Robinson v. Southwestern Development Co.

California Court of Appeal Dec 29, 1954 No. Civ. 8477Published

Before: Van Dyke

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Holding. The court held that conveyances of a fractional interest in oil, gas, and hydrocarbons 'in and under and that may be produced' from real property create expense-bearing mineral fee interests rather than expense-free royalty interests. Consequently, the owners of such interests are entitled to their proportionate share of bonuses, rents, and royalties, subject to the costs of production.

Issues

Did the trial court correctly determine the nature and extent of the parties' interests in the oil and gas lease?
Did the trial court abuse its discretion in denying the motion for a new trial based on newly discovered evidence?

Disposition. affirmed

Quotations verified verbatim against the opinion

“a grant of a fraction of all “of the oil, gas and other minerals in and under and that may be produced” from the land creates an expense-bearing mineral fee interest rather than an expense-free royalty interest.”

“the deeds by which appellants took their interest did not grant to them expense-free royalty interests, but rather expense-bearing mineral fee interests.”

VAN DYKE, P. J.

This is an appeal by defendants Houchin and Gallagher from a judgment in favor of plaintiffs and respondents, C. Ray and Pauline I. Robinson, in an action for declaratory relief brought to determine the rights of the respective parties under an oil and gas lease, including their rights in a bonus paid for the execution of the lease. Involved in such determinations are the rights of the parties with respect to royalties to be paid under the same lease or future leases. Other defendants than Houchin and Gallagher did not appeal.

The judgment appealed from declares the following: Respondents Robinson, together with A. E. and Sarah Montgomery, who are nonappealing defendants, were and are the owners of an undivided 45-5/6 interest in and to certain real property in Fresno County; respondents Robinson were and are the owners of an undivided one-half interest of said undivided 45-5/6 interest in said real property; prior to the execution and delivery of the oil and gas lease under which the bonus was paid, the following transactions had taken place affecting the ownership of the .land and the rights of the parties to share in oil, gas and other hydrocarbons produced therefrom:

On July 7, 1938, A. E. Jones and wife, who then owned the fee simple title to all of said land, executed an oil and gas lease to The Texas Company, which provided a rental or royalty of 121/2 per cent of production.

On April 6, 1939, while said lease was existing, the successor in interest to A. E. Jones and wife, conveyed an undivided one-fourth of the land to A. E. Montgomery, the deed reciting that it conveyed the designated interest and a one-fourth interest in the existing lease.

On May 3, 1939, Montgomery and wife conveyed to appellant Houchin “An undivided 1% of all oil, gas, petroleum or other hydrocarbon substances within or underlying or which may be produced and saved from” the said real property, and also on said date conveyed one-half of 1 per cent

[3]

of all oil, gas, etc., to nonappealing defendant Gilbert. (The description in the two deeds as to the nature of the rights conveyed is the same.)

June 12, 1939, Montgomery and wife, by a like further instrument, conveyed one-half of 1 per cent of the oil, gas, etc., to nonappealing defendant Southwestern Development Company, a corporation.

Robinson v. Southwestern Development Co.

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VAN DYKE, P. J.

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