Phoenix Title and Trust Company v. Smith

403 P.2d 828, 1 Ariz. App. 424
CourtCourt of Appeals of Arizona
DecidedJuly 1, 1965
Docket1 CA-CIV 40
StatusPublished
Cited by1 cases

This text of 403 P.2d 828 (Phoenix Title and Trust Company v. Smith) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Phoenix Title and Trust Company v. Smith, 403 P.2d 828, 1 Ariz. App. 424 (Ark. Ct. App. 1965).

Opinion

CAMERON, Judge.

Plaintiffs below, appellants herein, brought suit to quiet title or for declaratory judgment to determine possession in and to some 40,000 acres of land in Mohave County, Arizona. Appellant, Phoenix Title and Trust Company, appears in its capacity as a trustee.

In the summer of 1956, the defendants below, appellees herein, entered into negotiations to purchase some 45,000 acres of land, including some patented mining claims situated in Mohave County, Arizona. The purchase price was $150,000. Other than the patented mining claims, mineral rights to the property had been reserved by prior grantors. The agreement for sale of the 45.000 acres, comprising what is called the Diamond Bar Ranch, was dated 1 August, 1956, but was not signed until October, 1956. Defendants, by agreement dated 3 October, 1956, contracted to sell 40,000 acres of the 45.000 acres purchased, less the patented mining claims, to Southwestern Realty *426 Company for the amount of $200,000. In the agreement for sale, the following provision is contained:

“The sellers herein reserve unto themselves, their heirs, executors, and assigns, all range use rights.”

The warranty deed to the said 40,000 acres also contained the provision:

“The grantors herein reserve unto themselves, their heirs, executors, and assigns, all range use rights.”

The agreement for sale is a form agreement prepared by Phoenix Title and Trust Company and contains the following provisions as part of the printed form:

“Buyer may enter into possession of said property and continue in such possession for and during the life of this agreement. Buyer agrees to maintain said premises and all improvements thereon in good repair to prevent no waste thereof and take the same care thereof as a prudent owner would take.”

The agreement carries Phoenix Title and Trust Company escrow number 541882.

Also on 3 October, 1956, Southwestern Realty Company, an Arizona corporation, entered into an agreement to sell the same 40,000 acres to George L. Dobson, a resident of California, for the amount of $270,-000. This agreement was also on plaintiff Phoenix Title and Trust Company’s form (escrow number 541883), and referred specifically to the rights of the defendant “in and to all range use rights in the within property”. The sales price, $270,000, was later reduced to $250,000.

The testimony indicates that Mr. Dobson thought he was dealing with the defendants in the purchase of this land through Mr. O. C. Williams as broker, and not until late in the transaction did he realize that Southwestern Realty Company was to be a party to the transaction. The testimony also indicates that the defendants were aware of this so-called “double escrow” and had no objections to Southwestern selling this property for whatever it could obtain.

The testimony is abundantly clear in the trial below, that the defendants and Mr. Dobson and Mr. O. C. Williams, acting for Southwestern Realty Company, intended in this transaction to transfer “exchange rights” only in and to the 40,000 acres. Mr. Dobson understood this, Mr. Williams understood this, and it was clearly Mr. Smith’s intention. The instruments as recorded in the office of Mohave County Recorder, however, are completely silent as to this intention.

By “exchange rights” as defined by the parties, is meant the right of the holder of the “rights” to apply to the United States Government to “trade” or “exchange” this property for other government property located elsewhere in the state or county on whatever basis the authorities will agree to trade.

When Mr. Dobson was unable to exchange his interest in and to the 40,000 acres for other land held by the federal government, he then sold his interest to other parties, some of whom comprise the plaintiffs herein.

It should be noted that though the defendants strongly dispute the right of the buyers to enter into possession of said property, that the printed portion of the agreement for sale specifically provides that “buyer may enter into possession of said property and continue into such possession for and during the life of the agreement”, and we assume thereafter when the agreement is performed. The provision is in direct conflict with the interpretation placed upon the reservation of range use rights by the defendant. Generally, if the written provisions of a contract, here the reservation of range use rights, are inconsistent with the printed provisions, the written matter deliberately added by the parties must prevail. Wilhorn Builders v. Cortaro Management Company, 82 Ariz. 48, 308 P. 2d 251 (1957); Deuel v. McCollum, 1 Ariz. App. 188, 400 P.2d 859 (1965).

The question then before this Court concerns the legal effect in the agreement for sale and in the deed of the reservation of *427 range use rights by the defendants-sellers to Southwestern Realty Company.

It has been said that the terms “reservation and exception” are often used interchangeably and that their distinction is “technical, slight and shadowy”, Victory Oil Co. v. Hancock Oil Co., 125 Cal.App.2d 222, 270 P.2d 604 (1954). Ordinarily, for the purpose of determining what is granted in a deed, the distinction between an exception and a reservation is of little importance since by whatever name the property excepted or the estate reserved is never considered a part of the grant. Reynolds v. McMan Oil & Gas Co., 11 S.W.2d 778 (Tex. Com.App.1928). While an exception operates on the description on the property and withdraws from the description the excepted property, Moore v. Davis, 273 Ky. 838, 117 S.W.2d 1033 (1938), a reservation is technically a newly created right which grantee impliedly conveys back to the grantor. Goss v. Congdon, 114 Vt. 155, 40 A.2d 429 (1945), Nelson v. Bacon, 113 Vt. 161, 32 A.2d 140 (1943). In the instant case, the “range use rights” would properly be considered a reservation since it is a new right or use created out of the property granted to Southwestern Realty Company.

Counsel cite no cases and we have been unable to find any in which a reservation for grazing or range use purposes has been reserved to the grantor, their heirs and assigns, in perpetuity. We must, therefore, consider some rules of construction in determining the effect that this clause has at law on future purchasers of this property. Generally, doubts arising as to the intention of the parties must be resolved in favor of a free and untrammeled use of the land. Marshall v. Callahan, 229 S.W.2d 730 (Mo.App.1950). Also, benefit of the defect of description of exception or reservation accrues to the grantee. Pima Farms Co. v. McDonald, 30 Ariz. 82, 244 P. 1022 (1926).

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Related

Phoenix Title and Trust Company v. Smith
416 P.2d 425 (Arizona Supreme Court, 1966)

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403 P.2d 828, 1 Ariz. App. 424, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phoenix-title-and-trust-company-v-smith-arizctapp-1965.