(39 Ind. A. 1) SUPREME LODGE K. P. v. ANDREWS et al. (No. 5,407.)1 (Appellate Court of Indiana, Division No. 2. June 28, 1906.) On rehearing. Denied. For former opinion, see 77 N. E. 361. PER CURIAM. Rehearing denied. COMSTOCK, P. J. (dissenting). The petition for a rehearing in this cause emphasizes the proposition that where a voluntary society proceeds regularly in accordance with its own rules, they not being contrary to public policy and the laws of the land and its procedure not being "mala fides," such rules and proceedings cannot be abrogated by a policy holder or set aside by the courts. Croak v. High Court, etc., 162 Ill. 298, 44 N. E. 525. This doctrine is ignored in the original prevailing opinion. Mr. Andrews, as a member of the appellant society, had a right to transfer to a membership of the fourth class, limited by the rules and laws of the order. His right was qualified. It depended upon the approval of his application by the medical examiner in chief. As a member of this mutual benevolent society, he approved and assented to the qualification. For many months, he had a right, unqualified, to be transferred from the second to the fourth class free of charge and regardless of age. During that time he did not file his application for a transfer, and a change in the laws placed a restriction upon this right, which appellees ask shall be removed. The writer is of the opinion that the courts have no right to prescribe rules for the government of society, in opposition to its own laws. The right of the applicant to transfer depended upon more than his application. The application required the approval of the medical examiner in chief. not receive this approval for reasons stated, both by indorsement on the application and the oral testimony of the medical examiner. The right to membership is determined by the laws of the order; the right and manner of change from one class to another is determined by the same laws and rules. The rules do not say that the applicant shall be transferred upon the approval of the local medical examiner, nor that the opinion of the medical examiner shall be set aside by the opinion of other medical men, although they may be of equal learning and experience, but only upon the conditions to which, as a member of the order, he has subscribed. The complaint charges that the applicatiou was rejected solely because of the advanced age of the applicant, arbitrarily and without legitimate excuse. If the testimony of the medical examiner in chief, or of Dr. McConnell, another medical examiner, are to be given any weight, these grounds are not only not sustained by any evidence, but are positively disproved. Their testimony is uncontradicted as to physical infirmities that 78 N.E.-28 It did are indicated by and are likely to follow a certain pulse rate at a certain age, conditions shown to have existed in the applicant, and directly rebutting the charge made in the complaint. The conclusion reached in the prevailing opinion ignores the rules of order. The petition for a rehearing should be granted, and the judgment of the trial court reversed. (74 Oh. St. 295) GILL et al. v. FLETCHER. (Supreme Court of Ohio. June 12, 1906.) 1. DEED-CONSTRUCTION-RESERVATION. Whether the language used in a deed creates a reservation or exception from the grant depends upon the intention of the parties as evinced by a construction of the whole instrument in the light of the circumstances of each case. [Ed. Note. For cases in point, see vol. 16, Cent. Dig. Deeds, §§ 455, 456.] 2. MINES AND MINERALS-DEEDS-EXCEPTION -RESERVATION OF MINERALS. Where the owner of a fee-simple estate in lands conveys the lands to another in fee simple, reserving one-half of the mineral which may thereafter be found on said land and declaring that the grantee, his heirs and assigns shall have and hold the land and its appurtenances, "the half of the mineral only excepted," such conveyance creates an exception to the grant. leaving in the grantor and his heirs a fee-simple estate in one-half of the mineral separate and distinct from the estate in the surface and the other half of the mineral conveyed to the grantee. [Ed. Note. For cases in point, see vol. 34, Cent Dig. Mines and Minerals, § 154.] 3. ADVERSE POSSESSION-MINERAL LANDS. Under such a deed the subsurface rights will not be lost by nonuser, nor by constructive possession under color of recorded deeds which are silent as to the excepted mining rights; but to bar such rights under the statute of limitations the possession must be actual, open, notorious, continuous, exclusive, and adverse, shown by overt acts of unequivocal character which clearly indicate an assertion of ownership of the premises to the exclusion of the rights of the real owner. (Syllabus by the Court.) Error to the Circuit Court, Ottawa County. Action by Gill and others against James Fletcher. Judgment for defendant was affirmed in the circuit court, and plaintiffs bring error. Reversed, and judgment rendered for plaintiffs. This action was begun in the court of common pleas of Ottawa county by the plaintiffs in error, who were plaintiffs below, to quiet title to certain lands, which are now a part of said Ottawa county; and also to restrain the defendant from interfering in any manner with the right of plaintiffs in the premises and from preventing the plaintiffs from going upon the premises and removing onehalf of the gypsum, or plaster, therefrom, and for other relief. The case was tried in the court of common pleas and also in the circuit court on appeal and in both courts the judgment was in favor of the defendant. The circuit court made findings of fact sep1 Transfer denied. arate from its conclusions of law, from which | er, who holds by mesne conveyances. None findings it appears that on the 5th of October, 1838, one Joseph Gill and his wife, residing in the county of Jefferson, Ohio, conveyed the lands in question to one Jesse Payne, who resided in Berkley county, Virginia. The lands were described as the east half of section 9, etc., "joining a fractional school section on the Sandusky Bay near Lockwood's Plaster Beds, and containing 317 acres more or less; the said Joseph Gill reserving the one-half of the plaster or the profits thereof which may hereafter be found on said land. To have and to hold the same hereby conveyed with all and singular the premises and every part and parcel thereof with every of the appurtenances (the half of plaster as above described only excepted) unto the said Jesse Payne, his heirs and assigns forever." The grantor, Joseph Gill, was born in February, 1763, and the grantee, Jesse Payne, was born in 1776, and they were acquainted with each other at the time of this conveyance. The said Joseph Gill died intestate as to the property which is the subject of this action, and it descended to his son, John W. Gill, who died intestate about 1872, leaving the plaintiffs herein, who are all nonresidents of the state of Ohio, his only heirs at law. In the lifetime of Jesse Payne he entered into a written agreement with his son, A. C. Payne, whereby he agreed to convey to the latter 972 acres of the land described in the deed aforesaid, and afterwards such proceedings were had in the court of common pleas of Ottawa county, that on or about the 20th of February, 1836, Amos Payne, as executor of the last will of Jesse Payne, was authorized and directed to execute this written agreement by a deed conveying the said 972 acres to A. C. Payne, his heirs and assigns forever; which the executor accordingly did convey. Neither the agreement between Jesse Payne and A. C. Payne, nor the deed from the executor of Jesse Payne to A. C. Payne, contained any restriction, limitation, reservation, or exception whatever, but by its terms purported to convey to A. C. Payne in fee simple every right and interest in the premises described. That deed was filed for record on the 12th of October, 1866, and was duly recorded in the record of deeds of Ottawa county, and A. C. Payne went into possession of the premises under the claim of title described and conveyed by said deed, without knowledge of any claim of the plaintiffs or those under whom they claim. The deed from Joseph Gill to Jesse Payne, however, was recorded on the 3d day of December, 1838, in the record of deeds of Erie county, and the same was not recorded, nor a transcript of the records of Erie county relating to the premises described in the deed was not recorded in Ottawa county before the year 1888. The deed from the executor of Jesse Payne to A. C. Payne covers the land which is now held by the defendant in this action, James Fletch of the deeds from A. C. Payne down to the defendant herein contains any restriction, limitation, reservation or exception whatever. The defendant, Fletcher, and those under whom he claims, successively went into possession of the premises described in the deed to Fletcher by virtue of their respective deeds, and for more than 35 years next prior to the commencement of this action they have been in actual, notorious, and uninterrupted possession of the premises, and have cleared, cultivated, used, and improved the same for agricultural purposes only under claim of ownership of the same and every right, title, and interest therein by virtue of the said deeds. There is no affirmative evidence that Joseph Gill or John W. Gill, or any of the plaintiffs, had any actual knowledge of the claim of exclusive ownership by the defendant and his predecessors in title, prior to the year 1902. On the 5th day of October, 1838, the date of the conveyance by Joseph Gill to Jesse Payne, gypsum, otherwise called plaster, was not known to exist upon the land described in the deed, but a large deposit of plaster was at that time known to exist about one and one-half miles east of the premises described in the deed, which deposit was known as Lockwood's Plaster Beds, as mentioned in the deed. Those deposits of plaster existed in certain strata, the first or upper stratum being near the surface and broken and not continuous, Between the different strata of plaster there were layers of limestone. On the 5th of October, 1838. and up to about the year 1864, only the upper stratum was known to exist, and it was obtained by quarrying or stripping the earth therefrom, and was taken in the form of bowlders or chunks ranging in size from the size of one's fist to many tons in weight, and after 1864 a lower stratum was found from which the gypsum was obtained by stripping the earth from the same, and then replacing the earth after the gypsum had been taken out. About the year 1900, other valuable deposits of gypsum or plaster were found to exist about one-half mile west from the premises in possession of the defendant, which gypsum existed wholly beneath the surface of the earth, and since that time extensive operations for mining have been conducted west and east of the premises of the defendant. But after the gypsum has been removed from between the strata of limestone there have been some cavings in of the earth and the surface has been to some extent interfered with for farming purposes. No plaster has ever been actually found or taken from the surface, or from beneath the surface of the defendant Fletcher's land, nor has there been any mining or exploration for gypsum conducted on or under said premises. But the court finds from the evidence that gypsum, or plaster, exists thereunder and probably in quantities that would make it profitable to mine the same. This proceeding in error is prosecuted to reverse the judgment of the This language cannot be overlooked nor circuit court. Scott Stahl and S. P. Alexander, for plaintiffs in error. Wm. C. Wierman, for defendant in error. DAVIS, J. (after stating the facts). The plaintiffs in error make two contentions: First, that as to the one-half of the gypsum underlying the land there was a severance of the title in the deed of Joseph Gill to Jesse Payne so that the grantor withheld to himself a fee simple in one-half of the mineral estate and conveyed to the grantee all of the other half of the mineral and all other rights in the land; second, that the plaintiffs in error have not lost their rights in the mineral through adverse possession by the defendant and his grantors. It is familiar law, already recognized by this court in Burgner v. Humphrey, 41 Ohio St. 340 and 352, that the surface of the land and the minerals underlying it may belong to different owners. The doctrine is thus stated, with citations of a great number of authorities: "It is well settled that a mine may be severed from the surface, the surface being held in fee by one person and the mine by another. The ownership of a mine after severance is to all intents and purposes the same as the ownership of land, and is attended with all the attributes and incidents peculiar thereto. The mine itself may, in turn, be divided longitudinally and each stratum become the subject of a grant; the mine thus becoming the property of as many owners as there are different strata. Severance may be accomplished by a conveyance of the mines and minerals only, or by a conveyance of the land with a reservation or exception as to the mines and minerals." 20 Am. & Eng. Ency. Law (2d. Ed.), 771-773. The defendant in the case at bar insists upon the technical distinction between a reservation and an exception, maintaining that, since the language of the deed is: "The said Joseph Gill reserves the half of the plaster, etc., which may hereafter be found on said land" it should be construed as a reservation and not an exception; because the express language is that of a reservation and because it is a reservation of something which was not known to be in esse at the time of the conveyance, as shown by the words, "which may hereafter be found." Upon the theory that the deed operated only as a reservation to the grantor of something out of the estate granted, it is urged that whatever rights the grantor reserved to himself expired with his life, because there are no words of inheritance in the reservation. The weakness of this theory lies in the fact that it does not give full force and effect to all the words of the deed. Following and in immediate connection with the language above quoted these words occur, "To have and to hold the half of the plaster as above described only excepted * *." thrown out of the instrument. The parties meant something in using it and it can only mean that the grantor excepted out of the estate granted and retained in himself the fee simple, which he already had, in the one-half of the plaster. It cannot be maintained that the plaster was not in esse at the time of the conveyance. With good reason it was at that time believed to exist, although it had not been "found"; and hence the reservation or exception. The court found that it exists now and the necessary inference is that it existed then. The case is not at all like cases in which an estate is granted and at the same time some new right or privilege is reserved out of it to the grantor, as, for example, a right of way or other easement. It is conceded that if the language of the deed constitutes an exception, words of inheritance are not necessary to transmit the estate to the plaintiffs; but the use of the word "reserve" or "reserving" or of other words of similar import, does not necessarily create a technical reservation. The deed may, nevertheless, operate as an exception. The construction of the deed is to be drawn from the circumstances of each case and from all the words of the instrument, the object being to ascertain and give effect to the intention of the parties. In this case the words are both "reserve" and "except"; and it seems clear to us that not only the language employed but also the facts found by the circuit court justify the conclusion that it was not the intention of the grantor to reserve to himself merely an immediate privilege which should expire with his own life, but that it was the intention of the parties to except from the grant an absolute and inheritable estate in the one-half of the plaster beneath the surface of the land conveyed. Hay's Lessee v. Storrs, Wright (Ohio) 711; Sloan v. Furnace Co., 29 Ohio St. 568; Coal Creek Mining Co. v. Heck, 15 Tenn. 497; State v. Wilson, 42 Me. 9; Bridger v. Pierson, 45 N. Y. 601; Wood v. Boyd, 145 Mass. 176, 13 N. E. 476; Whitaker v. Brown, 46 Pa. 197. A separate estate in one-half of the mineral having been excepted by the grantor, it becomes a material question whether the rights of the plaintiffs are lost to them by adverse possession. It is not disputed that title to a mine which has been severed from the title to the surface may be acquired by adverse possession; but this can take place only when the possession is actual, continuous, open, notorious and hostile. It cannot be accomplished by secret trespass upon the owner's rights and it has been held in many cases that, where there has been a severance of estates, neither the owner of the surface nor the owner of the mine can claim the other estate merely by force of the possession of his own estate. Nor does the mine owner lose his rights by mere nonuser. His title can be defeated only by acts which actu ally take the mineral out of his possession. We cite some of the cases which support the foregoing propositions. Smith v. Lloyd, 9 Exch. 562; Arnold v. Stevens, 24 Pick. (Mass.) 106, 35 Am. Dec. 305; Caldwell v. Copeland, 37 Pa. 427, 78 Am. Dec. 436; Armstrong v. Caldwell, 53 Pa. 284; Kingsley v. Coal & Iron Co., 144 Pa. 613, 23 Atl. 250; Hummer v. Coal & Iron Co., 160 Pa. 483, 28 Atl. 853; Algonquin Coal Co. v. Coal & Iron Co., 162 Pa. 114, 29 Atl. 402; Huss v. Jacobs, 210 Pa. 145, 59 Atl. 991; Marvin v. Iron Mining Co., 55 N. Y. 538, 14 Am. Rep. 322. In this connection it is proper to direct attention to the principle that a tenant in common cannot assert title by adverse possession against his co-tenant, unless he shows a definite and continuous assertion of adverse right by overt acts of unequivocal character clearly indicating an assertion of ownership of the premises to the exclusion of the right of the co-tenant. This principle has been so generally recognized by the courts that it may be said to be elementary. It has been distinctly declared by this court in Youngs v. Heffner, 36 Ohio St. 232. Therefore, when by the exception and severance of title in the mineral by the deed, the grantor, Gill, and the grantee, Payne, became tenants in common in the mineral, each owning onehalf, neither the grantee nor those holding under him could acquire title through the statute of limitations as against the plaintiffs unless they are able to show such open and unequivocally adverse possession of the mineral rights as would put the plaintiffs and their ancestors upon notice. Actual possession of the surface and constructive possession of the mineral under color of deeds will not be sufficient. It must be an actual interference with the seisin of plaintiffs with denial of their title. The record of deeds from Payne's executor, and of mesne conveyances down to the defendant, which deeds convey the full title with no exceptions or reservations, cannot operate as adverse possession, nor as notice of an adverse claim. The deeds being silent as to the mining right in Gill and his heirs, which had been severed by the deed from Gill to Payne, they could only be construed as conveying only such title as Payne, or his grantees, had. As to the severed mining estate, a distinct title must be asserted and established. Kincaid v. McGowan, 88 Ky. 92, 4 S. W. 802, 13 L. R. A. 289, and cases cited above. There was no open, unequivocal, exclusive, and adverse possession in this case; and to hold otherwise, in our opinion, would be inconsistent with the findings of fact, and with the line of decisions which we have cited. (74 Oh. St. 307) ADVANCE THRESHIER CO. v. HOGAN et al. (Supreme Court of Ohio. June 12, 1906.) 1. MORTGAGES FORECLOSURE-APPLICATION OF PROCEEds. Where parties to a mortgage given to secure the payment of several notes maturing at different times have provided in the instrument that the mortgagee may elect as to the application of payments in case the proceeds of a sale of the mortgaged property are insufficient to satisfy the entire debt, the court upon foreclosure will, as between mortgagor and mortgagee, order application of money arising from sale in conformity with such election if made in proper time. [Ed. Note. For cases in point, see vol. 35, Cent. Dig. Mortgages, §§ 1629, 1630.] 2. SAME TIME FOR ELECTION. Such election is not too late if made by proper demand prior to the trial. 3. PRINCIPAL AND SURETY SURETY. NOTICE ΤΟ Where two of the notes so secured contain a clause that they, with others, are secured by mortgage given by the mortgagor to the creditor, and are signed by a third party as surety for the debtor, such surety will be held, in the absence of circumstances showing the contrary, to have had notice of the provisions of the mortgage respecting the application of payments, and to have contracted with reference thereto. 4. SAME REMEDIES OF SURETY-APPLICATION OF PAYMENT. The primary equity growing out of the relation of creditor, debtor and surety, is that the creditor be paid what is due him; that he does not lose this equity as against the surety except by misconduct to the latter's prejudice. So that, when the creditor in the original contract has received a mortgage covering the entire debt, and a personal guaranty on a part of it, the presumption is, in the absence of circumstances showing the contrary, that he has taken the personal guaranty as additional protection for his debt. This presumption is strengthened where it appears that the creditor, at the inception of the debt guarantied by the surety, refused to part with the property, the consideration for the notes signed by the surety, without such personal security. The surety has, in case of sale resulting in a sum insufficient to satisfy the entire debt, no standing to demand that the proceeds be applied pro rata upon the notes upon which he is surety. A fortiori is this the case where the mortgage contains a clause to the effect that where any of the notes are guarantied by a third party such party shall have no rights under the mortgage unless, the same is assigned to him, and that on sale the proceeds shall be first applied on notes not so guarantied until the same are fully paid. (Syllabus by the Court.) Error to Circuit Court, Logan County. Action by Advance Thresher Company against D. S. Hogan and others. From a judgment in favor of defendant J. Lincoln Clayton, plaintiff brings error. Reversed. John R. Cassidy, for plaintiff in error. A. Jay Miller, for defendant in error. SPEAR, J. An action Judgment reversed, and judgment for plain- January 23, 1904, by the Advance Thresher tiffs in error. SHAUCK, C. J., and PRICE, CREW, and SUMMERS, JJ., concur. Company against Dell S. Hogan, W. R. Hogan, and J. Lincoln Clayton, in the common pleas of Logan, to obtain judgment against the Hogans upon 10 promissory notes of various dates and amounts, maturing at different times, and aggregating $1,962, and to obtain foreclosure of a chattel mortgage executed by the Hogans August 29, 1903, and given to secure payment of the notes, the property covered being a grain separator, a compound steam traction engine, a band cutter, and feeder, pneumatic straw stacker, and other items of personal property including some live stock. The traction engine, with attachments, was sold by the company to the Hogans contemporaneous with the execution of the mortgage and the delivery of three of the notes, each for $400, two of which were signed also by the defendant in error, Clayton. Each of these notes contained a statement to the effect that it, with others, was secured by chattel mortgage of even date, and that failure to pay the note or the others so secured when due made that note and all others so secured immediately due at the option of the holder. The mortgage The mortgage had a similar provision to the effect that in case of default in payment of any of the notes at maturity, then all of the notes may become due and payable without notice at the option of the mortgagee. Two of the notes being past due at the commencement of the action, the mortgagee, by declaration in the petition, elected to treat all as due. The Hogans were in default. Clayton answered, alleging that he was surety only on the two notes, and that January 23, 1904, the Hogans made and delivered to him their chattel mortgage conveying the property described in the petition subject to the plaintiff's prior mortgage lien. He demanded as relief a finding of his suretyship on the two notes, and that plaintiff be required to exhaust the Hogans and its securities other than this defendant, and apply a pro rata of the proceeds on the two notes on which he was surety before resorting to its remedies at law against him as surety. Both chattel mortgages were duly attested and filed with the proper officer. Such further proceedings were then had that judgment was rendered against the Hogans on the petition of plaintiff, and an order of sale issued and the property embraced in the mortgage was sold; the proceeds of the sale amounting to $1,248.75. The cause was then tried in the common pleas as to the distribution of proceeds, and was appealed to the circuit court, in which court plaintiff filed a reply to Clayton's answer in which it was alleged: (1) That in addition to the chattel mortgage given by the Hogans to Clayton, they on the same date executed and delivered to him a mortgage on real estate owned by them as further indemnity; and (2) that and (2) that at the time of the execution of the chattel mortgage set out in the petition it was agreed between plaintiff and the defendants that none of the sureties on the note secured by the mortgage should have any rights under the mortgage unless the same should be by the plaintiff assigned to them, and that on sale of the property covered the proceeds should be first applied on the notes secured thereby other than those on which Clayton was surety until such notes not so secured were fully paid. The circuit court, on trial, sustained a demurrer to the first paragraph of the reply, and overruled a demurrer to the second paragraph. As part of its evidence, and in support of the second paragraph of the reply, the plaintiff introduced its chattel mortgage which contains the following stipulation: "And the proceeds of sale shall be applied, after paying all costs, fees, and expenses incurred by the mortgagee, its agents, or assigns in that behalf, to the payment of any or all of said notes; and if not sufficient to pay all of said notes, then to be applied on either of said notes or divide the proceeds among the several notes in such proportions as it may elect at the option of the party of the second part without notice, whether said notes are due or not due by the terms thereof, the whole being made due by the consent of the party of the first part hereby given on his violating any of the conditions or covenants of this chattel mortgage; all notes being declared due as above provided, any deficiency arising after applying the proceeds of said sale as above specified the mortgagors agree to pay forthwith to said mortgagee, its successors or assigns. Where any of the notes mentioned in this chattel mortgage are indorsed or guarantied by any third party, it is agreed and understood that said indorsers or guarantors, shall have no rights under this chattel mortgage, unless same is assigned to them, and that on sale of the property as herein provided the proceeds shall be applied on notes not so guarantied or indorsed until the same are fully paid." It appeared further by the uncontradicted testimony that the steam traction engine with attachments was purchased by Dell S. Hogan of the plaintiff after the purchase of the other articles mentioned; the price was $1,200, for which he offered his three notes for $400 each with W. R. Hogan, and a chattel mortgage on the engine and the articles enumerated in mortgage then on file; that the company refused the offer because not satisfied with the security, and then, and before the proposition to sell was accepted, the name of the defendant Clayton was obtained by Hogan to two of the notes. The security being thus made satisfactory to the company, the sale was made and the engine delivered. The court thereupon found for the defendant Clayton as to his alleged suretyship, and in his favor and against plaintiff as to the distribution of the fund, and ordered that the fund, after payment of costs, be applied pro rata upon all the notes set out in the petition. The defendant offered no testimony. No separate finding of facts was made, but there is no substantial dispute as to the evidence, which is all set out in the |
