Davis v. Hardman, s. 12227

• Decision Date: 13 December 1963
• Docket Number: 12228,Nos. 12227,s. 12227
• Court: West Virginia Supreme Court
• Parties: Flora Talbott DAVIS et al. v. Don W. HARDMAN et al.

Page 77

133 S.E.2d 77

148 W.Va. 82

Flora Talbott DAVIS et al. v. Don W. HARDMAN et al.

Nos. 12227, 12228.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 17, 1963.

Decided Nov. 5, 1963.

Rehearing Denied Dec. 13, 1963.

Syllabus by the Court

Where deeds are made by which several undivided interests in a tract of land are conveyed, with the right in the several grantees, their heirs and assigns, to lease the land for oil and gas purposes and to receive the carrying rental, or the bonuses and carrying rentals, but subject to reservations in favor of the several grantors of the oil and gas royalty, when produced, such reservations do not constitute a reservation of the oil and gas in place; but, on the contrary, such deeds constitute a conveyance of the entire tract of land, including the oil and gas in place, but subject to mere royalty interests in the oil and gas when such oil or gas, or both, are produced.

No. 12227:

Clarence M. Rogers, James A. Graham, Clarksburg, for appellants.

Robert L. Holland, West Union, William E. Simonton, Jr., Pennsboro, for appellants.

No. 12228:

Orville L. Hardman, James M. Powell, Parkersburg, for appellees.

CALHOUN, Judge.

This case, on appeal from a final judgment of the Circuit Court of Doddridge County, presents to the Court for decision the basic question of determining which one of two oil and gas leases is valid; and that, in turn, calls for a determination whether the right to lease is in the owner of the fee, subject to certain reservations of oil and gas rights; or whether the right to lease is in the persons owningthe rights thus reserved. The trial court entered judgment in favor of the lessor who owns the fee subject to the reservations, and her lessees.

The tract of land in question contains approximately forty-four acres and is situated on Wolf Pen Run, a branch of Meathouse Fork of Middle Island Creek in New Milton District of Doddridge County. Upon his death William H. H. Davis devised the tract to his four sons: W. G. Davis, Hobart M. Davis, Alva L. Davis and A. Colwell Davis.

The undivided one-fourth interest of W. G. Davis was conveyed without a restriction or reservation of any kind to A. Colwell Davis. Alva L. Davis thereafter conveyed his one-fourth interest in the tract to A. Colwell Davis, subject to the following reservation: 'There is reserved for the benefit of Alva L. Davis, his heirs and assigns, his proportionate share of one-fourth ( 1/4) of the rest and residue of the oil and gas royalty, when produced, in and under said land, but said second party, his heirs and assigns, to have the right to lease said land for oil and gas purposes and to receive the bonuses and carrying rentals.' Thereafter there was conveyed to A. Colwell Davis the one-fourth undivided interest of Hobart M. Davis, subject to a reservation identical to that quoted above. As a consequence, A. Colwell Davis became the owner of the tract of forty-four acres, subject to the oil and gas reservations in favor of his two brothers.

In 1916 A. Colwell Davis and his wife conveyed the forty-four-acre tract to William F. Kidner, subject to reservation as follows:

'There is excepted and reserved for the benefit of Alva L. Davis, his heirs and assigns, his equal one-fourth of the oil and gas royalty in and under said land, when produced, being the one-fourth of the usual one-eighth oil royalty and one-fourth of the usual gas well rental from each and every gas well that may be drilled on said premises in the future, being the same royalty excepted by him in deed to said first party, subject, however to said Jesse F. Randolph Royalty deed.

'There is excepted and reserved for the benefit of Hobart M. Davis, his heirs and assigns his equal one-fourth (1-4) of the oil and gas royalty in and under said land, when produced, being the one-forth of the usual one-eighth oil royalty and one-fourth of the usual gas well rental from each and every gas well that may be drilled on said premises in the future, being the same royalty excepted by him in deed to said A. Colwell Davis, subject, however, to said Jesse F. Randolph royalty deed.

'There is excepted and reserved for the benefit of said A. Colwell Davis, his heirs and assigns, one-half of the oil and gas royalty, in and under said land, when produced, being one-half of the usual one-eighth oil royalty, and one-half of the usual gas well rental from each and every gas well that may be drilled on said premises in the future, subject, however, to said Jesse F. Randolph royalty deed which royalty deed of said Jesse F. Randolph expires in a few years as shown by his deed.

'Said second party, his heirs or assigns to have the right to lease said land for oil and gas purposes and to receive the carrying rental but any lease that may be hereafter given on said land to be so leased as to be to the best advantage of all parties concerned in the royalty. * * *.'

William F. Kidner and his wife conveyed the forty-four-acre tract to george Ahouse, subject to the reservations to which reference has been made previously. George Ahouse, unmarried, conveyed the same tract, subject to the same reservations, to Frank Ables. After his death intestate, their heirs of Frank Ables conveyed the tract, subject to the same reservations, to Lura M. Ables. The ultimate result was that Lura M. Ables became the owner of the forty-four-acre tract, subject to the reservations.

In the meantime, Alva M. Davis became the owner of the reservation in favor of Hobart Davis. As a consequence, A. Colwell Davis and Alva L. Davis each owned a reservation in equal (one-half) proportions affecting the tract of forty-four acres. A. Colwell Davis died leaving his widow, S. Maude Davis, one of the plaintiffs, as his sole devisee, and Alva L. Davis died leaving his widow, Flora T. Davis, one of the plaintiffs, as his sole devisee.

Flora T. Davis and S. Maude Davis, owners of the reservations affecting the entire forty-four-acre tract, executed an oil and gas lease to Luther G. Pigott and Franklin G. Michels, doing business as P & M Oil Company. Lura M. Ables, owner of the forty-four acres, subject to the reservations, later executed an oil and gas lease affecting the tract in question to Don W. Hardman and Creed C. Hardman, doing business as Hardman Drilling Company.

Soon after receiving its lease, dated August 29, 1961, Hardman Drilling Company commenced drilling operations and was successful in establishing a well producing oil and gas. By agreement of all parties in interest, the money arising from the sale of oil produced is being held by Eureka Pipe Line Company, pending the outcome of the litigation involved in this case.

In November, 161, S. Maude Davis and Flora T. Davis, as lessors, and Luther G. Pigott and Franklin E. Michels, doing business as P & M Oil Company, lessees, instituted an action in the Circuit Court of Doddridge County against Lura M. Ables, her lessees, Don W. Hardman and Creed C. Hardman, doing business as Hardman Drilling Company, and also against various persons who, as a partnership, are assignees of the rights of the Hardmans under their lease from Lura M. Ables.

By its final judgment, the circuit court held that, at the time Lura M. Ables executed the lease to the Hardmans, she was the owner of the forty-four acre tract with the ight to execute an oil and gas lease covering such tract, 'subject only to a duty to reserve for the benefit of Flora Talbott Davis and S. Maude Davis a usual one-eighth (1-8) royalty from the actual production of oil and a usual gas royalty from the actual production of gas, and to lease the same to the best advantage of all parties concerned in the royalty.' By the same final judgment order, the circuit court held that the lease executed by the Davis women to Pigott and Michels was null and void and, accordingly, it was cancelled as a cloud upon the title of the Harmans and their assignees.

This Court granted an appeal from the final judgment of the circuit court pursuant to a petition presented in behalf of Flora Talbott Davis and S. Maude Davis, lessors and plaintiffs; and the Court also granted an appeal from such final judgment pursuant to a separate petition presented in behalf of Luther G. Pigott and Frnaklin E. Michels, lessees and plaintiffs. Inasmuch as the two appeals involve the same final judgment of the circuit court and the same legal questions, they have been heard and considered together as one case in this Court.

The contention of the plaintiffs is predicated on an assertion that, under prior decisions of this Court, a conveyance or reservation of royalties from oil or gas will be treated in law as a conveyance or reservation of the oil and gas in place. This contention calls for a consideration of the prior decisions upon which such contention is based.

The legal principle upon which the plaintiffs rely apparently was first dealt with in Toothman v. Courtney, 62 W.Va. 167, 58 S.E. 915. In that case (62 W.Va. at page 175, 58 S.E. at page 918), the Court stated: 'Though he did not reserve by name the oil in place, or any part of it, his reservation of all the rental or royalty to be derived from it compels the court to hold, by construction of the instrument, that it vests in him the title to that thing, the beneficial use whereof has been reserved, namely, the oil in place. Jarman on Wills, marg. p. 741, says: 'A devise of the rents and profits or of the income of land passes the land itself both at law and in equity--a rule, it is said, founded on the feudal law, according to which the whole beneficial interest in the land consisted in the right to take the rents and profits. * * *'' The rule of construction upon which such holding was based has been variously stated. 'A devise of the use, income, or proceeds of land ordinarily passes the fee, but such a grant does not necessarily devise a fee and it will not do so where an intention to the contrary appears.' (Italics supplied.) 96...