Boylin v. United Western Minerals Co., 7220

• Decision Date: 10 June 1963
• Docket Number: No. 7220,7220
• Parties: Frank BOYLIN, Maurice Greenberg, Lewis (Louis) Shur, Mabel Parsley, Administratrix of the Estate of Jack Parsley, Deceased, Kelsey Boltz, and Max Kamiel, Plaintiffs-Appellants, v. UNITED WESTERN MINERALS COMPANY, San Jacinto Petroleum Corporation, White, Weld & Company, J. H. Whitney & Company, Swan Finch Oil Corporation, Defendants-Appellees.
• Court: New Mexico Supreme Court

Page 717

382 P.2d 717

72 N.M. 242

Frank BOYLIN, Maurice Greenberg, Lewis (Louis) Shur, Mabel

Parsley, Administratrix of the Estate of Jack

Parsley, Deceased, Kelsey Boltz, and Max

Kamiel, Plaintiffs-Appellants, v. UNITED WESTERN MINERALS COMPANY, San Jacinto Petroleum

Corporation, White, Weld & Company, J. H. Whitney

& Company, Swan Finch Oil Corporation,

Defendants-Appellees.

No. 7220.

Supreme Court of New Mexico.

June 10, 1963.

Chavez & Cowper, Belen, for appellants.

McKenna & Sommer, Santa Fe, for appellees United Western Minerals Co., San Jacinto Petroleum Corp., White, Weld & Co., J. H. Whitney & Co.

COMPTON, Chief Justice.

This is an appeal from a summary judgment in favor of appellees, defendants below.

The action is for an accounting and for the payment of accrued royalties. The appellants alleged in their complaint that appellees had acquired by assignment certain mining claims in McKinley County burdened with the payment of royalties to appellants which had not been paid. Motions to dismiss were filed on behalf of the various appellees. The court, after examination of the stipulations, affidavits and exhibits of record made a part of the motions to dismiss, viewed the motions as one for summary judgment which it granted appellees on the ground that there did not exist a genuine issue as to any material fact. This appeal follows.

It was stipulated that the chain of title in appellees grew out of a basic mining lease which provided that the total maximum royalties to be paid on all claims covered should not exceed 15%. The basic mining lease was executed between the owners of the property, the Cospers, assigned to the Kings, by the Kings to one Parsley, by Parsley to the Colamer Corporation, and by Colamer Corporation to the appellees. It was also stipulated that the royalties claimed by appellants were from past production from two of the mining claims, State Nos. 7 and 8, the only claims from which ore was produced.

We summarize the record. At the time of the assignment to Colamer Corporation, the claims were burdened with 10% royalties. Thereafter Colamer Corporation entered into a contract with the United States under the Defense Minerals Exploration Administration, for the exploration and development of the claims, which contract provided for a lien on a 5% 'percentage royalty' to the United States until such time as the monies advanced by it had been repaid. Subsequent to the DMEA contract, but prior to the assignment and conveyance by Colamer Corporation to appellees, the appellants, being the stockholders of Colamer Corporation, transferred all of the stock of that corporation, or sold the corporation so to speak, to Swan Finch Corporation by a letter agreement which listed claims State Nos. 7 and 8 as being subject to a 10% royalty and provided that the difference between 15% and the royalties payable as listed was payable to the appellants as ore payments in accordance with the percentages listed opposite their names therein. By this letter agreement Swan Finch agreed to complete insofar as possible the outstanding DMEA contracts, but payment to the United States under these contracts was not set forth nor the 5% percentage royalties called for under the DMEA contracts specifically mentioned as included in the royalties to which the various claims were subject.

Appellants contend that the 5% royalty payable to the government was never considered, nor intended to be considered, a royalty within the maximum royalty limitation in the basic mining lease.

Whatever may have been the intentions of the parties to the letter agreement referred to above, a determination as to what obligations were assumed by, or imposed upon, appellees under the assignment and conveyance to them of the mining claims by Colamer Corporation is decisive here. We think this issue is resolved by a construction of the instrument itself. The assignment and conveyance provides that the assigned properties are those fully described in Exhibit A attached to and made a part thereof, and are assigned and conveyed subject only to the net profits interest therein reserved and to the various royalty interests particularly described in Exhibit A. Exhibit A, paragraph 1, specifically describes the claims assigned. With respect to State Nos. 7 and 8, it states:

'The following named Federal lode mining claims located in McKinley County, New Mexico, and covering the west 4,500 feet of Section 8 in Township 13 North, Range 9 West, N.M.P.M.:

'State Nos. 1-27.

'All of the foregoing Federal lode mining claims located in said Section 8 are subject, however, to five per cent royalty payable to the Defense Minerals...