Minnelusa Oil Corporation v. De Larm, 2178
| Decision Date | 11 March 1941 |
| Docket Number | 2178 |
| Citation | 111 P.2d 107,56 Wyo. 464 |
| Parties | MINNELUSA OIL CORPORATION v. DE LARM; KYTE v. TWIFORD |
| Court | Wyoming Supreme Court |
APPEAL from the District Court, Niobrara County; HARRY P. ILSLEY Judge.
Petition in the nature of a bill of interpleader to determine rights to oil royalties by the Minnelusa Oil Corporation against Floy L. DeLarm and others, wherein C. H. Kyte and Harry G Twiford, filed cross-petitions. From an adverse judgment, C H. Kyte appeals.
Affirmed.
For the appellant there was a brief and oral argument by George M. Porter of Crawford, Nebraska.
In the construction of a written instrument, extrinsic evidence will be resorted to only if the terms of that instrument are ambiguous or uncertain. The construction of a contract on its face is a matter of law for the courts. Western Company v. Gibson Lumber and Coal Company (Colo.) 176 P. 318; Baker v. Dairy Co., 77 F.2d 574; Bauer v. Goldman (Colo.) 100 P. 435; Dobbins v. Graer (Colo.) 114 P. 305; Comm. Int. Rev. v. Transp. Corporation, 71 F.2d 104; Sinclair Refining Co. v. Refiners Oil Co., 75 F.2d 851; Sterling Homes Co. v. Stamford Water Co., 79 F.2d 607; Beck v. Traders & General Ins. Co. (Okla.) 77 P.2d 109; Federal Deposit Insurance Corporation v. Grim (Okla.) 86 P.2d 774. If the terms of a contract are unambiguous, they cannot be varied by parol or extrinsic evidence. Piggly Wiggly Company v. Lowell Packing Co. (Colo.) 29 P.2d 623; Schuler v. Allam (Colo.) 101 P. 350; Stickney v. Hughes (Wyo.) 79 P. 922; Bosler v. Coble (Wyo.) 84 P. 895; Rouan v. Casper Brick & Tile Co., 211 P. 1102. It is not the duty of the court to make contracts for the parties. Phillips v. Hamilton, 95 P. 846. An instrument admitting of two constructions will be construed most strongly against the grantor, or most favorably to the grantee. 13 Cyc. 609; Lincoln v. Wilder, 29 Me. 169; Griffin v. Fairmont Coal Company, 53 S.E. 24; 2 Deveter on Real Estate 848; City of Alton v. Transport Co. (Ill.) 52 Am. Dec. 479; Lumber Company v. Sheets (W. Va.) 83 S.E. 81; Allen v. Yeater, 17 W.Va. 128; Turk v. Skiles (W. Va.) 30 S.E. 234; 2 Shareswood's Blackstone 379; Claugh v. Bowman, 15 N.W. 504; Lincoln v. Wilder, 29 Me. 169; Isaac v. West's Executor, 6 Rand. 652; Pike v. Monroe, 36 Me. 309. The intent of the parties as revealed by the language of the instrument must determine its definition. Burkett v. Commissioner Int. Rev., 31 F.2d 667; In re Lathrop, 61 F.2d 37; 8 R. C. L. 1037, 1038; 3 Summers Oil and Gas 488. An adjudication by the United States Land Department is binding upon the courts. 4 Thornton Oil & Gas 860; Robbins v. Elk Basin, 285 F. 179; Edwards v. Begole, 121 F. 1; Harvey v. Holles, 160 F. 631. A correct definition of the word "royalty" and its application to the issues here are important. The courts have defined the term. Leydig v. Commissioner Int. Rev., 43 F.2d 494. Sections 97-104 to 110, R. S. 1931, affect the question. An assignment of a royalty is an interest in property. Thornton, 5th Ed. pp. 644 to 645; Summers Oil and Gas, Vol. 3, p. 465; Arrington v. Royalty Company, 90 A. L. R. 780 and two annotations; also annotation at 101 A. L. R. 889; Pure Oil Company v. Kindall, 156 N.E. 119; Keaton v. Murphy (Ark.) 131 S.W.2d 635; Horner v. Company, 76 S.E. 662. The question is discussed in the Wyoming case of Rue v. Merrill, 42 Wyo. 407, and Tendolle v. Oil Syndicate, 35 Wyo. 442; 3 Summers Oil and Gas 493. The definition of the word "royalty" seems to be fast changing. Glassmire, Oil and Gas Leases and Royalties, pp. 67, 79; Sykes v. Austin, 77 P.2d 719; 13 Cyc. 605. The title given an instrument is no part of the contract itself. Thornton Oil and Gas, 5th Ed. p. 127.
For the respondent, there was a brief by H. B. Durham and C. M. Crowell of Casper, and oral argument by Mr. Crowell.
The case presents for review a single question. Did Twiford assign to Larson his complete interest in the oil to be derived from the lands, or did he restrict his assignment to his interest under the lease to the Buck Creek Oil Company, then in effect? The trial court held that it was the intention of the parties that only Twiford's interest in the lease to the Buck Creek Company should pass. The authorities hold that an assignment of royalties may be restricted to the lease in effect on the land or may be extended to cover all future, as well as present leases, made on the land. 3 Summers Oil & Gas 488. The facts bring the case within the rule in Tendolle v. Oil Syndicate, 38 Wyo. 442. We direct the court's attention to the concluding clause in the body of the assignment. Bellport v. Harrison (Kan.) 255 P. 52; Keaton v. Murphy (Ark.) 131 S.W.2d 625; Leydig v. Comm. Int. Rev., 43 F.2d 494. The West Virginia and Texas authorities lean toward a doctrine that a grant of royalties is real property. Updegraff v. Coal and Land Co. (W. Va.) 81 S.E. 1050. As opposed to the view of the foregoing jurisdictions, see Miller v. Sooy (Kan.) 242 P. 140; Pure Oil Co. v. Kindall, 156 N.E. 119, and Rue v. Merrill, 42 Wyo. 497. The point was discussed in Beam v. Dugan (Calif.) 23 P.2d 58, but we rely primarily upon the language of the assignment from Twiford to Larson, which we believe restricted the assignment to the Buck Creek Oil Company then in effect, and believe the judgment below should be affirmed.
This is a cause here by direct appeal from a judgment of the district court of Niobrara County. The real controversy is between two defendants therein, C. H. Kyte and Harry G. Twiford, made parties to the litigation through a petition in the nature of a bill of interpleader filed by the Minnelusa Oil Corporation. The trial was to the court without the intervention of a jury, and the facts are to be found in the admissions of the pleadings filed by the respective parties and a stipulation of submission of the cause to the district court upon an agreed statement of facts. As will hereinafter appear, the problem to be solved by the district court and by this court is the proper construction of an instrument designated "Assignment of Royalty Interest in the Buck Creek Oil Company, Incorporated in Wyoming"--and therefore simply a question of law. The judgment aforesaid was in favor of Twiford and against Kyte. The circumstances which led to the institution of this litigation are briefly these:
The locators of an oil placer mining claim on the Northeast Quarter of the Northeast Quarter of Section 8, Township 35 North, Range 65 West of the 6th P. M., leased on December 30, 1919, and for a 12 1/2 per cent royalty the forty acres just described to the Buck Creek Oil Company, a Wyoming corporation. It was at the same time agreed between the lessors aforesaid and their lessee corporation just mentioned that it should on behalf of said lessors make application to the proper authority for an oil and gas lease from the United States of America to said locators after the enactment of the so-called "Leasing Bill" authorizing the leasing of the public lands of the United States for drilling for oil and gas, and this application was in due time made. This agreement also provided that the royalty under the Buck Creek Oil Company lease, already mentioned, should be 12 1/2 per cent "of the balance after deducting the royalty to be paid under" the lease from the United States.
January 23, 1920, the aforesaid locators conveyed to Twiford, the respondent herein, "an undivided one-ninth of nineteen-twentieths of a 12 1/2 per cent royalty in and to" the property above described. May 6, 1922, the United States of America gave a lease for the purpose of drilling for oil on that property and other lands to Twiford, together with other assignees of the original locators and the remaining locators, certain specified royalties "on all oil and gas produced from the land leased" being required to be paid to the lessor, the minimum of which royalties was 12 1/2 per cent, together with a rental of "one dollar per acre per annum," which rental was yearly credited on the royalty paid for that year.
July 21, 1924, Twiford made an assignment to one T. A. Larson, which reads:
and I hereby authorize and direct the Buck Creek Oil Company, incorporated in Wyoming, to recognize this assignment and from this date to make all royalty payments accruing under the royalty and royalty contract above described to T. A. Larson, assignee.
(Signed) Harry G. Twiford Assignor"
The assignor's signature to the instrument was duly attested, its execution acknowledged by Twiford, and it was recorded July 23, 1924, in the office of the County Clerk of Niobrara County, Wyoming.
On January 28th of the year following, Larson assigned to one M I. Olson all of the former's "right, title and interest in and to that certain assignment from Harry G. Twiford to him under date of July 21, 1924."...
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