Joseph C. REYNOLDS and wife, Jane C. Reynolds,
v.
B. V. HEDRICK GRAVEL & SAND COMPANY.
No. 102.
Supreme Court of North Carolina.
January 29, 1965.*890 Wm. M. Styles, Asheville, for plaintiff appellants.
Lee, Lee & Cogburn, by Max O. Cogburn, Asheville, for defendant appellee.
HIGGINS, Justice.
The plaintiffs seek in this action to have the Court declare void the reservations in the defendant's deed to Claude L. Reed and Nell S. Reed executed July 5, 1957, upon the ground the reservations are repugnant to the granting, holding, and warranty clauses of the deed. In the alternative, they claim if the reservations are found to be valid, nevertheless, when the defendant became the last and highest bidder at the trustee's sale, the title thus acquired merged with the interest reserved and the assignment authorized the trustee to convey to the Reeds an unencumbered title which passed by mesne conveyances to the plaintiffs.
*891 The defendant contends the intention of the parties is clearly expressed both in its deed to the Reeds and in their deed of trust to the trustee; that the reservations apply to a small part (18.2 acres) of the overall tract and describe the property rights intended by the parties to pass by the deed; that they relate to the quantum of the estate embraced in the description, are readily reconcilable with the other clauses of the deed, and are not void for repugnancy. In the alternative, it contends, in any event, plaintiffs are estopped to deny the validity of the reservations by their acts and conduct in that they agreed to purchase the reserved rights and to pay $1,000.00 per acre for a deed of release; that they actually had a deed prepared for the defendant's execution but this deed was not executed and delivered due to failure of the parties to agree upon the time for the payment.
In the view we take of this case we may disregard the alternative contentions of both parties. Mr. Lee, as Trustee, could only convey such title to the Reeds as the trust instrument authorized. The defendant merely assigned its bid. This assignment did not enlarge the trustee's authority. It merely directed to whom he should make the deed. Staunton Military Academy v. Dockery, 244 N.C. 427, 94 S.E.2d 354; Brett v. Davenport, 151 N.C. 56, 65 S.E. 611. If the reservations are valid, and we hold they are, the defendant's rights are established by the deed and not by estoppel.
The plaintiffs contend the reservations in the defendant's deed to the Reeds are inconsistent with its more formal and controlling clauses and must give way to them because of the irreconcilable conflict. They cite McNeill v. Blevins, 222 N.C. 170, 22 S.E.2d 268; McCotter v. Barnes, 247 N.C. 480, 101 S.E.2d 330; Cleveland Realty Co. v. Hobbs, 261 N.C. 414, 135 S.E.2d 30. We add these cases: Ellis v. Barnes, 231 N.C. 543, 57 S.E.2d 772; Jeffries v. Parker, 236 N.C. 756, 73 S.E.2d 783; Oxendine v. Lewis, 252 N.C. 669, 114 S.E.2d 706. Generally stated, the rule is that in order for the Court to hold any part of a deed void for repugnancy, the rejected part must be irreconcilably conflicting with the granting, holding, and warranty clauses. As stated by the present Chief Justice in Ellis v. Barnes, supra, the rule is: "In the interpretation of the provisions of a deed, the intention of the grantor must be gathered from the whole instrument and every part thereof given effect, unless it contains conflicting provisions which are irreconcilable, or a provision which is contrary to public policy or runs counter to some rule of law." Citing Willis v. Mutual Loan & Trust Co., 183 N.C. 267, 111 S.E. 163.
To determine the legal effect of the "reservation" in the defendant's deed to Mr. and Mrs. Reed, we may look to the entire instrument to determine whether the "reservation" was intended as a limitation on the estate granted, or a limitation on and a part of the description of the property conveyed, or a limitation upon the use of the property for the benefit of the grantor. True, the word "reservation" is used, but the meaning of the word may be determined by reference to other provisions of the deed. Hardison v. Lilley, 238 N.C. 309, 78 S.E.2d 111. "While there is a distinction between `exception' and `reservation' * * * the terms are often used indiscriminately and frequently what purports to be a reservation has the force and effect of an exception when such appears to be the obvious intention of the parties. * * * The modern tendency of the courts has been to brush aside these fine distinctions, and look to the character and effect of the provision itself." Vance v. Pritchard, 213 N.C. 552, 197 S.E. 182, citing authorities.
The mutual agreements between the defendant and the Reeds as expressed in the deed and in the deed of trust executed July 5, 1957, leave no room for doubt as to the intent and purpose that the defendant, its successors and assigns, should have the perpetual right to mine, process and remove sand, gravel, etc., from 18.2 acres specifically *892 described within the 71-acre boundary. The condition attached by the parties to the exercise and enjoyment of the right reserved, is that 30 days written notice be given. The plaintiffs not only had record notice but their own deed from the Smiths was made subject to "all mineral rights of record."
The negotiations between the parties for a deed of release show the interpretation the parties placed upon their respective claims to the mining, sand and gravel rights, etc., reserved in the 18.2 acres described in the defendant's deed. "Such construction of the contracts by the parties is one of the best indications of their true intent and meaning * * *." American Trust Co. v. Catawba Sales & Processing Co., 242 N.C. 370, 88 S.E.2d 233.
We need not now determine whether the reservations in the July 5, 1957, instruments constitute a limitation upon the quantum of the property conveyed as in Hardison v. Lilley, supra; a reservation upon the use of land, as in Barrier v. Randolph, 260 N.C. 741, 133 S.E.2d 655; Cleveland Realty Co. v. Hobbs, 261 N.C. 414, 135 S.E.2d 30; or a valid exception as in Central Bank & Trust Co. v. Wyatt, 189 N.C. 107, 126 S.E. 93. The appeal is from a judgment holding the defendant's claim is not invalid and is not a cloud upon the plaintiffs' title. The question presented was answered by the trial judge in favor of the defendant by holding the reservations valid.
In upholding the judgment we deem not inappropriate a quotation from Stephens Co. v. Lisk, 240 N.C. 289, 82 S.E.2d 99: "And decisions of this Court uniformly hold that the courts are required to interpret a deed so as to ascertain and effectuate the intention of the parties as gathered from the entire instrument. In Gudger v. White, 141 N.C. 507, 54 S.E. 386, 388, the Court, treating the subject of interpreting a deed, in opinion by Walker, J., declared: `We are required by the settled canon of construction so to interpret it as to ascertain and effectuate the intention of the parties. Their meaning, it is true, must be expressed in the instrument; but it is proper to seek for a rational purpose in the language and provisions of the deed and to construe it consistently with reason and common sense. If there is any doubt entertained as to the real intention, we should reject that interpretation which plainly leads to injustice, and adopt that one which conforms more to the presumed meaning, because it does not produce unusual and unjust results. All this is subject, however, to the inflexible rule that the intention must be gathered from the entire instrument, "after looking" as the phrase is, "at the four corners of it."'"
To allow the plaintiffs to take from the defendant the mineral, sand, and gravel rights reserved in its deed would permit naked form to control over material substance. Such a decision would not be very good law and would be rather poor morals.
The judgment of the Superior Court is
Affirmed.