Bodcaw Lumber Company v. Goode

• Decision Date: 25 June 1923
• Docket Number: 63
• Citation: 254 S.W. 345,160 Ark. 48
• Parties: BODCAW LUMBER COMPANY v. GOODE
• Court: Arkansas Supreme Court

254 S.W. 345

160 Ark. 48

BODCAW LUMBER COMPANY v. GOODE

No. 63

Supreme Court of Arkansas

June 25, 1923

Appeal from Columbia Chancery Court; J. Y. Stevens, Chancellor reversed.

Decree reversed and cause remanded.

Henry Moore, Jr., for appellant.

The reservation in the granting clause of the deed of the mineral rights in the land conveyed will be construed to be an exception thereof from the grant to effect the intention of the grantor to carve out and retain all the mineral rights including oil and gas. 93 Ark. 9; 99 Ark. 247. The reserving clause is not repugnant to the grant, but only a limitation thereon. 94 Ark. 618; 78 Ark, 230; 112 Ark. 525. The owner of land in fee simple can convey the land to another and reserve to the grantor, or retain, excepting from the grant, the minerals, oil and gas that may be under the surface. 103 Ark 180; 107 Texas 226; 215 S.W. 80. The Congress of the United States recognized this principle, act approved August 24 1912, Compiled Statutes, § 4638; also act approved July 17, 1914, 38 Statutes at Large, 3092, 310; § 4640-B, Compiled Statutes; 155 U.S. 667; Tiedeman, Real Property, 843. See discussions of question by Hon. T. J. Gaughan before Arkansas Bar Association, 1922 session. Different estates may be created; there may be a severance of the mineral estate from the estate in the lands, which may be accomplished by an exception in a deed or by sale and conveyance. 4 L. R. A. (N. S.) 480; 152 Pa. 286; 18 L. R. A. 706; 141 W.Va. 559, 31 L. R. A. 128; 94 N.Y. 595; 93 Mo. 107, 5 S.W. 605; 93 Va. 332, 24 S.E. 1020; Anderson's Dictionary Law, 667; 2 Rapalge and Lawrence's Law Dictionary, 723; 55 N.Y. 534, 14 Am. Rep. 132; 31 Pa. 427, 78 Am. Dec. 436; 60 L. R. A. 798; 143 Pa. 293, 13 L. R. A. 627, 24 Am. Rep. 544; 233 Pa.St. 540; Ann. Cas. 1913-B. The State of Texas recognizes that there may be a severance of the mineral estate from the estate in the lands. Session Acts 1907, 490, Acts 1917; 150 S.W. 1151. Louisiana likewise, act 31. Acts 1910, and also a statute of our State, C. & M. Digest, § 9856. Oil and gas, like other minerals, belong to the owner of the soil. 28 Texas C. App. 292, 69 S.W. 169; Neil v. Martin, 75 S.W. 430; 18 R. C. L., § 85; 27 Cyc. 681; Thornton, Law Relating to Oil and Gas, 32, §§ 19, 20, 52; 231 U.S. 353, 34 S.Ct. 62, 58 L. ed. 264. Severance may be by conveyance of the mines or minerals only, or by a conveyance of the land with reservation or exception as to the mines or minerals. 20 Am. & Eng. Enc. of Law, 772; 57 W.Va. 287, 50 S.E. 236. It is held that oil and gas have the power of self-transmission, but the later cases hold that there is no analogy between the moving of these minerals and animals ferae naturae in their tendency to wander at will. 177 U.S. 190; 49 N.E. 399; 176 S.W. 717; 84 N. E. (Ill.) 46; 75 P. 995; 146 S.W. 122; 57 N.E. 912; 95 N.E. 225; 76 N.E. 525; 100 N.E. 681; 104 N.E. 983. The overwhelming weight of authority supports the rule that a fee owner, or the owner of a separate estate in the oil and gas, holds an absolute title to these minerals while in place to the same extent and legal effect as though minerals involved where coal, iron ore, or any other solid mineral. 177 U.S. 190, supra, is the leading case in opposition to this rule. 49 N.E. 399; 43 S.W. 355; 27 S.E. 411; 43 W.Va. 286; 28 S.E. 781; 45 W.Va. 806. 32 S.E. 216; Lindley on Mines, § 859-B; 65 W.Va. 636; Williams v. Oil Co., 52 W.Va. 181; Thornton, § 619; 62 W.Va. 167, 58 S.E. 915; 63 W.Va. 317, 61 S.E. 307; 166 Mich. 320, 120 N.W. 818; 51 Pa. 375; 57 W.Va. 535, 50 S.E. 603; 41 W.Va. 559; 23 S.E. 664, 56 Am. St. Rep. 884, 31 L. R. A. 128; 115 Minn. 239; 4 L. R. A. (N. S.) 477; 231 U.S. 62, L. ed. Discussion of history of jurisprudence of the oil- producing States on fugacious character of oil and gas. James A. Veasy. April number Michigan Law Review. Concludes oil and gas in situ not fugacious, but form as much a part of the realty as iron. coal, sulphur, salt or any other mineral. The Louisiana case, Frost-Johnson Lumber Co. v. Sallings, 150 La. 756, 91 So. 207, holding contrary to the great weight of authority that mineral rights are not subject to separate grant, is little entitled to favorable consideration here. The exception of the mineral rights, if not valid in perpetuity, should certainly be held effective for a reasonable time. 77 Ark. 116; 127 Ark. 121; 237 U.S. 101; 145 Ark. 310; 148 Ark. 301.

Joe Joiner, for appellee.

Oil and gas cannot be owned separate and apart from the land. 103 Ark. 180; 233 Ill. 9; 84 N.E. 53; 130 Pa. 235; 5 L. R. A. 731; 131 Ind. 277, 31 N.E. 59; 53 W.Va. 501, 44 S.E. 433; 1 Thornton on Oil and Gas Law, 43, par. 24; 239 F. 933; 177 U.S. 190. The reservation in the deed is repugnant to the grant, and void. 82 Ark. 212; 98 Ark. 570; 118 Ark. 522; 131 Ark. 103; 94 Ark. 618; 195 Ill. 181, 62 N.E. 809; 22 Ky. L. Rep. 814, 64 S.W. 413; 24 Ky. L. Rep. 1364, 70 S.W. 1062; 103 Md. 696, 63 A. 965; 214 S.W. 537. 82 Ark. 212 has not been overruled, as contended by appellant, and was cited in 131 Ark. 103. The clause in this deed is a reservation and not an exception. 141 Iowa 438; 99 Ark. 244; 241 F. 581. Appellant has lost its right, if any it had, by abandonment. 205 S.W. 111; 169 S.W. 957; 97 Ark. 167; 192 S.W. 79; 225 S.W. 347. Appellant did nothing in all the time, more than 10 years, it claimed to own the mineral rights, to indicate its ownership. It did not have same separately assessed nor pay taxes thereon, as required in C. & M. Digest, 9857, while appellee was assessing and paying taxes on the land which included these minerals. Its claim is barred. C. & M. Digest, 6942; 1 Thornton, Law of Oil and Gas, 77, 111.

OPINION

MCCULLOCH. C. J.

This controversy involves the gas, oil and other mineral rights in and under a certain tract of land, containing forty acres, in Columbia County. Appellant. a corporation, formerly owned the land in fee simple, and in the year 1912 it conveyed the land to appellee by warranty deed but the granting clause contained a reservation (or exception) of the oil, gas and other mineral rights. in the following language:

"Reserving to the grantor, its successors and assigns, all of the gas, oil and minerals and mineral rights in and under said land. with the right to prospect for and exploit the same, and use sufficient surface therefor, and the right to lay, maintain and operate pipe lines for oil and gas; and the right to erect, maintain and operate telephone and telegraph lines, with the right reserved to remove any building, machinery, pipe lines or other property erected or placed on said land in connection therewith; and reserving to said grantor, its successors and assigns a right- of-way for railroad or tramroad not exceeding one hundred feet in width across said land, if same shall be necessary for, or desired by it, its successors or assigns, such pipe lines for oil and gas and such telephone and telegraph lines and such right-of-way, however, not to infringe upon or interfere with any improvements upon said land without payment of a reasonable amount for damages caused thereby."

Appellee instituted this action against appellant in the chancery court of Columbia County to cancel the reservation clause in said deed, and to quiet his title. In the complaint he alleged that appellant had not explored this tract of land for oil, gas or other minerals, nor any other land in that county, and that appellant had not paid any taxes on the mineral rights in the land. Appellee also pleaded the statute of limitations in bar of the right of appellant to assert any mineral rights in the land, and also pleaded in his complaint that appellant was barred by laches in not proceeding more expeditiously to explore the land for minerals.

Appellant answered, but the answer really tendered no issue of fact, and attempted to raise questions of law upon the facts pleaded in the complaint. The court sustained a demurrer to the answer, and appellant elected to stand upon it, and the court rendered a final decree in favor of appellee, canceling the reservation clause in the deed, and quieting appellee's title as against any claim of appellant to mineral rights.

It is first contended that the reservation clause is void as being in conflict with the grant. It will be observed, however, that the clause in question is a part of the granting clause of the deed, and must therefore be read in connection with the grant as a limitation thereon, rather than as being in conflict with it. This is the rule where an exception or reservation is found in the granting clause of a deed. Fletcher v. Lyon, 93 Ark. 5, 123 S.W. 801. It is otherwise where the clause attempting to limit the grant is contained in the habendum or any subsequent clause of the deed. McDill v. Meyer, 94 Ark. 615, 128 S.W. 364.

There is another preliminary to the main question in the case with respect to the language of the clause in using the word "reservation," instead of "exception." There is a clear distinction, of course, between a reservation and an exception in a deed, in that there may be a reservation to the grantor of some new thing issuing out of the thing granted but not theretofore in esse, whereas an exception relates to a part of the thing granted. These terms are too often used interchangeably, however, to be material, and it always becomes a question to determine what the real intention of the parties was with respect to the thing granted. Parker v. Parker, 99 Ark. 244, 138 S.W. 462. There are many authorities on this subject in other States, and it is uniformly held that where the word "reservation" is used, and it is clear that the intention of the grantor was to create an exception to the grant, the clause will be construed so as to carry out the obvious...