Wilcox v. Ruan ( 1921 )

Stevens, J.

1- traSsf°erAof0:iIS' stock, effect. I. This is an action to quiet title to the coal and other minerals underlying the E14 of the SE1^ of the SE1^ of Section 21, and the Ey2 of the NE^ of the NE^4 of Section 28, all in Township 75 north, Range 16 west of the 5th P. M. The land described is referred ^ ^ evidence as Tracts A, B, and C. C is a small, irregular tract on the east side of the NE% of the NE3/4 of Section 28, and comprises three or four acres. The court below found that defendants had title only to Tracts A and C. Tract B is, therefore, not involved upon this appeal. Plaintiffs claim to be the owners of the record title through numerous mesne conveyances from the United States government. No claim is made by the defendants that they have any interest in the surface. Defendants claim title under a written contract entered into July 3, 1915, by and between George H. and John H. Ramsey, as parties of the first part, and William Baxter, Daniel Edwards, William B. Williams, and John Owens, parties of the second part. By the terms of this contract, the parties of the first part agreed to transfer and assign to parties of the second part all the shares of the capital stock- of the Garfield Coal Company, a corporation, and to transfer and assign any and all leases belonging to said corporation, if necessary, to second parties. The consideration named in this contract is $1,000, $400 of which was paid in cash at the time of the execution of the contract, and the balance, $600, by note of second parties, due on or before one year from date.

Defendants further claim that, at the time of the execution of the contract and the assignment of the shares of stock of the Garfield Coal Company, George H. Ramsey exhibited to the parties of the second part a plat showing five adjoining 40-acre tracts, and represented that the corporation owned all of the coal and mineral underlying 160 acres thereof, which included all of the land in controversy. The shares of stock assigned by first parties under the above written agreement were as follows: 17% shares of William C. Ramsey, 17% shares of John H. Ramsey, and 50% shares of George H. Ramsey. The assignments were made to William Baxter, secretary-treasurer of the corporation.

At the time of the execution of the contract and the assignment of the shares of stock, the legal title to the minerals in controversy was in George H. Ramsey, who obtained title thereto by quitclaim deed from the Garfield Coal Company, dated August 1st and recorded August 3, 1898. On December 3, 1919, George H. Ramsey and wife quitclaimed the above described land, together with all coal and mineral underlying the same, to A. C. Evans. Rachel Ruan has no other interest in the subject-matter of this litigation than as the wife of J. A. Ruan, who acquired whatever interest he may have in the property from John Owens and Daniel Edwards. Daniel Edwards conveyed his interest in the Second Vein Coal Company to the defendant Ruan. by bill of sale. The Second Vein Coal Comnanv is a copartnership, composed of Mrs. William Baxter, William B. Williams, and J. A. Ruan, and was organized shortly after the assignment of the capital stock of the Garfield Coal Company to the parties named above. Mrs. Baxter has succeeded to the rights of her husband, William Baxter, now deceased. The Garfield Coal Company was engaged in the operation of a coal mine near the land in controversy, at the time the written contract was entered into; and later, either the same mine or another in that vicinity was operated by the Second Vein Coal Company. Ruan testified that he is the secretary-treasurer of both the corporation and the Second Vein Coal Company. The record is not quite clear as to whether the mine operated by the copartnership is the same mine as the one previously operated by the corporation. Other sources of title will be referred to and discussed later.

It is not claimed by defendants that George H. Ramsey conveyed any inter'est in the minerals personally owned by him, unless by the transactions already mentioned. The obligation assumed by the parties of the first part in the written contract was to assign all of the shares of stock of the Garfield Coal Company to the parties of the second part, and to transfer and assign any and all leases held thereby, if necessary. The corporation was, and still is, a going concern, as we understand'the testimony. The assignment of the shares of stock held by the parties of the first part in no way affected the corporate entity. Its holdings were neither increased nor diminished thereby. George H. Ramsey, so far as anything bearing upon that question is shown in the record, never obligated himself to convey any property owned by him personally. It is suggested that he owned practically all of the stock, and dominated and controlled the management and business of the corporation, and that he treated the coal land standing in his name as its property. The record does not sustain this contention. The most that can be claimed for it is that it shows that George H. Ramsey, when he exhibited the plat which he said showed the property of the corporation, stated that the 160 acres included the two 20-acre tracts in question. The evidence does not reveal when or by whom the plat was made, but it does show that the matters written thereon are in the handwriting of John H. Ramsey. As previously stated, the Garfield Coal Company did at one time own tracts A, B, and C; but in August, 1898, it quitclaimed the same to George H. Ramsey. So far as appears from the evidence, the plat may have been made before that date. The words “Garfield Coal Company,” with other matters', are written on the two 20-acre tracts shown on the plat and the two 40-acre tracts immediately east thereof, but do not appear on the other 40.

William Baxter was deceased at the time of the trial, and George H. Ramsey was not called as a witness; but the other parties to the written contract testified that Ramsey told them that the mineral underlying the 160 acres belonged to the corporation. While the record is somewhat confusing at this point, we assume that the title to the coal underlying the surface of the other tracts designated on the plat was either in the Garfield Coal Company, or it held some right thereto under one or more leases. In any event, it is not claimed that the record title was in George H. Ramsey. We have beld that minerals underlying tbe surface of tbe land are real estate, subject to be conveyed and taxed as sucb. In re Appeal of Colby, 184 Iowa 1104. Neither tbe agreement to assign tbe shares of stock of the corporation, nor tbe exhibition of tbe plat, nor tbe statement of George H. Ramsey that tbe minerals underlying tbe land designated thereon belonged to tbe corporation, amounted to a conveyance of his personal interest therein. He may have made false representations to the assignees of the stock as to tbe holdings of tbe corporation, but this did not have tbe effect to transfer title to them to real estate owned by him. Whether the facts shown were sufficient to work an estoppel against Ramsey or not, and whether, if so, same were available to the defendants, as against the plaintiff Caldwell, to whom A. C. Evans conveyed the land by warranty deed, while the action to quiet title was pending, we need not determine, as no estoppel was pleaded.

Defendants also claim title by 'adverse possession. This claim is wholly without support in the evidence. It is true that some of the defendants went upon Tract C and dug a few holes, shortly before A. C. Evans commenced the action to quiet title; but they acquired no adverse right or title thereby.

2 taxation-tax deed: non-not question. II. Plaintiffs also claim title to the mineral underlying Tract C, under and by virtue of a tax deed. The court below held deed buvalid, and gave the defendants a right to redeem from the tax sale. The mineral appears to have been taxed in 1914 to the Second Vein Coal Company, and. was sold for taxes on the 6th day of December, 1915. The ground upon which the court, found the tax sale invalid was that proper notice of redemption had not been given. Whether proper notice of redemption was given is at this time immaterial. Neither the Second Vein Coal Company nor any of the other defendants had any interest hr the property sold for taxes and convejmd by the tax deed, and could not, therefore, question plaintiffs’ tax title. Section 1445 of the Code of 1897; Adams v. Burdick, 68 Iowa 666. It was error for the court to set aside the tax sale and give defendants a right to redeem.

The abstract is very greatly extended and incumbered by unnecessary questions and answers. For this reason, one third of the cost of printing same will be taxed to appellants. The remaining' costs in this court and in the district court will be taxed to the defendants.

The judgment and decree of the court below, in so far as the same is adverse to appellants, is, therefore, reversed, and the cause remanded for a decree in harmony with this opinion; or, if the parties prefer, decree may be entered in this court.— Reversed and remanded.

Evans, C. J., ARthur and Faville, JJ., concur.