court decision overruling a motion to vacate a default judgment which quieted title to certain real estate in Hitchcock County. We reverse and remand for further proceedings.

This case involves a somewhat complicated factual situation involving several transactions for the sale of real estate. In summary, the pertinent facts, on which the parties agree, are as follows. On December 4, 1968, William E. and Koila R. Spader, the defendants and appellants herein, executed an agreement for the purchase and sale of real estate with Paul and Louise Miller. The Millers agreed to sell to the Spaders real estate in Hitchcock County described as the “North Half (N1/^), the Southeast Quarter (SE^4), and the East Half of the Southwest Quarter (E^SW1^), all in Section Fourteen (14), and the North Half of the Northeast Quarter (N% NE%) of Section Twenty-three (23), all in Township Three (3) North, Range Thirty-four (34), West of the 6th P.M. in Hitchcock County, Nebraska.’’ The con[679]*679tract for sale was an installment contract, with a total purchase price of $64,000, and specifically included the oil, gas, and mineral rights. The following escrow provision was included in the contract: “The Sellers will deposit in escrow at the First National Bank of McCook, Nebraska a good and sufficient Warranty Deed to the premises being purchased by the Buyers, the grantee’s names to be left blank and inserted by the Bank upon delivery, together with a good and sufficient abstract of title showing merchantable title of record in the premises being bought by the Buyers. The deposit shall be made on or before December 31, 1968. The said First National Bank, as escrow agent, shall retain the warranty deed and the said abstract until the full amount of the purchase price is fully paid at which time the said escrow agent will deliver the deed and abstract to the Buyers or their assigns. The escrow costs shall be shared one-half by the Sellers and one-half by the Buyers.”

On October 5, 1970, the Spaders executed an assignment of the real estate in question, agreeing to “sell, assign, set over and transfer absolutely” to Obed and Lola Walker “all of our right, title and interest” in the real estate, subject to the provisions of the land contract between the Millers and the Spaders. The assignment, however, provided that the Spaders “shall retain an (sic) one-half- interést in and to the oil, gas and minerals (sic) rights to the above described property for a period of ten yeabs after which period all oil, gas and mineral rights shall revert back to the land.”

On October 14, 1970, 9 days subsequent to the assignment by the Spaders to the Walkers, the Millers and the Walkers executed an agreement for the sale and purchase of the real estate. This contract, like the original contract between the Millers and the Spaders, provided for installment payments to be made to an escrow agent, a bánk. The Millers [680]*680agreed that they would furnish to the Walkers “an abstract of title showing said premises to be free and clear of all encumbrance whatsoever, and shall deliver to the First National Bank of McCook, McCook, Nebraska, to be held in escrow, a warranty deed running to’’ the Walkers. The bank, as escrow agent, was authorized to deliver a warranty deed to the Walkers upon their payment of the full contract price, which was $47,700. The contract between the Millers and the Walkers did not refer to any retention of a one-half interest of gas, oil, and mineral rights in the land by the Spaders. In 1971, the Millers and the Walkers deeded a small portion of the land in question to the Johnny Walker Boys’ Ranch, Inc.

A survivorship warranty deed, dated October 17, 1973, in which the Millers conveyed the land in question to the Walkers, without encumbrance and with no reservations, was filed with the register of deeds in Hitchcock County on October 19, 1973. On May 25, 1974, the Walkers granted an oil and gas lease to the Beren Corporation (Beren), the .plaintiff and appellee herein. The lease was granted to Beren for the purpose of mining for oil and gas, and for activities relating thereto. The lease was for a 5-year period, and included portions of Section 14, 23, 24, 25, and 26, Township 3 North, Range 34 West of the 6th P.M., Hitchcock County. Included in', the land leased to Beren were the portions of Sections 14 and 23 which the Spaders had contracted to buy from the Millers, and to which the Walkers had taken title under the deed from the Millers after the Spaders assigned their interest in that land to the Walkers. The lease made no reference to any gas, oil, and mineral rights which may have been retained by the Spaders under their assignment to the Walkers. On July 10, 1974, the Johnny Walker Boys’ Ranch, Inc., ratified the oil and gas lease between the Walkers and Beren in order to grant Beren rights as a lessee in regard [681]*681to the land which had been deeded to the ranch in 1971.

On December 1, 1975, Beren brought a quiet title action against the Spaders, the Walkers, and the Johnny Walker Boys’ Ranch, Inc. Beren’s petition alleged the facts already described above, and attached thereto were the relevant contract documents and the oil and gas lease. It alleged, however, in reference to the original agreement of sale between the Millers and Spaders, that no deed was prepared or deposited in escrow in accordance with that contract. The petition acknowledged that the Spaders had attempted to retain a one-half interest in the oil, gas, and mineral rights in the real estate under their assignment to the Walkers, but alleged “that said provision was made notwithstanding that the title to the oil, gas and minerals under said land had not vested in the defendants, William E. Spader and Koila R. Spader, and by reason of said assignment never would so vest; that such provision was void as an attempt to create an interest in real estate by means of a reservation in favor of persons without title thereto.” The petition further alleged that the Spader/Walker assignment became merged into the agreement of sale of the real estate between the Millers and the Walkers and the deed issued as a result of that agreement; and that the assignment therefore became void and of no effect. Beren alleged that the “pretended reservation” of rights in the Spader/Walker assignment cast a cloud upon the title Beren had in the land; and prayed that title be quieted against the pretended reservation, and that any claim of the Spaders be declared to be junior and inferior to the rights of Beren under its lease.

A summons was served on the Spaders on December 6, 1975, which provided that unless the Spaders answered the petition on or before January 5, 1976, the allegations of the petition would be taken as true and judgment rendered accordingly. The Walkers [682]*682and Johnny Walker Boys’ Ranch, Inc., both entered a voluntary appearance, but did not contest the allegations of the petition. The Spaders failed to answer within the prescribed time. The record is silent as to the reason for such failure, but in their brief they state that it was due to oversight in that they did not notify their attorney of the pending action. On January 7, 1976, 2 days after answer day, the District Court entered a default judgment in favor of Beren. The record is barren of any evidence that Beren gave the Spaders or their attorneys notice of its intention to take the default judgment.

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Bluebook (online)
255 N.W.2d 247, 198 Neb. 677, 1977 Neb. LEXIS 988, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beren-corp-v-spader-neb-1977.