179 P. 928 | Okla. | 1919
Plaintiffs' action was to recover the value of royalties on oil and gas produced on the west half of the northeast quarter and the southeast quarter of the northeast quarter of section 18, township 13 north, range 13 east, by the lessee, E.C. Lambert, and by him paid to the owners, Floyd and Louis Luckey, between the 19th day of January, 1916, and the 8th day of December, 1916.
The circumstances out of which the controversy arose are as follows: On the 24th day of August, 1915, Floyd Luckey, at the time the owner of the northeast quarter of section 18, township 13 north, range 13 east, Okmulgee county, executed thereon and delivered to E.C. Lambert an oil and gas mining lease for a term of five years, which lease provided for the payment of certain rentals for delayed drilling, and for $200 per year for each producing gas well, and one-eighth of the gross proceeds of all oil and gas produced and saved from the premises. On the 30th day of August following Floyd Luckey, by warranty deed, conveyed his title in the aforementioned lands to Louis Luckey. On the following day Louis Luckey, joined by Floyd Luckey, entered in a new oil and gas lease to E.C. Lambert on the 160-acre tract. The covenants of the lease do not differ materially from those of the lease of August 24th. On the 19th day of January, 1916, and before the development of the leased premises for oil and gas, the Luckeys, for a consideration of $4,000, conveyed their title to the northeast 40 acres of the 160-acre tract to W.R. Alexander and Frank Sheedy. While the deed named the latter-named parties as grantees, it was understood that they took only an undivided one-half interest therein, the title in and to the remaining interest being held by them in trust for E.W. Kimbley and Frank King, and which trust was discharged on the 10th day of October following by Alexander and Sheedy executing to Kimbley and King their warranty deed, conveying to them the legal title to an undivided one-half interest in said 40-acre tract. It is *218 not claimed that Lambert produced any oil or gas on the 40 acres acquired by Alexander and his cotenants. It is admitted that during the period for which a recovery is sought oil in considerable quantities was produced on the residue of 120 acres of land owned by the Luckeys and included in the land covered by the Lambert lease.
While the allegations of the petition are somewhat meager in respect to the locality of the production, in view of the position here taken by counsel, and the wide importance of the question in controversy, we will treat the case as sufficiently presenting the contention urged, that the purchasers of a portion of the reversion are entitled to an apportionment of all oil and gas royalties produced from the entire 160-acre tract. In support of their right to recover, counsel rely upon Wettengel v. Gormley,
"But, as we have seen, the royalties were personal. They were not disposed of by Gormley's will. They were not even referred to in it. The intestate laws must in such case be looked to for the disposition of this very considerable part of his estate. The children hold together all the acreage that is covered by the lease, and each should receive such share of the royalties as his or her share of the land bears to the whole tract covered by the lease."
Furthermore, it was said that after the expiration of the lease the severance of the freehold and its minerals would be complete. In Lynch v. Davis,
When Alexander and his cotenants took title from the Luckeys to the 40-acre tract, they acquired every interest that the grantors had therein at the time, including the oil and gas underneath the ground, subject only to Lambert's right to enter upon the land and explore it for oil and gas and remove the same if found. This much seems clear from a consideration of section 1162, Revised Laws, providing that a warranty deed made in substantial compliance with article 13 of the statutes "shall convey to the grantee, his heirs or assigns, the whole interest of the grantor in the premises described. * * *" Whatever there was underneath the surface of the earth, whether oil or gas or other valuable or precious minerals, passed to the purchaser by the deed of January 19, 1916. When executed and delivered by the Luckeys, their interest therein was completely extinguished. But the making of the deed in no wise affected Lambert's rights under his lease, as the deed itself in the covenants of warranty especially excepted the oil and gas lease. Lambert could, as formerly, keep the leases in force for a time either by the payment of periodical rentals, or by development work. Oil and gas are minerals, and, so long as they remain in place in mother earth, belong to the owner of the land under which they are found, and, of course, in the absence of a contract with another, such owner has the right to explore for oil and gas on his lands, and, when found, to remove the same. If, because of their transitory nature, they escape from his premises to the premises of another before being reduced to possession, they are no longer his property. When the Luckeys' grantees acquired the 40-acre tract purchased by them, it was subject only to the rights of the lessee to explore for, and, if found, to produce and remove therefrom, the oil and gas. As stated by the Ohio court in Northwestern Ohio Natural Gas Co. v. Ullery, supra:
"The fact that oil and gas are vagrant and transitory in their nature does not prevent them from adhering to and becoming part of the land while passing from one tract to another, and while so in one tract they are a part of that tract and belong to the owner thereof until they escape from said tract, and, if brought to the surface before such escape, they become personal property belonging to the owner of the land."
While the leases do not expressly state that the land may be subdivided, a subdivision may be fairly implied because of the provisions extending the conditions and agreements to the heirs, executors, administrators, successors, and assigns of both parties. The plaintiffs in error are the "assigns" of the 40-acre tract purchased by them. The argument sometimes urged that, the lease being indivisible, the lessee will not be subjected to the inconvenience of dealing with separate owners, is, in such case, neither convincing nor sound. The rights of the owners are rested upon a more stable foundation than the mere convenience of a lessee, and particularly where the claim is made, not by the lessee, but by one who is seeking to profit by it. The common-law rule of the apportionment of rents in agricultural leases, where the lessor sells a portion of the leased premises to a stranger, and, as here, apportionment is not provided *220 for by contract, has no place in the case under consideration, if, indeed, it has in our jurisprudence in respect to oil and gas leases. We know, as a matter of common knowledge, that it has been the general, if not universal, custom in this state, from the first discovery of oil and gas, for the royalty to be paid the owner of the lands on which the wells were located, and from which production was had. To apply the common-law rule of apportionment of rents to such class of cases would be destructive of titles, at least of such titles as had been acquired by purchase, and would work interminable confusion and bring about an almost endless amount of litigation, and that in cases where the parties had, from the earliest days of the business, in good faith made land ownership the basis of title to production.
The oil and gas under the 160 acres of land belonged to the Luckeys, subject only to the license or lease, so called, held by Lambert, to explore for oil and gas and produce the same when discovered. When there was carved out of this tract and conveyed to Alexander and his cotenants a portion of the lands, they pro tanto succeeded to the interest of the Luckeys, not only in the fee, but in the oil and gas produced on the 40-acre tract. But they acquired no additional or greater interest by their purchase. The deed did not include or influence the residue of the tract, and consequently did not affect the qualified. ownership in and, to the oil and gas under the remainder of the tract. Such qualified ownership remained in the Luckeys. Had neither of them theretofore executed the Lambert lease, they would have had a right to drill on the residue of the tract for oil and gas, and to possess themselves of such oil and gas as was produced therefrom. This is the rule announced in Northwestern Ohio Natural Gas Co. v. Ullery,
The judgment of the trial court is affirmed.
HARDY, C. J., and OWEN, PITCHFORD, and McNEILL, JJ., concur.