Stevens v. SEECO Inc.

Cite as 2015 Ark. App. 322
ARKANSAS COURT OF APPEALS
DIVISION III
No. CV-14-604
OPINION DELIVERED MAY 20, 2015
MYRTLE STEVENS
APPELLANT APPEAL FROM THE VAN BUREN
COUNTY CIRCUIT COURT
[NO. CV2010-181-2]
V.
HONORABLE MICHAEL A.
MAGGIO, JUDGE
SEECO, INC., ET AL.
APPELLEES AFFIRMED
ROBERT J. GLADWIN, Chief Judge
Appellant Myrtle Stevens appeals from an order declaring the Hall family, appellees
herein, to be the owners of certain mineral rights. The order also found that the Halls
properly leased those rights to appellee SEECO, Inc. We affirm.1
The minerals are subsurface in forty acres located in the Southwest Quarter of the
Southwest Quarter of Section 22, Township 11 North, Range 15 West, in Van Buren
County. The property was acquired in 1904 by appellant’s late grandfather, Joe C. Chandler.
In 1930, Chandler and his wife executed a deed that conveyed all of the mineral interests in
the property to W.E. Hall. Hall died in 1939, and his heirs, the Hall appellees, now claim the
mineral rights by virtue of the 1930 deed.
1
We previously dismissed this case for lack of a final order, Stevens v. SEECO, Inc.,
2012 Ark. App. 629, and ordered rebriefing. Stevens v. SEECO, Inc., 2015 Ark. App. 3.
Appellant has now obtained a final order and corrected the briefing deficiencies by filing a
supplemental addendum.
Cite as 2015 Ark. App. 322
Appellant asserts ownership of the property and its minerals through intestate
succession from her grandfather and father and conveyances from her siblings and others. She
maintains that the 1930 mineral deed to W.E. Hall did not vest any mineral rights in Hall or
his heirs because it was irregular in several respects, including: the spelling of the grantors’
name as “Chandlier” rather than Chandler; the consideration being stated as “$80.00 or Eight
Units of interest in Trust Contract” paid by “W.E. Hall Trustee,” even though no trust was
known to exist; and at least one of the Chandlers signing the deed using an “X” mark.
Appellant also cites a handwritten notation along the left margin of the deed that reads,
“Attested A.A. Cottrell, Clerk. I, W.E. Hall has [sic] this day released on this date 1/15-30.
W.E. Hall, Trustee.”
The present controversy arose after separate oil-and-gas leases had been executed on
the subject property by appellant and the Hall family between 2004 and 2008—the Halls with
SEECO or its predecessors, and appellant with Revard Petroleum. The competing leases
caused SEECO to file a complaint in 2010 naming appellant and approximately eighty
members of the Hall family as defendants. The complaint asked that SEECO be allowed to
pay accruing oil-and-gas royalties into the court registry and that the court determine the
royalties’ legal owners. The Hall heirs duly pled their claims, citing the 1930 mineral deed to
W.E. Hall as proof of their ownership. Appellant asserted that the 1930 Hall deed was either
defective or waived any rights W. E. Hall may have acquired in the minerals and, therefore,
she was the owner of the mineral interests.
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Both sides filed motions for summary judgment to join the issues. Following a hearing,
the court ruled that the 1930 mineral deed to W.E. Hall was valid:
This Court believes the deed conveying the subject minerals to W.E. Hall from [the
Chandlers] could be considered ambiguous. The deed must be construed most strongly
against the grantors; also, the actions and the conduct of W.E. Hall and his heirs must
be given considerable weight. Because the Hall heirs’ actions demonstrate their
continued belief that they were the rightful owners of the subject minerals, this Court
finds that the deed conveying an interest in the subject minerals to W.E. Hall is valid.
The court also found that the handwritten release language in the margin of the W.E. Hall
deed was ineffective and did not cause ownership of the minerals to revert to the Chandlers.
Accordingly, the court declared the Hall heirs to be the owners of the mineral rights. This
appeal followed, and appellant presents two arguments for reversal.
First, appellant argues that the circuit court erred in construing the 1930 mineral deed
against the Chandlers rather than against W.E. Hall, who she contends filled out the deed
form. See generally Gibson v. Pickett, 256 Ark. 1035, 512 S.W.2d 532 (1974); Deltic Timber
Corp. v. Newland, 2010 Ark. App. 276, 374 S.W.3d 261 (recognizing that, as a rule of last
resort when interpreting an ambiguous instrument, the instrument is construed most strongly
against the party who prepared it, or against the grantor). We see no reversible error.
Regardless of whether the deed was construed most strongly against the grantors or the
grantee, the fact remains that the deed contained all of the necessary terms for a valid mineral
conveyance. Appellant does not clearly identify any legal basis for setting aside or voiding the
deed, nor does she argue that the deed’s handwritten “release” language caused the minerals
to revert back to the Chandlers. In fact, she admits that the formalities required to effect a
release may be lacking. See generally Helms v. Vaughn, 250 Ark. 828, 467 S.W.2d 399 (1971).
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In short, appellant has not persuaded us that the circuit court’s decision to construe the deed
most strongly against the Chandlers affected the terms or validity of the deed. Appellant
therefore has not met her burden to demonstrate reversible error. See Gilliam v. Gilliam, 2010
Ark. App. 137, 374 S.W.3d 108.
For her second argument, appellant challenges the circuit court’s statement that the
actions of the Hall heirs “demonstrate their continued belief that they were the rightful
owners of the subject minerals.” Appellant argues that, to the contrary, the Halls’ actions
reveal that they abandoned the mineral interests. She cites the failure of W.E. Hall or his heirs
to pay taxes on the mineral interests, which resulted in two unsuccessful attempts by the State
to sell the interests to third persons; the lack of any recorded activity by the Halls involving
the minerals for more than seventy years after the 1930 deed; and the fact that certain probate
records, signed by some of the Hall heirs, denied that W.E. Hall’s widow held any real-
property interest at the time of her death in 1987. Again, we see no ground for reversal.
One cannot divest himself of title to real property by abandonment alone. There must
be an intent by the owner to abandon his claim. Helms, supra. Further, that intent must be
accompanied by circumstances of estoppel and limitation, if the abandonment is not by a legal
deed of conveyance. Id. In her arguments to the circuit court, appellant briefly mentioned the
concept of abandonment, but the argument was never developed, particularly with regard to
the estoppel element. Our appellate courts will not entertain arguments that were not fully
developed in the circuit court. Jenkins v. Dale E. & Betty Fogerty Joint Revocable Trust, 2011
Ark. App. 720, 386 S.W.3d 704.
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Moreover, the circuit court did not rule on the abandonment/estoppel issue. Even
where a party mentions a particular theory, if he does not bring it to the court’s attention for
a ruling, the matter is waived on appeal. Britton v. Floyd, 293 Ark. 397, 738 S.W.2d 408
(1987).
For these reasons, we affirm the circuit court’s order.
Affirmed.
ABRAMSON, J., agrees.
HARRISON, J., concurs.
BRANDON J. HARRISON, Judge, concurring. In this case that involves competing
claims of ownership to oil and gas rights in a piece of land, Myrtle Stevens is the undisputed
owner of the surface rights; the Hall heirs are the purported owners of the oil and gas rights.
The issue is whether the 1930 deed from the Chandlers to W.E. Hall was a valid conveyance
of the entire mineral interest. I agree with the circuit court’s decision that the 1930 deed
conveyed the entire mineral interest but disagree that the deed was ambiguous. While I agree
to affirm the circuit court’s ultimate disposition of the case, I would do so along a slightly
different line than have my colleagues.
Whether a deed is ambiguous is a matter of law that we review de novo. Deltic Timber
Corp. v. Newland, 2010 Ark. App. 276, at 8, 374 S.W.3d 261, 266. The basic rule when
construing deeds is to implement the grantor’s intent, as expressed by the deed’s language,
when doing so is not contrary to settled principles of law. Barton Land Servs., Inc. v. SEECO,
Inc., 2013 Ark. 231, at 7, 428 S.W.3d 430, 435. We gather the parties’ intentions from the
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deed as a whole, not from some particular clause alone. Id. To this end, every part of the
deed should be harmonized and reconciled so that, as the cases put it, “all may stand together
and none be rejected.” Id. (citing Wynn v. Sklar & Phillips Oil Co., 254 Ark. 332, 493 S.W.2d
439 (1973)). We will not resort to rules of construction when a deed is clear and
unambiguous; rules or canons of construction are used only when a deed’s language is
ambiguous, uncertain, or doubtful. Id.
Here, Stevens argues that the circuit court erred when it construed the deed against
Chandler (the grantor) instead of against the person who purportedly prepared the deed:
W.E. Hall (the grantee). A deed may be construed against the party who prepared it, or
against the grantor, only if the deed is ambiguous and, more importantly, only as a last resort
to resolve the ambiguity. See Gibson v. Pickett, 256 Ark. 1035, 1040, 512 S.W.2d 532, 536
(1974); Deltic Timber, supra (same). Because the deed in play here is not ambiguous when
considered as a whole, there is no legal reason to construe the deed against any party.
Stevens attacks the validity of the 1930 deed in three primary ways: (1) the Chandlers’
name is misspelled as “Chandlier” at places in the deed; (2) consideration for the conveyance
was $80 or shares in an unidentified trust—and the deed states that consideration was paid by
W.E. Hall, Trustee—but the grantee is simply W.E. Hall; and (3) at least one of the Chandlers
signed the deed by a mark (“X”) rather than by signature. To prevail and set the mineral
deed aside, she must have produced “clear, cogent and convincing” evidence. Aberdeen Oil
Co. v. Goucher, 235 Ark. 787, 790, 362 S.W.2d 20, 21 (1962).
Stevens’s arguments do not persuade. I address her main points in turn.
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1. The Chandlers’ name is misspelled as “Chandlier” throughout. A valid deed must have
competent parties who are identifiable, and an adequate description of the subject matter;
valid consideration; words that effectively express a transfer or grant; and a formal execution
and delivery. Harrison v. Loyd, 87 Ark. App. 356, 364, 192 S.W.3d 257, 262 (2004). The
misspelling of the Chandlers’ name is not fatal to the deed because the deed as a whole
adequately names the grantor and the grantee. See Treece v. Treece, 212 Ark. 294, 298, 205
S.W.2d 711, 713 (1947); see also 4 Tiffany Real Prop. § 967 (3d ed. 2000) (“It is sufficient,
however, if the name as given is sufficient to enable the grantor to be identified, and the fact
that his name as it appears in the instrument differs from his actual name, or from the name
signed thereto, does not invalidate the conveyance.”). The 1904 patent deed referred to “Joe
C. Chandler” but the deed being attacked in this appeal recited “J.C. Chandlier.” The
difference between the two names is not fatal because the initials “J.C.” match the first and
middle initials used in the first patent deed “Joe C.”. Furthermore, the last names,
phonetically speaking, are virtually identical. See McReynolds v. First Nat’l Bank, 156 Ark. 291,
245 S.W. 819 (1922).
2. Consideration was $80 or shares in an unidentified trust and the deed states that consideration
was paid by W.E. Hall, Trustee, but the grantee was W.E. Hall. An alleged lack of consideration,
standing alone, does not void a deed. Luther v. Bonner, 203 Ark. 848, 848, 159 S.W.2d 454,
457 (1942) (“A mere inadequacy of consideration is not sufficient to set aside deeds without
accompanying acts of fraud or deception.”). The consideration for the 1930 deed may have
been shares in a trust, but that recital is not in and of itself a legal basis to set the deed aside.
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And Stevens did not present evidence to the circuit court—much less “clear, cogent and
convincing” evidence—that a trust was created by the deed or that W.E. Hall had a trust
estate. See Griffin v. Griffin, 200 Ark. 794, 794, 141 S.W.2d 16, 20 (1940) (“Courts are
reluctant—and should be—to impress trusts upon lands conveyed by deeds . . .”). Simply put,
the word “Trustee” is legally superfluous in this case.
3. At least one of the Chandlers signed the 1930 deed by a mark (“X”) rather than by
signature. One is bound by whatever he uses as a substitute for his name. Walker v. Emrich,
212 Ark. 598, 602, 206 S.W.2d 769, 769 (1947). A deed may be effective if signed by a
properly witnessed mark. Aberdeen Oil Co. v. Goucher, 235 Ark. 787, 791, 362 S.W.2d 20,
22 (1962). So the presence of a mark in lieu of a signature, in this case, is not a sufficient
reason to void the deed.
Stevens, I’ll also note, does not challenge other parts of the deed, its delivery, or
whether it was properly recorded. She alleges no fraud or adverse possession. Stevens also
concedes, as my colleagues point out, that the handwritten “release” language written on the
side of the deed lacks the necessary formalities to unwind the conveyance.
My colleagues cite Helms v. Vaughn, 250 Ark. 828, 467 S.W.2d 399 (1971), as they
briefly mention the abandonment-of-mineral-rights concept. Even if Stevens sufficiently
raised her abandonment argument in circuit court, I agree that Stevens did not obtain a ruling
on the issue. But it is still worth noting here that under what circumstances, if any, oil and
gas rights may be abandoned is an issue that arguably remains unanswered in Arkansas.
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The supreme court in Helms did not squarely decide the abandonment issue mentioned
in that case. And in Bodcaw Lumber Co. v. Goode, 254 S.W. 345 (Ark. 1923), the supreme
court held that an oil and gas mineral right is an estate in the oil and gas in place, with the
holder of the oil and gas having a present right of possession in perpetuity. A logical extension
of the court’s reasoning in Bodcaw, therefore, seems to be that oil and gas rights cannot be
abandoned after the mineral estate has been severed from the surface estate. In fact, my
research has not uncovered one Arkansas case where an appellate court has declared an
owner’s mineral rights to have been abandoned. Adverse possession appears in some cases and
the commentary, but not “abandonment.” See, e.g., Thomas A. Daily & W. Christopher
Barrier, Well, Now, Ain’t That Just Fugacious!: A Basic Primer on Arkansas Oil and Gas Law, 29
U. Ark. Little Rock L. Rev. 211 (2007) (Fugacious I); Thomas A. Daily & W. Christopher
Barrier, Still Fugacious After All These Years: A Sequel to the Basic Primer on Arkansas Oil and Gas
Law, 35 U. Ark. Little Rock L. Rev. 357 (2013) (Fugacious II) (The authors do not address
the concept of abandonment in either article; only adverse possession is covered. Nor do the
authors indicate that adverse possession is legally synonymous with abandonment.). While
some states have statutes or regulations that address how to determine who owns mineral
rights that have not been exercised in years, Arkansas apparently has no such mechanism. The
point here is merely a cautionary one: this case should not be read as making any statement
on whether, or how, one may “abandon” oil and gas rights in Arkansas.
* * * *
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The 1930 W.E. Hall deed conveyed all the mineral interest that Joe C. Chandler
owned; and that deed was delivered and recorded before Stevens’s 1947 deed. Stevens has,
furthermore, presented no convincing evidence to void the 1930 deed. On this case’s facts,
the Hall heirs were entitled to summary judgment as a matter of law. Because I agree with
the circuit court’s ultimate decision that the property’s mineral interest was vested in the Hall
heirs, I respectfully concur in this appeal’s disposition.
Kent Tester, P.A., by: Kent Tester, for appellant.
Daily & Woods, P.L.L.C., by: Robert R. Briggs, for appellee.
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