Howard v. Dillard , 198 Okla. 116 ( 1947 )

ARNOLD, J.

This action was commenced by Vida Dillard in her personal capacity and as executrix of the estate of Josiah Hamilton Dillard, deceased, to have the court construe and determine the effect of a certain deed executed by the deceased on the 6th day of May, 1922; the defendants in the action are Wilton Howard, Walter H. Gant, Kermit Dillard, Lee H. Dillard, Mamie Grimes, nee Dillard, Douglas Dillard, Guy Dillard, Minnie Franklin, formerly Minnie Moore, nee Dillard, Joe Dillard, Vella Saunders, nee Dillard, Cub Dillard, V. E. Dillard, and C. D. Williams; except for Howard, Gant, and Williams, the other defendants are all children of the deceased.

Plaintiffs filed their original petition and amended petition. It was alleged that plaintiff was the executrix and the residuary legatee of J. H. Dillard, deceased; that J. H. Dillard during his lifetime was the owner of certain real estate, and that on the 6th day of May, 1922, he made a deed to the defendants or their predecessors in interest conveying to them an undivided one-eighth interest in and to all of the oil, petroleum, gas, coal, asphalt, and all other minerals of every kind or character in, on, and under the lands involved. A copy of said deed was attached to the petition. Plaintiffs alleged the effect of said deed was to reserve to the grantor and his successors seven-eighths of the royalties that might accrue to the entire mineral estate. It was averred that a construction of said deed was necessary and that the court should construe the same as a grant to defendants of not a full one-eighth royalty but rather a grant of one-eighth of an undetermined royalty of all the minerals accruing to or that might be produced from said land.

Defendants answered alleging that the deed referred to granted to them a fixed one-eighth royalty of all minerals in or under and that might be produced from said lands, and they prayed that the court should construe said deed and quiet title thereto.

The evidence in the case was by stipulation of the parties and is undisputed. Trial was to the court on the issues joined as above indicated and resulted in a judgment in favor of plaintiffs sustaining their construction of the deed, and defendants appeal. The pertinent parts of the. journal entry of judgment are as follows:

“It is ordered, Adjudged and Decreed by the Court that on its findings aforesaid the aforesaid instrument should be and is hereby construed by this' court and the rights of the parties are fixed thereunder as follows, to wit:

“1. That subject to the reservations hereinafter mentioned, said grant conveyed to the grantees, Kermit Dillard, Lee H. Dillard, Mamie Grimes, nee Dillard, Vella Saunders, nee Dillard, Douglas Dillard, Guy Dillard, Minnie Moore, nee Dillard (Now Minnie Franklin), Joe Dillard and Cub Dillard, their heirs and assigns, an undivided one-eighth interest in and to all oil, petroleum, gas, coal, asphalt and all other minerals of every kind or character, in, on' and under the land therein described.

“2. That said conveyance left an undivided seven-eighths interest in and to all such oil, petroleum, gas, coal, asphalt and all other minerals of every kind or character on, in and under said land, vested in the said J. H. Dillard, and his devisees and assigns.

“3. That said instrument further reserved in the said J. H. Dillard, his de-visees and assigns, the sole, absolute and exclusive right of management and control of the minerals granted, and the sole and exclusive right to lease said lands for the purpose of developing said minerals, to any person whom he or they might choose, and upon such terms and conditions as he or they might choose.

“4. That such conveyance also reserved to the grantor, his devisees and assigns all rentals and delay moneys which might be or become payable under any lease given on said premises by him or them.

“5. That the continued ownership by J. H. Dillard, his devisees and assigns of seven-eighths of the oil, petroleum, gas, coal, asphalt and all other minerals of every kind, on, in and' under said land, carries with it the right to receive seven-eighths of all royalties accruing from any lease made or to be made thereon by the said J. H. Dillard, his devisees and assigns.

“6. That subject to the reserved rights aforesaid, the conveyance of the one-eighth mineral interest mentioned in the first numbered paragraph of this judgment to the grantees named in said instrument and their assigns, carries with it the right to an undivided one-eighth interest in all royalties which may accrue from any lease made or to be made thereon by the said J. H. Dillard, his devisees and assigns; but that said grantees, their heirs and assigns, have no right, power or authority to themselves lease said premises, nor any right to any share of the rentals or delay moneys which may accrue from the leasing of the said premises by the said J. H. Dillard, his devisees or assigns.”

Omitting the specific descriptions of the lands covered,' the deed involved in this action reads as follows:

“Sale of Royalty

“This Indenture, made this the 6th day of May 1922, between J. H. Dillard of Carter County, Oklahoma, party of the first part, and Kermit Dillard, Lee H. Dillard, Mamie Grimes nee Dillard, Douglas Dillard, Guy Dillard, Minnie Moore nee Dillard, Joe Dillard, Vella Saunders nee Dillard and Cub Dillard, of Carter County, State of Oklahoma, parties of the second part, witnesseth:

“That the party of the first part, in consideration of the sum of $1.00 and other good and valuable consideration, the receipt of which is hereby acknowledged, does hereby grant, bargain, sell and convey unto the said parties of the second part, their heirs and assigns, an undivided one-eighth interest in and to all the oil, petroleum, gas, coal, asphalt and all other minerals of every kind or character in, on and under, and that may be produced from the following described lands situated in Jefferson County, State of Oklahoma, to wit: (Here follows description of some 4,000 acres of land.)

“It is expressly understood and agreed, however, that this conveyance is made, executed and delivered with the express understanding and agreement that the party of the first part shall retain management and control of the minerals and privileges hereinbe-fore mentioned, and that he shall have the sole and exclusive right to lease said lands to any person to whom he may choose and upon such terms and conditions suitable to him, and should the party of the first part so desire, he shall have the sole and exclusive right for the purpose of mining and operating for oil and gas and laying pipe lines and building tanks, power stations and structures thereon to produce, save and take care of said products on said described premises under the usual provisions as provided in regular 88 form of oil and gas lease.

“It is further expressly understood and agreed that one of the conditions upon which this conveyance is made and delivered is that in\ the event that said land shall be leased by the party of the first part to other parties, all rentals and delay moneys shall be payable to him; it being the intention of the parties hereto that the parties of the second part shall only be entitled to and shall only receive one-eighth royalty of all oil and gas which may be produced and saved from the above described premises, whether by the party of the first part, his executors or assigns, and that they shall have no voice whatever in the leasing and letting of said lands for such purposes, as aforesaid.

“To have and to hold the above described property, together with all and singular the rights and appurtenances thereunto belonging, to the said Kermit Dillard, Lee H. Dillard, Mamie Grimes, nee Dillard, Douglas Dillard, Guy Dillard, Minnie Moore, nee Dillard, Joe Dillard, Vella Saunders, nee Dillard, and Cub Dillard, their heirs and assigns forever.

“J. H. Dillard.”

In their petition in error defendants have assigned six grounds of error, but in their brief the six assignments are argued under one proposition as follows:

“The instrument designated a ‘Sale of Royalty’ conveyed to the grantees therein a full one-eighth of all of the oil, gas, and other minerals in and under or that might be produced from the lands involved, to be held as a royalty.”

It is the contention of the defendants that when the granting clause is construed with the provisions of the foregoing paragraphs of the deed the combined royalty interest of plaintiffs and defendants must be determined to be one-eighth of all minerals produced. It is. not contended that the granting clause, standing alone, could be so construed.

Under paragraphs 3 and 4 of the deed the grantor reserved unto himself the right to lease the lands involved on such terms as should be suitable to him and also the sole and exclusive right to develop for oil and gas and carry on other mining operations. These personal rights and privileges constitute rights in trust none of which were exercised by the grantor before his death and no trust relationship, coupled with an interest, came into existence. These reserved rights or privileges came to an end under the circumstances at the death of the grantor. See 41 Am. Jur. p. 878, sec. 100, and cases there cited in Note 6. These powers in trust did not run with the land. .

The situation might bé otherwise if the grantor had, during his lifetime, leased or begun oil and gas exploration.

This all being true, the foregoing rights reserved by the grantor to himself personally were not inheritable or assignable and did not descend to his representative or heirs.

In view of this interpretation it is obvious that the granting clause of the conveyance stands alone unaffected by the language used by the grantor in connection with the reserved powers mentioned. Thus, standing alone, the granting clause is clear and unambiguous and subject, as all agree under such circumstances, to only one interpretation, that is, that thereby the grantor conveyed to the grantee a one-eighth undivided interest in the minerals of the land in this case.

The judgment of the trial court correctly interprets the granting clause, holding that an undivided one-eighth interest in all oil, petroleum, gas, coal, asphalt and other minerals in and under said land was vested in the grantees named in the deed, and correctly holds that an undivided seven-eighths interest in said minerals is vested in the de-visees and assigns of J. H. Dillard. In all other respects the judgment of the trial court must be and is reversed, with directions to enter judgment in conformity with the views herein expressed.

DAVISON, V. C. J., and OSBORN, BAYLESS, WELCH, and GIBSON, JJ., concur. HURST, C. J., dissents.