HAWKINS, PRESIDING JUSTICE, FOR THE COURT:
Linda Faye Echols and Lewis E. Turner have appealed from a decree of the chancery court of Jefferson Davis County dismissing the complaint filed by Etta Mae Knox, deceased, and Turner against Shell Oil Company.
The issue we address on this appeal is whether the grantors in a mineral conveyance retained only a one-sixteenth non-participating royalty interest, or conveyed a one-sixteenth non-participating royalty interest. We agree with the chancellor that the interest conveyed a fifteen-sixteenths mineral interest, and reserved to the grantors only a one-sixteenth non-participating royalty interest, and affirm.
On November 17, 1939, Thomas (Tom) Price was fee simple owner of twenty acres in Jefferson Davis County, described as the South Half of the Northwest Quarter of the Southwest Quarter (S-1/2 NW-1/4 SW-1/4) of Section Three, Township Six North, Range Seventeen West (3-6N-17W). On that date he and his wife Mollie executed a form mineral deed to C. L. Wagner, conveying unto him an undivided fifteen-sixteenths (15/16) interest in the oil and gas minerals. The instrument is on Form 0270 Rev. 3-36; a copy is made an appendix to this opinion. Prior to the execution of this instrument, the Prices on the same date executed an oil and gas lease to the same property to Charles W. Kelley. Kelley assigned the oil and gas lease to Wagner on November 20, and all three instruments were filed for public record in the chancery clerk's office on December 14.
Tom died intestate in 1941, leaving as his sole heir-at-law his widow Mollie Terrell Price. On January 27, 1971, Mollie executed a general warranty deed to the twenty acres to Etta Mae Knox, which was filed for public record the same day.
There was no development under the 1939 oil and gas lease, and it expired.
On August 7, 1940, Wagner executed a mineral deed to
Kelley conveying an undivided one-third interest in the oil and gas minerals on 390 acres of realty in Jefferson Davis County, which included the twenty-acre tract. This conveyance provided that the grantee would have and enjoy all bonuses, rents and royalties and other benefits in proportion to his interest. There were various conveyances of the Kelley interest unnecessary to recite. Their interest will be referred to as the Wagner interest.
In September, 1972, the Shell Oil Company acquired an oil and gas lease from the Wagner interest parties, having as their source of title the November 17, 1939, deed from the Prices to Wagner. Shell in turn assigned the lease to the Florida Gas Exploration Company (Florida).
In October, 1973, Florida obtained a drilling permit for a block of acres, which included the twenty-acre tract, and drilled a well approximately one-half mile from this tract. This well began commercial production in March, 1974.
The Florida interest was also assigned to numerous parties unnecessary to recite.
On August 3, 1982, Knox executed an oil and gas lease of the tract to Lewis E. Turner, which was filed for public record on January 18, 1983. On March 23, 1983, she assigned an overriding royalty equal to one-sixteenth of eight-eights (1/16 of 8/8) part of the oil produced under the lease.
On March 28, 1983, Knox and Turner filed a complaint in the chancery court of Jefferson Davis County seeking inter alia to have the court construe the Price deed to Wagner as a conveyance of a one-sixteenth royalty only, and cancel as clouds on their title all oil and gas leases and assignments thereof from the Wagner owners, and all subsequent minerals conveyances of the Wagner interest, insofar as they purported to convey anything more than a one-sixteenth non-participating royalty interest. The complaint also asked for an accounting. The complaint did not charge fraud, and did not ask to reform the conveyance because of mistake.
The basic question before the chancellor was whether the Price deed was a mineral deed of an undivided fifteen-sixteenths interest, or simply a one-sixteenth royalty conveyance, with no ...