Dillon v. MorganDillon v. Morgan
Fish & Montgomery by Roy M. Fish, Springhill, for defendant-appellant.
MARVIN, Judge.
The issue is whether a seller of land by warranty deed may claim against his purchaser a servitude of one-half minerals reserved in the deed by the seller, when the seller failed to declare to the purchaser an earlier created servitude of one-half minerals affecting the land.
When the defendant in this declaratory judgment action purchased the property in 1969, his vendor, Dean, reserved one-half the minerals. In 1973, defendant sold the land by warranty deed to the plaintiff, reserving to defendant one-half the minerals. The existence of the Dean servitude was not declared by defendant and was not otherwise
The lower court‘s judgment declared plaintiff to be the “owner” of one-fourth minerals, reasoning that the minerals would be “owned” one-half by Dean, one-fourth by plaintiff and one-fourth by defendant becаuse defendant had only one-half to reserve.1 There is no evidence that this was the intent of the parties.2 Both parties appeal. On reargument before a five-judge panel as required by
At the outset, we find that defendant was obligated to deliver to plaintiff and warranted to plaintiff, title to the land, subject only to the reservаtion of a mineral servitude of one-half minerals by defendant.
Conceptually, the obligation to deliver is different from the obligation of warranty. Sеe and compare
Warranty is in essence a continuing guarantee to the buyer by the seller-warrantor and one of its principal objectives is maintaining the buyer in peaceable possession of the property.
If the seller fails to deliver that which he has obligated himself to deliver, the contract of sale may be enforced against the seller by the buyer by specific performance or other remedy.
The articles regarding the оbligations of the seller-warrantor supply the basis for the result in cases such as Hodges v. Long-Bell Petroleum Company, 240 La. 198, 121 So. 2d 831 (1960) and Gaines v. Crichton, 187 La. 345, 174 So. 666 (1937) wherein the principle of enforcing the seller‘s obligations was couched in terms of estoppel, by warranty or by deed. By whatever name, the principle is sound that a seller should not be allowed to obligate himself to deliver and to warrant title аnd peaceable possession to a buyer of a thing and then by his own act or claim to derogate from, or to assert rights to the thing contrary to, his obligations. Thus, in Hodges, the sellers under a warranty deed, who reserved a mineral servitude in 1938 and who failed to declare to the buyer the existence of a mineral servitude created in 1931, werе estopped or not allowed to assert against the buyer their rights under the 1931 servitude.
In Hodges, the buyer was not allowed to assert any claim contrary to the contract of sale by which he acquired the property, in effect making the “estoppel” a two-edged sword. Defendant here alternatively urges that because plaintiff knew he was “getting” оnly one-half minerals, plaintiff should be similarly barred from asserting ownership of all the minerals if and when the Dean servitude is extinguished.
Projecting defendant‘s alternative argument in this respect would produce this result in mineral “ownership,” assuming no interruption or suspension of liberative prescription:
1969 Dean ½ Defendant, as landowner ½ 1973 Dean ½ Plaintiff, аs landowner ½ 1979 Defendant ½ Plaintiff, as landowner ½ 1983 Landowner, in perfect ownership
It is true that defendant‘s dealing with the mineral rights underlying the property, in effect, produced problems similar to those produced by an “oversale” of minerals by a landowner. Defendant agreed to the acquisition by Dean of one-half minerals in 1969. Defendant аttempted to acquire for himself one-half minerals in 1973, at the same time conveying to plaintiff one-half minerals. See
While defendant‘s alternative argument appears to have equitable merit, it cannоt withstand close scrutiny. Only the landowner is empowered to create the mineral servitude.
While it is true that a buyer who goes into possession is not allowed to dispute his seller‘s title while he remains in possession—our understanding of the basis of the estoppel of the buyer in Hodges—certainly a buyer may enforce the obligations against his seller when it is the seller‘s actions which cause eviction of the buyer. See Consolidated-Progressive Oil Corp. v. Standard Oil Co., 158 La. 982, 105 So. 36 (1925).
Defendant‘s alternаtive argument is an attempt to have recognized his reversionary right to the expectancy of extinction of the outstanding Dean servitude, contrary to
Accordingly, judgment below is reversed at the cost of defendant-appellant and there is judgment in favor of plaintiff, Ira C. Dillon, declaring that in that certain deed under Register No. 237190, Webster Parish, Louisiana, dated January 10, 1973, plaintiff acquired, with the property described:
“Begin at the Southwest Corner of the Northeast Quarter of the Southwest Quarter (NE¼ of SW¼), Section 31, Tоwnship 23 North, Range 10 West, Webster Parish, Louisiana, thence run East along the South Line of said NE¼ of SW¼, 373 feet to the point of beginning; thence continue East along the South Line of said NE¼ of SW¼, 600 feet; thence run North 305 feet; thence run West 343 feet; thence run South 63 feet; thence run West 257 feet, more or less, to a point due North of the point of beginning; thenсe run South 242 feet to the point of beginning, containing 3.8 acres, more or less.
ALSO: The North 780 feet of the Southeast Quarter of the Southwest Quarter (SE¼ of SW¼), Section 31, Township 23 North, Range 10 West, Webster Parish, Louisiana, less three (3) acres sold to Johnny Green described in Volume 414, Page 145, of the Webster Parish Conveyance Records.”
the right to explore for and produce and reduce to his possession as an element of perfect ownership of land, one-half of all the minerals of any nature whatsoever underlying the property, and that this right of plaintiff shall be superior to and shall take precedence over the attempt by defendant, Harold G. Morgan, in said deed to create a mineral servitude by reserving to himself one-half of all the oil, gas, and other minerals underlying said property.
REVERSED AND RENDERED.
PRICE, J., dissents with written reasons.
HALL, J., dissents for reasons assigned by PRICE, J.
BOLIN, J., recused.
Ira C. Dillon brought this action to be declared the owner of an undivided one-half interest in the minerals under a tract of land purchased by him from defendant, Harold G. Morgan.
The pertinent facts are as follows: On February 8, 1969, defendant purchased the subject property along with other acreage in Webster Parish from Ray T. Dean who reserved one-half of the minerals. On January 10, 1973, defendant sold plaintiff a portion of the land he acquired from Dean and reserved one-half the minerals to himself. The deed, which was prepared by plaintiff‘s attorney, provides for an express warranty of “full guarantee of title” and did not acknowledge the existence of the prior reservation of one-half the minerals by Dean in 1969.
Plaintiff contends that in view of the outstanding mineral servitude at the time of the sale, the express warranty of title estops defendant from claiming the ownership of thе other one-half interest in the minerals.
Defendant contends that plaintiff had either actual or constructive knowledge of Dean‘s prior reservation and has no claim under warranty for not receiving any interest in the minerals under the property sold to him. Defendant has not proven by a preponderance of the evidence that he declared the existence of the prior servitude to plaintiff at the time of the sale, nor can it be said that plaintiff had constructive knowledge because of the title examination by the attorney who prepared the act of sale as the opinion was directed to a lender and was for a restricted purpose. Therefore, having reserved only one-half of the minerals to himself in the deed, defendant warranted to plaintiff that there was no outstanding servitude affecting the other one-half.
While it may be that defendant owes plaintiff an obligation under warranty for failing to declare the existenсe of the nonapparent servitude which encumbered the title to the property conveyed, this factor does not operate to nullify the grant to him of an undivided one-half of the minerals by the reservation clause of the deed. I am unaware of any Louisiana case which has allowed one party to use estоppel by deed to divest a second party of a real right established in a conveyance. Plaintiff‘s relief lies under the Civil Code articles providing for the warranty of the seller in the case of an eviction.
An eviction from title may result in the loss of the totality or a part of the thing sold due to claims of a third person.
The majority opinion is in error in applying the equitable doctrine of estoppel by deed to the circumstances presented here. Estoppel by deed, when applied correctly, merely means the contract speaks for itself. Neithеr party can abrogate the terms of the contract, which in this case specifically reserved to the seller a servitude of a one-half interest in the minerals. Therefore, under a proper application of the equitable principle relied on, neither the buyer nor the seller could claim that the other did not own a one-half interest in the minerals. This would lead to an impossible result since a one-half interest cannot be given to both the buyer and the seller.
The effect of the majority opinion is to reform the contract and to take a validly created mineral servitude from the seller and to give it to the buyer, a result which was never intended by both parties to the contract. This leaves the seller with no interest whatsoever in the minerals, yet thе purchase price remains the same. Therefore, the proper solution is that provided by the Civil Code.
The decisions relied on for application of the doctrine of estoppel by deed in the majority opinion, Hodges v. Long-Bell Petroleum, 240 La. 198, 121 So. 2d 831 (1960) and Gaines v. Crichton, 187 La. 345, 174 So. 666 (1937), present circumstances that are distinguishable from this case.
Hodges simply held that the vendor, Long-Bell Petrоleum, by using language in a conveyance tending to establish a new mineral servitude by a reservation clause was estopped to claim any other mineral interest against the purchaser, Hodges, other than that which could be effective at that time under the reservation.
Gaines merely applied estoppel to preclude a person who bought and sold property as a “trustee” from later claiming the benefit of suspension of the running of prescription against a mineral servitude because he was in fact trustee for minors which was not disclosed in the deed in question.
Neither of these decisions can be used as authority for divesting the defendant of thе mineral servitude legally reserved in the act of conveyance.
I agree that the trial court judgment should be reversed, but respectfully dissent from the majority opinion insofar as it declares
Notes
When granted by the landowner to another, this right is a mineral servitude—which in the absence of visible signs of its use is a nonapparent servitude burdening the land that must be declаred by the seller of the land to his purchaser under a warranty deed or otherwise revealed to the purchaser to avoid the effect of the warranty. R.S. 31:5, 6, 21 and cases cited in Comments following; Richmond v. Zapata Development Corp., supra; C.C. Art. 2515.