Case Name: Kimbark Exploration Company, a corporation, Appellee, v. Clementina Von Lintel, a widow, Appellee, and Norbert Von Lintel and _ Von Lintel, his wife; Angelia Richmeier and B. J. Richmeier, her husband, et al., Appellants
Court: Kansas Supreme Court
Jurisdiction: Kansas
Decision Date: 1964-04-11
Citations: 192 Kan. 791
Docket Number: No. 43,588
Parties: Kimbark Exploration Company, a corporation, Appellee, v. Clementina Von Lintel, a widow, Appellee, and Norbert Von Lintel and _ Von Lintel, his wife; Angelia Richmeier and B. J. Richmeier, her husband, et al., Appellants.
Judges: 
Reporter: Kansas Reports
Volume: 192
Pages: 791–802

Head Matter:
No. 43,588
Kimbark Exploration Company, a corporation, Appellee, v. Clementina Von Lintel, a widow, Appellee, and Norbert Von Lintel and _ Von Lintel, his wife; Angelia Richmeier and B. J. Richmeier, her husband, et al., Appellants.
(391 P. 2d 55)
Opinion filed April 11, 1964.
Edward Larson, of Hays, argued the cause, and Norman W. Jeter, of Hays, appeared with him on the briefs for the appellants.
F. F. Wasinger, of Hays, argued the cause, and appeared on the briefs for the appellee, Clementina Von Lintel.

Opinion:
The opinion of the court was delivered by
Hatcher, C.:
This appeal stems from a decree in a declaratory judgment action. The action sought a determination of the proper distribution of the landowner's one-eighth royalty, under a producing oil and gas lease, as between a life tenant and the remaindermen.
Neither the facts nor the issues are in dispute. They may be briefly stated.
Henry Von Lintel owned the Northeast Quarter (NE/4) of Section Two (2), Township Ten (10), Range Twenty-six (26), in Sheridan County, Kansas. On March 22, 1955, Henry Von Lintel and Clementina Von Lintel, his wife, executed an oil and gas lease covering the land described. Henry Von Lintel died July 12, 1957, leaving a will dated October 31, 1955, which devised his property to certain of his children, subject to the interest of his wife, Clementina Von Lintel, "to have, hold, manage, and control the same and receive all the rents, income and profits therefrom to her use and benefit for and during her life." Sometime in June, 1960, after the admission of the will to probate, production was obtained under the oil and gas lease.
The plaintiff, the assignee and operator of the oil and gas lease, brought this action, alleging in detail the facts above stated, requesting the district court to adjudicate the rights of the royalty owners to the one-eighth royalty accrued and accruing under the lease, and to render a declaratory judgment as to such rights and obligations. Attached to the petition was a copy of the will but it contains no language that will aid in the determination of this controversy.
The remainderman answered claiming that all of the landowner's royalty should be deemed principal under the will of Henry Von Lintel; that it should be invested; that the income therefrom should be. paid to the life tenant during her natural life, and that upon her death the principal should be distributed to the remaindermen.
The life tenant answered claiming that all of the proceeds of the one-eighth royalty which had accrued or may accrue during her lifetime belong to and should be paid to her.
The case was presented to the trial court on the undisputed facts alleged in die pleadings which we have abbreviated.
The district court entered judgment decreeing insofar as material to this controversy:
"That the defendant, Clementina Von Vintel, is entitled to all of the one-eighth (l/8th) royalty under the present existing oil and gas lease . . . during the lifetime of the said Clementina Von Lintel, and the same be and hereby is assigned to the said defendant, Clementina Von Lintel, for and during her lifetime; That all of the one-eighth (l/8th) royalty that has accrued, or will accrue, under said lease, shall be paid to the said Clementina Von Lintel forthwith by the said plaintiff herein, and shall further be paid as the same accrues during the lifetime of the said Clementina Von Lintel."
The plaintiff, the producer under the oil and gas lease, being interested only in to whom it should pay the one-eighth royalty has not participated in the appeal. The defendants remaindermen, hereinafter designated as appellants, have appealed challenging the decision of the district court. The defendant, the life tenant, hereinafter designated as appellee, has appeared supporting the decision of the district court.
' Although the answer may be difficult, the contention of the parties on appeal may be simply stated.
The appellee contends that, under the rule announced by this court, the life tenant, in the absence of a contrary intention manifested by the instrument creating the life estate, is. entitled to all royalties from wells brought into production after the commencement of the life estate but under authority' granted, through lease or otherwise, by the person who created the life estate.
The appellants contend that regardless of the rule previously existing in this state the legislature in 1951 by the enactment of the Uniform Principal and Income Act, particularly G. S. 1961 Supp., 58-909 pertaining to disposition of natural resources, set up a different rule which now governs the matter. The appellee answers with the suggestion that the Uniform Principal and Income Act did not purport to change the existing Kansas law.
The general rule followed by this court is stated in 31 C. J. S. Estates § 42 beginning on page 78 as follows:
"Under the open mine or open well doctrine, when not expressly precluded, a life tenant may work or have operated a mine, quarry, or well, opened before the creation of his estate, even to exhaustion; and not only for his own use but for profit; and is entitled to all proceeds derived from such operation without being obliged to make provision for any fund to offset depletion. The rationale of the open mine doctrine is that the owner of the previous estate by opening mines on the land impresses it with that character of use and enjoyment, and, in the absence of a provision to the contrary in the instrument creating the life estates, manifests an intention that the life tenant may likewise use and enjoy the land."
The above statement covers the situation where production of oil or gas or other minerals existed on the land at the time the life estate took effect. The statement continues covering the situation where the settlor authorized the development before the life estate took effect but development did not take place until after the life estate came into being. The statement reads:
"Where the owner of a preceding estate of inheritance authorizes a mine or well to be opened or drilled on his land, and such mine or well is not opened or drilled until after his death, the mine or well will be considered an open mine or well as of the date of the owner's death, and the life tenant is entitled to receive the royalties as issues and profits of the land. Mining by the life tenant will be allowed if the former owner of the fee has impressed on it the character of mining land, by executing an enforceable lease for that purpose prior to the commencement of the life estate, although no mines have been opened thereunder until after the commencement of the life estate. Where an oil or gas lease has been executed prior to the inception of the life estate, the life tenant is entitled to all accruing royalties although actual drilling operations do not commence until after the inception of the life estate. If a lessee of an oil and gas lease enters after lessor's death and drills and produces oil and gas, the wells will be regarded as open at lessor's death, and the life tenant will be entitled to the rents and profits reserved to lessor, accruing therefrom, during the life tenancy . . ." (p. 79. See, also, 33 Am. Jur. Life Estates Remainders, etc., § 330, p. 834.)
The trade term "open mine or open well doctrine" as used in the quotations simply means that a mine is being operated or an oil or gas well is producing. The term has also been extended to cover a situation where the production was authorized by the landowner before the life estate was created even though production had not yet commenced.
As one of the authorities for the above statement, the author cites Benson v. Nyman, 136 Kan. 455, 16 P. 2d 963 where this court held:
"While a life tenant under a will may not develop an oil and gas property to the deprivation of remaindermen, such rule does not apply where all developments were made under and by virtue of the provisions of a lease made by the landowner in his lifetime with a third party as lessee." (Syl. 2.)
This court again recognized the general rule and distinguished between an oil and gas lease made by the settlor and one made by the life tenant in Burden v. Gypsy Oil Co., 141 Kan. 147, 40 P. 2d 463 where it held in syllabus 5 as follows: "A life tenant may not develop an oil and gas property to the deprivation of the remaindermen where the development was not begun or authorized before the commencement of his life estate."
This court again recognized the rule in Pedroja v. Pedroja, 152 Kan. 82, 102 P. 2d 1012, where it stated on page 90 of the opinion:
". . . Based on finding five, the court held that the life tenants were entitled to share in the royalties from leases executed by the testator in his lifetime, but that on the leases executed subsequent to his death, the royalties therefrom are to be invested and the life tenants are entitled to the income from such investments. The correctness of the rule is not questioned . . ."
Those who desire to research the general rule above announced as applied in other states may see Mairs v. Trust Co., 127 W. Va. 795, 34 S. E. 2d 742; In re Shailer's Estate, Okl., 266 P. 2d 613; Youngman v. Shular, 155 Tex. 437, 288 S. W. 2d 495, and Barton v. Warner, (Tex. Civ. App.) 142 S. W. 2d 303.
The Kansas cases cited above were decided prior to the enact ment of the Uniform Principal and Income Act in 1951. This court has not had occasion to pass upon the effect of the act on the general rule as previously announced by this court. Neither have we found any cases in which the courts of other states have had occasion to pass on or interpret the provisions of the act and none have been cited in the briefs. The provision covering disposition of income from natural resources is to be found in G. S. 1961 Supp., 58-909, which provides:
"Where any part of the principal consists of property in lands from which may be taken timber, minerals, oils, gas or other natural resources and the trustee or tenant is authorized by law or by the terms of the transaction by which the principal was established to sell, lease or otherwise develop such natural resources, and no provision is made for the disposition of the net proceeds thereof after the payment of expenses and carrying charges on such property, such proceeds, if received as rent on a lease, shall be deemed income, but if received as consideration, whether as royalties or otherwise, for the permanent severance of such natural resources from the lands, shall be deemed principal to be invested to produce income. Nothing in this section shall be construed to abrogate or extend any right which may otherwise have accrued by law to a tenant to develop or work such natural resources for his own benefit." (Emphasis supplied.)
It would appear that the statute only attempts to cover a situation where the trustee or life tenant makes the lease or otherwise develops the natural resources. The situation where the settlor of the life estate has made the lease or otherwise developed the natural resources is noticably omitted.
The uniform principal and income act was adopted by the National Conference of Commissioners on Uniform State Laws in 1931, although not adopted by the legislature of this state until 1951. In the California Law Review, Volume 28, beginning at page 44, written in 1939, we find the following statement dealing with the section in question:
"Referring, then, first to section 10, which deals with the related topic of principal subject to depletion, the Act there adopts the orthodox rule that the returns from wasting assets are principal if the trustee is under a duty to convert, but where the trustee is under no duty to convert the returns are income. Section 9 abandons this test and lays down a rule apparently new, which applies only where 'the trustee or tenant is authorized . . . to sell, lease or otherwise develop such natural resources . . .' If these conditions exist — and no provision is made for cases where they do not exist — then the net proceeds, if received as rent on a lease, are income, but if received as consideration, whether as royalties or otherwise, for permanent severance, are principal . . ." (Emphasis supplied.)
A note by the committee drafting the Uniform Principal and Income Act throws some light on the scope and intent of the section in question. In the Hand Book of the National Conference of Commissioners on Uniform State Laws and Proceedings, 1928, at page 215, we find the following note made while the section was being developed:
". . . In general a tenant is not entitled to make merchandise of standing timber. . . . Or to open mines or oil wells Eager v. Pollard, 194 Kentucky 276, 239 S. W. 39 (1922) reported with a note in 43 A. L. R. 808, 811; 36 L. R. A. N. S. 1108 citing cases."
In the Pollard case cited in the above quotation it is stated:
". . . Royalties derived from oil wells opened up upon land after the death of the owner and not in pursuance of a contract executed by him, usually are considered as part of the corpus of the estate and not as income therefrom as between life tenants and the remaindermen. Crain v. West, supra; Meredith v. Meredith, 193 Ky. 192.
"Mineral wells that are opened up after the death of the fee owner, but in pursuance of an express or implied power conferred by his will are not distinguishable from those opened after his death in pursuance of a contract, and in several such cases royalties realized therefrom very properly, it seems to us, have been held in other jurisdictions to be income. See Thornton on Oil & Gas, vol. 1, section 301, and cases there cited.
"Rut this could not result of course where the testator by the will conferring the power provided otherwise with reference to the disposition of the funds derived thereunder." (l. c. 278.)
It is apparent that the committee had the general rule before it and was considering only the situation where the development or production was not authorized before the life estate came into being. If the committee was following the Pollard case it could not have intended to include a situation where the right to develop and produce was authorized by the landowner before the life estate was in being. The case on which they were relying for their authority would be to the contrary.
We are forced to conclude that the rule announced by this court to the effect that, "while a life tenant under a will may not develop an oil and gas property to the deprivation of remaindermen, such rule does not apply where all developments were made under and by virtue of the provisions of a lease made by the landowner in his lifetime with a third party as lessee," has not been changed or affected by the provisions of G. S. 1961 Supp., 58-909.
In the case under consideration the development took place under a lease made by the landowner before the life estate came into being. The proceeds from the one-eighth royalty therefor belong to the life tenant.
The judgment is affirmed.
approved by the court.