South Penn Oil Co. v. Haught
| Decision Date | 04 February 1913 |
| Citation | 78 S.E. 759,71 W.Va. 720 |
| Parties | SOUTH PENN OIL CO. v. HAUGHT et al. |
| Court | West Virginia Supreme Court |
Submitted June 14, 1911.
Syllabus by the Court.
S grants to S. P. O. Co. "the undivided one-fourth of all the oil and gas in and under" a tract of land, subject to an oil and gas lease then held by the grantee from the grantor on the same land, which provided that in case of production the lessor was to receive one-eighth as royalty. The grant also provided that, if the land was operated under the lease, the grantee should receive one-fourth of the royalty provided in the lease to be delivered to the lessor. There were no operations under the lease and it expired. Oil was later produced from the land by a lessee of a subsequent grantee of the land, both of whom had knowledge of S. P. O Co.'s claim of title to one-fourth of the oil and gas. In a suit by S. P. O. Co. for an accounting and to enjoin further development, Held:
I. The grant vested S. P. O. Co. with title to one-fourth of the oil and gas under the land.
II. That the production of oil without its consent constituted a waste and gave it the right to an accounting.
III. That, under the circumstances of the case, the fair and equitable basis for accounting is the 1/32 of the entire output of oil delivered to it in the pipe line.
IV. That it has a right to have any further development of the oil and gas enjoined.
Appeal from Circuit Court, Monongalia County.
Action by the South Penn Oil Company against A. P. Haught and others. From judgment for defendants, plaintiff appeals. Reversed and remanded.
A. B Fleming, Charles Powell, and Kemble White, all of Fairmont, for appellant.
Dille & Dille and Moreland, Moreland & Guy, all of Morgantown, for appellees.
Claiming to be the owner of the one undivided fourth of the oil and gas in place under a certain tract of land containing 62 acres, situated in Battelle district, Monongalia county, owned by the defendant Joseph S. Smith, plaintiff brought this suit against A. P. Haught, lessee of said Smith, and others, for an accounting for its alleged share of the oil produced from the land, and to enjoin further boring of wells. The court refused relief and dismissed plaintiff's bill, and it has appealed.
It is important first to determine whether plaintiff is a joint tenant with said Smith of the oil, and that question depends upon the effect of the following deed made to plaintiff, by Joseph S. Smith's father and grantor, viz.:
The lease referred to in the foregoing deed was dated the 13th of April, 1896, and was to remain in force for five years, and as long thereafter as the land was operated for the production of oil and gas. No operations were ever had under that lease, and it expired on the 13th of April, 1901.
There is no doubt that the purpose of the grantor in the foregoing deed was to invest the grantee with a present estate in fee simple, in and to the undivided one-fourth of all the oil and gas under the 100 acres of land, and that the legal effect of the language used fully accomplishes that purpose. Counsel for defendants insist that the intention was to grant a one-fourth of the royalty interest only. We do not think so. In order to arrive at the purpose the whole instrument must be read together, and its various parts made to harmonize if possible. That part leasing a fourth, not sold, is not material. It does not conflict with grantor's purpose to convey one-fourth in place, nor does it shed any additional light upon the granting clause. The deed is clearly divisible into two separate and distinct parts: (1) A grant for one fourth, and (2) the lease of another fourth. And, inasmuch as plaintiff claims nothing under the lease, it may be eliminated altogether.
The first part of the deed is, in form and effect, an absolute grant of an undivided one-fourth of all the oil and gas in place. The language could not be plainer to signify an intention to convey such an estate; read alone, it is too plain to admit of construction. No other part of the deed indicates any different intention, because there is nothing that conflicts with the granting clause. At the date of the deed, the grantee held an oil and gas lease on the land, but that did not prevent the lessor from granting what he had. He simply granted "subject to the lease." That was not a restriction upon the grant; it was simply to preserve the rights of the parties to the lease. No development had been made at that time, and hence the lessee had acquired no vested interest in the oil and gas in place; it had only the right of exploration, and, on finding oil or gas, the right to extract it. The title to those minerals was still in Smith, because they were then parts of the realty. And the existence of the lease did not prevent him from parting with his title to those minerals in place. The following provision harmonizes well with the purpose to grant title to one-fourth of the oil and gas in place, viz., "and so long as said premises are operated under said lease the party of the second part hereto shall be entitled to receive one-fourth of the royalty provided therein to be delivered to the party of the first part." This shows a purpose, not only to vest the grantee with title to so much of the oil and gas in place as the grantee would have acquired a right to under the terms of the lease, if it had developed the property, but also title to so much of the royalty oil as the grantor would have been entitled to receive on account of the undivided one-fourth, to wit, 1/32 of the oil. So that, whether the lease was worked or not, it was clearly the grantor's purpose to part...
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