Cleary Petroleum Corp. v. Harrison

• Decision Date: 16 December 1980
• Docket Number: 52552,Nos. 52551,s. 52551
• Citation: 1980 OK 188,621 P.2d 528
• Parties: CLEARY PETROLEUM CORP., Appellant, v. William S. HARRISON and Edda Joanne Harrison, Appellees. CLEARY PETROLEUM CORP., Appellant, v. Bryan BERRY and Edrae Berry, Appellees.
• Court: Oklahoma Supreme Court

Page 528

621 P.2d 528

1980 OK 188

CLEARY PETROLEUM CORP., Appellant, v. William S. HARRISON and Edda Joanne Harrison, Appellees.

CLEARY PETROLEUM CORP., Appellant, v. Bryan BERRY and Edrae Berry, Appellees.

Nos. 52551, 52552.

Supreme Court of Oklahoma.

Dec. 16, 1980.

CERTIORARI TO THE COURT OF APPEALS, DIVISION NO. 1.

Consolidated appeals by corporate oil-and-gas lessee defendant below from two judgments of the District Court, Roger Mills County, Hon. Charles M. Wilson, trial judge, quieting its title to the leasehold but declaring its lessor's interest to be but a right-of-way easement. Holding that lessee was not "aggrieved" by these judgments, Court of Appeals dismissed both appeals.

CERTIORARI GRANTED, OPINIONS OF THE COURT OF APPEALS VACATED AND TRIAL COURT'S JUDGMENTS REVERSED.

Monnet, Hayes, Bullis, Thompson & Edwards by Richard A. Grimes, Oklahoma City, for appellant, Cleary Petroleum Corp.

Smith & Wright by Gale F. Smith, Cheyenne, for appellees, William S. and Edda Joanne Harris and Bryan and Edrae Berry.

OPALA, Justice.

The issues to be dealt with on certiorari are: (1) Is a corporate oil-and-gas lessee "aggrieved" by a judgment which, while quieting its title to the leasehold, also declares its lessor's interest in the demised land to be but a right-of-way easement rather than a mineral estate or a fee? (2) Did the trial court correctly construe the deeds in question when it adjudged that they convey but an easement interest? (3) Was the quiet-title decree in favor of the fee claimants contrary to law?

We hold: (1) The trial court's decree reducing lessor's estate to a mere easement so derogates from lessee's quantum of interest in mineral leasehold as to give it the status of an aggrieved party. (2) By force of statutory presumption that every estate conveyed is to be deemed in fee simple unless expressly limited, the disputed instruments, because of an absence of contrary words, conveyed to lessor as a matter of law a fee simple. (3) Trial court's quiet-title decree in favor of fee claimants is contrary to law.

By two separate deeds predecessors-in-title of plaintiffs below (fee claimants or claimants) conveyed to the Board of County Commissioners (Board) certain strips of land in Roger Mills County. Decades later, the Board gave Cleary Petroleum Corporation (Lessee) an oil and gas lease in that land. ¹ Claimants brought two suits against the Board and its lessee for reformation of the deeds to make them reflect that the instruments, as truly intended by the two parties, were but a grant of right-of-way easements. Judgment was rendered in favor of claimants. It confirmed in them the fee subject to lessee's oil-and-gas lease not on reformation grounds but rather on the court's view that the deeds must be construed as granting the Board a mere easement. The court then quieted in the Board an easement interest and in the lessee its leasehold estate. Lessee filed two separate appeals. The Court of Appeals dismissed both cases because, in its view, lessee was not aggrieved by the "favorable" decision below. We grant certiorari, hold both appeals maintainable and reverse the trial court.

I. LESSEE'S APPEALABLE INTEREST

One who is not aggrieved by a court's decision however erroneous may not bring an appeal from it. ² Case law defines an "aggrieved party" as one whose pecuniary interest in the subject-matter is directly and injuriously affected or one whose right in property is either established or divested by the decision from which the appeal is prosecuted. ³ Generally, if the judgment sought to be reviewed does not, by its own force, operate to impose a burden or obligation, and it has no binding effect upon any right, interest, person or property of the appealing party, that appellant is not deemed aggrieved. ⁴ The effect of a judgment must be direct, substantial and immediate, rather than contingent on some future event. ⁵

One can hardly conceive of anything more derogatory to a mineral lessee's title than a decree adjudging his lessor to have been without any mineral estate of record at the very time and since the leasehold came to be granted. This is, in essence, what happened to the lessee here. The trial court's judgment clearly and directly derogates from and impairs lessee's interest in its leasehold estate. An oil and gas lease is a presently vested interest. ⁶ By declaring the deeds to the lessor had conveyed to it merely an easement and not a full fee, the trial court, in effect, knocked down the very foundation upon which lessee must rest its rights. A fee holder has an interest sufficient in law to give a valid oil and gas lease. ⁷ A mere easement holder, on the other hand, who has neither a fee nor a mineral estate, does not possess the requisite quantum of interest to confer the cluster of rights comprised within an oil-and-gas lease. ⁸ When the trial court construed the deeds to convey mere easements, the lease became eo instante a worthless grant from one without a title. The consequent detriment to lessee's estate is a direct and immediate divestiture of a valuable property right. It hence confers on lessee standing to appeal as an aggrieved party.

Claimants argue that because the trial court did quiet lessee's title to its oil-and-gas lease, the lessee cannot be aggrieved. This is so because claimants urge when the suit came to be terminated lessee's quantum of interest was the very same as it was when the trial began. We cannot accede to this view.

The only possible basis for the trial court's failure to disturb the lease was, no doubt, its view that lessee, as a bona fide purchaser for value and without notice of its lessor's deficient title, held free from the after-adjudged defect. Claimants' argument overlooks that the bona-fide-purchaser defense cannot apply here because the court determined lessee's grantor (Board) never had any muniment of interest to the minerals. According to the court's judgment, the defect appeared from the face of the two recorded instruments. The bona-fide-purchaser defense cannot create an interest whose existence is negatived by the record. ⁹ The doctrine protects against unknown claims that may not be discovered from the record not those of which the purchaser has constructive notice. If the trial court's quiet-title decree in favor of claimants is correct, lessee was charged with notice of lessor's defect in title. The deeds were on record. If they in fact did, on their face, appear to convey but an easement, lessee most certainly had record notice of lessor's deficient estate. ¹⁰ In short, lessee cannot occupy the status of a bona-fide-purchaser. Moreover, even if lessee had been correctly clothed with the protection of a bona-fide purchaser, it is nonetheless highly doubtful if this court-conferred status could be passed to lessee's alienees. They might be chargeable with record notice of the very defect in the Board's claim to the demised mineral which was adjudged to be fatal in the quiet-title decree. It is hence clear that the so-called "favorable" part of the trial court's quiet-title decree fails to leave lessee's mineral leasehold free from a serious cloud upon its alienability. The essential fragility of lessee's status and the clouded alienability of its interest both of these phenomena clearly apparent from an even casual examination of the record make the leasehold vulnerable to continued litigation over rights that remain uncertain. The precarious legal condition of the leasehold estate, brought about by the termination of the suit under review, is sufficient in itself to confer upon lessee standing on appeal as an "aggrieved party."

II.

THE QUANTUM OF INTEREST CONVEYED TO THE BOARD BY THE DEEDS

UNDER CONSTRUCTION

There is a statutory presumption that every estate in land granted by a deed shall be deemed an estate in fee simple unless limited by express words. ¹¹ The purpose of construing an instrument is to divine from its text the intent of the parties. Unless there is an ambiguity, that intent must be gathered solely from the four corners of the instrument. ¹² Both deeds here under construction, although not identical, contain similar words by which they grant all of the described property. This is followed by a statement of purpose which is said to be an exchange of "one right of way for another." ¹³ Neither instrument contains any express words that limit the statutorily presumed fee conveyance. Although the purpose of the deeds is disclosed, words by which it is declared will not, without more, suffice to limit the estate granted. ¹⁴ In the case at bar, nothing more is revealed. On their face and on the face of the record before us, the deeds in dispute clearly convey to the Board a fee estate not mere easements. We so hold.

Claimants contend much of the authority for this conclusion rests on cases involving railroads. They would have us draw a distinction which we cannot do. Although some of the cases involving railroads address issues peculiar to them, ¹⁵ the basic rules for construction of deeds announced in those cases are of universal application and cannot be altered here.

Claimants next urge that the trial court correctly applied to this case the rule that written portions of an instrument control over conflicting printed portions. ¹⁶ This principle is inapplicable here. In the case at bar there is no variance between any written or typed-in portions and those which are printed. The only written portions possibly in conflict with the printed words are in the statements describing the purpose of the deeds. These, however, for the reasons stated earlier, do not serve to diminish the fee estate conveyed.

III. THE TRIAL COURT'S DECREE IS UNSUPPORTED BY THE RECORD

These actions were brought in equity for reformation of deeds. The traditional standard of review in equity suits charges this court with the responsibility to examine the entire record to determine whether the decree is against the...