Newman v. Kerlyn Oil Co.

• Decision Date: 18 May 1945
• Docket Number: No. 14688.,14688.
• Citation: 189 S.W.2d 701
• Parties: NEWMAN et al. v. KERLYN OIL CO.
• Court: Texas Court of Appeals

189 S.W.2d 701

NEWMAN et al. v. KERLYN OIL CO.

No. 14688.

Court of Civil Appeals of Texas. Fort Worth.

May 18, 1945.

Supplemental Opinion October 23, 1945.

Appeal from District Court, Young County; Floyd Jones, Judge.

Suit by J. H. Newman and others against Kerlyn Oil Company to determine amount of royalties due under certain oil and gas leases. Judgment for defendant, and plaintiffs appeal.

Affirmed.

Tom M. Miller and Fred T. Arnold, both of Graham, for appellants.

Marshall & King, of Graham, for appellee.

BROWN, Justice.

On March 12, 1918, one E. R. Holt owned the fee simple title in and to the lands in controversy, and on such date Holt executed and delivered to John L. Hanna an oil and gas lease on such lands, the instrument retaining unto the grantor the usual and customary 1/8 of the minerals.

On March 1, 1919, Holt executed and delivered to E. R. Prideaux and J. H. Newman a certain instrument in which he conveyed to said grantees "an undivided one-sixteenth (1/16) interest in and to all the natural gas, oil, petroleum, coal and other minerals, and mineral substances, together with a like interest in the revenues derived from any or all of same, whether in kind or in money, in, on and under the following described lot, tract or parcel of land," etc., describing the lands in controversy.

The instrument, after describing the lands by metes and bounds, continues: "together with the right to enter thereon, open mines, drill mines, drill wells, lay pipe and erect all structures and appliances necessary and convenient in searching for, procuring, caring for, storing or removing any natural gas, oil, petroleum, coal or other minerals or mineral substances of whatever nature or kind that may be found thereon or thereunder," etc.

The instrument continues: "It is specially and expressly understood and agreed that the surface of the above described land is conveyed only for all purposes and uses above set forth. This sold and transferred, however, subject to the oil and gas lease executed on the 12th day of March, A. D. 1918, to John L. Hanna, which lease is recorded, etc."

No developments were attempted under the Hanna lease and all rights under it expired with time and by operation of law.

On April 11, 1941, Holt executed and delivered an oil and gas lease covering the said lands to one W. B. Saulsbury who, in turn, sold and assigned same to one Baird Neville, and Neville sold and assigned same to Kerlyn Oil Company, which present owner has brought about the production of oil from the lands.

Prideaux and Newman sold a fraction of their mineral interest to one L. O. Joplin. On October 8, 1941, Prideaux and Newman, as lessors, executed and delivered to Kerlyn Oil Company an oil and gas lease covering the lands in controversy and such instrument recites: "The royalties to be paid Lessor are: (a) on oil, one-eighth of that produced and saved from said land, the same to be delivered at the wells or to the credit of lessor into the pipe line to which the wells may be connected"; and such lease provides for a one-eighth royalty in and to the casing-head gas, or other gas or gaseous substance produced, sold or used.

Said Prideaux and Newman lease contains the following clause: "Without impairment of Lessee's rights under the warranty in event of failure of title, it is agreed that if lessor owns an interest in said land less than the entire fee simple estate, then the royalties and rentals to be paid Lessor shall be reduced proportionately." This provision is inserted because the lease did not attempt to confine the interest conveyed to the exact fractional interest that had been acquired from Holt.

Joplin ratified and confirmed the lease executed by Holt to Saulsbury, the instrument being dated October 14, 1941.

A controversy having arisen as to the amount and extent of royalty that belongs to and should be paid to Newman, Prideaux and Joplin, these parties brought suit against Kerlyn Oil Company, asserting their rights acquired from Holt, and alleged that on October 8, 1941, they executed an oil and gas lease to the defendant...