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Smart Summary

Factual and Procedural Background

The plaintiffs are the heirs (surviving husband and children) of Ada May Fields. Plaintiffs conveyed 65 acres by warranty deed to the defendants in July 1959. The deed purported to convey the "surface and surface estate" while reserving an undivided 1/4 mineral interest. Plaintiffs later discovered they in fact owned a 1/2 mineral interest. After defendants refused to execute a quitclaim deed for the additional interest, plaintiffs filed suit in Garvin County in March 1963 to quiet title and for slander of title, and amended their petition on October 7, 1964 to seek reformation of the deed based on mutual mistake and mistake of the scrivener. The trial court found mutual mistake and a scrivener's error and reformed the deed. Defendants appealed. The Supreme Court of Oklahoma affirmed the judgment on January 14, 1969.

Legal Issues Presented

  1. Whether there was a mutual mistake by the parties as to the amount of mineral interest owned by the plaintiffs at the time of the deed.
  2. Whether there was a mistake by the scrivener in reducing the parties' intent to writing, justifying reformation of the deed.
  3. Whether the five-year statute of limitations (12 Okla.St.Ann. § 95(6)) barred the plaintiffs' action for reformation.
  4. Whether the form of the judgment and the separation of findings of fact and conclusions of law from the journal entry rendered the judgment ineffective.

Arguments of the Parties

Appellants (Plaintiffs in Error — Cunnius)

  • Asserted the deed did not reflect a mutual mistake and that reformation is not justified.
  • Argued the action to reform the deed was barred by the five-year statute of limitations because the deed was executed in July 1959 and the amendment seeking reformation was filed in October 1964.
  • Contended the journal entry of judgment was insufficient to incorporate the separately prepared findings of fact and conclusions of law, rendering the judgment defective.

Appellees (Defendants in Error — Fields)

  • Presented testimony that plaintiffs and their representatives believed they owned only a 1/4 mineral interest and so intended to convey only surface rights.
  • Pointed to evidence that the decree in the estate (filed after the deed date) reflected a 1/4 interest and that the grantors/their attorney had not checked title before the deed or decree.
  • Argued defendants did not know the amount of mineral interest they were acquiring, paid the same price per acre as for contiguous surface-only land, and did not bargain for minerals.
  • Maintained the scrivener added a mineral reservation contrary to the grantors' instruction to prepare a surface deed.
  • Contended the statute of limitations did not begin to run until plaintiffs discovered and disputed the reservation in early 1962, so the 1964 reformation claim was timely.
  • Argued the journal entry's language ("in accordance with the findings of fact and conclusions of law") was sufficient to include the separate findings as part of the judgment.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Dennis v. American First Title and Trust Co., Okla., 405 P.2d 993 Standard for reformation: evidence must be full, clear, unequivocal and convincing as to mistake and mutuality. Used to state the required evidentiary standard and to evaluate whether plaintiffs met it.
Higgins v. Classen, 176 Okla. 233, 55 P.2d 101 Where by mutual mistake a deed conveys property not intended, equity will reform the deed to express true intent. Applied as authority for reforming a deed when mutual mistake as to property conveyed is proved.
Green v. Votaw, 192 Okla. 136, 134 P.2d 367 In equity the whole record is considered and appellate court will not disturb trial court when judgment is not against the weight of the evidence. Quoted to support deference to trial court findings on equitable reformation.
Nelson v. Daugherty, Okla., 357 P.2d 425 Rule regarding when statute of limitations begins to run for unexplored minerals; and appellate deference in equity. Used to hold the statute of limitations did not run until legal effect of reservation was disputed.
Kerr v. James, Okla., 375 P.2d 907 Scrivener's mistake in reducing intent to writing is grounds for reformation. Applied to support reformation where scrivener added a reservation contrary to grantor's instruction.
Good v. Cohlmia, Okla., 330 P.2d 588 Addresses accrual of statute of limitations for unexplored mineral interests. Used with Nelson to conclude limitations period began when reservation's effect was questioned (early 1962).
Hitt v. Hitt, Okla., 258 P.2d 599 General judgment is deemed to include special findings necessary to sustain it. Relied on to hold the journal entry's reference to findings and conclusions was sufficient to make them part of the judgment.

Court's Reasoning and Analysis

The court applied the evidentiary standard for reformation articulated in Dennis v. American First Title and Trust Co. It reviewed testimony that plaintiffs (heirs) and their attorney believed the heirs owned only a 1/4 mineral interest, that the final estate decree (filed after execution of the deed) indicated a 1/4 interest, and that grantors had not examined the abstract before delivery. The defendants testified they did not know the extent of the mineral interest, made no attempt to determine it during negotiations, paid the same per-acre price as for contiguous surface-only land, and did not bargain for mineral rights. The trial court found these facts established a mutual mistake as to what was to be conveyed, supporting reformation under Higgins v. Classen.

The court also accepted the uncontradicted evidence that the scrivener, despite instructions to prepare a surface deed, inserted a reservation of minerals without checking records; this scrivener's error independently justified reformation under precedent such as Kerr v. James.

On statute of limitations, the court concluded the five-year period under 12 Okla.St.Ann. § 95(6) did not begin until plaintiffs discovered and questioned the legal effect of the reservation in early 1962, citing Nelson and Good, so the October 1964 reformation amendment was timely.

Finally, the court held the journal entry's language referencing the findings and conclusions was sufficient to include them as part of the judgment, relying on Hitt v. Hitt and established principles of equitable review. Considering the whole record, the court found the trial court's factual findings were not against the weight of the evidence and affirmed.

Holding and Implications

Judgment affirmed.

Direct effects: the Supreme Court upheld the trial court's reformation of the deed based on mutual mistake and a scrivener's error, found the reformation claim timely under the five-year statute, and ruled the form of the journal entry was sufficient to include the court's findings and conclusions. The opinion does not announce a new legal principle; it applies existing precedent to the facts to sustain the trial court's equitable relief.

NOLEN R. CUNNIUS AND LaFERN CUNNIUS, PLAINTIFFS IN ERROR, v. JONAS A. FIELDS, ARTHUR W. FIELDS, JAMES J. FIELDS, EVELYN MAY FIELDS, MERLE FRANCIS KIDD AND MILDRED CHILDERS, DEFENDANTS IN ERROR.

HODGES, Justice.

The problem under consideration in this appeal arose out of the execution and delivery of a warranty deed which purported to transfer the surface and surface estate with a reservation of a 1/4th mineral interest. It was later discovered that the grantors owned a 1/2 mineral interest.

The plaintiffs are the heirs (surviving husband and children) of one Ada May Fields, who died intestate leaving the property in question. The land comprising 65 acres had been in the family of the intestate since it was patented. Plaintiffs conveyed by warranty deed to the defendants the property described as follows:

"The surface and surface estate in and to W 1/2 W 1/2 NW and NW NW SW Section 20, and SE NE NE and S 1/2 NE NE NE, less lots 11, 12, 13 and 14 for Town of Eola in Section 19, Township 1 North, Range 2 West of I.M.,
"There is hereby reserved from this conveyance a total of an undivided 1/4th interest in the oil, gas and other minerals lying in, under or which might be produced from said above described lands, together with the right of ingress and egress for for the purpose of drilling, exploring and developing the mineral interest hereby. Such reservation is made by the undersigned grantors for their respective and separate ownership in said minerals in the proportions of ownership with which they are vested at the time of the within grant and deed of conveyance."

This conveyance was made in July of 1959. In December, 1962, a person approached plaintiffs interested in obtaining an oil and gas lease on the property. At that time plaintiffs discovered that they in fact had inherited 1/2 mineral interest instead of a 1/4th interest. Plaintiffs subsequently made demand upon the defendants to execute a quit claim deed to the disputed mineral interest and were refused. Plaintiffs filed suit in the district court of Garvin County in March of 1963 to quiet title and asked for damages for slander of title. An amendment to the petition was filed on October 7, 1964, praying for reformation of the deed.

The main issue raised by this appeal is whether there was a mutual mistake made by the parties to the deed as to the amount of mineral interest owned by the plaintiffs and the related issue of an additional mistake of the scrivener in reducing the intention of the grantors to writing. The trial court found that there was a mutual mistake made by the parties regarding the amount of mineral interest owned by the plaintiffs and further that there was a mistake by the scrivener in reducing the intention of the grantors to writing. From this judgment, defendants appeal.

In an equitable action the court will review the evidence in order to determine if the judgment is clearly against the weight of the evidence. In an action to reform a deed this court in Dennis v. American First Title and Trust Co., Okla., 405 P.2d 993, stated:

"* * * the evidence must be full, clear, unequivocal, and convincing as to the mistake and its mutuality. Mere preponderance of evidence is not enough. The proof must establish the facts to a moral certainty and take the case out of the range of reasonable controversy; but it need not be so certain as to go beyond any possibility of controversy."

We shall examine the evidence in order to determine if the trial court correctly applied the facts to the rule of law regarding mutual mistake of the parties.

The evidence as to the plaintiffs mistake regarding the amount of mineral interest that was inherited by the heirs of Ada May Fields was clear and convincing. The surviving husband of the intestate and two of the sons who were present during the negotiations with the defendants testified that they thought, and had been told, that a 1/4th interest in the minerals had been left to them by the intestate, Ada May Fields. In support of their testimony the record reflects that the final decree in the estate of Ada May Fields was filed on August 6, 1959, indicating that the intestate died possessed with a 1/4th mineral interest in the conveyed property. The decree was dated and filed of record 23 days subsequent to the date of the warranty deed in question, July 14, 1959, and 7 days before the deed was recorded on August 13, 1959. The abstract of the property had not been seen by any of the grantors until several months after the deed was delivered. The surviving husband, Jonas Fields told the attorney for the estate of Ada May Fields that the heirs owned a 1/4th mineral interest in the property and the attorney had not checked the title to the property before preparing the final decree.

Both defendants testified that prior to the execution of the deed they did not know what amount of mineral interest was owned by the plaintiffs. In fact, no attempt was made by them during negotiations to find out the extent of the mineral interest. The evidence also shows that the defendants were aware of the conveying language in the deed "surface and surface estate." It is clear that the object of the purchase was for the surface only.

Also, evidencing an intent for the conveyance of the surface only, was the purchase by the defendants of a similar tract of land contiguous to the land herein in dispute for the same consideration per acre. This conveyance contained no mineral interest and occurred at approximately the same time the defendants were negotiating with the plaintiffs for the 65 acre tract in controversy.

The only testimony or proof offered on behalf of the defendants was that one of the plaintiff sons said during the negotiations that they owned over 1/4th of the minerals and the plaintiff father indicated that the defendants could have everything over 1/4th of the minerals, which testimony was contradicted by the plaintiffs. It is undisputed however, that the defendants did not know what interest in the minerals they were buying, no negotiations took place as to the purchase price of the minerals and the defendants had paid the same price per acre for the same kind of contiguous land, without any minerals, the year before to the uncle and brother-in-law of the plaintiffs. It is obvious that the minerals were not bargained for or considered in the purchase of the property.

The trial judge found that there had been a mutual mistake by the parties as to the property to be conveyed and reformed the deed to express the true intent of the parties. This court has held in the case of Higgins v. Classen, 176 Okla. 233, 55 P.2d 101, in the second syllabus thereof,

"Where by mutual mistake of the parties, a deed conveys property not intended by the parties to be conveyed, a court of equity will reform the deed to make it express the true intent."

In a case of equity this court will consider the whole record, and where the judgment of the trial court is clearly not against the weight of the evidence this court will not disturb the judgment on appeal, Green v. Votaw, 192 Okla. 136, 134 P.2d 367; Nelson v. Daugherty, Okla., 357 P.2d 425; Dennis v. American First Title and Trust Company, Okla., 405 P.2d 993. We have carefully examined the evidence and find that the same is clear, full and convincing as to the mutual mistake of the parties and is sufficient to support the judgment of the trial judge.

In further support of the judgment the trial court found that there had been an error made by the scrivener in reducing the intention of the grantors to writing. The record reveals that Mr. Jonas Fields had informed the scrivener to prepare a surface deed to the property to be conveyed. Instead of following this instruction, the scrivener added to the surface deed a reservation of mineral interest without checking the records to determine the exact amount owned by the grantors. This evidence was uncontradicted. A mistake by the scrivener in reducing the intent of the grantor to writing is grounds for reformation of the deed, Green v. Votaw, supra; Kerr v. James, Okla., 375 P.2d 907; Dennis v. American First Title and Trust Company, supra.

The defendants also argue that the cause of action for reformation of a deed is barred by the statute of limitations. The parties agree that the five year statute of limitations under 12 Okla.St.Ann. § 95(6) applies to an action for the reformation of a deed in question. The defendants assert that since the deed was executed in July of 1959, and the amendment for reformation was filed in October 1964, the statute of limitations had run on this cause of action. The uncontradicted evidence was that the plaintiffs discovered the mistake as to the amount of minerals that they had actually owned in the early part of the year 1962 when a lease was purchased from them by a buyer who informed them that they owned a 1/2 interest in the minerals instead of 1/4th. Shortly thereafter, plaintiffs requested a quit claim deed from the defendants, and were refused. Only the unexplored minerals are involved in controversy in this case. The mistake plaintiffs made and seek to reform is the one regarding the amount of mineral interest they own. The earliest it can be said that the legal effect of the reservation of minerals was questioned or disputed is in the early part of 1962. The statute of limitations does not begin to run in the case of unexplored minerals until the legal effect of the reservation is questioned or disputed. Nelson v. Daugherty, Okla., 357 P.2d 425; Good v. Cohlmia, Okla., 330 P.2d 588. The statute of limitations did not begin to run until the early part of the year 1962. Since the amendment to the petition setting out the third cause of action to reform the deed was filed in October 1964, the statute has not run.

The final point of the defendants to be considered by this court is the question of whether the judgment is in proper form and includes the findings of fact and conclusions of law so as to be an effective judgment. The findings of fact and conclusions of law handed down by the court were set out in an instrument separate from that of the journal entry of judgment. The question presented by the defendant is that the language of the journal entry is insufficient to include the findings of fact and conclusions of law as part of the judgment. The journal entry is in general form and recites among other things, that the judgment is rendered for the plaintiffs "in accordance with the findings of fact and conclusions of law * * *". We are of the opinion that the judgment is sufficient and proper. A general judgment of the trial court is deemed to include special findings on any and all issues necessary to sustain the judgment, Hitt v. Hitt, Okla., 258 P.2d 599. Further, the language used in the journal entry of judgment is sufficient to include the findings of fact and conclusions of law of the court.

Judgment affirmed.

IRWIN, C.J., BERRY, V.C.J., DAVISON, WILLIAMS, BLACKBIRD, JACKSON, and McINERNEY, JJ., concur.

LAVENDER, J., concur in results.

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CUNNIUS v. FIELDS
(Jan 14, 1969)