United States District Court, Eastern District of Illinois
March 23, 1962
STEWART OIL COMPANY, A CORPORATION, MICHIGAN OIL COMPANY, A CORPORATION, STEWART PRODUCERS, INC., A CORPORATION, KENNETH PATTERSON, G.F. STEWART, W. ROLLAND STEWART, FRANK J. TIERNAN, AND MORRIS YARBROVE, PLAINTIFFS,
SOHIO PETROLEUM COMPANY, A CORPORATION, DEFENDANT AND COUNTERCLAIMANT, V. WALTER E. KLINE, STELLA P. KLINE, R.E. HAYES, CARL E. MOSES, DAVID R. STEWART, W.T. FREDERKING, A.P. WAGEMANN, JOHN J. STEINER, JOSEPHINE M. STEINER, AND DONK BROS. COAL & COKE COMPANY, COUNTERDEFENDANTS.
The opinion of the court was delivered by: Juergens, District Judge.
This action was commenced by the plaintiffs to recover the
proceeds from the sale of oil produced from the Southeast Quarter
of the Southeast Quarter of Section 29, Township 6 North, Range 4
West of the Third Principal Meridian, Bond County, Illinois, and
sold to Sohio Petroleum Company, defendant. After the action was
instituted, the defendant paid the funds received from the sale
of the oil into the Registry of this Court, alleging that there
were adverse claims to the proceeds and that the
defendant-counterclaimant was in doubt as to the person or
persons entitled to said proceeds and that it could not safely
determine as between the adverse claims without hazard to itself
and asked that this Court determine to whom the proceeds should
be paid. The defendant-counterclaimant, Sohio Petroleum Company,
does not claim any part of the proceeds.
On October 24, 1957, this Court entered an interlocutory decree
which provided that the amended counterclaim was in the nature of
a bill of interpleader, that it was aptly filed, and that the
Court has jurisdiction over the parties and the subject matter.
The Sohio Petroleum Company was allowed to deposit the sum of
money in dispute in the Registry of the Court, subject to further
order of the Court. The Sohio Petroleum Company was released and
discharged from any and all liability for the proceeds of the oil
produced from the property from the first purchase until the
first day of September, 1957. Additional funds have subsequently
been deposited in the Registry of the Court to abide the result
of the trial.
The counterdefendants, John J. Steiner and Josephine M.
Steiner, having failed to plead or appear, were judged and
The plaintiffs and the counterdefendants, Donk Bros. Coal &
Coke Company, Carl E. Moses and David R. Stewart, claim that they
are entitled to the proceeds by virtue of an oil and gas lease
dated October 21, 1955, from Donk Bros. Coal & Coke Company,
lessor, to Carl E. Moses and David R. Stewart, lessees, and
subsequently assigned to the plaintiffs subject to a royalty of
1/8 interest in the original lease reserved to Donk Bros. Coal &
Coke Company and an overriding royalty of 1/16 of 7/8 reserved to
Carl E. Moses and 1/32 of 7/8 reserved to David R. Stewart.
Donk Bros. Coal & Coke Company acquired its interest in the
property from one Theodore Rassieur, who had in turn acquired
title from Samuel J. Brown by warranty deed dated September 21,
1907, which provides in pertinent parts as follows:
"The Grantor Samuel J. Brown, (unmarried), of Town
of Old Ripley, in the County of Bond and State of
Illinois, for and in consideration of Other good and
valuable considerations, and the sum of One DOLLARS
CONVEY and WARRANT to Theodore Rassieur, of St.
Louis, Missouri, the following described real estate
to-wit: All coal and other mineral under the surface
of the following described tracts of land:
"The Southeast quarter (¼) of the Southeast quarter
(¼) of Section No. Twenty-nine (29), in Township No.
Six (6), North; Range No. Four (4), West of the Third
(3rd) Principal Meridian, 40 acres; containing in all
143.55 acres, more or less, in Townships Nos. 5 & 6,
North, Range No. Four (4), West of the Third
Principal Meridian, in the County of Bond and State
of Illinois, together with the right to mine and
remove said coal and other mineral and the right to
conduct mining operations under the surface of said
tracts of land therefor, and the right to use all
rooms, entries and mining ways at coal depth under
the surface of said tracts of land as and for mining
ways, to and from beds of coal or other mineral in
other lands, hereby releasing and waiving all rights
under and by virtue of the Homestead Exemption Laws
of the State of Illinois.
"Dated this 21st day of September, A.D. 1907.
"/s/ Samuel J. Brown."
The words "at coal depth" are added by interlineation to the
The counterdefendants, Walter E. Kline, Stella P. Kline, R.E.
Hayes, W.T. Frederking and A.P. Wagemann, claim the proceeds by
virtue of mesne conveyances from Samuel J. Brown originating with
a deed from Samuel J. Brown to Albert T. Brown dated the 21st day
of September, 1907, which provides in pertinent parts as follows:
"The Grantor, Samuel J. Brown, (unmarried), of the
Town of Old Ripley, in the County of Bond and State
of Illinois, for and in consideration of Other good
and valuable considerations, and One DOLLARS in hand
paid CONVEY AND WARRANT
to Albert T. Brown, of the same place, in the County
of Bond and State of Illinois, the following
described Real Estate, to-wit:
"Also the Southeast quarter (¼) of the Southeast
quarter (¼) of Section No. Twenty-nine (29), in
Township No. Six (6) North; Range No. Four (4), West
of the Third (3rd) Principal Meridian, 40 acres, more
"Containing in all 143.55 acres, more or less;
(Coal etc. underlying said premises reserved, same
having been heretofore sold); situated in the County
of Bond, in the State of Illinois, hereby releasing
and waiving all rights under and by virtue of the
Homestead Exemption Laws of this State."
"Dated this 21st day of September A.D. 1907.
"/s/ Samuel J. Brown"
There is no dispute between the parties as to the title to the
premises prior to Samuel J. Brown.
Donk Bros. Coal & Coke Company and those plaintiffs and
counterdefendants claiming under it contend that the terms in the
deed from Samuel J. Brown to Donk Bros. Coal & Coke Company
conveyed as a matter of law the oil and gas underlying said
premises and that accordingly they are now entitled to the
proceeds from the oil and gas which has been removed or which
will be removed in the future.
The counterdefendants, Walter E. Kline, Stella P. Kline, R.E.
Hayes, W.T. Frederking and A.P. Wagemann (hereinafter referred to
as "Kline et al."), contend that the deed from Samuel J. Brown to
Theodore Rassieur does not convey the oil and gas as a matter of
law. They further contend that it was the intention of the
parties that only the coal and the right to mine the coal beneath
the surface of the ground was meant to be conveyed. They further
assert that the deed from Samuel J. Brown to Theodore Rassieur is
ambiguous and should be construed in order to conform to the
intention of the parties. In the alternative, they argue that in
the event it is found that the deed is not ambiguous, it should
be reformed to comply with the intention of the parties.
The ghosts of the past that have long haunted the courts in the
State of Illinois, when they were faced with the term "coal and
other mineral," were laid to rest by the Illinois State Supreme
Court in the case of Nance v. Donk Bros. Coal & Coke Company,
13 Ill.2d 399, 151 N.E.2d 97 (1958). In that case Mr. Justice House,
together with Justice Klingbiel in a concurring opinion, had the
following to say:
"The complaint specifically prays for a
construction of the deeds to exclude a conveyance of
the oil and gas. However, the allegations thereof do
state a cause of action for deed reformation and
plaintiffs have alternatively prayed for that relief.
For the reasons hereinafter given, the reformation
remedy is available to plaintiffs but not
construction of the deeds.
"We have long followed the universally accepted
doctrine that where the language used in a deed has a
settled legal meaning, the intention of the parties
must be gathered from the instrument itself and
extrinsic evidence is not admissible to aid in its
construction. (Cases cited).
"In a series of Illinois decisions in the early
1940's, it was held, as in the majority of other
jurisdictions, that a conveyance of `all coal and
other mineral' has a settled legal meaning and does
include oil and gas, with incidental exploration,
development and production rights. (Cases cited)."
Justice Bristow, together with Justice Daily in a special
concurring opinion, had the following to say:
"Counts 1, 2, and 5 of the complaint also pray for
relief by way of construction of the deeds in the
light of extraneous matter alleged. I do not believe
that this court intends to hold that relief by way of
deed construction is available in this case, and
concurrence in the end result should in no wise be
construed as an abandonment of certain fundamental
principles of the substantive law of Illinois.
"These principles and decisions have established
that where the language of a deed has a settled legal
meaning the instrument itself is the only criterion
of the intention of the parties and extrinsic
evidence is not admissible to aid in its
construction; (Cases cited) that a conveyance of `all
coal and other mineral' has a settled legal meaning
and does include oil and gas, with incidental
exploration, development and production rights (Cases
cited); that the enumeration of other and incidental
mining rights in the habendum clause of a conveyance
of `all coal and other mineral' does not derogate
from, but enlarges the express and implied rights
included in the granting clause. (Cases cited.)"
Thus it would appear that the contention of Kline, et al. that
"coal and other mineral" does not convey oil and gas as a matter
of law is diametrically opposed to the established law of the
State of Illinois and accordingly avails them nothing.
The contention of Kline et al. that the deed is ambiguous is
based on the fact that the words "at coal depth" are interlined
into the printed portion of the deed and thus create ambiguity in
the meaning intended to be placed in the deed by the parties.
These words are interlined in the habendum clause in the deed and
appear in that portion of the deed pertaining to the right to use
rooms, entries and mining ways under the surface of the tracts.
The interlineation of these words does not create an ambiguity in
the granting clause.
That the plaintiffs are not entitled to have this deed
construed is amply established by Illinois law as stated by the
Justices of the Illinois Supreme Court in the excerpts from the
opinion hereinabove set out.
Thus it would appear that the only avenue of relief available
to the counterdefendants, Kline et al., is through the principles
A reformation action rests upon a theory that the parties had
reached an understanding between themselves; but in reducing it
to writing, through mutual mistake or through mistake on one side
and fraud on the other, some provision which had been agreed upon
was omitted; and the action is to so change the instrument as
written to conform it to the contract agreed upon by inserting
the provision omitted or by striking one inserted by mutual
mistake. A court of chancery may reform an instrument so as to
make it conform to the intention of the parties and the agreement
Counterdefendants, Kline et al., assert that local custom and
understanding of the words "coal and other mineral" at the time
of the execution of the deed between Samuel Brown and Theodore
Rassieur was not deemed to include oil and gas underlying the
These counterdefendants have introduced in evidence a great
number of deeds pertaining to the conveyance of coal in Bond
County, Illinois, from various landowners. The deeds involved
generally contain the printed statement "all coal and other
mineral under the surface of the following described tracts of
land." In some deeds the words "and other mineral" have been
stricken. In other instances the words "all coal and other
mineral" remain unchanged. Other deeds contain the words "except
oil, gas and other precious metals." Still other deeds contain
the words "except oil and gas."
These counterdefendants also introduced a quit claim deed from
Theodore Rassieur and Carrie M. Rassieur, his wife, to Donk Bros.
Coal & Coke Company, which purports to convey the lands
and interests in lands acquired by Theodore Rassieur in Bond
County, Illinois. By this deed Theodore Rassieur and his wife
purport to convey to Donk Bros. Coal & Coke Company the interest
in the land they had acquired in Bond County. It is interesting
to note that the interests in the lands conveyed are separated so
that only the interests which were acquired by Rassieur and his
wife were conveyed to Donk Bros. Coal & Coke Company. This deed
contains 87 separate entries of parcels of land. In this deed
parcels Nos. 1 through 54, inclusive, are preceded by the words
"all coal and other mineral under the surface of the following
described tracts of land"; entries Nos. 55 through 68, inclusive,
are preceded by the statement "also all coal under the surface of
the following described tracts of land"; entries Nos. 69 and 70
are prefaced by the statement "also all coal and other mineral,
except oil, gas and other precious metals, under the surface of
the following described tracts of land." Nos. 71 through 78,
inclusive, are prefaced by the statement "also all coal and other
mineral except oil and gas under the surface of the following
described tracts of land." Entries Nos. 79 through 87, inclusive,
are preceded by the statement "also all coal below the depth of
one hundred and twenty-five feet under the surface of the
following described tracts of land."
Mr. William Ganzer, called by Kline et al., testified he had
been instrumental in obtaining a number of options in the area
during the years preceding and subsequent to the conveyance of
the deed here in dispute. He stated that in pursuing his task of
obtaining options it was his intention to obtain options for coal
only; that he did not intend to option the lands for anything
other than coal underlying same and the right to mine the coal.
He testified on cross-examination that he was not present at the
time the deed was executed by Samuel J. Brown conveying the coal
and other mineral to Rassieur and he had no idea as to the
conversation which took place or whether any matters concerning
the mineral to be obtained by virtue of the lease was discussed
by the parties.
The Court has examined the evidence relevant to the allegations
of the counterdefendants, Kline et al., that there was a general
understanding in the community concerning the conveyance of coal
and other mineral and their allegation that such understanding
was that it did not convey oil and gas, and finds that the
evidence is insufficient to establish such an understanding in
the community. As evidenced by the number of changes in the deeds
conveying coal and other mineral in the area, it appears that
when the parties intended to limit the interest to be conveyed,
additional words were inserted in the deed to exclude those
minerals not intended to be conveyed or the words "and other
minerals" were stricken. The Court finds that there was no
understanding in the community, where the property in dispute is
located, at the time of the execution of the deeds from Samuel J.
Brown by which the coal and other mineral were conveyed, to the
effect that the words "coal and other mineral" had anything other
than their usual legal meaning.
As additional evidence that it was not the intention of the
parties that oil and gas be conveyed by the term "coal and other
mineral," the counterdefendants, Kline et al., attempted to
introduce their Exhibit 17 (which will hereafter be referred to
as Exhibit K-17) under the ancient document rule. The offered
document is a photostatic copy of a notice of acceptance of coal
rights under option as it was recorded in the office of the Clerk
of the Circuit Court and Ex-Officio Recorder for Bond County,
Illinois, which purported to give notice of acceptance to Nancy
A. Brown, who was a sister to Samuel J. Brown and resided in the
home of Samuel J. Brown.
The document in question was said to be on a form of
substantially the same type as other Notice of Acceptance of Coal
Rights Under Option forms, the originals of which were introduced
in evidence, except that at the bottom of the
notice and between the date and signature there appears the
"In response to your inquiry regarding the phrase
`other minerals' it is my intention to buy only the
coal and such other minerals as may be mined with the
coal at coal depth."
The document is signed "Theodore Rassieur by C.C. Terry His Agent
and Attorney." The document is dated the 6th day of June A.D.
1907 and was not recorded until the 17th day of November A.D.
1947 — more than 40 years after it was executed.
At the trial the plaintiffs and some counterdefendants asked to
examine the original document and were informed that it was not
available for examination, that it had been lost subsequent to
having been recorded. Subsequent to the trial, the
counterdefendants, Donk Bros. Coal & Coke Company, examined the
document, recorded in Bond County, Illinois, and upon comparing
it with other notices of acceptance of coal rights under option
found that this particular document contained a great number of
variances between it and other documents of similiar nature. Upon
making this discovery, a motion to submit additional evidence was
promptly made to the Court in order to clarify any questions
concerning the document's authenticity. A hearing was granted.
During the course of this second hearing it developed that one
Alva Nance had presented a document similar to the one which is
here in dispute to the Circuit Clerk and Ex-Officio Recorder of
Bond County, Illinois and asked that it be recorded.
Alva Nance testified at the first hearing that he had presented
the document to the Recorder and that it was recorded; that it
had subsequently been returned to him and had been lost. At the
second hearing Alva Nance testified he had taken the document to
the Recorder's office for recording; that the Recorder stated he
was unable to read it and asked him if he could decipher parts of
the document for him; that he then took the document to his
office and typed out what he believed to be the exact wording of
the document; that he then returned the original document
together with his typewritten facsimile to the Recorder's office
and that it was recorded.
The typist who was employed in the Recorder's office for the
purpose of typing the various documents into the official records
in the Recorder's office of Bond County testified that she had in
fact recorded the document in almost exactly the same manner in
which it was given to her. She stated she did not remember having
seen two documents, that she did not recall having seen the
original document but merely was presented with the document
which had been typed by Alva Nance, and that she had typed it
into the record exactly as it was given to her.
The comparison of the document which was recorded with other
documents of the same nature which were executed in or about the
year 1907 discloses that the recorded Notice of Acceptance of
Coal Rights Under Option in dispute is substantially different in
a number of details from the other documents of similar import
which were executed about the same time. There is no adequate
showing that the purported ancient document was in fact recorded,
nor was this document available for inspection by the Court.
If this Court were to admit the Notice of Acceptance of Coal
Rights Under Option (Exhibit K-17) under the ancient document
rule, it would in effect be stretching that theory out of all
proportion. Such action would open the door for anyone in the
future to present fraudulent and spurious documents into
evidence. Exhibit No. K-17 will not be admitted into evidence and
will not be considered as evidence in this case, since in the
opinion of the Court it smacks of fraud.
Examining the entire evidence, it is not possible to say that
there has been any substantial evidence which would justify this
Court in reforming the deed between Samuel J. Brown and Theodore
Rassieur so as to insert a meaning other than its established
legal meaning. The evidence presented completely fails to show
that the intentions of the parties were any other than to convey
the coal and other mineral as is stated in the deed and,
accordingly, reformation will be denied.
The counterdefendants, Carl E. Moses, David R. Stewart, and
Donk Bros. Coal & Coke Company, and the plaintiffs, as an
additional argument in support of their claim, assert that the
counterdefendants, Kline et al., and their predecessors in title,
are guilty of laches. This defense may have some merit; however,
the Court will not consider the allegations of laches since the
facts set out hereinabove are determinative of the issues
The Court finds that judgment should be entered for the
plaintiffs, Stewart Oil Company, a corporation; Michigan Oil
Company, a corporation; Stewart Producers, Inc., a corporation;
Kenneth Patterson; G.F. Stewart; W. Rolland Stewart; Frank J.
Tiernan; and Morris Yarbrove; and for the counterdefendants, Carl
E. Moses, David R. Stewart, and Donk Bros. Coal & Coke Company,
as their several interests appear, and against the
counterdefendants, Walter E. Kline, Stella P. Kline, R.E. Hayes,
W.T. Frederking, A.P. Wagemann, John J. Steiner, and Josephine M.
The above and foregoing shall be considered findings of fact
and conclusions of law.
Parties to settle the order.
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