author: SATHRE, Judge.

text:
    PETROLEUM EXCHANGE Inc. v. POYNTER.
    No. 7396.
    Supreme Court of North Dakota.
    May 26, 1954.

      J. K. Murray, Bismarck, for appellant and defendant.
    William R. Mills, Bismarck, for plaintiff and respondent.
   SATHRE, Judge.

The plaintiff corporation brought this action against the defendant A. M. Poynter for damages for breach of an alleged agreement to accept from the plaintiff assignments of two oil and gas leases covering lands in Emmons County, North Dakota.

The complaint sets forth two causes of action. The first cause alleges that on the 16th day of April 1952 plaintiff and the defendant through his agent W. M. Berger, entered into a contract whereby plaintiff agreed to assign to defendant one oil and gas lease covering 1,042 acres of land in Emmons County, North Dakota and .that defendant agreed to pay plaintiff the sum of $2,605 on or before 30 days from the presentment of the draft issued by the said W. M. Berger by and on behalf of the defendant. The second cause of action alleges that pn the same date an identical agreement was made as to 481.81 acres of land in Emmons County and that the defendant agreed to pay $1,204.50 on or before 30 days from the presentment of the draft issued by said Berger as agent of the defendant. The complaint then alleges that the plaintiff was at all times ready and able to perform the contracts and that the defendant refused to perform the same. Judgment is demanded for the sum of $1,-042.00 and $712.70.

The defendant answered by general denial, except that it admitted the corporate existence of the plaintiff, and as a further defense he denied specifically that W. M. Berger was his agent or that he ever ratified or approved said assignments and that he never honored or accepted the drafts, or that he personally or through an agent or agents entered into any contract relations with the plaintiff for the acceptance of assignment-of the leases referred to in the complaint.

The plaintiff corporation and defendant are both engaged in the purchase, sale and assignment of gas, oil and mineral leases in the State of North Dakota. The plaintiff contends that on or about April 12, 1952 it negotiated with one W. M. Berger, an agent of the defendant for assignment to the defendant of two oil and gas leases covering land in Emmons County, North Dakota. These leases were .obtained by the plaintiff from the owners of the land involved on or about the 11th. day of March 1952. W. M. Berger testifying for the plaintiff stated that he was a salesman for Sears Roebuck and that' occasionally he contacted land' owners and obtained oil and gas leases from them and subsequently sold of assigned them;at a profit. He contacted the defendant A. M. Poynter and inquired whether he was interested in taking assignments of gas arid oil leases. Poynter advised him that he was interested in talcing such leases and he handed Mr. Berger some of his contract or assignment forms and also sqme of his sight draft forms. The draft forms carried Poynter’s printed name thereon. ; There'after W. M." Berger secured from the plaintiff two assignments in which he'inserted defendant’s 'name as assignee, and Mr. Berger drew two sight drafts signed .by himself on the First National Bank of Bismarck, payable in IS days upon approval-of title, and then delivered the assignments to one Mr. Locke who thereafter forwarded them to the defendant A. M. Poynter at his place of business at Shreveport, Loüisiana. ' The defendant refused to accept the assignments and the drafts and the assignments were returned to plaintiff’s manager Mr. Mills, and were retained by him. One of the assignments was thereafter reassigned by plaintiff to a third party. Plaintiff then brought his action against the .defendant to recover‘the full purchase price of one assignment and the difference in the price obtained for the second a.ssignméñt and the price fixed by the terms of. the assignment'.

The case- was tried in the district court of Burleigh County, North Dakota, before the Honorable Geo-. Thom Jr., district judge and a jury. The jury returned a verdict in the sum of $1,016 and judgment was. entered and the defendant appealed.

When both parties had rested the defendant made a motion for a directed verdict in his' favor -upon the grounds that the leases were • agreements for leasing or asr signment of an • interest in real property and under the provisions of Section 9-0604 NDRC 1943, Subdivision 4, -were required -to be in writing; that there is no proof in the record of any contract in writing by the defendant to purchase the assignments; that the said leases or assignments were in violation of the - Statute of Frauds of this State in that the amount involved exceeded $500; that neither the defendant or, any person or agent in his behalf had ever signed any memorandum in writing accepting the said assignments; that the defendant had at no time accepted the assignments but rejected the same ■and refused to accept the same .on the ground that the plaintiff did not have good title to said leases. The motion was denied and the issues were submitted to the jury and the jury returned a verdict for the plaintiff for $1,016. Thereafter in due time the defendant made a motion for judgment, notwithstanding the verdict which motion was denied. .The defendant appealed from the judgment and from the order denying his motion for judgment notwithstanding the verdict.

There is a conflict in the evidence as to whether or not Berger was the ostensible agent of the defendant Poynter and if this were the only issue in the case it was properly ■ submitted to the jury and the jury having returned a verdict for the plaintiff it should not be disturbed. -There,is however, no evidence in the record.that W. M. Berger had written authority from the defendant as' his agent to purchase and accept the oil and gas leasés and assignments involved in this action.'

The defendant contends 'that ‘ plaintiff brought this action to enforce an agreement for acceptance of transfers o-f interests in real property and since Berger, alleged agent of defendant, was not authorized in writing to make such acceptance, plaintiff’s action was barred by the statute of frauds, section 9-0604. NDRC 1943, Subdivision 4.

The real issue on this appeal is therefore whether under the provisions o-f said Section, -Berger was authorized as'- the agent of the defendant to accept the assignments ' in question and to bind him to their terms. Section 9-0604 .provides:

“The following contracts are. invalid, unless the same or some note or memorandum thereof is in writing and subscribed by the party to 'be charged, or by his agent:
******
“An, agreement for the leasing fo-r a -longer period than 'one year, or for the sale, of real property, or of an interest therein. Such agreement, if made by an agent of the party sought .to be charged, is invalid unless the authority of the agent is in writing subscribed by the party sought to be charged.”- ■ . , '

The first question presented is whether under the statute quoted’ ’ an oil, gas and minera.1 lease or an assignment thereof in the form of the leases and assignments involved in the instant case is an interest in reah property. While this question has not been considered by this court it has been held by the courts in most of the oil producing states that oil, gas and mineral leases are transfers of "interests ■ in real property. In the case of Piney Oil & Gas Co. v. Allen, 235 Ky. 767, 32 S.W.2d 325, 326, the Supreme Court of Kentucky had under consideration an oil and gas lease similar in form and language to the leases involved in the case at bar, and it was there held that such lease creates an interest in real estate. . We.quote fr.om the opinion:

“It is also settled that an oil and gas ' lease , creates an interest in real estate, and is governed by the principles of law applicable to land. Wolfe County v. Beckett, 127 Ky. 252, 105 S.W. 447, 32 Ky.Law Rep. 167, 17 L.R.A.,N.S., 688; Beckett-Iseman [Oil] Co. v. Backer, 165 Ky. 818, 178 S.W. 1084; Rader v. Shaffer, 186 Ky. 802, 218 S.W. 292; Kash v. United Star Oil Co., 192 Ky. 422, 233 S.W. 898”.

In the case of Standard Oil Co. of Louisiana v. Oil Well Salvage Co., 170 Ark. 729, 281 S.W. 360, 363, the plaintiff and defendant were: holders of oil, gas and mineral leases covering the same lands executed by the landowners as lessors. ' The lease of the Oil Well Salvage Company was subsequent to the lease of the Standard Oil Co. The Salvage' Company brought action against the Standard Company alleging that the latter had appropriated oil from the former’s reservoir and dam, claimed damages and prayed for judgment en-j oining the Standard Company from taking oil from the leased premises. The trial court found the issues of law and fact in favor of the Salvage Company and entered judgment in its favor. On appeal the Supreme Court of Arkansas held that: >

“Under such circumstances, • turo such leases would bp wholly repugnant to each other, and the prior .lease, would be paramount and superior”. . ,

We quote 'further from the opinion: '

“The rights granted to the lessee, and which passed by Mesne conveyances to the Standard Company, were not a license, but an interest and easement in the land itself. Ewert v. Robinson, 8 Cir., 289 F. 740; Smith v. McCullough, 8 Cir., 285 F. 698; Rich v. Doneghey, 71 Okl. 204, 177 P. 86, 3 A.L.R. 352; Barnsdall v. [Bradford] Gas Co., 225 Pa. 338, 74 A. 207, 26 L.R.A.,N.S., 614; Blair v. Clear Creek Oil & Gas Co., 148 Ark. 301-310, 230 S.W. 286, 19 A.L.R. 430. The instrument under which the Standard Company was1 operating being á lease, and conveying an interest and easement in the leased premises to the lessee, the lessor had no-right by a subsequent lease to convey any interest that would be in conflict with such prior lease, and those holding under the subsequent instrument could not enter upon the premises, and exercise alleged rights in conflict with thé rights of those claiming under the prior lease, without the knowledge, consent, or ac-' quiescence, and over the protest,..of those holding under the prior lease.” r

And in the later, case, Clark v. Dennis, 172 Ark. 1096, 291 S.W. 807, the Supreme Court of Arkansas quoted with the approval the case of Standard Oil Co. of Louisiana v. Oil Well Salvage Co., supra.

In the case of McCracken v. Hummel, 43 Cal.App.2d 302, 110 P.2d 700, 701, the Supreme Court of California said:

‘‘It is now settled that an oil lease for an indefinite period creates in the lessee an estate in real property. Callahan v. Martin, 3 Cal.2d 110, 43 P.2d, 788, 101 A.L.R. 871; Pimentel v. Hall-Baker Co., 32 Cal.App.2d 697, 90 P.2d 588; Andrews v. W. K. Co., 35 Cal.App.2d 41, 94 P.2d 605”.

In the case of Dallapi v. Campbell, 45 Cal.App.2d 541, 114 P.2d 646, 649, it is stated:

“ ‘Under the usual oil and gas lease, the owner-lessor transfers to his lessee his right to drill for and produce oil and other substances. The right of the lessee presents a clear case of a profit a prendre in gross, a right to remove a part of the substance of the land. * * * This profit a pendre vests in the lessee an incorporeal hereditament, a present estate, an interest in the land, which is a chattel real if it is to endure for years’ ”.

In the decision in the case of Provin v. Continental Oil Co., 49 Cal.App.2d 417, 121 P.2d 740, 744, it was said:

“It is true that the lessee of an oil lease has an interest or estate in real property. Callahan v. Martin, 3 Cal.2d 110, 43 P.2d 788, 101 A.L.R. 871.”

In the syllabus of the Texas case of Carroll v. McCarthy, Tex.Civ.App., 129 S.W. 2d 1201, it states that:

“A mineral leasehold estate is an ‘estate in land’.”

In another Texas case, Gulf Oil Corp. v. Marathon Oil Co., 137 Tex. 59, 152 S.W. 2d 711, 724, it is said:

“In this state, oil and gas lessees are owners of estates in land.”

And in the Kentucky case of Cannon v. Carr, 292 Ky. 793, 168 S.W.2d 21, 22, it was held that:

■ “A lease of land is the conveyance of an estate in realty for it divests the owner for a given time of his right of possession and control. Mattingly’s Ex’r v. Brents, 155 Ky. 570, 159 S.W. 1157. And as aptly said in Tiffany, Real Property, Sec. 80: ‘As stated before, the reference to a lease as an “Agreement” or a “Contract” has the effect of obscuring the important fact that it is a conveyance, transferring an estate to the lessee, a fact which is clearly recognized by the first class of statutory provisions above referred to.’ ”

The leases under consideration in the instant case are identical with or similar to the leases considered in the decisions which we have cited herein. We conclude therefore that oil, gas and mineral leases are conveyances of interests in real property under the provisions of Section 9-0604.

In construing subdivision 4 of Section 9-0604 another important feature of said statute may properly be considered. It provides that an agreement for the leasing, or for the sale, of real property, or of an interest therein, must be in writing in order to hold the party to be charged. In other words,' the statute has reference to the agreement to make a lease rather than to the lease or the instrument of conveyance or of sale of real property or of an interést therein. This is clearly stated in Tiffany Real Property Third Ed. Section 80, page 120 P. .

“Properly ‘ speaking, an ‘agreement (or contract) for leasing’ means an agreement to make a lease, and the fact that these statutory provisions usually invalidate in terms an agreement for leasing ‘or for the sale of’ an interest in land would seem to show that this is the proper construction of the language used, an agreement to make a lease and an agreement to sell being both executory contracts, clearly distinguishable from a lease or conveyance in fee, either of which involves the actual transfer of an estate. Thus regarded, the provisions here in question would correspond to the fourth section of the English Statute, which provides that no action shall be brought on any contract or sale of lands, or any interest in or concerning them, unless the agreement or some memorandum thereof is in writing, signed by the person to be charged. That this was the view of the persons who prepared the Revised Statutes of New York, from which the provisions has been adopted in other states, appears from their own statement. So far as regards either this state, or the other states in which such provision is found in addition to a provision of the character before referred to, expressly invalidating oral leases for over one year, the provision is, if regarded as referring to a lease rather than a contract to make a lease utterly superfluous.”

And in Tiffany Landlord and Tenant Vol. 1, Section 25, page 227 it is stated:

“In a number of states there is a provision to the general effect that an ‘agreement (or contract) for the leasing of land’ for longer than one year is invalid if not in writing, the modes of expression varying to some extent, as in the class of provisions previously referred to. The distinguishing characteristic of this class of enactments is that they speak of an ‘agreement’ or ‘contract’ for leasiñg rather than of a lease or conveyance. As before stated, the reference to a lease as an -‘agreement’ or a ‘contract’ has the effect of obscuring the important fact that it is a conveyance, transferring an estate to the lessee, a fact which is clearly recognized by the first class of statutory provisions above referred to. Properly speaking, the expression an ‘agreement (of contract) for leasing’ means an agreement to make a lease, and the fact that these statutory provisions usually invalidate in terms an agreement for leasing ‘or for the sale of’ an interest in land w'ould seem to show that this is the proper construction of the language used, an agreement to make a lease and an agreement to sell being evidently both executory contracts, clearly distinguishable from a lease or conveyance in fee, either of which involves an actual transfer of an estate.”

The statute must therefore be construed to mean exactly what it states in clear and unmistakable language that it is the agreement or some note or memorandum thereof for the leasing for a longer period than one year etc., that is required to be in writing.

The next question to be considered is whether under the language of Subdivision 4 o‘f Section 9-0604 Supra, the term “party to be charged” includes both the vendor and vendee. It. provides that An agreement for the leasing for a longer period than one year, or for the sale of real property' or an interest therein, is invalid unless the same or some note or memorandum thereof is in writing and subscribed by the party to be charged; and that such agreement if made by *an agent of 'the party so charged;' is invalid' unless the authority of the agent; is in writing subscribed by the party sought; to be charged.

The question thus presented is as to what, is meant by the term “party to be charged”.. The phrase or term “party to be charged”' has not been construed by the Supreme-Court of this State, but numerous other States have construed the term with the result that two rules have been established^

The one rule holds that the “party to be-charged” within the meaning of the Statute-of 'Frauds is the seller or vendor. This rule-, has been-adopted by the courts of Tennessee- and .Kentucky. The other rule holds that: the “party to be charged” is the defendant: to the action and must be signed by him-whether he be the vendor of the vendee,. This rule has been adopted by Idaho, Indiana, Arkansas, Oklahoma .and C.alifornia.

In the case of Mitchell v. Schmelzer, 191 Okl. 646, 132 P.2d 332, 333, the plaintiff' brought an action against the defendant to. recover on a promissory note in the sum of' $500 executed and delivered by the defendant and secured by á mortgage on an undivided half interest in the mineral rights., on a parcel of land. Judgment was demanded for the amount of the note and for foreclosure of the mortgage. The defendant admitted the execution and delivery of" the note and mortgage but alleged that; thereafter the parties entered into a contract whereby the plaintiff agreed to buy the said one half interest in the mineral rights covered by the mortgage, pay $1,000 cash and cancel defendant’s note for $500. The case was tried to a jury and a verdict returned in favor of the defendant and the plaintiff appealed. The Supreme Court of Oklahoma in reversing the judgment said:

“It is now well established that the statute of frauds applies to the vendee as well as, the vendor, and the words, hhe party to be charged,’ have been generally defined to mean the party against whom the contract is sought to be enforced, whether this party be the vendor or. the vendee. Jennings v. New York Pet. Royalty Corp., 169 Okl. 528, 43 P.2d 762; Davis v. Holman, 163 Okl. 59, 20 P.2d 575; Stegall v. Jack, 172 Okl. 154, 44 P.2d 97; Aikman v. Evans, 181 Okl. 94, 72 P.2d 479. No contention is made that plaintiff, the purported vendee herein, signed a written contract or any note or memorandum of any agreement for the purchase of the property involved herein. No'contention is made'that there was sufficient partial- performance of the contract to take 'the case out of the operation' of the statute1 of frauds. It appears that defendants 'have ’ failed to establish a valid contract for. the purchase of said property’’. 'The Oklahoma statute of frauds is identical in language with subdivision 4 of section 9-0604.' .

In the Indiana case of Graham v. Henderson Elevator Co., 60 Ind.App. 697, 111 N.E. 332, 335; the Supreme Court of Indi-, ana said:

■“‘‘The party to be charged,’ under the. statute of frauds, means the defendant to the .action. The memorandum must.be signed by him, but need not necessarily be signed by the plaintiff in the suit. Newby v. Rogers, 40 Ind. 9-12; 20 Cyc. p. 272.
. “Where it is sought to enforce a contract alleged to be evidenced by a memorandum sufficient to take it out of the, operation of the statute of frauds, or to. hold a party liable in damages for a breach of the alleged contract, and the party against whom liability is sought to be enforced has not signed any memorandum containing the essential elements of the contract, but has signed another instrument or -writing in which it is claimed such reference is made to the former as to amount to an adoption and acceptance of the terms thereof to be sufficient under the statute (section 7469, Burns 1914), the signed memorandum or instrument must contain a clear and definite reference to such other writing or instrument and so identify it as to make its provisions a part of the signed memorandum or instrument relied on.” Numerous citations.

In the case of Chicago Mill & Lumber Co. v. Matthews, 163 Ark. 571, 260 S.W. 963, 964, the plaintiff brought an action for specific, performance of a contract'to sell certain lands, alleging that the- defendant had agreed to purchase the same at an agreed price; . that 'the plaintiff' executed and delivered to'the-defendant a warranty deed which the defendant refused to accept. Defendant denied that. plaintiff was the owner of the-land and further' denied that he had agreed to purchase it. The lower court held- that the defendant was entitled to a small «part'of the land by adverse possession, and plaintiff appealed -to the Supreme Court. We quote from the decision.

“As we have. said, this suit ■ was brought to enforce the specific performance of a contract of' sale.- The company, the. owner of - the 'land, brought the'suit,-and has prayed that relief. • -
“The agreement- sued on was one to-convey the title to land and to be valid should have been in writing, but was not. It is true the defendant did not plead the, statute of frauds, but he did deny the existence of the contract sued on. Under these circumstances it de-irolved upon the plaintiff to prove, the existence of a valid contract, which must have been a written contract. Cook v. Cave, 163 Ark. 407, 260 S.W. 49.
“It is true the vendor in the deed tendered brings this suit,, which would, of course, be a waiver of the statute by it, but the party here sought to be charged is the vendee, and in the case of Jones v. School District, 137 Ark. 414, 208 S.W. 798, we held that ‘the words, “the party to be charged,” refer not to '“the party to be charged” with the contract, but to “the party to he chargéd” in the action; that is, the defendant.’
“We have held that a suit for specific performance of a contract to convey land may be brought by the owner of the land- as well as by the prospective purchaser. Garrison v. Geren, 159 Ark. 9, 251 S.W. 39; Robinson v. Florence Sanitarium, 149 Ark. 355, 232 S.W. 590; Dollar v. Knight, 145 Ark. 522, 224 S.W. 983; Wilkins v. Lanes, 126 Ark. 339, 190 S.W. 99; Ex parte Hodges, 24 Ark. 197. But that relief cannot be awarded here, primarily because the company does not prove a valid and enforceable contract, for the reason that the 'contract was not in writing.”

In the case of Jones v. School District, 137 Ark. 414, 208 S.W. 798, 799, the Supreme Court of Arkansas said:

“The great weight of authority is that the words ‘the party to be charg-éd’ refer, not to ‘the party to be charged’ with the contract, but -to ‘the party to be charged’ in the action — that is, the defendant.”

The State of California has a statute, 'Section 1973, subdivision 4, Code' Civ. Proc., of which is identical with subdivision 4 of our Section 9-0604 Supra, and has an additional clause providing that: '

“An agreement authorizing or employing an agent or broker to purchase or sell real estate for compensation or a commission” must be in writing.

The section quoted from the California statute makes it clear that in that state the authority of an agent- to purchase or sell real estate must be in writing.

In the case of Harper v. Goldschmidt, 156 Cal. 245, 104 P. 451, 453, 28 L.R.A., N.S., 689, decided in 1909 the Supreme Court of California said:

“But in all of the states, like California to-day, where thé statute requires the signature of the party to be charged, when effort is made to charge the vendee, it is uniformly held that the signature of the vendor plaintiff is not sufficient, but that the signature of the defendant vendée is absolutely essential, saving in the exceptional class of cases where the conduct of the vendee has amounted to such a performance, or part performance, of the contract as to' relieve the" contract ; from the necessity of his signature.”

Under the. decisions died the term “party to be charged” as .used in subdivision 4 of Section 9-0604, Supra, clearly includes both vendor and vendee.. In order to consummate a sale or á transfer of land or an estate or interest therein at least two parties are necessa-ry to the- transaction; and to render the rights and equities, of the parties equal the. “party-to be. charged” must apply to, either party. Such construction, of; the 'term “party to be charged” we believe is just and equitable.

In the case of Stegall v. Jack, 172 Okl. 154, 44 P.2d 97, 99, the facts Were somewhat similar to the facts in the case at bar. The plaintiffs had negotiated with the agent of the defendant 'for the sale of a farm at a certain price."¡¡They.executed a deed to the defendant, placed it in escrow in a bank together with a draft on the defendant, which draft was-also signed by L. R. Stegall, defendant’s agent. The defendant refused to accept delivery of the deed and plaintiffs brought action and recovered judgment. On appeal to the Supreme Court the judgment was reversed. We quote from the opinion.

“Even if it should be conceded that the signing of the deed and placing it in escrow by plaintiffs together with the draft drawn oh B. F. Stegall and signed by L. R. Stegall was sufficient to comply with the provisions of section 9455, O.S.1931, that ‘some note or memorandum thereof, be in writing’; even then, the plaintiffs could not prevail for the reason that it is not ‘subscribed by the party to be charged,’ and even if it should further be conceded that L. R. Stegall’s act in signing the draft be considered as agent of B. F. Stegall, yet this would not constitute an enforceable contract for the reason that it fails to comply with the further provisions of this section of the. statute providing that such contracts are invalid ‘unless the authority of the agent be in writing, subscribed by the party sought to be charged.’”

Counsel for plaintiff argues that under Section 47-1001 NDRC 1943 the agreement of the defendant to accept the leases and assignments thereof need not be in writing and that the agreement for transfer is sufficient when signed by the vendor. The statute provides:

■ “An estate in real property, other than an estate at will or for a term- not exceeding one-year, can be transferred only by operation of law or by an instrument in writing, subscribed by the party disposing of the same’ or by his agent thereunto authorized by writing. This does not abridge the power of any court to compel the specific performance of any agreement for the sale of real -property in case of part performance thereof.”

There is no conflict between Subdivision 4 of Section 9-0604 and Section 47-1001. Under the former the “party io be charged” may be either the vendor or the vendee or their agents, while the latter requires a transfer by the vendor to be in writing. These two statutes have been part of the territorial and state law since 1877, —in fact these statutes are found in the draft of the Civil Code of the State of New York in 1862. They are included in the territorial Codes of Dakota Territory of 1877 and 1887, and in the Revised Codes of North Dakota of 1895, 1899, 1905, 1913 and 1943 without any material change in the form or language. However, they are separate and distinct statutes, that is, they are not part of the same enactment. Section 47-1001 NDRC 1943, was originally enacted as an independent statute dealing only with an estate in real property, other than an estate at will, or for a term not exceeding one year, and has been carried as a separate statute in the several Code Revisions down to the present time without any material change. Its provisions apply only to the vendor or transferor and have no reference to the vendee or transferee; but it makes certain that an estate in real property'as therein defined can be transferred only by an instrument in writing signed by the. “party disposing of the same” or by “his agent thereunto authorized by writing.”

We are agreed that under the law and the decisions cited oil, gas and mineral leases are transfers of interests in real property and that an agreement to accept or purchase such leases, or assignments thereof is required to be in writing signed by the party to be charged' whether such party be the assignor or the assignee; and if such agreements are executed by an agent his authority must be in writing subscribed by-the party sought to be charged.

In the instant case there is no evidence in the record that W. M. Berger as agent of the defendant was authorized in writing to accept the leases and assignments under consideration; neither is there any evidence of part performance by the defendant either by payment or by taking possession under the terms of the assignments upon which the action is brought. The assignments were forwarded to the defendant by mail and he returned them with his refusal to accept them endorsed thereon.

For the foregoing reasons we conclude that the plaintiff has failed to establish a cause of action and that the defendant’s motion for judgment notwithstanding the verdict should have been granted.

The judgment is reversed and the case remanded with directions’ to vacate the judgment and dismiss the action,

MORRIS, C. J., and BURKE and GRIMSON, JJ., concur,

JOHNSON, J., did not participate.


source: Caselaw Access Project

author: BURKE, Judge.

license: Public Domain

text:
    MORRISON v. HAWKSETT et al.
    No. 7382.
    Supreme Court of North Dakota.
    June 2, 1954.
    O. B. Benson, Bottineau, for plaintiff and appellant.
    Roland A. Heringer, Rugby, for defendants and respondents.
   BURKE, Judge.

This is an action to quiet title. Upon trial of the action in district court, the answering defendants, Edmund Hawksett and Maude J. Hawksett, prevailed. Plaintiff has appealed from the adverse judgment entered in the action and has demanded a trial de novo in this court.

None of the facts in the case is in dispute. Margaret E. Hawksett acquired ti-tie to the land in question here in 1925. She died intestate in 1930, leaving as heirs at law, her widower, Edmund O. Hawk-' sett, and two children Beatrice Hawksett Ireys,- and Arthur G. E. Hawksett. Arthur O. E. Hawksett died intestate in 1938, leaving as his heirs at law his widow, Maude J. Hawksett, and his son, Edmund Hawksett, who are the answering defendants in this action. There were no probate proceedings with respect to the estates of any of these deceased persons and the record title to the land remained in Margaret E. Hawksett.

On April 13, 1940, Edmund O. Hawksett, widower, Beatrice Hawksett Ireys, and Will Ireys, her husband, conveyed the land in controversy to the plaintiff, Ross Morrison by quitclaim deed. Morrison immediately thereafter entered into the possession of the described land and has ever since been in possession of the entire tract. He has paid all the taxes levied' thereon subsequent to the year 1935.

The plaintiff claims title to the entire tract, by‘deed in so far as the interests of his grantees are concerned ánd by adverse possession under the provisions of Section 47-0603, NDRC 1943, Supp.1953, against the interests of the answering defendants.

Section 47-0603, supra, provides:

“A title to real property, vested in any person who shall have been in the actual open adverse and undisputed possession of the land under such title for a period of ten years and who shall have paid all taxes and assessments legally levied thereon, shall be valid in law.”

It is conceded by the defendants that plaintiff has been in open and undisputed possession of the land in controversy for more than ten years and that during that time he has paid all the taxes and assessments legally levied against the land. The answering defendants, however, urge that the quitclaim deed that plaintiff received from Edmund Hawksett, Beatrice Hawk-sett Ireys and Will Ireys conveyed title only to that interest which the grantors had in the land and that the plaintiff at no time has had title or color of title to the interest owned by the' answering defendants. Defendants also contend that plaintiff’s entry upon the land did not operate as an ouster of his grantors’ cotenants and that therefore his possession has not been adverse to them as such cotenants.

Under the laws of this state, title to the property of Margaret E. Hawksett vested in her heirs at law immediately upon her death. Her heirs, Edmund O. Hawk-sett, Beatrice Hawksett Ireys and Arthur O. E. Hawksett, therefore each succeeded to an undivided one third interest in the land in controversy upon her death. Likewise, the heirs of Arthur Hawksett, Maude J. Hawksett and Edmund Hawksett, each succeeded to one half of the interest of Ar.thur Hawksett upon his death. Section 56-0104, iNDR'C 1943, Stevahn v. Meidinger, N.D., 57 N.W.2d 1; Ellison v. Strandback, N.D., 62 N.W.2d 95. Thus at the time of the execution of the deed to the plaintiff in this case, his grantors, Edmund O. ¡Hawk-sett and Beatrice Hawksett Ireys were each vested with an undivided one third interest in the land and Maude J. Hawksett and Edmund Hawksett (grandson of Edmund O.) were each vested with an undivided one sixth interest therein.

The two questions presented for decision, whether the deed executed and delivered to the plaintiff constitutes color of title to the entire tract and whether his entry upon the land under the deed amounted to an ouster of his grantors’ co-tenants, are in reality but a single question. That is to say: if the deed is sufficient to confer color of title to the whole interest in the land, entry under that deed amounts to an ouster of the grantors’ cotenants.

Whether the deed was a warranty deed or a quitclaim deed is unimportant as one is as effective as the other to confer color of title. 2 C.J.S., Adverse Possession, § 72 p. 603. Stiles v. Granger, 17 N.D. 502, 117 N.W. 777. The important consideration is what the deed purports to convey. If a deed executed by a cotenant purports to convey full title to the land to a stranger and the grantee records his deed and enters into possession of all the land described in the deed, the possession of the grantee is adverse to the other co-tenants and is under color of title, Thurmond v. Espalin, 50 N.M. 109, 171 P.2d 325; Ulrich v. Coleman, 218 Ark. 236, 235 S.W.2d 868; Farmers State Bank, Clay Center v. Lanning, 162 Kan. 95, 174 P.2d 69; Jones v. Siler, 129 Tex. 18, 100 S.W. 2d 352.

The deed in the instant case recites that the grantors, “Grant, Bargain, Sell, Release and Quit-Claim to the said party of the second part, his heirs and assigns, forever, all that Right, Title, Interest, Claim or Demand in and to the following piece or parcel of land lying and being in the County of Bottineau and State of North Dakota and described as follows, to wit: The Northwest Quarter (NW¡4) of Section Eleven (11) Township 161, Range 80.

“To Have And To Hold The above Quit-claimed premises, together with all the hereditaments and appurtenances thereunto belonging or in anywise appertaining to the said party of the second part, his heirs and assigns Forever.”

A consideration- .of the language used in both the granting clause and the habendum clause of the deed can lead only to the conclusion that the deed purports to grant the whole title to the land described. It will be noted that the language used does not specifically limit the grant to the interest of the grantors but describes the interest granted as all that right, title and interest, to the described property. Likewise the purport of the habendum clause is that it is the.whole interest in the land described which is conveyed.

In view of the principles of law above set forth and the language used in the deed we are satisfied that plaintiff’s possession of the land in controversy was adverse to the defendants and under color of title.

Since at the time of the commencement of this action such possession had continued for more than ten years and since during that time plaintiff had paid all taxes levied against the land, plaintiff’s title to the entire tract had become- valid in law under the provisions of Section 47-0603, supra.

It follows that the judgment of the district court was incorrect. The judgment is therefore reversed and the case is remanded to the district court with directions to enter judgment in favor of the plaintiff.

MORRIS, C. J., and ■ SATHRE and GRIMSON, JJ., concur.

JOHNSON, J., did not participate.


author: SANDSTROM, Justice. MARING, Justice, sult. NEUMANN, Justice,

text:
    2002 ND 37
    Delmer T. KELLY, Plaintiff and Appellee, v. Susan C. KELLY, Defendant and Appellant.
    No. 20010165.
    Supreme Court of North Dakota.
    Feb. 21, 2002.

      Todd L. Cresap of Kenner Sturdevant Peterson & Cresap, PC, Minot, for plaintiff and appellee.
    Jeff L. Nehring of Nilles, Hansen & Davies, Ltd., Williston, for defendant and appellant.
   SANDSTROM, Justice.

[¶ 1] Susan Kelly appealed from a Northwest Judicial District Court order granting Delmer Kelly’s motion for a change of custody of their two daughters. We affirm, concluding the district court did not err in changing custody.

I

[¶ 2] Delmer and Susan Kelly were divorced in November of 1997. They resolved all matters in the divorce by a stipulation. At the time of the divorce, Susan Kelly was awarded sole custody of the couple’s two daughters. No child support was ordered. In late 2000, the Ward County Regional Child Support Enforcement Unit sought to establish a child support order. In January 2001, Delmer Kelly filed a motion for change of custody, alleging a substantial change of circumstances had occurred and a change of custody was necessary to serve the best interests of the children.

[¶ 3] At the custody hearing, Susan Kelly testified she had suffered a total of five strokes between 1996 and 1998. She testified a friend and co-worker had cared for her daughters during the times she had been unable to care for them. She also testified she had asked Delmer Kelly to take the children while she was ill, but he declined. She further testified her friend had cared for the girls for a total of twelve months throughout the period of her health problems.

[¶ 4] Susan Kelly testified she and the children had moved several times since the separation and divorce. She had moved to Minot, North Dakota, to pursue a masters degree in music. She then moved to Colorado for a job opportunity. She then moved back to Minot and then to Bowman, North Dakota. She left Bowman and moved to Westhope, North Dakota. Next, she moved to Fargo, North Dakota. While living in Fargo, she moved twice. She testified she has resided in Lignite, North Dakota, since 1999 with a man to whom she is not married. She testified the two children accompanied her in each of the moves, which took place between 1996 and 2000.

[¶ 5] The girls testified their mother had entered into several transitional relationships prior to her current relationship. The girls testified their mother would bring her male companions home for overnight visits. The younger daughter testified she and her sister had personally observed their mother in bed with an overnight guest. The younger daughter also testified to the names and physical descriptions of her mother’s overnight guests.

[¶ 6] Delmer Kelly testified he completed his education after the divorce, moved to Fargo, and went to work for the Veteran’s Administration. In July of 1999, he married Lori Kelly, who has four children from a previous marriage. Lori Kelly testified her children live with their father and she has visitation every other weekend and for extended periods during summer vacations and school holidays.

[¶ 7] He also testified that for approximately five months during the time Susan Kelly lived in Fargo, the girls stayed with him and his wife. He testified the girls were enrolled and attended school in Fargo during this period. Susan Kelly testified a member of Lori Kelly’s family was accused of inappropriate sexual conduct toward the girls while they were staying with their father. Lori Kelly testified a police investigation took place, but it revealed insufficient evidence and no further action was taken by the police. She also testified that since this incident, her family member is no longer allowed to visit their home.

[¶ 8] Delmer Kelly testified he has had sporadic contact with his daughters since the separation and divorce. He testified the girls informed him of their moves after the fact. Susan Kelly testified her former husband had come to visit the children only once and had never exercised his summer visitation privileges. Delmer Kelly testified he had contact with the children when they were living in Westhope and Minot, and the older daughter testified he exercised two-and-a-half weeks of visitation with her in the summer of 2000. Delmer Kelly also testified he kept in contact with his daughters through e-mail and telephone calls.

[¶ 9] After the incident with Lori Kelly’s family member, Donna Norrie, an employee of Burke County Social Services, was assigned to contact Susan Kelly and the girls. Norrie testified the man Susan Kelly is living with is a stabilizing factor in the children’s home. Norrie also testified the children were well-dressed and active in extracurricular activities at school. She also testified the children wanted to continue living with their mother.

[¶ 10] During the custody hearing, the district court heard from both the girls, ages fifteen and twelve, in chambers, out of the presence of their parents. The district court found the older daughter was a “bright, articulate, 15-year old who did not hide her strong desire to live with her father.” The district court also stated it found her “to be a particularly credible witness.”

[¶ 11] The district court found a material change in circumstances, and found a change in custody was necessary to serve the best interests of the children.

[¶ 12] The district court has jurisdiction under N.D.C.C. § 27-05-06. This Court has jurisdiction under N.D. Const, art VI, § 6, and N.D.C.C. § 28-27-01.

II

[¶ 13] A district court’s decision whether to change custody is a finding of fact subject to the clearly erroneous standard of review. Anderson v. Resler, 2000 ND 183, ¶ 8, 618 N.W.2d 480. A finding of fact is clearly erroneous if there is no evidence to support it, if the finding is induced by an erroneous view of the law, or if the reviewing court is left with a definite and firm conviction a mistake has been made. N.D.R.Civ.P. 52(a); Mosbrucker v. Mosbrucker, 1997 ND 72, ¶ 5, 562 N.W.2d 390.

[¶ 14] The test for changing the custody of a child is set forth in N.D.C.C. § 14-09-06.6(6):

The court may modify a prior custody order after the two-year period following the date of entry of an order establishing custody if the court finds:
a. On the basis of facts that have arisen since the prior order or which were unknown to the court at the time of the prior order, a material change has occurred in the circumstances of the child or the parties; and
b. The modification is necessary to serve the best interest of the child.

[¶ 15] First, in deciding whether to change custody, a court must consider whether there has been a material change of circumstances since the original custody decree. N.D.C.C. § 14-09-06.6(6)(a). Second, if the court decides there has been a material change in circumstances, it must decide whether a change in custody is necessary to serve the best interests of the child. N.D.C.C. § 14-09-06.6(6)(b).

[¶ 16] As we have stated, the use of “necessary” in the codification of the second step of the two-step test did not signal a departure from the standard embodied in our case law. Holtz v. Holtz, 1999 ND 105, ¶ 10, 595 N.W.2d 1 (“This part of the statutory formulation essentially tracks the two-step approach previously used by this Court for deciding a change of custody case.”) Since N.D.C.C. § 14-09-06.6(6) became effective, we have continued to reference our prior ease law, and we have sometimes substituted “require” or “compel” for the statutory language of “necessary” when reciting the second step of the test. See, e.g., Selzler v. Selzler, 2001 ND 138, ¶ 21, 631 N.W.2d 564; Mayo v. Mayo, 2000 ND 204, ¶ 14, 619 N.W.2d 631; O’Neill v. O’Neill, 2000 ND 200, ¶ 4, 619 N.W.2d 855; Anderson v. Resler, 2000 ND 183, ¶ 8, 618 N.W.2d 480; In re K.M.G., 2000 ND 50, ¶ 4, 607 N.W.2d 248; Hendrickson v. Hendrickson, 2000 ND 1, ¶ 16, 603 N.W.2d 896; Myers v. Myers, 1999 ND 194, ¶ 6, 601 N.W.2d 264; Holtz v. Holtz, 1999 ND 105, ¶¶ 9-10, 595 N.W.2d 1; Ramstad v. Biewer, 1999 ND 23, ¶ 11, 589 N.W.2d 905; Gietzen v. Gietzen, 1998 ND 70, ¶ 8, 575 N.W.2d 924.

A

[¶ 17] A material change of circumstances would be important new facts that were unknown at the time of the prior custodial decree. Selzler, 2001 ND 138, ¶ 21, 631 N.W.2d 564; Mayo, 2000 ND 204, ¶ 16, 619 N.W.2d 631; In re N.C.C., 2000 ND 129, ¶ 18, 612 N.W.2d 561. “A material change of circumstances can occur if a child’s present environment may endanger the child’s physical or emotional health or impair the child’s emotional development.” Selzler, at ¶ 21. The party seeking a modification of the custody order bears the burden of proof. N.D.C.C. § 14-09-06.6(8).

[¶ 18] The district court found the following material changes in circumstances:

That since the time of the granting of the divorce judgment in this matter, numerous changes constituting a significant change in circumstances has occurred. Those changes include, but are not limited to the following:
A. The Plaintiff, Delmer T. Kelly, has changed residence to Fargo, North Dakota and has remarried.
B. The Plaintiff, Delmer T. Kelly, is no longer a student, is no longer on disability, and has full-time employment with the Veterans Administration. .
C. The residence of the minor children ... has changed-on a number of occasions.
D. The children have gotten to an age where they are able to articulate their preference concerning custody issues to the Court.

[¶ 19] The relocation of a parent and a change of a child’s preference may constitute a significant change of circumstances. Gietzen v. Gietzen, 1998 ND 70, ¶ 10, 575 N.W.2d 924 (a custodial parent’s decision to move may be viewed as a significant change of circumstances and a mature child’s preference may be particularly significant in determining whether there has been a significant change of circumstances); Mosbrucker v. Mosbrucker, 1997 ND 72, ¶ 10, 562 N.W.2d 390 (a mature child’s preference can be considered as a change in circumstances); Alvarez v. Carlson, 524 N.W.2d 584, 590 (N.D.1994) (“a child’s preference is a factor that may be considered when determining whether there has been a significant change of circumstances”). The district court did not err in finding the numerous relocations of Susan Kelly and the change in the children’s preferences were material changes of circumstance.

[¶ 20] The district court’s findings regarding the improvements in Delmer Kelly’s life would not, by themselves, constitute a significant change in circumstances. Delzer v. Winn, 491 N.W.2d 741, 744 (N.D.1992) (improvements in the noncustodial parent’s life were not enough to show a significant change in circumstances). Improvements in a non-custodial parent’s situation “accompanied by a general decline in the condition of the children with the custodial parent over the same period” may constitute a significant change in circumstances. Hagel v. Hagel, 512 N.W.2d 465, 468 (N.D.1994). The district court did not err by finding Delmer Kelly’s situation had improved while at the same time his daughters’ situation had declined.

[¶ 21] The district court did not err in finding a material change of circumstances had taken place.

B

[¶ 22] In determining whether modification of custody is necessary to serve the best interests of the children, the factors in N.D.C.C. § 14-09-06.2(1) must be applied. N.D.C.C. § 14-09-06.6(6)(b); Blotske v. Leidholm, 487 N.W.2d 607, 610 (N.D.1992). Section 14-09-06.2(1), in part, provides:

For the purpose of custody, the best interests and welfare of the child is determined by the court’s consideration and evaluation of all factors affecting the best interests and welfare of the child. These factors include all of the following when applicable:
a. The love, affection, and other emotional ties existing between the parents and child.
b. The capacity and disposition of the parents to give the child love, affection, and guidance and to continue the education of the child.
c. The disposition of the parents to provide the child with food, clothing, medical care, or other remedial care recognized and permitted under the laws of this state in lieu of medical care, and other material needs.
d. The length of time the child has lived in a stable satisfactory environment and the desirability of maintaining continuity.
e. The permanence, as a family unit, of the existing or proposed custodial home.
f. The moral fitness of the parents.
g. The mental and physical health of the parents.
h. The home, school, and community record of the child.
i. The reasonable preference of the child, if the court deems the child to be of sufficient intelligence, understanding, and experience to express a preference.
j. Evidence of domestic violence.
k. The interaction and interrelationship, or the potential for interaction and interrelationship, of the child with any person who resides in, is present, or frequents the household of a parent and who may significantly affect the child’s best interests.
l. The making of false allegations not made in good faith, by one parent against the other, of harm to a child as defined in section 50-25.1-02.
m. Any other factors considered by the court to be relevant to a particular child custody dispute.

“In a modification proceeding, the best interests of the child must be gauged against the backdrop of the stability of the child’s relationship with the custodial parent.” Blotske, 487 N.W.2d at 610. “[I]f the previous custody placement was based upon the parties’ stipulation and not by consideration of the evidence and court made findings, the trial court must consider all relevant evidence, including pre-di-vorce conduct and activities, in making a considered and appropriate custody decision in the best interests of the children.” Wetch v. Wetch, 539 N.W.2d 309, 312-13 (N.D.1995).

[¶ 23] In its findings of fact, the district court addressed the N.D.C.C. § 14-09-06.2(1) factors. The district court did not find any of the factors favored Susan Kelly. The district court found factors (b), (c), (d), (e), (f), and (i) favored Delmer Kelly. The district court did not make specific findings regarding factors (g) and (h), the mental and physical health of the parents, and the home, school, and community record of the children. The district court found a change in custody from Susan Kelly to Delmer Kelly was necessary to serve the best interests of the children.

[¶ 24] The district court found factor (a) did not favor either party and in its memorandum opinion said both parents had some deficiencies in this area. The district court criticized Delmer Kelly for his limited attempts to keep in touch with his daughters, for refusing to take temporary custody during Susan Kelly’s illnesses, for not offering financial support even though it was not required, and for failing to “fully understand the impact [the] actions [of Lori Kelly’s family member] may have had on his daughters.” The district court also noted, in spite of Susan Kelly’s “past personal and medical problems,” it was convinced her love for the children was equal to Delmer Kelly’s.

[¶ 25] The district court found factor (b) favored Delmer Kelly. In its memorandum opinion, the district court said:

Past-actions - of Susan in frequenting bars and bringing various men home for overnight visits (conduct which has significantly discontinued since residing with [her current male companion]) has seriously eroded Susan’s credibility to serve as a role model. Susan has been residing with a man to whom she is not married for approximately two years.

The district court praised Susan Kelly for seeking to improve her parenting skills, but concluded her efforts should have taken place long ago. The district court found Delmer Kelly had a greater capacity to give his daughters guidance.

[¶ 26] The district court found factor (c) slightly favored Delmer Kelly. The district court noted Susan Kelly’s ability to provide for the children was dependent upon her relationship with the man she is living with.

[¶ 27] The district court found factor (d) favored Delmer Kelly. In its memorandum opinion, the district court said:

The numerous moves by Susan, her medical problems and transitional relationships with members of the opposite sex have done little to provide a satisfactory environment in which to raise a family. The situation has significantly improved due to [the] stabilizing influence [of her current male companion]. On the other hand, Delmer has remarried and his new relationship seems quite secure. Delmer has obtained significant employment and is in the process of constructing a new home. The situation with [Lori Kelly’s family member] is a consideration. However, Delmer has made it quite clear that [this individual] is no longer welcome in his home.

The district court questioned the suitability of the children’s environment. The district court, finding factor (e) also clearly favored Delmer Kelly, referenced earlier discussions in its memorandum opinion.

[¶ 28] The district court found factor (f) favored Delmer Kelly. In its memorandum opinion, the district court said:

Although morality is often based on one’s subjective judgment, much of Susan’s past conduct is beyond bounds of even the most liberal tolerances. [The younger daughter] testified that she personally observed her mother in bed with an overnight guest and had sufficient familiarity to name names and offer physical descriptions of various overnight male visitors. [The older daughter] referred to her mother’s past conduct as “disgusting.”
Although I have other concerns which have already been expressed, I would not be quick to render judgment on Susan’s current cohabitation because I am more inclined to consider the permanency of relationships rather than their legality. In considering the entire course of conduct since the divorce, I find that this factor favors Delmer.

[¶ 29] Regarding factor (i), the district court gave weight to the children’s preferences, especially the older daughter’s. Both girls expressed a desire to live with then* father. The district court viewed the younger daughter’s testimony with more skepticism, but concluded her preference was entitled to some weight. Specifically, the district court stated:

I asked [the older daughter] if perhaps, when things are not going well at home, whether she may be imagining how she would want things to be if she were to reside with her father. [She] responded that she had lived for six months in Fargo with her father and that she knows what conditions would exist.
I asked [her] if she would be prepared to cope with becoming enrolled in a much larger school system. Again, [she] stated that she had already spent several months attending a West Fargo school and that she received mostly A’s.
[She] has a boy friend in the school that she has currently been attending. [She] is well aware that she would be seeing less of her boy friend if she were to move to Fargo. When considered from the perspective of a teenager, this fact is a strong testament to her desire to live with her father.

[¶ 30] The district court found there was no evidence of domestic violence. The district court found factor (k) did not favor either party.

[¶ 31] The district court appropriately considered the stability of the relationship between the children and the custodial parent. See In re N.C.C., 2000 ND 129, ¶¶ 25-26, 612 N.W.2d 561 (evidence of a “pattern of moving around and leaving her children unattended” indicates the child’s relationship with the mother lacked stability); In re D.F.G., 1999 ND 216, ¶ 16, 602 N.W.2d 697 (“A parent’s frequent moving is evidence of the parent’s inability to provide a stable environment for a child.”); Ramstad v. Biewer, 1999 ND 23, ¶ 16, 589 N.W.2d 905. The district court found the relationship between Susan Kelly and her daughters lacked stability, stating “[t]he numerous moves by Susan, her medical problems and transitional relationships with members of the opposite sex have done little to provide a satisfactory environment in which to raise a family.” Likewise, the district court properly reviewed the moral fitness of each parent. Gietzen v. Gietzen, 1998 ND 70, ¶¶ 7, 11, 575 N.W.2d 924.

[¶ 32] The preference of the children “can be an important factor to consider when determining the best interests of the child.” Loll v. Loll, 1997 ND 51, ¶ 15, 561 N.W.2d 625. As children mature, more weight may be given to their preferences, if there are persuasive reasons for their preferences. Id. (citing Mertz v. Mertz, 439 N.W.2d 94, 96 n. 2 (N.D.1989)); Mosbrucker v. Mosbrucker, 1997 ND 72, ¶ 10, 562 N.W.2d 390. The district court stated it looked to the “age, intelligence, maturity, and the reasons given” when considering the weight to be given to a child’s preference. Here, both girls expressed a desire to live with their father, and the district court appropriately considered their preferences in finding factor (i) weighed heavily in favor of Delmer Kelly.

[¶ 33] Susan Kelly argued the district court should consider only her recent conduct when reviewing the best interests of the children. The district court appropriately considered all the conduct and activities of the parties since the original stipulation. Tulintseff v. Jacobsen, 2000 ND 147, ¶ 9 n. 1, 615 N.W.2d 129; Wetch v. Wetch, 539 N.W.2d 309, 312-13 (N.D.1995) (“[I]f the previous custody placement was based upon the parties’ stipulation and not by consideration of the evidence and court made findings, the trial court must consider all relevant evidence, including pre-di-vorce conduct and activities, in making a considered and appropriate custody decision in the best interests of the children.”).

[¶ 34] After the discussion of the best-interest factors, the district court found “there [had] been a significant change of circumstances which require, in the best interests of the children, that the Judgment dated November 6, 1997, be modified to provide Delmer with care, custody and control of [his daughters].” While the district court did not provide a separate analysis of its conclusion that a change in custody was necessary, we can “through inference or deduction ... discern the rationale for the result reached by the trial court” and will not remand for a clarification. Holtz v. Holtz, 1999 ND 105, ¶ 18, 595 N.W.2d 1.

[¶ 35] After reviewing the entire record, we are not left with a definite and firm conviction a mistake was made by the district court. We conclude the district court’s findings are not clearly erroneous.

Ill

[¶ 36] The district court’s order changing custody of the children from Susan Kelly to Delmer Kelly is affirmed.

[¶ 37] GERALD W. VANDE WALLE, C.J., and CAROL RONNING KAPSNER, JJ., concur.

MARING, Justice,

concurring in the re-

sult.

[¶ 38] Although I am somewhat concerned the trial court merely applied the best interest factors as though this was an original custody order and failed to gauge them against the preference for stability for the children, the court’s rationale for concluding the change of custody was required in the best interests of the children can be deduced from its findings about the lack of stability that existed for a time in the children’s physical environment due to frequent relocations and in their emotional environment due to Susan Kelly’s indiscriminate relationships with men. I, therefore, concur in the result. I write separately because I believe the majority opinion’s citation to Wetch v. Wetch, 539 N.W.2d 309 (N.D.1995) is misplaced in light of the language of N.D.C.C. § 14-09-06.6(6) and the facts of this case. Also, I believe the majority opinion does not correctly set forth the two-step modification of custody analysis of N.D.C.C. § 14-09-06.6(6).

I

[¶ 39] The issue in Wetch was “whether it is error in a change of custody proceeding for a trial court to refuse to consider evidence of relevant custody factors occurring prior to entry of the original custody decree.” 539 N.W.2d at 312. We concluded the trial court abused its discretion in excluding such evidence because the prior custody decisions in Wetch were “based on stipulation of the parties, not upon evidence introduced in a contested proceeding and not by considered fact finding of the court.” Id. at 313. Thus, we remanded the case to the trial court to consider the pre-divorce conduct in its modification of custody analysis. Id.

[¶ 40] Subsequent to our decision in Wetch, the Legislature enacted N.D.C.C. § 14-09-06.6. Section 14-09-06.6(6), N.D.C.C., provides:

The court may modify a prior custody order after the two-year period following the date of entry of an order establishing custody if the court finds:
a. On the basis of facts that have arisen since the prior order or which were unknown to the court at the time of the prior order, a material change has occurred in the circumstances of the child or the parties; and
b. The modification is necessary to serve the best interest of the child.

The majority opinion cites to Wetch in its discussion of N.D.C.C. § 14 — 09—06.6(6)(b), whether the modification is necessary to serve the best interest of the child. See Majority Opinion at ¶22. However, the only issue resolved in Wetch, was whether a trial court should “consider” pre-divorce facts in a change of custody proceeding where the prior custody award was based upon a stipulation. See 539 N.W.2d at 312. The determination of what facts a trial court may consider in a change of custody proceeding is now governed by N.D.C.C. § 14-09-06.6(6).

[¶ 41] Under section 14 — 09—06.6(6)(a), N.D.C.C., a court may modify a prior custody order “[o]n the basis of facts that have arisen since the prior order or which were unknown to the court at the time of the prior order.” (Emphasis added). Thus, under 14-09-06.6(6)(a) a trial court should consider facts occurring prior to the entry of an original custody decree based on a stipulation if such facts “were unknown to the court at the time of the prior order.” N.D.C.C. § 14-09-06.6(6)(a). However, establishing what facts a trial court may consider at a modification proceeding merely begins the inquiry under N.D.C.C. § 14^09-06.6(6). More difficult is the use of this evidence in the application of the statutorily required findings. As explained by an Illinois Appellate Court in construing a statute somewhat similar to N.D.C.C. § 14-09-06.6(6):

Section 610 allows the court in making its decision to rely upon facts that have arisen since the prior judgment or that were unknown to the court at the time of entry of its prior judgment. Our court had an opportunity to address this section in Boggs v. Boggs (1978), 65 Ill.App.3d 965 [22 Ill.Dec. 645] 383 N.E.2d 9. There we stated:
“Section 610(b) clearly states that evidence may be received of either newly arisen facts or those unknown to the court at a prior hearing. Obviously, the reference to facts which were unknown at prior hearing includes a reference to such facts which were then in existence. Otherwise there would be no reason to refer to such facts because they would fall into the category of newly arisen facts. Not so clear is an answer to the question of whether the unknown facts in existence at the time of the prior hearing may be considered as bearing on the change of circumstances requirement. Obviously, facts in existence at a prior time cannot be the basis of a change in circumstances taking place after that time. However, the wording of 610(b) is constructed in such a way as to indicate that evidence of both newly arisen facts and those previously unknown to the court can be considered not only on the question of the child’s best interests but also on the change of circumstances requirement.
... [We] construe the words ‘a change has occurred in the circumstances of the child or his custodian’ to mean that a change in circumstances as previously shown to the court has occurred. That construction would enable the court hearing the petition to modify to exercise its judicial discretion rather than be bound by the previous order based upon an agreement. We adopt that construction.” 65 Ill.App.3d 965, 967-68 [22 Ill.Dec. 645] 383 N.E.2d 9, 11-12.
We do not suggest that every time a noncustodial parent seeks to modify a stipulated custody judgment the court is to automatically find a change of circumstances and proceed to a decision based on the best interest of the child. The court must still weigh the evidence and find if the circumstances existing at the time of the prior custody hearing were different than they appeared. If the evidence indicates the custodial parent was fit and acceptable at the time of the prior hearing, then modification must rest on subsequent change of circumstances of the child or of the child’s custodian. However, if the evidence indicates a lack of fitness at the time of the prior agreed judgment, then that factor should be considered in determining the propriety of a modification under the provisions of section 610 which require clear and convincing evidence.

In re Marriage of Gibbons, 158 Ill.App.3d 998, 111 Ill.Dec. 148, 512 N.E.2d 52, 55 (1987) (emphasis added).

[¶ 42] Similarly, under N.D.C.C. § 14-09-06.6(6)(a), a court must find that a material change in circumstances has occurred based on facts that have arisen since the prior order or that were unknown to the court. See N.D.C.C. § 14-09 — 06.6(6)(a). However, under the wording of N.D.C.C. § 14-09-06.6(6), the language “[o]n the basis of facts that have arisen since the prior order” only modifies the finding of a material change in circumstances and not subsection (b) relating to the best interest analysis. The question becomes whether the Legislature intended to permit the trial court to “rehash” facts existing both prior to and at the time of the prior custody order or to limit the evidence considered in the best interest analysis also to those that have arisen since the last custody order or that were unknown to the court. The doctrine of res judicata would make it inappropriate to rehash facts already tried or which could have been tried. Even Wetch was limited to cases involving stipulations. 539 N.W.2d at 313.

[¶ 43] However, we need not decide that issue in this case because Susan has never raised any issue regarding the consideration of pre-divorce evidence at the trial court level or on appeal. Thus, the majority’s citation to Wetch at ¶¶ 22 and 33 is misplaced. What Susan does argue is that the trial court erred in its application of N.D.C.C. § 14-09-06.6(6) by failing to properly weigh her past moves, health problems, and transitional relationships against the recent stability and continuity she had been providing her children.

II

[¶ 44] Section 14-09-06.6(6), N.D.C.C., was generally intended to codify this Court’s two-step approach to modification of custody determinations. See Anderson v. Resler, 2000 ND 183, ¶8, 618 N.W.2d 480 (“In 1997, the legislature codified this Court’s two-step approach for deciding a change of custody request.”). Under the two-step approach relied on by this court prior to the enactment of N.D.C.C. § 14-09-06.6(6), we recognized “[u]nlike an initial custody determination in which the trial court considers only the best interests and welfare of the child, a motion to modify custody requires a two-step analysis.” Anderson v. Hensrud, 548 N.W.2d 410, 412 (N.D.1996). “First, the trial court must determine whether there has been a significant change in circumstances since the original custodial placement.” Id. “If there has been a significant change in circumstances, then the trial court must determine whether the significant change compels, in the child’s best interests, a change in custody.” Id. “The two-step analysis reflects the ‘doctrinal aversion to changing the custody of a happy child who has been living with one parent for a substantial time.’ ” Id. (quoting Alvarez v. Carlson, 524 N.W.2d 584, 590 (N.D.1994)). We have noted, “the important factor in any change of custody proceeding is the stability of the child’s relationship with the custodial parent,” and “[i]t is the continuity of the custodial parent-child relationship that is critical.” Ramstad v. Biewer, 1999 ND 23, ¶¶ 14, 15, 589 N.W.2d 905.

[¶ 45] The clear legislative intent of N.D.C.C. § 14-09-06.6 is to make custody determinations as permanent as possible and to curtail repeat “painful, disruptive, and destabilizing” custody battles. See Quarne v. Quarne, 1999 ND 188, ¶¶ 9-10, 601 N.W.2d 256. The question is how does N.D.C.C. § 14-09-06.6(6) accomplish the Legislature’s purpose of curtailing custody battles and of providing stability in the lives of children without the requirement that the material change in circumstances must compel or require a change in custody to further the best interests of the child.

[¶ 46] Under the first step of the two-step approach of our prior case law, a party moving for a modification of custody had to show that a significant change in circumstances occurred since the prior custody order. Under our prior case law, we defined a “change in circumstances” as “new facts that were unknown at the time of the prior custodial decree.” See Mc-Donough v. Murphy, 539 N.W.2d 313, 316 (N.D.1995); Alvarez, 524 N.W.2d at 589. Unfortunately, some of our recent cases have relied on this same definition to determine whether a “material” change has occurred in the circumstances of the child or the parties under N.D.C.C. § 14-09-06.6(6)(a). See Selzler v. Selzler, 2001 ND 138, ¶ 21, 631 N.W.2d 564 (“A material change in circumstances occurs when new facts are presented that were unknown to the moving party at the time the divorce decree was entered.”); Mayo v. Mayo, 2000 ND 204, ¶ 16, 619 N.W.2d 631 (same). However, we have also said that a “significant change in circumstances” is one that “so adversely affect[s] the child that custody should be changed,” Blotske v. Leidholm, 487 N.W.2d 607, 609 (N.D.1992), and “so adversely affects the child that a change of custody is necessary,” Alvarez, 524 N.W.2d at 589. Under N.D.C.C. § 14 — 09—06.6(6) (a), a trial court must make a finding that a “material change has occurred in the circumstances of the child or the parties” on facts “that have arisen since the prior order or which were unknown to the court at the time of the prior order.” This clearly means that it is after the court identifies new facts or changes in circumstances that it then determines whether these changes are a “material” change in circumstances. See Overboe v. Farm Credit Serv. of Fargo, 2001 ND 58, ¶ 10, 623 N.W.2d 372 (“If possible, each word of a statute must be given effect.”). Thus, in enacting N.D.C.C. § 14-09-06.6(6)(a), the Legislature clearly intended the occurrence of a material change in the circumstances of the child or the parties to be something more than the mere presentation of new facts that were unknown, to the moving party at the time the divorce decree was entered. See Mayo, at ¶ 16.

[¶ 47] The Legislature did not define a “material” change in circumstances, and it is very important, therefore, for our Court to interpret what is meant. In accord with the purpose of the legislation, the finality of decrees and the preference for stability of the custodial parent-child relationship, the determination of whether there is a material change of circumstances must be met only by evidence of a significant or important change that has a negative impact on the well-being of the child. This would adequately provide a threshold that would guard against modification of a prior custody decree and preserve the public policy in favor of stability for the children. The purpose of requiring moving parties to make this showing is similar to the purpose that was served by the requirement of our two-step approach which required the significant change in circumstances to compel a change in custody in order to serve the best interest of the child. See Ramstad, 1999 ND 23, ¶ 27, 589 N.W.2d 905 (Vande Walle, C.J., concurring in result) (“The requirement that the changes in circumstances necessary to support a change in custody must compel or require that change, expresses our position that because of the significance of stability in a child’s life, the custody of that child is not to be changed as a result of every change in circumstances of the parents.”).

[¶ 48] This interpretation of section 14-09-06.6(6) is supported by an examination of N.D.C.C. § 14-09-06.6(4). See North Dakota Fair Housing Council, Inc., v. Peterson, 2001 ND 81, ¶ 36, 625 N.W.2d 551 (“ ‘Statutes relating to the same subject matter shall be construed together and should be harmonized, if possible, to give meaningful effect to each, without rendering one or the other useless.’ ”). Section 14-09-06.6(6) was adopted at the same time as N.D.C.C. § 14-09-06.6(4). Under 14-09-06.6(4), N.D.C.C., a party seeking modification of custody must first submit briefs and affidavits which establish a “pri-ma facie case justifying a modification” before the party is entitled to an evidentia-ry hearing. In enacting N.D.C.C. § 14-09-06.6(4), the Legislature recognized that an evidentiary hearing to determine a child’s best interest was often a difficult and time-consuming process for the child and the parents. See Hearing on SB 2167 before the Senate Judiciary Committee, 55th N.D. Leg. Sess. (Jan. 21, 1997) (testimony of Sherry Mills Moore). Thus, the purpose of N.D.C.C. § 14-09-06.6(4) was to curtail the number of these hearings by bifurcating the test for modification of custody. See id. Therefore, under N.D.C.C. § 14-09-06.6(4), a trial court is to first determine, from the briefs and affidavits, if the moving party has established a “prima facie case justifying a modification.” Only if a “prima facie case justifying a modification” is established, will a party be entitled to an evidentiary hearing to determine if modification is necessary to serve the best interest of the child. See N.D.C.C. § 14-09-06.6(4). In bifurcating these two steps, the Legislature hoped to not only prevent needless changes in custody, but to also spare children from the harmful effects of the custody battle itself. See Hearing on SB 2167 before the Senate Judiciary Committee, 55th N.D. Leg. Sess. (Jan. 21, 1997) (testimony of Sherry Mills Moore).

[¶ 49] The standards that a party must meet to establish a “prima facie case justifying a modification” are provided in subsections 5 and 6 of N.D.C.C. § 14-09-06.6. In the two-year period following the entry of an order establishing custody, a “prima facie case justifying a modification” is established if the moving party shows, through the submission of briefs and affidavits, willful interference with visitation, danger to the child’s health, or a change in primary physical care of the child to the other parent for longer than six months. See N.D.C.C. § 14r-09-06.6(4)-(5). If the moving party succeeds in showing one of these things, it is then entitled to an evi-dentiary hearing to determine if “modification is necessary to serve the best interest of the child.” See N.D.C.C. § 14-09-06.6(5). After the two-year period following the entry of a custody order, a “prima facie case justifying a modification” is established if the moving party shows, through the submission of briefs and affidavits, -that, on the basis of facts which have arisen since the prior custody order or which were unknown to the court at the time of the prior order, a material change in circumstances of the child or the parties has occurred. See N.D.C.C. § 14-09-06.6(4), (6)(a). Only if the moving party succeeds in this showing will it be entitled to an evidentiary hearing to determine if “modification is necessary to serve the best interest of the child.” See N.D.C.C. § 14-09-06.6(6)(b).

[¶ 50] When viewed in the context of its relationship to N.D.C.C. § 14-09-06.6(4), it is clear that the material change of circumstances requirement of N.D.C.C. § 14-09-06.6(6)(a) must require something more of parties than the mere presentation of new facts “that were unknown to the moving party at the time the divorce decree was entered,” see Selzler, 2001 ND 138, ¶ 21, 631 N.W.2d 564. As discussed above, N.D.C.C. § 14-09-06.6(6)(a) provides the standard for determining if a party has established a “prima facie case justifying a modification” under N.D.C.C. § 14-09-06.6(4). The Legislature intended this standard to curtail the number of evidentiary hearings on the best interest factors. This standard would be of little, if any, help in reducing the number of best interest hearings if it could simply be met by a showing of new facts “that were unknown to the moving party at the time the divorce decree was entered.” Selzler, 2001 ND 138, ¶ 21, 631 N.W.2d 564. Rather, it is clear the Legislature intended to require parties to meet the higher standard of showing that there has been a significant or important change of circumstances that has a negative impact on the well-being of the child.

[¶ 51] The second step, after the trial court has found a material change in circumstances, is to apply the best interest factors in N.D.C.C. § 14-09-06.2 gauged against the preference for stability of the custodial parent-child relationship. In Blotske, we described how a trial court is to apply the best interest factors:

We have said that in determining the best interests of a child in a change of custody proceeding, the trial court is to apply the factors in N.D.C.C. § 14-09-06.2. However, that application must be done within the constraints of a modification proceeding, as contrasted to an original custody proceeding. In an original custody proceeding, the fact finder is given free rein to weigh each factor as it deems fit, under no constraints (in the majority view) to assign one factor priority or give one factor more weight than another. A trial court making an original award of custody must determine the single issue of what is in the child’s best interests. But a modification proceeding is different from an original custody award. In a modification proceeding, the best interests of the child must be gauged against the backdrop of the stability of the child’s relationship with the custodial parent.

Blotske, 487 N.W.2d at 610 (citations omitted). It is this analysis that a trial court must apply in N.D.C.C. § 14-09-06.6(6)(b), “[t]he modification is necessary to serve the best interest of the child.” Evidence that establishes the first step, a material change of circumstances, can also be considered by the trial court under N.D.C.C. § 14-09-06.2, the best interest factors, in the second step of the analysis. However, such evidence may be more significant in the court’s consideration of one step of the analysis than the other step. See McDonough, 539 N.W.2d at 317; Alvarez, 524 N.W.2d at 589.

[¶ 52] In summary, in my opinion, the proper method for analyzing a motion to change custody is, first, the moving party must submit affidavits and briefs in support of the motion. N.D.C.C. § 14-09-06.6(4). Based on these briefs and affidavits, the trial court must determine if the party has established a “prima facie case justifying a modification.” Id. If the motion is brought in the two-year period following the entry of a custody order, a “prima facie case justifying a modification” is established by showing any of the three items listed under N.D.C.C. § 14-09-06.6(5). If the motion is brought after this two-year period, a “prima facie case justifying a modification” is established if the court finds a material change has occurred in the circumstances of the child or the parties. See N.D.C.C. § 14-09-06.6(4), (6)(a). A material change in circumstances is a significant or important change that has a negative impact on the well-being of the child. See Alvarez, 524 N.W.2d at 589; Blotske, 487 N.W.2d at 609. Only when a party meets the standards for a “prima facie case justifying a modification” is the court required to hold an evidentiary hearing to determine if “modification is necessary to serve the best interest of the child.” See N.D.C.C. § 14-09-06.6(4), (6)(b). At that point, the best interest factors must be gauged against the preference for the stability of the custodial parent-child relationship. Such a construction of N.D.C.C. § 14-09-06.6 gives meaning to every word of the statute and furthers the Legislature’s intent of curtailing changes in custody and providing stability to children.

Ill

[¶ 53] I, therefore, respectfully concur in the result only.

[¶ 54] MARY MUEHLEN MARING and WILLIAM A. NEUMANN, JJ„ concur.

NEUMANN, Justice,

concurring specially.

[¶ 55] I write separately only to point out that while I have signed Justice Mar-ing’s concurrence, I agree with much of the majority opinion, including its result. In fact, with the exception of the majority’s citation of Wetch v. Wetch, 539 N.W.2d 309 (N.D.1995), I see very little disagreement between the two opinions.

[¶ 56] I have joined Justice Maring’s opinion because its careful analysis of our prior cases and N.D.C.C. § 14-09-06.6(6) has done much to clarify my understanding of the effect of the statute on our change-of-custody jurisprudence, as well as my understanding of the two-step analysis to be applied by our trial courts since the enactment of the statute. Prior to the enactment of the statute our cases were not always consistent in their articulation of the standard to be applied in deciding a motion to change custody. While, in my opinion, the statute makes no large changes in the standard to be met to change custody of a child, perhaps its new articulation of that standard will help us approach these unhappy cases with greater clarity and confidence.

[¶ 57] WILLIAM A. NEUMANN, J„ concur.

      . The legislature did not provide a definition of the word material in N.D.C.C. § 14-09-06.6(6)(a). When a definition is not provided, "[w]ords used in any statute are to be understood in their ordinary sense.” See N.D.C.C. § 1-02-02. The concurrence's suggestion that "material" should be interpreted to mean something other than its plain meaning is not in accordance with our rules of statutory interpretation.

      . The statute at issue in Gibbons provided:
      After the expiration of the 2 year period following a custody judgment specified in subsection (a) of this Section, the court shall not modify a prior custody judgment unless it finds by clear and convincing evidence, upon the basis of facts that have arisen since the prior judgment or that were unknown to the court at the time of entry of the prior judgment, that a change has occurred in the circumstances of the child or his custodian, or in the case of a joint custody arrangement that a change has occurred in the circumstances of the child or either or both parties having custody, and that the modification is necessary to serve the best interest of the child. In the case of joint custody, if the parties agree to a termination of a joint custody arrangement, the court shall so terminate the joint custody and make any modification which is in the child's best interest.
      1982 Ill. Laws 82-1002 Sec. 610(b). Since the decision in Gibbons, Illinois's modification statute has been amended in ways not pertinent to this case. See 750 Ill. Comp. Stat. Ann. 5/610(b) (West 1999).