ARK.] ALLEN V. THOMPSON. 169 ALLEN V. THOMPSON. Opinion delivered June 29, 1925. PRINCIPAL AND AGENT—RATIFICATION. —Where a purchaser accepted and retained a deed conveying a fourth interest in mineral royalties, instead of demanding a return of his money and offering to reconvey because of the vendor's failure to convey a half interest thereiri according to a previous oral agreement, he will be held to have ratified his agent's action in closing the deal on the basis of a one-fourth interest, and cannot sue for specific performance of such oral contract. •
170 ALLEN V. THOMPSON. [169 2. CONTRACTS—MODIFICATION ,OF . ORIGINAL , CONTRACT.—One cannot •,close a contract on terms known and understood by both parties, . and afterwards insist lin • en a , different contract simPly because it conformed With the' original UnderStanding; as pal :ties haVe 'a "right to change or modify their contracts by mutual agreerhent before consummation thereof. 3: • . MINES AND MINERALS—CHECK NOT CONTRACT.—A check given for royalties„containing a notation that it is for "one-half royalties Lon" tw . lo described tracts , of land helci not a written contract for half royalties on both traets, but Merely evidence 'of payment suM named'for one half rdyalty in one and one-fourth'ioyalty 'in the • other, as expressed' in the two deeds. • 4. •' .FRAUDS, STATUTE OF—SALE OF MINERAL ROYALTIES—ORAL' CONTRACT. oral centract for the sale of a ,half interest ih mineral . ,.royalties.in land is within the statute of frauds; .the check and
deeds, executed in consummation of the . contract'not Constituting a written executory contract. . D. • -Appeal Trim Columbia Chancery Court; J:- Y. Stevens;Chanceltor;.reversed. 'Appellarit'po se. Henry Steven's'and E. A. Uptoii, for appellee. IllikPHEEYS;' J. This suit Was bronkh-t bY apPellee against appellant in the 'chancery : court of Columbia County tb 'enforce the specific performance . of an alleged contract for the sale and purchase of an undivided one-.:half interest in the royalty of -all the 'oil, gas, and other minerals on and under a certain seventy-acre .trdct of land-in Said -county brrefOrming'one of the deeds of conveyance. The land was conveyed by .appellant to appellee in two deeds, one conveying . an undivided one-half interest in said royalty upon and under sixty acres of :said tract, and the' other an undivided one-fourth interest in said royalty. , upon and under .ten acres of said . tract: It was . alleged_ that, through mutual mistake, an undivided one-fourth .interest 'of the . . oil, gas, :and -other Mineral, instead of an undivided . one-half interest, in -the ten-acre tract was conveyed by appellant to appellee, ApPellant filed an *answer denying that a mistake had been made in the quantity of royalty conveyed in the
ARK.] ALLEN V Tilowso.N. 171 ten-acre tract, and,.by way -of further—defense; alleged •that:the contract for the sale and .purchase,..of ;said ;royalty was verbal and, yoid . as: being . within the. statute .of , frauds ... • • : I The, Cause was submitted. to the, court upOn the pleadings,and testimony, :which resulted in a findMg that, hy niutnal mistake, , the deed to- the ten T acre tracp ;conveyed an undivided one4ourth. interest in, said royalties, an, ; undivided_ one Thalf , interest . .t1-1 , eiTiT, ,and decrged a . reforniation of , the deed_so as- to i. conVey a One,-,halfl interest..in said „royalties. The court , further ou -iid:that;oneTh . alf of . the . royaltY from ' the oil prOduCed belonged , 'to appellee,. and decreed: that, he 'have . • a .. nd recoVer one-half .of the royalty . of the ; oil; heretofore , produced, from . which findings and decree, an appeal ,has been duly: prosecuted to this court. The testimony . is conflicting .as to whether appellee Contracted 'With appel-lan , t to purehase an undivided one-half interest in the..Oil ,and,mineral royalties in the ten-acre tract, but . there is Contlict : relative , to -the 'quantity :of royaltY entering into a d-ie . deal -as , finally . agreed upon and . cOnsminnated. T , h e •u • . ndispiited evidence reflectS that aPPellee selected ,Harnwell YOUng, a firna.a . attorneYs at Stepilens , purcl i la n se appellant 's . . ,royalty . ..rights ,. in. -the .soventy-acre . tract; and 'Placed a . check. , in . ..their hailc.1§ .f:or $2,200. -with which . to pay appellant for 'said royalties it the abstract , showed good and ` 11.ffi.Cierit fide in him. The check was written bylHarnwell and contaiOd the koi . iolring notation in the- left-hand Coma . ; to-wit "One-half royalty; on SEW •;;SW1/4,,. and.:,-.SWA/4 .NW1/4 8E1/4 and W. 1 /0 , :SW,3/4 SE 1/4 , all .;in twp.. 15 S., rge. 20 . W."; On exaniiiiatiom. of ,_ . the•I abstract, it: was diScovered that„ . appellant , Only 7 , oNnecl. au un--divided one-fourth interest: in :the, royalties upon and 'under the ten-acre tract.: - After ,making-thiS discovery, Harnwell. prepared two- deeds; one for am undiv-ided one-• half:interest. in the-royalties in the,-shity-acre tract, .und the other . an undivided one-fourth .interest , in. the-royal-
172 ALLEN V. THOMEgON. [169 ties in the ten-acre tract. These deeds were executed by appellant and delivered to Harnwell in •exchange for the check which he indorsed and collected. Harnwell placed the deeds of record and sent them to appellee, explaining that he had closed the deal upon the basis of $2,200 for an undivided one-half interest in the royalties in the sixty-acre tract, and an undivided one-fourth interest in the royalties in the ten-acre tract. Appellee accepted and retained the deeds, and by so doing ratified the action of his agent. Unless he intended to abide by the sale and purchase of the royalties made by his agent, he should have repudiated the transaction by demanding a return of his money and offering to reconvey the royalties in said lands to appellant. It is true • that he requested his agent several times to get the other undivided one:fourth interest in the ten-acre tract from appellant, claiming that he was entitled to it under the original agreement, but At that time he knew his agent had closed the deal with appellant upon the basis of $2,200 for an undivided one-half interest in the royalties in the sixty-acre traict, and an undided one-fourth interest in the yoyalties in the ten-acre tract. One Cannot close a contract.upon terms known and understo.od by both parties,.and afterwards insist upon a different contract simply because same was in conformity with the' original understanding between the parties thereto. • Parties have a right to change or modify their contracts by mutual agreement before consummation • of same. Appellee attempts to uphold the decree of the trial court upon the theory that the only contract which could be consummated between appellee's agent and appellant was expressed in the check. The check was not in substance or form a contract 'between the parties. It did not purport to be a contract. It was . merely an evidence of the payment of the sum named therein for the royalties expressed in the two deeds. The court erred in treating the check as a written contract between the parties. The contract, if any, 'between the parties was
oral and non-enforceable as being within the statute of frauds. The check and the two deeds were instruments executed and delivered in consummation of the contract, and were not themselves in any sense a written execu-tory contract. On account of the error indicated, the decree is reversed; and the cause is remanded with directions to dismiss appellee's bill t for the want of.egnity.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.