Court Opinion

ID: 6343704
Source: CourtListenerOpinion
Date Created: 2022-05-25 14:01:38.352825+00
Date Added: 2024-06-11T08:43:23.477806
License: Public Domain

Cite as 2022 Ark. App. 268
                   ARKANSAS COURT OF APPEALS
                                  DIVISIONS III AND IV
                                       No. CV-21-97

PATRICK DIXON MEHAFFY                            Opinion Delivered   May 25, 2022
                                APPELLANT
                                                 APPEAL FROM THE FAULKNER
V.                                               COUNTY CIRCUIT COURT
                                                 [NO. 23CV-19-395]
MARLEY JO CLARK, INDIVIDUALLY
AND AS TRUSTEE OF THE CLARK                      HONORABLE SUSAN WEAVER,
RECOVABLE TRUST DATED AUGUST 7,                  JUDGE
2003; THE CLARK REVOCABLE TRUST
DATED AUGUST 7, 2003; MARLEY JO                  SUBSTITUTED OPINION ON
CLARK, AS TRUSTEE OF THE MARLEY                  GRANT OF REHEARING;
JO CLARK REVOCABLE TRUST; THE
MARLEY JO CLARK REVOCABLE TRUST;                 REVERSED AND REMANDED
AND MARLEY JO CLARK, JR.,
INDIVIDUALLY AND AS TRUSTEE OF
THE CLARK REVOCABLE TRUST

                                 APPELLEES

                                  MIKE MURPHY, Judge

       This case is a dispute over percentage ownership in mineral interests in a tract of land

 in Faulkner County, Arkansas. On March 9, 2022, in Mehaffy v. Clark, 2022 Ark. App. 125,

 643 S.W.3d 55, we reversed and remanded the circuit court’s order quieting title in the

 minerals with a 1/2 interest to the appellees and 1/4 interest to the appellant, Patrick

 Mehaffy.1 We agreed with Mehaffy that the court erred in its calculation, so we remanded

       1
        The remaining 1/4 interest was reserved by previous owners of the land, Joyce and
 Robert Mayer.
for entry of judgment awarding 3/8 interest in the mineral rights to both sides. On March

28, 2022, the appellees filed a petition for rehearing; Patrick Mehaffy did not file a response.

We grant the petition for rehearing and issue the following substituted opinion.

       The parties derived their respective mineral interests from two brothers: L.R. Clark,

Mehaffy’s predecessor; and W.G. Clark, Jr., Marley Jo Clark’s late husband. The brothers

were shareholders in National Holding Company, an Arkansas corporation.2 In June 1980,

National Holding received a warranty deed from Joyce and Robert Mayer conveying

approximately 1,780 acres of land, including the property now at issue. In that deed, the

Mayers retained and reserved a 1/4 interest in the oil, gas, and other minerals. Two years

later, National Holding transferred its interest to two shareholders, W.G. Clark, Jr., and L.R.

Clark, pursuant to two quitclaim deeds dated April 16, 1982. The granting clauses in those

deeds both state that for the sum of ten dollars, National Holding Company

       does grant, sell, quitclaim unto the said GRANTEE and unto his heirs and assigns
       forever, all its right, title, interest and claim in and to the following lands lying in
       Faulkner County, Arkansas

              An undivided half of the following: [the legal description of the land,
              including the land in dispute].

       No mention was made in either quitclaim deed of the 1/4 reservation by Joyce and

Robert Mayer or minerals in general. The deeds were executed on the same day (April 16,

1982), in the presence of the same witnesses, and with the stamp of the same notary public.

       2
         There were two other shareholders of National Holding Company, but they are not
part of this litigation. All the shareholders are now deceased.

                                               2
Two and a half years later, and once again on the same day (June 1, 1984), the deeds were

recorded in Faulkner County.3 The W.G. Clark, Jr., deed was recorded by the Faulkner

County Circuit Clerk and Ex-Officio Recorder at 4:10 p.m., and the L.R. Clark deed was

recorded at 4:15 p.m.4

       Turning to present day, the mineral interests were subsequently leased by the

respective parties to oil- and gas-exploration companies, and it was during the examination

of title by those companies that the issue of the timing of the filing of the two deeds came

about. In 2019, Mehaffy filed this quiet-title action against the appellees because one of the

companies was holding royalties from production from the property pending resolution of

the issue. Because National Holding owned a 3/4 interest in the mineral rights and conveyed

an undivided and unreserved 1/2 interest by quitclaim to each grantee, Mehaffy argues that

each grantee (and thus, their successors) subsequently possessed a 3/8 mineral interest.

       The appellees denied the claim and took the position that they owned 1/2 of the

mineral rights by virtue of their predecessor in title filing his deed first, leaving only a 1/4

interest in the disputed mineral rights to L.R. Clark. Their argument relies on the plain

language of the granting clause conveying 1/2 of the entire tract, not just 1/2 of National

Holding’s 75 percent mineral interest. And since the W.G. Clark deed was recorded first,

       3
       The deeds were inadvertently filed in Pulaski County a year earlier. Both deeds have
an identical stamp showing they were filed and recorded on May 11, 1983, at 2:35 p.m.
       4
         There is no reason to go through the chain of title to present day because the issue
in this case is the intent of the parties to the transaction between National Holding and the
Clark brothers.

                                               3
they believe he received 4/8 (or 1/2) of the disputed mineral interests, and L.R. Clark

received the remaining 2/8 (or 1/4) of the disputed mineral interest. They also

counterclaimed, asserting adverse possession and stating that they were entitled to a

declaratory judgment that they owned 1/2 of the mineral rights.

       On November 9, 2020, the court entered an order in favor of the appellees, adopting

their reasoning and granting them declaratory judgment.5 It found that the evidence of the

order of delivery was lacking and that priority of recording is controlling because Mehaffy

could not prove that the brothers were on notice of each other’s deed. To support its

findings, the court’s order provided:

       10.       Although it’s likely that a person of ordinary intelligence would have known
                 about his brother’s conveyance, when the litigation does not involve the
                 original parties, a subjective inquiry into what the original parties understood
                 is barred by Arkansas law.

       11.       Determining the grantor’s subjective intent with extrinsic evidence is only
                 allowed to construe an “ambiguous, uncertain, or doubtful deed.” Deltic
                 Timber Corp. v. Newland, 374 S.W.3d 261, 267 (Ark. Ct. App. 2010); see also,
                 Riffle v. Worthen, 327 Ark. 470, 472, 939 S.W.2d 294, 295 (1997). See also,
                 Mason v. Buckman, 2010 Ark. App. 256, 7 (Ark. App. 2010).

       12.       Because the deed is not ambiguous, extrinsic evidence is barred. See, e.g., Deltic
                 Timber Corp. v. Newland, 374 S.W.3d 261, 267 (Ark. Ct. App. 2010).

       13.       Because this case does not involve the original parties, interpretation of the
                 subjective intent of the grantor and grantee is “inappropriate.” Peterson v.
                 Simpson, 690 S.W.2d 720, 723 (Ark. 1985).

       5
           It also found that appellees’ adverse-possession claim was moot.

                                                 4
       Mehaffy now appeals from the trial court’s order.6 On appeal, he argues that the

circuit court clearly erred in awarding him only a 1/4 interest in the minerals and instead

should have awarded him a 3/8 interest.

       Quiet-title actions have traditionally been reviewed de novo as equity actions. SEECO,

Inc. v. Holden, 2015 Ark. App. 555, at 4, 473 S.W.3d 36, 38. Our standard of review on

appeal from a bench trial is not whether there was substantial evidence to support the finding

of the circuit court but whether the circuit court’s findings were clearly erroneous or clearly

against the preponderance of the evidence. Mauldin v. Snowden, 2011 Ark. App. 630, at 2,

386 S.W.3d 560, 562. A finding of fact is clearly erroneous when, although there is evidence

to support it, we are left with the definite and firm conviction that a mistake has been

committed. Rice v. Welch Motor Co., 95 Ark. App. 100, 103, 234 S.W.3d 327, 330 (2006).

       The basic rule in the construction of deeds, as with other contracts, is to ascertain

and give effect to the real intention of the parties, particularly of the grantor, as expressed by

the language of the deed, when not contrary to settled principles of law and rules of property.

Duvall v. Carr-Pool, 2016 Ark. App. 611, at 9–10, 509 S.W.3d 661, 667. We will resort to the

rules of construction only when the language of the deed is ambiguous, uncertain, or

doubtful. Barger v. Ferrucci, 2011 Ark. App. 105, at 3–4.

       We agree with Mehaffy that he is entitled to a 3/8 interest in the minerals because

the court erred in finding that it could not ascertain the intent of the original parties to the

       6
        The appellees filed a cross-notice of appeal, but it is considered abandoned because
their brief asks for no affirmative relief.

                                                5
deeds. Specifically, the court erred in finding that evidence of delivery was lacking. The

record establishes that the deeds used identical language, were executed on the same day, in

the presence of the same witnesses, and with the stamp of the same notary public. There is

a rebuttable presumption that an instrument is delivered on the date on which it is dated,

provided, at least, it is not acknowledged on a different date. Rawls v. Free, 184 Ark. 737, 43

S.W.2d 540, 541 (1931). Here, the date of the instrument and that of the acknowledgment

is the same date—April 16, 1982. In light of our de novo review, no evidence was presented

to rebut this presumption.

       It is a fundamental real estate principle that title to real property is effective upon

valid delivery of the deed. See First Sec. Bank v. Geels, 2011 Ark. App. 294, at 4–5, 383 S.W.3d

437, 440. A delivered deed passes title as between the parties even though it has not been

recorded. Barker v. Nelson, 306 Ark. 204, 207, 812 S.W.2d 477, 479 (1991). Therefore,

because the deeds were delivered at the same time, it is unnecessary to consider the priority

of recording as the circuit court did.

       The deeds from National Holding Company delivered to the Clark brothers on April

16, 1982, were quitclaim deeds. A quitclaim deed can only transfer what is possessed by the

grantor. Xayprasith-Mays v. Wallace, 2021 Ark. App. 370, 635 S.W.3d 359. In this case,

National Holding possessed at the time of the conveyances 3/4 of the mineral interests. It is

evident from these circumstances that National Holding intended to convey to each brother

equal shares of its mineral interest—that is, a 3/8 interest. The deeds still had the effect of

conveying a 3/8 interest whether they were recorded or unrecorded.

                                               6
       Accordingly, we hold that the circuit court erred in the respective percentages of

mineral rights it assigned to each party; we reverse and remand for entry of judgment

consistent with this opinion.

       Reversed and remanded.

       VIRDEN, GRUBER, BARRETT, WHITEAKER, and HIXSON, JJ., agree.

       Richard Mays Law Firm PLLC, by: Richard H. Mays, for appellant.

       Taylor & Taylor Law Firm, P.A., by: Andrew M. Taylor and Tasha C. Taylor, for appellee.

                                              7