Classen v. Federal Land Bank of Wichita

617 P.2d 1255, 228 Kan. 426, 68 Oil & Gas Rep. 426, 9 A.L.R. 4th 1106, 1980 Kan. LEXIS 342
CourtSupreme Court of Kansas
DecidedOctober 7, 1980
Docket51,542
StatusPublished
Cited by22 cases

This text of 617 P.2d 1255 (Classen v. Federal Land Bank of Wichita) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Classen v. Federal Land Bank of Wichita, 617 P.2d 1255, 228 Kan. 426, 68 Oil & Gas Rep. 426, 9 A.L.R. 4th 1106, 1980 Kan. LEXIS 342 (kan 1980).

Opinions

The opinion of the court was delivered by

Holmes, J.:

The Federal Land Bank of Wichita, Wichita, Kansas, (Land Bank) appeals from a judgment in favor of Frank H. and Helen Classen (the Classens) quieting their title to the oil, gas and other minerals under two quarter sections of land in Meade County.

The basic facts are not in dispute and were agreed to by stipulation of the parties. The stipulated facts pertinent to the issues in this appeal were:

“1. The Defendant, The Federal Land Bank of Wichita, was previously the owner of fee title to the surface and minerals in and under the following described real estate:
The Southwest Quarter (SW/4) of Section Five (5); the Northeast Quarter (NE/4) of Section Seven (7); and the Northwest Quarter (NW/4) of Section Eight (8); all in Township Thirty-three (33) South, Range Twenty-seven (27) West of the 6th P.M., Meade County, Kansas.
“2. On the 5th day of August, 1943, the Defendant conveyed the above described property to Frank H. Classen and Helen Classen, his wife, by warranty deed recorded in Book 40, Page 595.
“3. From said deed the Defendant excepted and reserved unto itself, its successors and assigns, an undivided one-fourth (%) of all oil, gas and other minerals and mineral rights in, upon and under the above described real estate for a period of twenty (20) years from and after April 25, 1941,
‘. . . and so long thereafter as oil, gas and/or other minerals or any of them are produced therefrom or the premises are being developed or operated . . .’
“4. On August 19, 1949, Frank H. Classen and Helen Classen, his wife, conveyed the Northeast Quarter (NE/4) of Section Seven (7), above described, to A. J. Enns, by warranty deed recorded in Book 44, Page 567.
“5. On November 28, 1950, Frank H. Classen and Helen Classen, his wife, executed and delivered to Columbian Fuel Corporation an oil and gas lease upon and covering the Northwest Quarter (NW/4) of Section Eight (8), and the Southwest Quarter (SW/4) of Section Five (5), above described. The said oil and gas lease was recorded in Book 7, Page 521 and was subsequently assigned to Diamond Shamrock Corporation.
“6. On November 28, 1950, the Defendant, The Federal Land Bank of Wichita, Wichita, Kansas, made, executed and delivered to Columbian Fuel Corporation an oil and gas lease, covering the Southwest Quarter (SW/4) of Section Five (5) and the Northwest Quarter (NW/4) of Section Eight (8), above described. Said lease was recorded in Book 8, Page 284 and was subsequently assigned to Diamond Shamrock Corporation.
[428]*428“7. On May 5, 1958, A. J. Enns and Susie Enns, his wife, conveyed the Northeast Quarter (NE/4) of Section Seven (7) to Menno A. Friesen and Hilda L. Friesen, his wife, as joint tenants, by deed recorded in Book 49, Page 128.
“8. By Declaration of Consolidation of Gas Leasehold Estate, dated October 20, 1958, the hereinabove described oil and gas leases, as amended, were pooled and unitized by the then record owners with other leases on other lands, to form a consolidated gas leasehold estate upon and covering all of Section Eight (8), Township Thirty-three (33) South, Range Twenty-seven .(27) West, Meade County, Kansas.
“9. Thereafter, on or about March 30,1959, and within the primary term of the Defendant’s one-quarter (%) mineral interest reservation, a well productive of gas in paying quantities was drilled upon said pooled and unitized gas leaseholds estates — the said well being located on the Southeast Quarter (SE/4) of said Section Eight (8).
“10. Said well has continuously produced gas in paying quantities since March 30, 1959, and continues to produce gas in paying quantities at this time. Since commencement of production, royalties on such production attributable to the Northwest Quarter (NW/4) of Section Eight (8) have been paid, and continue to be paid, three-fourths (%) to Plaintiffs, and one-fourth (14) to Defendant. Such division and payment of royalty has been made at all times with the full knowledge of Plaintiffs.
“11. On November 30, 1960, the then record owners of the oil and gas leases described in paragraphs numbered 5 and 6 above released the leases, only insofar as they covered the Southwest Quarter (SW/4) of Section Five (5) hereinbefore described. The release is recorded in Book G, Page 239.
“12. On April 25,1961, there was no producing oil or gas well drilled, or in the process of being drilled, which was physically located on any of the three quarter sections originally conveyed by the Defendant to the Plaintiffs by deed recorded in Book 40, Page 595.
“19. To date, no producing oil or gas well has ever been physically located and drilled upon the Southwest Quarter (SW/4) of Section Five (5) or on the Northwest Quarter (NW/4) of Section Eight (8), above described.”

Hereafter the Northwest Quarter of Section Eight will be referred to as Tract 1; the Northeast Quarter of Section Seven as Tract 2; and the Southwest Quarter of Section Five as Tract 3.

At the outset we deem it appropriate to comment that although, strictly speaking, “pooling” refers to the consolidation of multiple tracts for purposes of forming a drilling or spacing unit, and “unitization” refers to a consolidation of tracts for joint operation of all or part of a reservoir, the terms are often used interchangeably. 5 Summers, Oil and Gas § 951. In the context of their use in this opinion, we will be referring to a gas spacing or drilling unit. Likewise, a term mineral interest may be created by either grant or reservation, resulting in two types of future interests. Many [429]*429courts and authorities describe the potential interest to be obtained by the fee owner upon termination of the term mineral interest as a “reversion,” regardless of the method of creation, and the owner thereof as the “reversioner.” As rules of law considered herein apply equally to either method of creation, we will not attempt to differentiate between the two types of interests and will use the more commonly understood terms relating to reversionary interests.

Tract 2, owned by Menno and Hilda L. Friesen, was the subject of a separate quiet title action in the Meade County District Court against the Land Bank wherein the Friesens' title was quieted against the one-fourth mineral interest claimed by the Land Bank and therefore Tract 2 is not directly involved in this appeal. That decision was recently affirmed by this court in Friesen v. Federal Land Bank of Wichita, 227 Kan. 522, 608 P.2d 915 (1980), and we will not repeat here additional facts set forth therein.

In the fall of 1958, the Land Bank and the Classens executed separate documents to Shamrock Oil and Gas Corporation, evidently an assignee of the leases to Diamond Shamrock Corporation, amending the oil and gas leases described in stipulations 5 and 6 above. The purpose of the amendments was to allow the consolidation of the gas leasehold estates on Tract 1 with the rest of Section 8 to form one 640 acre unit for the production of gas. The properties involved are located in what is known as the McKinney Gas Field.

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Classen v. Federal Land Bank of Wichita
617 P.2d 1255 (Supreme Court of Kansas, 1980)

Cite This Page — Counsel Stack

Bluebook (online)
617 P.2d 1255, 228 Kan. 426, 68 Oil & Gas Rep. 426, 9 A.L.R. 4th 1106, 1980 Kan. LEXIS 342, Counsel Stack Legal Research, https://law.counselstack.com/opinion/classen-v-federal-land-bank-of-wichita-kan-1980.