Butler v. Stewart

49 N.W.2d 176, 331 Mich. 277
CourtMichigan Supreme Court
DecidedSeptember 5, 1951
DocketDocket 14, Calendar 45,048
StatusPublished

This text of 49 N.W.2d 176 (Butler v. Stewart) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Butler v. Stewart, 49 N.W.2d 176, 331 Mich. 277 (Mich. 1951).

Opinion

Reid, C. J.

Plaintiffs filed their bill of complaint to rescind their conveyance of lands for fraud, and also prayed for cancellation of conveyances by the grantee, defendant Stewart Oil Company, to third parties (herein made defendants), for an accounting and for injunctive orders. From a decree for defendants, plaintiffs appeal.

Plaintiff Jack Butler (referred to herein as plaintiff) has lived in Hart, Michigan, for about 40 years. For most of his life and until recent years he has been a blacksmith. Since 1947, he has had arthritis and other ailments. Since quitting’ blacksmithing he has been farming and he has owned farms in Oceana county. He has been a horse' trade! and has dealt in real estate, fur, fruits and “everything mostly,” and has kept himself informed as to what has gone pn in the vicinity of Plart. About 1944 and 1945 plaintiffs bought for $900 the lands in question herein, 160 acres located north of Hart, the soil of which was poor for farming. Plaintiffs have not farmed very, much on it.

In January, 1947, plaintiffs made an oil and gas lease with defendant Carter Oil Company, giving Carter Oil Company royalty interest in oil and gas produced on the 160 acres in question, plaintiff to receive 50 cents per acre and {- of the oil produced, if any.

*279 Plaintiff Jack Butler testified lie rode out to the 160-acre farm in question on July 15,1947, and found some men drilling what plaintiff calls a core test or drill on his farm without permission of plaintiff and they failed to answer plaintiff’s question as to whether they struck anything. There is no proof that such drilling showed presence of oil. It was not done by defendant Stewart Oil Company, whose grant of royalty is herein complained of, but was done by Carter Oil Company under plaintiffs’ lease.

Plaintiff Jack Butler testified that on July 30, 1947, defendant J. Russell Stewart (representing the Stewart Oil Company) came to plaintiffs’ house ip. Hart and sought to buy plaintiffs’ fractional interest in oil royalty in plaintiffs’ 160-acre farm in question. On that day defendant Stewart produced and plaintiffs signed and delivered to defendant Stewart, as representing the Stewart Oil Company, a mineral deed conveying the entire mineral interests of the Butlers to the Stewart Oil Company and defendant Stewart delivered to plaintiffs a check for $2,000, the agreed consideration.

The record discloses that Mrs. Butler was' present at least during part of the conversation, and that after defendant Stewart had stated his proposition, in response to her husband’s question, she approved of the proposition. Mrs. Butler was not sworn as a witness. Plaintiff Jack Butler was evasive and not highly reliable as a witness.

Plaintiff claims that defendant Stewart on July 30, 1947, made the following 3 misrepresentations to plaintiff as showing the background of the fraudulent concealment of knowledge by Stewart of the “gas blow-out” hereinafter discussed.' Plaintiffs claim they relied and acted on said misrepresentations, i.e.:

1. That there was no oil or gas under plaintiffs’ land in question. Plaintiffs claim that there was in *280 fact oil under plaintiffs’ lands in question and that defendant Stewart on July 30,1947, had information persuasive of that fact and that Stewart, having made statements as to absence of oil under plaintiffs’ lands, became obligated to disclose his information indicative of presence of oil. This representation is supported only by testimony of plaintiff J act Butler. It must be apparent that one seeking to purchase mineral rights does not do so if there is no possibility of the presence of such minerals. The Carter Oil Company having previously purchased an oil lease from plaintiffs, plaintiff Jack Butler must have had knowledge under all the circumstances shown in the testimony of the possibility of oil under his lands. This claimed misrepresentation is improbable, for otherwise Stewart would be in the inconsistent position of negotiating for an interest in what he in the same breath was saying did not exist. The testimony of J. Russell Stewart that he had no evidence there was any oil under plaintiffs’ lands seems the more plausible in the light of the entire record. We find such misrepresentation was not made.

2. That the Stewart Oil Company, whom defendant Stewart represented, allocated certain sums each year to buy royalties regardless of the fact that the money for the most part was merely lost in profitless investments. Defendant Stewart admits saying to plaintiff that his company went all over the State buying royalties in different parts of the State where they had no leases and where there was a concentration of leases and that “a lot of it went down the drain.” But plaintiff1-claims the statement by defendant Stewart of his company’s habit of buying such royalties was intended to and did conceal from plaintiff, defendant Stewart’s information and belief indicative of actual presence of oil on plaintiffs’- lands . in question.' Plaintiff .cannot-be considered as believing that the money that Stewart *281 was paying him was purely a gift without any real consideration, or money merely handed out carelessly. Plaintiff is not supported in his claim as to Stewart making any misrepresentation in such particular. No deception is considered by us as proven.

3. That “most everybody behind you has sold to me,” meaning that almost every owner of lands between plaintiffs’ lands and “the lake” had sold to Stewart. It seems improbable that plaintiff was deceived or uninformed as to whether the owners back of him had made oil leases. We consider that plaintiffs have failed to prove this misrepresentation.

Plaintiffs claim that the misrepresentation by Stewart and his failure to disclose knowledge of a “blow-out” of a well drilled about July 13, 1947, by Carter Oil Company on the Thomascheski farm about lj miles from plaintiffs’ lands in question, of sufficient force to require that the hole be cemented in, which blow-out would be of interest to any oil man, completed the fraud. Plaintiffs claim defendant Stewart knew of this blow-out but concealed his knowledge and information on that subject from plaintiffs. There seems to have been an excitement among people living in the general neighborhood of Hart because of the blow-out.

Plaintiff denies that on the day he closed the deal with defendant Stewart, he,- plaintiff, knew anything about the blow-out. However, on cross-examination, plaintiff testified as follows : •

“Q. Between July 15, 1947 and July 30, 1947, wasn’t there some talk around the streets of Hart with respect to the Carter Oil Company having obtained a showing of gas on the Thomascheski farm?

“A. No, I don’t know.

“Q. You didn’t hear that at all?

“A. No.

“Q. Are you sure ?

*282 “A. That was in 1947 ?

“Q. Yes, while the Carter Oil Company was core drilling.

“A. I don’t remember.

“Q. They called it a gas blow-ont.

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Bluebook (online)
49 N.W.2d 176, 331 Mich. 277, Counsel Stack Legal Research, https://law.counselstack.com/opinion/butler-v-stewart-mich-1951.