Court Opinion

ID: 7919353
Source: CourtListenerOpinion
Date Created: 2022-09-08 22:17:46.381012+00
Date Added: 2024-06-11T16:32:57.869889
License: Public Domain

Schroeder, J.,
dissenting: The question presented by this lawsuit is whether the plaintiffs (appellants), as the owners of an undivided interest in the minerals under a portion of the leased acreage, are entitled to share in the royalty oil produced from the leased acreage.
*647The oil and gas lease here in question contained the usual granting provisions and reserved the usual Mi of the production to the lessor as royalty. The lease dated June 18, 1956, was for a period of two years and as long thereafter as off or gas is produced. Production was obtained within the primary term of the lease on the quarter section which extended the lease on the whole quarter section.
The “leased premises” in the lease here under consideration clearly refer to the entire quarter section of land. To hold otherwise would fail to give credence to the granting clause which covers:
“. . . all that certain tract of land, together with any reversionary rights therein, situated in the County of Russell, State of Kansas, described as follows, to-wit:” [Here the legal description of the entire quarter section is given.] (Emphasis added.)
It would also fail to give credence to the “lesser interest” clause which reads:
“If said lessor owns a less interest in the above described land than the entire and undivided fee simple estate therein, then the royalties and rentals herein provided shall be paid the lessor only in the proportion which his interest bears to the whole and undivided fee. . . .” (Emphasis added.)
The lease also contained an “entirety” clause reading in part as follows:
“. . . If the leased premises are now or hereafter owned in severalty or in separate tracts, the premises, nevertheless, may be developed and operated as an entirety, and the royalties shall be paid to each separate owner in the proportion that the acreage owned by him bears to the entire leased area. . . .” (Emphasis added.)
The validity of an entirety clause in an oil and gas lease was upheld and its effect discussed in Hoffman v. Sohio Petroleum Co., 179 Kan. 84, 292 P. 2d 1107.
Paulina Mermis had previously executed the “Ratification of Mineral Deed” and thereby knew that her grantee, George W. Holland, or his successors, owned an interest in the west eighty. In negotiating the terms of the lease she was free to limit it to the east eighty if she chose to do so. On the contrary, she chose to include the entire quarter section. The third party defendants (all defendants other than Pan American) as her successors in interest are, of course, bound by such burdens as she chose to impose upon the lands. Clearly, she had the right to execute the lease with an *648“entirety” clause. Any holding to the contrary would deprive her of rights possessed by her at the time of negotiating the lease.
The court’s opinion overlooks the recitals in the “lesser interest” and “entirety” clauses.
Under the “lesser interest” clause Paulina Mermis agreed that if she owned a lesser interest than the “entire and undivided fee simple estate,” then her royalties are to be that portion which her interest bears to the “whole and undivided fee.”
She applies this language to “the above described land” and not to fust her interest therein.
The "entirety” clause recites:
“. . . If the leased premises are now or hereafter owned in severalty or in separate tracts, . . .” (Emphasis added.)
The word “now,” which the court overlooks, means the time when the lease was executed. When the lease was executed Paulina Mermis and her successors in interest owned 140 of the 160 mineral acres in the lease — 80 acres under the east eighty and 60 acres under the west eighty. Clearly then, under the “lesser interest” clause of the lease she was entitled to 140/ 160ths or Mas of the Mi reserved royalty.
The leased premises on the date of the lease were “owned in severalty” as to the west eighty, and “in separate tracts” as between the east and west eighties. The “entirety” clause directs that “the royalties shall be paid to each separate owner in the proportion that the acreage owned by him bears to the entire leased area.” Thus, under the lease the remaining Mi of the Mi reserved royalty belongs to the plaintiffs.
None of the authorities upon which the court relies in its opinion applies to the factual situation here presented. The land here under lease was not subdivided after the delivery of the oil and gas lease. (See, 3 Kuntz, Oil and Gas, § 45.4.)
Under the plain and unambiguous language of the lease here in question, the plaintiffs have established a right to their proportionate share of the royalty reserved.
In my opinion the “Ratification of Mineral Deed” executed by Paulina Mermis on the 13th day of June, 1936, in favor of and delivered to George W. Holland, his heirs and assigns, was a sufficient conveyance of the mineral interest standing alone to erne any defect occasioned by the failure to record the previous mineral conveyance. *649The second conveyance was properly recorded two days after its execution and delivery.
It is respectfully submitted the plaintiffs are entitled to their proportionate share of the lath reserved royalty under the lease here in question, and the trial court should be reversed.