Barnett v. Getty Oil Co., 46682

• Court: United States State Supreme Court of Mississippi
• Citation: 266 So.2d 581
• Docket Number: No. 46682,46682
• Parties: Cecil E. BARNETT v. GETTY OIL COMPANY et al.
• Decision Date: 05 June 1972

Page 581

266 So.2d 581

Cecil E. BARNETT v. GETTY OIL COMPANY et al.

No. 46682

Supreme Court of Mississippi.

June 5, 1972.

Rehearing Denied Oct. 2, 1972.

Boyd, Holifield & Harper, Laurel, for appellant.

Wells, Gerald, Brand, Watters & Cox, Scott P. Hemleben, Jackson, for appellees.

BRADY, Justice:

This is an appeal from the Chancery Court of Clarke County, Mississippi, wherein the chancellor dismissed the original bill of complaint filed by the appellant, Cecil E. Barnett, with prejudice. From that adverse decree the appellant prosecutes this appeal.

The record reveals that the mineral interests in controversy are located in the S 1/2 of the NW 1/4 of Section 17, Township 1 North Range 15 East. The record clearly establishes that J. D. Haynes executed an oil, gas and mineral lease to the lands in controversy to Roger A. Mateer on July 23, 1958. This lease was given for a primary term of ten years and expired under its own terms on July 23, 1968. This lease was assigned to Southwest Gas Producing Company, Inc.

It is evident from the record that J. D. Haynes conveyed to the appellant an undivided one-sixteenth interest in the minerals under the land in controversy. The appellant sent a draft and a Mineral Right and Royalty Transfer Form R-101 to J. D. Haynes' residence in Texas. This instrument was executed on July 10, 1968, and appellant had it filed for record on July 16, 1968.

On October 31, 1968, and Oil, Gas and Mineral Lease was recorded on behalf of Getty Oil Company. This lease covered the S 1/4 of the NW 1/4, Section 17, Township 1 North, Range 15 East, and other lands, and was dated May 27, 1968. This lease was for a primary term of three years. In addition, this lease was to commence on July 23, 1968. The appellant testified that he checked the records in the office of the Chancery Clerk of Clarke County, Mississippi, and found that the property was subject only to an oil, gas and mineral lease (the one of July 1958), and that this lease was about to expire. The appellant paid to Mr. Haynes the sum of $2,500, amounting to $500 per mineral acre, for Mr. Haynes' undivided one-sixteenth interest in the minerals. The appellant, Mr. Barnett, testified that at the time he purchased the one-sixteenth mineral interest he had received no notice of any kind of any oil, gas and mineral lease executed by Mr. Haynes to Getty Oil Company under the date of May 27, 1968.

He asserts that from and after July 16, 1968, he was recognized, accepted and participated as the owner of an unleased or working one-sixteenth mineral interest in the B. Harper 17-5 No. 1 well, of which Getty Oil Company was the operator. The appellant testified that he was treated as an owner of a working interest as contrasted to a royalty interest until July 24, 1969, approximately eight months after said well had been brought in as a producer of oil, and almost a year after the filing of his mineral conveyance from Mr. Haynes. This was corroborated by the appellees' witness, C. D. Chapman, who testified that he had been a landman for Getty Oil Company, employed in the New Orleans, Louisiana office, from 1965 until July 1969. This witness testified that when the oil, gas and mineral lease executed by Haynes to Getty Oil Company came into his possession he mislaid it and failed to have it recorded. When it was brought to his attention that the mineral deed from Haynes to the appellant was on record, then this witness testified he concluded that the appellant was the owner of an unleased mineral interest in the said lands. Mr. Chapman contacted the appellant for Getty Oil Company and requested that the appellant participate in the well as the owner of a working interest. However, Mr. Chapman was not an attorney and he testified that he did not consult any attorney for Getty Oil Company concerning his failure to record the lease from Mr. Haynes to Getty Oil Company. Mr. Chapman testified that he had received the lease from a Mr. Robert Knellinger, an independent petroleum landman and a commissioner broker, who testified that he handled the transaction involving the procuring of a lease from Mr. Haynes to Getty Oil Company. Robert Knellinger testified that he obtained the description from the previous lease of July 23, 1958, and positively asserted that it was his intention to copy the same description, which would have been the S 1/2 of the NW 1/4 instead of the S 1/4 of the NW 1/4.

After the well was completed and all conveyances were examined by title attorneys in preparation of division orders, the appellant was advised by letter on July 24, 1969, that he was considered the owner of a royalty interest. The appellant thereupon filed suit on November 12, 1970. Subsequent to the filing of this suit Getty Oil Company obtained a 'corrected lease' which was acknowledged on January 6, 1971, and filed for record on January 14, 1971.

After a full and complete hearing, the chancellor took the cause under advisement and requested briefs to be submitted by the parties. After studying the briefs, the chancellor entered a final decree dismissing appellant's bill of complaint with prejudice. From that decree, the appellant appeals, assigning the following as error:

I

The court erred in failing to grant any relief to appellant under the undisputed facts in the case although relief was mandatory under any theory of the case.

II

The court erred in failing to adjudicate appellant to be the owner of an unleased mineral or working interest consisting of an undivided one-sixteenth (1/16th) interest in and to all of the oil, gas and other minerals contained in the lands in controversy.

III

The court erred in failing to adjudicate appellant to be the owner of an unleased mineral or working interest in the North Half of the South Half of the Northwest Quarter of Section 17, Township 1 North, Range 15 East, Clarke County, Mississippi.

IV

The court erred in admitting parol evidence to vary the terms of the oil, gas and mineral lease from J. D. Haynes to Getty Oil Company dated May 27, 1968, filed for record October 31, 1968, no ambiguity appearing on the face of the recorded instrument.

V

Getty Oil Company and its assigns are estopped to deny appellant's ownership of an unleased one-sixteenth (1/6th) mineral interest (working interest) and the court erred in admitting parol evidence as to that which transpired with reference to said lands within the corporate structure of Getty Oil Company.

VI

The court erred in overruling appellant's motion to exclude all instruments shown as Exhibit 4 to appellees' answer, which instruments were not offered in evidence and cannot be considered as proof in this record.

Appellant urges in support of his first error assigned that the only controversy between the parties is whether or not the mineral interest owned by the appellant is (1) an unleased mineral interest, (2) a combination unleased mineral interest and royalty interest, or (3) whether said interest is wholly a royalty interest. The appellant submits that under any theory of the case he was entitled to some relief as prayed for in the bill of complaint. The appellant contends that the record discloses that the well had been in production almost three years at the time of the trial of this case and that the appellee have wholly failed, neglected and refused to pay over any monies, either as a working interest, a partial unleased working interest and partial royalty interest, or as a royalty interest. The proof discloses without contradiction, and appellees concede, that the appellant was entitled to an accounting and receipt of the proceeds attributable to the royalty interest under any theory of the case.

In support of his second error assigned, the appellant contends that there was absolutely no testimony offered to show notice on the part of the appellant as to the existence of any alleged oil, gas and mineral lease executed by Haynes except the lease dated July 23, 1958, which lease expired under its own terms on July 23, 1968. The appellant contends that the undisputed proof reflects that the appellant is a bonafide purchaser for value without notice of the oil, gas and mineral lease from Haynes to Getty Oil Company and is entitled to the protection afforded by Mississippi Code 1942 Annotated section 867, 868 and 869 (1956). It is the contention of the appellant here, and it was the contention of the appellant in the trial court, that the oil, gas and mineral lease executed by Haynes to Getty Oil Company, which was filed for record on Cotober 31, 1968, was a 'top lease' and was not a valid and subsisting oil, gas and mineral lease at the time of the filing for record of the mineral conveyance from Haynes to the appellant. The appellant asserts that the case of Gulf Refining Company v. Harrison, 201 Miss. 294, 28 So.2d 221, 30 So.2d 44, sugg. of error overruled 201 Miss. 294, 30 So.2d 807 (1947) is an entirely different factual situation from that at bar and the appellant does not consider such case as throwing any light on the present controversy.

From time to time exceptional briefs are filed by counsel representing litigants in causes appealed to this Court, and in the case at bar this is certainly true. Counsel representing both the appellant and appellees are to be commended for their splendid briefs and their hard fight and the dedicated efforts which were made in the Court here and in the court below.

The Gulf case, supra, is most important to the decision of this case. The appellant takes the position that he should be protected by the registry statutes but this Court in the Gulf case dealt with the same question and concluded that these sections are inapplicable when the grantee (the appellant in this case) accepts a conveyance which is expressly made subject to valid and subsisting lease or leases. The Gulf case is relevant in that the mineral conveyance used in that case was a form R-101 'Mineral Right and Royalty Transfer' instrument...