Exxon Corp. v. Whitehead

• Citation: 591 So.2d 46
• Parties: EXXON CORPORATION, et al. v. John J. WHITEHEAD. EXXON CORPORATION, et al. v. Michael Terry LLOYD, et al. EXXON CORPORATION, et al. v. Robert R. WAITE, et al. 1900888, 1900889 and 1900890.
• Decision Date: 27 November 1991
• Court: Supreme Court of Alabama

Page 46

591 So.2d 46

EXXON CORPORATION, et al. v. John J. WHITEHEAD.

EXXON CORPORATION, et al. v. Michael Terry LLOYD, et al.

EXXON CORPORATION, et al. v. Robert R. WAITE, et al.

1900888, 1900889 and 1900890.

Supreme Court of Alabama.

Nov. 27, 1991.

Ben H. Harris, Jr., William H. Hardie and Alan C. Christian of Johnstone, Adams, Bailey, Gordon & Harris, Mobile, for appellants.

Robert S. Edington, Mobile, for appellee John J. Whitehead.

Halron W. Turner of Turner, Onderdonk, Kimbrough & Howell, P.A., Chatom, for appellees Michael Terry Lloyd, Brenda K. Lloyd and Edward P. Turner, Jr.

Frank Woodson of Turner, Onderdonk, Kimbrough & Howell, P.A., Mobile, for appellees Robert R. Waite, Margie N. Waite and Relco, Inc.

ADAMS, Justice.

This is the second time this case has come before this Court. In the first appeal, this Court remanded the case to the trial court for a determination of the intent of the parties with regard to certain language in deeds that this Court found to be ambiguous. The facts of the case were succinctly set forth in Exxon Corp. v. Waite, 564 So.2d 941 (Ala.1990), and, for the convenience of the reader, the statement of facts from that opinion, along with part of our discussion of those facts, is quoted here:

"These appeals involve three consolidated actions to quiet title to an undivided 1/2 mineral interest in four residential lots in Mobile County. The dispute arose from a purported reservation of the mineral interest in the deeds from the developer of the subdivision.

"The parties all initially share a common chain of title. On September 1, 1949, C.M. Cleveland and his wife, Elizabeth Cleveland, conveyed 386 acres of land to Ora Harwell. In the conveyance, the Clevelands reserved an undivided 1/2 interest in the oil, gas, and minerals. The Clevelands' mineral reservation is not in dispute.

"On March 5, 1962, Ora Harwell and his wife, Irene Harwell, conveyed the property they had received from the Clevelands, including their undivided 1/2 mineral interest, to Ivan H. Nall and his wife, Virginia Grace Nall. The deed from the Harwells to the Nalls did not contain a reservation of the mineral interest; therefore, the Nalls received the 386 acres and the Harwells' undivided 1/2 mineral interest. The Nalls subdivided a portion of the land they had obtained from the Harwells into the Stately Pines Subdivision. The Nalls subsequently conveyed lots 5, 9, 10, and 11 in the subdivision.

"On October 11, 1974, the Nalls executed an oil, gas, and mineral lease of the entire Stately Pines subdivision to Exxon. In that lease the Nalls deleted the warranty clause. The lease granted to Exxon 3/16 of the Nalls' undivided 1/2 mineral interest to Exxon as a working interest and retained 3/16 of the Nalls' undivided 1/2 mineral interest as a royalty interest for the Nalls. That lease was recorded in the office of the judge of probate on April 2, 1975.

"I. The Waite Conveyance.

"On April 25, 1973, the Nalls conveyed by warranty deed lots 10 and 11 of the Stately Pines Subdivision to Robert R. Waite and his wife, Margie N. Waite. The deed, which was prepared by the Nalls, contained the following language: 'Oil and mineral rights reserved by former owners.'

"On July 30, 1975, the Waites executed an oil, gas, and mineral lease to Clifford O. Rudder. On April 26, 1983, Rudder assigned his interest in the lease to Relco, Inc.

"On January 4, 1984, the Waites and Relco, Inc., sued the Nalls and Exxon to quiet title to the undivided 1/2 mineral interest in lots 10 and 11. The Nalls and Exxon filed an answer and a counterclaim to quiet title to lots 10 and 11.

"The Waites claim the undivided 1/2 royalty interest, and Relco claims the undivided 1/2 working interest in lots 10 and 11. However, the Nalls also claim the undivided 1/2 royalty interest, and Exxon also claims the undivided 1/2 working interest in lots 10 and 11.

"II. The Lloyd Conveyance.

"On April 25, 1973, the Nalls conveyed by warranty deed lot 9 of the Stately Pines Subdivision to Michael Terry Lloyd and his wife, Brenda K. Lloyd. The deed, which was prepared by the Nalls, contained the following language: 'Oil and mineral rights reserved by former owners.'

"On November 19, 1975, the Lloyds executed an oil, gas, and mineral lease to Edward P. Turner, Jr. That lease was recorded in the office of the judge of probate on December 3, 1975.

"On July 29, 1985, the Lloyds and Edward Turner filed suit against the Nalls and Exxon to quiet title to an undivided 1/2 mineral interest in lot 9. The Nalls and Exxon filed an answer and a counterclaim to quiet title to lot 9.

"The Lloyds claim the undivided 1/2 royalty interest, and Turner claims the undivided 1/2 working interest in lot 9. However, the Nalls also claim the undivided 1/2 royalty interest, and Exxon also claims the undivided 1/2 working interest in lot 9.

"III. The Lowery (Whitehead) Conveyance.

"On August 13, 1973, the Nalls conveyed by warranty deed lot 5 of the Stately Pines Subdivision to Jerry Lowery. The deed, which was prepared by the Nalls, contained the following language: 'All oil and mineral rights reserved by former owners.' The deed from the Nalls to Lowery was not recorded in the office of the judge of probate until August 18, 1975.

"On January 9, 1980, Lowery purported to convey all of his 1/2 interest in the minerals to J.S. Roberts, Jr. That deed was recorded in the office of the judge of probate on January 17, 1980. On December 7, 1981, Roberts purported to convey his interest by deed to John J. Whitehead. That deed was recorded in the office of the judge of probate on December 11, 1981.

"On June 29, 1982, Whitehead's attorney forwarded to Exxon a title opinion regarding the mineral interest in lot 5. Thereafter, Exxon began making royalty payments to Whitehead, which continued until October 27, 1983, when they were suspended.

"On July 29, 1985, Whitehead sued the Nalls and Exxon to quiet title to an undivided 1/2 mineral interest in lot 9. The Nalls and Exxon filed an answer and counterclaim to quiet title to lot 9.

"Whitehead claims the undivided 1/2 mineral interest in lot 5. However, the Nalls claim the undivided 1/2 royalty interest, and Exxon claims the undivided 1/2 working interest in lot 5.

"The Waite, Lloyd, and Whitehead cases were consolidated for trial, upon a motion by Exxon. On March 19, 1986, the trial court held that the three deeds were not ambiguous and heard testimony only on the question of whether Exxon was a bona fide purchaser of the mineral interest in lot 5 with reference to the Whitehead conveyance.

"The trial court held that the language 'oil and mineral rights reserved by former owners' was not an effective reservation of the mineral rights by the Nalls. The trial court quieted title to the undivided 1/2 mineral interest in lots 10 and 11 in favor of the Waites and Relco; quieted title to the undivided 1/2 mineral interest in lot 9 in favor of the Lloyds and Turner; quieted title to the undivided 1/2 mineral interest in lot 5 in favor of Whitehead as to the Nalls' reserved royalty interest under their lease to Exxon, but in favor of Exxon as a bona fide purchaser for value as to the working interest under the Nalls' lease.

"The Nalls and Exxon appeal from the judgments in favor of the Waites, Relco, the Lloyds, and Turner. Whitehead appeals from the judgment in favor of Exxon holding that Exxon was a bona fide purchaser, and Exxon and the Nalls cross appeal from that judgment insofar as it construed the language of the purported reservation against them.

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