Stegall v. Bugh

• Decision Date: 03 February 1958
• Docket Number: No. 5-1449,5-1449
• Citation: Stegall v. Bugh, 228 Ark. 632, 310 S.W.2d 251 (Ark. 1958)
• Parties: J. H. STEGALL, Appellant, v. Mrs. E. E. BUGH et al., Appellees.
• Court: Arkansas Supreme Court

Page 251

310 S.W.2d 251

228 Ark. 632

J. H. STEGALL, Appellant, v.Mrs. E. E. BUGH et al., Appellees.

No. 5-1449.

Supreme Court of Arkansas.

Feb. 3, 1958.

Dissenting Opinion Feb. 17, 1958.

Rehearing Denied March 17, 1958.

Spencer & Spencer, El Dorado, for appellant.

Mahony & Yocum, Crumpler & O'Connor, J. S. Brooks, B. L. Allen, El Dorado, and Sam Pickard, Houston, for appellees.

WARD, Justice.

The question for decision is: Do the words 'except the mineral interest in said lands', following the description in a warranty deed, include oil and gas under the peculiar facts and circumstances of this case?The trial judge held that the words did not include oil and gas, and appellant prosecutes this appeal to reverse said holding.

The issue arose in the manner presently set forth.A summary statement will suffice because there is little, if any, dispute over facts which we deem essential.On November 6, 1900, B. H. Stegall and his wife [parents of appellant] executed a warranty deed conveying 120 acres of land in Section 23, Township 17 South, of Range 14 West, Union County, to one M. F. Goodwin.The deed contained the exception clause as mentioned above.Appellant is now the owner of the mineral rights reserved under the above deed, and appellees claim an interest in the oil and gas as remote grantees of the said M. F. Goodwin.

Appellant's main contention is that B. H. Stegall, at the time he executed the deed to Goodwin in 1900, understood the word 'mineral' to include oil and gas.To prove that B. H. Stegall had such understanding, appellant introduced evidence to the effect that, in 1900, there appeared traces of oil or a substance resembling oil on several springs [called 'oil springs'] on or near the land conveyed.It was also shown by testimony that B. H. Stegall was careful to select a scrivener to prepare a deed that would reserve to him the oil and gas.There was other testimony from all of which the trial judge might have been justified in finding that B. H. Stegall actually meant to reserve all rights to oil and gas when he executed the deed in question.

Based on the above testimony showing the intention of B. H. Stegall to reserve oil and gas rights at the time he executed the deed in 1900, appellant relies on language used by this court in the case of Brizzolara v. Powell, 214 Ark. 870, 218 S.W.2d 728, 730, for a reversal.In considering a similar exception in the cited case, we said that, 'the question involves the intent with which these words were used', etc.From the quoted language and other similar language found in the cited case, appellant appears to conclude that the 'intent' of the grantor is controlling here.Expressed another way, appellant's argument appears to be that, based on the Brizzolaracase, supra, it is our duty to determine from the testimony just what B. H. Stegall had in mind when he used the word 'mineral' in the exception in the conveyance to Goodwin.We do not agree that this is a correct interpretation of the holding in the Brizzolaracase, supra, or of the holdings in similar decisions to which that case makes reference and which we will mention presently.We think that the meaning which this court has heretofore and should hereafter give to the word 'mineral', in connection with its use in situations similar to those of this case, is governed not by what the grantor meant or might have meant, but by the general legal or commercial usage of the word at the time and place of its usage.The testimony in the case under consideration justified the trial court, we think, in finding that the word 'mineral', in its accepted legal and commercial usage, did not include oil and gas in Union County in 1900.This testimony was to the effect that there was no oil production in Union County until about 20 years after the deed in question was executed and that the word 'minerals', as commonly used in Southern Arkansas and in Union County in 1900 would not have included oil and gas.A geologist with the Arkansas Oil & Gas Commission for about 6 years stated that the first showing of oil in Union County was in 1920; that in 1900 there was no oil produced in East Texas, or Northern Louisiana; that the understanding of the people engaged in the oil business in 1900 and until 1919 was that there would never be any production in the southern part of Arkansas, and; that the word 'minerals', from the standpoint of the oil industry in Union County during the above mentioned period would not have included oil and gas.

The conclusion which we have reached above is, we think, consistent with and supported by former decisions of this court, to which we wish to make only brief reference.

Missouri Pacific R. Co. v. Strohacker, 202 Ark. 645, 152 S.W.2d 557, 563.This case dealt with deeds, executed in 1892 and 1893, conveying lands in Miller County, which excepted 'all coal and mineral deposits'.We held these words did not include oil and gas, but, in doing so, said: 'If the reservations had been made at a time when oil and gas production, or explorations, were general, and legal and commercial usage had assumed them to be within the term 'minerals', certainly appellant should prevail.'The court found however, from testimony which it is not necessary to restate, that such usage was not shown.The rule of interpretation [of the word 'mineral'] employed by the court in reaching the decision it did is shown by these expressions used or quoted with approval: '* * * the best and surest method of expounding an instrument is by referring to the time when, and the circumstances under which it was made', and 'The best construction is that which is made by viewing the subject of the contract as the mass of mankind would view it; for it may be safely assumed that such was the aspect in which the parties themselves viewed it.'

Missouri Pacific Railroad Company v. Furqueron, 210 Ark. 460, 196 S.W.2d 588.This case construed the same exception language contained in a deed executed in 1894 which conveyed land also in Miller County.It was there held that the questioned language did not include oil and gas.We followed the Strohackercase, supra, although we were specifically urged to overrule it.

Carson v. Missouri Pacific Railroad Company, 212 Ark. 963, 209 S.W.2d 97, 99, 1 A.L.R.2d 784.There the deed in question was executed in 1892 and the reservation was 'all coal and mineral deposits * * *', and we held, following the reasoning in the Strohacker and Furqueron cases, supra, that Bauxite was not included.Among other things the court pointed out: 'We conclude that the rule announced in the Strohackercase, supra, as well as the unreasonableness, under the circumstances, of the construction asserted by appellee, requires a holding that bauxite was not in the contemplation of the parties to the contract when this reservation of mineral rights was made'.

Brizzolara v. Powell, supra[214 Ark. 870, 218 S.W.2d 730].Here all the cases mentioned above were referred to and all were unanimously approved by this court.It was stated that the holdings in these cases had 'become a rule of property on which have been founded innumerable important transactions'.The deed under consideration there was executed in 1897.

The deed [containing the exception] under consideration was executed only 7 years after the deed in the Strohackercase, supra, and only 3 years after the deed in the Brizzolaracase, supra.There is no testimony by appellant tending to show any change in oil and gas development or in the general usage of the word 'minerals' during the indicated interval of time.We see no reason therefore why we should not here follow the rule announced in the cases heretofore mentioned.

Affirmed.

McFADDIN, Justice (dissenting).

I think the time has come when this Court should declare that by January 1, 1900 it was generally considered and understood that oil was a mineral.Such conclusion prompts the dissent.

Because of our decisions in the Strohacker case¹ and others since then, as herein mentioned, there has been left open the question as to when oil (i. e. petroleum) came to be generally considered in Arkansas as a mineral.Oil may be of three kinds: animal, vegetable, or mineral.Webster's Dictionary so states concerning 'oil'.The kind of oil we are considering in this case is mineral oil; and the other word for mineral oil is petroleum, ² which itself comes from two Latin words--petra, meaning rock; and oleum, meaning oil--so petroleum means rock oil.The question is this: in 1900 was petroleum generally considered in Arkansas to be a mineral?I say it was.

Certainly, petroleum was considered a mineral (a) by the man who made the deed here involved; and (b) by the oil fraternity generally; and (c) by the world at large as a matter of general information.I will demonstrate:

(a) The deed here in question was dated November 6, 1900, from B. H. Stegall to M. F. Goodwin; and immediately following the description of the land in the granting clause, there was this language: '* * * except the mineral interest in said lands * * *.'The evidence shows that Mr. Stegall, the grantor, lived in Union County and understood that oil was a mineral.He discussed with many people the possibility of oil and gas within the area of his land and told them that some day oil would be produced in Union County; and these conversations were before 1900.When he sold the lands here involved to Mr. Goodwin on November 6, 1900, Mr. Stegall told the grantee that he wanted to reserve all of the oil.The grantee agreed and stated that all he wanted was the surface rights.Mr. Stegall spent several days looking for someone who knew how to make a mineral reservation; and the person drawing the deed used the language, 'except the mineral interest in said lands'.Of course, the test is not what was in the mind of the grantor, but what was the general understanding of the words; so my first point is that the grantor, living...