Court Opinion

ID: 3544510
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:55:56.883976+00
Date Added: 2024-06-11T14:22:20.706583
License: Public Domain

On June 28, 1921, the plaintiff and his wife executed and delivered to L.I. Hall, an agent of the defendant trust, the oil and gas lease on the lands involved. The lease was to run for five years with the right to renew it year by year thereafter by the payment each year of a consideration of $1 unless oil or gas were developed in the meantime of commercial value. At the same time the plaintiff executed and delivered to Hall for the defendant a mineral deed conveying 25 per cent. of "all gas, oil and minerals" in the same land in the event the lease was allowed to lapse. The lands were not developed or exploited for oil or gas by the defendant either directly or indirectly and on March 7, 1931, at the request of the plaintiff, the lease was terminated and removed from the records.
The complaint contains the usual allegations essential in an action to quiet title. Defendant by answer set up four affirmative defenses to the complaint: (1) A copy of the mineral deed is attached as Exhibit A and made a part of the answer and title paramount to plaintiff's title is claimed thereunder; (2) that the plaintiff was guilty of laches in not beginning his action for fourteen years after the execution of the mineral deed; (3) that the plaintiff is estopped from denying the paramount title of the defendants to the oil, gas, and mineral in the lands involved by reason of the deed and the warranties contained *Page 342 
therein; (4) that plaintiff's action is barred by the provisions of section 9015, Revised Codes, the statute of limitations.
To the affirmative defenses thus set out in the answer the reply alleges (1) that the defendant trust is neither a natural nor artificial person under the laws of Montana, and therefore incapable of receiving title by such conveyance and for such reason the deed is void; (2) that the deed was given without consideration; (3) that the deed was obtained by misrepresentation and fraud; (4) that the mineral deed and lease, by being given at the same time, are parts of the same transaction and are to be taken and construed as one contract and that the intention of the parties, as shown by the instruments and as agreed upon at the time, was that the land would be speedily explored and exploited to determine whether there was any oil and gas thereunder. A similar reply was interposed to each of the four affirmative defenses.
The court took the matter under advisement and in due course made findings of fact substantially as follows:
1. That the Northland Petroleum Consolidated is a common-law or business trust.
2. That the individual defendants are the trustees thereof.
3. That the plaintiff executed and delivered to the defendant trust the mineral deed conveying a one-fourth interest in the oil, gas, and other minerals in the land involved and received a good and valuable consideration therefor.
4. That such one-fourth interest was purchased by the trustees of the defendant trust for the use and benefit of the unit holders and such trustees had a just legal and valid right to defend this action on behalf of parties in interest.
5. That the defendant trust, under the declaration of trust duly recorded in Glacier county, and pleaded herein, is an association having and exercising certain powers and privileges not possessed by individuals and is a corporation within the meaning of section 18, Article XV of the Constitution of Montana with the power to sue and be sued in all courts in like case as natural persons. *Page 343 
6. That the individual defendant trustees under the terms of the declaration of trust and provisions of law applicable had the right to assume a trade-name under which it might conduct its business.
7. That plaintiff in conveying the real estate involved dealt with the defendant as a legal entity, received a valuable consideration for such conveyance and is thereby estopped from denying the legal existence of the defendant trust.
8. That the plaintiff's action is barred by section 9015, Revised Codes, the statute of limitations.
9. That plaintiff is estopped to deny the paramount title of the defendant to the one-fourth interest in the oil, gas, and other minerals.
Plaintiff assigns error on findings numbered 3, 4, 5, 6, 7, and 8 and on the court's conclusions of law No. 1. Assignment No. 1 directed to the court's finding No. 3 and assignment 6 directed to finding 8 raises questions that should be determined in favor of the plaintiff. The other assignments give rise to questions on which the authorities are not in harmony but the weight of authority would lead to their determination generally in favor of the defendant, but they are not essential to the determination of this controversy on its merits.
Finding No. 3 is to the effect that the mineral deed was made and delivered to the defendant by the plaintiff and that the plaintiff received a good and valuable consideration therefor. The record shows the deed was made and delivered as found by the court, but there is not sufficient evidence in the record to support the finding that plaintiff received a good and valuable consideration. Plaintiff alleges and counsel contends that there was no consideration for the mineral deed and plaintiff testified that he received nothing for either the deed or lease. The deed recites the consideration of $1 the receipt of which is thereby acknowledged, and "other valuable considerations." The other valuable considerations appear to consist of one "Beneficial Interest" in the trust, 1,000 of which were authorized issued of the par value of $100. The beneficial interest will be adverted *Page 344 
to later. There was a 12 1/2 per cent. interest in the oil and gas reserved by plaintiff under the lease which might have resulted in additional consideration but the record does not show that there was any development or attempt to develop.
The rule denying the admission of parol evidence to vary the terms of a valid written instrument is not involved in the controversy. The deed was not acknowledged by the plaintiff and was not under seal when it was delivered to the defendant, but it was proved by the subscribing witness as provided by section 6922, Revised Codes, obviously for the purpose of recordation. Specific consideration need not be mentioned in a written contract (section 10606, subd. 39), but "In equity it has always been permissible to inquire into the consideration of a sealed instrument * * * (or any other). It is laid down in a number of cases that when the consideration for a promise wholly fails the promise is without consideration and unenforceable." (13 C.J. 315.) The consideration of $1 named in the deed was merely nominal, and not sufficient according to some authorities to support the contract. (Great Western Oil Co. v. Carpenter,43 Tex. Civ. App. 229, 95 S.W. 57.)
As to the one "Beneficial Interest" as the "Other Valuable Consideration," named in the deed, the testimony as to the time when tender of this was made to the plaintiff is in sharp conflict. Witness Frisbee, secretary and trustee of the trust, testified the unit was tendered to plaintiff a number of times. Plaintiff testified it was not tendered until he demanded the release of the deed. A "unit" showing date of March 27, 1931, made out to plaintiff was received in evidence and it was tendered to him in open court at the hearing held in this action and refused. Whether it was ever legally tendered to plaintiff or not appears doubtful for the reason it was not tendered as required by the defendant's own rules as set out in the declaration of trust, and whether properly tendered or not is immaterial, as the record does not show the units of the defendant trust had any value, and being without value, of course, could not be any consideration for the deed. Section 3 of the declaration of *Page 345 
trust, after fixing the number and par value of the beneficial interests, how they should be transferred, providing for their registration, and other similar matters, then provides: "The Holder shall signify in writing that he is fully conversant with the terms of the Declaration of Trust, and also of the statements made in the first minutes of the Company, and he assents thereto." It is clear that there was no compliance with this provision of the declaration of trust and such provision, I think, was binding on all parties and consequently no legal offer of delivery of the beneficial interest was made to the plaintiff.
Even if it had been legally tendered to and accepted by plaintiff, the record does not show it had any value whatever for it does not appear that any of the lands held by the defendant under oil and gas leases were ever developed either directly or indirectly, and the only practical method proposed by the provisions of the declaration of trust by which any value could accrue to its "beneficial interest" was by drilling and exploiting the lands the trust controlled for oil and gas.
The defendant's witness, Frisbee, was asked by counsel for plaintiff if any of the oil and gas holdings of the trust had ever been developed by the trust. The court sustained an objection that such question was irrelevant and immaterial "under the present state of the proof." Unless the objection were on the ground that such question was improper on cross-examination, I think the ruling was error. Whether the lands were developed for oil and gas or not is not only material but important in the determination of this controversy. The question as to whether the trust owned any oil and gas leases "at this time" was objected to on the same ground and the objection sustained. If the trust now holds no oil and gas leases it tends to establish lack of good faith in carrying out the expressed purposes of the trust as set out in the declaration, and would tend to show that leases were obtained along with mineral deeds in the same lands, no development had and the transactions resulted in the lessor receiving nothing but the trust holding royalties that might be of value without the trust giving anything of value in return. *Page 346 
Such a situation carries a strong presumption of fraud. I think the court erred in sustaining the objection in each instance on the grounds given for the ruling. It is clearly obvious from the record that defendant never gave anything of substantial value for the deed, and consequently could not show any injury or damage to oppose or prevent the issuance of a decree declaring the deed void.
Adverting to the question of fraud, it is said with some reason that plaintiff's pleadings do not fairly raise an issue of fraud in accordance with the rule governing such a pleading as laid down by this court speaking through Chief Justice Brantly inBuhler v. Loftus, 53 Mont. 546, 165 P. 601, 604, where it was said: "In other words, in order to make out a case of fraud, the pleading must allege facts embodying the following essential elements: (1) That the defendant made a representation or statement, intending that plaintiff should act upon it; (2) that the representation was false; (3) that the plaintiff believed it; and (4) that he acted upon it to his damage. (Butte HardwareCo. v. Knox, 28 Mont. 111, 72 P. 301, and cases cited;Power  Bro. v. Turner, 37 Mont. 521, 97 P. 950, 952; Ott
v. Pace, 43 Mont. 82, 115 P. 37; Henry v. Continential B. L. Assn., 156 Cal. 667, 105 P. 960; Crocker v. Manley,164 Ill. 282, 45 N.E. 577, 56 Am. St. Rep. 196; Southern Dev.Co. v. Silva, 125 U.S. 247, 8 Sup. Ct. 881, 31 L. Ed. 678; 2 Pomeroy's Eq. Jur., sec. 878.)" But it was also said in that case that "whatever is necessarily implied in or is reasonably to be inferred from, an allegation, is to be taken as directly averred." And this rule of liberal construction has been applied in numerous cases by this court (Grant v. Nihill, 64 Mont. 420,210 P. 914; Gauss v. Trump, 48 Mont. 92, 135 P. 910;Grover v. Hines, 66 Mont. 230, 213 P. 250; Doane v.Marquisee, 63 Mont. 166, 206 P. 426; Wheeler  MotterMercantile Co. v. Moon, 49 Mont. 307, 141 P. 665; WilloburnRanch Co. v. Yegen, 49 Mont. 101, 140 P. 231; Harmon v.Fox, 31 Mont. 324, 78 P. 517; County of Silver Bow v.Davies, 40 Mont. 418, 107 P. 81; Woodward v. Melton,58 Mont. 594, 194 P. 154; Griffiths v. Thrasher, *Page 347 95 Mont. 210, 26 P.2d 995; Connelly Co. v. Schlueter Bros.,69 Mont. 65, 220 P. 103; Ray v. Divers, 72 Mont. 513,234 P. 246; Gotzian  Co. v. Norris, 89 Mont. 307,297 P. 489), and liberal construction of a pleading is enjoined by section 9164, Revised Codes "with a view to substantial justice between the parties." To hold plaintiff's pleadings do not allege misrepresentation, deceit, or fraud would no doubt comply with the exacting views of the strict technician who permits the forms of law to obscure the cause, but such holding utterly disregards the liberal rules enjoined by the statute and adhered to by this court in the numerous decisions cited — and if applied here would permit overnice technicalities to defeat the ends of justice. I am convinced fraud may be fairly inferred from the facts alleged. Furthermore in any action where fraud is in issue I am strongly inclined to hold to the pronouncement of this court in State exrel. Sparrenberger v. District Court, 66 Mont. 496, 509,214 P. 85, 88, 33 A.L.R. 464, where it is said, "Fraud cuts down everything. The law sets itself against fraud to the extent of breaking through almost every rule, sacrificing every maxim, getting rid of every ground of opposition. The law so abhors fraud that it will not allow technical difficulties of any kind to interfere to prevent the success of justice, right and truth."
The consideration received by the plaintiff, if any, is such as to shock the conscience and give rise to the presumption of fraud by implication. In such circumstances fraud may be shown by direct or circumstantial evidence or by both. (DeepwaterCouncil v. Renick, 59 W. Va. 343, 53 S.E. 552.) And inadequacy of consideration, although not so gross as to shock the conscience and amount to proof of fraud, may nevertheless be considered with other circumstances in determining the existence of fraud. As illustrations of these views, it was held in the case of Great Western Oil Co. v. Carpenter, supra, that a consideration of $1, recited as paid in an oil and gas lease, and in fact paid, was a mere nominal consideration which was insufficient to support the contract. In Lowe v. Trundle,
 *Page 348 78 Va. 65, it was held that mere inadequacy of consideration is not of itself sufficient for rescission of a contract unless so gross as to shock the conscience and astound the judgment of a man of common sense, in which case it will of itself create a presumption of fraud. In Blake v. Blake, 7 Iowa, 46, 47, it was held that where the inadequacy of consideration is so gross as to create a presumption of fraud, the contract founded thereon will not be enforced. In 2 Devlin on Real Estate, third edition, page 1469, it is said: "There must either be actual fraud or a fiduciary relation must exist to render inadequacy of consideration a ground for setting aside a deed. But if the inadequacy is so gross as to shock the conscience, a court will be justified in setting aside a deed." In Howard v. Turner,125 N.C. 107, 34 S.E. 229, the supreme court of North Carolina held that the want of consideration may be shown as evidence of fraud, although the lack of consideration does not of itself constitute fraud. In Krause v. Stevens, 103 Neb. 463,172 N.W. 245, the supreme court of Nebraska held that the consideration for a conveyance of a valuable interest in real estate must itself have some value, and if it is merely nominal, and there are indications of fraud or concealment of essential facts, equity will cancel such conveyance. In Grace v.Callahan, 189 Iowa, 213, 178 N.W. 520, 523, the supreme court of Iowa said that "fraud is often difficult to prove, and is seldom established by the admissions of the party or by positive testimony alone. It may be, and usually is, to be found in the circumstances and the results of the transactions. * * * The trail of fraud is not always easily followed, and while the law charitably prefers to sustain all business transactions which are reasonably explainable on the theory of fairness and honesty of all parties concerned, yet courts are not at liberty to ignore clear and convincing indicia of bad faith, or refuse to draw inferences of fraud from circumstances which irresistibly point to that result.'" And it has been held, in substance, in many other cases, that mere inadequacy of consideration is not a distinct ground for equitable relief against the obligation of the deed, unless the inadequacy *Page 349 
of price is so gross and palpable as to amount in itself to proof of fraud. (Huiller v. Ryan, 306 Ill. 88, 137 N.E. 484;Trackwell v. Irvin, 66 Ind. App. 5, 115 N.E. 807; Douglas
v. Ogle, 80 Fla. 42, 85 So. 243; Walker v. Bourgeois,88 N.J. Eq. 124, 102 A. 250; Ravany v. Equitable Life Assur.Soc. of U.S., 26 N.M. 514, 194 P. 873; De Yulio v.Brownell, 107 Or. 651, 215 P. 576; Howland v. Day,125 Wash. 480, 216 P. 864; Dold Packing Co. v. Doermann, (C.C.A.) 293 Fed. 315.)
Doubt as to the merits of defendant's position here arises from another source. Section 7533, Revised Codes 1935, provides: "Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together." This statute has been construed in numerous cases by this court (Dodd v. Vucovich, 38 Mont. 188,99 P. 296; Lyon v. Dailey Copper, M.  S. Co., 46 Mont. 108,120, 126 P. 931; Smith v. Hoffman, 56 Mont. 299,184 P. 842; United States Nat. Bank v. Chappell, 71 Mont. 553,568, 230 P. 1084; United States Bldg. etc. Assn. v.Gardiner, 87 Mont. 586, 289 P. 555; United States B.  L.Assn. v. Burns, 90 Mont. 402, 416, 4 P.2d 703; Orem v.Hansen Packing Co., 91 Mont. 222, 7 P.2d 546) and in many other jurisdictions; 5 New Cal. Dig., p. 370; 6 Cal. Jur. 298; 4 Cal. Jur. Supp. (1926-1936), p. 106; 6 R.C.L. 1840; Joy v.City of St. Louis, 138 U.S. 1, 36, 38, 11 Sup. Ct. 243,34 L. Ed. 843; McNeill v. Pappas, 74 Cal. App. 591,241 P. 897).
In view of the fact that the lease and mineral deed were given at the same time and between the same parties and relating to the same subject-matter, it appears to me that they constitute one agreement or at least must be construed together. But even if this were an erroneous conclusion, the deed provides on its face that it was made subject to the lease. Obviously it was executed subsequent to the lease, although both were made the same day, and when the plaintiff made the deed he was conditionally divested of title to all the oil and gas in the land except the 12 1/2 per cent. reserved, and, consequently, if the deed conveyed anything, it could only be 25 per cent. of the 12 1/2 per *Page 350 
cent. reserved by the plaintiff. It is obvious that when plaintiff on his demand got the lease removed from the records in 1931 he believed such release cleared his title from both instruments, and if the two instruments constitute one contract the release of the lease ipso facto nullified the deed. The contention of defendant that when the lease was eliminated the deed then became operative to vest in the defendant a fee-simple title to a one-fourth interest in all the oil and gas in the plaintiff's land is utterly repugnant to good conscience and equity. This is adverted to in another place.
Finding No. 8 that the plaintiff's action is barred by section 9015, Revised Codes, is error. If it may be said that defendant has any estate or interest in plaintiff's land, a question left in doubt by the record, such interest, being of an undivided nature, would constitute the parties here tenants in common. "An interest in common is one owned by several persons, not in joint ownership or partnership." (Sec. 6682, Rev. Codes.) Section 9015 has been construed to determine title by prescription (Stettheimer v. City of Butte, 60 Mont. 111, 198 P. 455;Thompson v. Chicago etc. R. Co., 78 Mont. 170, 253 P. 313), founded, of course, upon adverse possession. This section was taken from section 318 of the Code of Civil Procedure of California.
The supreme court of California, in construing their section 318, has said that adverse possession is necessary to set the statute of limitations running in favor of one tenant in common against his cotenant in common, and the decisions of that court in Unger v. Mooney, 63 Cal. 586, 49 Am. Rep. 100; in Miller
v. Myers, 46 Cal. 535; in Pacific Gas  Electric Co. v.Crockett Land  Cattle Co., 70 Cal. App. 283, 289,233 P. 370; in Barrow v. Simon, 2 Cal. App. 2d 500,38 P.2d 197, and others are in full accord with the rule laid down by this court on tenancy in common in Le Vasseur v. Roullman,93 Mont. 552, 20 P.2d 250, 252, where it is said: "Now `one of the incidents of tenancy in common is that each of the co-tenants is entitled to the exclusive possession of the entire property as *Page 351 
against the whole world, except his co-tenants.' (Hopkins v.Noyes, 4 Mont. 550, 2 P. 280, 283.)
"`All acts done by a cotenant and relating to or affecting the common property, are presumed to have been done by him for the common benefit of himself and the others. The relation between him and the other owners is always supposed to be amicable rather than hostile; and his acts are therefore regarded as being in subordination to the title of all the tenants, for by so regarding them they may be made to promote the interests of all. Therefore, as a general proposition, the entry of one co-tenant enures to the benefit of all.' (Freeman on Cotenancy, 2d ed. sec. 166.) `And, supported by the same reasons, and prevailing to the same extent, is the rule that the continuing possession of a cotenant, whether the entry was made by himself or in connection with his companions, is the possession of all the cotenants.' (Id., sec. 167.)
"However, one tenant in common may oust his cotenant and make his possession adverse. But, as prima facie the possession of every cotenant is presumed to be by virtue of his title, and not in hostility to the rights of his cotenants, whoever asserts the remedy, to the granting of which the fact of ouster is a prerequisite, must first remove this prima facie presumption. (Id., sec. 222.) In order to sustain the claim that he has obtained title by adverse possession, the claimant must show that his cotenants had sufficient notice of his exclusive and hostile claim.
"`It may be stated as the rule, that in all cases the co-tenant must have knowledge of the ouster or disseizer before an adverse possession can be alleged against him. The knowledge must be either brought home to him, or the occupier must make his possession so visibly hostile, notorious and adverse, as to justify an inference of knowledge on the part of the tenant sought to be ousted or disseized, and of laches on his part, should he, under such circumstances, fail to assert his rights.' (Northrop v. Marquam, 16 Or. 173, 18 P. 449, 459; and see *Page 352 Weshgyl v. Schick, 113 Mich. 22, 71 N.W. 323; Baily v.Trammell, 27 Tex. (317) 328; 38 Cyc. 23.)
"The proof in this case is wanting as to an adverse, which is equivalent to a hostile, holding. There is nothing to show that plaintiff ever `hoisted his flag' or otherwise gave notice to his cotenants that he made any claim to the land except as their cotenant. Indeed, the testimony is barren of any suggestion that he ever denied their title to or rights in the property. Clearly the plaintiff was not entitled to recover upon the proof adduced."
In the action at bar the defendant never had actual possession; the defendant never "hoisted its flag" or otherwise gave notice of its hostile claim, and consequently, plaintiff's rights were not barred by the provisions of section 9015, and for the same reasons he was not estopped in this action on the ground of laches.
Let it be remembered that by a long line of decisions by this court, in controversies that arise between the landowner and a holder of oil and gas leases, the contracts must be construed liberally in favor of the former. (Thomas v. Standard Dev.Co., 70 Mont. 156, 224 P. 870; Solberg v. Sunburst Oil Gas Co., 73 Mont. 94, 235 P. 761; McDaniel v.Hager-Stevenson Oil Co., 75 Mont. 356, 243 P. 582; Solberg
v. Sunburst Oil  Gas Co., 76 Mont. 254, 246 P. 168; Bowes
v. Republic Oil Co., 78 Mont. 134, 252 P. 800, 802.) The policy of the court is expressed in the last-mentioned case, where it is said, "it must be remembered that such leases as this are executed for the purpose of having lands explored, tested, and drilled to determine whether oil and gas may be found therein. * * * While forfeitures are not usually favored in the law, * * * forfeitures are here favored rather than frowned upon."
The parties respectively pray for a decree quieting title according to their respective claims; the equities are clearly with the plaintiff, but on account of the exclusion of evidence heretofore mentioned as error, plaintiff has not presented a record that clearly entitles him to the decree prayed for; on the other *Page 353 
hand, to quiet defendant's title on the record before us would work a manifest injustice. Before quieting title in any litigant he must show his right to such relief irrespective of the weakness of the title of his adversary. (Borgeson v. Tubb,54 Mont. 557, 172 P. 326.) It appears to me that the majority in holding that the defendant took 25 per cent. of plaintiff's oil and gas in place, by the deed have misconstrued the decisions of this court and others in cases such as Broderick v. StevensonConsol. Oil Co., 88 Mont. 34, 290 P. 244. In that case royalty was sold outright for a substantial consideration with provisions in the contract that if the lease outstanding were canceled or forfeited the royalty vendee should have title to a certain percentage of the oil and gas in place in the land. In all such cases that I have found or read the grantee of the royalty interest was not a party to the outstanding lease, but a stranger thereto and in no way responsible for the development of the land. Here the lease and deed were taken by the same party at the same time covering the same land; the lessee was vested with exclusive power to develop or not develop the land under the lease for five years, and could renew the grant for an indefinite period thereafter by paying the plaintiff $1 per year; the defendant elected not to drill and develop the land; it held a deed to 25 per cent. of all plaintiff's oil and gas, if the defendant's construction of the agreement is to be accepted, andif the lease were allowed to lapse, be canceled or forfeited, defendant would be the owner in fee of 25 per cent. of the oil and gas without costs to it other than the munificent consideration of $1 and a unit in the trust which, so far as the record shows, was worthless. If no fraud were intended when the lease and deed were obtained from the plaintiff, it is nothing short of astounding how wonderfully advantageous the arrangements turned out in the interest of the defendant and how disadvantageous to the plaintiff. Defendant obviously drew the contract or contracts and if an ulterior purpose were ever revealed in a contract where fraud was not clearly shown the contracts involved here are monuments to the ingenuity of the draftsman. *Page 354 
It was clearly to the advantage of the defendant to allow the lease to be canceled or forfeited and that, by its own dilatory tactics, it permitted to come about. These facts alone are amply sufficient to bar the defendant from any right to relief in a court of equity. "He who seeks equity must do equity."
Whether any fraud were intended by the defendant at the inception of the arrangements or not is immaterial; it permitted a fraud to be perpetrated by a contract of its own making and should not be allowed, by a decree of this court, to profit by it.
Adverting to decisions relating to the sale of royalties and the distinction between such cases and the action at bar, a case involving facts more nearly similar to those involved here of any I have found is that of Crowder v. James, 110 Okla. 214,236 P. 891. In that case the landowner, Polly Barnett, executed an oil and gas lease to "Crowder and Turner and * * * Bernard"; drilling was to be commenced within one year, and if not so commenced certain rentals were to be paid within the year to continue the grant in force. On the same day the lessor executed to the same parties "a purported assignment" of a one-half of royalties in the same land; Bernard assigned his interest in the lease and royalties to other parties and they in turn again assigned to the defendants, who were the appellants in the higher court. Polly Barnett the same day she gave the lease and assigned the royalties to defendants gave one Dickson, grantor of the plaintiff James, respondent on appeal, a conveyance of all her royalty in the land and some months later a warranty deed thereto. James brought an action to quiet his title, he and his grantor having been in possession all the time; the defendants did nothing to develop the land for oil and gas and their lease expired on failure to pay rentals, in one year; defendants claimed that the assignment of royalty to them "conveyed absolutely the interest specified therein" irrespective of the lease. The court said, "Since defendants, by their omissions, had permitted said lease to lapse; their assignment of the royalty interest, ipso facto, became void." *Page 355 
The judgment in the action at bar should be reversed and remanded, with instructions to grant plaintiff a new trial.