[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 

Browne v. Artex Oil Co., Slip Opinion No. 2019-Ohio-4809.] 

NOTICE 

This slip opinion is subject to formal revision before it is published in an 

advance sheet of the Ohio Official Reports. Readers are requested to 

promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 

South Front Street, Columbus, Ohio 43215, of any typographical or other 

formal errors in the opinion, in order that corrections may be made before 

the opinion is published. 

SLIP OPINION NO. 2019-OHIO-4809

BROWNE ET AL., APPELLANTS, v. ARTEX OIL COMPANY ET AL., APPELLEES. 

[Until this opinion appears in the Ohio Official Reports advance sheets, it 

may be cited as Browne v. Artex Oil Co., Slip Opinion No. 2019-Ohio-4809.] 

The limitations period set forth in R.C. 2305.04 applies to a claim for declaratory 

judgment that an oil and gas lease has terminated by its terms and by 

operation of law due to lack of production. 

(No. 2018-0942—Submitted June 11, 2019—Decided November 26, 2019.) 

APPEAL from the Court of Appeals for Guernsey County, No. 17 CA 20, 

2018-Ohio-3746. 

_____________________ 

FRENCH, J. 

{¶ 1} In this appeal, we consider which statute of limitations applies to a 

claim for declaratory judgment that an oil and gas lease has terminated by its terms 

and by operation of law due to lack of production. We hold that the applicable 

statute is R.C. 2305.04, which states that an action to recover title to or possession 

of real property shall be brought within 21 years after the cause of action accrues. 

 
SUPREME COURT OF OHIO

2

Facts and procedural background

{¶ 2} Appellants, Barry L. Browne and Rosa R. Browne, own 

approximately 86 acres of land, along with the oil and gas interests underlying the 

property, in Guernsey County, Ohio. An oil and gas lease executed in 1975 by one 

of the Brownes’ predecessors in interest and recorded in January 1976 burdens the 

property. The lease “grant[ed], demise[d], lease[d] and let” the identified real 

property to the lessee for the purpose of mining and operating for oil and gas for a 

one-year primary term and a secondary term for as “long thereafter as oil and gas, 

or either of them, is produced by lessee from said land.” One well was drilled on 

the property. 

{¶ 3} Appellees, Artex Oil Company, Artex Energy Group, L.L.C., Arloma 

Corporation, and James Huck, L.L.C., acquired interests in the lease through 

various assignments, cross-assignments, and stipulations of interest. Artex Oil 

Company has operated the well since 1999. Its records state that from December 

1999 through September 2014, the well produced 1,771.49 barrels of oil, which 

generated gross revenue of more than $100,000. Artex Oil Company presented 

evidence in 2016 that since the Brownes obtained ownership of the mineral interests 

in 2012, it had paid royalties to the Brownes in 2013, 2014, and 2015. 

{¶ 4} In December 2014, two years after obtaining ownership of the mineral 

estate, the Brownes filed this action against appellees for quiet title, declaratory 

judgment, conversion, and unjust enrichment, all based on their contention that the 

lease had terminated by its terms due to lack of production. The complaint alleged 

that the well did not produce any oil or gas from its inception until 1999 and that 

the well had been inoperative for a sufficient time to terminate the lease. The 

Brownes based their allegation of pre-1999 lack of production on reports from the 

Ohio Department of Natural Resources that allegedly showed no reported 

production from the well through 1999. The Brownes requested that the court quiet 
January Term, 2019 

3

the title to their property, declare the lease null and void, and award damages for 

appellees’ conversion and unjust enrichment. 

{¶ 5} In their answer, appellees asserted a statute-of-limitations defense to 

the Brownes’ claims. Appellees also filed a counterclaim for a declaratory 

judgment that the lease remained valid and in effect because of continuous 

production of oil since 1977. 

{¶ 6} The parties filed cross-motions for summary judgment. Although it 

initially denied the parties’ motions, the trial court, on reconsideration, granted 

summary judgment for appellees and dismissed the Brownes’ claims with 

prejudice. The trial court acknowledged appellees’ evidence of production in 

paying quantities from the well and held that the Brownes had not presented any 

evidence to satisfy their burden of proving that the well was no longer profitable. 

With respect to the Brownes’ allegations of lack of production prior to 1999, 

however, the court held that “there is a 15-year statute of limitation” applicable to 

the Brownes’ claims, so any lack of production prior to 1999 was irrelevant. Based 

on appellees’ evidence of production since 1999, the court held that the lease 

remained valid and enforceable according to its terms. 

{¶ 7} The Brownes appealed the trial court’s judgment and, as relevant here, 

argued that the trial court erred by holding that their claims were subject to a 15-

year statute of limitations. They argued that this is a case for recovery of title to or 

possession of real property and that the correct limitations period is the 21-year 

period under R.C. 2305.04. The Fifth District rejected that argument and affirmed 

the trial court’s judgment. It held that pursuant to R.C. 2305.041, the Brownes’ 

case is subject to the 15-year statute of limitations for an action upon a written 

agreement or contract in former R.C. 2305.06, Am.Sub.H.B. No. 152, 145 Ohio 

Laws, Part II, 3341, 3569 (“H.B. 152”). 

{¶ 8} This court accepted a discretionary appeal on a single proposition of 

law. 153 Ohio St.3d 1485, 2018-Ohio-3867, 108 N.E.3d 82. The Brownes ask this 
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4

court to hold that an action for a declaratory judgment that an oil and gas lease has 

terminated by its own terms for lack of production is governed by the 21-year 

statute of limitations in R.C. 2305.04 and that the limitations period does not begin 

to run until a justiciable controversy arises. 

Analysis 

{¶ 9} This appeal presents a purely legal question—which statute of 

limitations applies to the Brownes’ claim that the lease terminated by its terms and 

by operation of law. See Ohio Bur. of Workers’ Comp. v. McKinley, 130 Ohio St.3d 

156, 2011-Ohio-4432, 956 N.E.2d 814, ¶ 34. 

Law of the case does not moot the statute-of-limitations question 

{¶ 10} Before turning to the parties’ arguments regarding the appropriate 

statute of limitations, we first address the dissenting opinion’s assertion that that 

question is moot because its answer will not affect the outcome of this case. The 

dissent states that the appellate court’s rulings regarding the burden of proof and 

the evidence that may be used to establish production of oil and gas remain the law 

of the case and foreclose any possibility that the Brownes can survive appellees’ 

motion for summary judgment, even if a 15-year statute of limitations does not bar 

consideration of pre-1999 lack of production. We disagree. 

{¶ 11} The law-of-the-case doctrine provides that “the decision of a 

reviewing court in a case remains the law of that case on the legal questions 

involved for all subsequent proceedings in the case at both the trial and reviewing 

levels.” Nolan v. Nolan, 11 Ohio St.3d 1, 3, 462 N.E.2d 410 (1984). The law-ofthe-case doctrine is a rule of practice, not a rule of substantive law, and courts will 

not apply it to achieve unjust results. Id., citing Gohman v. St. Bernard, 111 Ohio 

St. 726, 730-731, 146 N.E. 291 (1924), overruled in part on other grounds, New 

York Life Ins. Co. v. Hosbrook, 130 Ohio St. 101, 196 N.E. 888 (1935), paragraph 

two of the syllabus. 
January Term, 2019 

5

{¶ 12} As we have stated, the Brownes’ complaint alleged that the lease 

expired due to lack of production of oil and gas from the lease’s inception until 

1999. The trial court, however, did not address that claim; because it determined 

that a 15-year statute of limitations applied, the trial court held that any lack of 

production prior to 1999 was irrelevant. 

{¶ 13} Having concluded that lack of production prior to 1999 was 

irrelevant, the trial court—with respect to both the Brownes’ claims and the 

counterclaim—considered only the evidence of production, or lack thereof, from 

1999 onward. With respect to the time period beginning in 1999, the trial court 

held, on reconsideration, that the Brownes “have not presented any evidence to 

satisfy their burden” of proving that the wells are no longer profitable. But the trial 

court’s entry of judgment for appellees on their counterclaim depends on its 

determination that the 15-year statute of limitations rendered pre-1999 lack of 

production irrelevant. Had the trial court determined that any of the years prior to 

1999 remained in play, it would have had to consider whether there was, in fact, 

consistent production during those years. The trial court did not do that. 

{¶ 14} Even accepting as true the dissent’s position that the Fifth District’s 

rulings regarding the burden of proof and the evidence that may establish 

production of oil and gas are the law of the case, nothing in the court of appeals’ 

decision renders our determination of the applicable statute of limitations advisory. 

{¶ 15} The court of appeals affirmed the trial court’s holding that the 

Brownes had “the burden to prove that the wells are no longer profitable.” 2018-

Ohio-3746, 116 N.E.3d 687, ¶ 35. The trial court’s holding, however, did not 

address whether the Brownes presented evidence of lack of production prior to 

1999, because the court held that any lack of production before 1999 was irrelevant. 

In reviewing the trial court’s holding regarding the burden of proof, the court of 

appeals applied the accepted standards applicable to summary judgment under 

Civ.R. 56 and merely concluded that the Brownes bore, but did not meet, the 
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6

reciprocal burden of producing evidence to rebut appellees’ evidence of “continued 

production” from the well. Id. at ¶ 34. Like the trial court, the court of appeals did 

not address the Brownes’ ability to prove that the well went out of production prior 

to 1999. 

{¶ 16} In response to appellees’ motion for summary judgment, the 

Brownes argued that appellees had not met their initial burden with respect to 

production prior to 1999. If that were true, then the Brownes were not required to 

meet a reciprocal burden to avoid summary judgment—even though they would 

have the burden of proof at trial. See AAAA Ents., Inc. v. River Place Community 

Urban Redevelopment Corp., 50 Ohio St.3d 157, 553 N.E.2d 597 (1990), paragraph 

two of the syllabus (“Regardless of who may have the burden of proof at trial, the 

burden is upon the party moving for summary judgment to establish that there is no 

genuine issue of material fact and that he is entitled to judgment as a matter of 

law”). 

{¶ 17} Neither the trial court nor the court of appeals analyzed the evidence 

regarding pre-1999 production or lack of production, as both courts considered that 

question irrelevant in light of the 15-year statute of limitations. The dissenting 

opinion erroneously states that the trial court found that the Brownes had “failed to 

present any evidence that the well on their property ever failed to produce oil or gas 

in paying quantities.” Dissenting opinion at ¶ 63. The trial court found only that 

the Brownes had failed to satisfy their burden of proving that “the wells are no 

longer profitable.” (Emphasis added.) That finding regarding current profitability 

does not relate to pre-1999 production or lack of production. Thus, the court of 

appeals’ holding regarding the burden of proof, even if the law of the case, does not 

decide this case if the 15-year limitations period does not bar consideration of pre1999 production or lack of production, when neither lower court has analyzed the 

Brownes’ claim that the lease expired by its terms for lack of production prior to 

1999. 
January Term, 2019 

7

{¶ 18} Although the dissenting opinion conducts a review of the pre-1999 

evidence and decides that appellees met their initial burden and that the Brownes 

failed to meet their reciprocal burden to demonstrate a genuine issue of material 

fact, the better practice is to allow the trial court to analyze the evidence in the first 

instance. 

An oil and gas lease creates in the lessee a vested property interest 

{¶ 19} We turn now to the question this court accepted: Which statute of 

limitations applies? In determining which limitations period applies, we “look to 

the actual nature or subject matter of the case, rather than to the form in which the 

action is pleaded. The grounds for bringing the action are the determinative factors, 

the form is immaterial.” Hambleton v. R.G. Barry Corp., 12 Ohio St.3d 179, 183, 

465 N.E.2d 1298 (1984). And in order to determine the nature of this case, we 

briefly consider our recent precedent regarding the characterization of subsurface 

minerals and the nature of oil and gas leases in Ohio. 

{¶ 20} Ohio, like a majority of states, recognizes that minerals underlying 

the surface of real property are part of the realty but may be severed from the surface 

estate for purposes of separate ownership. Chesapeake Exploration, L.L.C. v. 

Buell, 144 Ohio St.3d 490, 2015-Ohio-4551, 45 N.E.3d 185, ¶ 21-22. Indeed, the 

Marketable Title Act, as amended in 1973, Am.S.B. No. 267, 135 Ohio Laws, Part 

I, 942-943, and the Dormant Mineral Act, 1989 Sub.S.B. No. 223, 142 Ohio Laws, 

Part I, 981, were enacted partly in response to the common-law rule that severed 

mineral rights were not subject to abandonment or termination for the failure to 

produce oil or gas. Corban v. Chesapeake Exploration, L.L.C., 149 Ohio St.3d 512, 

2016-Ohio-5796, 76 N.E.3d 1089, ¶ 15, 17-19 (lead opinion). 

{¶ 21} The owner of a mineral estate, whether or not also the owner of the 

surface estate, may convey the rights to the subsurface minerals through an oil and 

gas lease. Buell at ¶ 24. The oil and gas lease provides a mechanism by which an 
SUPREME COURT OF OHIO

8

owner of a mineral estate can permit others to explore and exploit the land’s mineral 

resources in exchange for royalties and other consideration. Id. at ¶ 17. 

{¶ 22} Although oil and gas leases “ ‘straddle the line between property and 

contract,’ ” id. at ¶ 41, quoting Keeling & Gillespie, The First Marketable Product 

Doctrine: Just What is the “Product”?, 37 St. Mary’s L.J. 1, 6 (2005), Ohio is in 

line with the general consensus among the states that an oil and gas lease creates a 

real-property interest, id. at ¶ 42-43, 49; see also R.C. 5301.09, 2014 Sub.H.B. No. 

9 (effective Mar. 23, 2015) (recognizing that oil and gas leases “create an interest 

in real estate”). 

{¶ 23} In describing the property interest created by an oil and gas lease, we 

have acknowledged that the lease affects the possession and custody of both the 

mineral and surface estates. Buell at ¶ 60. During the term of the lease, “the lessor 

effectively relinquishes his or her ownership interest in the oil and gas underlying 

the property in favor of the lessee’s exclusive right to those resources.” Id. at ¶ 62. 

The lessee also enjoys reasonable use of the surface estate to accomplish the 

purposes of the lease. Id. at ¶ 60. Based on the vested nature of the grant, “the oil 

and gas lease has been construed as transferring to the lessee a fee simple 

determinable in the mineral estate with a reversionary interest retained by the lessor 

that can be triggered by events or conditions specified in the lease.” Id. at ¶ 61, 

citing Harris v. Ohio Oil Co., 57 Ohio St. 118, 129-130, 48 N.E. 502 (1897). 

{¶ 24} As the lease here exemplifies, the term of an oil and gas lease is 

typically defined by a habendum clause that sets out a primary fixed term, followed 

by a secondary term that extends the lessee’s rights under the lease on satisfaction 

of certain described conditions, such as production of oil and gas in paying 

quantities. Buell, 144 Ohio St.3d 490, 2015-Ohio-4551, 45 N.E.3d 185, at ¶ 77. If 

the conditions of the secondary term are not met, the lease terminates by its express 

terms and by operation of law and the mineral estate revests in the lessor. Id. Upon 
January Term, 2019 

9

expiration of the lease, the lessee loses his status as lessee by virtue of the terms of 

the agreement. Id. at ¶ 73. 

{¶ 25} Although termination of a lease pursuant to a habendum clause 

occurs by operation of law, there is no record notice on the chain of title that the 

mineral rights have reverted to the lessor unless the lessee takes the additional step 

of recording a formal release. Id. at ¶ 75. In the absence of a formal release, a 

lessor may “need to resort to the courts to obtain complete relief, i.e. cancellation 

of the lease of record and removal of the cloud from the title.” Rudolph v. Viking 

Internatl. Resources Co., Inc., 2017-Ohio-7369, 84 N.E.3d 1066 (4th Dist.), ¶ 41, 

citing Summers, Oil & Gas, Section 19:1 (3d Ed.2016). That is what the Brownes 

seek here—a judicial declaration that the lease terminated by its own terms due to 

lack of production and that the mineral estate reverted to the Brownes or to their 

predecessors in interest by operation of law. 

{¶ 26} The dissenting opinion faults our reliance on Buell based on its 

characterization of the discussion in that case of the property interests implicated 

by oil and gas leases as dicta. The author of the dissenting opinion took a similar 

position in Buell itself but did not garner any other votes for that position. See Buell

at ¶ 96 (Kennedy, J., concurring in the answers to the certified questions and 

concurring in the opinion in part). Here, as in Buell, the author contends that this 

court in Buell should have answered the certified question—whether a recorded oil 

and gas lease affects title to an interest in land and is a “title transaction” for 

purposes of the Dormant Mineral Act—but should have gone no further. An 

examination of the nature of oil and gas leases, however, was a necessary predicate 

to answering the certified question. We stated, “Answering the certified questions 

requires an interpretation of the term ‘title transaction’ under the Dormant Mineral 

Act as well as a review of the nature of a recorded oil and gas lease under Ohio 

law.” (Emphasis added.) Id. at ¶ 29. 
SUPREME COURT OF OHIO

10 

{¶ 27} While we acknowledged in Buell that the precise “nature of the 

instrument” was not “a dispute presented to us for resolution,” 144 Ohio St.3d 490, 

2015-Ohio-4551, 45 N.E.3d 185, at ¶ 65, fn. 5, our discussion of the nature of oil 

and gas leases more generally was necessary to our determination that a recorded 

oil and gas lease “constitutes a title transaction because it affects title to the surface 

and mineral owners’ interests in land,” id. at ¶ 66. But even if that discussion was 

dicta, as the dissent in this case suggests, we may nevertheless rely on it as 

persuasive authority, see, e.g., Humphrey’s Exr. v. United States, 295 U.S. 602, 

627, 55 S.Ct. 869, 79 L.Ed. 1611 (1935) (dicta “may be followed if sufficiently 

persuasive,” even though it is not controlling); State ex rel. Baur v. Medina Cty. 

Bd. of Elections, 90 Ohio St.3d 165, 168, 736 N.E.2d 1 (2000) (disapproving of a 

party’s reliance on dicta not simply because it was dicta but also because it was not 

supported by persuasive authority and was contrary to the court’s holding in the 

case in which it appeared). Our analysis in Buell is supported by persuasive 

authority, and this court’s discussion of the nature of oil and gas leases under Ohio 

law flows from long-standing precedent of this court, including particularly Harris, 

57 Ohio St. 118, 48 N.E. 502. Reliance on Buell is warranted. 

{¶ 28} Bearing in mind the nature of oil and gas leases as set out in Buell

and Harris, we now consider which statute of limitations applies to the Brownes’ 

claims. 

The Brownes’ claims are not exempt from application 

of a statute of limitations 

{¶ 29} Contrary to their own proposition of law, which states that the 21-

year statute of limitations in R.C. 2305.04 applies to their claims, the Brownes 

alternatively argue in their merit brief that no statute of limitations should apply to 

their claims. 

{¶ 30} The Fourth and Seventh District Courts of Appeals have rejected the 

argument that a claim to declare that an oil and gas lease terminated by its own 
January Term, 2019 

11 

terms is not subject to any statute of limitations. See Rudolph, 2017-Ohio-7369, 84 

N.E.3d 1066, at ¶ 53 (4th Dist.) (any suggestion that “there is no statute of limitation 

on actions to declare a lease has terminated by its own terms is incorrect”); Potts v. 

Unglaciated Industries, Inc., 2016-Ohio-8559, 77 N.E.3d 415, ¶ 101 (7th Dist.) 

(“The fact an act or omission is alleged to have occurred, which would cause a lease 

to expire automatically and by operation of law, does not eliminate the application 

of a specific statute of limitations”). We agree with those courts and reject the 

Brownes’ alternative argument. 

{¶ 31} An action for a declaratory judgment is a civil action. Renee v. 

Sanders, 160 Ohio St. 279, 116 N.E.2d 420 (1953), paragraph one of the syllabus. 

“[U]nless a different limitation is prescribed by a statute, a civil action may be 

commenced only within the period prescribed in sections 2305.04 to 2305.22 of the 

Revised Code.” R.C. 2305.03(A). R.C. 2305.04 through 2305.131 set out statutes 

of limitations that apply to specific types of claims. R.C. 2305.14 creates a catchall 

limitations period of ten years for those causes of action that do not fall within any 

of the types of claims specified in the other statutes. Through R.C. 2305.03(A) and 

the catchall limitations period in R.C. 2305.14, the General Assembly has instructed 

that any civil action is subject to a statute of limitations. 

{¶ 32} Statutes of limitations serve several important purposes. They

ensure fairness to the defendant; encourage prompt prosecution of causes of action; 

suppress stale and fraudulent claims; and avoid inconveniences caused by delay, 

including the difficulties of proof in older cases. Doe v. Archdiocese of Cincinnati, 

109 Ohio St.3d 491, 2006-Ohio-2625, 849 N.E.2d 268, ¶ 10. Difficulty of proof in 

older cases is an especially apt consideration in the context of oil and gas leases, 

which can continue, upon production of oil and gas, for many decades. For 

example, Potts, 2016-Ohio-8559, 77 N.E.3d 415, involved an oil and gas lease 

executed and recorded in 1896 and a claim to quiet title filed 117 years later, in 

2013. The Seventh District rejected the arguments that no statute of limitations 
SUPREME COURT OF OHIO

12 

applied and that the defendant-lessee was required to prove production for the entire 

112-year secondary term of the lease. Id. at ¶ 113-115. The court stated, “The 

entire purpose behind a statute of limitations is to eliminate the burden a stale claim 

puts upon a party and to recognize evidence is unlikely to exist on events occurring 

in the distant past.” Id. at ¶ 112. 

{¶ 33} Because the General Assembly has instructed that civil actions are 

subject to a statute of limitations and because application of a statute of limitations 

to claims arising out of the alleged termination of an oil and gas lease is consistent 

with the purposes of statutes of limitations in general, we reject the Brownes’ 

argument that their claims are exempt from application of any statute of limitations. 

R.C. 2305.041 does not apply to the Brownes’ claims 

{¶ 34} In its determination of the appropriate limitations period, the Fifth 

District looked to R.C. 2305.041, which states: 

With respect to a lease or license by which a right is granted 

to operate or to sink or drill wells on land in this state for natural gas 

or petroleum and that is recorded in accordance with section 

5301.09 of the Revised Code, an action alleging breach of any 

express or implied provision of the lease or license concerning the 

calculation or payment of royalties shall be brought within the time 

period [for commencement of an action for breach of a contract of 

sale] that is specified in section 1302.98 of the Revised Code. An 

action alleging a breach with respect to any other issue that the 

lease or license involves shall be brought within the time period [for 

commencement of an action upon a written contract] specified in

section 2305.06 of the Revised Code. 
January Term, 2019 

13 

(Emphasis added.) The court of appeals applied R.C. 2305.041 and stated, 

“[b]ecause this case involves an issue other than the calculation or payment of 

royalties,” the 15-year limitations period in former R.C. 2305.061

 applies to the 

Brownes’ claims. 2018-Ohio-3746, 116 N.E.3d 687, at ¶ 24-25. 

{¶ 35} R.C. 2305.041 establishes limitations periods for two types of claims 

involving oil and gas leases: (1) actions alleging breach of an express or implied 

lease provision concerning the calculation or payment of royalties and (2) actions 

alleging a breach with respect to any other issue involving the lease. Both types of 

actions involve allegations of a breach. And as oil and gas leases are contracts, Lutz 

v. Chesapeake Appalachia, L.L.C., 148 Ohio St.3d 524, 2016-Ohio-7549, 71 

N.E.3d 1010, ¶ 9, both types of actions governed by R.C. 2305.041 involve 

breaches of contract. A “breach of contract” occurs upon a “[v]iolation of a 

contractual obligation by failing to perform one’s own promise, by repudiating it, 

or by interfering with another party’s performance.” Black’s Law Dictionary 232 

(11th Ed.2019). 

{¶ 36} The Brownes’ complaint states that appellees and/or their 

predecessors in interest “breached the express provision of the Lease requiring” the 

production of oil or gas “to continue the existence of the Lease.” But despite the 

Brownes’ use of the word “breach,” the lease did not impose a contractual 

obligation upon the lessee to produce oil or gas. Nor did it afford the lessor a 

contractual remedy for a lessee’s failure to do so. It instead merely provided for 

termination of the lease if after the expiration of the lease’s primary term oil or gas 

was not produced from the leased premises. The Brownes do not seek damages for 

breach of contract; they seek a declaration that the lease terminated by its terms due 

 

1. In 2012, the General Assembly shortened the limitations period in R.C. 2305.06 for 

commencement of “an action upon a specialty or an agreement, contract, or promise in writing” to 

eight years, 2012 Sub.S.B. No. 224, but appellees agree that, if applicable at all, the former version 

of R.C. 2305.06, H.B. 152 at 3569, with its 15-year limitations period, would apply here. 
SUPREME COURT OF OHIO

14 

to lack of production, an order quieting title to their property, and damages for 

conversion and unjust enrichment. 

{¶ 37} Courts in other states have refused to recognize or impose any 

obligation on a lessee to maintain a lease under the terms of a habendum clause. 

See Miami Oil Producers, Inc. v. Larson, 203 Mont. 225, 232, 661 P.2d 1260 

(1983) (lease provided that it would terminate if drilling or reworking operations 

did not resume within 90 days after cessation of production following the primary 

term; lessee was not obligated to extend the lease by resumption of operations); 

Lynch v. S. Coast Drilling Co., Inc., 442 S.W.2d 804, 807 (Tex.Civ.App.1969) 

(limitation that extended the lease only as long as oil and gas were produced 

“impose[d] no obligation on lessees to perform any duty”); San Mateo Community 

College Dist. v. Half Moon Bay Ltd. Partnership, 65 Cal.App.4th 401, 410, 76 

Cal.Rptr.2d 287 (1998) (termination of lease for failure to continue producing in 

paying quantities “d[id] not constitute a forfeiture for breach of a lease covenant”). 

{¶ 38} The crux of the Brownes’ claims is that the lessees’ alleged failure 

to produce oil or gas from the well resulted in the lease’s termination pursuant to 

the habendum clause. As we held in Buell, an oil and gas lease terminates by its 

express terms and by operation of law and the mineral estate revests in the lessor if 

the conditions of the secondary term are not met. 144 Ohio St.3d 490, 2015-Ohio4551, 45 N.E.3d 185, at ¶ 77. Termination of a lease pursuant to its habendum 

clause is not the result of a breach of the lease when nothing in the lease obligates 

the lessee to maintain the lease into the secondary term or for any period of time 

once the secondary term commences. Because the Brownes’ claims do not arise 

out of a breach of the lease, R.C. 2305.041 does not apply. 

 
January Term, 2019 

15 

R.C. 2305.04’s statute of limitations for claims to recover title to or possession of 

real property, and not R.C. 2305.06’s statute of limitations for claims upon a 

written agreement, applies 

{¶ 39} Appellees argue that the Brownes’ claims, even if they do not fall 

within the scope of R.C. 2305.041, are governed by the 15-year limitations period 

in former R.C. 2305.06, H.B. 152 at 3569, which applies to any “action upon a 

specialty or an agreement, contract, or promise in writing” and is not limited to 

actions alleging a breach. The Brownes, on the other hand, argue that the automatic 

termination of an oil and gas lease by its terms, due to cessation of production, 

implicates only property interests and does not present a contractual dispute. They 

argue that if any statute of limitations applies, it is the 21-year statute of limitations 

in R.C. 2305.04 for “[a]n action to recover the title to or possession of real 

property.” 

{¶ 40} Consistent with the Brownes’ argument, the Fourth District Court of 

Appeals has held that a claim for a declaratory judgment that an oil and gas lease 

terminated by its own terms is not a contract claim but an action to quiet title. 

Rudolph, 2017-Ohio-7369, 84 N.E.3d 1066, at ¶ 3, 44-45. In Rudolph, the subject 

well did not produce for four years, from 1998 through 2001, and the court of 

appeals held that the lease expired by its own terms in December 1999, after two 

years of nonproduction. Id. at ¶ 39. To determine the appropriate statute of 

limitations for Rudolph’s declaratory-judgment claim, the court looked to the 

underlying nature or subject matter of the claim. It stated that a lessee’s failure to 

maintain a lease by production in paying quantities does not necessarily give rise 

to a cause of action for breach of the lease. Id. at ¶ 43. The court explained that if, 

for example, production had ceased because the lessee had made a good-faith 

determination that it was not economically reasonable to commercially operate the 

well or because the well had become depleted, then there was no breach. Id. Based 

in part on this court’s discussion in Buell of the nature of oil and gas leases and the 
SUPREME COURT OF OHIO

16 

property interests they create, the Fourth District held that Rudolph’s declaratoryjudgment claim was not an action on contract but was more akin to a quiet-title 

action, and the court applied the 21-year statute of limitations for recovery of real 

property under R.C. 2305.04. Rudolph at ¶ 44-46. See also Cox v. Kimble, 5th 

Dist. Guernsey No. 13 CA 32, 2015-Ohio-2470, ¶ 57-66 (suggesting, without 

expressly holding, that an action for a declaratory judgment that an oil and gas lease 

expired by its terms is subject to the 21-year statute of limitations in R.C. 2305.04).

{¶ 41} We agree with the Fourth District’s holding in Rudolph that an action 

to recognize the reversion of mineral interests following the alleged termination of 

an oil and gas lease pursuant to its express terms is not an action upon a written 

contract; it is more akin to a quiet-title action. 

{¶ 42} The court of appeals here erroneously held that the nature or subject 

matter of the Brownes’ claims was “a dispute over the written terms of the lease 

agreement.” 2018-Ohio-3746, 116 N.E.3d 687, at ¶ 22. As we stated previously, 

the lease did not impose a contractual obligation upon the lessee to produce oil or 

gas. And the parties do not dispute either the terms of the lease or the meaning of 

those terms; they dispute only whether there was a period of nonproduction that 

terminated the lease by operation of law. Like the plaintiff in Rudolph, the Brownes 

seek recognition of their reversionary interest in the minerals, which themselves 

constitute part of the realty. We therefore hold that the Brownes’ claims are 

governed by the 21-year statute of limitations in R.C. 2305.04.

We do not decide when the Brownes’ claims accrued 

{¶ 43} Beyond correctly stating that R.C. 2305.04 is the applicable statute 

of limitations, the Brownes’ proposition of law states that the limitations period 

does not begin to run until a justiciable controversy arises. R.C. 2305.04 states that 

the time for bringing an action is measured from when the cause of action accrued. 

{¶ 44} Justiciability is a threshold requirement for a declaratory judgment. 

Arnott v. Arnott, 132 Ohio St.3d 401, 2012-Ohio-3208, 972 N.E.2d 586, ¶ 10. “[I]n 
January Term, 2019 

17 

order for a justiciable question to exist, ‘ “[t]he danger or dilemma of the plaintiff 

must be present, not contingent on the happening of hypothetical future events 

* * * and the threat to his position must be actual and genuine and not merely 

possible or remote.” ’ ” Mid-American Fire & Cas. Co. v. Heasley, 113 Ohio St.3d 

133, 2007-Ohio-1248, 863 N.E.2d 142, ¶ 9, quoting League for Preservation of 

Civ. Rights v. Cincinnati, 64 Ohio App. 195, 197, 28 N.E.2d 660 (1st Dist.1940), 

quoting Borchard, Declaratory Judgments, 40 (1934). 

{¶ 45} To the extent the Brownes assert the legal principle that a 

declaratory-judgment claim accrues only when there is a justiciable controversy 

that can be addressed through declaratory judgment, we agree. But the Brownes 

further ask this court to determine when their claims accrued and when the statute 

of limitations began to run. They maintain that a justiciable controversy arose—

and that their cause of action accrued—only when they realized that there was a 

dispute over the lease’s continued validity. And they argue that lessees’ resumption 

of production following the alleged termination did not give rise to a justiciable 

controversy. But the Brownes did not raise that issue in the court of appeals, and 

neither the trial court nor the court of appeals considered or determined when the 

Brownes’ cause of action to recover title to real property accrued, so as to begin the 

limitations period. We therefore decline to address that question for the first time 

on appeal. See Independence v. Office of the Cuyahoga Cty. Executive, 142 Ohio 

St.3d 125, 2014-Ohio-4650, 28 N.E.3d 1182, ¶ 30 (“an appellant generally may not 

raise an argument on appeal that the appellant has not raised in the lower courts”). 

Conclusion 

{¶ 46} We hold that the 21-year limitations period in R.C. 2305.04 applies 

to a claim for a declaratory judgment that an oil and gas lease has expired by its 

own terms for lack of production. In light of the applicable statute of limitations, 

and contrary to the trial court’s statement, evidence of lack of production prior to 

1999 is not irrelevant. We therefore reverse the Fifth District’s judgment and 
SUPREME COURT OF OHIO

18 

remand this matter to the trial court to evaluate the parties’ claims in light of the 

correct statute of limitations. 

Judgment reversed 

and cause remanded. 

O’CONNOR, C.J., and FISCHER and DEWINE, JJ., concur. 

KENNEDY, J., dissents, with an opinion joined by STEWART, J. 

DONNELLY, J., dissents and would dismiss the appeal as improvidently 

accepted. 

_________________ 

KENNEDY, J., dissenting. 

{¶ 47} By accepting only the proposition of law related to the statute of 

limitations, this court rendered the appellants’ appeal moot. As I explain below, 

regardless of this court’s ruling on the statute-of-limitations issue, the ultimate 

judgment will be the same—summary judgment in favor of the oil companies 

(because under the law-of-the-case doctrine, the court of appeals’ rulings on the 

issues that were not accepted for review by this court will remain in place on 

remand). Accordingly, I would dismiss this appeal as moot. 

{¶ 48} I disagree with the majority’s analysis for three reasons. First, 

deciding today which statute of limitations applies to an action seeking a 

declaration that an oil and gas lease has expired cannot affect the outcome of this 

case; regardless of the statute of limitations applied, the appellants, Barry L. and 

Rosa R. Browne, have not produced sufficient evidence to show that there is a 

genuine question whether the well on their property ever went out of production, 

which would have caused the lease to expire by operation of law. Second, in 

holding that the 21-year statute of limitations for actions to recover title to real 

property applies to litigation seeking to quiet title after an oil and gas lease has 

expired, the majority amplifies dicta in Chesapeake Exploration, L.L.C. v. Buell, 

144 Ohio St.3d 490, 2015-Ohio-4551, 45 N.E.3d 185, misconstruing Ohio law and 
January Term, 2019 

19 

improperly classifying the property interest created by an oil and gas lease. Third, 

in determining that a statute of limitations applies in a quiet-title action brought to 

declare that a lease expired under its terms, the majority muddles the law of oil and 

gas by requiring judicial action to terminate a lease when it is well established in 

our caselaw that when a lease expires, it terminates automatically and by operation 

of law; a lawsuit is not needed for the landowner to regain his or her property rights 

to oil and gas. 

{¶ 49} For these reasons, I dissent. 

Facts and Procedural History 

{¶ 50} The Brownes own land in Guernsey County encumbered by an oil 

and gas lease that was signed by one of their predecessors-in-interest and recorded 

in 1976. The lease provided for a one-year primary term and a secondary term for 

as “long thereafter as oil and gas, or either of them, is produced by lessee from said 

land.” One well has been drilled on the property. 

{¶ 51} In 2014, the Brownes sued appellees, Artex Oil Company, Artex 

Energy Group, L.L.C., Arloma Corporation, and James Huck, L.L.C. (collectively, 

“Artex”), seeking to quiet title to the oil and gas rights and requesting a declaratory 

judgment that the lease is no longer in effect as well as damages for conversion of 

oil and gas and a remedy for unjust enrichment. Specifically, they alleged that the 

lease had expired due to the lack of production of oil or gas from the lease’s 

inception until at least 1999. Artex counterclaimed, alleging that there had been 

continuous production of oil since 1977 and seeking a declaratory judgment that 

the lease remained in effect. 

{¶ 52} Artex moved for summary judgment, arguing that the Brownes bore

the burden to prove that the well had gone out of production and that their reliance 

on a lack of affirmative evidence—in the form of production reports and receipts—

that the well had produced oil and gas did not satisfy their burden. Artex pointed 

to evidence from James Vernon Patterson, a prior owner of the property, who 
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20 

averred that the well had remained in continuous production from its completion 

until he sold the property in 2000. Artex also presented the affidavits of two of its 

former well pumpers, stating that the well had remained in production since 1999. 

These men explained that oil was produced and stored in tanks until sufficient 

quantities accumulated for sale and the weather permitted the necessary access to 

the tanks. According to Artex, although oil sales took place only when sufficient 

oil had accumulated in the storage tank, production occurred throughout the life of 

the well. 

{¶ 53} In response, the Brownes maintained that it was Artex that bore the 

burden to prove that the lease remained in effect by producing evidence showing 

that the well had produced oil or gas continuously since it was built. The Brownes 

relied on evidence that Artex’s predecessors-in-interest had failed to report any 

production from the well to the Ohio Department of Natural Resources (“ODNR”) 

until 1999 and that Artex itself reported no production for the years 2002, 2005, 

and 2008. The Brownes also asserted that the only receipts Artex had produced 

showing that oil from the well had been collected and sold were six run tickets, and 

those run tickets show the sale of oil only from 2009 through 2013. Lastly, they 

pointed to a graph, created by Artex’s predecessor-in-interest and provided in 

discovery, showing actual production only during the first four years of the well’s 

existence; the Brownes noted that “[a]lthough the graph is dated through 1996, 

there is no indication of production after 1980.” 

{¶ 54} After initially denying Artex’s motion for summary judgment, the 

trial court reconsidered, entered summary judgment for Artex, and dismissed the 

Brownes’ claims. Although the trial court stated that the Brownes bore “the burden 

to prove that the well[ is] no longer profitable,” it is manifest that the focus of the 

case remained on whether the well on the Brownes’ property had ever gone out of 

production. The trial court found they had “not presented any evidence to satisfy 

their burden” while Artex had “presented significant evidence that the well has been 
January Term, 2019 

21 

producing in paying quantities.” It determined that “the absence of an ODNR 

report does not mean that a well did not produce,” and it explained that Artex’s 

“production records and affidavits can be used to show that the Well has been 

producing.” Lastly, the court held that a 15-year statute of limitations applied to 

the Brownes’ claims, and it indicated that “any lack of production prior to 1999 

would be irrelevant.” 

{¶ 55} The Fifth District Court of Appeals affirmed the summary judgment 

in favor of Artex, holding that pursuant to R.C. 2305.041, the 15-year statute of 

limitations for an action upon a written contract set forth in former R.C. 2305.06, 

Am.Sub.H.B. No. 152, 145 Ohio Laws, Part II, 3341, 3569, applied to the Brownes’ 

attempts to terminate the lease for nonproduction, that the Brownes bore the burden 

of proving that the lease had terminated for nonproduction, and that Artex could 

present production records and affidavits (rather than run tickets or receipts for the 

“legal tender of oil”) to prove continued production. 2018-Ohio-3746, 116 N.E.3d 

687, ¶ 25, 35, 38, 41. It also explained that the trial court had not erroneously 

focused on profitability rather than production; the court of appeals pointed out that 

the trial court made several findings regarding production, and therefore, the court 

of appeals concluded, “the trial court did not determine [that the Brownes’] issue 

was one of profitability as opposed to production.” Id. at ¶ 44-47. 

The Majority Opinion Is Advisory 

{¶ 56} This court accepted the Brownes’ first proposition of law for review: 

“In an action to declare that an oil and gas lease has terminated under its own terms 

for lack of production in paying quantities, the applicable statute of limitations is 

21 years, per Ohio Revised Code § 2305.04, and does not begin to run until a 

‘justiciable controversy’ arises.” See 153 Ohio St.3d 1485, 2018-Ohio-3867, 108 

N.E.3d 82. 

{¶ 57} However, in accepting the Brownes’ appeal on only one of the 

propositions of law they raised, this court declined review over four other 
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22 

propositions that addressed dispositive rulings of the court of appeals. Proposition 

of law No. 2 stated, “A cessation of commercial production of oil or gas, generally 

for two years or more, will cause an oil and gas lease to automatically terminate 

under the terms of its habendum clause.” Proposition of law No. 3 contended, “In 

order to perpetuate an oil and gas lease under its habendum clause, there must exist 

objective and verifiable evidence of the commercial sale of oil or gas.” Proposition 

of law No. 4 maintained, “Evidence of production, i.e., the mere withdrawal of oil 

or gas from a well bore, is not the equivalent to evidence of ‘production in paying 

quantities’ necessary to perpetuate an oil and gas lease under its habendum clause.” 

And proposition of law No. 5 urged, “In an action to declare that an oil and gas 

lease has expired under its own terms for lack of production in paying quantities, 

the burden of proof is on the lessee.” 

{¶ 58} Because a majority of this court chose not to consider these 

propositions of law challenging the appellate court’s rulings regarding the burden 

of proof and the evidence that may be used to establish the production of oil and 

gas, these rulings will remain the law of the case on remand. As we explained in 

Giancola v. Azem, “a trial court is without authority to extend or vary the mandate 

issued by a superior court, * * * and ‘where at a rehearing following remand a trial 

court is confronted with substantially the same facts and issues as were involved in 

the prior appeal, the court is bound to adhere to the appellate court’s determination 

of the applicable law.’ ” 153 Ohio St.3d 594, 2018-Ohio-1694, 109 N.E.3d 1194, 

¶ 16, quoting Nolan v. Nolan, 11 Ohio St.3d 1, 3, 462 N.E.2d 410 (1984). Although 

we generally view the law-of-the-case doctrine as a rule of practice, the mandate 

rule is substantive; “the Ohio Constitution ‘does not grant to a court of common 

pleas jurisdiction to review a prior mandate of a court of appeals,’ ” State ex rel. 

Cordray v. Marshall, 123 Ohio St.3d 229, 2009-Ohio-4986, 915 N.E.2d 633, ¶ 32, 

quoting State ex rel. Potain v. Mathews, 59 Ohio St.2d 29, 32, 391 N.E.2d 343 

(1979). 
January Term, 2019 

23 

{¶ 59} This means that on remand, the trial court is required to leave the 

burden of production and persuasion on the Brownes, and it is obliged to enter 

judgment against them if they are not able to prove a negative—that is, if they are 

unable to provide sufficient evidence to show that there is a genuine question 

whether the lease expired because the well on their property did not produce oil or 

gas for a sufficient period of time. And because the majority determines only that 

the trial court erred in failing to consider evidence of lack of production prior to 

1999, any claim that the well went out of production at any time after that time is 

beyond the scope of the trial court’s review. 

{¶ 60} The Brownes’ theory of recovery was premised on their assertion

that there was no evidence that the well had remained in continuous production, 

and their claim that the lease had expired hinged on Artex’s bearing the burden of 

proving the continued production of oil or gas since the completion of the well. 

The allocation of the burden of proof therefore decides this case. And because it is 

the law of the case that the Brownes bear the burden of proof, they cannot succeed 

in this litigation regardless of the majority’s determination that the 21-year statute 

of limitations for actions to recover title to real property applies to their declaratoryjudgment action. Because a summary judgment in favor of Artex is inescapable on 

remand, determining what statute of limitations controls does not affect the 

outcome of this case. 

{¶ 61} But even if this appeal were not moot, there would still be no need 

to decide the statute-of-limitations issue. This case comes to the court on appeal 

from a summary judgment in favor of Artex. Our review is therefore de novo, and 

we must “consider the evidence as if for the first time.” Argabrite v. Neer, 149 

Ohio St.3d 349, 2016-Ohio-8374, 75 N.E.3d 161, ¶ 14. For this reason, we must 

conduct our own examination of the record, Murphy v. Reynoldsburg, 65 Ohio 

St.3d 356, 360, 604 N.E.2d 138 (1992), independently and without deference to the 

lower court’s determination, Johnson v. Am. Italian Golf Assn. of Columbus, 2018-
SUPREME COURT OF OHIO

24 

Ohio-2100, 113 N.E.3d 1144, ¶ 13 (10th Dist.); see also Bonacorsi v. Wheeling & 

Lake Erie Ry. Co., 95 Ohio St.3d 314, 2002-Ohio-2220, 767 N.E.2d 707, ¶ 24 (in 

reviewing summary-judgment rulings, “we apply the same standard as the trial 

court and court of appeals”). Further, an appellate court reviews the inferior court’s 

judgment, not its reasoning, and “[w]e have ‘consistently held that a reviewing 

court is not authorized to reverse a correct judgment merely because erroneous 

reasons were assigned as the basis thereof,” Salloum v. Falkowski, 151 Ohio St.3d 

531, 2017-Ohio-8722, 90 N.E.3d 918, ¶ 12, quoting Joyce v. Gen. Motors Corp.,

49 Ohio St.3d 93, 96, 551 N.E.2d 172 (1990). 

{¶ 62} The trial and appellate courts correctly ruled that the Brownes’ claim 

cannot survive Artex’s motion for summary judgment. Artex not only argued that 

the Brownes lack any evidence to meet their burden to demonstrate that the well 

ever went out of production, but also it presented the affidavit of the Brownes’ 

predecessor-in-interest, who averred based on personal knowledge that oil and gas 

had been produced from the well “on a continuing basis” from the time the well 

was completed until the time that he sold the property in 2000. He also stated that 

the gas that was produced was not sold but had been used by the landowner. Artex 

therefore met its initial burden in moving for summary judgment to demonstrate 

that there is no genuine issue of material fact and that the Brownes cannot prove 

that the well on their property went out of production prior to 1999. See Vahila v. 

Hall, 77 Ohio St.3d 421, 429, 674 N.E.2d 1164 (1997) (explaining that the party 

moving for summary judgment bears the initial burden to inform the court of the 

basis for the motion and to identify the parts of the record that demonstrate the 

absence of a genuine issue of material fact on the essential elements of the 

nonmoving party’s claims). 

{¶ 63} The burden of going forward with evidence therefore shifted to the 

Brownes, who needed to present sufficient evidence to establish that there was a 

genuine issue of fact remaining for trial regarding whether the well in fact had gone 
January Term, 2019 

25 

out of production. Civ.R. 56(E); Deutsche Bank Natl. Trust Co. v. Holden, 147 

Ohio St.3d 85, 2016-Ohio-4603, 60 N.E.3d 1243, ¶ 34. However, the Brownes 

failed to meet this burden. As they admitted in their response to Artex’s motion for 

summary judgment, “[t]he only evidence that has been offered thus far is the 

absence of reporting during the statutory reporting period that started in 1984 

through 1999.” However, the failure to file production reports does not prove that 

a well was not producing oil or gas. Potts v. Unglaciated Industries, Inc., 2016-

Ohio-8559, 77 N.E.3d 415, ¶ 75 (7th Dist.); see also Holland v. Gas Ents. Co., 4th 

Dist. Washington No. 15CA42, 2016-Ohio-4792, ¶ 28 (noting the difference 

between failing to file a production report and reporting no production). The well 

summary on which the Brownes rely simply indicates that no production reports 

were submitted to ODNR; it does not show that the well owner ever reported no 

production (or zero barrels) of oil from the well. Therefore, the Brownes have 

simply failed to present any evidence that the well on their property ever failed to 

produce oil or gas in paying quantities. And because the Brownes’ evidence is 

insufficient to create a genuine issue of material fact, summary judgment in favor 

of Artex was appropriate. Todd Dev. Co., Inc. v. Morgan, 116 Ohio St.3d 461, 

2008-Ohio-87, 880 N.E.2d 88, ¶ 14. 

{¶ 64} For all of these reasons, deciding what statute of limitations, if any, 

applies to the Brownes’ action is unnecessary and contravenes “our long-standing 

practice disfavor[ing] issuing advisory opinions,” Capital Care Network of Toledo 

v. Ohio Dept. of Health, 153 Ohio St.3d 362, 2018-Ohio-440, 106 N.E.3d 1209, 

¶ 31, as well as “the ‘cardinal principle of judicial restraint—if it is not necessary 

to decide more, it is necessary not to decide more,’ ” State ex rel. LetOhioVote.org 

v. Brunner, 123 Ohio St.3d 322, 2009-Ohio-4900, 916 N.E.2d 462, ¶ 51, quoting 

PDK Laboratories, Inc. v. United States Drug Enforcement Administration, 362 

F.3d 786, 799 (D.C.Cir.2004) (Roberts, J., concurring in part and concurring in 

judgment). 
SUPREME COURT OF OHIO

26 

The Majority Opinion Relies on Dicta 

{¶ 65} In determining that R.C. 2305.04, the statute of limitations for 

actions to recover title to real property, applies, the majority relies on Chesapeake 

Exploration, L.L.C. v. Buell for the statement that oil and gas “may be severed from 

the surface estate for purposes of separate ownership.” Majority opinion at ¶ 20, 

citing Buell, 144 Ohio St.3d 490, 2015-Ohio-4551, 45 N.E.3d 185, at ¶ 21-22. It 

quotes Buell as suggesting that “ ‘the oil and gas lease has been construed as 

transferring to the lessee a fee simple determinable in the mineral estate with a 

reversionary interest retained by the lessor that can be triggered by events or 

conditions specified in the lease.’ ” Majority opinion at ¶ 23, quoting Buell at ¶ 61. 

The majority then reasons: 

[A]n action to recognize the reversion of mineral interests following 

the alleged termination of an oil and gas lease pursuant to its express 

terms is not an action upon a written contract; it is more akin to a 

quiet-title action. 

* * * We therefore hold that the Brownes’ claims are 

governed by the 21-year statute of limitations in R.C. 2305.04.

Id. at ¶ 41-42. 

{¶ 66} The statements from Buell, however, are dicta. As the North 

American Coal Royalty Company and the Ohio Oil and Gas Association argued in 

that case, it was “not necessary to address whether an oil and gas lease creates a 

particular property interest,” and as I noted in my opinion concurring in part, the 

majority’s addressing that issue without briefing and on the record available in that 

case “could have unintended negative consequences in the oil and gas industry,” 

Buell at ¶ 96 (Kennedy, J., concurring in the answers to the certified questions and 

concurring in the opinion in part). 
January Term, 2019 

27 

{¶ 67} The first question in Buell was whether a recorded oil and gas lease 

was a “title transaction,” i.e., whether a recorded oil and gas lease affects title to an 

interest in land, for purposes of the Ohio Dormant Mineral Act. Id. at ¶ 14, 29-32. 

Buell correctly answered that question in the affirmative. We had already 

recognized that “an oil lease is an encumbrance,” Karas v. Brogan, 55 Ohio St.2d 

128, 129, 378 N.E.2d 470 (1978), and a recorded lease puts a cloud on record title—

a title search would reveal the possibility that the lessee may claim rights under the 

recorded lease encumbering the property. The second question before the court in 

Buell was whether mineral rights that had been reserved in a deed were saved from 

being deemed abandoned under the Dormant Mineral Act by the unrecorded 

expiration of a recorded lease of those rights to a third party. Buell at ¶ 68. The 

simple answer was no, because the unrecorded expiration of a lease does not affect 

record title—the expiration of the lease happened automatically by operation of law 

and outside the chain of recorded title. Id. at ¶ 75. 

{¶ 68} It was therefore unnecessary for this court in Buell to go further and 

decide the exact nature of the property interest, if any, that is transferred by an oil 

and gas lease, and the majority opinion in Buell acknowledged as much. It noted 

that the nature of the instrument was not a dispute presented to the court for 

resolution, id. at ¶ 65, fn. 5, but it assumed that the instrument was an oil and gas 

lease, id., notwithstanding its recognition that the rights of the parties to an oil and 

gas lease depend on the terms of the lease itself, id. at ¶ 48, 53. And then the court 

admitted that the result would be the same even if the lease transferred “something 

less than a determinable fee.” Id. at ¶ 65. 

{¶ 69} The court’s statements in Buell that an oil and gas lease severs the 

mineral estate from the surface estate and creates a fee-simple-determinable interest 

in land were unnecessary and therefore are obiter dicta, which has “no precedential 

force” in a later case, State ex rel. DiFranco v. S. Euclid, 138 Ohio St.3d 367, 2014-

Ohio-538, 7 N.E.3d 1136, ¶ 24, superseded by statute on other grounds, as stated 
SUPREME COURT OF OHIO

28 

in State ex rel. Cincinnati Enquirer v. Cincinnati, __ Ohio St.3d __, 2019-Ohio3876, __ N.E.3d __, ¶ 12; see also Cosgrove v. Williamsburg of Cincinnati Mgt. 

Co., Inc., 70 Ohio St.3d 281, 284, 638 N.E.2d 991 (1994) (explaining that dicta in 

a prior case had no binding effect on this court’s decision in a later case). 

{¶ 70} As Chief Justice Marshall wrote almost 200 years ago in Cohens v. 

Virginia: “It is a maxim not to be disregarded, that general expressions, in every 

opinion, are to be taken in connection with the case in which those expressions are 

used. If they go beyond the case, they may be respected, but ought not to control 

the judgment in a subsequent suit when the very point is presented for decision.” 

19 U.S. 264, 399, 5 L.Ed. 257 (1821). This is so because “ ‘[t]he problem with 

dicta, and a good reason that it should not have the force of precedent for later cases, 

is that when a holding is unnecessary to the outcome of a case, it may be made with 

less care and thoroughness than if it were crucial to the outcome.’ ” State v. Bodyke, 

126 Ohio St.3d 266, 2010-Ohio-2424, 933 N.E.2d 753, ¶ 89 (O’Donnell, J., 

concurring in part and dissenting in part), quoting Bauer v. Garden City, 163 

Mich.App. 562, 571, 414 N.W.2d 891 (1987). Today’s decision affords dicta 

precedential value and ignores the wisdom of these fundamental tenets. 

The Dicta in Buell Is Erroneous 

{¶ 71} The court in Buell acknowledged that there is a split of authority on 

the nature of the right conveyed by an oil and gas lease. Buell, 144 Ohio St.3d 490, 

2015-Ohio-4551, 45 N.E.3d 185, at ¶ 42. Some states, Texas, Pennsylvania, 

Mississippi, New Mexico, North Dakota, and Alabama, follow the ownership-inplace theory. 1 Brown, The Law of Oil and Gas Leases, Section 3.02(1) (2d 

Ed.2019). The ownership-in-place theory applies the common-law rule applicable 

to solid minerals such as coal and recognizes that an oil and gas lease conveys an 

interest in land based on the premise that oil and gas are subject to ownership, 

severance, and sale while still embedded in the ground. Id. That is, the lease 
January Term, 2019 

29 

conveys the oil and gas itself while still in the ground, creating a determinable fee. 

Cherokee Water Co. v. Forderhause, 641 S.W.2d 522, 525 (Tex.1982). 

{¶ 72} Other states—including Oklahoma, Kansas, Indiana, New York, 

Illinois, Arkansas, Kentucky, Montana, Wyoming, Tennessee, Washington, West 

Virginia, and California—follow the incorporeal-hereditament theory, which is 

premised on the idea that oil and gas can move across property lines and therefore 

cannot be owned by the lessee until produced from the ground. 1 Brown, Section 

3.02(2) and fn. 26. As the Supreme Court of Oklahoma has explained, an oil and 

gas lease “does not vest in [the lessee] the title to the oil and gas in said land, and 

is not a grant of any estate therein, but is simply a grant of a right to prospect for 

oil and gas, no title vesting until such substances are reduced to possession by 

extracting same from the earth—an incorporeal hereditament.” Kolachny v. 

Galbreath, 1910 OK 229, 26 Okla. 772, 110 P. 902, 906. An incorporeal 

hereditament is an intangible right in land such as an easement. Black’s Law 

Dictionary 842 (10th Ed.2014). 

{¶ 73} In Buell, the majority viewed the 1897 decision in Harris v. Ohio Oil 

Co., 57 Ohio St. 118, 48 N.E. 502 (1897), as adopting the ownership-in-place 

theory of oil and gas law, so that an oil and gas lease creates a fee-simpledeterminable interest in the lessee. Buell at ¶ 42-44, 61. The problem with that 

analysis, however, is that our precedent has long adopted the view that oil and gas 

in place remains the property of the landowner and becomes the property of the 

well owner only when it is produced. For example, in Harris, the court explained 

that oil and gas had remained the property of the landowner after the expiration of 

the lease. Id. at 128. Chief Justice Burket, who authored Harris, also wrote Kelly 

v. Ohio Oil Co., which held that “[p]etroleum oil is a mineral, and while it is in the 

earth it forms a part of the realty, and when it reaches a well, and is produced on 

the surface, it becomes personal property, and belongs to the owner of the well.” 

57 Ohio St. 317, 49 N.E. 399 (1897), paragraph one of the syllabus. Therefore, oil 
SUPREME COURT OF OHIO

30 

and gas subject to an oil and gas lease remains the property of the lessor until it is 

produced. Nonamaker v. Amos, 73 Ohio St. 163, 170-171, 76 N.E. 949 (1905). 

{¶ 74} Buell correctly cited Kelly and Nonamaker as holding that oil and 

gas are part of the realty, Buell, 144 Ohio St.3d 490, 2015-Ohio-4551, 45 N.E.3d 

185, at ¶ 21, but omitted the second half of the holding in those cases, which is that 

oil and gas is not owned by the owner of the well until it is extracted from the 

ground. Buell then tried to distinguish our decision in Back v. Ohio Fuel Gas Co., 

160 Ohio St. 81, 113 N.E.2d 865 (1953), by focusing on the difference between the 

instruments at issue in those cases—according to Buell, Harris involved a lease, 

while Back concerned a license. Buell at ¶ 44-47. 

{¶ 75} At issue in Back was whether filing an instrument conveying oil and 

gas rights with the records of leases instead of filing it with the records of deeds of 

conveyances gave a subsequent purchaser of the property affected by the instrument 

constructive notice of the conveyance of the oil and gas rights. To decide that 

question, the court had to determine the nature of the property rights conveyed by 

the instrument. The court in Back acknowledged that there was authority for the 

position that oil and gas can be conveyed or encumbered in the same manner as any 

other mineral estate. But Back explained that this view—the ownership-in-place 

theory—had been “ ‘severely criticized,’ ” and that in most states, oil and gas in 

place cannot be conveyed separately from the land. Id. at 87, quoting 24 American 

Jurisprudence, Section 4, at 520. The court then cited Kelly and Nonamaker as 

supporting this view that oil and gas is not subject to separate ownership from the 

realty until it is raised to the surface and produced from the well, at which point, it 

becomes the personal property of the well’s owner. Back held that because the oil 

and gas could not be conveyed separately from the realty, the instrument was not a 

deed of conveyance—it did not convey a fee-simple property interest—but rather 

had to be recorded with the leases and licenses. 
January Term, 2019 

31 

{¶ 76} Harris and Back shared a consistent view of the nature of the 

property right conveyed when a landowner leases oil and gas rights. It does not 

matter that Harris characterized the instrument as a lease and Back characterized it 

as a license. That is a false distinction that allowed Buell to justify disregarding the 

more recent holding in Back. Rather, the relevant analysis is whether a lease or 

license transfers ownership of oil and gas in place. And as Kelly, Nonamaker, and 

Back demonstrate, Ohio has adopted the incorporeal-hereditament theory. This 

means that the court’s dictum in Buell that an oil and gas lease transfers fee-simple 

ownership of oil and gas in place, subject to reverter, id. at ¶ 61, is erroneous. 

Instead, in Ohio, the property owner retains fee-simple ownership of the oil and gas 

(and the rest of the realty) subject to an oil and gas lease and the lessee obtains an 

interest in the land to enter onto it, prospect for oil, drill wells, and produce oil and 

gas. This is an incorporeal hereditament known as a profit a prendre (a license 

coupled with an interest, not a bare license), which involves an interest in land that 

affects title. See Boatman v. Lasley, 23 Ohio St. 614, 618-619 (1873) (profit a 

prendre confers “the right to enter upon the lands of another, and remove gravel or 

other materials therefrom” and “so far partakes of the nature of an estate in the land 

itself, as to be treated as an inheritable and assignable interest”). Or as the court 

stated in Harris, the lessee obtains a limited estate, a “lease of the land” for the 

purpose of drilling for and producing oil. Id., 57 Ohio St. at 129-130, 48 N.E. 502. 

It is a property right to enter on and work the land, not a fee-simple estate in the oil 

and gas. 

{¶ 77} Ohio’s adoption of the incorporeal-hereditament theory is legally 

and practically sound, because while it is in the ground, oil and gas can move across 

property lines and therefore cannot be bought and sold in fee simple. A property 

owner has the right to use its land “to secure and appropriate to its own use that 

which [comes] into its lands by percolation, or by flowing through unknown natural 
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underground channels.” Kelly, 57 Ohio St. at 329, 49 N.E. 399. As the court in 

Kelly explained: 

Whatever gets into the well belongs to the owner of the well, no 

matter where it came from. In such cases the well and its contents 

belong to the owner or lessee of the land, and no one can tell to a 

certainty from whence the oil, gas, or water which enters the well 

came, and no legal right as to the same can be established or 

enforced by an adjoining landowner. The right to drill and produce 

oil on one’s own land is absolute, and cannot be supervised or 

controlled by a court or an adjoining landowner. 

Id. at 327-328. 

{¶ 78} This is the “rule of capture,” which permits a property owner to drill 

for and produce oil and gas from his or her own land even though doing so may 

drain oil and gas from underground pools that are below a neighbor’s property. 

Barnes v. Res. Energy Exploration, 2016-Ohio-4805, 68 N.E.3d 133, ¶ 29 (7th 

Dist.), citing Northwestern Ohio Natural Gas Co. v. Ullery, 68 Ohio St. 259, 272, 

67 N.E. 494 (1903). But there is no mechanism in law allowing a property owner 

to grant fee-simple ownership of a neighbor’s real property (i.e., the oil and gas 

beneath it). Accordingly, an oil and gas lease gives the lessee the right to use the 

lessor’s land to produce oil and gas from it, and the lessee acquires title to the oil 

and gas only when it is brought to the surface. Viewing an oil and gas lease as 

creating fee-simple ownership fails to recognize the fugacious nature of oil and gas 

as well as the law of capture’s role in assigning title to oil and gas once they are 

produced. 

{¶ 79} The Marketable Title Act, as amended in 1973, Am.S.B. No. 267, 

135 Ohio Laws, Part I, 942-943, and the Dormant Mineral Act, 1989 Sub.S.B. No. 
January Term, 2019 

33 

223, 142 Ohio Laws, Part I, 981, are irrelevant to determining the property interest 

created by an oil and gas lease. These acts were enacted to address the problem of 

severed mineral interests (e.g., by reservation in a deed) that went long unused but 

clouded the title to property and prevented landowners from making productive use 

of oil and gas under their property. Corban v. Chesapeake Exploration, L.L.C., 149 

Ohio St.3d 512, 2016-Ohio-5796, 76 N.E.3d 1089, ¶ 17-19 (lead opinion). Mineral 

rights had been “fractionalized through devise, descent, and conveyance,” id. at 

¶ 16, but under common law, they “were not subject to abandonment or termination 

for the failure to produce oil or gas or to extract other minerals,” id. at ¶ 15. In 

contrast, oil and gas leases typically include conditions under which the lease will 

expire; for example, a condition might be that the lease will cease upon “the 

permanent abandonment, lack of production, or the exhaustion of oil and gas 

resources on the property.” Buell, 144 Ohio St.3d 490, 2015-Ohio-4551, 45 N.E.3d 

185, at ¶ 77-78. Neither the Marketable Title Act nor the Dormant Mineral Act 

speaks to our coherent body of caselaw holding that an oil and gas lease does not 

transfer fee-simple ownership of any part of the realty but rather grants an 

incorporeal hereditament permitting the lessee to enter onto the land to prospect for 

and produce the oil and gas under it. 

{¶ 80} The majority’s defense of its reliance on the dicta in Buell boils down 

to the ipse dixit that Buell controls because the majority says so. However, it is as 

true for this court as it is for the United States Supreme Court that “[t]he 

justifications for the case system and stare decisis must rest upon the Court’s 

capacity, and responsibility, to acknowledge its missteps. It is our duty to face up 

to adverse, unintended consequences flowing from our own prior decisions.” Nixon 

v. Shrink Missouri Govt. PAC, 528 U.S. 377, 406, 120 S.Ct. 897, 145 L.Ed.2d 886 

(2000) (Kennedy, J., dissenting). Rather than doubling down on Buell, which 

turned a century of caselaw on its head and which may yet have consequences this 

court did not intend, this court should simply admit its error and move forward, 
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34 

acknowledging Buell as a cautionary tale against deciding issues that do not affect 

the outcome of the case. 

The Majority’s Statute-of-Limitations Analysis Is Incorrect 

{¶ 81} In addition to mischaracterizing the nature of the property interest 

created by an oil and gas lease, the majority incorrectly analyzes the statute-oflimitations issue in this case. It recognizes that a failure to produce is not a breach 

of the oil and gas lease but rather terminates the lease by operation of law and that 

upon termination, “the mineral estate revests in the lessor.” Majority opinion at 

¶ 24. Yet it apparently also presupposes that the lease remains in effect until an 

action is brought and the lease is declared terminated. But these two things cannot 

both be true. To expire by operation of law means no judicial action or record 

notice is required for the expiration of the lease to take effect—it is automatic. See 

generally Buell at ¶ 73-78. This court has said that “all rights to drill cease at the 

expiration of the time limited in the grant” and that such cessation of rights is not 

based on “rescission or forfeiture, but [on] expiration of the term of the grant.” 

Detlor v. Holland, 57 Ohio St. 492, 506, 49 N.E. 690 (1898). That is, upon the 

expiration of an oil and gas lease, the landowner regains all of the sticks in the 

bundle of rights that go with property ownership, including the right to exclude 

others from the property or to lease the oil and gas rights to someone else. 

{¶ 82} Accordingly, “although a court order may be necessary to adjudicate 

the rights of the parties when allegations are that a lease has terminated for failure 

to produce in paying quantities, a lease terminates not because of the entrance of a 

court order but for failure to produce in paying quantities under the lease’s 

habendum clause.” Baytide Petroleum, Inc. v. Continental Resources, Inc., 2010 

OK 6, 231 P.3d 1144, ¶ 23. And notably, not only is no court action required for 

an owner/lessor of property to reclaim the mineral rights after termination of a 

lease, but also the General Assembly has provided an extrajudicial method by 
January Term, 2019 

35 

which the expiration of an oil and gas lease can be recorded to eliminate the cloud 

on the property’s title without resorting to the courts, R.C. 5301.332. 

{¶ 83} Because court action is not needed to terminate a lease that has 

expired on its own terms and by operation of law, a statute-of-limitations defense 

is not relevant to determining whether an oil and gas lease has terminated and the 

mineral rights have reverted to the landowner. A statute of limitations may come 

into play if the landowner subsequently seeks recovery for unjust enrichment or 

claims trespass or conversion of oil and gas after the lease’s expiration, see, e.g., 

R.C. 2305.09. And the statute of limitations for recovering title to or possession of 

real property, R.C. 2305.04, may be relevant when a lessee relies on the 21-year 

period to obtain an interest by adverse possession. See State ex rel. A.A.A. Invests. 

v. Columbus, 17 Ohio St.3d 151, 153, 478 N.E.2d 773 (1985); see generally Natural 

Gas Pipeline Co. of Am. v. Pool, 124 S.W.3d 188, 199 (Tex.2003) (holdover tenant 

on oil and gas lease acquired interest by adverse possession as defined by the 

original lease). But absent adverse possession, the landowner has full ownership 

of his or her property after the expiration of a lease, and no statute of limitations 

can limit the right of a landowner to his or her own property, including the right to 

seek a declaration that the lease has terminated on its own terms. 

Conclusion 

{¶ 84} “It has become settled judicial responsibility for courts to refrain 

from giving opinions on abstract propositions and to avoid the imposition by 

judgment of premature declarations or advice upon potential controversies.” 

Fortner v. Thomas, 22 Ohio St.2d 13, 14, 257 N.E.2d 371 (1970). And here, the 

majority’s declaration that the 21-year statute of limitations applies to a complaint 

seeking to establish that an oil and gas lease has expired is not only advisory but 

also sows confusion in the law by suggesting that judicial action is necessary to 

establish something that occurred automatically as a matter of law. And in reaching 
SUPREME COURT OF OHIO

36 

that determination, it relies on dicta in Buell, lending Buell unwarranted 

precedential value. 

{¶ 85} In the end, this case turns on the question whether a movant has 

demonstrated entitlement to a summary judgment, and the hypothetical question of 

which statute of limitations should apply should be left for another day. 

{¶ 86} Accordingly, I would dismiss this appeal as moot. 

 STEWART, J., concurs in the foregoing opinion. 

_________________ 

Fields, Dehmlow & Vessels, L.L.C., and Ethan Vessels; and Knowlton 

Bennett & Conaway and Bryan Conaway, for appellants. 

Theisen Brock, L.P.A., Daniel P. Corcoran, and Kristopher O. Justice; and 

Donald D. Brown Law Offices and Donald D. Brown, for appellees.

Chad A. Endsley, Leah F. Curtis, and Amy Milam, urging reversal for amici 

curiae Ohio Farm Bureau Federation and Guernsey County Farm Bureau. 

Vorys, Sater, Seymour & Pease, L.L.P., Timothy B. McGranor, and

Gregory D. Russell, urging affirmance for amici curiae Ohio Oil and Gas 

Association and Southeastern Ohio Oil and Gas Association. 

_________________