Court Opinion

ID: 9586032
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:06:29.049185+00
Date Added: 2024-06-11T17:24:19.032482
License: Public Domain

Given, Judge,
dissenting:
The controlling facts in this case are plain. They are not in dispute. Certain oil and gas leases, in the usual form, granting unto lessees the right to remove minerals, were executed and recorded in the proper office. By certain writings these leases were transferred to Marshall and Price, who transferred, assigned or subleased certain rights, including the right to remove minerals, from the lower strata, to the defendant, United Carbon Company. Prior to the transfer, assignment or sublease to the defendant, the original lessors and those having acquired title through the original lessees, entered into a written contract whereby a change in the quantum of royalty to be paid was effected. Other changes were also effected. The last mentioned contract was not recorded, in fact, was not in form a recordable instrument. The defendant was not a party to such agreement, had no notice thereof, or of any fact putting it on inquiry. It paid a substantial cash price for the property or rights acquired. Yet defendant is held liable for royalties for minerals produced in excess of royalties provided for in the recorded leases.
Insofar as pertinent, the applicable statutes, Code, 40-1-8, 9, provide: “Any contract in writing made in respect to real estate or goods * * * or any contract in writing made for the conveyance or sale of real estate, or any interest or term therein of more than five years, or any other interest or term * * * under which the whole or any part of the corpus of the estate may be taken, destroyed * * * shall, from the time it is duly admitted to record, *490be, as against creditors and purchasers, as valid as if the contract were a deed * * * [but] Every such contract * * * shall be void as to creditors and subsequent purchasers for valuable consideration without notice, until and except from the time that it is duly admitted to record * *
It is significant, I think, that the statutory provisions relate to “any contract” executed “in respect to real estate”, or any contract “under which the whole or any part of the corpus of the estate may be taken”. The application of the statute clearly is not made to depend on whether “any contract” amounts to an assignment, a sublease or a contract creating a “creditor beneficiary” relationship, but only whether it is made “in respect to real estate”, including any contract whereby “the whole or any part of the corpus may be taken”.
In my view, there is not the least doubt that the unrecorded contract, under which recovery is permitted, was one “in respect to real estate”. I need cite no authority for the proposition that minerals in place constitute real estate. Even if such view is not warranted, there can not be the least doubt that the contract was one “under which the whole or any part of the corpus of the estate” could be taken. Clearly, therefore, the unrecorded contract was one relating to a transaction within contemplation of the recording statutes. Just as clearly, the statutes declare such contract “shall be void” as to “subsequent purchasers for valuable consideration without notice”. It is on such a void contract that recovery is permitted. Does not such a holding render our recording statutes nugatory and useless as to such contracts? Can purchasers of oil and gas, or other leases, hereafter rely on our public records, or must they rely on open inquiry, for ascertainment of title of lessors, lessees, or those claiming under them?
Being of the views indicated, I respectfully dissent. I am authorized to say that Judge Riley concurs in the views expressed in this dissent.