Charles v. McClanahan

Prentis, J., delivered the opinion of the court. On September 5, 1901, Green Charles and wife and D. M. Charles and wife conveyed a certain tract of land to George W. McClanahan. So much of the granting clause as is necessary to recite reads thus: “The said parties of the first pail; do grant, bargain and sell unto the said George W. McClanahan, all that certain piece or parcel of land situate in Buchanan county, Virginia,” (here follows a proper description of the land) “containing 20 acres, the same more or less. (One-half of the mineral is excepted from this conveyance.)” Then follows a covenant of special warranty, with the usual Virginia statutory covenants of title. — 684 — On June 21, 1910, D. M. Charles and wife conveyed to Green Charles all of their undivided interest in a large tract of land, excepting therefrom the twenty acres which had been conveyed to George W. McClanahan, and including therein all coal and other mineral which had been excepted from the McClanahan deed and in four other conveyances, fully identified. Then on July 16, 1918, McClanahan and wife conveyed to their son, Wilson McClanahan, the twenty acres of land which had been thus conveyed to him in 1901, without making any reservation of the mineral rights. Thereafter, in May, 1920, Green Charles instituted this suit. Its objects were, (a) the correction and reformation of the deed from Green Charles and D. M. Charles to George W. McClanahan of September 5,1901, and (b) the vacation and annulment of the deed from George- W. McClanahan and wife to Wilson McClanahan, of July 16, 1918, in so far as it purports to convey one-half of the coal and minerals underlying the twenty acres of land thereby conveyed, upon the ground that this deed constitutes a cloud upon the complainant’s title to such one-half of such coal and minerals.” The pertinent facts as to the original conveyance from Charles to McClanahan are, that at the time the grantors did not think that they owned but half of the coal and mineral underlying the tract (though Green Charles denies this). The claim on the part of McClanahan is, that it was his purpose to buy and the intention of the grantors to convey their entire interest in the land; and he filed an answer which he asked to be read as a cross-bill, praying that his deed be reformed so as to carry out this intention. It is manifest, however, that even if the grantors were mistaken in thinking that they did not own all of the minerals, it is nevertheless true, and is clear from the testimony, that when they came to execute the deed, it was explicitly and distinctly understood that the title to one-half of the minerals thereunder was not to be conveyed. There — 685 — was no mistake of the draftsman in drawing the deed, nor was there any mistake or misunderstanding between the parties as to the property which the deed conveyed and as to the estate in the minerals therein which were reserved. The precise form of the deed grew out of the ignorance of both the grantors and the grantee as to the true estate which the grantors owned prior to the conveyance. [1] We must first determine, then, in this case, the true effect and proper construction to be put upon the original conveyance of twenty acres here involved. McClanahan claims that it was the previous understanding that he was to have the entire estate therein which the grantors owned. In the absence of fraud or mistake in the instrument itself, the rule is universal, applicable to deeds as well as to all other contracts, that prior stipulations and understandings are merged in the final and formal contract executed by the parties, and when a deed has been delivered and accepted as performance of an antecedent contract to convey, the contract is merged in the deed. In Slocum v. Bracy, 55 Minn. 249, 56 N. W. 826, 43 Am. St. Rep. 499, it is said that “no rule of law is better settled than that where a deed has been executed and accepted as performance of an executory contract to convey real estate, the contract is functus officio, and the rights of the parties rest thereafter solely on the deed.’’ [2] The question has been considered very recently by this court in two cases. In Charles v. Charles, 127 Va. 610, 104 S. E. 823, 825, in which it was held that there was no reservation of title to certain minerals claimed by the grantor because the language relied upon there, which was in the clause relating to covenants, was insufficient to create such a reservation. It followed, therefore, that the grantee took the entire estate of the grantors under the express language of the deed in the granting clause. This is said: “When parties reduce their contracts or agree — 686 — ments to writing, acknowledge them before an officer, and cause or. permit them to be spread upon the public records in the absence of any evidence of fraud, there is a very strong presumption that they correctly set forth the understanding and agreement of the parties thereto. Courts of equity will not lightly set them aside.” And the doctrine is there stated to be that in order to justify a court of equity in undertaking to correct a deed which the parties have accepted, the evidence must be clear, convincing and satisfactory, and the pertinent cases are there cited. In Woodson v. Smith & Johnson, 128 Va. 652, 104 S. E. 794, this is said: “Doubtless, many cases may arise in which distinct and unperformed stipulations contained in a contract for sale will not be merged in or discharged by deed where that instrument is silent upon the subject of such stipulations. In such cases, there is no conflict between the contract and the deed. But- the deed must be regarded as the sole and final expression of the agreement between the parties as to every subject which it undertakes to deal with. All inconsistencies between the prior contract and the deed must be determined by the latter alone, and previous negotiations or agreements, verbal or written, cannot be set up for the purpose of contradicting it. The application of these principles may result in occasional hardship and occasionakfailure to carry out the real intention of the parties; but the principles themselves are safe and sound, they have been shown by experience to promote justice and fair dealing in the average case, and they are, for these reasons, abundantly supported by authority.” Citing Portsmouth Refining Co. v. Oliver Refining Co., 109 Va. 513, 64 S. E. 56, 132 Am. St. Rep. 924; Stephen Putney S. Co. v. R., F. & P. R. Co., 116 Va. 211, 81 S. E. 93; 2 Devlin on Deeds (3d ed.), sec. 850a; 13 Cyc. 616; 8 Ruling Case Law, p. 1048, sec. 102; note to Clifton v. Jackson Co., 16 Am. St. Rep. 622. — 687 — [3] Applying this undoubted rule to the facts of this case it seems to us perfectly clear that the prayer of the cross-bill is without' merit, and that McClanahan, the grantee under the original deed, acquired no interest in the one-half of the minerals underlying the tract which is the subject of this controversy, because the title thereto is expressly reserved, and hence he is not entitled to have his deed reformed by striking out the exception from the grant, of which he had full knowledge before the delivery of the deed and which he accepted as full and final performance of the contract. The trial court dismissed the complainant’s bill upon the ground, to use the language of the decree, “that the equities are with the defendants” — that is, the decree refused to grant the prayer of the bill for the correction and reformation which was prayed for by the complainant, Charles, and also denied his prayer that so much of the deed from George W. McClanahan to his son, Wilson Mc-Clanahan, of July 16, 1918, as purports to convey the one-half of the coal and minerals underlying the tract which had been excepted from his conveyance, because it constituted a cloud upon his (Charles) title. [4] We think that the court correctly denied the prayer of the bill for the reformation and correction of the original deed, because the deed expressed sufficiently the true and final agreement of the parties, and needs no correction or reformation. It expressly excepts from the operation of the conveyance one-half of the minerals. As this expressed the understanding of the parties when the instrument was delivered, the complainant is not entitled to any such relief. The language may possibly need construction, though its meaning to us seems clear. The evidence shows that the only mineral which can be profitably mined in that locality is coal, and that in reserving the minerals, the parties had coal in mind. The language, however, is comprehensive — 688 — and includes one-half of all mineral substances which may underlie the property which may profitably be mined without impairing the rights of the owner of the surface. [5] The complainant also alleged that the deed of July 16, 1918, from George W. McClanahan and wife to their son, Wilson McClanahan, constituted a cloud upon his title, because it undertook to convey the entire tract without the reservation of the half of the minerals which the complainant owned and the court refused to grant this relief. We are of opinion that this constitutes harmful error, and that this relief should have been granted. Under our construction of the original deed to McClanahan, he has no title to the half of the minerals which was reserved, and it appears from this record that the complainant, Green Charles, is now the sole owner of the estate which was thus reserved. The deed from George W. McClanahan and wife to Wilson McClanahan does, therefore, constitute a cloud upon his title, which he is entitled to have removed. The equitable doctrines referred to in the dissenting opinion are not controverted. We cannot, however, apply them to the facts appearing in this record, for we find no evidence of fraud on the part of the appellant, Charles. He testifies that at the time of the original contract the reservation of the minerals was made, saying with reference thereto that he told McClanahan “in the beginning that we would except one-half of it;” and that he “also told him when we made the deed that we would except one-half of it.” This version of the original contract is strikingly confirmed by the testimony of McClanahan himself, for in his cross-examination this question and answer appear: “Q. Then at the time you bought and at the time you accepted this deed, you bought the surface and one-half of the coal and mineral underlying this tract, didn’t you? “A. That is what I bought.” [6] If McClanahan had the rights under the original — 689 — agreement which he now claims, he could have refused the deed which was tendered and either recovered the purchase money, $25, or enforced his rights in a suit for specific performance. As he did neither, but accepted the deed as a satisfactory performance of the contract of sale, and made no such claim for seventeen years thereafter, he must be held to have waived every claim which is inconsistent with its provisions. Our conclusion, therefore, is to reverse the decree of the trial court and enter a, decree here cancelling, vacating and annulling the deed from George W. McClanahan and Jemima McClanahan, his wife, to Wilson McClanahan, dated July 16, 1918, in so far as that deed purports to convey one-half of the coal and minerals underlying the twenty acres of land embraced in and conveyed by that deed, and removing the cloud thereby created upon the appellant’s title to one-half of the coal and minerals underlying the tract. Reversed.