Pasteur v. Niswanger , 226 Ark. 486 ( 1956 )

Lee Seamsteb, Chief Justice.

This appeal is from-the Lafayette Chancery Conrt. The court decreed parti-1 tion and sale of a leasehold working interest in an oil and gas lease on 40 acres of land in said county. The question involves the right of the court to enter a judgment for partition and order of sale of the leasehold working interest owned by the parties, under the facts in the case.

Appellant Edna Mae Pasteur acquired the ownership of the lease in question. To get the funds necessary to drill or work the lease, she sold and assigned a one-half interest in the lease to Adma C. Niswanger for the sum of $9,000, and Pasteur contracted with Niswan-ger to drill a well on the premises and if oil was found to also drill a second well thereon, to he commenced within. six months from the completion of the first well. .

By a later agreement between said parties Pasteur' agreed to drill this second well on the leasehold premises- and Niswanger was to pay her an additional $17,000 to’ pay for one-half of the cost of drilling the second well Niswanger paid to Pasteur the $17,000 and still owns a half interest in the leasehold estate.

To provide funds for her part of the cost of drilling the second well, Pasteur sold other interests in the leasehold working interest; To appellant, Eddie Adamson, a’ one-sixteenth interest; to appellant, M. H. Harrell, three-' sixteenths interest. Harrell, mortgaged his interest to Farmers and Merchants National Bank of Gilmer, Texas;; and to the appellee, Iris Jordan a one-sixteenth, interest.-, Pasteur retained three-sixteenths interest in the lease. The working interest of seven-eighths is also'subject to two overriding royalty interests, one eighth of one-eighth' of seven-eighths leasehold interest held by Carter Oil Company and one-sixteenth of seven-éighths of leasehold' interest held by T. C. Short.- i!-

. The parties now own the respective interests as set out above in the leasehold working interest, including all machinery and personal property used on the premises. Both of the wells drilled by Pasteur were producing wells. The oil produced from the two wells is now being-severed from the soil and delivered through oil pipe lines to the market.

. Appellees filed the partition suit on the sole ground that they are co-tenants of the appellants in the leasehold estate and as such are entitled to a sale under partition and division of the proceeds of such sale among the parties as their interests are set out herein.

There is no evidence on this point but Title 53 of Arkansas Statutes, 1947, creates the Oil and Gas Commission and gives it jurisdiction over the production and sale of oil and gas in this state as a conservation regulation of such industry. It is necessary to secure a permit from the Commission before drilling starts for oil or gas. Where there is production, a division order requiring the proper measuring of the oil at the time of delivery to the pipeline, and a designation of the owners and their interest in the oil to be delivered must be set out. We assume the parties have complied with the law in drilling and selling the oil from the two wells here involved.

Our court has held that an oil and gas lease conveys an interest and easement in land itself, but no title passes until the oil and gas is reduced to possession. Clark v. Dennis, 172 Ark. 1096, 291 S. W. 807; Osborn v. Arkansas Territorial Oil and Gas Co., 103 Ark. 175, 146 S. W. 122; Davis v. Collins, 219 Ark. 948, 245 S. W. 2d 571.

Oil severed from the soil and reduced to possession becomes personal property. Shreveport-El Dorado Pipe Line Co. v. Bennett, 172 Ark. 804, 290 S. W. 929.

No attempt was made in this case to partition the land upon which the lease exists. Our statute, Sec. 34-1801 Ark. Stats. 1947, provides for the partition of land. Owners of leasehold working interests are not co-tenants of the owners of the fee or surface of the land. Their interests are of a different kind. Their interests are also of a different kind to the interests of the owners of mineral rights where severed from the land.

The mineral interests in land may he partitioned under the provisions of Sec. 53-401, Ark. Stats. 1947, and related sections, under the conditions therein set out. None of the statutes apply to the facts in this case or to the partition of a leasehold working interest. Warfield Natural Gas Co. v. Cassady, 266 Ky. 217, 98 S. W. 2d 495; Hall v. Vernon, 47 W. Va. 295, 34 S. E. 764; Beardsley v. Kansas Natural Gas, 78 Kan. 571, 96 P. 859, 173 A.L.R. 860, note 5.

There is no statutory right, to compel the partition of a leasehold estate worlcing interest in this state-. • The right to have partition in equity is based upon the application of equitable principles, and only upon showing facts indicating sufficient reason for equitable interference. 173 A. L. R. p. 850-859.

In the case of Fry v. Dewees, 151 Kan. 488, 99 P. 2d 844, the court held that where there is production operating under a division order partition has already been made. '

It has been held that'there is no ground for partition of personal property where it is divisible by weight, a measure or number into portions identical in quality and value. There would be no dispute that a court of law or equity could settle. Counting, weighing and measuring are not judicial but ministerial functions. 40 Am. Jur. p. 87, Sec. 104.

The object of a leasehold estate working interest is to produce the mineral sought. As long as there is production, there is partition. Under the facts in this case the right to partition by the court should be denied.

The decree is reversed and the petition for partition is dismissed.

Justice McFaddiN concurs.