844 LEWIS-GOODWIN OIL & GAS CO. v. HOLMES. [171 LEWIS-GOODWIN OIL & GAS COMPANY V. HOLMES. Opinion delivered October 4, 1926. • MINES AND- MINERALS—FORFEITURE FOR NON PAY ME N T OF RENT— WAWER.—Wheie a lessee's delay in payment of rent worked a forfeiture, whereupon the lessor conveyed the land to another, the subsequent acceptance of the rent by the lessor did not invalidate his grantee's title, as the lessor had no power to waive the forfeiture. Appeal from Union Chancery Court, Second Division; George M. LeCroy, Chancellor ; affirmed'. Mahony, Yocum & Saye and J.N Saye, for appellant. Gaughai c Sifford, for appellee. HUMPHREYS, J. On the 5th day of April, 1924, John P. Holthes, the fee owner of the south half of the northwest quarter of the northwest quarter of section 15; Elizabeth Holmes, the fee owner of the south half of the 'northeast quarter of the northeast quarter of section 16; Martha Holmes, the fee owner of the northwest quarter of the southwest quarter of section 15 and the northeast quarter of the southeast quarter of section 16; the Smackover Oil & Gas Company, owner of an oil and gas lease covering the northwest quarter of the southwest quarter of section 15, and J. T. Sifford, trustee, owner of an oil and gas lease covering the southeast quarter of the southeast quarter of the northeast quarter of section 16, all of said lands being in township 16 south, range 16 west, in Union County, Arkansas, appellees herein, filed a joint suit in the chancery court of Union County 'against Lewis-Goodwin Oil & Gas Company, appellant herein, to cancel and correct the oil and gas lease executed by Joe McGruder and his wife to it on March 7, 1921, and recorded on June 3, 1922, purporting to correct the description contained in an oil and gas lease executed by the McGruders, April 23, 1919, to J. K. Mahony, trustee, and recorded May 19, 1919, so as to correctly describe the lands aforesaid, which lease was assigned by J. K. Mahony to appellant on October 23, 1920, and recorded the same date.
ARK.] LEWIS-GOODWIN OIL & GAS CO. v. HOLNiES. 845 On April 1, 1923, prior to the institution of this Snit, John P. Holmes sold an oil Alid gas lease On tlie solith half of the southwest quarter of the northwe -st qnarter of section 15, township 16 sOuth, range 16 west; -in 'said county, being a part of the 120-acre tract aforesaid, to the Gulf Refining Company for $10,181.80 cash and certain payments to be made, but, when the abstract Was delivered,-appellant's lease from the McGruders was discovered, whereupon the ,Gulf Refining CoMpany refued tauccept the lease and make tbe cash payment ; In order to consummate the deal and clear the title' to the , Gulf Refining"Company, John P. Holmes and appellant herein entered into an . agreement to the effect that the CaSh payment should be placed in the First National•Bank of El . Dorado, Arkansas, to be paid to appellee, John P: Holmes; or aPpellarit, according as the title to the oil and gas lease holding rights on said land should be judicially determined. This suit was brought purSuant tO: • the agreement and for the purpose of testing the validity of the corrected lease from the McGruders to the appellan : t The appellant filed ari answer, denYing the Material allegations of the bill attacking the Validity of its lease, and'interposed the further defenSe, by way Of cross-bill; that, When , made by the MeGruderS to its assignor, J. K. MahOny, trustee, 'Joe McGruder was in possession of the land 15Y . Purchase from John P. Holmes, appellee herein, under a deed erroneously describing the land as' being in range 15 west instead of 16 west, through a mUtual mistake in drafting and accepting the deed, and that, on tins account, it was entitled to a reformation thereof, :for which it' prayed.. It also alleged that the deed referred to'r'ecited that there was an unpaid balancp Of $1,500 on the purchase price 'of the 120-acre tract of land, which was eVidenced by McGruder's promissory note, 'due and payable on Jannary 1, 1920. It tendered into COurt $2,300,, the amount' due upon said nbte to that date, and asked that it be subrogated to the rights of Holmes in said warranty deed, and that the lien retained therein be foreclosed and the land sold,: subject to the oil and gas lease
846 LEWIS-GOODWIN OIL & GAS CO. V. HOLMES. [171 Owned by appellant. On motion of appellant, the McGruders were made parties to the suit. Appellees filed a reply, denyink ,§eriative, the material allegations of ;the . cross-bill. . The cause was heard bythe court upon the Pleadings and the testimonY . adduced by the respective parties, which resulted in . a decree ' Cluieting the title of each of the appellees to their alleged rOspectiVe interests in the land, as against all claims on the part of appellant, denying it the rights of reformation and subrogation, and adjudging , john P. Holmes to be the " owner of the suin of $10,181.80 deposited by agreeMent in the First 'National • Bank of El Dorado, ArkanSas, and to all of the . benefits accruing to : the leSSor under and by Virtue of said oil and gas 'lease executed in favor of the Gulf Refining ,Compariy, -covering the South half of the sonthwest . Oar-ter . of section 15, township 16 south; range 16 west; in . said county, from which is this aPpeal. According to the above recital . of the. facts, J. I P. .Holmes was the owner. of the 120-acre tract on March 3, 1919, when he sold same tO ' Joe McGruder by an 'erroneous description, and of the 20-acre tract, which was a part of the-120-acre tract, on April- 1, 1923, when'he . con-. .tracted to lease it to the -Gulf Refining Company'by cor--rcct description. On -January 17, 1921; Joe McG-ruder conveyed the I20-acrctraCt back . to • J. P. Holmes by*the same brionebUs description.' Though not recited in- the 'statement above,- J. P. Hohnes conveyed all 'of . the land to 'Frank M.: Pugh . on March 9, 1921, by correct description; but Pugh had reconveyed -it . to him by correct deseription at the time he contracted a leasehold estate therein to the Gulf Refining Company. As Holmes owned 'the land at the time he sold same to McGruder and also *hen he proPosed to lease 20 acres to . the . Gulf -Refining Company, the question of an innocent purchaser. is' not involved in this suit. It was deVeloped by Undisputed • testimony adduced in the -case that there was a mutual mistake as to description in the deed from -Holmes to McGruder, in . the lease from McGruder to J. K. Mabony,
ARK.] LEWIS-GOODWIN OIL & GAS CO. V. HOLMES. 847 in the assignment of the lease from J. ,K. •ahony to appellant, and in the deed from McGruder back to-Holmes in settlement of the lien retained for the purchase money. In view of this undisputed fact, McGrudey would have been entitled to a reformation of the . deed made by Holmes to him ha& he 'not .conveyed the land back to Holmes, and his lessees, Ainhony. 'and appellant, were entitled to the same relief by virtue of their lease from McGruder, if the lease was in force and effect.when the agreement was made between Holmes and• appellant to clear the title to the Gulf Refining Company. As we understand, the agreement itself, and the construction placed upon it by learned attorneys in their respective briefs, the sole question to be determined on this appeal is whether appellant had a valid lease on the 120-acre tract of land at the time Holmes and appellant agreed to clear the title to the 20-acre tract in the Gulf Refining Company and litigate over the proceeds. In other words, it was agreed that, if appellant's lease was in force and effect at tbat time, it should have $10,181.80 deposited with the court, and, if not, it should be paid to Holmes. The record reflects that the first payment of the rental upon appellant's lease was deposited in the designated bank three days late. This failure on the part of the appellant to pay the rent on time automatically worked a forfeiture of the lease, and , the only . way to revive it was for Joe Mc4ruder to waive the forfeiture by subsequently accepting the rents deposited in the bank, or by some other method of waiving the forfeiture. He did not waive the forfeiture by any other method, but accepted the rental money in -September, 1921. At the time he acepted the rental, however, he had conveyed the land back to J. P. Holmes and had become Holmes' tenant. He had been Holmes ' tenant eight or nine months . when. he received the rent from, the bank. He ,had no interest in the land at- that time, as be had conveyed it back to Holmes for a consideration. It does not, apPear in the record that Joe McGruder accepted the rent by and with_ the consent of Holmes, his grantee, and the
848 [171 burden rested upon appellant to _prove a waiver of the, forfeiture, for Holmes obtained the title thereto during the time the lease was null and void on ,aCcount of said forfeiture. In other words, Holmes took the land free of any outstanding claim under the lease when Joe McGruder conveyed , it to him, and no subsequent independent act of Joe McG ruder : could thereafter ratify the, lease se as to bind Holmes. It does not appear, in .the abstract that the delayed payment of the ,rent, or ,the, subsequent payments, had been brought to McGruder's attention before he conveyed the land back to Holmes so, that it could be ,said that he waived the forfeiture by-. silent acquiescence while he owned the land. No error appearing, the decree is affirmed.
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