Toothman v. Courtney

Decision Date25 April 1907
PartiesTOOTHMAN v. COURTNEY.
CourtWest Virginia Supreme Court

Submitted June 11, 1906.

Rehearing Denied Oct. 17, 1907.

Syllabus by the Court.

A deed granting, by the use of appropriate technical terms, all the oil and gas under a tract of land, together with the exclusive right to enter thereon at all times for the purposes of drilling and operating for oil and gas, but limiting the estate to a term of seven years and as much longer as oil or gas may be found thereon in paying quantities, stipulating for the payment of commutation money for delay in drilling, denominating it rental, and providing for the delivery into pipe lines, for the grantor, of one-eighth of all the oil produced and saved from the premises, and also for payment of a yearly rental for every gas well from which gas is transported and used off of the premises, does not pass the title to the oil and gas in place. In legal effect it is a mining lease and the title to the oil and gas in place remains in the grantor.

[Ed Note.-For cases in point, see Cent. Dig. vol. 34, Mines and Minerals, §§ 154, 160.]

Technical words in a deed, contract, or other instrument will be limited and controlled in their effect by the intention of the parties, gathered from the instrument, considered, as a whole, in the light of the nature of its subject-matter and the purpose for which it was executed.

[Ed Note.-For cases in point, see Cent. Dig. vol. 11, Contracts §§ 732-734.]

An undivided interest in land or mineral underlying land cannot properly be entered and taxed on the land book; and a deed founded upon a sale of such undivided interest for nonpayment of taxes is irregular, and will be set aside.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 45, Taxation, §§ 577, 1352, 1353.]

Such defect in the assessment, sale, and deed is not cured by any provision of section 25 of chapter 31 of the Code of 1899 [Code 1906, § 884].

[Ed. Note.-For cases in point, see Cent. Dig. vol. 45, Taxation, § 770.]

A bill to set aside a tax deed in such case must tender the purchase money and taxes subsequently paid as a condition precedent to the setting aside of the deed, or aver the willingness and readiness of the plaintiff to pay the same. A decree which fails to secure to the purchaser such reimbursement is erroneous.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 45, Taxation, § 1586.]

On reversing a decree for insufficiency of the bill, in a cause in which a good case is disclosed by the evidence, this court will remand the cause with leave to the plaintiff to amend his bill.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 3, Appeal and Error, §§ 4606, 4616-4619.]

Appeal from Circuit Court, Monongalia County.

Action by Daniel L. Toothman against David H. Courtney and others. From a decree in favor of plaintiff, defendant Courtney appeals. Reversed and remanded.

Cox & Baker, for appellant.

W. S. Meredith and W. S. Conaway, for appellee.

POFFENBARGER J.

Daniel L. Toothman obtained, by a decree of the circuit court of Monongalia county, the setting aside of a deed, made by the clerk of the county court of said county, conveying to David H. Courtney an undivided one-sixteenth of the oil and gas in a tract of 143 acres of land, lying in said county, pursuant to a sale thereof, as delinquent land, made by the sheriff. The land seems to be rich in oil production, carried on by the South Penn Oil Company, and the decree, in addition to setting aside said deed, requires said company to pay one-sixteenth of the oil produced by it to Toothman instead of Courtney. Believing the tax deed valid and his title to the royalty good, Courtney has appealed.

As the decree stands upon the theory of invalidity in the assessment, nontaxability, and nonsalableness of the Toothman interest as land, it is necessary to disclose here the transactions relating to the title. Owning the tract of land in fee, Toothman on the 6th day of August, 1889, executed to one C.J. Ford an instrument, the true character of which is a matter of controversy between counsel for the respective parties, but which designates itself "oil lease." In express terms, it grants to Ford "all the oil and gas in and under" the land, "to have and to hold for the term of seven years" from the date thereof "and as much longer as oil or gas is found in paying quantities thereon." Further provisions, bearing upon the question to be determined, read as follows: "The above grant is made upon the following terms: 1st. Second party agrees to drill a well upon said premises within ten months from this date, or thereafter pay to first party a yearly rental of $144.00 dollars for further delay until such well is drilled, such rental when due, shall be deposited in First Nat. Bank of Fairmont, state of West Va., should second part fail to make such deposit or pay to first part, on there premises or at present residence of first part the said rental, then this instrument shall be null and void and neither party hereto shall be held to any accrued liability or to any damages, or to any stipulations or conditions herein contained. 2nd. Should oil be found in paying quantities upon the premises, second part agrees to deliver to first part in the pipe line with which he may connect the well or wells, the one-eighth part of all the oil produced and saved from the premises. 3rd. Should gas be found, second part agrees to pay to first part three hundred dollars yearly, payable quarterly, on demand for each and every well from which gas is transported or used off the premises so long as the same is so transported or used. *** 7th. Second part may at any time remove all his property and reconvey the premises hereby granted and thereupon this instrument shall be null and void." Ford assigned the interest acquired by this paper, along with others, to the South Penn Oil Company by an instrument entitled "Assignment of Leases," and dated April 23, 1891. By a paper, called "Deed for Oil Royalty," dated May 1, 1894, Toothman conveyed to Joseph McDermott "the 1-16 one sixteenth part of all the oil and gas in and under" the tract of land, in consideration of $500 then paid. There were then 12 producing wells on the land, and the following clause of the deed is said to have been intended to apply to additional wells, if any should be drilled: "Party of the second part agrees to pay to first party fifty dollars for each and every well drilled on above premises." By a deed dated April 2, 1897, Toothman conveyed to Luther B. Wilson the tract of land, together with a slight interest in the oil and gas. He retained practically a one-sixteenth interest, half of the one-eighth originally provided for, by a reservation clause couched in the following terms: "Party of the first part reserves all the oil rental, there are twelve wells drilled, and if any wells be drilled, after the twelve wells is drilled, the second party is to have the sixty-fourth part of the oil." For the year 1900 an entry was made in the land books, charging to Toothman an undivided one-sixteenth of the oil and gas in the tract of land for taxation. The taxes were extended on the same, and, being unpaid, that interest was sold by the sheriff in January, 1903, as delinquent land to Nicholas C. Vandervort, who assigned his purchase to Courtney by uniting with the clerk in the deed made to him. No irregularities in the sale or deed, such as are usually relied upon in cases of this kind, are set up in the bill. There is an allegation of fraud, but it is unsustained by any evidence adduced. It does not appear that the entire tax on the land in which the oil and gas are was charged to any person or persons and paid under other entries in the land book, so as to make the charge against Toothman, in any sense, a double assessment on the interest owned by him. If it did, the deed would be void on that ground. The crucial tests of the propriety of the decree, therefore, are, first, whether Toothman owned any interest in the land; second, whether, if so, there was a valid assessment; and, third, whether the defect in the assessment, if any, invalidates the sale and deed.

We are unable to adopt the view, vigorously pressed upon us in argument by counsel for the appellee, that the instrument executed by Toothman to Ford and assigned by the latter to the South Penn Oil Company, passed the fee-simple title to the oil and gas. In the granting part thereof it uses terms technically efficacious and appropriate for the accomplishment of such a result, and, if they were not limited and restrained by other language and provisions, the instrument could not be held to be a lease. Though words of absolute conveyance are used, the habendum limits them. The estate granted is a term of seven years from the date of the deed, and as much longer as oil and gas may be found in paying quantities. By the discovery and production of oil and gas or one of them the specific term of seven years may be greatly prolonged; but, tested by the letter of the deed, and probably by its spirit as well, the term does not cease to be a mere term by the prolongation thereof. However long the term, an estate for years is not a freehold. Moreover, this deed implies that so much of the corpus as is conditionally granted is to be severed and removed from the land, and the implication is re-enforced by conditions annexed to the grant which compel the grantee to take out the oil and gas. The instrument does not contemplate a continuing and interminable ownership of the gas and oil in place, but rather a limited right of possession and use of the land for the severance, conversion into personal property, and removal, of certain portions thereof. Though the instrument,...

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  • CHAPTER 1 ROYALTY INTERESTS IN THE UNITED STATES: NOT CUT FROM THE SAME CLOTH
    • United States
    • FNREL - Special Institute Oil and Gas Royalties on Non-Federal Lands (FNREL)
    • Invalid date
    ...on the 500 year old Coke's Rule, had apparently concluded that a freestanding royalty interest could not be created. Toothman v. Courtney, 62 W.Va. 167, 58 S.E. 915 (1907). Fortunately, Toothman was limited in Davis v. Hardman, 148 W.Va. 82, 133 S.E.2d 77, 19 O.&G.R. 713 (1963). Likewise se......

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