Stevens v. SEECO Inc.

2015 Ark. App. 322

Opinion

Cite as 2015 Ark. App. 322

ARKANSAS COURT OF APPEALS DIVISION III No. CV-14-604

OPINION DELIVERED MAY 20, 2015 MYRTLE STEVENS APPELLANT APPEAL FROM THE VAN BUREN COUNTY CIRCUIT COURT [NO. CV2010-181-2] V. HONORABLE MICHAEL A. MAGGIO, JUDGE SEECO, INC., ET AL. APPELLEES AFFIRMED

ROBERT J. GLADWIN, Chief Judge

Appellant Myrtle Stevens appeals from an order declaring the Hall family, appellees

herein, to be the owners of certain mineral rights. The order also found that the Halls

properly leased those rights to appellee SEECO, Inc. We affirm.1

The minerals are subsurface in forty acres located in the Southwest Quarter of the

Southwest Quarter of Section 22, Township 11 North, Range 15 West, in Van Buren

County. The property was acquired in 1904 by appellant’s late grandfather, Joe C. Chandler.

In 1930, Chandler and his wife executed a deed that conveyed all of the mineral interests in

the property to W.E. Hall. Hall died in 1939, and his heirs, the Hall appellees, now claim the

mineral rights by virtue of the 1930 deed.

1 We previously dismissed this case for lack of a final order, Stevens v. SEECO, Inc., 2012 Ark. App. 629, and ordered rebriefing. Stevens v. SEECO, Inc., 2015 Ark. App. 3. Appellant has now obtained a final order and corrected the briefing deficiencies by filing a supplemental addendum. Cite as 2015 Ark. App. 322

Appellant asserts ownership of the property and its minerals through intestate

succession from her grandfather and father and conveyances from her siblings and others. She

maintains that the 1930 mineral deed to W.E. Hall did not vest any mineral rights in Hall or

his heirs because it was irregular in several respects, including: the spelling of the grantors’

name as “Chandlier” rather than Chandler; the consideration being stated as “$80.00 or Eight

Units of interest in Trust Contract” paid by “W.E. Hall Trustee,” even though no trust was

known to exist; and at least one of the Chandlers signing the deed using an “X” mark.

Appellant also cites a handwritten notation along the left margin of the deed that reads,

“Attested A.A. Cottrell, Clerk. I, W.E. Hall has [sic] this day released on this date 1/15-30.

W.E. Hall, Trustee.”

The present controversy arose after separate oil-and-gas leases had been executed on

the subject property by appellant and the Hall family between 2004 and 2008—the Halls with

SEECO or its predecessors, and appellant with Revard Petroleum. The competing leases

caused SEECO to file a complaint in 2010 naming appellant and approximately eighty

members of the Hall family as defendants. The complaint asked that SEECO be allowed to

pay accruing oil-and-gas royalties into the court registry and that the court determine the

royalties’ legal owners. The Hall heirs duly pled their claims, citing the 1930 mineral deed to

W.E. Hall as proof of their ownership. Appellant asserted that the 1930 Hall deed was either

defective or waived any rights W. E. Hall may have acquired in the minerals and, therefore,

she was the owner of the mineral interests.

2 Cite as 2015 Ark. App. 322

Both sides filed motions for summary judgment to join the issues. Following a hearing,

the court ruled that the 1930 mineral deed to W.E. Hall was valid:

This Court believes the deed conveying the subject minerals to W.E. Hall from [the Chandlers] could be considered ambiguous. The deed must be construed most strongly against the grantors; also, the actions and the conduct of W.E. Hall and his heirs must be given considerable weight. Because the Hall heirs’ actions demonstrate their continued belief that they were the rightful owners of the subject minerals, this Court finds that the deed conveying an interest in the subject minerals to W.E. Hall is valid.

The court also found that the handwritten release language in the margin of the W.E. Hall

deed was ineffective and did not cause ownership of the minerals to revert to the Chandlers.

Accordingly, the court declared the Hall heirs to be the owners of the mineral rights. This

appeal followed, and appellant presents two arguments for reversal.

First, appellant argues that the circuit court erred in construing the 1930 mineral deed

against the Chandlers rather than against W.E. Hall, who she contends filled out the deed

form. See generally Gibson v. Pickett, 256 Ark. 1035, 512 S.W.2d 532 (1974); Deltic Timber

Corp. v. Newland, 2010 Ark. App. 276, 374 S.W.3d 261 (recognizing that, as a rule of last

resort when interpreting an ambiguous instrument, the instrument is construed most strongly

against the party who prepared it, or against the grantor). We see no reversible error.

Regardless of whether the deed was construed most strongly against the grantors or the

grantee, the fact remains that the deed contained all of the necessary terms for a valid mineral

conveyance. Appellant does not clearly identify any legal basis for setting aside or voiding the

deed, nor does she argue that the deed’s handwritten “release” language caused the minerals

to revert back to the Chandlers. In fact, she admits that the formalities required to effect a

release may be lacking. See generally Helms v. Vaughn, 250 Ark. 828, 467 S.W.2d 399 (1971).

3 Cite as 2015 Ark. App. 322

In short, appellant has not persuaded us that the circuit court’s decision to construe the deed

most strongly against the Chandlers affected the terms or validity of the deed. Appellant

therefore has not met her burden to demonstrate reversible error. See Gilliam v. Gilliam, 2010

Ark. App. 137, 374 S.W.3d 108.

For her second argument, appellant challenges the circuit court’s statement that the

actions of the Hall heirs “demonstrate their continued belief that they were the rightful

owners of the subject minerals.” Appellant argues that, to the contrary, the Halls’ actions

reveal that they abandoned the mineral interests. She cites the failure of W.E. Hall or his heirs

to pay taxes on the mineral interests, which resulted in two unsuccessful attempts by the State

to sell the interests to third persons; the lack of any recorded activity by the Halls involving

the minerals for more than seventy years after the 1930 deed; and the fact that certain probate

records, signed by some of the Hall heirs, denied that W.E. Hall’s widow held any real-

property interest at the time of her death in 1987. Again, we see no ground for reversal.

One cannot divest himself of title to real property by abandonment alone. There must

be an intent by the owner to abandon his claim. Helms, supra. Further, that intent must be

accompanied by circumstances of estoppel and limitation, if the abandonment is not by a legal

deed of conveyance. Id. In her arguments to the circuit court, appellant briefly mentioned the

concept of abandonment, but the argument was never developed, particularly with regard to

the estoppel element. Our appellate courts will not entertain arguments that were not fully

developed in the circuit court. Jenkins v. Dale E. & Betty Fogerty Joint Revocable Trust, 2011

Ark. App. 720, 386 S.W.3d 704.

4 Cite as 2015 Ark. App. 322

Moreover, the circuit court did not rule on the abandonment/estoppel issue. Even

where a party mentions a particular theory, if he does not bring it to the court’s attention for

a ruling, the matter is waived on appeal. Britton v. Floyd, 293 Ark. 397, 738 S.W.2d 408

(1987).

For these reasons, we affirm the circuit court’s order.

Affirmed.

ABRAMSON, J., agrees.

HARRISON, J., concurs.

BRANDON J. HARRISON, Judge, concurring. In this case that involves competing

claims of ownership to oil and gas rights in a piece of land, Myrtle Stevens is the undisputed

owner of the surface rights; the Hall heirs are the purported owners of the oil and gas rights.

The issue is whether the 1930 deed from the Chandlers to W.E. Hall was a valid conveyance

of the entire mineral interest. I agree with the circuit court’s decision that the 1930 deed

conveyed the entire mineral interest but disagree that the deed was ambiguous. While I agree

to affirm the circuit court’s ultimate disposition of the case, I would do so along a slightly

different line than have my colleagues.

Whether a deed is ambiguous is a matter of law that we review de novo. Deltic Timber

Corp. v. Newland, 2010 Ark. App. 276, at 8, 374 S.W.3d 261, 266. The basic rule when

construing deeds is to implement the grantor’s intent, as expressed by the deed’s language,

when doing so is not contrary to settled principles of law. Barton Land Servs., Inc. v. SEECO,

Inc., 2013 Ark. 231, at 7, 428 S.W.3d 430, 435. We gather the parties’ intentions from the

5 Cite as 2015 Ark. App. 322

deed as a whole, not from some particular clause alone. Id. To this end, every part of the

deed should be harmonized and reconciled so that, as the cases put it, “all may stand together

and none be rejected.” Id. (citing Wynn v. Sklar & Phillips Oil Co., 254 Ark. 332, 493 S.W.2d

439 (1973)). We will not resort to rules of construction when a deed is clear and

unambiguous; rules or canons of construction are used only when a deed’s language is

ambiguous, uncertain, or doubtful. Id.

Here, Stevens argues that the circuit court erred when it construed the deed against

Chandler (the grantor) instead of against the person who purportedly prepared the deed:

W.E. Hall (the grantee). A deed may be construed against the party who prepared it, or

against the grantor, only if the deed is ambiguous and, more importantly, only as a last resort

to resolve the ambiguity. See Gibson v. Pickett, 256 Ark. 1035, 1040, 512 S.W.2d 532, 536

(1974); Deltic Timber, supra (same). Because the deed in play here is not ambiguous when

considered as a whole, there is no legal reason to construe the deed against any party.

Stevens attacks the validity of the 1930 deed in three primary ways: (1) the Chandlers’

name is misspelled as “Chandlier” at places in the deed; (2) consideration for the conveyance

was $80 or shares in an unidentified trust—and the deed states that consideration was paid by

W.E. Hall, Trustee—but the grantee is simply W.E. Hall; and (3) at least one of the Chandlers

signed the deed by a mark (“X”) rather than by signature. To prevail and set the mineral

deed aside, she must have produced “clear, cogent and convincing” evidence. Aberdeen Oil

Co. v. Goucher, 235 Ark. 787, 790, 362 S.W.2d 20, 21 (1962).

Stevens’s arguments do not persuade. I address her main points in turn.

6 Cite as 2015 Ark. App. 322

1. The Chandlers’ name is misspelled as “Chandlier” throughout. A valid deed must have

competent parties who are identifiable, and an adequate description of the subject matter;

valid consideration; words that effectively express a transfer or grant; and a formal execution

and delivery. Harrison v. Loyd, 87 Ark. App. 356, 364, 192 S.W.3d 257, 262 (2004). The

misspelling of the Chandlers’ name is not fatal to the deed because the deed as a whole

adequately names the grantor and the grantee. See Treece v. Treece, 212 Ark. 294, 298, 205

S.W.2d 711, 713 (1947); see also 4 Tiffany Real Prop. § 967 (3d ed. 2000) (“It is sufficient,

however, if the name as given is sufficient to enable the grantor to be identified, and the fact

that his name as it appears in the instrument differs from his actual name, or from the name

signed thereto, does not invalidate the conveyance.”). The 1904 patent deed referred to “Joe

C. Chandler” but the deed being attacked in this appeal recited “J.C. Chandlier.” The

difference between the two names is not fatal because the initials “J.C.” match the first and

middle initials used in the first patent deed “Joe C.”. Furthermore, the last names,

phonetically speaking, are virtually identical. See McReynolds v. First Nat’l Bank, 156 Ark. 291,

245 S.W. 819 (1922).

2. Consideration was $80 or shares in an unidentified trust and the deed states that consideration

was paid by W.E. Hall, Trustee, but the grantee was W.E. Hall. An alleged lack of consideration,

standing alone, does not void a deed. Luther v. Bonner, 203 Ark. 848, 848, 159 S.W.2d 454,

457 (1942) (“A mere inadequacy of consideration is not sufficient to set aside deeds without

accompanying acts of fraud or deception.”). The consideration for the 1930 deed may have

been shares in a trust, but that recital is not in and of itself a legal basis to set the deed aside.

7 Cite as 2015 Ark. App. 322

And Stevens did not present evidence to the circuit court—much less “clear, cogent and

convincing” evidence—that a trust was created by the deed or that W.E. Hall had a trust

estate. See Griffin v. Griffin, 200 Ark. 794, 794, 141 S.W.2d 16, 20 (1940) (“Courts are

reluctant—and should be—to impress trusts upon lands conveyed by deeds . . .”). Simply put,

the word “Trustee” is legally superfluous in this case.

3. At least one of the Chandlers signed the 1930 deed by a mark (“X”) rather than by

signature. One is bound by whatever he uses as a substitute for his name. Walker v. Emrich,

212 Ark. 598, 602, 206 S.W.2d 769, 769 (1947). A deed may be effective if signed by a

properly witnessed mark. Aberdeen Oil Co. v. Goucher, 235 Ark. 787, 791, 362 S.W.2d 20,

22 (1962). So the presence of a mark in lieu of a signature, in this case, is not a sufficient

reason to void the deed.

Stevens, I’ll also note, does not challenge other parts of the deed, its delivery, or

whether it was properly recorded. She alleges no fraud or adverse possession. Stevens also

concedes, as my colleagues point out, that the handwritten “release” language written on the

side of the deed lacks the necessary formalities to unwind the conveyance.

My colleagues cite Helms v. Vaughn, 250 Ark. 828, 467 S.W.2d 399 (1971), as they

briefly mention the abandonment-of-mineral-rights concept. Even if Stevens sufficiently

raised her abandonment argument in circuit court, I agree that Stevens did not obtain a ruling

on the issue. But it is still worth noting here that under what circumstances, if any, oil and

gas rights may be abandoned is an issue that arguably remains unanswered in Arkansas.

8 Cite as 2015 Ark. App. 322

The supreme court in Helms did not squarely decide the abandonment issue mentioned

in that case. And in Bodcaw Lumber Co. v. Goode, 254 S.W. 345 (Ark. 1923), the supreme

court held that an oil and gas mineral right is an estate in the oil and gas in place, with the

holder of the oil and gas having a present right of possession in perpetuity. A logical extension

of the court’s reasoning in Bodcaw, therefore, seems to be that oil and gas rights cannot be

abandoned after the mineral estate has been severed from the surface estate. In fact, my

research has not uncovered one Arkansas case where an appellate court has declared an

owner’s mineral rights to have been abandoned. Adverse possession appears in some cases and

the commentary, but not “abandonment.” See, e.g., Thomas A. Daily & W. Christopher

Barrier, Well, Now, Ain’t That Just Fugacious!: A Basic Primer on Arkansas Oil and Gas Law, 29

U. Ark. Little Rock L. Rev. 211 (2007) (Fugacious I); Thomas A. Daily & W. Christopher

Barrier, Still Fugacious After All These Years: A Sequel to the Basic Primer on Arkansas Oil and Gas

Law, 35 U. Ark. Little Rock L. Rev. 357 (2013) (Fugacious II) (The authors do not address

the concept of abandonment in either article; only adverse possession is covered. Nor do the

authors indicate that adverse possession is legally synonymous with abandonment.). While

some states have statutes or regulations that address how to determine who owns mineral

rights that have not been exercised in years, Arkansas apparently has no such mechanism. The

point here is merely a cautionary one: this case should not be read as making any statement

on whether, or how, one may “abandon” oil and gas rights in Arkansas.

* * * *

9 Cite as 2015 Ark. App. 322

The 1930 W.E. Hall deed conveyed all the mineral interest that Joe C. Chandler

owned; and that deed was delivered and recorded before Stevens’s 1947 deed. Stevens has,

furthermore, presented no convincing evidence to void the 1930 deed. On this case’s facts,

the Hall heirs were entitled to summary judgment as a matter of law. Because I agree with

the circuit court’s ultimate decision that the property’s mineral interest was vested in the Hall

heirs, I respectfully concur in this appeal’s disposition.

Kent Tester, P.A., by: Kent Tester, for appellant.

Daily & Woods, P.L.L.C., by: Robert R. Briggs, for appellee.