Acoma Oil Corp. v. Wilson - 471 N.W.2d 476 (N.D. 1991)

Rule:

In cases where a grantor conveys some mineral interests while keeping some mineral interests in the same tract of land without an explicit reservation, the focus is on whether or not the grantor has enough mineral interests in that tract of land to satisfy the conveyance.

Facts:

The original landowner transferred to third parties a 6.5 percent royalty of all oil and gas produced from the 160 acres. The property was then conveyed to new owners. Via two mineral deeds, the successor landowners conveyed a 40/320th interest in the minerals in and under the property. Neither mineral deed indicated that the conveyed interest was burdened by the outstanding 6.5 percent royalty. The successor landowners died, and their sons took over their interest in the property. A dispute arose over the issue of whether the burden of the 6.5 percent royalty should be shared proportionately by the mineral deed holders and the sons, or born entirely by the sons. The trial court held that the royalty burden should be proportioned among the current interest holders. The mineral deed holders challenged the decision. 

Issue:

Should the 6.5 percent royalty be shared proportionately by the mineral deed holders and the sons? 

Answer:

No.

Conclusion:

On appeal, the court reversed the decision of the trial court and held that the mineral deed holders were not responsible for any portion of the 6.5 percent royalty. The court held that equitable estoppel and actual or constructive knowledge of the outstanding 6.5 percent royalty were not applicable to the action, because the successor landowners owned enough royalty interest in the tract of land to satisfy the previous royalty assignments without a reduction of any royalty from the "mineral acres" conveyed to the mineral deed holders.