Title: Bowen v. Bianchi

State: mississippi

Issuer: Mississippi Supreme Court

Document:

359 So. 2d 758 (1978) Wilmer BOWEN et ux. v. John H. BIANCHI et al. No. 50291. Supreme Court of Mississippi. May 31, 1978. Dale, Hathorn & Clark, Joseph Dale, Prentiss, for appellants. Patterson, Harper, Mallette & Bellan, C.E. Harper, Jackson, Donald G. Kruger, Prentiss, Allen & Allen, Robert O. Allen, Donald B. Patterson, Brookhaven, for appellees. Before ROBERTSON, LEE and BOWLING, JJ. BOWLING, Justice, for the Court. Wilmer Bowen and wife were complainants under a bill of complaint filed against John H. Bianchi and others in the Chancery Court of Jefferson Davis County. Each defendant filed a special demurrer to the bill of complaint. All demurrers were sustained by the lower court and an appeal was granted. Under the allegations of the bill of complaint, all of which we assume are true in considering the cause, complainants sought to cancel certain mineral interest conveyances held by the defendants involving forty acres of land in Jefferson Davis County. It was alleged that these instruments all constituted clouds on complainants' title and should be cancelled and set aside. The bill of complaint alleged that on November 17, 1942, G.C. Sims, then owner of the property, entered into a contract with complainant Wilmer Bowen, under the terms of which Sims agreed to sell and Bowen agreed to purchase the property in question. Under the terms of the contract, a copy of which was attached to the bill of complaint, the total consideration for the sale and purchase was $500, to be paid over a period from the date of the contract to May 15, 1946, with payments of $100 each, the first to be made at the time of executing the deed, and succeeding payments due annually on May 15, 1943, 1944, 1945 and 1946, with all payments to bear interest at the rate of eight percent per annum. The contract then provided that upon receiving the May 15, 1946, payment, G.C. Sims would execute and deliver to Bowen a warranty deed to the property. In the event of default in the payments, those already paid would be considered as earnest money and rent. It was alleged that under and by virtue of the contract, G.C. Sims gave up all possession of the land and then complainants immediately entered into possession *759 and began construction of a residence thereon; that complainants have continued in uninterrupted possession and use of all the land from the date of the contract until the present time; that G.C. Sims never was in possession of said land or any part thereof after November 17, 1942. It was alleged that on February 22, 1945, a purported mineral right and royalty transfer instrument was executed by G.C. Sims and wife to C. Fred Morgan, and at that time complainants were in full possession of all the land and had constructed and were using the residential building as their home, together with other buildings on the said land; they had fenced the land and were farming a portion thereof. It was alleged that all this possession was sufficient notice to put the said C. Fred Morgan on inquiry which would have revealed the existence of the land purchase contract and the interests of the complainants. It was alleged that all payments were made under the contract and on August 20, 1946, G.C. Sims and wife, P.L. Sims, carried out the obligation of the contract by executing to the Bowens a warranty deed to the subject property. Allegations were made that the defendants in the suit were bound by the terms of the land purchase contract and, therefore, "took nothing" by virtue of their instruments. It was alleged that the complainants did not have knowledge of the execution, recordation, or existence of any of the purported mineral right and royalty transfer instruments received and held by the defendants derivatively from the instrument executed by Sims and wife to C. Fred Morgan; that at no time during the period set out in the bill of complaint had the complainants been disturbed in their possession of the property and had no reason to believe that they did not own the mineral interests. The special demurrers filed by the defendants raised the issue that the cause of action set out in the bill of complaint was barred by the statute of limitation as set out in Mississippi Code Annotated sections 15-1-7 and 15-1-9 (1972). The lower court agreed with these contentions and entered its decree sustaining all demurrers as being barred by the above set out statutes of limitation. Appellees (defendants below) contend that the instrument executed in favor of C. Fred Morgan on February 22, 1945, was at most a voidable instrument and as it was immediately recorded in the office of the chancery clerk, appellants had constructive notice of the instrument and the ten-year statutes of limitation began to run on the date of recordation. Appellants contend that by taking complete possession of the property pursuant to the contract of November 17, 1942, and the manner of possession which was clearly evident on February 22, 1945, the date of the mineral instrument to Morgan, put Morgan on notice of appellant's claim to the property, including the minerals, under the terms of the contract and that any inquiry would have revealed appellants' right to the surface and minerals under the contract. They contend that the mineral instrument to Morgan was void as Sims had conveyed the surface and the minerals to appellants upon the execution of the contract; that because of the void instrument and the open, full and complete possession of the property, the statutes of limitation set out in the demurrers are not applicable. We agree with these contentions of appellants. Appellees rely primarily on the following cases: Aultman v. Kelly, 236 Miss. 1, 109 So. 2d 344 (1959); Neal v. Teat, 240 Miss. 35, 126 So. 2d 124 (1961); Dent v. Calhoun, 326 So. 2d 320 (Miss. 1976); Cooley v. Cooley, 328 So. 2d 57 (Miss. 1976); and Robinson v. Rhodes, 236 So. 2d 746 (Miss. 1970). Appellants correctly contend that the facts and opinions in these cases differ from the case at bar. We need to analyze those cases. In Aultman, supra, the heirs of one Raphael C. Cuevas, deceased, sought to cancel a mineral deed executed by Cuevas on April 30, 1945, to Ferris E. Tate. The suit charged that Cuevas was mentally and physically unable to execute the instrument and that he thought he was signing a lease rather than a mineral deed. It was alleged that Tate secured the deed from Cuevas by *760 fraud and, therefore, the deed was voidable. The distinction between Aultman and the present case is that the alleged fraudulent mineral deed was secured from the owner of the property at a time when he was in actual possession thereof. In Neal v. Teat, supra, the same ownership and possession situation existed as in Aultman. The bill in chancery was filed by Oscar Neal and wife, Hattie Neal, alleging that the agents of the defendant Teat fraudulently obtained from them a deed to an undivided one-half interest in and to the oil, gas and other minerals under the property in question. Again, as in Aultman, the alleged fraudulent and voidable instrument was secured from the owners in possession. The Court in holding that the two statutes of limitation in question barred the suit, made several observations: Other interesting observations made by the Court in Neal were: It is obvious in Neal that the paramount consideration by the Court was that the persons allegedly defrauded and who brought the suit not only owned but were in full possession of the entire property at the time they executed the alleged voidable instrument. In Dent v. Calhoun, supra, Estella Zinnerman, on May 26, 1955, conveyed the entire mineral interest in the land in question to Windham and Calhoun. This instrument was filed for record on May 27, 1955. Zinnerman did not get title to the property until a forfeited tax land patent was conveyed by the State on June 9, 1955. On June 11, 1955, Zinnerman conveyed the land to appellant Dent. The suit was filed by Dent against Windham and Calhoun to cancel their mineral instrument as a cloud. The chancellor found that as a fact Dent learned of the mineral deed within a few days after its execution but waited until more than ten years elapsed before filing suit. It was clear that this voidable deed with the knowledge of its execution by Dent set in motion the statutes of limitation. In Cooley v. Cooley, supra, the facts presented to the lower court were not set out. However, the Court held that the statutes of limitation as applied in Neal and Dent were applicable. It is significant that the opinion stated: This indicates that the suit also involved a claim by an owner in possession who executed an alleged voidable instrument while in that status. In Robinson v. Rhodes, supra, the question now before the Court was not reached, and the case obviously does not apply here. Now let us look at the authorities applicable to the contentions of appellants; that is, that the statutes of limitation in question do not apply here because (1) the mineral instrument in question was void and not voidable; (2) it was secured by fraud from appellants, but if any fraud, it was by Sims, the original owner and/or Morgan, and (3) after November 17, 1942, the date of the contract, appellants were in full, sole and complete possession of the relatively small tract of land, had built their residence thereon, and were living on the land and working it that the time the mineral instrument was executed and delivered from Sims to Morgan; and (4) any reasonable inquiry would have caused anyone to ascertain the true facts of possession and their claim to the property and minerals under the contract. At the outset, it might be argued that the "contract" did not operate as a conveyance to appellants of all surface and mineral rights as in a deed. This principle was discussed and settled in the early case of Taylor v. Lowenstein, 50 Miss. 278 (1874), where the Court said: The above principle was affirmed in Stevens v. Hill, 236 So. 2d 430 (Miss. 1970); Gulf Refining Co. v. Travis, 201 Miss. 336, 29 So. 2d 100 (1947); Russell v. Scarborough, 155 Miss. 508, 124 So. 648 (1929); and Stovall v. Judah, 74 Miss. 747, 21 So. 614 (1897). The principal case on the issues before the Court appears to be Gulf Refining Co. v. Travis, supra. There, G.B. Travis conveyed the property in question to his daughter, Mrs. J.H. Hooks. She was a nonresident of the State of Mississippi but immediately placed a tenant on the property who established and retained possession while living on and working the land. After the conveyance to his daughter, G.B. Travis executed a mineral deed to another party. This deed was recorded but Mrs. Hooks did not record her deed of conveyance for approximately ten years. The Court, in holding that the statutes of limitation did not apply because of the possession of Mrs. Hooks through her tenant and subsequent grantee, made the following statements, to wit: It is conceded by the parties and is alleged in the bill of complaint that no actual possession of the minerals under the subject property was taken by the original grantee, or his subsequent grantees or assigns. In the case of Continental Oil Co. v. Walker, 238 Miss. 21, 117 So. 2d 333 (1960), involving the setting aside of a forged mineral deed, this Court, in affirming the lower court's action is setting the deed aside, said: Therefore, we conclude that the learned chancellor erroneously applied Mississippi Code Annotated sections 15-1-7 and 15-1-9 (1972), to the admitted alleged facts of the bill of complaint. He should have overruled the demurrers and tried the issues under the bill of complaint and answers or other pleadings by the appellees. The cause is therefore reversed and remanded. REVERSED AND REMANDED. ROBERTSON and SMITH, P. JJ., and SUGG, WALKER, BROOM, LEE and COFER, JJ., concur. PATTERSON, C.J., took no part.