Hurst v. Rice

643 S.W.2d 563, 278 Ark. 94, 76 Oil & Gas Rep. 442, 1982 Ark. LEXIS 1616
CourtSupreme Court of Arkansas
DecidedDecember 20, 1982
Docket82-164
StatusPublished
Cited by6 cases

This text of 643 S.W.2d 563 (Hurst v. Rice) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hurst v. Rice, 643 S.W.2d 563, 278 Ark. 94, 76 Oil & Gas Rep. 442, 1982 Ark. LEXIS 1616 (Ark. 1982).

Opinion

Robert H. Dudley, Justice.

Both parties to this appeal claim forty acres of mineral rights in Johnson County. Gas and coal are now at stake.

In 1919 Rebecca Rogers Smith deeded her dower interest in the land to W. A. Hill. In 1920 he conveyed his interest in the surface “with all coal and mineral reserved, all right to mine, strip or enter and remove any and all coal is reserved.” Appellees, the Hills, claim their title to the minerals through W. A. Hill. The mineral rights were not properly subjoined with the surface rights on the tax books in the years material to this appeal and, in 1929, the “Mineral Titles” in the name of W. A. Hill were forfeited for nonpayment of the 1926 taxes.

Appellant, Emma Hurst, claims title to all minerals by virtue of a State mineral tax deed obtained by her husband in 1930 for non-payment of the 1926 tax on minerals. The tax deed was confirmed in 1938 in an ex parte proceeding.

In 1966, appellant, Emma Hurst, leased her interest to a drilling company as did others. Various leases were then pooled and unitized into a drilling unit and producing gas wells were drilled. In 1967 the producing gas companies filed a suit asking for a declaratory judgment between the parties to this appeal, and others, to determine ownership of the oil and gas and entitlement to royalties. After both parties to this appeal had answered, the trial court in 1967 decreed that appellant, Emma Hurst, and her husband, since deceased, “were the owners of oil and gas in and under” the tract.

In 1981 appellant, Emma Hurst, filed a petition to quiet title to the oil, gas and other mineráls. She alleged that coal was being removed pursuant to a lease with the owner of the surface lands. The defendant removing the coal and the defendants owning the surface lands were dismissed without prejudice and are not parties to this appeal.

The trial court held: (1) the 1967 decree decided only that appellant Hurst was entitled to oil and gas royalties that would accrue from the wells then producing; (2) the tax deed and confirmation, under which appellant claims, were invalid; and (3) the title to all coal, gas, oil and other minerals is owned by the heirs of W. A. Hill, under the mineral reservation, subject only to the right of appellant Emma Hurst to receive royalties from the then producing wells. Only Emma Hurst appeals. There is no cross-appeal.

Appellant first contends that the chancellor erred in interpreting the 1967 decree to establish in her only a right to receive a royalty on the wells then producing. We agree. Both of the parties to the present action were before the court in 1967, ownership of the oil and gas was at issue and there was a final adjudication on the merits. That judgment decreed that appellant and her husband were “the owners of the oil and gas in and under the lands described....” After that term of court lapsed, the trial court lost jurisdiction to modify the judgment except for grounds which are not applicable to this case. Ark. Stat. Ann. § 29-506 (Repl. 1962), superseded by ARCP Rule 60. The time to modify has passed. There was no appeal. The time to appeal has passed. The matter of ownership of the oil and gas is now res judicata. As we stated in Wells v. Heath, 269 Ark. 473, 602 S.W.2d 665 (1980):

The doctrine of res judicata is accepted as a rule of inflexible absolute law in practically every jurisdiction. If the judgment is entitled to res judicata, it is conclusive as to the cause of action involved no matter how “unfair” or “patently erroneous” it may now seem to the court examining the judgment. 65 Harv. L.R. 818. There must be an end to litigation at some point; and, if there has been one fair trial on the merits of a case, that is all that is required.

Thus, the trial court erred in modifying the 1967 decree. The distinction between the 1967 decree and the 1982 decree is significant. The 1967 decree gave appellant ownership of the oil and gas but the 1982 decree modified that ownership to a right to royalty from a lease. Appellant’s award under the 1967 decree gave her the incidents of ownership of oil and gas including the right to sell the same, to explore for and develop the minerals, to lease for exploration and development, to receive income therefrom in the form of delay rentals and royalties either for shut-in or production, to pass by will or inheritance and to occupy as much of the surface as is reasonably necessary for mining and drilling purposes. H. Williams & C. Meyers, Oil & Gas Law § 301 (1981). However, under the 1982 decree the rights of appellant were modified and appellant was held to possess a right only to receive payment of royalties from all wells producing in 1967. Thus, appellant would have only a right of contract to receive a payment based upon production under a lease and nothing more. Appellant’s interest would terminate when the lease terminated. Id. §§ 302 and 303; see also, Hickman, Oil and Gas — Partition — Interest of Lessee, 11 Ark. L. Rev. 186 (1957).

The decree now on appeal is modified to reflect that the appellant is the owner of the oil and gas.

The 1967 decree was the result of a suit for a declaratory judgment filed by the production companies. It involved only the ownership of oil and gas. It did not involve title to the coal and other mineral rights. In the 1982 decree now before us the appellees, as heirs of W. A. Hill, were held to be owners of the coal and other minerals. We affirm.

The claim of appellant, Emma Hurst, to the coal and mineral rights is based on the mineral tax deed. The mineral assessments for the year of the tax forfeiture were not subjoined to the assessments of the surface rights. For a mineral estate assessment to be valid, the mineral estate listing on the tax books must be subjoined to the surface estate. Adams v. Bruder, 275 Ark. 19, 627 S.W.2d 12 (1982). Therefore, the State mineral tax deed was void. The 1938 ex parte attempt to confirm the tax title did not constitute an adjudication against W. A. Hill because he was not made a party to that action and his reservation of mineral rights was of record. One seeking confirmation of a mineral title has constructive knowledge of a previous deed of record and is required to make that prior deed holder a party to the proceeding if the prior deed holder is to be bound. Union Sawmill Co. v. Rowland, 178 Ark. 372, 10 S.W.2d 858 (1928).

Appellant Emma Hurst also claims that she has been in adverse possession of the minerals. A void mineral tax deed can be sufficient color of title for the purpose of determining title by adverse possession. Skelly Oil Co. v. Johnson, 209 Ark. 1107, 194 S.W.2d 425 (1946). However, to constitute adverse possession of constructively severed minerals, there must be a continuous user of the minerals for the statutory period. Even a sporadic user is not sufficient. Skelly Oil Co. v. Johnson, supra, citing Claybrooke v. Barnes, 180 Ark. 678, 22 S.W.2d 390,67 A.L.R. 1436 (1929).

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Bluebook (online)
643 S.W.2d 563, 278 Ark. 94, 76 Oil & Gas Rep. 442, 1982 Ark. LEXIS 1616, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hurst-v-rice-ark-1982.