Cummings v. Midstates Oil Corporation

• Decision Date: 28 September 1942
• Docket Number: 35020.
• Citation: 193 Miss. 675,9 So.2d 648
• Court: Mississippi Supreme Court
• Parties: CUMMINGS et al. v. MIDSTATES OIL CORPORATION et al.

9 So.2d 648

193 Miss. 675

CUMMINGS et al. v. MIDSTATES OIL CORPORATION et al.

No. 35020.

Supreme Court of Mississippi

September 28, 1942

Henry & Barbour and Bridgforth & Love, all of Yazoo City Swep S. Taylor, Jr., of Jackson, R. R. Norquist and Miss Ruth Campbell, both of Yazoo City, and James McClure, of Sardis for appellants.

Wells Wells, Lipscomb & Newman and L. O. Smith, Jr., all of Jackson, Chas. L. Follansbee, C. E. Cooper, A. D. Kennedy Jr., and Chas. W. Barnes, Jr., all of Tulsa, Okl., and J. G. Holmes, of Yazoo City, for appellees.

ROBERDS Justice.

The main question for decision herein is whether, as between the parties to this litigation, a tract of ten acres of land located in Yazoo County, Mississippi, is included within an oil, gas and mineral lease executed by W. F. Cummings and wife to J. H. Pendleton August 31, 1939. Jones, Gaskey and Midstates Oil Corporation, appellees, claim under that lease; appellants contend the ten acres are not covered by that lease. Cummings and wife, by bill, and the other appellants by admissions in answers and by cross-bills, sought in this suit to cancel, as a cloud on their titles, the leasehold claims of appellees. The description expressly excepted the ten acres but was followed by the usual intention, or cover-all, clause contained in such leases. The Chancellor, after hearing oral proof of the circumstances surrounding the parties and the execution of the lease, held (1) that the cover-all clause contained words of conveyance and was more than a mere expression of intention and (2) the general intention clause controlled over the express exception, and that, therefore, the lease included the ten acres. We affirm the conclusion of the Chancellor, but we do so on the ground that appellants, by their conduct and the acts and events hereinafter set out, have adopted a practical construction of, and ratified and confirmed, the Pendleton lease as including said ten acres of land, and are estopped to assert otherwise. We do not pass upon either question decided by the Chancellor.

The description in the Pendleton lease reads: "Southeast Quarter of the Southwest Quarter, and the Northeast Quarter of Southwest Quarter, and West half of Southeast Quarter, and the Southwest Quarter of the Southwest Quarter less Ten (10) acres off of West side of the Southwest Quarter of the Southwest Quarter, also Seven (7) acres off of South end of Northwest Quarter, all in Section 31, Township 10, Range 2 West. It is the intention that this lease shall also include all land owned or claimed by Lessor adjacent or continguous to the land particularly described above, whether the same be in said survey or surveys or in adjacent surveys."

It is the usual oil, gas and mineral lease. It grants, leases and lets unto the lessee the described lands for the purpose of prospecting and producing, treating and preserving thereon, and transporting and marketing therefrom, etc., oil, gas and minerals, with the right to lay pipes, construct tanks, stations, etc., and do all things necessary to accomplish such purposes, for a period of ten years and as long therafter as oil, gas or other minerals may be produced therefrom. It provides that if drilling operations are not commenced within one year the lease shall terminate, but lessee may keep it alive by paying a yearly renewal rental of one dollar per acre on the basis of 155 acres. There are other rights of lessee not necessary to set out.

The consideration to Cummings for the lease was (1) four hundred dollars cash, (2) one-eighth of the oil and gas sold and used, and if not sold or used, fifty dollars per gas well per year, and one-tenth of other minerals, which might be produced on the lands, and (3) the cash renewal rentals. Lessor has other rights not necessary to be set out. Lessor warrants and agrees to defend the title to the property conveyed, and lessee has the right to discharge liens and encumbrances on the lands, using rents and royalties for that purpose.

Immediately after executing the Pendleton lease, Cummings began to sell and convey designated percentages of mineral rights in his land and in his royalty and rents under that lease, his grantees, in turn, conveying to others, some twenty-six in all, Cummings owning, when suit was filed, a small interest therein. These grantees were all parties to this suit. He conveyed these rights by three conveyances-one each to D. L. Staples and J. L. Britt, both dated September 1, 1939, conveying to each one-fourth of the minerals in place and of his royalty and rents, and the other to one W. J. Lutz, dated September 29, 1939, conveying one-half thereof. This should have been one-fourth, and on January 9, 1941, Lutz reconveyed to Cummings a one-fourth. F. H. Parker, the appellant mainly interested in this appeal, was half interested with Lutz. The Staples-Britt instruments are called "Royalty Conveyances"; the one to Lutz is designated "Mineral Right and Royalty Transfer."

The Staples conveyance grants, sells, conveys, assigns and delivers unto the grantee one-fourth interest in and to all of the oil, gas and other minerals in and under, and that may be produced from, the "Southwest Quarter of Southwest Quarter and the East half of Southwest Quarter, Less 25 acres off the North end, and West half of the Southeast Quarter less 25 acres off the North end, All located in Section 31, Township 10, Range 2 West, containing 155 acres more or less, together with the right of ingress and egress at all times for the purpose of mining, drilling and exploring said lands for oil, gas and other minerals and removing the same therefrom."

Then follow these provisions:

"Said land being now under an oil and gas lease executed in favor of J. H. Pendleton it is understood and agreed that this sale is made subject to the terms of said lease, but covers and includes 1/4th One Fourth of all the oil royalty, and gas rental or royalty due and to be paid under the terms of said lease, provided, however, the original term of said oil and gas lease shall not be extended without the written consent of the grantee first having been obtained.

It is understood and agreed that One-Fourth of the money rentals which may be paid to extend the term within which a well may be begun under the terms of said lease is to be paid to the said Grantee and in the event that the above described lease for any reason becomes canceled or forfeited then and in that event an undivided One Fourth of the lease interests and all future rentals and bonuses on said land for oil, gas and other mineral privileges shall be owned by the said Grantee, D. L. Staples, owning one-Fourth of all oil, gas and other minerals in and under said lands, together with One-Fourth of all oil, gas and other minerals in and under said lands, together with One-Fourth interest in all future events."

Then follows a general warranty clause, in which grantors agree to warrant and defend "the said property" against the claims of all persons, further granting unto the grantee the right to redeem the land from all liens and encumbrances and be subrogated to the rights of the holder thereof.

It will be seen that this instrument includes the southwest quarter of the southwest quarter of Section 31, without excepting the ten acres, and estimates the total acreage described at 155 acres. It then stipulates that said lands are under the Pendleton lease.

The Britt and Staples conveyances are alike except as to grantees.

The description in the Lutz instrument reads: "SW 1/4 of the SW 1/4 and the E 1/2 of the SW 1/4, less 25 acres off the north end and W 1/2 of the SE 1/4 less 25 acres off the north end, of Section 31, Township 10, Range 2 West, containing 155 acres." This is followed by a statement that the parties believe the grantors own more land than is covered in the description, "and it is also understood that the present lease does not cover all the land owned" by the grantors, and the intent clause covers all land owned by grantors in Yazoo County. It then grants the right to do all things necessary to mine, drill, produce and save the oil, gas and minerals on said lands, and warrants the title to the designated interest in the minerals. This paragraph follows:

"This conveyance is made subject to any valid and subsisting oil, gas or other mineral lease or leases on said land, including also any mineral lease, if any, heretofore made or being contemporaneously made from grantor to grantee; but, for the same consideration hereinabove mentioned, grantor has sold, transferred, assigned and conveyed and by these presents does sell, transfer, assign and convey unto grantee, his heirs, successors and assigns, the same undivided interest (as the undivided interest hereinabove conveyed in the oil, gas and other minerals in said land) in all the rights, rentals, royalties and other benefits accruing or to accrue under said lease or leases from the above described land; to have and to hold unto grantee, his heirs, successors and assigns."

The only material differences between this conveyance and the Staples-Britt royalty conveyances are (1) this conveyance does not expressly describe the Pendleton lease and (2) in it grantor says he thinks he has more land than is described and his cover-all clause includes all lands he may own in Yazoo County. The only existing lease on the lands was the Pendleton lease. That was assigned by Pendleton to Jones and Gaskey September 7, 1939, and it and the assignment were filed for record that day. Therefore, while the Pendleton lease is not expressly described in the Lutz conveyance, the reference therein to existing lease could mean only the Pendleton lease. The reference in the Lutz deed to lands Cummings thought he might own other than...