Summary
In Texas Gulf Producing Co. v. Griffith, 218 Miss. 141, 65 So.2d 834 (1953), the Court held the conveyance one of royalty only, despite a typed-in intention clause reference to "twenty-four mineral acres".
Summary of this case from Knox v. Shell Western E P, Inc.Opinion
No. 38712.
June 8, 1953.
1. Clouds on title — parties — requisite defendants in cloud suit.
In suit to remove clouds claimant may proceed against any one of several who may be asserting an adverse claim, and in such case it is necessary to join as defendants only those parties who are asserting adverse claims or hold such record evidence of title as should be cancelled as clouds, and trial court in such suit is not without jurisdiction because of absence of necessary parties.
2. Minerals — production on drilling unit is production on leased lands in unit — extends terms of such leases.
For purpose of extending primary term of oil, gas and mineral lease, production from land within established drilling unit of which leased land forms a part, is deemed to be from leased land within the unit; in other words, production on the unit is the equivalent of production on the leased land.
3. Minerals — production on drilling unit — lease not extended as to leased lands outside unit.
Production from established drilling unit which incorporated only part of leased land did not extend primary term of oil, gas and mineral lease as to all of leased land whether within or without drilling unit, but continued in force beyond primary term of lease only that portion of the leased land incorporated into unit; as to remaining lands lease terminated at expiration of primary term thereof.
Headnotes as approved by Holmes, J.
ON SUGGESTION OF ERRORJuly 3, 1953 35 Adv. S. 15 65 So.2d 834
4. Clouds on title — complainant must show perfect title.
In suit to cancel prior oil, gas and mineral lease as cloud on complainants' asserted title to leasehold interest under subsequent lease executed to one of complainants and covering an undivided one-half interest in oil, gas and minerals in same land, complainants were required to show a perfect title in themselves.
5. Clouds on title — evidence necessary.
In present suit in order to show perfect title in themselves it was not only necessary for complainants to show termination of prior lease, but to further show that complainants' immediate grantors in complainants' lease had not divested themselves of leasing rights under prior instrument executed by grantors to third person.
6. Oil and gas — instrument conveying interest in — construed as a whole.
In determining whether such instrument conveying such interest in oil, gas and other minerals in lands in suit was a royalty conveyance or mineral deed the instrument would be construed as a whole and interest of parties gathered from plain and unambiguous language therein employed.
7. Deeds — construed as whole — without separating into formal parts.
A deed must be construed as a whole without separating it into its formal parts, and intent of parties thereto must primarily be gathered from a fair consideration of entire deed and language employed therein.
8. Minerals — oil and gas — instrument construed as royalty conveyance.
In present case where such instrument which was denominated as a "royalty deed," and which reserved in grantors exclusive right to lease lands for oil and gas purposes and reserved to grantors bonus money paid for future leases and delay rentals under oil and gas lease, which required grantors in granting future leases to reserve as royalty not less than one-eighth of oil and gas produced and saved, and which declared intention that grantee should be entitled to one-half of oil and gas run to credit of royalty interest reserved under and by virtue of oil or gas lease in force or subsequently granted, was a royalty conveyance and not a mineral deed and validly reserved in grantors the right to grant future leases; and where on showing made prior lease terminated as to 8 acres, the subsequent lease so executed by grantors to one of complainants is a valid lease as to said 8 acres.
Headnotes as approved by McGehee, C.J.
APPEAL from the chancery court of Jefferson Davis County; NEVILLE PATTERSON, Chancellor.
Bernard W. Chill, Bonner R. Landman and William H. Gordon, Jackson, for appellant.
I. The Court did not have jurisdiction to try this cause because of the absence of necessary parties who should have been named parties defendant in the trial court. Whelan, et al. v. Placid Oil Co., et al., 198 F.2d 39; Hunt v. McWilliams, 240 S.W.2d 865; Calcote v. Texas Pac. Coal Oil Co., 157 F.2d 216; Belt v. Texas Co., 175 S.W.2d 622; Rogers National Bank v. Pewitt, 231 S.W.2d 487; Veal v. Thomason, 138 Tex. 341, 159 S.W.2d 472; Keegan v. Humble Oil Ref. Co., 155 F.2d 971; Hudson v. Newell, 172 F.2d 848; Griffith v. Gulf Ref. Co., 60 So.2d 518; Jones, et al. v. N.O. N.E.R.R. Co., 59 So.2d 541; Foulke, et al. v. Schenewerk, et al., 197 F.2d 234; Griffith's Mississippi Chancery Practice, pp. 109, 111; Merrill Engineering Co. v. Capital National Bank, 5 So.2d 666; McIlvoy v. Alsop, 45 Miss. 372; Floreen v. Saucier, 27 So.2d 557; McPike v. Wells, 54 Miss. 136; Catlett v. Bacon, 33 Miss. 269; Phipps v. Tarpley, 24 Miss. 597; Robbins, et al. v. Berry, 47 So.2d 846; Hudson v. Newell, 174 F.2d 546.
II. The lease of 16 November, 1939, insofar as the interest of the mineral owners Longino and his assignees is concerned was with their actual approval unitized under authority granted by said mineral owners to the appellant. The purported reservation in the Magee-Longino mineral deed was void. The Magees were without authority to execute a valid oil and gas lease to appellees Griffith and Watson on 26 November, 1949. Therefore, appellant's lease as to said one-half mineral interest is in full force and effect and the purported lease of appellees Griffith and Watson was void ab initio.
1. The rules of real property apply to mineral and royalty interests.
A. In Mississippi minerals are capable of severed ownership and may be owned separate and apart from the surface. Moss v. Jourdan, 129 Miss. 598, 92 So. 698; Stern v. Great Southern Land Co., 148 Miss. 649, 114 So. 739; Stokely v. State, 149 Miss. 435, 115 So. 563; Liverpool and London and Globe Ins. Co. v. Delaney, 190 Miss. 404, 200 So. 440; Pace v. State, 191 Miss. 780, 4 So.2d 270; Merrill Engineering Co. v. Capital National Bank, 192 Miss. 378, 5 So.2d 666.
B. The validity of such grants or reservations of minerals is determined by the same rules of law as are applicable to conveyances of real estate. Foster v. Runk, 109 Pa. 291; Palmer v. Crews, 203 Miss. 806, 35 So.2d 430.
C. The words used in the granting clause define the "type" of interest conveyed. Anderson v. Butler, 203 Miss. 512, 35 So.2d 709.
2. The reservation in the Magee-Longino deed violates the rule against perpetuities or is a restraint on alienation and, therefore, void as against public policy. Univ. of Vt., et al. v. Ward, 104 Vt. 239, 158 A. 773; Queen City Park Ass'n v. Gale, (Vt.), 3 A.2d 529; 4 Thompson Real Property, 708, Sec. 2171; Boye v. Boye, 300 Ill. 508, 133 N.E. 382; Restatement of Property, Sec. 159(1); Hamilton v. City of Jackson, 157 Miss. 284, 127 So. 30; Persons v. Chambliss, Admr., 38 So. 286; Alexander v. Richardson, 106 Miss. 517, 64 So. 217; Dallapi v. Campbell, 114 P.2d 646; Sec. 838, Code 1942; In re Estate of Thomas E. Lilley, Deceased, (Penn.), 116 A. 392, 28 A.L.R. 366; Foulke, Perpetuities, p. 185, et seq.; Nodulty v. Girard, 45 Pa. 11; Gully v. Neville, 55 So. 289; Hudson v. Gray, 58 Miss. 882; Henry v. Henderson, 58 So. 354; Reddoch v. Williams, 92 So. 831; Gray, Perpetuities, Chap. 247; Lewis, Perpetuities, p. 657; Cody v. Staples, 80 Conn. 82, 67 A. 1; Quinlan v. Wickman, 233 Ill. 39, 84 N.E. 38; Moroney v. Haas, 277 Ill. 467; Slade v. Patten, 68 Me. 380; Graham v. Whitridge, 99 Md. 248, 66 L.R.A. 408; In re Jones Estate, 64 N.E.2d 604; Union Sulphur Co. v. Lognion, 26 So.2d 845; Humble Oil Ref. Co. v. Guilloy, 33 So.2d 845; 41 Am. Jur., Perpetuities, Sec. 12; Gambrill v. Gambrill, 122 Md. 563, 89 A. 1094; Fosdick v. Fosdick, (Mass.), 6 Allen 41; Lovering v. Worthington, 106 Mass. 86; First Universalist Society v. Boland, 155 Mass. 171, 15 L.R.A. 231, 29 N.E. 524; Gray v. Whitmore, 192 Mass. 367; Leonard v. Burr, 18 N.Y. 96; Hatch v. Hatch, 1 Ohio decs. 270; Smith v. Townsend, 32 Penn. 434; Marlborough v. Godolphin, 1 Eden 404, 28 Eng. Reprint 741; Church in Brattle Square v. Grant, 3 Gray (Mass.) 146, 63 Am. Dec. 725; Beall v. Wilson, 146 Ky. 646, 143 S.W. 55; Greenough v. Osgood, 235 Mass. 235, 126 N.E. 461; Johnson v. Webber, 65 Conn. 501, 33 A. 506; Farnam v. Farnam, 83 Conn. 369, 77 A. 70; Eaton v. Eaton, 88 Conn. 269, 91 A. 191; Robinson v. McDonald, 2 Ga. 116; Post v. Rohrbach, 142 Ill. 600, 32 N.E. 687; Howe v. Hodge, 152 Ill. 252, 38 N.E. 1083; Nevitt v. Woodburn, 190 Ill. 283, 60 N.E. 500; Chaplain v. Cheney, 191 Ill. 574, 61 N.E. 363; Outland v. Bowen, 115 Ind. 150, 17 N.E. 281; Herron v. Stanton, 128 N.E. 363; Armstrong v. Bell, 24 So.2d 10; Gaston v. Mitchell, 4 So.2d 892; 16 Am. Jur., Deeds, Sec. 178; California Jurisprudence, 251, Sec. 124; Towle v. Towle, 97 Me. 427; Johnson v. Lish, (Md.), 4 Harr. J. 441; Lovering v. Worthington, 162 Mass. 86; Bunning v. Hormas, 104 Neb. 383; Drummond v. Drummond, 26 N.J. Eq. 234; Patterson v. Ellis, 11 Wend. 259 (N.Y.); Miller v. Malcolm, 26 Wend. 229; Shepherd v. Shepherd, 19 S.C. Eq. 142; Saxton v. Weber, 83 Wis. 617, 20 L.R.A. 509, 53 N.W. 905; Harris v. McLaran, 30 Miss. 533; Caldwell v. Willis, 57 Miss. 555; Catherine H. Maddock, et al. v. Bettie H. Keeler, 296 Ky. 440, 177 S.W.2d 568, 162 A.L.R. 578; Restatement, Property, Vol. 4, Secs. 393, 394; Stone v. Easter, (Okla.), 219 P. 655; Livingston v. Stickles, 7 N.Y. 253; DePeyster v. Michael, 6 N.Y. 467, 57 Am. Dec. 470; Phillips v. Chambers, 174 Okla. 407, 51 P.2d 303; 41 Am. Jur. 12; Andrews v. Lincoln, 95 Me. 541, 50 A. 898; Springfield Safe Dep. Trust Co. v. Ireland, 268 Mass. 62, 167 N.E. 261, 64 A.L.R. 1071; Gerdner v. City National Bank Trust Co., 267 Mich. 270, 255 N.W. 587; Central Hanover Bank Trust Co. v. Helme, 121 N.J. Eq. 406, 190 A. 53; McLaughlin v. Wingling, 90 Okla. 159, 13 P. 552; Closset v. Burchaell, (Ore.), 230 P. 554; Friede's Estate, 313 Penn. 328, 170 A. 123, 91 A.L.R. 766; Lockhart's Estate, 306 Penn. 394, 159 A. 874; Boston v. Thaw, 246 Penn. 348, 92 A. 312; Brookover v. Grimm, 118 W. Va. 227, 190 S.E. 697.
3. The reservation is void because of "repugnancy" to the grant. Associated Oil Co., et al. v. Hart, et al., 277 S.W. 1043; 18 C.J. 267, Secs. 224, 225, 337; Schoenberger v. Lyon, 7 W. S. 184; Pynchon v. Stearns, 11 Metz. (Mass.), 312, 45 Am. Dec. 210; Cutler v. Tufts, 3 Pick. (Mass.), 272; Thompson, Real Property, 376, Sec. 3278; Horticultural Devel. Co. v. Lark, 139 So. 229; Barksdale v. Elam, 30 Miss. 694; American Oil Co. v. Williamson, 154 Miss. 441, 122 So. 488.
4. The reservation at most amounts to only the reservation of a "naked" power and therefore, (a) the power reserved is void, or, (b) is not subject to exclusive exercise by the grantor donee. Dallapi v. Campbell, 114 P.2d 646; Thompson, Real Property, Sec. 2281.
III. The lease of 16 November, 1939, under which appellant claims was continued in full force and effect beyond its primary term by the production of oil and gas within the terms of said lease as defined by the law applicable thereto.
1. It is the declared public policy of the State of Mississippi to conserve the natural resources of oil and gas, to prevent waste and to protect the correlative rights of owners in a common source or pool of oil and gas to the end that each such owner in a common pool or source of supply of oil and gas may obtain his just and equitable share of production therefrom, and the State may exercise its police power to that end. Millette v. Phillips Pet. Co., 48 So.2d 347; The Conservation Law of 1932, and the amendments thereto. See: Chap. 117, Laws 1932 (Secs. 5, 7, 8, 46), Secs. 6136, 6138, 6139, 6178, Code 1942; Chap. 305, Laws 1936, Sec. 6140, Code 1942; Ohio Oil Co. v. Indiana, 177 U.S. 190, 20 S.Ct. 576; Champlain Ref. Co. v. Corporation Comm. of State of Oklahoma, 286 U.S. 210, 52 S.Ct. 559; Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 31 S.Ct. 337; Walls v. Midland Carbon Co., 254 U.S. 300, 41 S.Ct. 118; Bandini Pet. Co. v. Superior Court, 284 U.S. 8, 52 S.Ct. 103; State v. J.J. Newman Lbr. Co., 102 Miss. 802, 59 So. 923, 60 So. 215; Article IV, Sec. 33, Const. 1890; Tatum, et al. v. Wheeless, et al., 178 So. 95; Superior Oil Co. v. Foote, et al., 59 So.2d 85; Bernstein v. Bush, 177 P.2d 913; Patterson v. Stanolind Oil Gas Co., 77 P.2d 83, 59 S.Ct. 259; Croxton v. State, 97 P.2d 11; Marrs v. City of Oxford, 24 F.2d 541; Railroad Comm. of Texas v. Rowan Nichols Oil Co., 60 S.Ct. 1021, 60 S.Ct. 343; Bennett v. Corporation Comm., 142 P.2d 810, 815; Chap. 117, Sec. 5, Laws 1932 (Sec. 6136, Code 1942); Chap. 256, Sec. 7(f), Laws 1948 (Secs. 6132-16, Code 1942); Chap. 256, Sec. 12, Laws 1948 (Secs. 6132-24, 6132-25, 6132-26, 6132-27, Code 1942); Hunter Co. v. McHugh, 11 So.2d 495, 501; Palmer Oil Corp. v. Phillips Pet. Co., 231 P.2d 997; Railroad Comm. v. Humble, 101 S.W.2d 614, 623; Shell Pet. Co. v. Railroad Comm., 164 S.W.2d 773; Sun Oil Co. v. Potter, 182 S.W.2d 923, 926; Rabbit Creek Oil Co. v. Shell, 66 S.W.2d 737; Placid Oil Co. v. North Central Texas Oil Co., 19 So.2d 336; Ohio Oil Co. v. Kennedy, 28 So. 504; Sun Oil Co. v. Stout, 46 So.2d 151; Anderson-Kerr v. Van Meter, 19 F.2d 1068, 1074; Sun Oil Co. v. Gillespie, 65 S.W.2d 652; Brown v. Humble, 83 S.W.2d 935.
2. Units 14 and 41 were legally and properly organized and established as a matter of law. Placid Oil Co. v. North Central Texas Oil Co., 19 So.2d 619; Grelling, et al. v. Allen, et ux., 218 S.W.2d 896; Griffith v. Gulf Ref. Co., 60 So.2d 518, 521; Knight v. Chicago Corp., 183 S.W.2d 666, 188 S.W.2d 564; Croaton v. State, 97 P.2d 11; Palmer Oil Corp. v. Phillips Pet. Co., (Okla.), 231 P.2d 997, 96 L.Ed. 680; Tidewater Associated Oil Co. v. Stott, 159 F.2d 174; Patterson v. Stanolind Oil Gas Co., 77 P.2d 83, 59 S.Ct. 259; Marrs v. City of Oxford, 24 F.2d 541, 32 F.2d 134; Railroad Comm. of Texas v. Rowan Nichols Oil Co., 60 S.Ct. 1021, 60 S.Ct. 343; Bennett v. Corporation Comm., 142 P.2d 810; Superior Oil Co. v. Foote, 59 So.2d 85; Superior Oil Co. v. Berry, 59 So.2d 689.
3. The lease of 16 November, 1939, has been continued in full force and effect beyond its primary term. Hunter Co. v. Shell Oil Co., 31 So.2d 10; LeBlanc v. Danciger Oil Ref. Co., 49 So.2d 855; Hardy v. Union Producing Co., 20 So.2d 734; Crichton v. Lee, 25 So.2d 229; Superior Oil Co. v. Foote, (Miss.), 59 So.2d 85, 63 So.2d 137; Superior Oil Co. v. Berry, (Miss.), 59 So.2d 689, 63 So.2d 115; Griffith v. Gulf Ref. Co., (Miss.), 60 So.2d 518; Ohio Oil Co. v. Indiana, 20 S.Ct. 576; Champlain Ref. Co. v. Corporation Comm. of Oklahoma, 52 S.Ct. 559; West v. Kansas Natural Gas Co., 31 S.Ct. 337; Placid Oil Co. v. North Central Texas Oil Co., 19 So.2d 616; Walls v. Midland Carbon Co., 41 S.Ct. 118; Bandini Pet. Co. v. Superior Court, 52 S.Ct. 103; State v. J.J. Newman Lbr. Co., 59 So. 923, 60 So. 215; Tatum v. Wheeler, 178 So. 95; Compensation Comm. v. Barlow, 2 So.2d 544; Millette v. Phillips Pet. Co., 48 So.2d 344; Cities Service Gas v. Peerless Oil Gas Co., 220 P.2d 279, 71 S.Ct. 215; Burford v. Sun Oil Co., 63 S.Ct. 1098; Railroad Comm. v. Rowan Nichols Oil Co., 60 S.Ct. 1021, 61 S.Ct. 343; Palmer Oil Corp. v. Phillips Pet. Co., 231 P.2d 997, 96 L.Ed. 680; Patterson v. Stanolind Oil Gas Co., 77 P.2d 83, 59 S. Ct. 259; Croxton v. State, 97 P.2d 11; Marrs v. City of Oxford, 24 F.2d 541, 32 F.2d 134; Hood v. Southern Production Co., 19 So.2d 336; Placid Oil Co. v. North Central Texas Oil Co., 19 So.2d 616; Alston v. Southern Production Co., 21 So.2d 383; Ohio Oil Co. v. Kennedy, 28 So.2d 10; Everett v. Phillips Pet. Co., 51 So.2d 87; Brown v. Humble Oil Ref. Co., 83 S.W. 935, 87 S.W.2d 1069; Corzelius v. Harrell, 179 S.W.2d 419, 186 S.W.2d 961; Lindsley v. Natural Carbonic Gas Co., 31 S.Ct. 337; Hunter Co. v. Shell Oil Co., 31 So.2d 855.
Robert G. Livingston, Prentiss, and Hall Callender, Columbia, for appellees, B.C. Griffith and Roy E. Watson.
I. There was no lack of jurisdiction in the trial court because of any absence of parties. Griffith's Mississippi Chancery Practice, 2nd Ed., Sec. 113, p. 111, Sec. 116, p. 113; Jones, et al. v. New Orleans N.E.R. Co., et al., 59 So.2d 541; Hudson v. Newell, 174 F.2d 546.
II. The conveyance executed by Estella Milloy Magee and husband to Charles F. Longino was a royalty deed; and Longino and his assigns were without power or authority to make a lease on their royalty interest, or to amend the existing lease, and the purported lease amendment executed by them was and is null and void. Bennett v. Robinson, 25 So.2d 641; Union Sulphur Co., Inc. v. Lognion, 26 So.2d 845; Humble Oil Ref. Co. v. Guillory, 33 So.2d 183; Palmer, et al. v. Crews, 203 Miss. 806, 35 So.2d 430, 4 A.L.R. 2d 483; Bailey v. Federal Land Bank of New Orleans, 43 So.2d 375; Armstrong v. Bell, 199 Miss. 29, 24 So.2d 10; Koenig v. Calcote, 199 Miss. 435, 25 So.2d 763; Summers' Oil and Gas, Perm. Ed., Vol. 3, p. 348; Glassmire, Oil Gas Leases Royalties, 2nd Ed., p. 63; Sumter Lbr. Co., Inc. v. Skipper, 183 Miss. 595, 184 So. 296; 31A Texas Jurisprudence 827; Watkins v. Slaughter, 189 S.W.2d 699; Klein v. Humble Oil Ref. Co., 67 S.W.2d 911; Maxwell v. Hunter, 116 F.2d 260; Gill v. Bennett, 59 S.W.2d 473; 16 Am. Jur., Sec. 174, Deeds, p. 536, Sec. 237, p. 570, Sec. 303, p. 610; Cummings v. Midstates Oil Corp., 193 Miss. 675, 9 So.2d 648; Richardson v. Moore, 198 Miss. 741, 22 So.2d 494; Martel v. A. Veeder Co., Inc., et al., 199 La. 423, 6 So.2d 335; Stern v. Great Southern Land Co., 148 Miss. 649, 114 So. 739; Pace v. State, 191 Miss. 780, 4 So.2d 270; 41 Am. Jur. 50, 77; Ann. Cas. 1912d 886; Lloyd's Estate v. Mullen Tractor Equipment Co., 4 So.2d 282; Humble Oil Ref. Co. v. Guillory, 212 La. 646, 33 So.2d 182; Martin v. Adams, 62 So.2d 328; 12 Am. Jur. 739; State ex rel. Brown, Land Comm'r v. Poplarville Sawmill Co., 119 Miss. 432, 81 So. 124; Universal Film Exchanges, Inc. v. West, 163 Miss. 272, 141 So. 293.
III. The Estella Milloy Magee lease of November 16, 1939, expired of its own terms ipso facto on November 16, 1939. Glassmire, Oil and Gas Leases and Royalties, 2nd Ed., Sec. 54; 39 C.J.S. 894; Merrill Engineering Co. v. Capital National Bank, 192 Miss. 378, 5 So.2d 666; Chap. 117, Laws 1932; Chap. 305, Laws 1936; Moore v. Grillis, 205 Miss. 865, 39 So.2d 505; Sinquefield v. Valentine, 159 Miss. 144, 132 So. 81; Meyer v. Nebraska, 262 U.S. 390, 43 S.Ct. 635, 67 L.Ed. 1042, 29 A.L.R. 1446; Chism v. Hollis, 152 Miss. 772, 118 So. 713; Bradley v. Howell, 161 Miss. 346, 134 So. 843; Koenig v. Calcote, 199 Miss. 435, 26 So.2d 763; Miss. Law Journal, Marcy, 1947, May, 1948; Parten v. Webb, 197 La. 197, 1 So.2d 76; 31A Texas Jur., Sec. 158, p. 276, Sec. 161, p. 285, Sec. 162; Woodruff v. Brady, 72 P.2d 709; Anthis v. Sullivan Oil Gas Co., 83 Okla. 86, 203 P. 187; Dygus v. Rogers, 181 P.2d 253; Gypsy Oil Co. v. Marsch, 121 Okla. 135, 248 P. 329; Baldwin v. Blue Stem Oil Co., 106 Kan. 848, 189 P. 920; Kahm v. Ark. River Gas Co., 253 P. 563; Macco Const. Co. v. Fickert, 172 P.2d 951; Moon v. Marker, 26 Cal.App.2d 33, 78 P.2d 460; Caswell v. Gardner, 12 Cal.App.2d 597, 55 P.2d 1222; Gas Ridge, Inc. v. Suburban Agricultural Properties, Inc., 150 F.2d 363; Berline v. Waldschmidt, 156 P.2d 865.
IV. Involuntary pooling of the Magee land did not occur by virtue of the adoption of spacing rules and regulations. Chap. 117, Secs. 5, 40, Laws 1932; Chap. 305, Laws 1936; Chap. 256, Laws 1948, Sec. 19(a); 12 Am. Jur. 267; 42 Am. Jur. 470, Sec. 135, Public Administrative Law; Dailey v. Railroad Comm., 133 S.W.2d 219; Pickens v. Ryan Consolidated Pet. Corp., 219 S.W.2d 150; Mueller v. Sutherland, 179 S.W.2d 801; Dobson v. Ark. Oil Gas Comm., 235 S.W.2d 33; Republic Natural Gas Co. v. Baker, 197 F.2d 647; Placid Oil Co. v. North Central Texas Oil Co., 19 So.2d 616; Crichton v. Lee, 209 La. 561, 25 So.2d 299; Arkansas La. Gas Co. v. Southwest Natural Production Co., 60 So.2d 9.
Garner W. Green and Garner W. Green, Jr., Jackson, for appellee, Mrs. Geraldine B. Martin.
Discussed the following points:
I. Alleged custom not permitted to supersede express contract.
II. No inequitable conduct upon the part of appellee whereon appellant may make complaint.
III. No extension of the primary term of the thrift lease under (a) statutes of the State of Mississippi; and (b) in virtue of orders made by the oil and gas board.
IV. Appellee's mineral deed effective to vest rights in fee after November 16, 1939, and no power in appellant by contract to pool.
V. Unitization of Unit 41 and Unit 14 ineffective to vest any right in appellant.
And cited the following authorities under the foregoing points:
Anderson-Kerr v. Van Meter, 19 P.2d 1068; Arizona Grocery Co. v. Atchison, T. S.F.R. Co., 284 U.S. 370, 76 L.Ed. 348; Baldwin v. Blue Stem Oil Co., 106 Kan. 848, 189 P. 920; Bandini Pet. Co. v. Superior Court, 284 U.S. 8, 52 S.Ct. 103; Bank of Forest v. Capital Nat. Bank, 173 Miss. 99, 160 So. 578; Bank of Philadelphia v. Posey, 130 Miss. 530, 92 So. 840; Barney v. Baltimore, 6 Wall. 280, 18 L.Ed. 825; Belhaven College v. Downing, 62 So.2d 372; Belt v. Texas Co., 175 S.W.2d 622; Bernstein v. Bush, 29 Cal.2d 773, 177 P.2d 915; Berry v. Tidewater Asso. Oil Co., 188 F.2d 820; Bishopric v. Jackson, 196 Miss. 720, 16 So.2d 776; Botany Worsted Mills v. United States, 278 U.S. 282, 73 L.Ed. 378; Bradley v. Howell, 161 Miss. 346, 133 So. 660; Bradstreet Co. v. City, 81 Miss. 233, 32 So. 999; Briscoe v. Buzbee, 163 Miss. 574, 143 So. 887; Broom v. Board, 171 Miss. 586, 158 So. 344; Brown v. Humble, 83 S.W.2d 935; Calcote v. T-P Coal Oil Co., 157 F.2d 216; California Co. v. State Oil Gas Board, 200 Miss. 824, 27 So.2d 542; Catlett v. Bacon, 33 Miss. 269; Champlain Ref. Co. v. Com., 286 U.S. 210, 52 S.Ct. 599; Clay County v. Chickasaw County, 64 Miss. 542; Cohen v. Calhoun, 168 Miss. 34, 150 So. 198; Continental Casualty Co. v. United States, 314 U.S. 527, 86 L.Ed. 426; Crichton v. Lee, 209 La. 561, 25 So.2d 229; Croxton v. State, 97 P.2d 11; Cummings v. Midstates Oil Corp., 193 Miss. 645, 9 So.2d 648; Davidson v. Meridian, 211 Miss. 683, 53 So.2d 48; DeKorwin v. First Natl. Bank, 156 F.2d 858; De La Rama S.S. Co. v. United States, 97 L.Ed. 308; Deposit Guaranty Bank T. Co. v. Williams, 193 Miss. 432, 9 So.2d 638; Donald v. J. White Lbr. Co., 68 F.2d 441; Dulion v. Folkes, 153 Miss. 91, 120 So. 437; Earp v. Mid-Continent Pet. Corp., 27 P.2d 855, 91 A.L.R. 188; Ewen Corp. v. Deposit Guar. Bank Trust Co., (Miss.), 62 So.2d 572, 575; Fireman's Fund Ins. Co. v. Williams, 170 Miss. 199, 154 So. 545; Floreen v. Saucier, 27 So.2d 557; Fouke v. Schenewerk, 197 F.2d 234; French v. State, 52 Miss. 763; Green v. Superior Oil Co., (Miss.), 59 So.2d 100; Grelling v. Allen, 218 S.W.2d 896; Griffith v. Gulf Ref. Co., (Miss.), 60 So.2d 518; Grimes v. LaGloria Corp., Tex. Civ. App., 251 S.W.2d 755; Gulf Ref. Co. v. Harrison, 201 Miss. 298, 30 So.2d 44; Hassie Hunt Trust v. Proctor, (Miss.), 60 So.2d 551; Henry v. Board, 203 Miss. 780, 34 So.2d 232; Home Bldg. L. Ass'n v. Blaisdell, 290 U.S. 398, 78 L.Ed. 413; Hopkins v. Hopkins, 174 Miss. 642, 165 So. 414; Hudson v. Gulf Ref. Co., 202 Miss. 331, 30 So.2d 66; Hudson v. Newell, 172 F.2d 849, 174 F.2d 546; Hughes v. Franklin, 201 Miss. 215, 29 So.2d 79; Humble Oil Ref. Co. v. Welborn, (Miss.), 62 So.2d 211; Hunt v. McWilliams, 240 S.W.2d 865; Jones v. N.O. N.E.R. Co., (Miss.), 59 So.2d 541; Kalmia Realty Ins. Co. v. United States, 181 F.2d 598; Keegan v. Humble Oil Ref. Co., 155 F.2d 971; Knight v. Chicago Corp., 183 S.W.2d 666; Lamar Life Ins. Co. v. Billups, 175 Miss. 771, 169 So. 32; Latta v. Kilbourn, 150 U.S. 524, 37 L.Ed. 1169; Lee v. Newman, 55 Miss. 365; Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 31 S.Ct. 337; McCubbins v. Morgan, 199 Miss. 153, 23 So.2d 926; McFadden Oates v. Ray, 184 Miss. 352, 185 So. 245; McIlvoy v. Alsop, 45 Miss. 372; Magnolia Lbr. Corp. v. Czerwiec Lbr. Co., 207 Miss. 738, 43 So.2d 204; Marrs v. City of Oxford, (Kan.), 24 F.2d 541; Martin v. Board, 181 Miss. 363, 178 So. 315; Medallion Oil Co. v. Hinckley, 92 F.2d 155; Meridian Star v. Kay, 211 Miss. 536, 52 So.2d 35; Merrill Eng. Co. v. Capital National Bank, 192 Miss. 378, 5 So.2d 666; Millette v. Phillips Pet. Co., 48 So.2d 347; Miss. B. L. Ass'n v. McElveen, 100 Miss. 16, 56 So. 187; Morgan v. United States, 304 U.S. 1, 82 L.Ed. 1129; Mueller v. Sutherland, 179 S.W.2d 801; Musgrove v. Vicksburg N.R. Co., 50 Miss. 677; Natchez Ins. Co. v. Stanton, 2 Sm. M. (10 Miss.) 340, 41 Am. Dec. 592; National Labor Relations Bd. v. Seven-Up Bottling Co., 97 L.Ed. 234; Ohio Oil Co. v. Indiana, 177 U.S. 190, 20 S.Ct. 576; Ohio Oil Co. v. Kennedy, 29 So.2d 504; Orrell v. Bay Mfg. Co., 83 Miss. 800, 36 So. 561; Paepcke-Leicht Lbr. Co. v. Savage, 137 Miss. 11, 101 So. 709; Palmer Oil Corp. v. Amerado Pet. Corp., 343 U.S. 390, 96 L.Ed. 1022; Palmer Oil Corp. v. Phillips Pet. Co., 231 P.2d 997; Pate Lbr. Co. v. Weathers, 167 Miss. 228, 146 So. 433; Patterson v. Stanolind Oil Gas Co., 77 P.2d 83; Phipps v. Tarpley, 24 Miss. 597; Placid Oil Co. v. North Central Texas Oil Co., 206 La. 693, 19 So.2d 336; Postal Tel. Cable Co. v. Willis, 93 Miss. 540, 47 So. 380; Pratt v. Shell Pet. Co., 100 F.2d 833; Publ. Serv. Comm. v. Wycoff Co., 97 L.Ed. 176; Rabbit Creek Oil Co. v. Shell, 66 S.W.2d 737; Railroad v. Weiner, 49 Miss. 726; Railroad Comm. v. Humble, 101 S.W.2d 614; Ramsey v. Brown, 77 Miss. 124, 25 So. 151; Republic Nat. Gas v. Baker, 197 F.2d 647; Republic Nat. Gas v. Oklahoma, 334 U.S. 62, 92 L.Ed. 1212; Rice v. McMullen, 207 Miss. 706, 43 So.2d 195; Richter v. Vicksburg Candy Co., 136 Miss. 563, 101 So. 294; Robbins v. Berry, 47 So.2d 346; Rogers Natl. Bank v. Pewitt, 231 S.W.2d 487; Rosenblatt v. Escher, 184 Miss. 274, 185 So. 551; Sac County v. Cromwell, 96 U.S. 51, 24 L.Ed. 681; Seeley v. Cornell, 74 F.2d 353; Shackleford v. NOJ GNR Co., 37 Miss. 202; Shell Pet. Co. v. Railroad Comm., 164 S.W.2d 773; Shields v. Barrow, 17 How. 130, 15 L.Ed. 158; Sivley v. Summers, 57 Miss. 712; Smith v. Smith, 211 Miss. 481, 52 So.2d 1; Standard Oil Co. v. State, 107 Miss. 377, 65 So. 468; Standard Oil Co. v. United States, 337 U.S. 293, 93 L.Ed. 1371, 164 Fed. 376; Standard Oil Co. of N.J. v. United States, 221 U.S. 1, 55 L.Ed. 619; State v. J.J. Newman Lbr. Co., 102 Miss. 802, 59 So. 923; State v. Wheatley, 113 Miss. 555, 74 So. 427; Stone v. Independent Linen, 212 Miss. 580, 55 So.2d 165; Stone v. Mississippi, 101 U.S. 814, 25 L.Ed. 1079; Strickland v. Humble Oil Ref. Co., 194 Miss. 194, 11 So.2d 820; Sumter Lbr. Co. v. Skipper, 183 Miss. 595, 184 So. 296; Sun Oil Co. v. Gillespie, 65 S.W.2d 652; Sun Oil Co. v. Potter, 182 S.W.2d 923; Sun Oil Co. v. Stout, (La.), 46 So.2d 151; Superior Oil Co. v. Beery, (Miss.), 59 So.2d 689; Superior Oil Co. v. Foote, (Miss.), 59 So.2d 85; Superior Oil Co. v. Griffith, (Miss.), 59 So.2d 104, 60 So.2d 505; Superior Oil Co. v. Morgan, (Miss.), 59 So.2d 103; Tatum v. Wheeless, 180 Miss. 800, 178 So. 95; Thompson v. Consolidated Gas Utilities Corp.,
300 U.S. 55, 81 L.Ed. 510; Tidewater Associated Oil Co. v. Stott, 159 F.2d 174; Trager v. Jenkins, 75 Miss. 676, 23 So. 424; Tyler, R.B., Co. v. Laurel Equip. Co., 187 Miss. 590, 192 So. 573; United States v. Cotton Valley Operators Committee, 77 Fed. 409, 9 F.R.D. 719; United States v. Grace Evangelical Church, 132 F.2d 460; United States v. Ohio Oil Co., 234 U.S. 548, 58 L.Ed. 1459; United States v. Porhownik, 182 F.2d 829; Veal v. Thomason, 138 Tex. 341, 159 S.W.2d 472; Veix v. Sixth Ward Bldg. L. Ass'n, 310 U.S. 32, 84 L.Ed. 1661; Vicksburg v. Ins. Co., 72 Miss. 70; Wade v. Woodward, 166 Miss. 406, 145 So. 737; Wagley v. Colonial Baking Co., 208 Miss. 815, 45 So.2d 717; Walls v. Midland Carbon Co., 254 U.S. 300, 41 S.Ct. 118; Waterman v. Canal-Louisiana Bank Co., 215 U.S. 33, 54 L.Ed. 80; Webb v. Jackson, 174 Miss. 808, 165 So. 809; Whelan v. Placid Oil Co., 198 F.2d 39; White v. Hunt, 193 Miss. 742, 10 So.2d 539; Young v. Weaver, 202 Miss. 291, 32 So.2d 202, 174 A.L.R. 983; 12 Am. Jur., Contracts, Sec. 249, Constitutional Law, Sec. 421; 55 Am. Jur., Usages Customs, Sec. 31; Annotation, The Doctrine of Primary Administrative Jurisdiction, 96 L.Ed. 585, 94 L.Ed. 806; Broom's Legal Maxims, pp. 539, 689; 62 C.J. 422; 66 C.J. 381; 15 C.J.S. 641; 16 C.J.S., Constitutional Law, Sec. 281; 17 C.J.S., Contracts, Sec. 325; 25 C.J.S., Customs and Usages, Sec. 30; Conservation of Oil Gas, A Legal History, 1948, Edited by Blakely M. Murphy, Section of Mineral Law, A.B.A.; Griffith's Miss. Chancery Practice, 2nd Ed., Secs. 109, 382, 506; Hardwicke, Antitrust Laws, et al. v. Unit Operation of Oil Gas Pools, 1948; Secs. 1457, 1088, 1988, Code 1942; Secs. 1, 2, 178, 198, Miss. Const. 1890; Chap. 117, Sec. 40, Laws 1932; Chap. 305, Laws 1936; 1 Summers Oil Gas, Secs. 38, 104, 1952 Supp., Secs. 83.11, 104, 104.1; 7 Summers Oil Gas, Sec. 1234, 1952 Supp.; Virgil, The Aeneid, Book IV, Line 337, p. 145.
ON SUGGESTION OF ERRORBrief for appellant.
I. When a portion of the Magee-Thrift lease of 16 November, 1939, was incorporated into Unit 14, and said unit became a producing unit, then said production fixed the term and preserved and continued the determinable fee in the lessee and his assigns and the well so thus drilled on the Unit and the continuous production from the Unit which embraced a portion of the Magee-Thrift lease, carried and held the entire lease past the primary term, not only as to said NE 1/4 S.E. 1/4, Section 33, Township 9 North, Range 19 West, but also as to the South 8 acres of that certain 16 acres in the East side of the SE 1/4 NW 1/4, Section 3, Township 8 North, Range 19 West. Cook v. Farley, 195 Miss. 638, 15 So.2d 352; Wight v. Ingram Day Lbr. Co., 195 Miss. 823, 17 So.2d 196; Stern v. Great Southern Land Co., 148 Miss. 649, 114 So. 739; 19 Miss. Law Journal 294; Stokely v. State, 149 Miss. 435, 115 So. 563; Stephens County v. Mid Kansas Oil Gas Co., 113 Tex. 160, 254 S.W. 290, 29 A.L.R. 566; 31A Texas Jur., 197, Sec. 120; 18 Miss. Law Journal 243; 13 Miss. Law Journal 427; Lloyd's Estate v. Mullin Tractor Equipment Co., 192 Miss. 62, 4 So.2d 482; Koenig v. Calcote, 199 Miss. 435, 25 So.2d 763; Calcote v. Texas Pacific Coal Oil Co., 157 F.2d 216; Cummings v. Mid-States Oil Corp., 193 Miss. 675, 9 So.2d 648; Grissom v. Anderson, 125 Tex. 626, 79 S.W.2d 619; Hager v. Stakes, 116 Tex. 453, 294 S.W. 835; Bell v. Miss. Orphans Home, et al., 192 Miss. 205, 5 So.2d 214; Restatement of the Laws, Real Property, Sec. 44, pp. 121-122; Cosden Oil Co. v. Scarborough, 55 F.2d 634; 2 Summers Oil and Gas, Sec. 297, p. 132, 1952 Pocket Parts Sec. 470, pp. 30-31; Superior Oil Co. v. Foote, (Miss.), 59 So.2d 85; Sanders v. Flowers, 218 La. 472, 49 So.2d 858; Everette v. Phillips Pet. Co., 218 La. 835, 51 So.2d 87; Hunter Co. v. Shell Oil Co., 211 La. 893, 31 So.2d 10; Hardy v. Union Producing Co., 207 La. 137; Crichton v. Lee, 209 La. 561, 25 So.2d 229; Berry v. Tidewater Associated Oil Co., et al., 188 F.2d 820; Pearson v. Back, 120 S.W.2d 1075; Sinclair Prairie Oil Co. v. Campbell, 164 F.2d 907; Gypsy Oil Co. v. Cover, 189 P. 540; Smith v. Gypsy Oil Co., 265 P. 647; State ex rel. Shell v. Worden, 103 P.2d 124; South Penn. Oil Co. v. Snodgrass, 76 S.E. 961; Cadillac Oil Co. v. Harrison, 244 S.W. 669; Wilson v. Purnell, 250 S.W. 850; Cowman v. Phillips Pet. Co., 51 P.2d 988; Wilson v. Texas Co., 76 P.2d 779; Thuss, Texas Oil Gas, (2nd Ed.), Sec. 74, p. 102; 3 Summers Oil and Gas, Sec. 512; Glassmire, Oil and Gas Leases and Royalties (2nd Ed.), Sec. 86; Walker, Mimeograph Text on Oil and Gas, p. 705; LeBlanc v. Danciger Oil Ref. Co., 218 La. 463, 49 So.2d 855; Gray v. Cameron, 218 Ark. 142, 234 S.W.2d 769; Smith v. Carter Oil Co., 104 F. Supp. 463; 1 Oil and Gas Reporter No. 3, p. 1712, No. 4, p. 2480; Scott, et al. v. Pure Oil Co., et al., 194 F.2d 393; Southland Royalty Co. v. Humble Oil Ref. Co., 249 S.W.2d 914; Sinclair Prairie Oil Co. v. Campbell, et ux., 164 F.2d 907.
II. It is necessary for this Court to construe the instrument executed to Charles F. Longino by Estella Magee and her husband, Houston Magee, because the deed being a mineral deed would vest the reversionary leasing rights in Charles F. Longino and his assigns who by their actions in accepting royalties from Texas Gulf, appellant, have recognized appellant's leasehold rights to an undivided one-half interest in said property and are estopped by the record in this appeal, and by their actions, from denying the same. Dallapi v. Campbell, 114 P.2d 646; Summers, Oil and Gas Law, Sec. 470, p. 30 (1952 Pocket Parts); Eagle Oil Co. v. Sinclair Prairie Oil Co., 105 F.2d 710; Prairie Oil Co. v. Carleton, 91 Cal.App.2d 555, 205 P.2d 81; Koenig v. Calcote, 199 Miss. 435, 25 So.2d 733.
The lease of 16 November, 1939, insofar as the interest of the mineral owners Longino and his assignees is concerned was with their actual approval unitized under authority granted by said mineral owners to the appellant. The purported reservation in the Magee-Longino mineral deed was void. The Magees were without authority to execute a valid oil and gas lease to appellees Griffith and Watson on 26 November, 1949. Therefore, appellant's lease as to said one-half mineral interest is in full force and effect and the purported lease of appellees Griffith and Watson was void ab initio.
1. The rules of real property apply to mineral and royalty interests.
A. In Mississippi minerals are capable of severed ownership and may be owned separate and apart from the surface. Moss v. Jourdan, 129 Miss. 598, 92 So. 698; Stern v. Great Southern Land Co., 148 Miss. 649, 114 So. 739; Stokely v. State, 149 Miss. 435, 115 So. 563; Liverpool London Globe Ins. Co. v. Delaney, 190 Miss. 404, 200 So. 440; Pace v. State, 191 Miss. 780, 4 So.2d 270; Merrill Eng. Co. v. Capital Nat. Bank, 192 Miss. 378, 5 So.2d 666.
B. The validity of such grants or reservations of minerals is determined by the same rules of law as are applicable to conveyances of real estate. Foster v. Runk, 109 Pa. 291; Palmer v. Crews, 203 Miss. 806, 35 So.2d 430.
C. The words used in the granting clause define the "type" of interest conveyed. Anderson v. Butler, 35 So.2d 709, 203 Miss. 512.
2. The reservation in the Magee-Longino deed violates the rule against perpetuities or is a restraint on alienation and, therefore, void as against public policy. Univ. of Vt., et al. v. Ward, 104 Vt. 239, 158 A. 773; Queen City Park Ass'n v. Gale, (Vt.), 3 A.2d 529; 4 Thompson on Real Property, Sec. 2171, p. 708; Boye v. Boye, 300 Ill. 508, 133 N.E. 382; Restatement of Property, Sec. 159(1); Hamilton v. City of Jackson, 157 Miss. 284, 127 So. 30; Persons v. Chambliss, Admr., 38 So. 286; Alexander v. Richardson, 106 Miss. 517, 64 So. 217; Dallapi v. Campbell, 114 P.2d 646; Sec. 838, Code 1942; In re Estate of Thomas E. Lilley, Deceased, (Penn.), 116 A. 392, 28 A.L.R. 366; Foulke, Perpetuities, p. 185, et seq.; Nodulty v. Girard, 45 Pa. 11; Gulley v. Neville, 55 So. 289; Hudson v. Gray, 58 Miss. 882; Henry v. Henderson, 58 So. 354; Reddoch v. Williams, 92 So. 831; Gray, Perpetuities, Chap. 247; Lewis, Perpetuities, p. 657; Cody v. Staples, 80 Conn. 82, 67 A. 1; Quinlan v. Wickman, 233 Ill. 39, 84 N.E. 38; Moroney v. Haas, 277 Ill. 467; Slade v. Patten, 68 Me. 380; Graham v. Whitridge, 99 Md. 248, 66 L.R.A. 408; Gambrill v. Gambrill, 122 Md. 563, 89 A. 1094; Fosdick v. Fosdick, 6 Allen 41 (Mass.); Lovering v. Worthington, 106 Mass. 86; First Universalist Society v. Boland, 155 Mass. 171, 15 L.R.A. 231, 29 N.E. 524; Gray v. Whitmore, 192 Mass. 367; Leonard v. Burr, 18 N.Y. 96; Hatch v. Hatch, 1 Ohio Dec. 270; Smith v. Townsend, 32 Penn. 434; Marlborough v. Godolphin, 1 Eden 404, 28 Eng. Reprint 741; Church in Brattle Square v. Grant, 3 Gray (Mass.) 146, 63 Am. Dec. 725; Beall v. Wilson, 146 Ky. 646, 143 S.W. 55; Greenough v. Osgood, 235 Mass. 235, 126 N.E. 461; Johnson v. Webber, 65 Conn. 501, 33 A. 506; Farnam v. Farnam, 83 Conn. 369, 77 A. 70; Eaton v. Eaton, 88 Conn. 269, 91 A. 191; Robinson v. McDonald, 2 Ga. 161; Post v. Rohrback, 142 Ill. 600, 32 N.E. 687; Howe v. Hodge, 152 Ill. 252, 38 N.E. 1083; Nevitt v. Woodburn, 190 Ill. 283, 60 N.E. 500; Chaplain v. Cheney, 191 Ill. 574, 61 N.E. 363; Outland v. Bowen, 115 Ind. 150, 17 N.E. 281; Herron v. Stanton, 128 N.E. 363; Towle v. Towle, 97 Me. 427; Johnson v. Lish, (Md.), 4 Harr. J. 441; Lovering v. Worthington, 162 Mass. 86; Bunning v. Hormas, 104 Neb. 383; Drummond v. Drummond, 26 N.J. Eq. 234; Patterson v. Ellis, 11 Wend. 259 (N.Y.); Miller v. Malcolm, 26 Wend. 229; Shepherd v. Shepherd, 19 S.C. Eq. 142; Saxton v. Weber, 83 Wis. 617, 20 L.R.A. 509, 53 N.W. 905; Harris v. McLaran, 30 Miss. 533; Caldwell v. Willis, 57 Miss. 555; Catherine H. Maddock, et al. v. Bettie H. Keeler, 296 Ky. 440, 177 S.W.2d 568, 162 A.L.R. 578; Restatement, Property, Vol. 4, Secs. 393, 394; Stone v. Easter, (Okla.), 219 P. 655; Livingston v. Stickles, 7 N.E. 253; DePeyster v. Michael, 6 N.Y. 467, 57 Am. Dec. 470; Phillips v. Chambers, 174 Okla. 407, 51 P.2d 303; 41 Am. Jur. 12; Andrews v. Lincoln, 95 Me. 541, 50 A. 898; Springfield Safe Dep. Trust Co. v. Ireland, 268 Mass. 62, 167 N.E. 261, 64 A.L.R. 1071; Gerdner v. City National Bank Trust Co., 267 Mich. 270, 255 N.W. 587; Central Hanover Bank Trust Co. v. Helme, 121 N.J. Eq. 406, 190 A. 53; McLaughlin v. Wingling, 90 Okla. 159, 13 P. 552; Closset v. Burchaell, (Ore.), 230 P. 554; Friede's Estate, 313 Penn. 328, 170 A. 123, 91 A.L.R. 766; Lockhart's Estate, 306 Penn. 394, 159 A. 874; Boston v. Thaw, 246 Penn. 348, 92 A. 312; Brookover v. Grimm, 118 W. Va. 227, 190 S.E. 697.
3. The reservation is void because of "repugnancy" to the grant. Associated Oil Co., et al. v. Hart, et al., 277 S.W. 1043; 18 C.J. 267, Secs. 224, 225, 337; Schoenberger v. Lyon, 7 W. S. 184; Pynchon v. Stearns, 11 Metz. (Mass.) 312, 45 Am. Dec. 210; Cutler v. Tufts, 3 Pick, (Mass.), 272; Thompson, Real Property, 376, Sec. 3278; Horticultural Devel. Co. v. Lark, 139 So. 229; Barksdale v. Elam, 30 Miss. 694; American Oil Co. v. Williamson, 154 Miss. 441, 122 So. 488.
4. The reservation at most amounts to only the reservation of a "naked" power and therefore, (a) the power reserved is void, or, (b) is not subject to exclusive exercise by the grantor donee. Dallapi v. Campbell, 114 P.2d 646; Thompson, Real Property, Sec. 2281.
Brief for appellee, Mrs. Geraldine B. Martin.
I. The sole question whereon this suggestion of error is made is the Fourteenth Amendment, guaranteeing equal protection of the law and against deprivation of property without due process. Berry v. Tidewater Associated Oil Co., 188 F.2d 820; Bouslog v. City of Gulfport, 112 Miss. 184, 72 So. 896; Bowles v. Willingham, 321 U.S. 503, 88 L.Ed. 892; Brown Plumbing Co. v. McDowell, (Ala.), 200 So. 104; Butler v. State, (Miss.), 63 So.2d 79; California Co. v. State Oil Gas Board, 200 Miss. 824, 27 So.2d 542; Coe v. Armour Fert. Works, 35 S.Ct. 626, 529, 237 U.S. 413, 424, 59 L.Ed. 1027; Coffey v. Noel, 11 F.2d 399, 401, 402; Donald v. J.J. White Lbr. Co., 68 F.2d 441; Federal Trade Comm. v. Ruberoid Co., 343 U.S. 470, 96 L.Ed. 1081, 1094; Griffin v. Griffin, 327 U.S. 220, 90 L.Ed. 635, 640; Hansberry v. Lee, 311 U.S. 32, 85 L.Ed. 22; Hudson v. Lewis, C.C.A. 5th Cir., No. 13240; Humble Oil Ref. Co. v. Welborn, (Miss.), 62 So.2d 211; Jack v. Thompson, 41 Miss. 49; Joint Anti-Fascist Refugee Comm. v. McGrath, 341 U.S. 123, 95 L.Ed. 817; Lamar Life Ins. Co. v. Billups, 175 Miss. 771, 169 So. 32; Lochner v. New York, 198 U.S. 45, 49 L.Ed. 937; Louisville Joint Stock Land Bank v. Radford, 296 U.S. 661, 80 L.Ed. 471; May v. Anderson, 97 L.Ed. 767; Moran v. Murphy, 187 Miss. 633, 193 So. 29; Morgan v. United States, 304 U.S. 1, 82 L.Ed. 1129; Mullane v. Central Hanover B. T. Co., 339 U.S. 306, 94 L.Ed. 865; New York v. New York N.H. H.R. Co., 97 L.Ed. 268; Palmer Oil Corp. v. Amerada Pet. Corp., 343 U.S. 390, 96 L.Ed. 1022; Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565; Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 96 L.Ed. 485; Porterfield v. Butler, 47 Miss. 165, 170; Riley v. Gaddis, 146 Miss. 44, 111 So. 739; Smith v. Smith, 52 So.2d 1; South Buffalo Ry. Co. v. Ahern, 97 L.Ed. 279; State Oil Gas Board v. Superior Oil Co., 202 Miss. 130, 30 So.2d 589; Steele v. Palmer, 41 Miss. 88; Superior Oil Co. v. Beery, 63 2d 131; Superior Oil Co. v. Foote, 214 Miss. 857, 59 So.2d 85, 87; Superior Oil Co. v. Griffith, (Miss.), 59 So.2d 104; Trager v. Jenkins, 75 Miss. 676, 23 So. 424; Wilby v. State, 93 Miss. 767; 42 Am. Jur., Public Administrative Law, 470, 476, Sec. 135; Conservation of Oil Gas, A Legal History, 1948, edited by Blakely M. Murphy, Section of Mineral Law, A.B.A.; Sec. 197, Miss. Const. 1890; 14th Amendment, U.S. Const.; Chap. 117, Laws 1932; Chap. 305, Laws 1936; Sec. 6132-22, Code 1942; Mississippi Law Journal, No. 1, p. 58, No. 3, p. 462.
ORIGINAL OPINION
On November 16, 1939, Estella Magee and her husband, Houston Magee, executed to J.E. Thrift, Jr. an oil, gas, and mineral lease on land in Jefferson Davis County, Mississippi, describing the same in the lease as follows:
"48 acres more or less. The same land and all of the land described in deed dated September 3, 1938 recorded in Book 43 at page 564 deed records Jefferson Davis County, Mississippi, from Anna Milloy et al to Estella Magee as the NE 1/4 of SE 1/4 Section 33 Township 9 north, range 19 west, and the south 8 acres of that certain 16 acres in the east side of the SE 1/4 of the NW 1/4 section 3, township 8 north, range 19 west, all in Jefferson Davis County, Mississippi."
The lease was what is known as an "unless" lease and was for a primary term of ten years, "and as long thereafter as oil, gas, or other mineral is produced from said land hereunder." The lease contained neither a pooling agreement nor a force majeure clause. The validity of the lease in its inception is not questioned. On October 7, 1940, J.E. Thrift, Jr. assigned the lease to Fohs Oil Company, which by corporate merger and change of corporate name became Texas Gulf Producing Company, and the latter company succeeded to the ownership of the lease. On the same date that the aforesaid lease was executed, towit, on November 16, 1939, the lessors, Estella Magee and her husband, Houston Magee, conveyed to Geraldine B. Martin, subject to said lease, an undivided one-half interest in the oil, gas and other minerals in the land described in said lease.
On July 1, 1944, Estella Magee and her husband, Houston Magee, conveyed to Charles F. Longino an undivided one-half interest in the oil, gas and other minerals in said land, reserving the right to execute future leases thereon and the right to all bonus money and delay rentals. Thereafter, and subject to like reservations as contained in the aforesaid conveyance to him, Charles F. Longino conveyed to Dewitt Smith on March 26, 1948, an undivided 1/48 mineral interest in said land, and to H.R. Hays on March 26, 1948, an undivided 1/48 mineral interest in said land, and on July 15, 1949, Dewitt Smith conveyed to W.J. Morris, subject to like reservations, an undivided 1/16 of 1/8 of 4/320 mineral interest in said land.
The land covered by the aforesaid lease is located in the Gwinville Gas Field, which embraces a large area of land in Jefferson Davis and Simpson Counties, Mississippi, and which came into production as a proven gas field in the year 1944.
Pursuant to the authority vested in the State Oil and Gas Board by Chap. 117 of the Laws of 1932 and Chap. 305 of the Laws of 1936, the Board, by its orders of August 30, 1945, August 28, 1946, August 11, 1947, and September 11, 1947, finding it necessary so to do to prevent waste and to protect the correlative rights and opportunities of owners of gas in the common source of supply, adopted rules and regulations applicable to the Gwinville Gas Field, providing that every gas well should be located on a drilling unit consisting of at least 320 contiguous surface acres upon which no other drilling or producible well is located, determining the efficient drainage area of each gas well to be 320 contiguous surface acres, providing for the application for and the granting of permits to drill, providing for the allocation of allowables for each gas well upon filing with the board for approval a plat showing the location of the well and the acreage assignable to it, defining an owner as the person who has the right to drill into and produce from a field or pool and to appropriate the production either for himself or for himself and another, and providing for the filing of well completion reports.
By instrument dated December 12, 1947, the Texas Gulf Producing Company, holder of the lease here involved, and other lessees of contiguous lands, as non-operators, and the Humble Oil and Refining Company, a leaseholder of contiguous lands, as operator, entered into an agreement to pool and combine their leases as to gas rights into a unit of 320 acres known as Unit No. 14, in so far as lands covered by said leases are embraced therein, reciting therein that the Humble Oil and Refining Company had completed a gas well on the pooled unit known as the J.S. Hubbard, et al, No. 1 well, and providing that the operation of said well should be under the exclusive charge, control, and supervision of the Humble Oil and Refining Company.
On November 21, 1947, the Humble Oil and Refining Company had applied for, and on November 22, 1947, was granted, a permit to drill a gas well, stating the exact location thereof in the NE 1/4 of Section 33, Township 9 north, Range 19 west, Jefferson Davis County.
On January 10, 1948, there was filed with and approved by the Board a plat of Unit No. 14, containing 320 contiguous acres and embracing the NE 1/4 of the SE 1/4 of Section 33, Township 9 north, Range 19 west, or 40 acres of the land covered by the aforesaid lease dated November 16, 1939, and originally executed by Estella Magee and her husband, Houston Magee, to J.E. Thrift, Jr., but not embracing the other eight acres covered by said lease.
A well completion report dated January 16, 1948 was filed with and received by the Board on January 23, 1948, showing the completion on January 10, 1948 of the well drilled on said unit pursuant to said permit. Thereafter, allowables applicable to said well were set by the Board beginning January 26, 1948.
All the foregoing transpired during the primary term of the aforesaid lease dated November 16, 1939, and prior to the effective date of Chap. 256 of the Laws of 1948. Thereafter, on June 23, 1950, on the application of Superior Oil Company, one of the interested lessees, and after a hearing pursuant to notice, the Board entered an order adjudging that the aforesaid drilling Unit No. 14 had been therefore legally established and ordering the integration of the interests embraced therein.
The said Geraldine B. Martin declined to enter into a voluntary pooling agreement as to the lands in which she owned a 1/2 mineral interest, and has declined to accept the tender of royalty payments under the lease of November 16, 1939. The unit well is located on land other than that covered by the lease of November 16, 1939.
On November 26, 1949, Estella Magee and her husband, Houston Magee, executed to Roy E. Watson an oil, gas, and mineral lease on an undivided 1/2 interest in the same lands covered by the aforesaid lease originally executed to J.E. Thrift, Jr., which lease so executed to Roy E. Watson was assigned by him on December 17, 1949 to B.C. Griffith to the extent of a 1/2 interest therein.
After the expiration of ten years from November 16, 1939, the date of the Thrift lease, and after the appellees Roy E. Watson and B.C. Griffith acquired from Estella Magee and her husband, Houston Magee, the aforesaid lease dated November 26, 1949, the appellees filed their bill in chancery praying an adjudication that the said Thrift lease had terminated by its terms, and asking to have the same cancelled as a cloud upon their asserted title to a leasehold estate under the aforesaid lease of November 26, 1949. In the original bill and subsequent pleadings, the Texas Gulf Producing Company and numerous other parties were named as defendants to the action, among them Geraldine B. Martin. Through disclaimers filed, the suit resolved itself into a controversy between the Texas Gulf Producing Company on the one hand, and Roy E. Watson, B.C. Griffith, and Geraldine B. Martin on the other hand. Upon hearing the case, the chancellor granted the relief prayed for by Roy E. Watson and B.C. Griffith, and by Geraldine B. Martin in her cross-bill, and from this decree the Texas Gulf Producing Company prosecutes this appeal. During the pendency of this appeal, the appellee Roy E. Watson died and this cause as to the said Roy E. Watson has been revived in the name of Mrs. Lorraine B. Watson, executrix of the last will and testament of Roy E. Watson, deceased.
The appellant contends on this appeal (1) that the trial court was without jurisdiction of this cause because of the absence of necessary parties, and (2) that the deed from Estella Magee and her husband to Charles F. Longino was a mineral deed and not a royalty deed and that, therefore, the execution by Longino and his assignees of the pooling amendment to the Thrift lease was a valid exercise of their rights as the owners of the fee in the minerals, and the purported oil, gas, and mineral lease executed by Estella Magee and her husband to Roy E. Watson was of no effect, and (3) that the Thrift lease dated November 16, 1939 did not terminate at the expiration of its primary term on November 16, 1949, for the reason that land covered thereby had been previously included in an established drilling unit, towit, Unit No. 14, and that since January 10, 1948 gas was being produced therefrom, and that such production was from the land covered by the lease and continued the lease in force.
We think that the contention that the trial court was without jurisdiction of this cause because of the absence of necessary parties is untenable. This was a suit to remove clouds and not to quiet or confirm title. Any intention on the part of the appellees to affect the title of absent parties is wholly disclaimed. Moreover, (Hn 1) in suits to remove clouds, the claimant may proceed against any one of several who may be asserting an adverse claim, and in such cases it is necessary to join as defendants only those parties who are asserting an adverse claim or hold such record evidence of title as should be cancelled as a cloud. McLendon v. McGee, 189 Miss. 712, 198 So. 725; Griffith's Chancery Practice, 2d Ed., p. 113, Sec. 115. The primary purpose of this suit is to obtain an adjudication of the termination of the Thrift lease at the expiration of its primary term and to cancel the same as a cloud upon the asserted title of claimants insofar as it affects the adverse claims of named defendants and we think the claimants had the right to proceed against such of those as were asserting an adverse claim. We are of the opinion, therefore, that the trial court was not without jurisdiction of this cause because of the absence of necessary parties.
(Hn 2) The contention of the appellant that the Thrift lease dated November 16, 1939, was extended and continued in force beyond its primary term because during its primary term and prior to the effective date of Chap. 256 of the Laws of 1948, a part of the land covered by said lease was included in an established drilling unit, to-wit, Unit No. 14, under the rules and orders of the State Oil and Gas Board, and production was and is being had from land within the drilling unit of which the leased land forms a part, is sound insofar as it affects the leased land within the unit and must be sustained under the prior decisions of this Court, holding that such production is deemed to be from the leased land within the unit. We need not detail the various grounds of attack made by the appellees upon the validity of the establishment of the unit and the effect thereof, since they have been decided adversely to the contentions of the appellees in our said prior decisions. California Co. v. State Oil and Gas Board, 200 Miss. 824, 27 So.2d 542; Green v. Superior Oil Company, 59 So.2d 100; Superior Oil Company v. Foote, 214 Miss. 857, 59 So.2d 85; Superior Oil Company v. Beery, 63 So.2d 115 (suggestion of error overruled April 27, 1953). In Superior Oil Company v. Beery, supra, we said:
"And what we are now holding is that the effect of the establishment of a drilling unit of a given area and the prevention of the drilling of more than one well thereon is to necessarily pool the rights of the oil and gas lessees and all of the mineral rights in such area, because any other result would mean that only the oil and gas lessee that drilled the unit well could receive any portion of the 7/8 of the gas produced therefrom, and only the owners of the minerals under the particular tract on which the well is drilled could receive any portion of the royalties from production, since it is only upon the theory that all other interests of the oil and gas lessees and of all other royalty interests have been pooled with the Dale tract that they can participate in the production from the Dale well."
In the opinion overruling the suggestion of error in Superior Oil Company v. Beery, supra, we further said: "The present decision, holding that the effect of the establishment of the drilling unit is to pool all interests in the unit and thereby to extend the terms of all leases then in effect, is a logical and necessary step in the light of all of the foregoing cases, and is essential in giving practical effect to the establishment of the unit. In brief, production on the unit is the equivalent of production on appellee's land."
(Hn 3) The question is presented, however, as to whether the production from Unit No. 14, which incorporated only a part of the leased land, extended the primary term of the lease of November 16, 1939, as to all of the leased land whether within or without the unit. We deal with the question only as it arises out of the particular facts of this case. The appellant, by agreement with other lessees of contiguous lands and with approval of the State Oil and Gas Board, acting pursuant to the authority vested in it by Chap. 117 of the Laws of 1932 and Chap. 305 of the Laws of 1936, effected the establishment of a drilling unit, that is to say, Unit No. 14, which incorporated only 40 acres of the 48 acres covered by the Thrift lease, and the result of which was to pool or unitize all interests within the unit area. Only one well was permitted to be drilled on the unit consisting of 320 contiguous surface acres, and the efficient drainage of such well was determined under the rules and regulations of the State Oil and Gas Board to be 320 contiguous surface acres. The well was drilled on the unit on land other than the leased land embraced therein. The issuance on application of the permit to drill the well, the drilling and completion of the well, the filing and approval of the plat of the unit area, and the fixing of allowables for the well all transpired during the primary term of the Thrift lease. Production from the well, under the prior decisions of this Court, was deemed production from that part of the leased land within the unit. No other well could be drilled on the leased land within the unit. If the production from the unit well is to be held to continue in force the lease as to the 8 acres which are outside the unit and located about three-fourths of a mile from the other 40 acres, then the lessee may hold the lease in force indefinitely as to said 8 acres without any obligation to drill thereon, except such as may be required of a prudent operator in the development and protection of the land from drainage, and without any obligation to pay delay rentals thereon during the remainder of the primary term of the lease, and without any obligation to pay royalties or other compensation or benefits to the lessors, or royalty or mineral holders. Appellant has not sought an exception under the spacing regulations to drill on said 8 acres, and did not incorporate said 8 acres in another drilling unit until after the expiration of the primary term of the lease. The 8 acres were not drained by the unit well, and there was no production therefrom during the primary term. Appellant elected during the primary term to incorporate the 40 acres in a drilling unit and to leave the 8 acres out. To hold that the lease was continued in force indefinitely as to the 8 acres without the payment of royalty or rentals or other benefits therefrom as the result of the establishment of the unit incorporating the 40 acres and the compulsory pooling resulting therefrom, when no well was drilled on the leased land, would be to apply our conservation laws in violation of the constitutional guaranty that no person shall be deprived of his property without due process of law. The basis of our prior decisions in upholding the establishment of drilling units and the compulsory pooling resulting therefrom is that a mineral owner is not deprived of a valuable property right by the failure to produce oil or gas from his land in the unit by a well thereon when he is permitted to receive the equivalent thereof from the unit well. In Superior Oil Company v. Beery, 63 So.2d 115, the Court said:
"It follows from what is said in the foregoing paragraph that a land or mineral owner is not deprived of any valuable property right in violation of due process of law because of the failure to produce oil or gas from his tract of land by a well thereon, when he is allowed to receive the equivalent thereof from a unit well on adjacent land in furtherance of the public policy of the State in the conservation of its natural resources. We recognize that in the absence of such laws enacted in the exercise of the police powers of the State, the appellee would have been entitled to the reversionary interest in his minerals after December 29, 1949, if no production of oil, gas or other mineral was had from a well on his mineral acres. But Chapter 305, Laws of 1936, made it the `duty of the Board to prorate and regulate the gas well production from each common source of supply . . ., for the protection of public and private interest, and to adjust the correlative rights and opportunities of each owner of gas in a common source of supply. . . .' These conservation laws and regulations are based upon the theory that an individual having a right under given circumstances may exercise even the higher right of giving up the asserted right in the interest of the public welfare. Such was the philosophy of the moratorium statutes under which holders of mortgages and deeds of trust, giving unto them the right to foreclose in the default of a payment of an indebtedness, were denied the right to do so upon compliance with certain requirements not provided for in the contract of security.
"An attribute of sovereignty, such as the police power of the state to conserve its natural resources, needs no constitutional sanction for its valid exercise; it is a power inherent in the existence of a government."
Our conservation laws were enacted to be fair and reasonable and to do justice and equity to all parties concerned, and we think that it was not contemplated under the statutes authorizing the establishment of drilling units and the compulsory pooling resulting therefrom that the establishment of the unit and the production from a well on land therein other than the leased land should affect the leased land without the unit. Particularly is this true because if the production from such unit well were to be held to keep the lease in force indefinitely as to the leased land without the unit, the lessor would be deprived of the right to drill on the leased land without the unit, and deprived of any royalties, rentals, or benefits therefrom. Under such interpretation, if a lease covered segregated tracts aggregating 1,000 acres and 40 acres thereof were placed in a drilling unit, and production should be had on land within the unit but not on the 40 acres, the lease might be continued in force indefinitely beyond the primary term as to the entire 1,000 acres, without any royalties, rentals, or other benefits to the lessor, or royalty and mineral owners, as to the 960 acres without the unit. To give this effect to the establishment of the unit under the facts of this case would, in our opinion, be a violation of the constitutional guaranty that no person shall be deprived of his property without due process of law. It is our conclusion, therefore, that the Thrift lease was not, under the facts of this case, continued in force beyond its primary term as to the 8 acres therein described, but that as to said 8 acres, the said lease terminated at the expiration of the primary term of the lease.
After the expiration of the primary term of the Thrift lease, the 8 acres covered by said lease were unitized with other lands and included in Unit No. 41. Appellees, however, do not question or seek to cancel any unitization becoming or made effectual after the expiration of the primary term of the Thrift lease, and hence we only comment that the rights of the parties with respect to the 8 acres embraced in Unit No. 41 will be governed by the views expressed by us in this opinion.
The conclusions herein before reached render it unnecessary for us to construe the instrument executed to Charles F. Longino by Estella Magee and her husband, Houston Magee.
For the reasons hereinbefore set forth, the decree of the court below is affirmed as to the 8 acres embraced in the Thrift lease, and as to the 40 acres embraced therein the decree of the court below is reversed and judgment entered here for the appellant in accordance with the prayer of its cross-bill. The appeal costs should be taxed one-half against the appellant and one-half against the appellees.
Affirmed in part and reversed in part.
All Justices concur except Hall, J., who took no part.
OPINION ON SUGGESTION OF ERROR
We have given careful and painstaking consideration to the suggestions of error filed on behalf of the appellant, Texas Gulf Producing Company, and the appellee, Geraldine B. Martin, and we have reached the conclusion that both suggestions of error should be overruled.
The appellant, however, urges upon us the necessity that this Court construe the instrument executed by Estella Magee and her husband, Houston Magee, to Charles F. Longino, dated July 1, 1944, and we yield to this in order to clarify our holding that the decree of the court below should be affirmed as to the 8 acres here involved.
The appellees, Roy E. Watson and B.C. Griffith, sought by their original bill filed in this cause to cancel the Thrift lease dated November 16, 1939 as a cloud upon their asserted title to the leasehold interest under the lease executed to Roy E. Watson by Estella Magee and her husband, Houston Magee, dated November 26, 1949, covering an undivided 1/2 interest in the oil, gas and other minerals in the entire 48 acres here involved. (Hn 4) In order to prevail, it was necessary that appellees show a perfect title in themselves, Nicholson v. Myres, 170 Miss. 441, 154 So. 282, (Hn 5) and that the Thrift lease had terminated. This they succeeded in doing as to the 8 acres unless the Magees, by the execution of the aforesaid instrument to Charles F. Longino, had divested themselves of the leasing rights which remained in them after conveying an undivided 1/2 interest in the minerals to Geraldine B. Martin. We are of the opinion that they had not so divested themselves of such leasing rights for the reason that the instrument executed by them to Charles F. Longino was a royalty conveyance and not a mineral deed, and that the same validly reserved in the Magees the right to execute future leases.
This brings us to a consideration of the nature of the instrument executed by the Magees to Charles F. Longino under date of July 1, 1944. This instrument is headed "Royalty Deed." The instrument, excluding the signatures and acknowledgment thereof, is as follows:
"ROYALTY DEED
"KNOW ALL MEN BY THESE PRESENTS:
"THAT Stella Milloy Magee and husband Houston Magee for and in consideration of the sum of Ten Dollars ($10.00) DOLLARS, to us cash in hand paid by Charles F. Longino the receipt of which is hereby acknowledged, do hereby grant, bargain, sell, and convey unto the said Charles F. Longino and unto his heirs and assigns forever, SUBJECT, HOWEVER, to all of the terms, conditions and reservations hereinafter mentioned, AN UNDIVIDED One half (1/2) interest in and to all of the oil, gas and other minerals, in, under and upon the following described lands situated in Jefferson Davis County, in the State of Mississippi:
"NE 1/4 of SE 1/4 section 33, Township 9 North Range 19 West and the south 8 acres of that certain 16 acres on the east side of SE 1/4 of NW 1/4 section 3 Township 8 North Range 19 West containing in all 48 acres more or less.
"It is the intention of the Grantors herein to convey by these presents and they do convey by these presents 24 mineral acres.
"The grantors herein expressly reserve to themselves their heirs or assigns, the exclusive right to lease said lands, or any part thereof, for oil and gas purposes, without interference or hindrance upon the part of the grantee, his heirs or assigns; and the grantee herein, his heirs or assigns shall never be entitled to receive any part of the consideration, cash or otherwise, paid or to be paid, for any oil gas mining lease heretofore or hereafter executed covering said land, or any part thereof, nor shall the grantee, his heirs or assigns, ever be entitled to receive any part of any delay rentals to defer the commencement of drilling operations provided by any such lease; and the grantee herein, his heirs or assigns, shall not be required to join in the execution and delivery of any oil and gas mining lease covering said land, or any part thereof, in order to convey good title to lessee thereunder; PROVIDED, that the grantors herein expressly covenants with the grantee that no oil and gas mining lease shall ever be executed covering the above land, or any part thereof, that shall reserve to the grantors herein, their heirs and assigns, as royalty, less than one-eighth of all of the oil and gas produced and saved from said land and that this covenant shall be deemed a covenant running with the land.
"It is the intention of the parties hereto that the grantee herein, his heirs, or assigns, shall be entitled to receive hereunder one-half (1/2) of all oil and/or gas run to the credit of the royalty interest reserved under and by virtue of any oil and gas mining lease now in force and effect covering said land, and under any oil and gas mining lease hereafter executed covering said land, or any part thereof; and in any event the grantee herein, his heirs or assigns, shall be deemed the owner of and shall be entitled to receive part of all oil and gas produced and saved from said land, or any part thereof.
"TO HAVE AND TO HOLD the above described property and property interest together with all and singular the rights and appurtenances hereunto belonging, unto the said Charles F. Longino, his heirs, and assigns forever.
"And they hereby covenant with the said Charles F. Longino that we will forever warrant and defend the title to the above described lands and the rights herein conveyed against all lawful claims whatever.
"Witness our signatures on this 1 day of July, 1944." (Hn 6) In construing the aforesaid instrument, it is necessary under well recognized rules of construction that the same be construed as a whole, and that the intent of the parties thereto be gathered from the plain and unambiguous language therein employed. In 26 C.J.S., page 328, we find the following: (Hn 7) "A deed must be construed as a whole, without separating it into its formal parts. The intent must primarily be gathered from a fair consideration of the entire instrument and the language employed therein . . ."
We held in the case of Goff v. Avent, 122 Miss. 86, 84 So. 134, that when the meaning of language is to be determined by the Court, the intent of the parties, expressed in the words they have used, must govern. Again we said in the case of Gulf and S.I.R. Co. v. Patten, et al, 180 Miss. 756, 178 So. 468, as follows: "In construing deeds, the intention of the parties is sought to be effectuated, of course, but this intention must be found in the language of the instrument; so that effect must be given if possible to each item of the written contents, and no item shall be stricken or rejected so long as it may be harmonized with the other items."
(Hn 8) Applying these rules of construction to the instrument under review, we find no difficulty in determining the instrument to be a royalty conveyance and not a mineral conveyance. The parties themselves have denominated the instrument a "royalty deed." The granting clause of the instrument is expressly made subject to the terms, conditions, and reservations thereinafter mentioned. The instrument reserves in the grantors the exclusive right to lease the lands therein described for oil and gas purposes. All bonus money paid for future leases and all delay rentals under any oil and gas lease on the lands are reserved to the grantors. In granting future leases, the grantors are required under the expressed terms of the instrument to reserve as royalty not less than 1/8 of all of the oil and gas produced and saved from the land. It is expressly declared in the instrument that it is the intention of the parties thereto that the grantee shall be entitled to receive one-half of all oil and/or gas run to the credit of the royalty interest reserved under and by virtue of any oil and/or gas lease in force or subsequently granted. Thus it is manifest from the entire instrument and the plain language thereof that the parties intended by said instrument to vest in the grantee a royalty and not a mineral interest.
We are, therefore, of the opinion that at the time of the execution by the Magees of the lease to Roy E. Watson, dated November 26, 1949, the Magees were vested with the leasing rights with respect to the mineral interest therein described, subject to the prior Thrift lease, and that since the Thrift lease has terminated as to the 8 acres here involved, the lease so executed by the Magees to Roy E. Watson dated November 16, 1949, should be and it is held to be a valid lease as to said 8 acres.
Accordingly, both of the suggestions of error herein filed are overruled.
Suggestions of error overruled.
All Justices concur except Hail, J., who took no part.
I concur with the original decision and that on suggestion of error. The following states my understanding of what we decide.
Appellant, Texas Gulf Producing Company, argues that, when the 40 acre tract was incorporated into Unit 14, and that unit became producing by the drilling of a unit well not on the 40 acre tract, this production constituted production not only under the leased lands within the unit, but also fixed the term and preserved the lessee's estate under the entire lease including that in the 8 acre tract under lease outside of the unit.
At common law and under the usual habendum clause in an oil and gas lease, one producing well during the primary term on any part of the lease will continue the lease in effect as an entirety. The provision fixing the term of the lease is ordinarily considered indivisible. And in several cases the Louisiana Courts have held that where part of leased lands is incorporated in a compulsory unit, and a producing well is drilled in the unit not on the leased lands therein, such production continues the lease in effect as to both the lands in the unit and outside the unit. Hunter Co., Inc. v. Shell Oil Company, Inc., 211 La. 893, 31 So.2d 10 (1947); Le Blanc v. Danciger Oil Ref. Co., 218 La. 463, 49 So.2d 855 (1950); Smith v. Carter Oil Co., 104 F. Supp. 463, (D.C.W.O. La., April 10, 1952). See also Gray v. Cameron, 234 S.W.2d 769 (Ark. 1950). However, those cases dealt with orders of the Louisiana Commissioner of Conservation which expressly provided that production within the unit should continue all leases affected thereby in effect. And the Louisiana compulsory pooling statutes then in existence expressly so provided. But in the instant case, neither the order of the State Oil and Gas Board nor the Mississippi conservation statutes of 1932 and 1936 expressly so provide.
In order to reach the suggested result, the Court would have to imply from the 1932 and 1936 conservation statutes, and the rules of the Board thereunder, not only that production within the unit constitutes production under each tract therein, which has already been decided by this Court, but also would have to imply that units so created under the 1932 and 1936 conservation statutes, in which production was had not on leased lands therein, would continue the lease in effect as to leasehold lands outside of the unit. I do not think that this implication is warranted by the 1932 and 1936 statutes and the rules of the Board. The orders of the Board in question and the actions of the lessee concerning Unit 14 were restricted to property within the unit. The aforesaid doctrine of indivisibility of the obligations of the lease is applicable only between the contracting parties and their successors in interest. The situation in the instant case was not caused by the lessor, but was brought about by the actions of appellant, lessee, the statutes, and the intervention of the State Oil and Gas Board in the exercise of the police powers of the state. The division of obligations of the lessee was effectuated by these statutes, the actions of the Board and of appellant, lessee.
It may be that the Legislature has the power to provide that production as in the instant case would continue the lease as to lands outside the unit. It is my understanding of the present decision that we do not consider here either that issue or whether the 1950 compulsory pooling act so provides; nor do we consider whether a producing well on the leased lands in the unit continues the lease on lands outside of it. We are now holding simply that we are not willing to imply from the general terms of the 1932 and 1936 statutes, and the supplementary rules of the Board under that legislation, that the Legislature intended that production not on the leased lands within the unit would continue the lease as to lands not within the unit.