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Keywords

contractleaseappellant

willlease

Related Cases

Wynn v. Sklar & Phillips Oil Co., 254 Ark. 332, 493 S.W.2d 439

Facts

The dispute arose from a 'Royalty Deed' executed on April 4, 1921, by T. M. Talley and his wife to J. M. Talley, which was contested by the appellants who argued it conveyed all royalties under the land. The case involved various prior instruments, including a warranty deed and leases, which reserved mineral rights and outlined royalty payments. The chancellor found that the deed in question clearly conveyed a one-eighth interest in the minerals beneath the land, despite the appellants' claims to the contrary.

The parties agree that the matter turns entirely upon the interpretation of an instrument entitled ‘Royalty Deed’ executed on April 4, 1921, by T. M. Talley and his wife to J. M. Talley.

Issue

Did the 'Royalty Deed' executed on April 4, 1921, convey a one-eighth interest in the oil, gas, and minerals under the land, or did it convey one-eighth of the production of those resources?

The questions involved will be better understood by a description of the various instruments relied upon by the parties.

Rule

The court applied principles of contract interpretation, focusing on the language of the deed and the intentions of the parties, particularly in cases of ambiguity.

The chancellor held that the deed conveyed a one-eighth interest in oil, gas and minerals under the lands.

Analysis

The court analyzed the language of the 'Royalty Deed' and determined that the granting clause clearly indicated an intention to convey a one-eighth interest in the minerals themselves, rather than a share of the production. The court noted that the inclusion of the term 'royalty' did not negate the clear intent expressed in the deed, and the ambiguity created by the parenthetical clause was resolved by prioritizing the explicit terms of the grant.

If we consider the various meanings which have been accorded the word ‘royalty,’ and treated the parenthetical clause as controlling, the deed might be taken to have conveyed any of the following: (1) the ‘royalty’ payable under the lease described in item 2, which was then only slightly more than two years old; (2) fee title to 1/8 of the minerals in place, with all attendant incidents, with the parties considering the 1/8 interest and ‘royalty’ as synonymous and inserting the parenthetical clause in an effort to clarify the interest conveyed; (3) a perpetual royalty either ‘participating’ or ‘nonparticipating,’ which constitutes a beneficial interest in future oil and gas production; (4) a beneficial interest in future production together with an interest in oil and gas in place; and (5) an interest that enabled the grantee to grant an oil and gas lease and collect the entire royalty paid thereunder.

Conclusion

The Supreme Court affirmed the chancellor's decree, concluding that the deed conveyed a one-eighth interest in the oil, gas, and minerals under the land, rather than a share of the production.

Decree affirmed.

Who won?

J. M. Talley prevailed in the case because the court found that the language of the 'Royalty Deed' clearly conveyed a one-eighth interest in the minerals, aligning with the intentions of the parties as expressed in the deed.

The chancellor stated here that there was no evidence that the 1919 lease was in force at the time of the execution of the deed we are considering.

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Schweiso v. Williams, 150 Cal.App.3d 883, 198 Cal.Rptr. 238

Hannan v. Dusch, 154 Va. 356, 153 S.E. 824, 70 A.L.R. 141

Lucenti v. Cayuga Apartments, Inc., 48 N.Y.2d 530, 399 N.E.2d 918, 423 N.Y.S.2d 886

Broadrick v. Oklahoma, 413 U.S. 601, 93 S.Ct. 2908, 37 L.Ed.2d 830

Royce v. Guggenheim, 106 Mass. 201, 1870 WL 7078, 8 Am.Rep. 322