Wilson v. Holm

• Decision Date: 24 January 1948
• Docket Number: 36951.
• Citation: 164 Kan. 229,188 P.2d 899
• Parties: WILSON et al. v. HOLM et al.
• Court: Kansas Supreme Court

188 P.2d 899

164 Kan. 229

WILSON et al. v. HOLM et al.

No. 36951.

Supreme Court of Kansas

January 24, 1948

Appeal from District Court, Russell County; C. A. Spencer, Judge.

Action by Lorraine Wilson and another against H. E. Holm and Mrs. H E. Holm, his wife, whose true given name is unknown, and others to quiet title to real estate. From judgment for plaintiffs, the defendants appeal.

BURCH J., dissenting.

Syllabus by the Court.

1. In this jurisdiction a deed, conveying oil and gas in place for a fixed term of years and so long thereafter as either or both are produced in paying quantities, creates a base or determinable fee.

2. A motion for judgment on an opening statement will not be sustained unless in the making of such statement it appears the plaintiff has admitted facts which necessarily and absolutely preclude his recovery under the issues made by the pleadings.

3. When a defendant does not stand upon his demurrer to the plaintiff's evidence, and thereafter, by his own evidence, supplies any deficiency which may have existed in the evidence of plaintiff, any error in the overruling of his demurrer is cured.

4. Factual findings of a trial court will not be disturbed when from an examination of the record, it appears they are supported by substantial competent evidence.

5. Mineral deeds are to be construed in accord with the intent and purpose of the parties as gathered from an examination of the entire instrument.

6. Under the provisions of a mineral deed, the primary term of which has expired, conveying oil and gas in place for 15 years and as long thereafter as oil or gas, or both, are produced in paying quantities, it is held: (a) The estate conveyed expires and reverts to the grantees if and when there is a cessation of production. (b) Whether such an estate has terminated for failure to produce oil or gas in paying quantities depends entirely upon the meaning of that term as used in the deed. (c) Temporary cessation of production because of necessary developments or operation does not result in a termination of rights acquired by the grantees. (d) Failure of a lessee to produce or failure of production for any other cause does not result in a defeasance ipso facto. (e) If for any reason there is a cessation of production of oil in paying quantities from the land described in the conveyance the owners of the minerable in place are required to move promptly and by their efforts actually establish that such cessation, regardless of its cause, is temporary, not permanent. In the event of their failure to do so the production contemplated by the deed is to be regarded as at an end.

7. When a mineral deed has terminated because of failure to produce oil, subsequent production from the land therein described will not extend its term or revive rights which the parties themselves had definitely fixed by their own contract.

8. The record in an action to quiet title to real estate as against persons claiming an interest therein under and by virtue of a mineral deed providing that such interests were to continue so long as oil and gas was produced in paying quantities from the land involved is examined, and it is held, that under the facts, conditions and circumstances disclosed, as fully set forth in the opinion, the trial court properly concluded production of oil in paying quantities from such land had ceased under circumstances resulting in the termination of all rights asserted by the defendants under their mineral deed.

W. C. Attwater, of Wichita (P. J. Warnick and Alan B. Phares, both of Wichita, on the brief), for appellants.

C. R. Holland, of Russell (Oscar Ostrum, of Russell, on the brief), for appellees.

PARKER Justice.

This is an action to quiet title to real estate. The plaintiffs recovered and the defendants appeal.

All that needs to be said with respect to the pleadings is that they raise the issue whether defendants are still the owners of an undivided one-half interest in the minerals in and under the tract of land involved by virtue of a mineral deed conveying such an interest to the person from whom they acquired their interests for a term of fifteen years and so long thereafter as oil or gas was produced from the property in paying quantities or had lost ownership of, and title to those interests by reason of cessation of production of oil from the land after expiration of the primary term of the instrument on which their claim of title is based, with the result their right, title and interest reverted to the original grantors.

The case was commenced on September 4, 1946, and submitted to the trial court on January 27, 1947, by agreement. Thereafter, for sound reasons not here important, the cause was taken under advisement until April 16, 1947, when it came on for decision. The findings of fact made by the trial court on that date so adequately portray the factual picture revealed by the record they can be quoted at length in lieu of a statement of facts in which needless repetition could only ensue. When first made, after all parties had adduced their evidence, such findings read:

'1. On November 2, 1927, Alta C. Whitson, a widow; Ralph Whitson and Ward Whitson, single men; Lorraine Wilson and Ross C. Wilson, her husband, as grantors, made, executed and delivered to H. E. Holm, as grantee, a mineral deed conveying an undivided one-half interest in and to all of the oil, gas and other minerals in and under, and that may be produced from the following described land, situated in Russell County, Kansas, to-wit:

'The Southwest Quarter of Section 16 Township 11 South, Range 15 West of the 6th P. M. for a period of 15 years and as long thereafter as oil or gas, or both, are produced in paying quantities, which deed was filed for record December 3, 1927, and duly recorded in Book 7, at Page 604 in the Office of the Register of Deeds, Rusell County, Kansas. That a full, true and correct copy of said mineral deed was admitted in evidence in this section by agreement.

'2. That thereafter H. E. Holm made various transfers and assignments of said interest and at all times pertinent to this action the defendants herein became and are the ultimate owners thereof.

'3. That during the years of 1933 and 1934 all of the owners of mineral rights in and to the South Half of the Southwest Quarter of Section 16, made, executed and

delivered valid and existing oil and gas leases which leases were for a primary term of 10 years and for so long thereafter as oil and/or gas might be produced, which leases were owned as of September 25, 1945, by the defendant H. E. Holm and by C. M. Ashby, and that as of September 25, 1945, there was one producing oil well on this tract.

'4. That on or about September 24, 1945, water from what is known as the Dakota formation broke through the casing of said well which thereupon ceased to produce oil and commenced producing salt and mineralized waters, and which well was pumped by the pumper until about November 30, 1945, when the same was shut down because of such water.

'5. That Simon Lebow was the owner of oil and gas leases covering the following described lands and real estate, situatted in Russell County, Kansas, to-wit:

'The Southeast Quarter of Section 17, and the Northeast Quarter of Section 20, all in Township 11 South, Range 15 West of the 6th P. M., upon which there were several producing oil wells and which oil wells are located immediately to the west and southwest from said land of the plaintiffs and that said Dakota water commenced flooding the oil producing horizon on the plaintiffs' land and the oil producing horizons belonging to said Simon Lebow which caused the said Simon Lebow damages to his wells.

'6. That on or about December 31, 1945, said Simon Lebow bought and purchased said oil and gas leasehold interest from the defendant H. E. Holm and the defendant C. M. Ashby and became the legal owner of said lease and the material and equipment thereon which was purchased by said Simon Lebow for the sum of $1,500.00, which was about the salvage value of the equipment and material at the well.

'7. That after acquiring title to said leasehold from Holm and Ashby, Lebow pulled and removed all tubing and pumping rods from the well and caused cement to be injected into the well by Halliburton. That was a 'squeeze' job; the purpose being to force cement up on the outside of the casing to shut off the leaks therein.

'8. After a squeeze job, it is necessary that the cement be then drilled from the hole, preferably by a light drilling machine known as a spudder. Lebow was unable (did not) to get such a machine from January 1946, to October 1, 1946, and he conducted no further operations upon the land for the purpose of reconditioning said well or placing it back in production. (emphasis supplied).

'9. That during the month of May, 1946, the Summitt Oil Company, which had secured oil and gas leases on the north half of said quarter section, commenced the drilling of a well thereon for oil and gas purposes, and secured production therein on or about September 1, 1946.

'10. The tubing and pumping equipment taken from the well for the purpose of running cement therein were placed on the ground near the well where they remained until August, 1946, or later.

'11. That on or about July 18, 1946, C. R. Holland, an attorney for the plaintiffs, demanded a release of the leases owned by Simon Lebow covering the South Half of the Southwest Quarter of said Section 16, claiming that said leases were forfeited by reason of the cessation of production from the oil well upon said 80 acres. This demand was in writing, and a copy thereof was introduced in evidence as Plaintiffs' Exhibit 4, to which reference is hereby made. Several

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