Court Opinion

ID: 5020891
Source: CourtListenerOpinion
Date Created: 2021-10-01 04:10:40.541023+00
Date Added: 2024-06-11T08:17:45.772637
License: Public Domain

Appellant and appellees filed motions for rehearing, and in addition asked for a clarification of our opinion as to the status of ownership of lessor and assigns, and lessee and assigns, and and to the lands involved. We overrule all motions for rehearing, but will endeavor to clarify our opinion somewhat.
In order to determine the interest held by lessee and assigns and the interest held by lessor and assigns, it can best be done by reviewing the lease contract and determining therefrom just what was conveyed by lessors to lessees in said conveyance, and on the other hand what was the consideration, the agreements and covenants agreed to be paid, kept and performed by lessees.
There is no dispute as to what the lease contract conveyed without considering the typewritten rider, which has been spoken of by the parties and even by us in our opinion as an option clause, but which probably would be better spoken of as a contingency clause. Without such clause the contract simply conveyed to lessee a determinable fee in 7/8 of the minerals thus determinable because the lease provided that the grant was to be for a term of only twenty years, or as long thereafter as production of minerals was obtained, and this twenty year term was further limited by the provision that it would terminate in the absence of production unless drilling operations were carried on or rentals were paid.
The contingency clause which we have construed as being a part of the lease contract provides in effect that in the event the lease is kept alive by the payment of rentals, as distinguished from being kept alive by drilling operations or production of oil, then the 7/8 mineral interest becomes vested in the lessee in fee. This means a title forever, as distinguished from one that is limited in duration-in other words, lessee first had a determinable fee in the 7/8 of the minerals which ripened into a fee title to 7/8 of the mineral upon the happening of the contingency as provided in said rider.
In consideration for the conveyance of this estate it is recited in the lease contract that in addition to $10 cash on hand paid the lessee agreed to do certain other things, one of which was to
 "deliver to the credit of lessor free of cost and in the pipeline to which they may connect their well, an equal 1/8 part of all oil produced and saved from the leased premises, also 1/8 of the net proceeds of the potash or other minerals at the mine".
Everything else that lessee agreed to do or became obligated to do under the regular lease he is still bound by, even though lessee is the owner in fee of 7/8 of the minerals. We think that the provision.
 "and lessor or assigns will execute proper legal conveyance to the same without any further consideration on the part of lessee"
is of no import in construing said contingency clause, because the covenants and agreements provided to be performed by lessee is the primary consideration for the *Page 730 
grant, and such is not in any sense 'further consideration'.
The relationship of lessor and lessee is exactly the same as though there had never been any limitation put upon the original grant which made his title a determinable fee until the happening of the said contingency. Since lessee's interest must bear the entire cost of operations, it is called what is commonly known as an operating interest, and lessor's interest is what is commonly known as a royalty interest.
If any questions posed by either the appellant or the appellees in their motions for rehearing are not answered herein, the answer can be found by referring to the terms of the lease contract itself.