Opinion ID: 1161511
Heading Depth: 1
Heading Rank: 3

Heading: The deeds gave to plaintiffs the exclusive privilege of drilling for oil and gas, which constitutes a profit a prendre, an incorporeal hereditament.

Text: [1] We begin with consideration of the leading case of Callahan v. Martin (1935) 3 Cal.2d 110 [43 P.2d 788, 101 A.L.R. 871]. In that case this court definitively resolved the conflict in the early California cases as to the nature of ownership of oil and gas interests in this state. (See Colby, The Law of Oil and Gas (1943) 31 Cal.L.Rev. 357, 384-402.) We there rejected the view held by the majority of concerned jurisdictions that the assignee of an oil and gas interest possesses a defeasible fee in definite corporeal real property. (See, e.g., Texas Co. v. Daugherty (1915) 107 Tex. 226 [176 S.W. 717, L.R.A. 1917F 983]; see also 1 Williams & Meyers, Oil and Gas Law, ง 203.3; 1 Kuntz, Oil & Gas, ง 2.4, p. 66.) The concept of the defeasible fee, we held, did not sufficiently recognize the practical difference between oil and gas and solid minerals: the latter remain in place beneath the surface of land, but the former, fugacious and vagrant, may be drawn from beneath the surface of other lands. (3 Cal.2d at pp. 116-117.) We held that an operating lessee under a lease for a term of years ... has an interest or estate in real property in the nature of a profit a prendre, which is an incorporeal hereditament, and that the assignee of a royalty interest in oil rights under an assignment by the landowner[ [6] ] also has an interest or estate in real property in the nature of an incorporeal hereditament. (P. 118.) [7] We further stated, The holders of oil interests under a landowner's assignments have rights of profit a prendre, which are estates in real property, and are properly described as real property, or real estate, where, as in the instant case, they are to endure in perpetuity. (Pp. 127-128.) In Dabney-Johnston Oil Corp. v. Walden (1935) 4 Cal.2d 637 [52 P.2d 237], we further elaborated the California position. The owner of land has the exclusive right on his land to drill for and produce oil. This right inhering in the owner by virtue of his title to the land is a valuable right which he may transfer. The right when granted is a profit a prendre, a right to remove a part of the substance of the land. A profit a prendre is an interest in real property in the nature of an incorporeal hereditament. ... The profit a prendre, whether it is unlimited as to duration or limited to a term of years, is an estate in real property. If it is for a term of years, it is a chattel real, which is nevertheless an estate in real property, although not real property or real estate. [Citation omitted.] Where it is unlimited in duration, it is a freehold interest, an estate in fee, and real property or real estate. Thus, although the oil and gas in place doctrine is rejected, interests in oil rights which are estates in real property may be granted separate and apart from a grant of surface title. (Italics added.) (P. 649.) With this background we proceed to analyze the grants to the two corporations. We have no doubt that Abrams and Brandt purported to convey to the corporations the entire interest of the partnership in the oil, gas, and other hydrocarbonic substances underlying section 31. As we pointed out in La Laguna Ranch Co. v. Dodge (1941) 18 Cal.2d 132 at page 135 [114 P.2d 351, 135 A.L.R. 546], however, [T]he owner of land does not have an absolute title to the oil and gas in place as corporeal real property, but rather has the `exclusive right' to drill for oil and gas upon his premises. (See Bernstein v. Bush (1947) 29 Cal.2d 773, 778 [177 P.2d 913]; Tanner v. Title Ins. & Trust Co. (1942) 20 Cal.2d 814, 819 [129 P.2d 383]; Caffroy v. Fremlin (1961) 198 Cal. App.2d 176, 182 [17 Cal. Rptr. 668].) [8] Since an owner may not effectively transfer rights in property greater than those he himself is able to enjoy (23 Am.Jur.2d, Deeds, ง 289), the corporations received no title to the oil and gas as corporeal real property but rather obtained the exclusive privilege of drilling for these substances. [9] This right, as explained by Callahan and Dabney-Johnston, is a profit a prendre, an incorporeal hereditament. Since the right is to endure in perpetuity, it is a freehold interest, an estate in fee, and real property or real estate.