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Reynolds v. Burns

OPINION FILED SEPTEMBER 29, 1960.

AUSTIN REYNOLDS ET AL., APPELLEES,

v.

WILLIAM JACKSON BURNS ET AL., APPELLANTS.



APPEAL from the Circuit Court of Saline County; the Hon. C.E. WRIGHT, Judge, presiding.

MR. JUSTICE HERSHEY DELIVERED THE OPINION OF THE COURT:

Rehearing denied November 30, 1960.

This is an action to quiet title to the oil, gas and other minerals, except coal, in and under some 14 parcels of land in Saline County. The plaintiffs, by their amended complaint, sought to remove certain instruments as clouds upon their title and further sought a declaratory judgment that they were entitled to all of the oil and gas produced or to be produced from the described premises.

The circuit court of Saline County entered a decree granting the relief prayed in the complaint and dismissed the counterclaim of one group of defendants who are appellants in this court.

The plaintiffs claim a fee-simple title to the mineral estate, as do the defendants. A freehold being thus involved, this court has jurisdiction on direct appeal.

A determination of the issues here involved requires a somewhat detailed statement of the history of the title to the land involved over a period of many years. In substance, the parties are in accord as to the factual matters in the record of title but reach different conclusions as to the legal effect of the stated facts.

In November of 1910, A.J. Webber, the then owner of the property here involved, died testate. By his will, which was duly admitted to probate in the county court, a trust was created to last for a period of 15 years from the date of his death. The named trustees-executors were to have control of the property and to continue to operate certain businesses and divide the net income among named beneficiaries. At the expiration of the 15 years, the trust was to terminate and the trust property was to be distributed. J.H. Webber and May O. Burns, children of the testator, were to receive the property on the basis of the terms and conditions of the will and the conditions of survivorship existent at the time of the expiration of the 15-year period.

The named executors-trustees qualified as such and proceeded to the administration of the estate. An inventory of the estate, which included the land involved in this litigation, together with considerable other real estate and personal property, was duly filed.

In 1915 one of the two named executors died and J.H. Webber was selected as successor pursuant to the selection provisions in the A.J. Webber will. In 1923 the executors-trustees instituted a proceeding in the circuit court to construe the will and to ascertain the authority of the executors-trustees to borrow money and pledge the assets of the estate or trust as security therefor. A decree was entered in that proceeding construing the will and authorizing the executors-trustees to borrow money and to pledge the assets of the estate as security therefor. In that proceeding the executors and trustees were parties, as were the beneficiaries, although the proceeding has been described by the parties as an ex parte proceeding.

Thereafter, in accordance with the decree of construction, the executors-trustees borrowed certain money and gave notes to secure the same. Included among the obligations thus incurred was a note for $6,000 to J.M. Reynolds.

In January of 1927, after the expiration of the 15-year trust term, the executors-trustees filed a final account in the county court proceeding, to which was appended an agreement signed by May O. Burns and J.H. Webber, reciting a complete and full settlement of the trustees' account, and, by this agreement, the beneficiaries agreed to assume all outstanding obligations of the estate in consideration of the transfer to them of the assets of the estate or trust. The final report and the agreement were thereupon approved on January 29, 1927.

On June 9, 1927, the beneficiaries, as the then legal titleholders, made an assignment for the benefit of creditors. By this assignment all property belonging to each of them, including the property acquired from the estate of their father, was assigned and transferred to one W.W. McCreery as trustee. The assignment was for the benefit of all creditors, including J.M. Reynolds and other creditors whose obligations had been incurred during the 15-year term of the trust.

All creditors joined in the execution of the assignment, which provided that the creditors were to accept the assignment in satisfaction of their debts. The trustee was to administer the trust until the debts were all paid and any property thus assigned then remaining was to be returned to J.H. Webber and May O. Burns.

The assignors thereupon executed a deed to W.W. McCreery, as trustee, conveying some 3,000 acres of land, including the land involved in this case. The deed of conveyance recited ...


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