154 S.W.2d 556 | Ky. Ct. App. | 1941
Affirming.
The Kenton Coal Oil Company brought an action in equity in the Clay circuit court against Petroleum Exploration, Inc., seeking the cancellation of an oil and gas lease executed and delivered to the defendant June 25, 1934, by Gardner Baker and wife and Georgia Campbell and husband, and asking that it be adjudged the owner of all the coal, gas, oil, and minerals and necessary *565 mining privileges in and under a 150-acre tract of land in Clay county; that its title to said minerals be quieted; that it recover of the defendant the value of gas which had been extracted from the land; and for an injunction against further removal of the gas. The defendant's demurrer to the petition was sustained, and, the plaintiff having declined to plead further, its petition was dismissed. From the judgment dismissing the petition, this appeal is prosecuted. The sole question presented is the propriety of the court's ruling in sustaining the demurrer to the petition.
The plaintiff in its petition alleged, in substance, that it was, and ever since April 1, 1903, had been, the owner of all the coal, gas, oil, and minerals in a certain described tract of land situated in Clay county containing 150 acres, more or less; that the land was a part of a tract of land containing 2,000 acres, more or less, in all of which the plaintiff owned the minerals, and which tract was owned on August 5, 1887, by George W. Baker; that the plaintiff acquired title to all of the minerals in all of said land under and by virtue of a deed or title bond, in writing, which was duly signed, executed, and delivered by George W. Baker to W.J. Horsley on August 5, 1887, and by which said George W. Baker conveyed to W.J. Horsley the said coal, gas, oil, and minerals and mining rights and privileges, and the title thereto was thereby vested in W.J. Horsley; and that on February 25, 1891, said deed or title bond was duly ratified, confirmed, and acknowledged by George W. Baker before James Marcum, clerk of the Clay county court. The petition alleged that "a duly certified copy of said deed or title bond is filed herewith as part hereof, marked 'Exhibit A,' " and further, "W.J. Horsley, by deed of conveyance duly executed and delivered by him to this plaintiff, on the 1st day of April, 1903, conveyed all of said coals, gases, oils, minerals and right and privileges so as aforesaid acquired by him from George W. Baker to this plaintiff." Exhibit A filed with and made a part of the petition reads:
"Know All Men by These Presents, That for and in consideration of Ten Dollars, in hand paid today 5th day of August, 1887, I have sold to W.J. Horsley, all the coals, gases, oils, and minerals with customary mining privileges in or on the tract of land or lands situated on the waters of Crain Creek *566 Buffalo Creek, in Clay Owsley Counties, Kentucky, adjoining the land of Thos. Baker, Henry Barrett etc. in Owsley County adjoining lands of Irvin Baker, and others. Containing 2,000 acres more or less, at 50 cents per acre, and I bind myself and heirs to make a good warranty deed for said coals, gases, oils, and minerals, free from dower liens and all incumbrances to the said W.J. Horsley, or his assigns when the money is paid as follows, viz:
"All within six months after above date, balance within six months from first deferred payment or as soon thereafter as good warranty deeds can be made to W.J. Horsley, or his assigns for said coals, gases, oils and minerals and such timber from 10 inches down as may be needed for mining purpose and if not paid in six months from this date in full this is to be null and void.
"Attest: J.B. Jones.
(Signed) Geo. W. Baker."
The certificate of James Marcum, clerk of the Clay county court, attached thereto states that:
"Geo. W. Baker, whose name is signed to this contract (hereto annexed) bearing date 5th day of August, 1887, personally appeared before me, in my said County, and acknowledged the same to be his act and I therefore certify the same for record.
"Given under my hand this the 25th day of February, 1891."
There is considerable dispute as to the nature of the action, but appellant asserts that it is an equitable action to cancel the title of an adverse claimant and to enjoin further acts of trespass under such title and to recover the value of gas which has been wrongfully appropriated by the appellee under an inferior title. Whatever the proper classification of the action may be, it is conceded that the sufficiency of the petition is to be determined by the construction placed upon Exhibit A, the instrument under which appellant claims title. Regardless of the allegations of the petition, the demurrer was properly sustained if the exhibit shows that appellant has no title. Whitaker v. Million,
In support of its contention that the instrument signed by George W. Baker is a deed and not an option, appellant cites a number of cases of which Day v. Miles,
Likewise, the writing executed by George W. Baker is not a title bond. There is no mutuality of obligation. What we commonly call title bonds or bonds for title are contracts for the conveyance of real estate. They are not required to be acknowledged but are valid instruments and are enforceable in the courts. Though a title bond cannot take the place of a recorded deed and is insufficient to pass the legal title, it gives the holder an *568
equitable right superior to the right of a purchaser or creditor with notice. Ferrell v. Childress,
" 'This contract to be null and void if said land is not surveyed and paid for within twelve months from this date, unless the grantor should fail or refuse to make a good deed, as hereinafter stated.
" 'It is further agreed by and between the parties hereto that the grantee has a right at any time to surrender this agreement upon the payment of the sum of $25.00 which amount grantor hereby agrees to accept as a full consideration for the surrender of this agreement, and the grantee is thereupon released from all liability named in this agreement, and hereby forfeits the sum of $100.00, this day advanced on this contract.' "
On August 6, 1910, the Heydrick contracts were assigned to Fields and Combs, and one of the questions involved in the litigation was: Were the Heydrick contracts *569 valid and in force when assigned to Fields and Combs? In disposing of this question, the court said:
"The Heydrick contracts were for a valuable consideration, and bound Brashear to convey the land to Heydrick, and his assignees, upon demand and payment of the purchase price within one year, but did not bind Heydrick to take the land at any time. These contracts by their express terms, unless exercised within one year from date, were null and void, and were only options to purchase the land at a fixed price for a definite time, expiring on May 25 and 26, 1904, respectively, without force or effect thereafter. No effort was made by Heydrick or his assignees to exercise the option under these contracts for more than six years after their execution, until, on August 6, 1910, appellants procured assignments of them from Heydrick, and notified Brashear they were going to take the property under same. Appellants, therefore, acquired no right under the assignments to them of these contracts."
To the same effect are Smith v. Ballou,
It is universally held that time is to be regarded as of the essence of options. Fields Combs v. Vizard Investment Company, supra; Rounds v. Owensboro Ferry Company,
Some point is made of the averment in the petition that on February 25, 1891, more than three years after the writing was signed by George W. Baker, it was duly ratified, confirmed, and acknowledged by him before the clerk of the Clay county court. The certificate of the clerk does not state when the writing was acknowledged, and it may be that it was acknowledged on the day it was signed and the certificate added thereafter as is frequently done, but even if the acknowledgment took place on February 25, 1891, its effect, at most, was only to renew and extend the option for another period of six months. It is not alleged, and there is no claim, that Horsley paid the purchase price at any time.
We conclude that no title passed to Horsley by virtue of the writing in question, and that the chancellor properly dismissed the petition.
Judgment affirmed.
Whole court sitting.