Connell v. Kanwa Oil, Inc.

• Citation: 170 P.2d 631,161 Kan. 649
• Decision Date: 06 July 1946
• Docket Number: 36624.
• Parties: CONNELL v. KANWA OIL, INC.
• Court: United States State Supreme Court of Kansas

170 P.2d 631

161 Kan. 649

CONNELL v. KANWA OIL, INC.

No. 36624.

Supreme Court of Kansas

July 6, 1946

Appeal from District Court, Russell County; C. A. Spencer, Judge.

Action by O. J. Connell against Kanwa Oil, Inc., a corporation, for specific performance of a written agreement for sale of an interest in an overriding royalty interest of oil and gas. From judgment sustaining a motion to quash the publication of service and taxing costs of the action against the plaintiff plaintiff appeals.

HARVEY C. J., and SMITH, J., dissenting.

Syllabus by the Court

1. Following numerous decisions of this court, cited in the opinion, it is held that an oil and gas lease conveys no interest in the land therein described but merely a license to explore and is personal property--an incorporeal hereditament--a profit a prendre.

2. An oil and gas overriding royalty interest is carved out of a leasehold interest and the rights acquired under an instrument creating such an interest can rise no higher than the source from which it springs.

3. Overriding royalty interests are not land within the meaning of that term as used in G.S.1935, 60-510.

4. The record in an action against a foreign corporation to require specific performance of an agreement to assign an interest in an overriding royalty examined, and held: (1) The action is in personal and unless instituted in conformity with the provisions of G.S.1935, 17-509, must be brought in the county where the defendant resides or can be summoned; (2) no jurisdiction of the defendant was obtained by publication service, and (3) the trial court properly sustained a motion to quash the publication service.

5. The provisions of the statute (G.S.1935, 60-2525) pertaining to constructive service do not create a cause of action or fix its venue and only become operative when the action is properly instituted in the district court of the county wherein such service is sought to be obtained.

J. B McKay, of El Dorado (O. J. Connell, Jr., of El Dorado, on the brief), for appellant.

Harold W. McCombs, of Russell (Paul Donald and J. M. Donald, both of Bowie, Tex., on the brief), for appellee.

PARKER Justice.

This was an action for the specific performance of an alleged written agreement for the sale of an undivided three-fourths interest in an overriding royalty interest of one-eighth of eight-eighths of all oil, gas and casing head gas, produced, saved and sold, from a certain oil producing tract of real estate located in Russell County, Kansas, in which the plaintiff, a resident of Butler County, sought to obtain service by publication in the district court of Russell County on the defendant, a foreign corporation and the owner of such royalty interest. The appeal is from a judgment sustaining a motion to quash the publication service and taxing the costs of the action against the plaintiff.

The grounds relied on by defendant for the sustaining of its motion to quash were:

'(a) That no valid service of summons by publication has ever been had in said cause.

'(b) That no valid affidavit for service by publication has ever been filed in said cause.

'(c) That this defendant is a corporation organized, existing and having its principal place of business outside of the State of Kansas; that no basis exists or has existed for obtaining service of summons upon this defendant by publication.'

Since it is conceded the all decisive issue raised by the appeal is whether service by publication on a foreign corporation is authorized by our statute in an action for specific performance of a contract to convey an overriding royalty interest where actual service of summons on such corporation cannot be had within the state, what has been heretofore related will suffice for a factual statement and permits inverse consideration of the grounds set forth in the motion.

As we approach consideration of the issue thus presented, it should be stated the positions of the parties with respect to such issue are in sharp conflict and there can be no reconciling of their views regarding the fundamental legal propositions applicable to its determination. However, their respective claims, although they are not to be so easily disposed of, can be simply stated. The appellant contends, first, that an overriding royalty interest is 'land' within the meaning of G.S.1935, 60-510, and hence the action may be brought and publication service obtained in the county where the land involved in the pleaded contract is situated and, second, that even if such an interest is not held to be land then, and in that event, the suit is nevertheless maintainable in such county and service by publication proper under the provisions of G.S.1935, 60-2525, authorizing constructive service of summons in certain cases, of which his cause is one. On the other hand appellee insists that an overriding royalty interest in an oil and gas lease is not 'land' within the meaning of the section of the statute first above referred to and that an action for specific performance of an agreement to sell such an interest is one in personam where service by publication is unauthorized.

G.S.1935, 60-510, upon which appellant bottoms the position assumed by him in his first contention, was originally Section 1 of Chapter 384 of the Laws of 1903 and reads:

'An action to compel the specific performance of a contract for the sale of lands situated in the state of Kansas may be brought in any county where the land or any part thereof is situate, or in any county where the defendant or any one of the defendants may reside.'

Prior to 1903 all actions to compel the specific performance of agreements for the sale of lands were regarded as actions in personam and could be brought only in the county where the defendants resided or could be summoned and, except for the enactment just quoted, there has been no material change since that date in provisions of our statute fixing venue in civil actions. There was then--as now--in full force and effect the following provisions which for convenience will be referred to as found in our present statute: G.S.1935, 60-501 to 502, incl., pertaining to actions concerning real estate or any interest therein, which required the action to be brought in the county where the subject of the action--the land--was situated; G.S.1935, 60-503, providing that actions therein designated and commonly referred to as local in character must be brought in the county where the cause, or some part thereof, arose; G.S.1935, 60-507, specifying that an action other than one of those mentioned in the first three sections of the article (60-501, 502 and 503), against a nonresident of the state or a foreign corporation, might be brought in any county in which there was property of, or debts owing to, the defendant or where such defendant might be found; and certain other sections, G.S.1935, 60-504, 505 and 508, inapplicable to the involved situation and for that reason not more specifically described. All other actions were strictly transitory in nature for purposes of venue and by the then, and now, provisions of G.S.1935, 60-509, were required to be brought in the county in which the defendant resided or might be summoned.

With the foregoing statutory sections effective it is interesting to note the early holding of this court both before and after the 1903 enactment on the subject of jurisdiction in cases similar in character to the one here involved.

In Close v. Wheaton, 65 Kan. 830, 70 P. 891, decided in 1902, it was held:

'An action to compel the specific performance of an agreement to convey land, if the defendant's obligation is in contract merely, without any element of trust, is an action in personam, and must be brought in the county where the defendant resides, and not of necessity in the county where the land is situated.' (Syl.)

And said:

'The character of an action for specific performance as in personam entirely is so well established that courts having jurisdiction of the parties frequently entertain suits to compel the execution of contracts for the conveyance of lands in other states, in which, of course, their decrees as to the res cannot operate. Lindley v. O'Reilly, 50 N.J.L. 636, 15 A. 379, 1 L.R.A. 79, 7 Am.St.Rep. 802.

'Sometimes a question may exist as to whether the complaining party may not have such peculiar interest in the property as to entitle him to the enforcement of a trust, and not of contract merely (Merrill v. Beckwith, 163 Mass. 503, 40 N.E. 855), in which event the action might be local and not transitory; but the plaintiffs in this case have neither stated in their pleadings, nor claimed before us, such character of right. We are, therefore, well convinced that the inherent nature of the ordinary proceeding to compel a vendor to comply with his contract, as contract, by the execution of a deed, makes the action one in personam, which can be brought only where the defendant resides or may be legally served with personal process.

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'Suits for the performance of agreements are not brought to determine titles, because, if so, they would operate on the res, but they are brought to enforce purely personal contracts. Of course, if the defendant obeys the decree, the title will pass, and the court may, in proper cases, order the decree to stand as a conveyance, in which instance, also, the title will pass; but nevertheless the object of the suit is not to determine the title, but to compel the defaulting party to abide his agreement.' 65 Kan. at pages 832, 833 and 834, 70 P. at page 891.

Later in Horner v. Ellis, 75 Kan. 675, 90 P. 275, 121 Am.St.Rep. 446, wherein Close v. Wheaton, supra, was quoted with approval, we held:

'Prior to the enactment of chapter 384, p.

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