Court Opinion

ID: 9559076
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:22:10.574184+00
Date Added: 2024-06-11T09:09:46.426680
License: Public Domain

SHINN, P. J.
I concur in the judgment.
The deed in question evidences a confusion of thought which I think has not been given sufficient attention. For this reason, and the additional reason that I wish to express my disapproval of the manner in which the interest of the grantee was indirectly enlarged I am expressing the following views.
Vasquez and wife had the following interests which were subject to sale and transfer; (1) a share of the so-called mineral rights consisting of underlying oil and gas, (2) a percentage of gross production, and, (3) a percentage of their landowner’s royalty. They sold numbers 1 and 2 and conveyed the interests in the following terms: “Grantors . . . hereby grant to H. C. Bailie, herein called Grantee, an undivided Three (3%) per cent of 100% of all petroleum, oil, *408gas and other hydrocarbons within or underlying, or which may be produced, saved and sold from that certain real property located in the County of Los Angeles, State of California, more particularly described as follows, to-wit:” The grant of number 1 conveyed 3 per cent of undeveloped oil and gas; number 2 conveyed 3 per cent of gross production of oil and gas. The instrument referred to the existing Ohio lease and made it clear that the 3 per cent would apply to any production or bonus paid under that lease. ■ Under the grant the interest of the grantee would never exceed 3 per cent of gross production, whether under the Ohio lease, or any future lease.
Vasquez and wife did not convey a percentage of their royalty. Had they done so the percentage of production going to the grantee would have increased or diminished proportionately as the royalty percentage might be increased or decreased by any new arrangement.
Twelve and one-half per cent, as called for in the Ohio lease, was a minimum royalty. Three per cent of 100 per cent was 6/25 of 12% per cent. In order to enlarge the interest of the grantee the following was written into the deed: ‘ ‘ This Grant Deed includes, but is not limited to 6/25ths of all bonuses, rents, royalties and other benefits which may accrue to the lessors under the terms of said Oil and Gas Lease or any extension or assignment thereof, or any other oil and gas lease that may be entered into with respect to said real property from and after the date hereof. ’ ’
This was correct with respect to the Ohio lease and did not enlarge the interest of the grantee thereunder. But by the addition of the words “any other oil and gas lease” the instrument was made to apply to an interest entirely separate from the ones conveyed (1 and 2), namely, a percentage of the landowner’s royalty. That there is an inconsistency between the granting clause and the later recital as to what the grant meant is clear. If it had been the intention of the parties that the grant should run to a percentage of landowner’s royalty that interest should have been added in the granting cause. As it is, the interest of the grantee has been enlarged from 3 per cent to 4.32 per cent of production by covert and indirect means. I so characterize them for the reason that the writing says, in effect, that the landowners had conveyed something they had not conveyed. In fact, I doubt that the contracting parties understood the import of the added words. Both plaintiffs and defendant evidently *409believed that the deed conveyed only 3 per cent of production. Defendant did not realize he could claim more until he had resorted to legal counsel and plaintiffs are not yet convinced.
If there is one type of conveyance which, above others, should be drawn with care it is one which evidences a sale of an oil and gas interest by a landowner to a speculator in oil royalites. Such questionable phraseology as we have here has been the cause of much misunderstanding and litigation, in which the landowner has usually been the loser and the speculator the gainer.
It would have taken but slight evidence to convince me that the questioned provisions of the deed resulted from mistake, but there is no evidence, other than the writing. Those provisions, however erroneous as a definition of the interest conveyed, may not be ignored. I realize that they contain a mere shadow of expression of intention to make them effective as a transfer of the greater interest, but I think they have to be given effect as a matter of contract.
A petition for a rehearing was denied January 21, 1954, and appellants’ petition for a hearing by the Supreme Court was denied February 24,1954. Schauer, J., was of the opinion that the petition should be granted.