Appling v. Federal Land Bank of Wichita

816 P.2d 297, 15 Brief Times Rptr. 1045, 116 Oil & Gas Rep. 443, 1991 Colo. App. LEXIS 216, 1991 WL 131998
CourtColorado Court of Appeals
DecidedJuly 18, 1991
Docket90CA792
StatusPublished
Cited by4 cases

This text of 816 P.2d 297 (Appling v. Federal Land Bank of Wichita) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Appling v. Federal Land Bank of Wichita, 816 P.2d 297, 15 Brief Times Rptr. 1045, 116 Oil & Gas Rep. 443, 1991 Colo. App. LEXIS 216, 1991 WL 131998 (Colo. Ct. App. 1991).

Opinion

Opinion by

Judge REED.

In this C.R.C.P. 105 action, plaintiffs, Jon Appling, Jeff Davis, Pat H. Appling, and Colokan, Inc., appeal the summary judgment which determined the interest of Co-lokan, the Federal Land Bank of Wichita (FLBW), and Barth Farms, Inc. (Barth), in and to the oil, gas, and other minerals (mineral interests) lying in, under, and upon the subject property. We affirm.

The mineral rights here in question all derive from a series of recorded warranty deeds involving the same surface area of *299 land, commencing with the Ross conveyance on March 20, 1967. On that date, Siegel M. and Charlene Lewis Ross, as grantors, conveyed the subject property to Jon Appling and Jeff Davis without reserving or excepting in their deed any mineral interests in themselves.

Appling and Davis, as grantors, immediately then conveyed to the Rosses “an undivided one-half interest in the mineral rights” lying in, upon, or under the subject property, and also an undivided one-half interest in any mineral lease then or thereafter existing upon the premises. This deed further contained the typed statement that:

“it being the intention hereby to convey only a royalty interest; the interest conveyed hereby, whether set forth above or below, is for a period of 20 years from and after the date of this conveyance, or as long thereafter as oil, gas and/or other minerals may be continuously produced in commercial quantities.”

It is undisputed that there were no outstanding mineral leases in existence at the time of the execution of these two deeds. It is also undisputed that there has never been any mineral production from the properties throughout the 20-year period set forth in the typed portion of the deed.

Thereafter, by mesne conveyances, Colo-kan, a corporation in which Appling was president, became vested with the ownership interest previously held by Appling and Davis.

On November 19, 1975, Colokan conveyed the property to Calvin Melcher. This conveyance contained an exception and reservation clause which reads:

“EXCEPTING AND RESERVING therefrom, however, one-half of all oil, gas, and other minerals in, under, and that may be produced from the described premises; and further EXCEPTING AND RESERVING one-fourth of all oil, gas and other minerals in, under, and that may be produced from the described premises, or royalty interests therein, for the period as set out and recited in that certain royalty deed [by which mineral interests were conveyed to the Rosses].”

On May 1, 1985, Melcher conveyed his entire interest in the subject property to FLBW. On August 29, 1985, FLBW then conveyed the property to Barth, but excepted and reserved to itself an undivided one-half of the mineral and mineral rights “it presently owns.”

The trial court, based upon these documents, and pursuant to cross-motions for summary judgment, determined that Colo-kan was the owner of an undivided one-fourth mineral interest and that FLBW and Barth were each the owners of an undivided three-eighths interest in and to the minerals lying in, upon, and under the subject property.

I.

Plaintiffs contend that the trial court erred in interpreting the conveyance from Colokan to Melcher and in determining its mineral interests thereunder. We disagree.

All mineral interests of the individual plaintiffs in the subject property were conveyed by them to Colokan. Thus, a determination of the mineral interests excepted and reserved by Colokan in its conveyance to Melcher is dispositive of their claim.

A deed is to be construed in accordance with the intent of the parties as determined, if possible, within the four corners of the document. Brown v. Kirk, 127 Colo. 453, 257 P.2d 1045 (1953); First National Bank v. Allard, 31 Colo.App. 391, 506 P.2d 405 (1972), aff'd, 182 Colo. 297, 513 P.2d 455 (1973). And, since the deed from Colokan to Melcher is unambiguous, extrinsic evidence to alter, vary, or change the deed is not permissible. See O’Brien v. Village Land Co., 794 P.2d 246 (Colo.1990).

Further, if, as here, the evidence consists of written documents, we are not bound by the trial court’s findings. Burks v. Verschuur, 35 Colo.App. 121, 532 P.2d 757 (1975). Thus, we are not bound by the trial court’s interpretation of the various deeds.

The initial deed from the Rosses conveyed the subject property and all of its *300 mineral interests to Appling and Davis. However, contrary to plaintiffs’ contention, the subsequent conveyance from Appling and Davis to the Rosses created in the latter both an undivided one-half mineral interest and also a one-half royalty interest in any mineral lease that might thereafter exist on the premises.

Plaintiffs are estopped to contend that the conveyance to Ross was only a royalty interest because they characterized that grant as a mineral interest in the conveyance to Melcher. See Surface Creek Ditch & Reservoir Co. v. Grand Mesa Resort Co., 114 Colo. 543, 168 P.2d 906 (1946).

The distinction between a mineral interest and a royalty interest has been defined in Simson v. Langholf, 133 Colo. 208, 293 P.2d 302 (1956) as follows:

‘[A]n interest in royalty is an interest in the proceeds derived from the minerals which a lessee has located, developed and produced, while an interest in minerals is an interest in those natural resources before recovery, necessitating their location, development and production before being reduced to actual possession.’ ”

The Rosses’ mineral interest, however, by the terms of the deed, was to exist only for a period of 20 years (and as long thereafter as there was continuous, commercial, mineral production). This interest would terminate automatically when this condition ceased to exist. Accordingly, the Rosses’ mineral interest was a determinable fee in which Appling and Davis, as owners of the fee, also held a possibility of reverter. See School District No. 6 v. Russell, 156 Colo. 75, 396 P.2d 929 (1964).

Thereafter, all of the interests of Ap-pling and Davis were conveyed to their corporation, Colokan. Thus, prior to Colo-kan’s conveyance to Melcher, Colokan held an undivided one-half interest in the minerals; the Rosses held an undivided one-half interest in the minerals for a conditional term; and Colokan, or its successors, held a possibility of reverter in the interest of the Rosses.

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Bluebook (online)
816 P.2d 297, 15 Brief Times Rptr. 1045, 116 Oil & Gas Rep. 443, 1991 Colo. App. LEXIS 216, 1991 WL 131998, Counsel Stack Legal Research, https://law.counselstack.com/opinion/appling-v-federal-land-bank-of-wichita-coloctapp-1991.