Rogers v. Morgan, 43097

• Decision Date: 25 May 1964
• Docket Number: No. 43097,43097
• Citation: 164 So.2d 480,250 Miss. 9
• Parties: James L. ROGERS v. James A. MORGAN et al.
• Court: Mississippi Supreme Court

Page 480

164 So.2d 480

250 Miss. 9

James L. ROGERS v. James A. MORGAN et al.

No. 43097.

Supreme Court of Mississippi.

May 25, 1964.

Satterfield, Shell, Williams & Buford, K. Hayes Callicutt, Craig Castle, Jackson, for appellants.

Wilbourn, Lord & Williams, Meridian, Boyd, Holifield & Harper, Laurel, for appellee.

RODGERS, Justice.

This is an interlocutory appeal from an order of the Chancery Court of Wayne County, Mississippi, sustaining a demurrer filed by appellee to the original bill of appellant. The appeal was allowed to this Court by the chancery court to settle the principles of law involved. The Citizens National Bank of Meridian, Trustee of the S. O. Socott Residuary Trust and Executor of the Estate of Mrs. Mary Lou Scott, Deceased, and Trustee of the Mary Lou Scott Residuary Trust, and others, filed an answer to the original bill and a cross bill after having obtained permission from the court. There was a stipulation and agreement by the attorneys that the answer and cross bill thus filed would become a part of the record of this case on appeal. There is apparently no dispute as to the interest of the Citizens National Bank of Meridian.

The complainant in the chancery court, James L. Rogers filed a bill of complaint charging that he is the owner of an undivided one-half interest in and to the oil, gas and other minerals in such property described in the bill. The deraignment of title shows the property to have been descended from a common source. It charged that on and before the 2nd day of April 1940, the property belonged to the Wausau Southern Lumber Company, a Wisconsin corporation, and that on that date it conveyed an undivided one-half interest in the oil, gas, minerals and ores in the described land. The deraignment of title outlines the various conveyances thereafter culminating in the conveyance to appellant James L. Rogers and that at the time the bill was filed Rogers owned all of the interest conveyed to W. M. Bankston, except a fractional royalty interest previously owned by C. C. Craft. This is now claimed by the intervening bank.

The conveyance from Wausau Southern Lumber Company to W. M. Bankston was as follows:

'MINERAL RIGHT AND ROYALTY TRANSFER

(to Undivided Interest)

'STATE OF WISCONSIN

County of Marathon>) §§

'KNOW ALL MEN BY THESE PRESENTS: That WAUSAU SOUTHERN LUMBER COMPANY, a Corporation of Wisconsin, with home offices at Wausau Wisconsin, Grantor, for and in consideration of the sum of Ten ($10.00) dollars, and other valuable consideration, paid by W. M. Bankston, of Clara, Mississippi, Grantee, the receipt of which is hereby acknowledged, has granted, sold and conveyed, and by these presents does grant, sell and convey unto said Grantee, an undivided one-half of the oils, gases, minerals and ores of every kind, existing in, under or on the following described land or property, to-wit:

'The Southeast quarter of the Southwest quarter (SE 1/4 of SW 1/4), and the North half of the Southeast Quarter (N 1/2 of SE 1/4) of Section twenty-eight (28), Township eight (8) North, Range nine (9) West, Wayne County, Mississippi.

'TO HAVE AND TO HOLD the said undivided one-half interest in the above described property, unto said grantee, his heirs, successors and assigns, forever, subject, however, to the following qualifications of the Rights of the Grantee, to-wit:

'This conveyance is made subject to an existing lease by Grantor to Urban B. Hughes, dated October 6th, 1939, expiring October 6th, 1949 if maintained by Lessee. Under said lease Grantor is to receive a Royalty of one-eighth of the net proceeds from Oil, Gas and Minerals obtained from the above described lands by said Lessee, and this instrument conveys to the grantee one-half of such net proceeds that may be due to the grantor under the aforesaid lease.

'Should the above described lease expire, or lapse, grantor herein reserves the right to make future leases affecting the above described lands, so long as there shall be included therein for the benefit of the Grantee herein, his heirs and assigns, the rights and interests herein conveyed by the Grantor to the Grantee; and the Grantor further reserves the right to collect and retain all bonuses and rentals paid for or in connection with said existing lease or any future lease.

'WITNESS the signature of the Grantor, this 2nd day of April, 1940.

'WAUSAU SOUTHERN LUMBER COMPANY

'By /s/ S. B. Bissell

'President'

It was alleged in the original bill of complaint that the interest retained by the Wausau Southern Lumber Company was thereafter conveyed through mesne conveyances to Alexander F. Chisholm, James A. Morgan, William A. Garner, Robert E. Garner and Jane G. Head, and that the last three named persons leased the property here involved to Chisholm and Morgan, the two first named owners, for a one-eighth royalty interest.

It is charged that this lease is between cotenants and prevents appellant from obtaining the maximum royalty being paid in the field on any lease 'covering his undivided one-half interest.' It is also alleged that the above-named cotenant 'could not lease to each other to the appellant's detriment and thus keep appellant from receiving the maximum royalty due on his undivided one-half mineral interest.' It is charged that fifty percent royalty can be obtained on a lease covering the lands here in question. Appellant charged that he was willing and able to pay his pro rata share of all development costs, bonuses, and rentals that might be due.

It is also alleged that a producing oil well is located less than 900 feet from the exterior boundary of the lands here involved, and that the complainant, appellant here, is suffering an irreparable damage; that the lands here involved are being drained by this producing well; that the lease above-mentioned was not made in good faith, and was without consideration; that appellant was willing to have his undivided one-half mineral interest covered by a lease as long as it provided for the maximum royalty payable in the area. It is also alleged that the defendants owe complainant the highest degree of care and utmost fair dealing, and diligence to obtain the maximum royalty being paid in the area. Appellant prays that a receiver be appointed to protect the interests of all parties.

The original defendants then filed their joint answer and demurrer. The demurrer was heard separately from the bill and sustained by the Chancellor.

The appellant insists that this Court should reverse the order of the chancellor because the demurrer admits the allegations of all facts properly pleaded, and that the original bill alleges, among other things, that the oil well located 900 feet from the equity or boundary of the land of the complainant is draining the lands here involved, and that the appellant, without the aid of the chancery court, is helpless to do anything to protect himself against the irreparable injury being suffered; that the defendants owed complainant the highest degree of care and good faith, and in support of this argument, the appellant cites the following cases: Covington v. Carney, Exec., 242 Miss. 461, 135 So.2d 192; Dabney Foundation, Inc. v. Perry, Exec., 223 Miss. 721, 79 So.2d 445; M. L. Virden Lumber Company, Inc. v. Stone, 203 Miss. 251, 33 So.2d 841; Williams v. Williams, 185 Miss. 53, 187 So. 209; and State ex rel. Baker v. Nichols, 106 Miss. 419, 63 So. 1025.

We agree with the principle announced in these cases, and with the rule announced by Griffith, Miss.Chancery Practice, Sec. 286, p. 285, as follows: 'The demurrer then, is a pleading by which the defendant challenges the sufficiency of the bill in substance, or in form, and presents to the court the question of law as to whether upon such a bill the defendant should be required to plead further; and by which, for the purpose of said challenge and of the argument of said test in law, all the facts of the bill well pleaded are, for the time being, admitted.'

In the instant case, however, it appears to us (with the exception to be discussed later) that the allegations pointed out by the appellant, and set out in the original bill, are largely conclusions of the pleader based upon an interpretation of the conveyance under which the appellant claims. However, conclusions of a pleader are not admitted, nor confessed by, a demurrer. See Love, Supt. of Banks v. Fidelity & Deposit Company of Maryland, 162 Miss. 532, 139 So. 387.

After a careful examination of the pleading and authorities cited by the parties in their briefs, we have come to the conclusion that the solution to the problem here presented lies in an interpretation of the conveyance from the Wausau Southern Lumber Company to W. M. Bankston, supra. There are several cases of interest on this question. In the case of Mounger, et al. v. Pittman, 235 Miss. 85, 108 So.2d 565, this Court said: '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)...