Opinion ID: 1111268
Heading Depth: 2
Heading Rank: 3

Heading: Benefit of covenants, express and implied.[16]

Text: These incidents of ownership may be separated and conveyed or retained as the parties see fit. [17] Holifield v. Perkins, 233 Miss. 876, 880, 103 So.2d 433, 434 (1958); Westbrook v. Ball, 222 Miss. 788, 790, 77 So.2d 274, 275 (1955); Ford v. Jones, 226 Miss. 716, 722, 85 So.2d 215, 218 (1956). Nothing in our law requires that all, nor any particular combination of mineral incidents, reside in any particular party. Listing the incidents of mineral ownership unmasks another myth. Mineral interests and royalty rights are never mutually exclusive categories. Royalty rights are one incident of a whole mineral estate. Conveyance of minerals without more conveys the right to receive royalties as well. Royalty is thus seen a subspecies of the mineral estate. It may be severed and conveyed, participating or non-participating. [18] The point is as simple as it is fundamental: the owner of a (partial or whole) mineral estate has legal power to convey to another any one or more of the various incidents of his estate  and to retain the others, as he sees fit. Oil and gas economics and custom may suggest some combinations more sensible than others. The law is indifferent to his choice. Today's is one of those cases in which the parties broke away from the law's facilities. They laid aside the labels of convenience. The instrument at issue reserved to the grantors, Hardy McLeod and Josephine McLeod, the right to receive all bonuses and delay rentals from an eight month old oil and gas lease then in effect and, as well, from all future oil and gas leases. Once they did this, the parties moved beyond the shorthand descriptives mineral interest and royalty interest. It became positively dangerous to continue to speak in those terms, as this lawsuit certainly demonstrates. Those who ask after that point whether a mineral interest or a royalty interest was conveyed by McLeod to Thornhill are simply asking the wrong question. Here lies the fundamental error of Appellees, System Fuels, Inc., et al., and of my colleagues in dissent. Our question is, which of the incidents of mineral ownership were conveyed to Thornhill on May 14, 1945, and which were retained in the McLeods? More precisely, the judicial mind has become charged to locate the authority to lease the oil and gas interest conveyed to Thornhill. [19] Was that authority retained by the McLeods or conveyed to Thornhill? The majority opinion, as much as I agree with it, makes the same mistake as everyone else, first on page 986 and at several points thereafter. The question is not, whether the McLeods conveyed a mineral estate or a royalty interest only, but which of the various incidents of mineral ownership were conveyed and which were retained. Two oft cited cases may be used to explain how we should construe mineral conveyances  and how we should not. Mounger v. Pittman, 235 Miss. 85, 108 So.2d 565 (1959) is a case of consequence. Grantors reserved a one-eighth interest in the land pertaining to oil and gas. The question was whether grantor's interest was chargeable with one-eighth of the cost of production. The language at issue was We do hereby reserve ... one-eighth of all the oil and gas which may be produced from said lands. .. . 235 Miss. at 86, 108 So.2d at 566. Everything else was conveyed to grantees. Though the matter could have been made more certain, construction is not difficult. The conveyance by its language gave grantees everything not reserved. Specifically, grantors reserved no right to drill or explore for oil and gas. They did reserve one-eighth of the oil and gas which may be produced ..., that production, if any, to be generated by the parties with the right and authority to drill and explore. The words which may be produced could sensibly mean only which may be produced by others than grantors. Grantors reserved the right to physical delivery of their one-eighth to themselves or as they might direct. From this it is a short step to reading the reservation as providing that grantors get their one-eighth without strings attached. The Mounger Court nevertheless offers careful definitions of non-participating royalty interest and minerals in place. 235 Miss. at 86-87, 108 So.2d at 566. These definitions were unnecessary at the time. They have proven mischievous as they reinforce the tyranny of labels [20] and contribute to the methodology that leads today's dissenters astray. Lackey v. Corley, 295 So.2d 762 (Miss. 1974) is wonderfully wrong and right. Grantees were not chargeable with cost of production because, as a matter of common English usage, the wording of the grant and reservation said they weren't, not because their interest was a non-participating royalty interest. The Lackey Court reasoned wrongly that grantees' interest had three of the four characteristics of a non-participating royalty interest, that the fourth  freedom from costs of production  would be implied to yield a non-participating royalty interest, and that because grantees held a non-participating royalty interest they were not chargeable pro rata with cost of production. Lackey, 295 So.2d at 764-65. This is nonsense. Why go by way of China to cross the street? The shortest distance between two points is a straight line, and this is so in law and logic as in geometry. The Lackey grantees were not chargeable with cost of production because the words in the instrument, as a matter of elementary English usage, said they weren't, period.