Court Opinion

ID: 9684117
Source: CourtListenerOpinion
Date Created: 2023-08-24 13:47:03.303551+00
Date Added: 2024-06-11T18:17:52.932099
License: Public Domain

Donald L. Corbin, Justice, concurring in part and dissenting in part. While I agree with the majority’s ruling affirming the trial court’s award of a one-half interest in the surface rights to Brett, I cannot agree with its affirmance of the award of a one-half interest in the mineral rights. This court avoids the issue of whether there was a severance of the mineral rights by ruling that Harold failed to obtain a ruling on that issue. In so doing, the majority narrowly interprets the trial court’s ruling. In its order, the trial court stated: “It is the finding of the Court that the mineral interests which were reserved by the parties are the property of the Plaintiff and Defendant equally.” Clearly, by ruling as it did, the trial court rejected Harold’s argument that the mineral rights had been severed from the surface estate. In fact, the court repeatedly stated from the bench that it was its belief that there had been no severance of the mineral estate from the surface. The fact that the trial court did not use the magic word “severance” in his written order is of no merit, as it clearly ruled on the issue. Not only do I believe the trial court ruled on this issue, but I also believe the trial court ruled incorrectly. There was ample testimony that Harold had been the sole recipient of the royalty payments resulting from the lease with Hogback Excavation. It was not until after the trial court ruled that Brett owned a one-half interest in the mineral estate that he received any royalty payment. In fact, Brett testified that he never sought any portion of the royalty payments. While this court has not specifically addressed a situation like the present one, we have discussed the effect a lease may have on the two estates. In Garvan v. Kimsey, 239 Ark. 295, 389 S.W.2d 870 (1965), this court analyzed whether a short-term exploratory lease severed the mineral estate from the surface estate for purposes of separate tax assessments. There, this court stated: However, this court has also held that an oil and gas lease does not of itself constitute constructive severance of the two estates, but conveys only an interest and easement in the land itself and no title passes until the oil and gas are reduced to possession. (Pasteur v. Niswanger, 226 Ark. 486, 290 S.W.2d 852; Clark v. Dennis, 172 Ark. 1096, 291 S.W. 807; 16 Ark. L. Rev. 301.) In Quality Coal Company v. Guthrie, 203 Ark. 433, 157 S.W.2d 756, this court said: “While in Arkansas the two interests [estate in the surface and estate in the oil and minerals] may be severed, we do not understand that the mere fact of leasing the lands for exploration purposes ipso facto creates such severance.” Nor are we convinced from our search of relevant Arkansas law that a short-term non-producing mineral lease, as is here involved, is such a severance as to fall within the terms of § 84-203, supra. Id. at 297, 389 S.W.2d at 871. In concluding as it did in Garvan, this court relied in part on its previous decision in Pasteur v. Niswanger, 226 Ark. 486, 290 S.W.2d 852 (1956). In that case, this court held that an oil and gas lease conveys an interest and easement in the land itself, but that no title passes until the oil and gas is reduced to possession. Id. (citing Davis v. Collins, 219 Ark. 948, 245 S.W.2d 571 (1952); Clark v. Dennis, 172 Ark. 1096, 291 S.W. 807 (1927); Osborn v. Arkansas Territorial Oil & Gas Co., 103 Ark. 175, 146 S.W. 122 (1912)). This conclusion was consistent with our holding in Shreveport-El Dorado Pipe Line Co. v. Bennett, 172 Ark. 804, 290 S.W. 929 (1927), where this court held that oil severed from the soil and reduced to possession becomes personal property. In summary, it appears that our case law indicates that a lease that results in the excavation of minerals from the surface constructively severs the mineral estate from the surface estate. It is this issue of severance that causes me concern in the present case. Because there was testimony indicating that the lease from Harold to Hogback Excavation has resulted in the severance of minerals from the soil and the payment of ample royalties to Harold, I believe the trial court erred in summarily ruling that there was never any severance of the mineral estate from the surface estate.1 For that reason, I dissent. Brown and Thornton, JJ., join.   While the abstract of this record does contain some testimony regarding the lease and payment of royalties, it should be noted that the record from the previous appeal of this case contains even more detailed testimony regarding the nature of the lease and the payment of royalties. There is also a copy of the lease agreement between Harold and Hogback Excavation. It is well settled that appeals will no longer be affirmed because of the insufficiency of the abstract without the appellant first having any opportunity to cure the deficiencies. In re: Modification of the Abstracting System —Amendments to Supreme Court Rules 2-3, 4-2, 4-3, and 4-4, 345 Ark.Appx. 626 (2001) (per curiam). Thus, pursuant to our new rule, I would give Harold fifteen days to supplement his abstract and addendum.