Court Opinion

ID: 3834344
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:04:14.399823+00
Date Added: 2024-06-11T07:40:14.461620
License: Public Domain

The dissenting opinion filed herein December 23, 1930, is withdrawn, and this opinion filed in lieu thereof on rehearing. The majority opinion prepared herein by Commissioner Teehee and Approved by the affirmative vote of Lester, V. C. J., Hunt, Riley, Cullison, and Andrews, JJ. The facts in this case, briefly stated, are as follows:
The Bass Furniture  Carpet Company took a mortgage on 40 acres of land in Seminole county, suit was filed and C. Dale Wolfe appeared for the Bass Furniture  Carpet Company, and was successful in having the mortgage foreclosed on an undivided one-third interest in and to the 40 acres involved. The Bass Furniture  Carpet Company tried to sell the undivided one-third interest and could not do so. Later, a partition suit was filed by C. Dale Wolfe, representing the Bass Furniture 
Carpet Company. The land was ordered partitioned *Page 135 
by the district court and commissioners were appointed who refused to partition the land in kind and appraised the same. The Bass Furniture  Carpet Company elected to take the land at its appraised value. Later, when the land was conveyed by sheriff's deed to the Bass Furniture  Carpet Company, it refused to pay for the two-thirds interest. An agreement was entered into by which Mr. Wolfe was to take over the land, pay for the two-thirds interest, and pay the Bass Furniture 
Carpet Company one-third of the appraised value for its interest, less cost and attorneys' fees, which was $200. Pursuant to that agreement, the Bass Furniture  Carpet Company executed its warranty deed to Mr. Wolfe on April 27, 1917, conveying to Wolfe all right, title, and interest in and to said estate. Said deed was placed of record. Wolfe paid the obligations of the Bass Furniture  Carpet Company to the other interested parties in said land, and has since that time been in possession. This suit was brought on March 5, 1926, more than seven years after the warranty deed was executed by the Bass Furniture  Carpet Company to C. Dale Wolfe. The record further discloses that this land was of little or practically no value until just a few weeks before this suit was brought. An oil well brought in near this property made it a very valuable property. The Bass Furniture  Carpet Company, acting through its attorneys, brought suit to declare a trust.
The record shows that the Bass Furniture  Carpet Company did not claim any interest in this land and made no attempt to claim any interest in it prior to the discovery of oil near the same a few weeks before this suit was brought. The testimony of Mr. J.R. Huggins, attorney for the Bass Furniture  Carpet Company, discloses that he called attention of the Bass Furniture  Carpet Company to the fact that there might be a lawsuit. At page 174 of the record his testimony is as follows:
"Q. You had examined the records? A. I had examined the records. Q. You knew he had bought the title from the heirs? A. No, sir, the record showed it in the name of the Bass Furniture Carpet Company. Q. Who did the title finally invest in? A. C. Dale Wolfe, under warranty deed and previously a quitclaim deed. Q. Did you take this matter up with Wilson  Wilson? A. I took it directly up with the Bass Furniture Company. Q. When? A. I wrote them and then received a letter from Wilson. Q. How did you happen to write that letter? A. I was making an investigation. Q. An investigation? A. That has nothing to do with this case. Q. Well, was it for the Bass Furniture Company or Wilson? A. Neither one. Q. That had no connection with you, and you found a lawsuit and wrote them? A. I was on an investigation for other parties and found this."
Prior to that time the Bass Furniture  Carpet Company had not made any claim that the warranty deed conveying this property to Wolfe was a trust deed.
Section 2 of art. 22 of the Constitution of Oklahoma provides:
"No corporation shall be created or licensed in this state for the purpose of buying, acquiring, trading or dealing in real estate other than real estate located in incorporated cities and towns and as additions thereto; nor shall any corporation doing business in this state buy, acquire, trade, or deal in real estate for any purpose except such as may be located in such towns and cities and as additions to such towns and cities: * * * Provided, however, that corporations shall not be precluded from taking mortgages on real estate to secure loans or debts or from acquiring title thereto upon foreclosure of such mortgages or in the collection of debts, conditioned that such corporation or corporations shall not hold such real estate for a longer period than seven years after acquiring such title."
The Bass Furniture  Carpet Company received title to the one-third interest of this land on January 9, 1917. The right to hold this land expired on January 9, 1924, more than two years before this suit was brought.
It may be contended that the land was held in trust by Wolfe. A corporation could not do indirectly what it could not do directly. It it could not be held in the name of the corporation, it could not be held in Wolfe's name as trustee.
It has been held that courts will not lend their aid to reinvest title in corporations that have no right to hold the same against the public policy of the state and contrary to the express provisions of the Constitution of Oklahoma. I believe this provision of the Constitution, prohibiting corporations from acquiring real estate out of incorporated cities, and there is no contention made that this is in an incorporated city, is one of the many wholesome provisions of the Oklahoma Constitution, and should be enforced by the courts.
The Supreme Court of the United States, in Case v. Kelly, 33 L.Ed. 513, in an opinion by Mr. Justice Miller, passed on the question here presented. In Case v. Kelly, supra, the Supreme Court of United States said:
"The corporation, in order to be entitled to buy and sell, to receive and hold, the title to real estate, must have some statutory *Page 136 
authority of the state in which such lands lie, to enable it to do so."
In the instant case the corporation does not have such statutory authority, and such authority is forbidden and withheld by the provisions of the Constitution of Oklahoma. The Supreme Court of the United States further said:
"Where the plaintiff has no right to take the property, it is not injured by a decree of the court which fails to grant such right, although such property was fraudulently acquired by the defendant."
If the corporation's contention is true, its right to hold this property expired more than two years before the suit was brought, and, having no right to hold it and no right to take title, it could not be injured by a decree of this court denying it that right. In the opinion, at page 516 of 33 L. Ed., the Supreme Court of the United States said:
"The railroad company is plaintiff in this action, and is seeking to obtain the title to such lands. It has no authority by the statute to receive such title and to own such lands, and the question here is, not whether the courts would deprive it of such lands if they had been conveyed to it, but whether they will aid it to violate the law and obtain a title which it has no power to hold. We think the questions are very different ones, and that while a court might hesitate to declare the title to lands received already, and in the possession and ownership of the company, void on the principle that they had no authority to take such lands, it is very clear that it will not make itself the active agent in behalf of the company in violating the law, and enabling the company to do that which the law forbids."
Other authorities follow and announce the same rule as announced by the Supreme Court of the United States. Likewise, it was held in Chamberlain v. Chamberlain, 43 N.Y. 424 that, if a corporation claims property under a will, it must show its ability to take and power to hold the property, and an Individual whose interest will be affected by the corporation accepting or holding the property, may raise the question of the corporation's ability to take or hold the property.
The same rule was followed in State, to Use of Wiltbank, v. Bates, 2 Harr. (Del.) 18; and in Proctor v. Methodist Episcopal Church South, 225 Mo. 51. It was held by that court that if the corporation was incapable of taking or holding real estate, under a will, the title would vest in the heirs.
This court, in Prince v. Gosnell, 19 Okla. 175, 92 P. 164, held that since the contract was against the public policy of the United States, it was void, and no right of action, either at law or equity, could be maintained thereon. The alleged contract is that Wolfe made an oral agreement with the Bass Furniture  Carpet Company at the time that the warranty deed was executed that he would hold the same in trust for it, the corporation, is against the public policy of the state of Oklahoma, and no right of action, either in law or equity, should be maintained thereon.
The warranty deed executed by plaintiff to defendant on the 27th day of April, 1918, is admitted to be the regular form of warranty deed.
Section 5272, C. O. S. 1921, provides:
"Every estate in land which shall be granted, conveyed, or demised by deed or will, shall be deemed an estate in fee simple and of inheritance, unless limited by express words."
Plaintiff does not contend that the deed executed here conveying this land by plaintiff to defendant, was limited by express words. This court, in the case of Oklahoma Ry. Co. v. Severns, 67 Okla. 206, 170 P. 216, in the third paragraph of the syllabus in considering this statute, said:
"* * * A voluntary grant or donation of land to a railway company vests it with an estate in fee, although the dedication was for railway purposes only."
This same statute was construed by the Circuit Court of Appeals in Gilbert v. M., K.  T. Ry. Co., 185 Fed. 102, in which the court said:
"We simply decide that, conceding the conveyance of the land in question was for railroad purposes only, still the deed that was executed for the purpose of conveying the land, when construed with reference to the laws of Oklahoma, conveyed an estate in fee."
The deed in question was a regular form of warranty deed and required by the statute of frauds to be in writing. The same conveyed a fee-simple title, and parol evidence was inadmissible to alter, vary, or contradict the terms of the same to prove that the deed was given for any other purpose than the purpose of conveying the fee-simple title.
The authorities above cited determined that the warranty deed conveyed to Wolfe fee-simple title to all the land involved. The corporation, plaintiff below, pleaded an express trust and the majority opinion finds a resulting trust. Section 8466, C. O. S. 1921, provides in part as follows:
"No such express trust shall be valid unless created, first, by a written instrument *Page 137 
subscribed by the grantor or grantors duly acknowledged, as conveyances of real estate are acknowledged, and recorded in the office of the county clerk of each county. * * *"
If Wolfe made an agreement to hold the land in trust for the Bass Furniture  Carpet Company, under this provision of the statute said agreement must be in writing and signed by Wolfe.
In Davidson v. Edwards, 270 S.W. 94, the Supreme Court of Arkansas said:
"It has been well said that the statute of frauds would be worse than waste paper if a breach of promise created a trust in the promisor, which the contract itself was insufficient to raise."
In Beach v. Packard, 10 Vt. 100, the court said:
"Parol evidence cannot be admitted to vary, contradict, add to, or control a deed or written contract."
Parol evidence was not admissible to vary the terms of the warranty deed by which the Bass Furniture  Carpet Company conveyed the lands in question to Wolfe.
The record does not support the finding of the majority opinion that the relation of attorney and client existed at the time the deed was made to Wolfe. In a letter written by Wolfe prior to the execution of the deed, he specifically stated that he was buying the land from them and wanted to vest title in himself. In speaking of the warranty deed from the Bass Furniture Company to himself, he says: "This will perfect the title in me."
After March 1, 1918, as a matter of law, the relation of Wolfe as attorney for the corporation terminated. That was the date on which the final judgment in the partition case was entered. As held by this court in the case of Okmulgee Northern Railway Co. v. Oklahoma Salvage  Supply Co., 133 Okla. 64,271 P. 167, the entry of final judgment terminated the relation of the attorney to the cause.
Under this holding, the entry of the final judgment in partition terminated the relation of the attorney and client.
The firm of Wilson, Tomerlin  Buckholts were the general attorneys for the corporation on the date the deed was executed. Mr. Buckholts testified that this was a bona fide sale. At page 125 of the record, he testified as follows:
"Q. And when they sold it, they was to get the $200? A. That is what they agreed to Q. Now, out of this $200 was Wolfe to take his attorneys fees? A. I suppose he would. Q. And he would take expenses, if any? A. I assume he would do that."
Plaintiff's exhibit No. 64, page 303 of the record, reads in part as follows:
"I have just talked with Mr. Buckholts and he says that the deed was executed and has been in your hands for some time and was made out to you. It does not seem that the Bass Furniture Carpet Company ever received the consideration of $200."
This was an admission that it was a bona fide sale and the consideration was $200.
It is contended that the making of the deed by the Bass Furniture  Carpet Company to Wolfe created the relation of attorney and client. No authorities are cited supporting this contention. For more than seven years the corporation did not pay any taxes or expenses and did not offer to pay any. Mr. Wolfe was in possession, paying all taxes and expenses and defending suits against title. The Bass Furniture Company permitted its rights, if any, to slumber, and not until there had been a change in the value of the land did it assert any claim to ownership in the real estate.
The cases cited in the majority opinion holding that, where the attorney acquires the subject of litigation, he holds it in trust for his client, are not in point. In the case at bar the attorney in the utmost good faith took title to this property in his client's name. Had Wolfe taken title in the foreclosure suit in his name, this law would apply, or had he taken title in the partition suit in his name, the authorities cited would apply, but the record in this case shows that he did not do so. The title was taken in his client, the Bass Furniture  Carpet Company, a corporation, and after that title was acquired for the Bass Furniture  Carpet Company and the sheriff's deed was confirmed by the court, upon advice of counsel, without fraud or misrepresentation on the part of Mr. Wolfe, the Bass Furniture  Carpet Company, by warranty deed, conveyed the property to Wolfe. So the authorities cited do not apply in the instant case. The facts do not bring this case within the rule announced in those authorities.
For the reasons herein stated, the Bass Furniture  Carpet Company is not entitled to judgment and decree of this court, and, on the contrary, judgment should be entered reversing this cause, with directions to the trial court to enter its decree quieting title in C. Dale Wolfe. *Page 138