Title: Raley v. Moore
Citation: 289 P.2d 957, 60 N.M. 200
Docket Number: 5954
State: new-mexico
Issuer: new-mexico Supreme Court
Date: November 4, 1955

289 P.2d 957 (1955) 60 N.M. 200 Jess W. RALEY and Mary J. Raley, Plaintiffs-Appellees, v. J. Hiram MOORE; Alice L. Childera, Executrix of the Estate of William R. Childers, Deceased; and Alice L. Childers, Indiviually, Defendants-Appellants. No. 5954. Supreme Court of New Mexico. November 4, 1955. Neal &amp; Girand, Hobbs, for appellants. Williams &amp; Johnson, Hobbs, for appellees. COMPTON, Chief Justice. This is a quiet title action brought by appellees. On February 3, 1942, appellees executed an oil and gas lease in favor of C.P. Yadon upon the W 32½ acres of the SE ¼ SW ¼, SW ¼ SW ¼, Section 8; the NW ¼ NW ¼ and the W 32 ¼ acres of the NE ¼ NW ¼ Section 17, Township 20 South, Range 38 East, containing 145 acres, with a primary term of 10 years and as long thereafter as oil and gas should be produced from the premises. Subsequently, and during the primary term of the lease, appellees conveyed to appellant Moore an undivided 4/13 interest, 10 royalty acres, and to W.R. Childers, predecessor in title to Alice L. Childers, an undivided 9/13 interest, 22 ¼ acres, in and under the W 32 ½ acres of the NE ¼ NW ¼ of said Section 17. Appellees seek to quiet their title to the premises retained by them. Appellants deny appellees' alleged ownership and, by cross-complaint, allege that by reason of their ownership of the W 32 ¼ acres of the NE ¼ NW ¼, Section 17, covered by the lease to Yadon, they are entitled to participate in all oil and gas rentals and royalties in the ratio as their interests bear to the whole and undivided fee. The rentals and royalties involved are from oil and gas produced *958 from the premises retained by appellees. The trial court found in favor of appellees and the cause is brought here for review. Appellants' position is without substance. Where a portion of the leased premises is subsequently conveyed by a lessor, rentals and royalties will not be apportioned on the basis of acreage in the absence of an express contract to that effect. Garza v. De Montalvo, 147 Tex. 525, 217 S.W.2d 988; Kimbley v. Luckey, 72 Okl. 217, 179 P. 928; Pierce Oil Corp. v. Schacht, 75 Okl. 101, 181 P. 731; Galt v. Metscher, 103 Okl. 271, 229 P. 522; Carlock v. Krug, 151 Kan. 407, 99 P.2d 858; Pittsburgh &amp; West Virginia Gas Co. v. Ankrom, 83 W. Va. 81, 97 S.E. 593, 5 A.L.R. 1157; Osborn v. Arkansas Territorial Oil &amp; Gas Co., 103 Ark. 175, 146 S.W. 122; Boren v. Burgess, D.C., 97 F. Supp. 1019. The record before us does not disclose such agreement. Appellants rely strongly on Schrader v. Gypsy Oil Co., 38 N.M. 124, 28 P.2d 885, 888, as supporting their position. The Schrader lease contains the provision "`If the leased premises shall hereafter be owned in severalty or in separate tracts, the premises, nevertheless, shall be developed and operated as one lease and all royalties accruing hereunder shall be treated as an entirety and shall be divided among and paid to such separate owners in the proportion that the acreage owned by each such separate owner bears to the entire leased acreage.'" The lease under consideration is 88 Producers Special and contains no such provision. The lesser interest and severability clause appearing in the lease upon which appellants rely, cannot be considered as having the effect of an "entirety clause." The Schrader case, therefore, is thus distinguished and is not in point. The conveyances to appellants contain the following provision: The foregoing provision is clear and when construed with the Yadon lease, which makes no provision for apportionment, we are readily led to the conclusion that rentals and royalties produced from appellees' lands, are not apportionable. Appellants, severally, are entitled to receive rentals and royalties only on oil and gas produced from their respective premises. The case of Carlock v. Krug, supra, and this one are so nearly alike on the facts, we quote therefrom at length [151 Kan. 407, 99 P.2d 861]: Yadon assigned the lease to Amerada Petroleum Corporation. In November, 1951, Amerada began drilling operations upon the premises owned by appellees. It was then apparent that the lease was soon to expire by its terms; whereupon, appellees and appellants jointly signed a so-called "lease agreement" with Amerada, which reads: It is argued that where separate owners of contiguous tracts jointly execute an oil and gas lease, the several tracts constitute a single unit for the disposition of the oil and gas produced therefrom and that the owners of contiguous tracts are entitled to participate pro rata in production from either tract. Be that as it may; we do not construe the agreement as creating a new lease. The agreement merely extended the primary term of the lease for 6 months and as long thereafter, etc. Moreover, it is clear that appellants at first did not look upon the "lease agreement" as having the effect of a new lease, or that they had the right to participate proportionately thereunder. *960 Shortly after signing the extension agreement, appellant Moore unsuccessfully tried to have the parties sign a pooling agreement in which he made no claim to apportionment. On January 10, 1952, he also wrote a letter to Amerada which clearly shows that he was not then contending that the lease agreement constituted a joint lease. Further, at the request of Amerada, he signed a division order in which he made no such claim. Appellant Childers, likewise, signed a similar division order and made no claim to the royalty or rentals. The finding of the court was warranted. The judgment will be affirmed, and it is so ordered. LUJAN, SADLER, McGHEE and KIKER, JJ., concur.