Hope Natural Gas Co. v. Reynolds
| Decision Date | 07 March 1944 |
| Docket Number | 9544. |
| Parties | HOPE NATURAL GAS CO. v. REYNOLDS et al. |
| Court | West Virginia Supreme Court |
Rehearing Denied June 16, 1944.
Syllabus by the Court.
David Williams and Haymond Maxwell, both of Clarksburg, for appellant.
Powell Clifford & Jones, of Clarksburg, for appellees.
The Hope Natural Gas Company filed its bill of complaint in the Circuit Court of Harrison County praying to have interplead Clyde Reynolds, J. L. Thrasher, Margaret Primm Reynolds, the National Valley Bank of Staunton, a Corporation, trustee, the Shenandoah Valley Joint Stock Land Bank of Staunton, a corporation, and the Virginian Joint Stock Land Bank of Charleston, a corporation, for the purpose of settling a controversy between certain of the defendants concerning the ownership of the oil and gas underlying a tract of one hundred and seventy-six acres located in Eagle District of Harrison County, being a part of a tract of six hundred acres upon which it held an oil and gas lease from Ai J. Reynolds and Lydia E. Reynolds, his wife, both then deceased, dated July 5, 1904, Hope having drilled a producing gas well upon the tract of one hundred and seventy-six acres and being in doubt as to whom, as between the conflicting interests of Clyde Reynolds and J. L. Thrasher, it should pay one-third of the royalty accrued since January 1, 1935, at the rate of twenty-five dollars per quarter. From a decree entered after the incoming of answers and cross-bills by Clyde Reynolds and J. L. Thrasher, and the taking of proof, that adjudicated the controversy in favor of Clyde Reynolds, this appeal was granted upon the petition of J. L. Thrasher.
In order to attempt to set forth the matter in controversy clearly it will be necessary to recite the salient allegations of the bill of complaint, and the answers of Clyde Reynolds and J. L. Thrasher.
The bill of complaint alleges Ai J. Reynolds and wife on the fifth day of July, 1904, executed an oil and gas lease to the plaintiff upon six hundred acres of land in Harrison County owned in fee by Reynolds, and that in April, 1907, a paying gas well was drilled upon that part thereof which is now the one hundred and seventy-six acres in controversy designated upon its records as Well No. 900, and that from time to time other wells not on the land in controversy have been drilled by it on the Reynolds tract of six hundred acres; that in 1907 Ai J. Reynolds died intestate leaving surviving him his widow and Clyde Reynolds, Frank L. Reynolds and Frances R. Cranwell, sons and a daughter, and that the widow also died many years ago. The bill further alleges that in 1909 the widow, who was then living, and the three heirs executed separate deeds for the purpose of effecting a partition of the six hundred acre tract as recommended by three agreed commissioners, subject to the assignment of dower to the widow and that pursuant to the agreement a tract of one hundred and seventy-six acres, being Tract No. 2 named in the commissioners report, was partly conveyed to Clyde Reynolds in a deed executed by Frank L. Reynolds and wife Lydia E. Reynolds, widow, and Frances E. Reynolds, now Frances R. Cranwell; that the oil and gas underlying the six hundred acres was not by the said deeds partitioned, but remained vested in the three children of Ai J. Reynolds, the royalty being paid one-third to the widow, the remainder of six-ninths being equally divided between Frank L. Reynolds Clyde Reynolds and Frances E. Reynolds; that Well No. 900 is the only producing well upon the tract of one hundred and seventy-six acres allotted to Clyde Reynolds.
The bill of complaint further alleges that on the sixth day of January, 1925, Clyde Reynolds and wife executed a deed of trust upon the tract of one hundred and seventy-six acres to the National Valley Bank of Staunton, Trustee, for the purpose of securing a loan from The Shenandoah Valley Joint Stock Land Bank in the amount of five thousand dollars; that default having occurred, the Trustee, on the twenty-seventh day of March, 1934, advertised the property for sale and, after several continuances, on the nineteenth day of May, 1934, the Virginian Joint Stock Land Bank of Charleston, which had acquired the assets of the trust deed creditor, became the purchaser and received a deed from the National Valley Bank, Trustee; that on October 25, 1934, the Virginian Joint Stock Land Bank of Charleston conveyed the one hundred and seventy-six acres of land to the defendant J. L. Thrasher, and that Clyde Reynolds, by an unrecorded written contract, conveyed his interest to his wife, Margaret Primm Reynolds.
The bill of complaint goes on to allege that a controversy has arisen among the parties defendant as to who is entitled to what is spoken of as the interest of Clyde Reynolds in the gas wells upon the tract of one hundred and seventy-six acres, present and future, Clyde Reynolds asserting that the underlying oil and gas was not included in the deed of trust executed by him on January 6, 1925, and also that at the sale under the deed of trust it was expressly announced by the auctioneer that no interest in the underlying oil and gas was being offered for sale, and that Clyde Reynolds further contends that the deed executed by the Trustee to the Virginian Joint Stock Land Bank conveyed no part of the oil and gas. The bill states that on the other hand, J. L. Thrasher contends that he is entitled to a full one-third of the royalty from the one hundred and seventy-six acres and that Clyde Reynolds holds no interest therein. The bill of complaint ends with the usual allegations of lack of interest in the subject matter by the plaintiff, lack of definite opinion concerning the claims of any parties, and threatened litigation that can be prevented only by an ancillary injunction pending final determination in this cause.
The bill alleges that the complainant has, since January 1, 1935, retained one-third of the royalty, payable quarterly, to the present owner of the interest in the oil and gas underlying the one hundred and seventy-six acres inherited by Clyde Reynolds from his father, Ai J. Reynolds.
The answer and cross-bill of Clyde Reynolds, after admitting most of the allegations of the bill of complaint, sets up the fact that the deed dated the twenty-ninth day of September, 1909, between Frank L. Reynolds and wife, Lydia E. Reynolds and Frances E. Reynolds, grantors, and Clyde Reynolds, grantee, filed a Plaintiff's Exhibit No. 2, conveyed the one hundred and seventy-six acres of land to Clyde Reynolds and excepted and reserved the underlying oil and gas. The language of that reservation is set out as follows:
"But there is likewise reserved and excepted from this deed all of the oil and gas in, upon and underlying the premises aforesaid, as to which the heirs at law of Ai J. Reynolds remain co-parceners, and in which the said Lydia E. Reynolds retains her dower right as widow of the said Ai J. Reynolds; ***."
The answer proceeds to allege that the trust deed executed by Clyde Reynolds and wife, to the National Valley Bank, Trustee, did not convey Clyde Reynolds' interest in the oil and gas underlying the tract of one hundred and seventy-six acres relying upon the following language appearing in the deed of trust as sustaining that allegation:
"*** and being the same tract or parcel of land which was conveyed to the said Clyde Reynolds by Frank L. Reynolds and others by deed of partition bearing date on the 29th day of September 1909 of record in the office of the clerk of the county court of Harrison County, West Virginia in D. B. No. 243 page 107 to which deed and the deeds and papers therein referred to reference is hereby made for more particular description and for derivation of title."
The answer and cross-bill alleges that the deed from the Virginian Joint Stock Land Bank of Charleston to J. L. Thrasher contained a specific reference to the deed from The National Valley Bank of Staunton, Trustee, and by so doing made the latter deed, together with the reservation and exception of the oil, gas and coal contained therein, a part of the deed to Thrasher; that all parties in interest are charged with notice that the oil and gas underlying the tract of one hundred and seventy-six acres was not intended to be conveyed in the deed of trust because the deed of trust specifically refers to the partition deed in which the oil, gas and coal were specially reserved.
There are many other detailed allegations in Clyde Reynolds' cross-bill and answer including a paragraph urging that the National Valley Bank of Staunton is not authorized to do business in the State of West...
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