Hickey v. Dirks
| Decision Date | 23 January 1943 |
| Docket Number | 35734. |
| Citation | 133 P.2d 107,156 Kan. 326 |
| Parties | HICKEY v. DIRKS et ux. |
| Court | Kansas Supreme Court |
Syllabus by the Court.
A "mineral deed" is a realty conveyance involving a severance from fee of present title to minerals in place either effecting such severance in first instance or conveying part of such mineral ownership previously severed from the fee.
"Royalty" is that part of oil and gas payable to lessor by lessee out of oil and gas produced and may be referred to as part of compensation to title owner for privilege of exploring developing, and producing oil and gas.
A "royalty" interest is regarded as "personal property". Gen.St.1935, 79-329, 79-330.
Statute requiring mineral deeds to be recorded within 90 days or interest conveyed listed separately for taxation does not apply to transfers of royalty interests in oil and gas produced. Gen.St.1935, 79-420.
In construing written instrument, intent of parties must be determined by examination of instrument as a whole from its four corners.
Generally in determining intent of parties to written instrument interlineations written into printed form by scrivener are given greater weight than conflicting printed words.
Instrument designated "sale of oil and gas royalty" containing interlineation reciting grantor's intention to convey one-fourth of his reserved one-eighth royalty was a royalty conveyance of "royalty", and not a "mineral deed" conveying present title to minerals in place, which must be recorded within 90 days or reported separately for taxation under the statute. Gen.St.1935, 79-420.
Portion of printed form indicating intention to convey title to minerals in place, but not constituting part of granting clause, should not prevail as against provisions written in, indicating conveyance of royalty interest.
Conveyance of land by deed specifically making conveyance subject to royalty interest in third person did not terminate such royalty interest.
Royalty interest conveyed for term of 10 years and as long as oil or gas are being produced in paying quantities did not lapse while production secured during 10-year period continued in paying quantities.
Undivided one-fourth interest in grantor's reserved royalty interest did not expire upon release of the particular oil and gas lease outstanding when one-fourth interest was conveyed.
1. Section 79-420, G.S.1935, is not applicable to transfers of royalty interests in oil and gas produced.
2. The general rule is that in construing a written instrument, for the purpose of determining intent, interlineations written into a printed form by the scrivener are given greater weight, in case of conflict, than the printed words.
3. An instrument designated "Sale of Oil and Gas Royalty"--the pertinent portions of which are set out in the opinion-- is here construed and held to convey a royalty interest rather than a present title to minerals in place.
Appeal from District Court, Barton County; Robert Garvin, Judge.
Action by Mary Ellen Hickey against Edd C. Dirks and his wife to enforce plaintiff's right to share in the production of a gas well under an instrument designated "sale of oil and gas royalty". From an adverse judgment, plaintiff appeals.
Judgment reversed with directions to enter judgment for plaintiff.
Clifford Sullivan, of Howard (Chas. L. Carroll, of Great Bend, and Carter Smith, of Tulsa, Okl., on the brief), for appellant.
Herbert Diets, of Great Bend, for appellees.
The principal question presented is whether a certain instrument designated "Sale of Oil and Gas Royalty" constitutes a mineral deed or a conveyance of royalty interest. If it is a mineral deed, carving out of the fee a present subsurface estate in the oil and gas in place, the instrument is void under Section 79-420, G.S.1935, not having been recorded within ninety days after execution or listed for taxation. On the other hand if the instrument conveyed only a royalty interest--a right to share in oil or gas produced--then the statute is not applicable. The trial court held for the defendants, construing the instrument to be a mineral deed, and the plaintiff appeals.
Appellant, Mary Ellen Hickey, was owner of the quarter section of land in question, located in Barton county. On January 27, 1933, she conveyed the land, by warranty deed in which her husband, M. E. Hickey, joined, to the Olmitz State Bank of Olmitz, Kansas. As part of the deal and on the same day the bank conveyed back to Mrs. Hickey certain interests by the instrument here in question. About three years prior thereto--on March 10, 1930--Mrs. Hickey and her husband had given an oil and gas lease, for a primary term of ten years, to W. H. Skelton. About five months after the deed to the bank--on June 6, 1933--the bank sold the land to Edd C. Dirks and Jessie G. Dirks, the appellees here. This deed by the bank to Dirks was, by its specific terms, made subject to the conveyance theretofore made to Mrs. Hickey. Delayed rentals were apparently paid under the Skelton lease, which was surrendered sometime in 1939 before the expiration of the primary term. In October, 1939, the Dirks gave an oil and gas lease on the land to W. A. Porter who assigned it to Geo. H. Hannum, Inc., and sometime in the spring of 1940 the Hannum company drilled on the tract, getting a producing gas well--all within the primary term of the Skelton lease. Claiming as a royalty owner, Mrs. Hickey demanded the right to share in the proceeds of production. Her demand being denied by Dirks, action was brought to enforce her rights under the instrument. By consent of Dirks the pipe line company to which the gas was delivered has withheld-- without prejudice to the rights of Dirks-- the proportionate royalty which would be due to Mrs. Hickey if she has a valid claim. We need not summarize the pleadings, no question being raised as to the manner or method by which the issues were joined.
As we have had frequent occasion to observe, terms relating to conveyances of oil and gas interests have often been loosely and inaccurately used. Volker v. Crumpacker, 154 Kan. 403, 405, 118 P.2d 540, and cases there cited. This is particularly true with reference to the term "royalty." A mineral deed is one which involves a severance, from the fee, of a present title to minerals in place. It either effects such severance of title in the first instance or conveys a part of such mineral ownership previously carved from the fee. It is a realty conveyance. Rathbun v. Williams, 154 Kan. 601, 604, 121 P.2d 243, and cases there cited. "Royalty" is that part of oil and gas payable to the lessor by the lessee out of oil and gas produced. It is sometimes referred to as part of the compensation to the title owner for the privilege of exploring, developing, and producing oil and gas from the tract. Under our statutes and decisions it is regarded as personal property. G.S.1935, 79-329, 79-330; Rathbun v. Williams, supra; Davis v. Hurst, 150 Kan. 130, 90 P.2d 1100, 122 A. L.R. 957, and cases there cited.
Transfers of "royalty" are not covered by the provisions of G.S.1935, 79-420. Kansas Nat. Gas Company v. Board of Com'rs of Neosho County, 75 Kan. 335, 89 P. 750; Finch v. Beyer, 94 Kan. 525, 146 P. 1141; Robinson v. Jones, 119 Kan. 609, 240 P. 957; Richards v. Shearer, 145 Kan. 88, 64 P.2d 56.
In drafting the instant instrument the scrivener, who was the president of the bank, used a printed form, inserting in addition to names, description of the tract etc. statements to indicate the intention of the grantor. Omitting formal portions not essential to our inquiry, the conveyance was as follows (interlineations by the scrivener being indicated by italics):
To continue reading
Request your trial
-
Cosgrove v. Young
...a realty conveyance. (Richards v. Shearer, 145 Kan. 88, 64 P.2d 56; Rathbun v. Williams, 154 Kan. 601, 121 P.2d 243; Hickey v. Dirks, 156 Kan. 326, 327, 133 P.2d 107.) On the other hand 'royalty' in its ordinary meaning is that part of oil and gas payable to the lessor by the lessee out of ......
-
Shepard v. John Hancock Mut. Life Ins. Co., 42349
...310, 255 P. 52; Burden v. Gypsy Oil Co., 141 Kan. 147, 40 P.2d 463; Lathrop v. Eyestone, 170 Kan. 419, 227 P.2d 136; Hickey v. Dirks, 156 Kan. 326, 330, 133 P.2d 107; Rathbun v. Williams, 154 Kan. 601, 604, 121 P.2d 243, and Magnusson v. Colorado Oil & Gas Corp., supra, 183 Kan. p. 571, 331......
-
Rist v. Toole County
... ... Northland ... Petroleum Consolidated, supra. The difference is well ... summarized as follows in Hickey v. Dirks, 156 Kan ... 326, 133 P.2d 107, 109, 'As we have had frequent occasion ... to observe, terms relating to conveyance of oil and gas ... ...
-
DUVALL v. STONE
...Glassmore, Oil & Gas Leases Etc. Sec. 18. The courts of some states hold that a royalty interest is personal property. Hickey v. Dirks, 156 Kan. 326, 133 P.2d 107. In this state a grant or reservation of the underlying oil and gas, or royalty rights provided for in a mineral lease as common......
-
Real Property Interests Subject to Oil and Gas Interests
...Manual of Oil and Gas Terms, 898 (7th Ed. 1987). [7] Cosgrove v. Young, 230 Kan. 705, 708, 642 P.2d 75, 78 (1982), Hickey v. Dirks, 156 Kan. 326, 327, 133 P.2d 107, 109 (1943). [8] Stratmann v. Stratmann, 6 Kan. App. 2d 403, 407, 628 P.2d 1080, 1084-85 (1981). Shaffer v. Kansas Farmers Unio......
-
Real Property Interests Subject to Oil and Gas Interests: Practical Suggestions for Resolving Potential Legal Conflicts Between Purchasers or Developers of Real Property and the Owners of Oil and Gas Interests to Which the Property Is Subject
...Manual of Oil and Gas Terms, 898 (7th Ed. 1987). [7] Cosgrove v. Young, 230 Kan. 705, 708, 642 P.2d 75, 78 (1982), Hickey v. Dirks, 156 Kan. 326, 327, 133 P.2d 107, 109 (1943). [8] Stratmann v. Stratmann, 6 Kan.App.2d 403, 407, 628 P.2d 1080, 1084-85 (1981). Shaffer v. Kansas Farmers Union ......