Lackey v. Corley

• Decision Date: 10 June 1974
• Docket Number: No. 47578,47578
• Citation: 295 So.2d 762
• Parties: James V. LACKEY, Trustee, et al. v. W. S. CORLEY et al.
• Court: Mississippi Supreme Court

Page 762

295 So.2d 762

James V. LACKEY, Trustee, et al. v. W. S. CORLEY et al.

No. 47578.

Supreme Court of Mississippi.

June 10, 1974.

O. B. Triplett, Jr., Forest, for appellants.

L. D. Pittman, Crymes G. Pittman, Raleigh, for appellees.

BROOM, Justice:

This is an appeal from the Chancery Court of Smith County. We reverse.

Appellants contend that they are owners of a non-participating royalty interest in the oil, gas and minerals pertaining to land in Smith County rather than a mineral interest or estate in place.

On December 22, 1943 W. S. Corley, joined by other grantors, conveyed by warranty deed certain land situated in Smith County to the S. E. Lackey Lumber Company (appellants' predecessor in title). Contained in that deed is the reservation before us for construction. It states:

The grantors herein reserve unto themselves all oil, gas and minerals in and upon the hereinabove described lands, together with rights-of-way over, through and across the said lands for the purpose of developing and removing the same, less and except an undivided one-half interest in an undivided one-sixteenth interest in and to said oil, gas and minerals that may hereafter be produced from the said lands.

Subsequently the grantors executed oil and gas leses thereon which appellants ratified and in the ratification instrument disclaimed any right to delay rentals.

Although many interests of others may be affected by our decision in this case, the only issue upon which we shall rule is whether the reservation contained in the warranty deed dated December 22, 1943 conveyed to the grantee an oil, gas and mineral estate in place, or a non-participating royalty interest. The chancellor decreed that the deed which contained the subject reservation conveyed 'an undivided' 1/32nd mineral interest and not a royalty interest.' In his opinion he said that the deed reserved unto the grantors therein '31/32nds mineral interest.' On that basis the chancellor dismissed the bill of complaint.

The most definitive case in regard to the issue of whether an instrument should be construed to either reserve or convey a non-participating royalty interest or an estate in the minerals in place is Mounger v. Pittman, 235 Miss. 85, 108 So.2d 565 (1959). In that opinion the Court stated:

The distinguishing characteristics of a non-participating royalty interest are: (1) Such share of production is not chargeable with any of the costs of discovery and production; (2) the owner has no right to do any act or thing to discover and produce the oil and gas; (3) the owner has no right to grant leases; and (4) the owner has no right to receive bonuses or delay rentals. Conversely, the distinguishing characteristics of an interest in minerals in place are: (1) Such interest is not free of costs of discovery and production; (2) the owner has the right to do any and all acts necessary to discover and produce oil and gas; (3) the owner has the right to grant leases; (4) the owner has the right to receive bonuses and delay rentals. (235 Miss. at 86, 108 So.2d at 566.)

Therefore, having in mind the characteristics enumerated by Mounger, we shall make our determination of whether a mineral estate in place or simply a non-participating royalty interest was conveyed by the instrument before us for construction. As said in Mounger, the presence of 'particular words, phrases, clauses, or sentences' found in a reservation or deed do not necessarily control in the process of construing the nature of the estate created. Conversely, the mere absence of particular words or phrases is not necessarily controlling. The rule in this jurisdiction is that when construing or interpreting deeds and reservations contained therein the instrument should be read as a whoe. Harris v. Griffith, 210 So.2d 629 (Miss.1968); Mounger, supra; Ford v. Jones, 226 Miss. 716, 85 So.2d 215 (1956); Texas Gulf Producing Co. v. Griffith, 218 Miss. 109, 65 So.2d 834 (1953). Reading the deed before us now reveals the obvious fact that the grantors were conveying fee simple title to the surface of land. They reserved, subject to subsequent language, 'all oil, gas and minerals in and upon the hereinabove described lands, together with rights-of-way over, through and across the said lands for the purpose of developing and removing the same . . ..' The grantors, by means of subsequent language, the 'less and except' phrase, conveyed (in addition to the surface) 'an undivided one-half interest in an undivided one-sixteenth interest in and to said oil, gas and minerals that may hereafter be produced from the said lands . . ..' (Emphasis added.)

In Armstrong v. Bell, 199 Miss. 29, 24 So.2d 10 (1945) this Court placed heavy emphasis upon the term 'hereinafter' found in a reservation, and held that the interest reserved was a royalty interest. The reservation was construed in essence to mean that it was for minerals...