Paxton v. Benedum-Trees Oil Co.
| Decision Date | 17 April 1917 |
| Citation | 80 W.Va. 187 |
| Court | West Virginia Supreme Court |
| Parties | Paxton v. Benedum-Trees Oil Co. |
1. Mines and Minerals Grant of Royalties.
A grant of the royalties, rents and income arising from the production of the oil from land is a grant of the oil in such land. (p. 191).
2. Case Partly Overruled.
Point one of the syllabus of the case of Harris v. Cobb, 49 W. Va. 350, is overruled in so far as it holds that the reservation in a deed of one-half of the royalties derived from the oil underlying the land conveyed is a reservation of only one-sixteenth of the oil in place. (p. 191).
3. Tenancy in Common Abstraction of Oil Injunction.
The abstraction of mineral oil from holds by one joint owner to the exclusion of his co-tenant is waste and may be enjoined by the co-owner so excluded. (p. 191).
4. Same Oil Lease Royalties-Accounting.
If a tenant in common take possession of the joint premises to the exclusion of his co-tenant and lease the same to a third party for the purpose of abstracting the oil therefrom, a specified proportion of such oil to be paid as royalty, the tenant so excluded may, if he choose, permit the lessee to continue operations under such lease, and require him to account for such proportion of the royalties as his interest in the oil in place bears to the whole thereof. (p. 195).,
5. Deeds Construction Effect.
In the construction of a deed the presumption is that the parties intended it to be effective, and a construction making a deed operative will be preferred to one rendering it void. (p. 195).
6. Same Construction Ambiguity.
Where there is ambiguity in a deed, or where it admits of two constructions, that one will be adopted which is most favorable to the grantee. (p. 195).
7. Same Construction Repugnancy.
If, in a deed, there be two clauses so totally repugnant to each other, that they cannot stand together, effect will be given to the first, and the latter rejected. (p. 195).
8. Mines and Minerals Oil and Gas Lease Construction Royalties.
An oil and gas lease, providing for the payment of one-eighth of the oil produced as royalty, and requiring the lessee to carry the lessor a one-sixteenth working interest clear through on the lease, means that the lessee shall conduct the operations upon said land without calling upon the lessor to contribute to the funds necessary to produce the oil, and shall pay to the lessor in addition to the royalty one-sixteenth of any profits derived from such operation as though he was actually a partner, (p. 197).
9. Evidence Construction of Deed Extrinsic Evidence.
Extrinsic evidence will not be admitted to explain or alter the terms of a written contract which is clear and unambiguous, (p. 197).
10. Same Parol Evidence Written Contract "Latent Ambiguity."
Proper parol evidence is admissible to explain a latent ambiguity in a written contract, and a latent ambiguity is one which arises not upon the words of the instrument, as looked at in themselves, but upon those words when applied to the object sought to be accomplished by the contract or the subject which they describe, (p. 197).
11. Contracts Construction Certainty.
Where a writing is ambiguous upon its face, it must be given effect, if possible, by the application of the well recognized canons of construction. If after the application of such rules of construction, the meaning of the writing remains doubtful it will be declared void for uncertainty. (p. 197).
(Miller, Judge, dissenting).
Appeal from Circuit Court, Roane County.
Suit by C. C. Paxton and others against the BenedumTrees Oil Company. Decree for defendant, and plaintiffs appeal.
Affirmed.
Ryan & Boggess, for appellants.
John M. Baker and Pendleton, Mathews & Bell, for appellee.
On the 18th day of March, 1904, the plaintiff 0. C. Paxton, being the owner in fee of a tract of land situate in Roane county, together with his wife, the plaintiff Phoebe Paxton, joined with a number of other parties in a deed which conveyed an interest in the oil and gas in the several tracts of lands owned by the various parties thereto to T. H. Kemper, the.granting clause of which is:
"Witnesseth, that the said parties of the first part in consideration of the respective amounts hereinafter provided for, the said parties of the first part do grant and convey unto the parties of the second part the 1/16 of all the oil and 1/2 of all of the gas within and underlying the several and respective tracts of land hereinafter described, including in this conveyance the 1/2 of all the royalties, incomes and rentals that may hereafter arise therefrom or accrue upon the real estate hereinafter described by virtue of any oil and gas lease, or leases now on said several tracts of land or which may hereafter be placed on said several tracts of land or any of them, that is to say:" Then follows the description of ten tracts of land in which plaintiffs are not interested, and resuming in regard to the Paxton land says: "And the said C. C. Paxton and Phoebe P. Paxton, his wife, in consideration of $217.50 in hand paid do grant and convey unto the said T. H. Kemper 1/16 of all the oil and 1/2 of all the gas or the income from the gas within and underlying the following described tracts of land situate in said county and state, and fully described in the deeds from L. S. Hersman and wife, W. H. Hershman, W. T. Jennings and Mason Campbell to C. C. Paxton, and dated respectively October 29, 1901, March 14, 1902, September 5, 1898, March 28, 1901, and March 2, 1880, and recorded in said clerk's office in D. B. 36, page 518; D. B. 35, page 520; D. B. 30, page 104, D. B. 34, page 118; D. B. 8, page 282 respectively and containing in all 145 acres, more or less."
On the 9th day of August 1909, the plaintiff C. C. Paxton and his wife executed an oil and gas lease to I. A. Whitecotton and C. A. Hayhurst, covering this land. This lease contained the provisions usual in such leases except that it provided for the payment to the lessor of one-fourth of the oil produced instead of the usual one-eighth. No operations were conducted under this lease and it was on September 30, 1909, surrendered and cancelled by agreement of the parties, and on the same date plaintiffs executed another lease for oil and gas purposes covering this land to I. A. Whitecotton. This lease grants the right to explore for and remove the oil and gas from the land for a period of one year from its date and so much longer as oil or gas is produced therefrom. It provides for the delivery to the grantee of one-eighth of all oil produced as royalty and for the payment of $300 per year for each gas well drilled, the product from which is marketed. There is a further provision in the lease in the following language: "Party of the second part does agree to carry parties of the first part a one-sixteenth working interest clear through on this lease; If oil and gas be found in paying quantity to continue to drill the until the farm is drilled up." There is also a paragraph at the end of the lease as follows: "1/16 of the oil and 1/2 of the gas or income from the gas is sold." This sufficiently states the terms and conditions of the lease for the solution of the questions arising in this case. It contains other covenants and provisions not involved in this litigation.
Shortly after he procured this lease Whitecotton transferred it to the defendant Benedum-Trees Oil Company, and thereafter it began to explore for oil and gas. The first well was completed in the spring of 1910 and produced oil in paying quantities. Other wells were subsequently drilled until at the time of the trial of this case in the court below in January, 1916, there had been five wells completed, all of which produced oil in paying quantities.
After the operating company began to produce oil a dispute arose as to the amount which should be delivered to Kemper and his assignees under the deed from Paxton and wife of March 18, 1904, above referred to. Paxton contended that the effect of that deed was to convey to Kemper onesixteenth of the oil, he, Paxton, being entitled to one-eighth of fifteen-sixteenths as royalty; that if Kemper allowed the lessee to extract all of the oil, it would be incumbent upon him to secure an accounting for his one-sixteenth from the lessee, such lessee being, so far as the interest of Kemper is concerned, a trespasser. The provision of the lease requiring the lessee to carry a one-sixteenth working interest for Paxton also became involved in the controversy, Paxton contending that nnder this provision he is entitled to a one-sixteenth interest in the oil produced after the payment of royalties free of any charge against the same for the cost of production, while the defendant operating company insists that under this provision Paxton is entitled to have one-sixteenth of the profits arising from the operation, without obligation on his part to furnish any money or to pay any losses in case the wells drilled were not productive. Paxton also claimed that the defendant operating company was not drilling upon the land as rapidly as the covenant in the lease required.
Paxton brought this suit for the purpose of having his rights determined and to compel the operating company to drill additional wells upon the land.
The first question to be settled is, what interest did Kemper take under the deed of March 18, 1904? Terms contained in the lease subsequently executed by Paxton are relied upon to aid in the construction of this deed. This cannot be done. The interest of Kemper and those claiming under him is fixed by the deed and cannot be affected by expressions in a paper subsequently made to which Kemper was not a party. Looking to the deed we find in the granting clause this language: "do grant and convey unto the parties of the second part the 1/16 of all the oil and 1/2 of all of the gas within and underlying the several and respective tracts of land hereinafter...
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