Montana oil and mining journal., 1937-06-12

that his share was 121k barrels out
Of every 1OO-else he was somehow
misIed, for he sold more than 12h
per cent. AS we recall now, he sold
something like ~ per cent, and we
learned that only the first 1914 per
cent was good: the other Az per cent
was worthless.
The writer then called on his old
friend Gal Hubbard, the abstractOr, and
took his first lesson in titles. 1t
seems now quite ridiculous that we did
not think of abstracts and basic titles,
but when we later saw lawsuits in
cases where experienced operators
bought and paid for leases only to
find later that the hOmesteader didn't
even have his patent from the gOverH-
ment, we realized that we were not
the only ones who did not appreciate
the importance of titles. We recall
now that a Shelby attorney sold a
Minneapolis operator a lease for cash.
The operator moved a rig onto the
lease and started to drill, only to
find that the lease belonged to Ohio
Oil company. We saw shotguns
brought into play in setting up title
to other tracts, in other cases.
1t was "CaI' Hubbard who told us
that a royalty deed is the same as a
deed to a town lot: a purchase in
which the buyer gets only what the
seller possessed. An abstract or search
of the chain OF title is necessary, if
the title is to be relied upon, he told
us, and once the title is established a
landowners royalty is perpetual. IL
it is bought subject to a mortgage or
other encumbrance, 1t is not perpetual
until such mortgage or encumbrance is
removed, he said. Royalties were new
to him. He knew nothing about the
operation of royalties, said nothing
about royalty values, but he did know
titles. One Of the earliest of our
purchases, we found was not land
owners royalty but overriding roy
atty. By the time he discovered it,
the property was in production and
we were receiving royalty checks
and big ones. But we really didn't
know the difference then, so long as
it was royalty"
1t was Mr.. Hubbard who always in-
sisted that there is only one 'ROY-
Atty" true royalty is equivalent
to the kings share: the landowners
share, here i'm America where every
man is king of his own domain. ANY
other interest in the lease or other
wise is NOT royalty, he insisted, and
he objected strenuousIy to calling over
riding royalty 'ROYALTY."
''It is a Iease-hoId interest,", he
said. ''It would be just as fair to
call copper gold. They look some
thing alike and both are used in the
system, but there is no mis-
taking copper for gold. Likewise, there
should be no mistaking of lease
hold interest for royalty"
But we thought that Hubbard didn't
know much about it: it was just his
own reasoning and not based on actual
oil fields practice, we concluded, so
we never followed it up. The whole
hing was too confusing to us to at
Tempt to change the nomenclature of
he royalty business. He was rather
i'm matters of business.
He pointed out to us the things we
should know about royalty titles but
oddly enough he never Joined us in a
'Oyalty purchase. Later on, however,
ne confessed that he had made a mis-
AXE in not investing and again adj
nitted that he had bought some roy
llties in the MidcOntinent, through I'M
Serial royalties, which turned out very
,adly. He knew titles but he did not
NOW ROYALTY VALUES, which we
lad learned to recognize through our
,eOlOgist friends and petroleum engin-
'ers who had devoted lifetime to their
ubtect just as Hubbard had devoted his
ifettme TO land titles.