Hafeman v. Gem Oil Co., s. 34017
| Decision Date | 28 December 1956 |
| Docket Number | 34023,34018,Nos. 34017,s. 34017 |
| Citation | 80 N.W.2d 139,163 Neb. 438 |
| Parties | Arthur H. HAFEMAN, Appellee-Cross-Appellant, v. GEM OIL COMPANY, a Colorado Corporation, et al., Appellants-Cross-Appellees Impleaded with: Dean Terrill, Appellee. Arthur H. HAFEMAN, Appellee-Cross-Appellant, v. GEM OIL COMPANY, a Colorado Corporation, et al., Appellees Impleaded with: Dean Terrill, Appellant-Cross-Appellee. Arthur H. HAFEMAN, Appellant, v. GEM OIL CO. et al., Appellees. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. If the signers of a division order are cotenants of the oil, they do not thereby contract with each other but a signer of it
admits that he owns the amount of oil set apart to him therein and expresses no intention to convey or transfer any oil to any other person.
2. The signer of a division order is generally not estopped from asserting his rights against his cotenants who are not entitled to the royalties which were paid to them.
3. The creation of an estoppel requires that the party against whom it is claimed acted with knowledge of his rights; that the party claiming the estoppel was without knowledge of the facts on which he bases his claim of estoppel; that he was influenced by and relied on the conduct of the other person; and that he changed his position in reliance thereon to his injury.
4. The doctrine of expressio unius est exclusio alterius means that the expression in an instrument of one or more things of a class implies the exclusion of all not expressed.
5. In the absence of fraud, mistake, or ambiguity a written agreement is the only competent evidence of the contract of the parties and it is not subject to interpretation or construction.
6. The intention of the parties to an unambiguous written contract must be determined from its contents.
7. If a tract of land upon which an oil and gas lease has been given is subsequently divided into different ownerships, the owners of separate mineral interests are only entitled, in the absence of specific agreement to the contrary, to royalties accruing from production on the particular tract to which their ownership attached, but this does not preclude inclusion of an entirety clause providing that if the leased premises were thereafter owned in severalty or separate tracts they could be developed and operated as an entirety and royalties should be paid to each separate owner in the proportion that his acreage bore to the entire leased area.
8. An entirety clause in an oil and gas lease constitutes a restriction on the right of the lessor, for the duration of the lease, to alienate his mineral interests in the leased premises contrary to its provisions.
9. The fact of cotenancy alone does not create a fiduciary relationship as to the property owned by the cotenants; but if one cotenant has possession of property or funds belonging to his cotenant, he becomes trustee thereof and stands in fiduciary relationship to a cotenant with respect thereto to the extent of the interest of the cotenant who may compel an accounting.
10. A tenant in common of oil underlying land which has been extracted by a cotenant is entitled to an accounting from the cotenant who produced the oil for the value of the ownership of the tenant in common in the oil.
11. A moot case is one which seeks to determine an abstract question which does not rest on existing facts or rights.
12. If a concrete case of fact or right is exhibited, there is no principle or policy of law which deprives a party of a determination because his motive in the assertion of such right is to secure such a determination.
13. Several actions may be brought and more than one judgment recovered against different wrongdoers for the injury done by them but only one satisfaction may be had.
14. A covenant in an oil and gas lease to pay rent or royalties is not personal or collateral but runs with the land.
15. One who acquires by assignment the entire interest of the lessee in a distinct part of the leased land is as to such part in privity with the lessor and liable to him for rent for or royalty from that part.
16. The assignment of an oil and gas lease by the lessee divests him of a privity of estate and transfers it to his assignee who thereafter holds in privity of estate with the lessor.
17. The assignee of a lease of land for oil and gas production who acquires all the estate of the lessee is liable to the lessor for the payment of rent or royalties which accrue while he holds an assignment of the lease; and this is likewise true as to any subsequent assignee of the lease.
18. Implicit in an obligation to pay royalties is the duty to pay the correct amount to the rightful owner.
19. An assignee of an oil and gas lease is obligated to perform a covenant of the lease for the payment of royalties to the lessor to the extent of his ownership of them if the lease by its terms extends the obligation to the assignee.
Martin, Davis & Mattoon, Sidney, for appellants.
Torgeson, Halcomb & O'Brien, John D. Knapp, Kimball, for appellees.
Martin, Davis & Mattoon, Sidney, for Dean Terrill, appellee.
Martin, Davis & Mattoon, Sidney, for appellant.
Torgeson, Halcomb & O'Brien, John D. Knapp, Kimball, for appellees.
Martin, Davis & Mattoon, Sidney, for Gem Oil Co. et al., appellees.
Torgeson, Halcomb & O'Brien, John D. Knapp, Kimball, for appellant.
Martin, Davis & Mattoon, Sidney, for appellees.
Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE, and BOSLAUGH, JJ.
This action seeks a determination and adjudication of the rights of the parties to royalty of the landowner payable by the terms of the base oil and gas lease of two noncontiguous quarter sections of real estate owned by Arthur H. Hafeman, an accounting of the royalty he claims is due him because of the production of oil from the land, a judgment in his favor for the amount thereof, and general equitable relief.
The parties are numerous and will, when appropriate, be designated herein as follows: Arthur H. Hafeman, plaintiff in the district court as appellee; and the defendants in that court, including Dean Terrill who is an appellee in case No. 34017, as appellants. The parties do not have a common status or identical and equal interests. They may be classified as follows: Appellee, who owned the land when the lease thereon was executed and delivered and who has a mineral interest therein; appellants who own only a mineral interest in one quarter section of the land will be sometimes referred to herein as mineral owners; appellants who own only a working interest in the lease as to the one quarter section of the land will be sometimes referred to herein as leasehold owners; Gem Oil Company and Dean Terrill are individually mineral owners and they each have a working interest in the lease. They will be sometimes referred to respectively as Gem Oil Company and Terrill.
The pleadings are quite voluminous and involved. There is no controversy concerning them. They join issue on questions pertinent to the litigation. Additional statements as to their contents will be made when appropriate. The parties concede, and the record verifies the correctness of their conclusion, that there is no issue of fact in the case. The controversy relates to the interpretation, meaning, and significance of the proof which principally consists of instruments and writings.
Appellee was the owner of the northeast quarter of Section 23 and the southeast quarter of Section 12, Township 14 North, Range 55 West, Kimball County, Nebraska. The land in Section 23 is referred to as Tract 1 and the land in Section 12 as Tract 2. Appellee and his wife on October 1, 1949, executed and delivered an oil and gas lease of the land to Magnolia Petroleum Company and thereby leased the land to it for oil and gas exploration and production. The lease contained provisions for its assignment by either party, in whole or in part, and an entirety clause. The lease was filed for record in the office of the register of deeds of that county on December 2, 1949, and it was in force at all times important to this litigation.
The lessee by letter proposed a farmout and assignment of the base lease, to the extent it affected Tract 1, to Eddie Fisher. The proposal was accepted by him on March 16, 1954. The terms of it were that if he commenced the drilling of a well on a designated location and prosecuted it with due diligence to a depth sufficient to test certain formations or until production in paying quantities was obtained and completed the work in a specified time, the lessee would assign to Eddie Fisher the lease as to Tract 1. The letter concerned two leases and contained this language: 'Reference is here made to said leases and the record thereof for this and all other purposes.'
Appellee and his wife on April 12, 1954, conveyed by mineral deed to Eddie Fisher for a consideration of $4,000 an undivided 1/2 interest in and to the oil, gas, and other minerals in and under and that may be produced from Tract 1, subject to the oil and gas lease of October 1, 1949. This deed recites that it is the intention of the grantor to convey 80 mineral acres. The grantee in the deed was, by agreement acknowledged April 22, 1954, changed from Eddie Fisher to Gem Oil Company. Appellee and his wife on May 15, 1954, conveyed by mineral deed to Dean Terrill for a consideration of $2,500 an undivided 1/4 interest in and to the oil, gas, and other minerals in and under and that may be produced from Tract 1, subject to the oil and gas lease of October 1, 1949. This deed recites it was the intention to convey and transfer approximately 40 mineral acres out of said tract.
The commercial production of oil was established May 15, 1954, by the test well drilled on Tract 1 in accordance with the farmout letter. The lessee of the base lease assigned it as to Tract 1 to Eddie Fisher on June 9,...
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