Ruthven & Co. v. Pan American Petroleum Corp.

482 P.2d 28, 206 Kan. 639, 39 Oil & Gas Rep. 242, 48 A.L.R. 3d 696, 1971 Kan. LEXIS 339
CourtSupreme Court of Kansas
DecidedMarch 6, 1971
DocketNo. 45,885
StatusPublished
Cited by1 cases

This text of 482 P.2d 28 (Ruthven & Co. v. Pan American Petroleum Corp.) 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
Ruthven & Co. v. Pan American Petroleum Corp., 482 P.2d 28, 206 Kan. 639, 39 Oil & Gas Rep. 242, 48 A.L.R. 3d 696, 1971 Kan. LEXIS 339 (kan 1971).

Opinions

The opinion of the court was delivered by

Harman, C.:

This is an action for an accounting from an oil purchasing company for a share of oil produced from leased land.

The appeal involves construction of an entirety clause in the lease [640]*640under which the oil was produced. A cross-appeal concerns the validity of a separate conveyance upon which plaintiffs’ claim is based.

We summarize certain background facts as stipulated by the parties prior to trial. On July 3, 1924, C. A. Mermis and his wife Paulina executed and delivered to George W. Holland as grantee an instrument entitled “Sale of Oil and Gas Royalty” in which for a consideration of $7,000 they conveyed an undivided one-fourth interest in the oil and gas minerals produced from the west half of a described quarter section of land in Russell county, the instrument reciting that the property was subject to a particular oil and gas lease. This instrument was not filed of record with the Russell county register of deeds until March 10, 1925 — more than ninety days after its execution.

On June 13, 1936, Paulina Mermis, a widow, owner of the west half mentioned above, executed and delivered to the same George W. Holland an instrument entitled “Ratification of Mineral Deed”. This instrument, which was primarily intended to ratify and confirm the July 3, 1924, document, because of possible ambiguity in the latter, was duly recorded June 15, 1936. Plaintiffs are the successors in interest to George W. Holland, who died December 22, 1946.

On June 18, 1956, the same Paulina Mermis executed and delivered to Leo J. Dreiling as lessee an oil and gas lease covering the entire quarter section for a primary term of two years. This lease was duly recorded the same day. Neither plaintiffs nor their predecessor in title ever joined in the execution of this or any other lease covering the quarter section.

Production of oil under the Dreiling lease was obtained on wells located on the east half of the quarter section. Stanolind Oil Purchasing Company, predecessor of defendant Pan American Petroleum Corporation, purchased the first oil produced therefrom on August 16, 1956, and production from wells on the east half has continued to date. No production has ever been obtained from the west half of the quarter section. On November 12, 1956, Stanolind obtained and issued a division order covering oil payments attributable to the production on the east half. Under this order Mrs. Mermis was to be paid all the landowner’s one-eighth royalty for the production, and she was so paid by Pan American and its predecessors in title during her lifetime and until September 1, 1965. [641]*641Thereafter payment was made to the executors of her estate until the land was sold to Curtis Warren and Lloyd J. Witt, then payment was made to them until May 19, 1967, when Witt died and his share was paid to the administrator of his estate until the commencement of this suit. All royalty payments since September, 1967, have been impounded by Pan American pending determination of ownership in this litigation. Plaintiffs have never received any royalty based on production under the Dreiling lease.

No claims were ever filed against the estates of Paulina Mermis or Lloyd J. Witt and the time for filing such claims has expired.

The mineral interest conveyed by the two instruments from the Mermis s to George W. Holland was never separately valued and listed for ad valorem taxation in Russell county. Russell county has never separately valued and listed non-producing mineral interests in that county. The oil run recipients paid the ad valorem taxes assessed by Russell county on the oil royalty attributable to them.

August 28, 1967, plaintiffs commenced this action by filing their petition naming Pan American as defendant. They alleged the execution of the three instruments we have mentioned; that at the time the Dreiling lease was executed the premises were owned in severalty and by reason of an entirety clause in that lease plaintiffs were entitled to 1/64th of the proceeds of all oil produced and they asked for an accounting. Plaintiffs’ claim for an apportionment of royalty is against Pan American only.

Pan American answered, asserting among other matters, the defense of laches and estoppel by conscious inaction and delay and, by way of third party practice, it brought into the action as defendants Curtis Warren, the Witt heirs and the executors of the Paulina Mermis estate so that it might be reimbursed by them if held liable to plaintiffs.

In trial to the court the court had before it the stipulated facts already summarized and in addition heard evidence offered by the parties.

In deciding the issues the trial court made two separate rulings. First, it held that the two instruments to George W. Holland together constituted a valid mineral deed effective June 13, 1936, conveying to Holland an undivided one-fourth of the minerals in and under the west half of the quarter section in perpetuity and it further quieted the title to such mineral interest in plaintiffs. By [642]*642way of cross-appeal defendants have challenged these findings and orders. Second, it ruled that the entirety clause under which plaintiffs were claiming was not applicable inasmuch as Mrs. Mermis could not and did not lease the undivided interest owned by plaintiffs in the west half of the quarter section, therefore that interest was not a part of the “leased premises” as that term was contained in the entirety clause. Plaintiffs have appealed from that ruling.

At trial the third party defendants sought to shield their interest in the oil runs by having the conveyance upon which plaintiffs base their claim declared void. The cross-appeal reasserts the same defense. Since such declaration would terminate this litigation we first consider the cross-appeal.

Defendants advance two contentions. They assert the “Sale of Oil and Gas Royalty” instrument of July 3, 1924, was void when it was not recorded within ninety days after execution and was not listed for taxation, as provided by R. S. 1923, 79-420. Defendants also assert a void instrument cannot be ratified, contending the so-called ratification instrument of June 13, 1936, could not validate the earlier void one. The parties have presented arguments pro and con upon these issues but in our view these matters need not be determined.

Plaintiffs contend, and we think correctly so, that the 1936 instrument itself constituted a valid conveyance. We need not recite the two instruments. Evidently the parties were uncertain as to whether an ambiguity existed in the first instrument and it was to resolve any doubt that the second one was executed (see discussion in XVI JRK, Distinctions Retween Royalties and Mineral Deeds, p. 28). The trial court treated the instruments as mineral deeds and for our purposes here we need make no further determination respecting their character. The third party defendants’ attack upon the initial instrument is premised on the assumption it was in fact a mineral deed as distinguished from a royalty transfer.

Suffice it to say the second instrument described in detail the interest conveyed, using the correct legal description, and it also contained the following language:

“. . . the said Geo. W. Holland is to have and own an undivided one fourth (%) interest in and to the mineral rights upon the above and foregoing described land and real estate. . . .”

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Cite This Page — Counsel Stack

Bluebook (online)
482 P.2d 28, 206 Kan. 639, 39 Oil & Gas Rep. 242, 48 A.L.R. 3d 696, 1971 Kan. LEXIS 339, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ruthven-co-v-pan-american-petroleum-corp-kan-1971.