Bonner v. Oklahoma Rock Corp., 78986
| Decision Date | 12 October 1993 |
| Docket Number | No. 78986,78986 |
| Citation | 863 P.2d 1176,1993 OK 131 |
| Parties | Jerry J. BONNER and Merline Bonner, Plaintiffs, v. OKLAHOMA ROCK CORPORATION, Defendant. |
| Court | Oklahoma Supreme Court |
Dan Little, Little, Little, Little & Windel, Madill, for plaintiffs.
John A. Claro and Bert Barefoot, Jr., Claro and Johnston, Oklahoma City, for defendant.
The United States District Court for the Eastern District of Oklahoma certified for this court's answer the following question posed pursuant to the Uniform Certification of Questions of Law Act, 20 O.S.1991 §§ 1601 et seq.:
"What rights, if any, does the defendant, Oklahoma Rock Corporation, a Texas Corporation, 1 presently hold concerning the subject tract, 2 by reason of the document in issue?"
Our answer is that unless Oklahoma Rock Corporation's [Oklahoma Rock's] in situ interest is found to be adversely affected by the Bonners' (plaintiffs') attempted federal-court claim 3 for rescission--upon failure of consideration--of their contract (with Southwest Stone) 4
which underlies the critical Document, 5 Oklahoma Rock is vested with title to all the gravel, stone, rock, shale, limestone and other forms of rock used to produce aggregate 6 [the substances or rock] underlying and situated upon the subject tract (with the exception of substances the Bonners personally may use in the property's improvement), subject to specified post-severance payments on a tonnage basis. 7
THE GENESIS OF THE CONTROVERSY AND THE ANATOMY OF FEDERAL LITIGATION
In 1965 Southwest Stone Co. [Southwest Stone] 8 conveyed by Joint Tenancy Warranty Deed [the Deed] to plaintiffs Jerry and Merline Bonner [Bonners] three tracts of land in Atoka County, reserving a one-eighth interest in all oil, gas and other minerals. The Bonners executed and delivered to Southwest Stone 9 a document called an "easement" [the Document]. 10
Both the Deed and the Document were recorded. Oklahoma Rock later acquired by various assignments whatever interest the Bonners conveyed to Southwest Stone. 11 Neither Southwest Stone nor its successors has mined any substances on the property. The Bonners have never demanded that either Oklahoma Rock or its predecessors begin mining operations
When this proceeding to quiet title, cancel an "easement," and restrain Oklahoma Rock from going upon the Bonner's property to extract, process and sell the substances was removed from the District Court, Atoka County, to the United States District Court for the Eastern District of Oklahoma, Oklahoma Rock counterclaimed to quiet its title in the substances. The parties brought cross-motions for summary judgment, which were denied. After a non-jury trial, the federal district court certified for this court's answer the question now before us. 12
The parol evidence rule teaches that unless fraud or mistake is involved pre-contract negotiations and oral discussions are merged into, and superseded by, the terms of an executed writing. 14 While According to the Bonners, the Document does not convey all the solid earthy substances; rather, only those that have been "used to produce aggregate." They urge the Document gives Southwest Stone no more than the right to take severed substances and that mining must take place before title to the rock passes. Oklahoma Rock claims the writing is a mineral deed which conveys substances in situ.
the practical construction of an agreement, as evidenced by the acts and conduct of the parties, may sometimes be available for the court's consideration in the event of an ambiguity, the parties have stipulated that the Document is not ambiguous, 15 conferring on the trial court--and hence on this court for purposes of answering the question posed--the power to construe the Document's meaning from its four corners. 16
The drafter labeled the Document an "easement." Although the name given to an instrument may be considered in determining the parties' intent, it is not controlling. 17 An easement is a right to make use of another's land for some definite and limited purpose. 18 "Easement" is a misnomer here, since the Document's clear, definite and unambiguous terms unmistakably convey more than simply the use of the Bonners' land for rock mining.
The Document provides that the grantors (Bonners) "grant, bargain, sell, assign and convey to the grantee (Southwest Stone, its successors and assigns ) ... all of the gravel, stone, rock, shale and limestone and other forms of rock used to produce aggregate which may be situated or found on the property. " We must give these words their ordinary legal effect, which is to vest the grantee with an estate in the enumerated substances. 19 We are not persuaded that the Document conveys only "used" or severed rock. 20 Rather, the term "used to produce aggregate" modifies "other forms of rock" to help define the character of the last substance included in the conveyance. The latter is a catchall, to assure the conveyance of any rock of the same kind which may not have been named.
A lease is a grant of the land's use for a definite term, 21 which must be less time than the lessor has in the premises. 22 The four corners of the Document yield no indication that the grant is for a term. 23 Neither do they reveal other characteristics expected from and customarily found in a lease. 24
A profit, or profit a prendre, the ancient Norman-French term by which this interest is known in the common-law system, is a liberty in one person to enter another's soil and take from it the fruits not yet carried away. 25 Analogous to the right to hunt and fish on the land of another, it is an incorporeal hereditament which may be conveyed in fee or for a term of years. 26 The Document's first clause grants more than simply a right to go upon the land and reduce the earthy substances to possession. By its own terms, it conveys the substances themselves. 27
Although the parties stipulated for a post-severance payment scheme and labeled it a "royalty," 28 we may not assume from this provision that the Bonners have parted with less than their entire interest in the rocks or that they intended to withhold title to the substances until after their extraction. Without any essential indicia that a mining lease or a profit a prendre was intended to be created, the "royalty" payments must be viewed as no more than a stipulated post-severance compensation for the in situ interest conveyed. 29
According to the Bonners, the second clause--which spells out the grantee's right to go upon the property to remove the substances--would be redundant if they had intended to grant the rock in place. 30 They urge that the clause is hence repugnant to a grant of minerals The right to remove the rock is denominated as exclusive. At common law, a mere right to remove minerals or other fruits of one's land is deemed nonexclusive and hence indivisible. 35 The grant of an exclusive right indicates an intent to pass an interest in land which is divisible, assignable and inheritable. 36 Express language of the Document bears this out; it explicitly provides that "the rights and obligations created ... are assignable" and contains words of inheritance--i.e., "grantee, its successors and assigns." 37
in the soil. 31 We disagree and ascribe its inclusion to no more than a legal draftsman's overabundance of caution. 32 Although the clause reveals the parties contemplated the carrying-on of quarrying operations upon the property, 33 their statement of purpose is not sufficient to transform the Document into a lease relationship in the face of clear, unambiguous terms granting an in situ interest. 34
None of the clauses which follow limits or qualifies a grant of substances in place (or in the soil). One clause provides that Southwest Stone is to pay the real property taxes attributable to its interest. This provision is clearly consistent with a grant to Southwest Stone of a fee interest in the substances. Tax liability for all cognizable interest in land is borne by the fee owner, while leasehold interests are non-assessable. 38
Absent illegality, parties are free to bargain as they see fit; a court may neither make a new contract to benefit a party nor rewrite the existing one. 39 Upon consideration of the entire Document without undue emphasis on any particular
part, 40 we are left with the firm conviction that it clearly effects a conveyance of rock in place, with stipulated post-severance payments to be made on a tonnage basis.
The Bonners urge that even if the court should decide that the Document conveys the rock in situ, Oklahoma Rock has a duty diligently to mine the substances, since the only consideration for the Document was the expected "royalty" from the product's sale. 41 According to Oklahoma Rock, although covenants to develop minerals may be implied in some leases, the court may not imply one in this case. We are urged this is so because here there has been an outright conveyance of the "solid minerals" 42 (rock) in place. 43
Contractual duties may arise from implied covenants. Implied-in-fact and implied-in-law (or constructive) covenants are the two varieties of implied covenants. A covenant implied...
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