United Carbon Co. v. Presley

29 S.E.2d 466, 126 W. Va. 636, 1944 W. Va. LEXIS 29
CourtWest Virginia Supreme Court
DecidedMarch 14, 1944
Docket9537
StatusPublished
Cited by2 cases

This text of 29 S.E.2d 466 (United Carbon Co. v. Presley) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Carbon Co. v. Presley, 29 S.E.2d 466, 126 W. Va. 636, 1944 W. Va. LEXIS 29 (W. Va. 1944).

Opinion

Riley, Judge:

United Carbon Company, a corporation, lessee under two oil and gas leases, one dated November 19, 1936, from J. L. Presley and wife, and the second dated September 27, 1941, from Benjamin D. Shatto and others (herein called “Shatto group”), both leases covering the same fifty-eight acres, more or less, on the waters of Mill Creek in Ripley District, Jackson County,1 sought by this bill of interpleader the direction of the Circuit Court of Jackson County in the matter of distribution of royalties under said leases. The pivotal issue is whether the Shatto group is entitled to receive one-half, of the royalties as it contended or one-sixteenth thereof as defendant Présley. contended. The circuit court’s decree adopted the Presley contention . and the Shatto group obtained an appeal here.

*638 The issue presented here concerns a dee4 dated April 27, 1907, executed by Philip Shatto to Ballard Brown, conveying three tracts of land, two of which aggregate fifty-eight acres with which we are dealing herein, which deed contains the following exception and reservation:

“It is expressly understood that there is excepted and reserved from the operation of this conveyance and the same does not convey the one half of the oil and gas royalty upon and as to said two tracts of land, containing 20 acres, more or less, and 38 acres more or less, that is to say the said Shatto reserves the undivided one sixteenth of the oil and gas underlaying said two small parcels of land; and each of the parties hereto hereby agrees and binds himself, his heirs and personal representatives to join in such lease, or leases, with the other of oil and gas in said two small parcels of land that may be necessary ór proper for the development of the oil and gas under said two small parcels of land, or either of them and to do all things necessary to promote the development thereof.”

The Shatto group, successors in title to Philip Shatto, asserts (1) that the reservation is clear and reserves one-half of the royalties; and (2) that if the language is ambiguous then Presley is estopped from claiming any greater interest than one-half because the parties to the deed had an understanding that Shatto was to reserve unto himself one-half of the oil and gas; that by lease executed thereafter by both Shatto and Brown, payments arising therefrom were divided equally between them; and, further, that in a second lease executed by grantee Brown alone, it was stated that one-half of the oil and gas had been reserved by Shatto, both leases being of record in the county clerk’s office of Jackson County, and by reason whereof subsequent purchasers of land had constructive notice of Shatto’s ownership of one-half of the minerals.

On the other hand, defendant Presley, who is owner of a part of the minerals conveyed by Shatto to Brown *639 in the deed mentioned above, contends that grantor Shatto’s interpretation of his reservation is contained in the words “that is to say the said Shatto reserves the undivided one sixteenth of the oil and gas underlaying said two small parcels of land”. The trial chancellor accorded the language such a construction and, in an opinion, incorporated as a part of the record, reasoned that while the first portion of the reservation was clear and without limitation, the grantor limited and- defined his general terms by definite and specific words, thus removing all doubt of his intention, and concluded that grantor Shatto had reserved one-sixteenth.of the oil and gas in place. To that view we cannot subscribe.

It is true, as all parties and the lower court agree, that the reservation of “one half of the oil and gas royalty upon and as to said tracts of land”, without more, would have effected a legal reservation of one-half of such minerals in place. Paxton v. Benedum-Trees Oil Co., 80 W. Va. 187, 94 S. E. 472; Snodgrass v. Koen, 82 W. Va. 337, 96 S. E. 606; Manufacturers Light & Heat Co. v. Knapp, 102 W. Va. 308, 135 S. E. 1. The rational of the principle enunciated in those cases is expressed in Toothman v. Courtney, 62 W. Va. 167, 175, 58 S. E. 195, in this language: “Though he did not reserve by name the oil in place, or any part of it, his reservation of all the rental or royalty to be derived from it, compels the court to hold, by construction of the instrument, that it vests in him the title to that thing, the beneficial' use whereof has been reserved, namely, the oil in place.” It is clear that in the first clause of the language which we are appraising the subject matter is expressed as “royalty”, while in the latter clause it is described as oil and gas underlying the land. If we accord to the term “royalty” its full legal significance and meaning, it follows that there is a repugnancy between the two clauses. It was held in Paxton v. Benedum-Trees, supra, pt. 7 syl., that, “If, in a deed, there be two clauses so totally repugnant to each other that they cannot stand together, effect will be given to the first, and the latter re *640 jected”. The application of that guide of construction to the language under consideration would result in a dis-affirmance of the trial court’s conclusion.

The same result obtains when we examine the language of the instrument to determine the sense in which the parties to the deed must have understood it. When Shatto used the term “royalty” in the reservation unquestionably he was thinking in terms of beneficial yield to him from ownership of a part of the oil and gas in place, and the fact that in the same paragraph of the deed the parties bound themselves to join in a lease or leases of the oil and gas reflects unequivocally that they were thinking in terms of such beneficial yield, rather than attempting to measure'their ownership of minerals in place. Therefore, when the further language: “that is to say the said Shatto reserves the undivided one sixteenth of the oil and gas underlaying the land” was added, it defined specifically what would be the beneficial yield to Shatto upon development of the land for oil and gas purposes. In other words, it defined the term “royalty” in the sense of bene-ficiál yield rather than ownership of the minerals in place and made specific what was meant by one-half of the royalty. Sinpe the purpose of the interpleader suit is distribution of royalties, we conclude that the Shatto group is entitled to one-half thereof.

Appellants further complain of the trial chancellor’s overruling of their motion for entry of a decree in their favor, on account of the default of' defendant Presley to file an answer or pleading on or before August 25, 1942. From the record it appears that on August 13, 1942, a decree was entered requiring defendants to interplead among themselves. For the purpose of aligning the parties, it was decreed that the Shatto group “shall take and assume the affirmative of the issues involved”, and thereafter be known as “proponents”, while the other defendants, including Presley, were to assume the negative of the issues involved and were to be known as “respondents”. Under the decree proponents were given until the *641

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29 S.E.2d 466, 126 W. Va. 636, 1944 W. Va. LEXIS 29, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-carbon-co-v-presley-wva-1944.