Carter v. Prairie Oil & Gas Co. , 58 Okla. 365 ( 1915 )

On January 4, 1914, in the district court of Creek county, Annie Carter, plaintiff in error, sued Senes W. Anthony, Charles H. Anthony, and Prairie Oil Gas Company, defendants in error, to clear her title to 120 acres of land, her surplus allotment as a citizen of the Creek Nation, on the ground that a warranty deed, purporting to convey the same, made, executed, and delivered by her to the defendants Anthony, dated August 9, 1907, was: (1) Procured by fraud; and (2) was executed in violation of section 19 of an act of Congress, approved April 26, 1906, c. 1876 (34 Stat. at L. 144), which reads:

"And every deed executed before, or for the making of which a contract or agreement was entered into before the removal of restrictions, be and the same is hereby declared void."

Aside from the allegations of fraud in procuring the deed, the petition substantially states that, before the removal of her restrictions, she made, executed, and delivered to the defendants Anthony a warranty deed to the land in controversy, dated July 2, 1907, which, she says, was void and not susceptible of ratification, and that on August 9, 1907, she made, executed, and delivered to them another like deed, purporting to convey the same land, in violation of said statute; that said second deed was an attempted ratification of the prior deed, and was also void, although executed after the removal of her restrictions, by reason of the sixteenth section of the Supplemental Agreement (Act June 30, 1902, c. 1323, 32 Stat. 500). It was further alleged that the Prairie Oil Gas Company claimed some interest in the land adverse to that of plaintiff. After the Anthonys had answered, in effect, a general denial, they admitted the execution and delivery of both deeds, but denied that the deed of August 9th was executed in fraud of the statute, and set up the same as an independent transaction for a valuable consideration, and not in ratification of the former deed, as charged. They alleged themselves to be the owner of the land, and for cross-relief prayed that their title thereto be quieted.

Prairie Oil Gas Company for separate answer set up that they were purchasers of 40 acres of the land in good faith and for a valuable consideration, and deraigned title by mesne conveyances from the Anthonys, and, further, that since acquiring title thereto it had erected valuable and lasting improvements on the land, and taken therefrom vast quantities of oil, to the amount of more than $84,000, and for cross-relief prayed that its title to the 40 acres be quieted.

After issue joined by reply there was trial by a jury and a general verdict for defendants, upon which the court, without reviewing the evidence and reaching the same conclusion as the jury or making any findings of fact, rendered and entered judgment, and plaintiff brings the case here.

This being an action of purely equitable cognizance, the court erred in sending it to the jury and in entering judgment upon the verdict as in a common-law action. Apache State Bankv. Daniels, 32 Okla. 121, 121 P. 237, 40 L. R. A. (N. S.) 901, Ann. Cas. 1914A, 520; Watson v. Borah et al.,37 Okla. 357, 132 P. 347. Rev. Laws 1910, sec. 4993, provides:

"Issues of law must be tried by the court, unless referred. Issues of fact arising in actions for the recovery of money, or of specific real or personal property, shall be tried by a jury, unless a jury trial is waived, or a reference be ordered, as hereinafter provided"

— and section 4994:

"All other issues of fact shall be tried by the court, subject to its power to order any issue or issues to be tried by jury. * * *"

This, not being an action for the recovery of money or of specific personal property, was properly triable to the court, who had a right to send or not to send issues of fact arising therein to the jury for specific findings. The proper practice is stated in the syllabus in Success Realty Co. v. Trowbridge,50 Okla. 402, 150 P. 898. There we said:

"In a case purely of equitable cognizance, neither of the litigants is entitled, as a matter of right, to a trial by jury. In the trial of equity cases the court may call in a jury for the purpose of advising the court upon questions of fact, and the court may either adopt or reject their conclusions as to the same as he sees fit."

But as this error was uncomplained of in the trial court, and it is too late to complain of it here (Nowlin v. Melvin,47 Okla. 57, 147 P. 307), we will not reverse the case on that account, but will dismiss the subject in the language of Dunphyv. Kleinschmidt et al., 11 Wall. 615, 20 L.Ed. 223:

"Now, it is perfectly obvious that, with the exception of the verdict being rendered by nine jurors, the trial was altogether conducted as a trial at common law, and that the decree was rendered on the verdict precisely as a judgment is rendered on a verdict at common law. This was clearly an error. The case, being a chancery case, and being instituted as such, should have been tried as a chancery case by the modes of proceedings known to courts of equity. In those courts the judge or chancellor is responsible for the decree. If he refers any questions of fact to a jury, as he may do by a feigned issue, he is still to be satisfied in his own conscience that the finding is correct, and the decree must be made as a result of his own judgment, aided, it is true, by the findings of the jury. Here the judgment is pronounced as the mere conclusion of law upon the facts found by the jury."

See, also, Lake Erie, etc., v. Griffin et al., 92 Ind. 487;Hall v. Doran et al., 6 Iowa, 433; Milk et al. v. Moore,39 Ill. 584. Or, as stated in Ayers v. Scott, Ky. Dec. (2 Ky.) 162:

"The chancellor, in order to inform his conscience as to any point arising in a cause, may direct an issue to be tried as to that point; but it is error to submit the whole case arising upon bill and answer to the jury."

Such being the state of the record, our duty is clear. InSuccess Realty Co. v. Trowbridge, supra, we also said:

"4. In all cases which were cognizable only in a court of chancery, this court on appeal has the power to consider the whole record, to weigh the evidence, and, when the judgment of the trial court is clearly against the weight of the evidence, render, or cause to be rendered, such judgment as the trial court should have rendered."

See, also, Schock et al. v. Fish, 45 Okla. 12, 144 P. 584.

The judgment is contrary to both the law and the evidence. Aside from the question of fraud in the procurement of the deeds, which was laid out of the case by the trial court, and correctly, there is no dispute as to the essential facts. The evidence discloses that on July 2, 1907, the land in controversy was a part of plaintiff's allotment in the Creek Nation, upon which restrictions had not been removed, and would not be removed by operation of law until August 8, 1907; that defendants were her lessees in possession under an oil and gas mining lease theretofore duly recorded; that they wanted to buy the land; that plaintiff's husband, co-operating with defendant Senes W., to induce her to sell it, on July 1st took her to his house, where they stayed all night, and with Senes next day they drove to Sapulpa; that there, at a certain law office, she, on that day, made, executed, and delivered to the defendants Anthony a warranty deed to the land, which was duly recorded. The pertinent part of the deed reads:

"For and in consideration of the sum of ($3,600) thirty-six hundred dollars, of which amount three hundred ($300) dollars is this day paid in cash, the receipt of which is hereby acknowledged, and the remainder to be due in two installments; one evidenced by a promissory note of this date, due August 9, 1907, for the sum of seventeen hundred ($1,700) dollars, and one note dated this date, due August 9, 1908, for the sum of sixteen hundred ($1,600) dollars, said last note to draw interest from August 9th, 1907, at the rate of seven (7) per cent. per annum," etc.

At the time the deed was delivered the $300 part consideration recited therein was paid, the deferred payments were evidenced by two promissory notes, as therein stated, and both were delivered to her, and she was requested by the Anthonys, the grantees therein, to return to the same place on August 9th, which she did. There on that date, present both plaintiff and the defendants Anthony, they prepared a like warranty deed, purporting to convey to them the same land for the same consideration, which she then and there made, executed, and delivered to them, at the same time surrendering to them their two notes recited in the deed of July 2d, the former of which they paid, and at the same time delivered to her their note for $1,600, as evidence of the deferred payment mentioned in the second deed. The pertinent part of said deed reads:

"In consideration of the sum of thirty-six hundred ($3,600) dollars, of which amount two thousand ($2,000) dollars in cash paid, the receipt of which is hereby acknowledged, and sixteen hundred ($1,600) dollars to be paid one year from this date, for which a note has this day been executed, dated the 9th day of August, 1907, and due the 9th day of August, 1908, bearing interest at the rate of seven (7) per cent. from date, have this day granted," etc.

Prairie Oil Gas Company deraigned their title to 40 acres of this land by mesne conveyances from the grantees in said deed, which was duly recorded. Both sides concede that the deed of July 2d was void. And such it was, as a fraud upon the statute participated in by both parties thereto. But defendants contend, and the court, in effect, found, that the two deeds were not evidence of or part of one and the same transaction, and hence the intent to evade the statute by the taking of the first could not be said to taint the second, and hence the second deed was good and passed the title. The court was wrong. The deed of July 2nd was not only void as executed before the removal of the restrictions, but, as it is impossible to conceive of the execution of that deed without a prior contract or agreement to make it, and which, when made, would enter into and form a part of the transaction evidenced thereby, it is apparent that said deed was made pursuant to a contract or agreement entered into prior to the removal of restrictions, which entered into that transaction, and hence, if that deed and the deed of August 9th were evidence of or part of one and the same transaction, that intent to violate the statute was carried into and tainted the second deed.

And since an agreement is nothing more than "a coming together of parties in opinion or determination; the union of two or more minds in a thing done or to be done; a mutual assent to do a thing" (Bouvier) — we repeat, it is impossible to conceive a thing done, as here, without at least a prior tacit agreement to do that thing. And these two deeds were evidence of or part of one and the same transaction. This for the reason they evidenced a contract between the same parties concerning the same subject-matter and were intended to accomplish the same object. In Brake v. Blain, 49 Okla. 486,153 P. 158, speaking of two instruments to convey land there in question, we said:

"The two agreements in writing, supra, constitute one contract, * * * and should be construed together. We say this for the reason that, although not executed at the same time, they refer to the same subject-matter, and on their face show that each was executed as a means of carrying out the * * * other. Canadian Coal Co. v. Lynch, 28 Okla. 585 [115 P. 466]."

As the word "transaction" is, according to Webster (International Dict. 1915 Ed.) derived from two Latin words,"trans," across, and "agere", to drive, and as it is apparent that what these parties attempted to accomplish thereby was to drive across, or, in other words, "put over," from one to the other the title to this land, it follows that they were part of that transaction, and, as such, evidence thereof, and not only must be construed together, but as having been made with a common intent, so that the taint in the one will taint the other. This thing of carrying taint from one instrument to another is not new. In Treadwell, Adm'x, etc., v. Archer,76 N.Y. 196, in the syllabus it is said:

"Where, upon the maturity of a promissory note given for a usurious loan, for the purpose of an extension, the borrower delivers to the lender a new note, by its terms made payable to a third person, which note is transferred by the lender to said third person, it is tainted with the usury, and is void in the hands of the payee, although he received the same in good faith and without knowledge of the usury."

And this thing of a determination by a court of the intent with which two deeds were made is nothing new. In Pullman v.Bennett, 55 Cal. 368, G., being owner of the B. ranch, agreed to convey to F. and W. 5,000 acres on the lower end of it, 500 acres to F. and 4,500 acres to W., and pursuant thereto on the same day executed deeds to F. and W., but as to which was delivered first the evidence was conflicting. In an action of ejectment brought by grantees of F. against subsequent grantees of G., it was held that the deeds, being executed at the same time, were part of the same transaction, and that, construing them together, it must have been understood and agreed, among other things, that the W. deed should be first located. If the court could there take those two deeds and determine what must have been the understanding between the parties thereto at the time they were executed, and if the court can take one or more deeds by their corners and say, in the light of the evidence before him, whether they are made in fraud of creditors, which, of course, is frequently done, we can and will so take these deeds and say, as a conclusion of law from the undisputed facts before us, whether they were executed in fraud of the statute. What, then, is the prohibitive force of the undisputed evidence surrounding these two deeds and which characterizes their execution? As we have seen, the logical inference to be drawn from the making of the deed of July 2d is that it was executed pursuant to an agreement to convey, entered into between the parties thereto before the removal of restrictions; in fact a deed is defined to be "a contract under seal, signed and delivered by the parties thereto." It was ineffectual to accomplish the purpose for which it was made, and no doubt placed of record so as to cloud the title and keep others from buying until such time as the restrictions were removed and the grantees therein left free to effect a transfer of the title to the property by securing the execution of another. The act of April 26, 1906, was leveled at this very practice. In Simmons v. Whittington, 27 Okla. 366,112 P. 1018, we said:

"Prior to the enactment of April 26, 1906, contracts and agreements for sale and purchase of allotments made before the removal of restrictions were void; but there existed no statute which specifically made deeds, procured after the removal of restrictions, in pursuance of contracts made before, void. Congress, no doubt, recognized that while such contracts to purchase and sell, made before the removal of restrictions, were void and could not be made the basis of an action for specific performance, designing persons, by procuring such contracts, could use them as a moral force to induce the Indian allottee, after the removal of his restrictions, to execute a deed which, when obtained, would be valid, and by such practice defeat the policy of Congress to protect the allottee from liability under any contract made before Congress deemed such allottee competent to transact his business and handle his property as other persons. Such contracts, although void, would constitute such a cloud upon an allottee's title as to render it, after the restrictions had been removed, unmarketable, without first obtaining a decree of court canceling such instruments. An opportunity was therefore afforded designing persons to obtain such contracts, thereby clouding the title of the allottee and forcing him to sell his land, when it became alienable, to the owner of such illegal contracts, or be to the expense of litigation to clear his title. But when any deed, procured in pursuance of such a contract, is struck down by the statute, all fruits of such contracts are destroyed, and there can be no inducement to obtain them. It was to accomplish this that this act was passed."

As evidence of the fact that the transaction of passing the title to the land did not end with the execution and delivery of the deed of July 2d, plaintiff was paid only $300 of the $3,600 consideration recited therein at that time, and was requested to return to the same place on the day after her restrictions were removed. Why return if the transaction was at an end? And why return on a day when she could make a valid deed to the land, unless it was for the purpose of renewing the transaction? and why make the deferred payment of $1,700, due and payable to her on that day, if not as an inducement to secure her return to that end? Accordingly, with intent to consummate the transaction of putting over the title from the plaintiff to the defendants Anthony, they met on August 9th at the same place, and proceeded to consummate the deal. And to that end the second deed was made, executed, and delivered, whereupon the parties grantee therein paid off the $1,700 note made payable that day to plaintiff, which made up, with the $300 already paid her, the $2,000 cash payment recited in the second deed, and executed their note, payable to her for $1,600, as therein recited, which was afterwards paid. From all of which it appears that, being evidence of or part of one and the same transaction, the taint of illegality in the first was carried over and entered into the making of the second deed, and that both must fall for the reason that for their making a contract or agreement was entered into before the removal of the plaintiff's restrictions. This is in keeping with Alfrey v. Colbert, 7 Ind. T. 338, 104 S.W. 638, which was quoted approvingly on another point in International Land Co. v. Marshall, 22 Okla. at page 709, 98 P. 951, 19 L. R. A. (N. S.) 1056. In the Alfrey Case, for a consideration of $550, a minor executed a deed to 120 acres of his land, which was void on account of his minority. After he became of age and could convey, for and in consideration of the payment of the money for the first deed and the additional sum of $5 he executed another deed to the same land to the same party, and in that action both deeds were sought to be set aside. In setting them aside the court, in effect, held that as the consideration of the first deed entered into the consideration of the second, and born were evidence of one and the same transaction, both were void. In passing, the court said:

"The last contention of appellant is: 'That if the first deed could not be ratified, or affirmed, the second deed conveyed title as an original conveyance; that the $550 paid when the first deed was executed, together with the $5 paid when the second deed was executed, made a good and sufficient consideration for the execution of the second deed.' But if the $550 was the consideration of the first deed, which the master and the court found to be void, then how can that be a consideration in the second deed, except it be to ratify the void deed? The only consideration moving between the parties at the time of the execution of the second deed was $5 and the including of the $550 in the consideration of the second deed makes conclusive the fact that the second deed was an attempt to ratify the first deed, which has been declared to be void."

And in the syllabus:

"A minor Indian, who, receiving $550, makes a deed of allotted land, void by Act of June 30, 1902, c. 1323, sec. 16, 32 Stat. 503, modified by Act April 21, 1904, c. 1402, 33 Stat. 204, and after he becomes of age, without further consideration except $5, makes another deed to the same person of the same land, does not give an original conveyance, but merely attempts to ratify the first deed, which is not susceptible of ratification."

On appeal the decree in the case was affirmed (Alfrey et al.v. Colbert, 168 Fed. 231, 93 C. C. A. 517), and that, too, on the ground, among others, that the second deed was intended to be confirmatory of the first.

We said that $300 was paid in part consideration for the land at the time of the execution and delivery of the first deed, and such is the undisputed evidence. Not only does plaintiff so state, but she is borne out by the face of the deed wherein she acknowledged the receipt of said amount from the grantees therein. Neither of them denies that they paid her that amount at that time. In fact, they introduced no evidence concerning the execution and delivery of the deed of July 2d, or the consideration therefor. Senes W., however, testified that the recited consideration of $2,000 cash in the second deed was not all paid plaintiff in cash, as therein stated, but that $300 of it was withheld at that time and paid by him to extinguish a prior outstanding lease on the property made by plaintiff to one Kennedy in 1904. By this he would have us believe that no part of the consideration for the first deed entered into the second, which we decline to do, and, since it is not claimed he withheld and paid out the $300 to Kennedy pursuant to any understanding or agreement between plaintiff and himself, or with her knowledge or consent, we will take her statement concerning the entire matter, and hold, as we do, that the $300 was paid her in cash at the time of the execution and delivery of the first deed, and that part of the consideration for that deed entered into the consideration for the deed of August 9th.

It will not do to say that, as these two deeds were not executed at the same time, they are not to be construed as one instrument. In 6 R. C. L., sec. 240, after the learned author states the rule to be:

"That in the absence of anything to indicate a contrary intention, instruments executed at the same time, by the same parties, for the same purpose, and in the course of the same transaction, are, in the eye of the law, one instrument, and will be read and construed together as if they were as much one in form as they are in substance" — he further says:

"In order to make the rule applicable it is not essential that the two instruments shall be executed simultaneously. When two written contracts are entered into between the same parties, concerning the same subject-matter, whether made simultaneously or on different days, they may, under some circumstances, be regarded as one contract, and interpreted together."

In support of this rule he cites Blagen v. Thompson, 23 Or. 239, 31 P. 647, 18 L. R. A. 315. There it is said:

"When two written contracts are entered into between the same parties concerning the same subject-matter, whether made simultaneously or on different days, they may, under some circumstances, be regarded as one contract, and be interpreted together. Dean v. Lawham, 7 Or. 422; Kruse v.Prindle, 8 Or. 158; Bishop, Cont., sec. 165."

In Chicago Trust Savings Bank v. Chicago Title Trust Co.,92 Ill. App. 366, in the syllabus it is said:

"Where two instruments are executed as a part of the same transaction and agreement, whether at the same or different times, they will be taken and construed together."

To the same effect is Joy v. City of St. Louis, 138 U.S. 1, 11 Sup. Ct. 243, 34 L.Ed. 843; Knowles v. Toone, 96 N.Y. 533;St. Louis, I. M. S. Ry. Co. v. Beidler, 45 Ark. 17; Wildman,Assignee, v. Taylor et al., 4 Benedict's Dist. Ct. Rep. 42;Chicago Trust Sav. Bank v. Chicago Title T. Co., 190 Ill. 404, 60 N.E. 586, 83 Am. St. Rep. 138; Neill v. Chessen, 15 Ill. App.? 266; Stacey v. Randall, 17 Ill. 467;Richardson v. Single, 42 Wis. 40; Gerdes v. Moddy, 41 Cal. 335;Leach v. Rains, 149 Ind. 152, 48 N.E. 858.

We are therefore of opinion that, although executed at different times, as both deeds refer to the same subject-matter and each was executed as a means of carrying out the intent of the other, both are evidence, or parts, of one and the same transaction, and should be construed together as one instrument; that, the first deed being void as in fraud of the statute, not only in that for the making of which an agreement was entered into before the removal of restrictions, but in that a part of the consideration of the first entered into the consideration for the second deed, the taint of illegality in that deed tainted the second, and that both were taken in fraud of the statute, and both are void, and, being void, that the subsequent purchaser takes no title.

Let the cause be reversed and remanded, not for a new trial, but to be proceeded with pursuant to the views herein expressed.

All the Justices concur, except KANE, C. J., and THACKER, J., who dissent.