Petition for Writ of Certiorari — Commissioners of the Land Office v. Butler

1\ VUP oie VUUTL, Uo.

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RR SEP 21 1988

JOSEPH F. SPANIOL, JR.

In The CLERK

Supreme Court of the United States

October Term, 1988

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_

THE STATE OF OKLAHOMA ex rel.

COMMISSIONERS OF THE LAND OFFICE

Petitioner,

CLAUDE R. BUTLER,

Respondent.

a

> 4

PETITION FOR A WRIT OF CERTIORARI TO THE

OKLAHOMA SUPREME COURT

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vv

Attorneys for Petitioner:

M. C. Kratz

General Counsel

PauL DeEGRAFFENREID

Senior Counsel

State of Oklahoma ex rel.

Commissioners of the

Land Office

P.O. Box 26910

5801 North Broadway

Oklahoma City, OK 73126

405-843-9962

MIcHaAEL Minnis & Associates, P.C.

MICHAEL MINNIS

First Oklahoma Tower, Suite 1310

210 W. Park Avenue

Oklahoma City, OK 73102

DATED: September 21, 1988

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

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—

—. eo We

QUESTIONS PRESENTED FOR REVIEW:

1. Where lands are part of a federally created Trust

and are sold by the Trustees (Petitioner herein) and where

that notice of sale contained a reservation of “oil, gas and

other minerals or mineral rights”, does such a reservation

include coal?

2. Should a determination of the question presented

herein be reached where the Court has excluded resort to

extrinsic evidence as to the intent of the parties?

3. Should a rule of construction known as “ejusdem

generis” be applied where such a construction may result

in a conveyance which is prohibited by statute and a

diminishment of federally created trust assets?

4. May the ultra vires acts of employees of Trustees

of a federally created Trust, result in a conveyance of

Trust property which was not authorized by the Trustees?

5. Where the published notice of sale of a tract of

land sold by Petitioners contained the following

language,

“at such sale there shall be reserved and retained

unto the state forever, title to fifty percentum of all

the oil, gas and other mineral rights in and under all

lands that may be sold. The purchaser will receive an

undivided fifty per centum of all the oil, gas, and

other mineral rights in and under all tracts hereby

Offered... .”

Does the doctrine of ejusdem generis operate to convey

only 50% of oil, gas and constituents thereof and there-

fore conveyed no coal interest to the purchaser?

il

THE LIST OF ALL PARTIES TO THE PROCEEDING

IN THE OKLAHOMA SUPREME COURT

The State of Oklahoma ex rel.,

Commissioners of the Land Office — (Petitioner)

Claude R. Butler - (Respondent - Appellee)

Amicus Curiae

Aetna Life Insurance and Federal Land Bank of Wichita

(in support of the Petitioner)

Peabody Coal Company

(in support of Respondent - Appellee)

towne,

iii

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW........... i

LIST OF ALL PARTIES TO PROCEEDING ......... ii

pee See eee Vv

OFFICIAL AND UNOFFICIAL REPORTS OF OPIN-

Ree Bee PRIN Ee LIN occ c cmc cccccccee 1

STATEMENT OF GROUNDS ON WHICH JURISDIC-

Po RO ee ee 1

THE CONSTITUTIONAL AND STATUTORY PROVI-

CCC R Es CEDUEG Ss ReSdso ac ebweecececeseees 2

STArmeenret OF THE CASE. ..............ccedeee. 2

THE FEDERAL QUESTIONS. .............0cceeeee- 7

REASONS FOR ALLOWANCE OF THE WRIT ..... 9

APPENDIX

Order Granting Rehearing and Majority Opinion,

seks hbo hs 55 Koweawen sacs cccces A-1

Dissenting Opinion, December 8, 1987............. A-14

Dissent to Denial of Petition for Rehearing, May

OEE ee ee ee er ree A-33

Majority Opinion, January 19, 1982................. B-1

Special Concurring Opinions, January 19, 1982 ....B-12

Dissent Opinion, January 19, 1982................. B-26

Been See Ges GT SD, BOTT 2... cc ccc ccc ccecs C-1

iv

TABLE OF CONTENTS-—-Continued

Page

The United Stutes Statutes, Act of Congress June 16,

1906, 34 U. S. Stat at Large Section 7, 8, 9, 10, 11,

12 GE BP ope sevivkatisvecwredssateensectesscssce D-1

The Oklahoma Constitution Article VI, Section 32,

REED Tee 6 San en cn akenrcatacavicesss D-8

Oklahoma Statutes, Section 6, Article 1, Chapter

28, Session laws of Oklahoma 1937, now cod-

ified as 64 O.S.A. Section 82.................... D-15

64 O.S.A. Sections 94, 95 and 96.................. D-20

Vv

TABLE OF AUTHORITIES

Page

CAsEs

Lassen v. Arizona, 395 U.S. 458 (1967).............64. 9

State of Oklahoma ex rel. Commissioners of the Land

Office v. Armstrong, 188 P.2d 347 (1947) ............ 7

The State of Oklahoma, ex rel., Commissioners of the

Land Office v. Butler, 753 P.2d 1334 (Okl. 1988) ..... 1

STATUTES

ee ets Se Ps avs ho ob b0cdced Cadevadiecaes 2

Act of Congress, June 16, 1906 34 U.S. Stat, at

Large pp. 267-278 Section 7, 8, 9, 10, 11, 12 and

) . Mepeneaeye pire ret Per TTT ETT TERT ETT eT TTT OO ET Te 2

Oklahoma Statutes — Section 6, Article 1, Chapter

28, Session Laws of Oklahoma — 1937, now cod-

ified as Title 64 O.S.A. Section 82.................. 2

Cs ee Ws a Oe Pe EOE so ccicsdccavecdnauecscces 3

64 O.S.A. (1941) Sections 94, 95, and 96.............. 2

CONSTITUTION

Oklahoma Constitution Article VI Section 32........ a

Oklahoma Constitution Article XI Section 1

GNI © nda yedcadctrcesarcpaacsnedeciodssssacics 2

CR. Se GR ee OE i a he nc bncdndecadecess 9

THE OFFICIAL AND UNOFFICIAL REPORTS

OF OPINIONS IN COURTS BELOW

The majority opinion, the dissenting opinion of Jus-

tice Opala with whom Vice Chief Judge Hargrave and

Justice Lavender join and the dissenting opinion of Jus-

tice Alma Wilson are all reported as The State of Oklahoma,

ex rel., Commissioners of the Land Office v. Butier, 753 P.2d

1334 (Okl. 1988).

The majority opinion of January 19, 1982, which was

withdrawn upon rehearing and the specially concurring

opinion of Justice Hargrave and joined by Justice Laven-

der and the dissent of Justice Simms joined by Justice

Hodges and Special Justice Joe Young was reported in the

Oklahoma Bar Journal Volume 53 ___ No. 3, dated Janu-

ary 23, 1982.

~>

STATEMENT OF GROUNDS ON WHICH

JURISDICTION IS INVOKED

The judgment sought to be reviewed is an opinion of

the Supreme Court of the State of Oklahoma dated and

entered December 8, 1987.

Rehearing was denied by order of the Oklahoma

Supreme Court on May 24, 1988. Petitioner requested an

extension of time to file its Petition for Certiorari on

August 8th and Associate Justice Byron White granted

extension of time. for filing petition for writ of certiorari

to and including September 21, 1988.

2

This Court has jurisdiction to review the judgment in

question by writ of certiorari under authority of 28

U.S.C.A. Sec. 1257(3).

s...

_

THE CONSTITUTIONAL AND STATUTORY

PROVISIONS

The United States Statutes Act of Congress, June 16,

1906 34 U.S. Stat, at Large pp 267-278 Section 7, 8, 9, 10,

11, 12 and 13. (Appendix, D-1)

The Oklahoma Constitution Article VI Section 32 and

Article XI Section 1 through 6. (Appendix, D-8)

Oklahoma Statutes - Section 6, Article 1, Chapter 28,

Session Laws of Oklahoma - 1937, now codified as Title

64 O.S.A. Section 82. (Appendix, D-15)

64 O.S.A. (1941) Sections 94, 95, and 96. (Appendix,

D-20)

STATEMENT OF THE CASE

Under the Enabling Act passed by the U.S. Congress

in June of 1906 (Act of June 16, 1906, Ch. 3335, §§ 1-22, 34

U.S. Stat. 267-78), the State of Oklahoma was granted title

in trust to 3.1 million acres of land for school, institution

and public building purposes. Petitioner, The Commis-

sioners of the Land Office, is the state-created agency

specifically charged by the State of Oklahoma with the

duty of carrying out these trust responsibilities.

In fulfilling its trust responsibilities, petitioner is

restricted by the enabling act, its own Constitution,’ and

subsequent consistent state legislative acts from selling

trust realty without reserving a portion of the minerals.”

Petitioner has executed more than 11,000 patents affect-

ing between 1.5 and 2.5 million acres of land containing

provisions for reservation of mineral interests.

Among the trust land sales by Petitioner was one in

1938. Three of the patents subsequently issued from these

sales were to respondent's predecessors in title. The pat-

ents specifically reserved 50% of the “oil, gas and other

minerals”.

The Commissioners of the Land Office are composed

of five state office holders and at the time of the sale of

subject lands they were the Governor, Secretary of State,

State Auditor, State Superintendent of Public Instruction

and the President of the State Board of Agriculture.

The resolution reflected in the minutes of Petitioner’s

regular September 12, 1938, meeting stated that the State

shall retain fifty percent of the mineral rights in and under the

lands sold. Petitioner subsequently advertised these tracts

1 In accepting the land grants from the United States,

Oklahoma constitutionally provided that: “The principal shall

be a trust fund held by the State, and shall forever remain

inviolate. It may increase, but shall never be diminished.”

OKLA. CONST., art. XI, § 2.

2 E.g. OKLA. STAT. tit. 64, § 96 (1941) provides that in

selling trust lands “the Commissioners of the Land Office

shall, in all cases, reserve and retain forever title to fifty (50%)

per centum of all the oil, gas and other mineral rights in and

under lands so sold.”

along with others according to the statutory scheme, and

the Public Notice of Sale read in pertinent part:

“At such sale there shall be reserved unto the State

forever, title to fifty per centum of all the oil, gas and

other mineral rights in and under all lands that may

be sold. The purchaser will receive an undivided fifty

per centum of all the oil, gas, and other mineral

rights in and under all tracts hereby offered... ”

At the time of the sale, Certificates of Purchase were

issued. Later, Patents were granted on the three subject

tracts. The certificates and the patents contain the follow-

ing reservations:

“fifty percentum of all the oil, gas and other mineral

rights.” — 1943.

or

“fifty percentum of all the oil, gas and other minerals

and mineral rights.” — 1957, 1961.

In 1977, Respondent, Claude R. Butler, brought an

action in state court to quiet title to his interest in coal

deposits found under lands granted to Respondent’s pre-

decessors in title in three patents issued by Petitioner in

1943, 1957 and 1961. Respondent contended the mineral

reservation language in the patents only related to oil and

gas and did not reserve any rights to other minerals

including coal. Petitioner contended the language in the

patents reserved 50% of all minerals under the land and

that the Petitioner was limited by federal statute and the

state Constitution from conveying any more interest in

the minerals.

The Trial Court in Craig County, Oklahoma entered

its Order sustaining Plaintiff’s (Butler) motion for judg-

ment where facts were not controverted. (Appendix C)

yee ee

The Trial Court’s Order contained conclusions of law

that the reservation of the oil, gas and other mineral

rights in the Patents reserves only the interest in and to

all the oil, gas and other minerals produced as a compo-

nent or constituent of oil or gas and specifically deter-

mined that there was no reservation of any other mineral

including coal. The Trial Court also held that the reserva-

tion language is clear, explicit and unambiguous and that

it is not necessary to consider any other evidence relating

to the intention of the parties. The Trial Court therefore

ordered that the Petitioner had reserved only an

undivided fifty per centum (50%) of all the oil, gas and

such other minerals as are produced as a component or

constituent of oil and gas from a drilled oil or gas well,

whether hydrocarbon or non-hydrocarbon, but not reser-

ving any other mineral, including coal.

Petitioner perfected a timely appeal of the Trial

Court’s October 5, 1977, order. On January 19, 1982, the

Oklahoma Supreme Court reversed the Trial Court judg-

ment. Oklahoma Supreme Court Justice Marian Opala,

writing for the majority, based the reversal on two princi-

ples, to-wit:

(1) The statutory scheme for sale of the subject

lands required Petitioner to reserve fifty percent of all

minerals and it was therefore powerless to convey to the

purchaser all of the coal rights; |

(2) The minutes of Petitioner’s meeting on “Sept-

ember 11, [sic] 1938” (actually September 12) contained a

resolution retaining fifty percent of the mineral rights.

Justice Opala noted that when the notice of sale was

published, the reservation had been changed to “oil, gas

and other mineral rights”. The Patents and Certificates

contained language similar to that in the notice of sale.

Justice Opala stated that Petitioner clearly showed intent

to reserve fifty percent of all minerals and that Peti-

tioner’s staff (who prepared the notice of sale) had no

power to act in contravention of the clear intent of the

Petitioner.

In a specially concurring opinion, Justice Rudolph

Hargrave stated that the Trial Court’s ruling should be

reversed because of its application of a rule of construc-

tion known as ejusdem generis. Justice Hargrave urged

that anytime a deed is held ambiguous enough to require

the application of this rule of ejusdem generis, the Court

should also entertain parol evidence as to the intent of

the parties.

In a dissenting opinion, Justice Robert Simms urged

that a patent is solemn evidence of title and that the Trial

Court’s analysis of the reservation language in the pat-

ents was correct.

Respondent timely requested a rehearing which was

granted almost five years later. On December 8, 1987, the

Supreme Court withdrew its January 19, 1982, opinion

and affirmed the Trial Court’s grant of summary judg-

ment for Respondent. The 1982 Supreme Court ruling

was by a 5-4 majority and the 1987 ruling was also by a

5-4 majority. This time Justice Simms wrote the majority

opinion and Justice Opala the dissent. The opinions are

very similar to those written by these Justices in 1982.

However in a published dissent to the denial of the

Commissioners’ subsequent request for rehearing, Justice

Alma Wilson wrote that the Commissioners administer a

federally-created trust as set out in the Oklahoma

Enabling Act. She stated that notice of sale provided for a

reservation of fifty percentum of all the oil, gas and other

mineral rights but the notice also stated that the purchaser

will receive an undivided fifty per centum of all the oil, gas

and other mineral rights in and under the tracts hereby offered.

Justice Wilson urged that under the doctrine of

ejusdem generis the Respondent’s predecessor in interest

was not offered and did not receive any interest in coal

and only received 50% of the oil, gas and the constituents

thereof.

The Commissioners’ request for rehearing was

denied on May 24, 1988. Justice Byron White of the

United States Supreme Court granted an extension of

time for Petitioner to file its petition for writ of certiorari

to September 21, 1988.

THE FEDERAL QUESTION

The Federal Question was first raised in the Trial

Court to Petitioner’s brief opposing Respondent’s motion

for summary judgment. Brief for Defendant, Butler v.

State of Oklahoma, No. C-77-58 (Craig Co. Dist. Ct., Okla.

Sept. 26, 1977). In its brief, Petitioner argued that the Trial

Court was not confronted with a case between private

parties but rather a case involving the “public interest”.

Petitioner urged that the Oklahoma Constitution required

the trust fund should “forever remain inviolate”. Citing

State of Oklahoma ex rel. Commissioners of the Land Office v.

Armstrong, 188 P.2d 347 (1947), Petitioner argued that the

trust fund created by federal law was from grants and

donations made by the United States for the benefit of the

state and could not be diminished. Id. at 2-3.

The Trial Court implicitly rejected the federal ques-

tions raised in granting summary judgment for Respon-

dent. Appendix C.

The federal questions were raised again in the Okla-

homa Supreme Court in the Brief of Appellant at 2, 6-8,

State of Oklahoma v. Butler, No. 51609 (Okl. Sup. Ct. Oct.

27, 1978). The Oklahoma Supreme Court ultimately

rejected arguments on the federal questions in its opinion

granting a rehearing. Appendix A-13.

Justice Alma Wilson’s dissenting opinion of May 24,

1988, very clearly focuses the federal questions raised.

Appendix A-33.

cd

REASONS FOR ALLOWANCE OF THE WRIT

As in Lassen v. Arizona, 395 U.S. 458 (1967), peti-

tioner’s cause arises out of duties attendant to congres-

sional land grants under a statehood enabling act. “[T]he

United States has a continuing interest in the adminstra-

tion of both the lands and the funds which derive from

them.” Id. at 585.

In violation of federal law, the Oklahoma Supreme

Court opinion will “result in diminishing the benefits

conferred by Congress”. Id. at 590. Under the Oklahoma

Enabling Act (Act of June 16, 1906, c 3335, §§ 7-12, 34

Stat. pp. 272-274) Petitioner is federally mandated to

administer certain lands granted by the United States to

Oklahoma in trust for the use and benefit of federally

designated purposes. The Oklahoma Supreme Courts

majority opinion of December 8, 1987, will result in a

diminution of the Petitioner’s “sacred trust” contrary to

the federal trust status created by the Oklahoma Enabling

Act and accepted by the state as a condition for state-

hood. Okla. Const., art. XI, §§ 1 and 2.

As of the audit for fiscai year 1987, the trust corpus

includes 770,000 acres of agricultural land, $514,000,000

in cash and royalty interests in 1.5 million acres. This

includes mineral interests retained when trust land was

sold. The effects of the Oklahoma Supreme Court ruling

on these trust interests is obvious. If the ruling is allowed

to stand, the federal trust created for the benefit of Okla-

homa schools will be deprived of interests not only in

coal but in all minerals other than oil and gas and its

derivatives which may be subsequently discovered under

10

these lands. It is not the intent of Congress or the State of

Oklahoma that this should happen.

Respectfully submitted,

Attorneys for Petitioner:

M.C. Kratz

General Counsel

PauL DgGRAFFENREID

Senior Counsel

Counsel fer Petitioner

State of Oklahoma ex rel.

Commissioners of the Land Office

P.O. Box 26910

5801 North Broadway

Oklahoma City, OK 73126

405-843-9962

MICHAEL Minnis & Associates, P.C.

MIcHAEL MINNIS

First Oklahoma Tower, Suite 1310

210 W. Park Avenue

Oklahoma City, OK 73102

Dated: September 21, 1988

A-1

APPENDIX A

IN THE SUPREME COURT OF

THE STATE OF OKLAHOMA

THE STATE OF OKLAHOMA, ) FOR OFFICIAL

ex rel., COMMISSIONERS OF ) PUBLICATION

THE LAND OFFICE, : (Filed Dec. 8, 1987)

Appellant, N

o. 51,609

V. )

CLAUDE R. BUTLER, )

Appellee.

ORDER GRANTING REHEARING

REHEARING GRANTED.

The opinion in the above cause promulgated January

19, 1982, at 53 OBJ 130, is hereby WITHDRAWN, and the

opinion handed down this date is substituted therefore.

DONE BY THE SUPREME COURT IN THE CONFER-

ENCE THIS 8th day of December 1987.

/s/ John B. Doolin

CHIEF JUSTICE

A-2

IN THE SUPREME COURT OF

THE STATE OF OKLAHOMA

THE STATE OF OKLAHOMA, |)

ex rel., COMMISSIONERS OF

THE LAND OFFICE,

Appellant,

)

) No. 51,609

)

v.

)

)

)

CLAUDE R. BUTLER,

Appellee.

(Filed Dec. 8, 1987)

AN APPEAL FROM THE DISTRICT COURT OF CRAIG

COUNTY, OKLAHOMA

HONORABLE WILLIAM J. WHISTLER,

DISTRICT JUDGE

Owner sought to remove a cloud on his

estate in coal and on minerals other than oil and

gas, its constituents and components. The trial

court sustained owner’s motion for summary

judgment. Commissioners of the Land Office

appeal.

AFFIRMED

Paul DeGraffenreid and

R. R. Williamson, Jr.,

Oklahoma City, Oklahoma, For Appellant,

John S. Athens, Russell H.

Harbaugh, Jr., Douglas L.

Inhofe,

Conners, Winters, Ballaine,

Barry & McGowen,

Tulsa, Oklahoma, For Appellee

Lee R. West, J. Clayton

LaGrone, Richard A. Paschal,

James E. Green, Jr.,

A-3

Hall, Estill, Hardwick, Gable,

Collingsworth & Nelson, P.C., For Amicus

Curiae.

SIMMS, J:

The issue presented by this appeal is whether a reser-

vation of an interest in “oil, gas and other mineral rights”

includes coal. We hold it does not. Our holding is consis-

tent with a long and unanimous line of cases. Our earlier

opinion in this matter has previously been ordered with-

drawn. Rehearing is granted, and this opinion is substi-

tuted therefor.

Claude Butler, the appellee, brought action to quiet

title in the rights to the coal on land he owned in fee

simple. His predecessors in interest acquired the property

by three separate patents from the Commissioners of the

Land Office by public sale of state-owned lands with

notice as provided by law. One patent reserved to the

state “an undivided fifty percentum of all oil, gas, and

other mineral rights” and the other two patents contained

reservations of “an undivided fifty percentum of all oil,

gas and other minerals and mineral rights”. The notice of

sale stated that the land would be sold subject to the

state’s reservation of fifty percent of “all the oil, gas and

other mineral rights”. The Commissioners counter-

claimed to quiet the state’s claimed interest in the coal

based on the reservations.

Mr. Butler sought summary judgment arguing that

the phrase “oil, gas and other minerals” has an estab-

lished meaning in Oklahoma; that it includes only oil and

gas and other minerals produced as a component or

constituent thereof. The Commissioners disagreed, urged

A-4

the Court to hold that the phrase was ambigious and to

allow extrinsic evidence of the intent of the original par-

ties at the time of the conveyances to be introduced.

The trial court found no significant distinction

between the language of the patents, held that the reser-

vations were unambigious and disallowed any extrinsic

evidence of intent. Based on our decision in Panhandle

Cooperative Royalty Co. v. Cunningham, Okl., 495 P.2d 108

(1972), the trial court held that the state had reserved

only fifty percent of the oil, gas and minerals produced as

constituents and components thereof, whether hydrocar-

bon or non-hydrocarbon, and that no other mineral,

including coal, was reserved by the state. The trial court

granted summary judgment in favor of Mr. Butler and

quieted title to all the coal in him.

The Commissioners bring this appeal contending pri-

marily that the trial court erred by disallowing extrinsic

evidence to show intent of the original parties. They

argue that the phrase “oil, gas and other minerals” is

ambigious and that extrinsic evidence should therefore be

allowed to show the intent of the original conveying

parties. The same arguments have been presented and

rejected repeatedly by this Court.

The phrase “oil, gas and other minerals” is, of course,

common in the oil and gas industry. It, and its close

variants, are standard terms which appear in very early

oil and gas leases, and have commonly been used in fee

conveyances and reservations, such as those before us

today. The meaning of “oil, gas and other minerals” has

been the subject of frequent and spirited litigation nation-

wide as well as in Oklahoma. Questions as to which

A-5

unspecified minerals are included within the phrase have

been answered with differing results under different

rationales. See, for instance the annotation Grant, Lease,

Exception, or Reservation of “Oil, Gas, and Other Min-

erals”, or the Like, as Including Coal or Metallic Ores, 59

ALR 3rd 116 (1974).

We have a consistent line of cases which offer no

possible result except that a reservation of “oil, gas and

other minerals”, standing alone, does not include coal.

See, e.g., Barker v. Campbell-Ratcliff Land Co., 64 Okl. 249,

167 P. 468 (1917) - reservation of “mineral rights”

includes oil and gas; Beck v. Harvey, 196 Okl. 270, 164 P.2d

399 (1946) - reservation of “mineral royalty” does not

include gravel; State, ex rel., Com'’rs of Land Office v.

Hendrix, 196 Okl. 596, 167 P.2d 43 (1946) conveyance of an

interest in and to all the oil, petroleum gas, coal, asphalt

and all other minerals of every kind and character docs

not include gravel; Cronkhite v. Falkenstein, 352 P.2d 396

(1960) - minera! deed for “oil, gas and other minerals”

does not include gypsum rock; and Holland v. Dolese Co.,

Okl., 540 P.2d 549 (1976) - reservation of an interest in

“the mineral rights” did not include quarried limestone.

In Oklahoma we have relied primarily on the rule of

ejusdem generis to determine the scope of such mineral

conveyances. Ejusdem generis is simply a rule of inter-

pretation. It gives guidance to the ordinary insight that

when specific words are followed by general words those

specific words restrict the meaning of the general. Thus,

where the phrase “other minerals” follows the enumera-

tion of particular classes of minerals such as oil and gas,

the general words will be construed as applicable only to

OOOO |

A-6

minerals of the same kind or class as those specifically

named. Wolf v. Blackwell Oil & Gas Co., 77 Okl. 81, 186 P.

484 (1920).

It is axiomatic that the interpretation of a written

contract which is free from ambiguity is a judicial func-

tion and that oral testimony or other extrinsic evidence is

not admissible to determine its meaning. The rules of

interpretation of contract, both statutory as set forth in 15

O.S.1981, § 151, et seq., and non-statutory rules such

ejusdem generis, are for use by the court to determine

whether an ambiguity exists. An ambiguity in a written

instrument allowing parol testimony does not appear

until application of pertinent rules of interpretation to the

face ot the instrument leaves it genuinely uncertain

which one of two or more meanings is the proper mean-

ing. Whether words of a contract or conveyance or other

written instrument are ambigious and therefore will sup-

port the need for extrinsic evidence is determined as a

matter of law by the trial court. See, e.g., Van Horn Drug

Co. v. Noland, Okl1., 323 P.2d 366 (1958); Panhandle Coopera-

tive Royalty Co. v. Cunningham, supra; Morgan v. Wheeler,

Ks., 150 Kan. 661, 95 P.2d 320 (1939); R & P Enterprises v.

LaGuarta, Gavrel & Kirk, Inc., Tex., 596 S.W.2d 519 (1980).

Appellants’ suggestion that the rule of ejusdem generis is

a rule to solve an ambiguity and therefore extrinsic evi-

dence should be allowed, is in error. This rule, like all

rules of interpretation, exists to aid the trial court’s deter-

mination of whether or not an ambiguity is present.

There is no longer room for question in Oklahoma.

The rule of law has evolved in this state that “oil, gas and

other minerals” is not ambigious. “Oil, gas and other

minerals” is not a description of the entire mineral estate.

A-7

The phrase has a certain and definite meaning: it includes

only oil and gas and those minerals produced as constitu-

ents and componenis thereof.

In Panhandle supra, the Court upheld the trial court's

determination that a mineral deed granting interest in

“oil, gas and other minerals” was not ambigious and that

extrinsic evidence of the parties’ intent as to the inclusion

of metallic minerals such as gold, silver and copper was

inadmissible. There the defendants had also argued that

the phrase was ambigious and included “all minerals”,

and that extrinsic evidence should be allowed to show

the parties’ intention to include metallic minerals. The

Court there did not rely on ejusdem generis, although it

recognized it as a rule of construction which is a useful

part of our law, but the Court did cite and rely on

Cronkhite v. Falkenstein, Okl., 352 P.2d 396 (1960), which

was an ejusdem generis case.

In Panhandle che Court conducted a historical review

of litigation on the issue which left no doubt that the

phrase “other minerals” resulted from early litigation

over rights to other distinct substances produced at the

well head - particularly casinghead gas - under mineral

deeds and conveyances of interest in “oil and/or gas”

and “oil and gas”. The phrase “other minerals” has a

special purpose in extending the connotation of “oil and

gas”.

Applying the statutory rules of interpretation, 15 O.S.

1961, § 151, et seq., the Court held that the deed in

question granted interest in oil and gas and other min-

erals produced as oil or gas or produced as a component

or constituent thereof whether hydrocarbon or non-

A-8

hydrocarbon, but did not grant any other mineral or the

right to produce any other mineral, including copper,

silver, gold, or any other types of metallic ores or metallic

minerals. Panhandle, supra at 113.

Following Panhandle the Court decided Allen v.

Farmers Union Cooperative Royalty Co., Okl., 538 P.2d 204

(1975), where metallic minerals were once again the sub-

ject of a quiet title action brought to determine whether

they were included in a reservation of “all oil, gas and

mineral rights’. The same arguments which were pre-

sented and rejected in Panhandle and are now presented

in the instant case, were before the Court in Allen, and

were summarily rejected.

The appellants there criticized the decision in Pan-

handle, and contended that the reservation is unam-

bigious and clearly meant “all minerals” of every kind.

Relying on the rule of ejusdem generis the Court deter-

mined that a reservation of “all oil, gas and mineral

rights” has essentially the same meaning as “all oil, gas

and other minerals” as set forth in Panhandle . . . i.e., oil,

gas and other minerals produced as a component or

constituent thereof, whether hydrocarbon or non-hydro-

carbon, and does not convey any other mineral or the

right to produce any other mineral including copper,

silver, gold or any other types of metallic ores or metallic

minerals. The Court reaffirmed its holding in Panhandle

that a deed granting oil, gas and other minerals is not

ambigious and consequently no extrinsic evidence of an

interpretative nature could be introduced to ascertain the

intention of the parties.

A-9

While coal was not the mineral directly at issue in

Allen, the question of coal ownership was passed on

indirectly by the Court in considering the mineral con-

veyance from Farmers to Flag. Farmers owned an inter-

est in “oil, gas and other minerals” and conveyed to Flag

an.interest in the “oil, gas, coal, iron, and other minerals”.

Farmers, held the Court, could not convey to Flag an

interest in metallic ores or minerals as Farmers owned

only an interest in the “oil, gas and other minerals” and

consequently could only convey to Flag an interest in

such minerals as defined in the Panhandle case. at 209.

Certiorari was denied by this Court in West v. Aetna

Life Insurance Company, (Ok1.Ct.App.) 536 P.2d 393 (1975),

wherein the Court of Appeals considered two groups of

deeds in an action brought by plaintiffs to quiet title to

metallic ores or minerals, including copper, gold, silver,

and lead. The defendants were claiming under reserva-

tions contained in deeds of conveyance and also under

grants in mineral deeds. At trial defendants offered to

show by parol evidence the intention of the parties at the

time of execution of the various grants and reservations.

The trial court, however, refused to admit the evidence,

holding the reservations and grants unambigious in law

and quieted plaintiff’s title in and to the mineral ores and

metals. Addressing the defendants’ arguments that the

phrase “oil, gas and other minerals” is ambigious and

should be subject to parol testimony, the Court of

Appeals conducted a thorough review of the Oklahoma

decisions, and stated that:

“The courts of Oklahoma, both state and federal,

Over a course of more than half a century, [have

A-10

adopted and applied] the rule of ejusdem gener-

is ... A review of the rulings of the Oklahoma

Supreme Court thereon constitutes a record of una-

nimity of ruling and decree, beginning with the case

of Kansas City Southern Railway Company v. Rein-

nam, 63 Okl. 69, 162 P. 726 (1917), and continuing

through the years to the recent case of Panhandle

Cooperative Royalty Co. v. Cunningham . . . The

Supreme Court in construing contracts, statutes,

deeds of conveyance, and other legal documents,

have consistently adhered to the policy of ‘stare

decisis’.” At 397.

Applying that rule in West, the Court of Appeals held

that the deeds were not ambigious, and that the reserva-

tions did not include metallic ores or minerals and

affirmed the trial court.

The certainty of the fixed meaning of “oil and gas

and other minerals” in Oklahoma is also reflected by the

Tenth Circuit decision of Sloan v. Peabody Coal Co., 547

F.2d 115 (10th Cir.1977). There, plaintiff had conveyed the

land to third parties who leased to the defendant for coal

mining purposes. Plaintiff had reserved one-half of “all

the oil, gas and minerals in, on, or under the surface of

said lands”. In its determination of whether the reserva-

tion included coal, the trial court had refused to consider

plaintiff’s extrinsic evidence to show the intent of the

parties and relied instead on the rule of ejusdem generis

in support of its conclusion that the language was unam-

bigious as a matter of law. The parties had agreed that the

issue was a legal one, that being whether under Okla-

homa law the reservation included coal. Relying on Okla-

homa decisions in Allen, Panhandle, and West, the Tenth

Circuit affirmed the trial court’s summary judgment for

defendant and noted that the Oklahoma courts in their

A-11

application of statutory and decisional law, have held

that the reservation of “oil, gas and other minerals” in a

deed is not ambigious. Finding that the application of the

rule of ejusdem generis is well established in Oklahoma,

the Tenth Circuit found it was properly applied by the

trial court and that the court was also correct in refusing

to admit extrinsic evidence as to intent of the parties. The

court also ruled that the chemical similarity between coal

and oil does not lead to a different result or a different

rule of construction.

We denied certiorari in Hutchison v. McClure,

Okl.App., 621 P.2d 546 (1980), wherein the Court of

Appeals held, in reliance on Sloan and 16 O.S. 1971, § 19,

that a reservation of “oil, gas and other minerals” did not

reserve an interest in coal.

The rule of law is clearly well settled in Oklahoma.

“Oil, gas and other minerals” or similar phrases are not,

standing alone, ambigious and do not allow the introduc-

tion of parol evidence. The meaning of the words must be

derived from common understanding which means that

“other minerals” shall be limited to minerals similar in

kind and class to “oil and gas”. Coal is not similar in kind

and class to oil and gas. Appellant urges us to find that

since all three belong to the class hydrocarbons, they are

similar and belong together. It is not, however, the chemi-

cal composition which is important, but rather those

traits which a man of common understanding would find

to be similar or dissimilar. While coal has some chemical

similarities to oil and gas, dissimilarities dominate. Coal

is a solid substance extracted from the land in ways

fundamentally different from those used to obtain oil, gas

or a “component or constituent thereof”, Panhandle, 495

A-12

P.2d, at 113. We therefore reaffirm our consistent position

that “oil, gas and other minerals” and similar phrases are

not ambigious. They do not include coal or other

unspecified minerals.

Appellants also suggest that slight differences in the

wording between the minutes of resolution of the Com-

misisoners to sell the property, the notice of sale, and the

patent support their argument that extrinsic evidence

should be allowed as to intent of the original parties.

It is fundamental that a patent is solemn evidence of

title; it is a written public grant of the highest character,

and high evidence of its own validity. Where government

officers have issued a patent in due form which on its

face is sufficient to convey title to land described, it is to

be treated as valid in actions of law. The recitals of the

patent are conclusive as to the estate conveyed, and no

evidence can be received for construction thereof. A pat-

ent is deemed to have been issued regularly and the

presumption exists that all usual necessary steps were

taken before the title was perfected by patent. See, e.g.,

Sharp v. City of Guthrie, 49 Okl. 213, 152 P. 403 (1915);

Bagness v. Broderick, 38 U.S. 436, 13 Pet. 436; 10 L.Ed. 235

(1839); Colorado Coal & Iron Co. v. United States, 123 U.S.

307, 55 S.Ct. 131, 31 L.Ed. 182 (1887); See, 1 O.S. 1981,

§ 11.

To look behind the patent to the minutes of the

meeting would be totally unsupported by law. The notice,

certificate of purchase, and patent were the specific acts

of the Commissioners and the entire sale process was

regular under 64 O.S.1941, §§ 95, 96, and in fact, the

A-13

words of the patent follow the statute, 64 O.S. 1941,

§ 82(d).

Appellants’ final argument is that a sacred trust of

the school lands existed for the benefit of the benefici-

aries and that as part of that trust, Commissioners were

forbidden by the Constitution to diminish the corpus.

They contend that by conveying coal rights without spe-

cific remuneration therefor, a diminution of the corpus

was effected which was beyond the Commissioners

authority. In support of this argument, appellants rely on

Lassen v. Arizona, 385 U.S. 458, 87 S.Ct. 584, 17 L.Ed.2d

515, which held that when trust lands are obtained by

anyone, including the state, the trust must be compen-

sated in money for the full appraised value. Lassen is

inapplicable here for, inter alia, this land sold for more

than its appraised value. Appellants’ argument would

mean that every time a new mineral was discovered on

subject lands, appellants could argue in retrospect that at

the time of sale it did not receive full compensation. We

reject the argument and find the notion contrary to the

language and spirit of the Enabling Act, the Oklahoma

Constitution, and common sense.

The trial court correctly granted the motion for sum-

mary judgment and we affirm.

JUDGMENT AFFIRMED.

DOOLIN, C.J., HODGES, SIMMS, KAUGER, and SUM-

MERS, JJ., CONCUR. HARGRAVE, V.C.J., LAVENDER,

OPALA, and WILSON, JJ., DISSENT.

A-14

IN THE SUPREME COURT OF

THE STATE OF OKLAHOMA

CLAUDE R. BUTLER, No. 51, 609

Appellee, (Filed Dec. 8, 1987)

ba FOR OFFICIAL

)

)

THE STATE OF OKLAHOMA ) PUBLICATION

ex rel. the Commissioners )

of the Land )

Office of said State,

)

Appellant.

OPALA, J., with whom Hargrave, V.C.J., and Lavender, J.,

join, dissenting.

Today’s opinion affirms summary judgment for the

plaintiff and quiets his title to all the coal rights in the

property in litigation. The court holds that a reservation

by the Oklahoma Commissioners of the Land Office

[Commissioners] of a fifty-percent interest in all the “oil,

gas and other mineral rights” underlying state lands

retains in the grantor solely oil and gas, its constituents

and components. The court specifically excludes from the

ambit of the reservation both coal and other unspecified

minerals. I recede from today’s pronouncement because,

in my view, the Commissioners were without statutory

power to convey more than fifty percent of “all minerals”

in the state-owned land. I would hence reverse the trial

court’s summary judgment and hold that the Commis-

sioners’ reservation effectively withheld from the patent's

grantee a one-half undivided interest in the coal rights.

FACTS

The appellee, Claude Butler [owner], sought to quiet

his title to the coal rights in certain land he claimed to

A-15

own in fee simple. His predecessors in interest acquired

title to the property from the Commissioners by three

separate patents.’ The first patent contained a reservation

to the state of “an undivided fifty percentum of all the

oil, gas and other mineral rights.” The reservation in the

other two patents was of “an undivided fifty percentum

of all oil, gas and other minerals and mineral rights.” The

property was sold to the owner’s predecessors in interest

through a public sale of state-owned lands. In the notice

of sale it was stated that the land would be sold subject to

a reservation in the state of an undivided fifty percent of

“all the oil, gas and other mineral rights.”

The owner sought summary judgment contending

that the sole issue tendered was the construction of the

phrase “oil, gas and other minerals” and that the mean-

ing of this phrase stood fixed as a matter of law. The

Commissioners urged extrinsic evidence should be

allowed to show the intention of the parties. By summary

judgment the trial court quieted title to all the coal rights

in the owner. Finding no significant distinction in the

language of the reservations in the three patents, the

court held that the state reserved only fifty percent of the

oil, gas and minerals produced as constituents and components

thereof, whether hydrocarbon and nonhydrocarbon, but

1 The first patent was dated November 29, 1943, the sec-

ond August 20, 1957 and the third December 5, 1961.

All statutory references to the cluster of enactments governing

conveyancing by the Commissioners are to the 1941 compila-

tion, the statutes that govern the interests in contest here.

A-16

failed to retain any other minerals, including coal.

According to the trial court, since the language in the

patents and in the notice of sale was clear, explicit and

unambiguous, the intention of the parties could be ascer-

tained from the writings alone, without resorting to

extrinsic evidence in a search for the parties’ intent. The

court took under consideration the pleadings, briefs of

the parties and certified copies of pertinent documents on

file in the court clerk’s office. These instruments included

the minutes of the Commissioners’ meeting at which a

resolution was adopted authorizing the sale of the lands

in suit.

The Commissioners appeal from the adverse sum-

mary judgment. This court may review a lower court’s

ruling on a pure question of law and correct any misin-

terpretation or misapplication of the applicable legal

norm. The error sought to be presented stands preserved

for corrective relief.?

The property in suit, which had been acquired by the

State through foreclosure proceedings, became a part of

the corpus of the permanent school fund. That fund may

be invested in first mortgages upon farmlands within the

state.4 The land came to be sold by the State in accord-

ance with the authority conferred by a 1937 statute.5

2 See 12 O.S. 1981 §630 and Southard v. Oil Equipment

Corporation, Okl., 296 P.2d 780, 782 [1956].

3 See Art. 11 § 2, Okl.Const.. Included in the permanent

school fund are proceeds of the sale of public lands that have

been or may be given by the United States government for the

use and benefit of the common schools.

4 Art. 11 § 6, Okl.Const.

5 Okl.Sess.L. 1937, Ch. 28, Art. 1 § 6 [later codified in 64

O.S. 1941 § 82].

A-17

I

LEGISLATIVELY CONFERRED POWERS

OF COMMISSIONERS

The validity of a Commissioners’ sale of public land

is governed by the power conferred by the legislature.

The applicable statute, 64 O.S. 1941 § 82, must be con-

strued to define the scope of the established authority.

The statutory provisions empowering the Commissioners

to issue patents become a part of the contract involved in

the conveyance of the land. The rights of the parties must

hence be determined in light of the statutory provisions.®

The Commissioners’ power to sell state lands or any

interest in them is exercised validly only when their acts

comply with the statutory mandate. Persons dealing with

state functionaries are bound tc know the extent of their

authority” and are charged with notice of the Commis-

sion’s statutory powers as well as with notice of the

officials’ nonconformity to the legally prescribed norms.®

The provisions of 64 O.S. 1941 § 96° set forth the

terms of sale contracts and certificates of purchase for the

sale of State land such as that involved in this case. This

section provides in part, that “the Commissioners of the

Land Office shall, in all cases, reserve and retain forever title

to fifty (50%) per centum of all the oil, gas and other mineral

6 Hoover Equipment Co. v. Board of Tax Roll Cor., Okl.,

436 P.2d 645, 649 [1968] and Baker v. Tulsa Building & Loan

Ass’n., 179 Okl. 432, 66 P.2d 45, 50 [1936].

7 State v. Frame, 200 Okl. 650, 199 P.2d 215, 217 [1948].

8 State v. Phillips Petroleum Co., infra note 10.

9 We do not quote here the text of 64 O.S. 1941 § 96

because only its subject and not its verbiage is relevant to our

discussion of the issues.

A-18

rights in and under lands so sold.” In State v. Phillips Petro-

leum Co.© we held that both this section and § 82(d)"

must be followed, even though the two provisions may

be viewed as somewhat contradictory. In order to give

full effect to both of these sections, the §96(c) require-

ment, which calls for a fifty-percent reservation of the

mineral estate, is to be regarded as controlling.

The ascertainment of legislative intent is the cardinal

rule of statutory construction.'? That intent is determined

10 Okl., 258 P.2d 1193, 1198 [1953].

11 The terms of 64 O.S. 1941 § 82(d) provide in pertinent

part:

“The Commissioners of the Land Office shall reserve and

retain forever the title to not less than forty (40%) per

centum of all the oil, gas and other mineral rights in and

under all lands to be sold; provided further, that the

Commissioners of the Land Office are empowered to join

in the execution of any oil, gas, or mineral lease on school

lands, which have been sold and in which they have

retained mineral interest, at their own discretion and with-

out the necessity of advertising as required on State-

owned lands. Such reservation is to be set out and

included in all Certificates of Purchase and Patents issued

to cover lands hereafter sold by the Commissioners of the

Land Office. . . .”

12 Riffe Petroleum Co. v. Great Nat. Corp., Inc., Okl., 614

P.2d 576, 579 [1980]; Lekan v. P & L Fire Protection Co., Okl.,

609 P.2d 1289, 1292 [1980]; Midwest City v. Harris, Okl., 561

P.2d 1357, 1358 [1977]; Stemmons, Inc. v. Universal C.I.T.

Credit Corporation, Okl., 301 P.2d 212, 216 [1956] and Adams

v. Fry, 204 Okl. 407, 230 P.2d 915, 917 [1951].

A-19

from the whole act in light of its general purpose and

object.!3 All of the statutory provisions dealing with the

same general subject should be construed together and

their provisions harmonized.'* A statute should also be

construed to render every word, sentence and provision

operative. It is presumed that every provision of a statute

was intended to have some useful purpose and should be

given effect.15 The title to an act is a proper guide in

ascertaining legislative intent.'*

Section 82 is one in a cluster of statutes under Title 64

which deal with sales, leases and deficiency judgments

relating to real property owned by the State and adminis-

tered by the Commissioners.'” These statutes must all be

construed together in order to arrive at the legislative

intent in any particular section. The Commissioners’

authority vis-a-vis mineral rights in state lands is also

dealt with in this chapter, although some of the statutes

refer to these rights in different terms.

13 Midwest City v. Harris, supra note 12 at 1358 and

Adams v. Fry, supra note 12 at 917.

14 Melton v. Quality Homes, Okl., 312 P.2d 476, 479 [1957]

and Becknell v. State Industrial Court, Okl., 512 P.2d 1180, 1183

[1973].

15 Matter of Ernest James C., Okl., 578P.2d 352, 355 [1978]

and W. L. Street v. Bethany Firemen’s Rel. and Pens. Fund,

Okl., 555 P.2d 1295, 1298 [1976].

16 Phillips v. Oklahoma Tax Com’‘n., Okl., 577 P.2d 1278,

1282 [1978] and Perry v. City of Oklahoma City, Okl., 470 P.2d

974, 979 [1970].

17 For other statutory provisions, see 64 O.S. 1941 §§ 81 -

100.

(Continued on following page)

A-20

By the terms of § 92 the Commissioners are autho-

rized to sell “oil, gas or other mineral leases” on state

lands. This language suggests that the sale of mineral

interests unrelated to oil and gas is covered by this stat-

ute. Reference is also made in § 82(d) to the execution of

“oil, gas or mineral” leases by the State in the minerals

reserved to it under this law. The title of the 1939 Act

amending 82 also provides in general terms that the

amendments relate to the preservation of mineral rights.

The titles to these acts and the references to mineral

rights in general throughout this grouping of related

statutes emphatically demonstrate a legislative design to

require the State’s retention of all minerals in one half of

the alienated lands.

A statute must also be construed so as to advance the

beneficial purposes manifested by the legislature.’* It

seems clear that the statutorily required reservation was

designed to preserve in the State a valuable interest in the

minerals underlying state-owned lands. This purpose is

not met unless the reservation mandated by § 82 is construed

to include all minerals in the retained subsurface estate.

(Continued from previous page)

In this group, 64 O.S. 1981 § 91 commands that the Commis-

sioners reserve “all oil, gas and minerals.” The title of this

section, enacted in 1963, provides that “all mineral rights [are]

to be retained by the State.” “Subsequent legislation may be

considered as an aid in construing prior enactments upon the

same subject.” Letteer v. Conservancy District No. 30, Okl., 385

P.2d 796, 801 [1963].

18 McGannon v. State, 33 Okl. 145, 124 P. 1063, 1067 [1912].

A-21

In sum, the quantum of interest conveyed by the

patents here in contest must be measured by the extent of

the Commissioners’ legislatively conferred power to

alienate land. The statutory provisions pursuant to which

the Commissioners acted constitute an integral part of

these patents. When the patents and applicable statutes

are read together, it is crystal-clear that the phrase “oil,

gas and other minerals” is indeed unambiguous. Its

meaning must be divined not from extrinsic evidence but

rather by reference to the restriction on the Commis-

sioners’ authority to transfer the State’s interest in the

land sold.

II

EJUSDEM GENERIS AND THE PHRASE

“OIL, GAS AND OTHER MINERALS”

The owner contends ejusdem generis should be

applied in rendering the meaning of the phrase “oil, gas

and other minerals.” Under this well-known canon of

construction, when a general phrase is followed by a list

of specific items, the scope of the phrase is restricted by

the nature of the specific items listed.‘ Applying this

rule to the language of § 82(d), the owner argues, the use

of words “oil and gas” before the general phrase “and

other minerals” requires that the “other minerals” be

limited only to those closely related to oil and gas, i.e.,

those which are constituents or components of oil and

gas.

19 Cronkhite v. Falkenstein, Okl., 352 P.2d 396, 399 [1960].

A-22

Ejusdem generis is one of many guides to statutory

interpretation. Other canons of construction are equally

potent. The ejusdem generis doctrine must yield to the rule

that an act should be so construed as to carry out the

object sought to be accomplished by it, so far as that

object can be collected from the language of the statute. If

the use of the ejusdem generis rule would hinder or defeat

the plain legislative purpose or intent, it may not be

applied in statutory construction.?° It is apparent in the

instant case that the application of ejusdem generis would

defeat the clear intent of the § 82(d) command that the

State retain a percentage of all mineral rights.

When construing the terms of § 82(d) together with

§ 96(c) our extant jurisprudence has implicitly recognized

that the reservation contemplated by the legislature must

encompass all minerals in the percentage interest

required to be retained. Although the exact character of

minerals included in the reservation was not specifically

before this court in those cases, it is clear that we viewed

the plain and ordinary meaning of the statutory language

to embrace not only oil-and-gas, its constituents and com-

ponents, but all other minerals as well.?!

20 Couch v. State, 71 Okl.Cr. 223, 110 P.2d 613, 616 [1941]

and Baccus v. Banks, 199 Okl. 647, 192 P.2d 683, 687, appeal

dismissed 333 U.S. 858, 68 S.Ct. 743, 92 L.Ed. 1138, reh.den. 333

U.S. 883, 68 S.Ct. 911, 92 L.Ed. 1158 [1948].

21 State v. Duggins, Okl., 258 P.2d 891, 894 [1953]; Penner

v. State, Okl., 302 P.2d 144, 149-150 [1956]; State v. Phillips

Petroleum Co., supra note 10 at 1199 and State v. Bright, Okl.,

261 P.2d 875, 877 [1953].

A-23

In the present case, the Commissioners were required

to reserve fifty percent of all minerals. They were hence

powerless to pass to the owner all of the coal rights under-

lying the property in suit. Because the conveyance cannot

be held to have alienated more than the quantum autho-

rized by statute to be sold, the owner’s predecessors in

interest acquired only fifty percent of the coal. The

remaining interest stood retained by the State’s

reservation.

III

PANHANDLE AND ITS EFFECT ON SUBSEQUENT

CASE LAW

The phrase “oil, gas and cther minerals” and similar

phrases have been construed in a number of our deci-

sions. Of primary significance is Panhandle Cooperative

Royalty Co. v. Cunningham.22 Panhandle dealt with the

construction of three mineral deeds. The issue was

whether copper, silver, gold or other metallic ores or minerals

were included within the purview of the respective grant-

ing clauses in these deeds.

A. Farmers-Flag Deed

There were essentially two deed forms to be con-

strued in Panhandle. The first one, the so-called Farmers-

Flag deed, contained in the granting clause a conveyance

of “oil, gas and other minerals.” Other provisions in that

deed specifically referred to oil and gas and the right to

execute oil-and-gas leases. The four-corners’ doctrine of

22 Okl., 495 P.2d 108, 113 [1972].

A-24

construction?? was applied and all parts of the deed were

carefully examined. It is through this analysis that the

deed, taken as a whole, was determined not to be ambig-

uous. The clear intention of the parties divined from the

face of the conveyance was to include in the phrase “oil,

gas and other minerals” only those minerals that were

produced as components and constituents of oil and gas.

Although Panhandle recognized the ejusdem generis canon,

we emphasized that it was not invoked in giving mean-

ing to the Farmers-Flag deed. Rather, the intent of the

parties to limit the effect of the granting clause to oil and

gas and closely related minerals was ascertained from the

clear language of the deed. Panhandle’s language that “in

contracts dealing with the production and utilization of

oil and gas, the expression ‘and other minerals’ has a

special purpose in extending the connotation of ‘oil and

23 The four-corners’ doctrine refers to the rule that con-

fines construction of a written instrument to its four corners.

See Cleary Petroleum Corp. v. Harrison, Okl., 621 P.2d 528, 532

[1980]. Extrinsic evidence to be used in search of the instru-

ment’s intended meaning is admissible only when the language

used is susceptible of multiple meanings and there is a dispute

between the parties as to the intended meaning of the lan-

guage in controversy. See Bryan v. Everett, Okl., 365 P.2d 146,

148 [1961] and Rose v. Cook, 207 Okl. 582, 250 P.2d 848, 850

[1952]. Extrinsic evidence was unnecessary in this case because

the phrase “oil, gas and other minerals” is not ambiguous when

the statutes pertinent to their issuance are read in conjunction with

the patents.

A-25

gas’ only”24— must be regarded as restricted to deeds, such

as the Farmers-Flag, which may be said to express the

parties’ “preoccupation with oil and gas”. The holding

does not, as a matter of law, govern the construction of all

instruments or material in which the phrase “oil, gas and

other minerals” is used. We surely did not intend to

pronounce that the quoted language, standing alone, must

always be restricted in its meaning to “oil, gas and other

minerals produced as oil or gas or produced as a compo-

nent or constituent thereof, whether hydrocarbon or

nonhydrocarbon.”

B. The Two Remaining Deeds

My view of the Panhandle’s ratio decidendi is rein-

forced by this court’s construction of two other deeds

under consideration there. The granting clauses in those

deeds also embraced “oil, gas and other minerals.”

Because other clauses in the conveyances did not reflect a

clear intention to pass only an estate in the oil, gas and

related components, those deeds, viewed as a whole,

were deemed to be ambiguous. The case was remanded

with directions to consider extrinsic evidence in a search

for the parties’ intent.

C. The Misperception of “Panhandle” and its Misap-

plication in Extant Caselaw

The Panhandle message may have been misread. In

West v. Aetna Life Insurance Company® a landowner

24 Panhandle Cooperative Royalty Co. v. Cunningham,

supra note 22 at 113.

25 Okl.App., 536 P.2d 393, 397-398 [1975].

A-26

sought to quiet title to his rights in metallic ores. The

grantor-defendant had conveyed the property, but

reserved the “oil, gas and other mineral rights.” The

defendant contended the reservation’s language was

ambiguous and extrinsic evidence should be allowed to

show the intent of the parties. The court employed

ejusdem generis to conclude that only minerals produced

as components and constituents of oi] and gas were

reserved. The granting clause in West was similar to

Panhandle’s Farmers-Flag deed. Unlike in Panhandle, the

court in West did not allude to other provisions in the

deed or in the reservation. Its failure so to ¢> makes it

unclear whether the four-corners’ doctrine was given

effect in like manner as in Panhandle to demonstrate that

the reservation was free from ambiguity. West may have

improperly relied on Panhandle for the application of

ejusdem generis. The latter decision neither teaches nor

suggests that ejusdem generis should be followed to the

exclusion of other canons of construction.

The owner places even stronger reliance upon Allen

v. Farmers Union Co-Operative Royalty Co.26 Allen, which

appears to rest on the same misperception of Panhandle as

that found in West, does not cite West. The case similarly

involved a deed that contained a reservation of “oil, gas

and mineral rights”. The trial court refused to consider

the subsequent acts of the parties as extrinsic evidence of

the intended meaning to be given the phrase. Instead, the

rule of ejusdem generis was viewed as applicable. Its use

resulted in the determination that the deed included only

26 Okl., 538 P.2d 204, 208-209 [1975].

A-27

minerals produced as components and constituents of oil

and gas. We affirmed the trial court’s decision. There was

no allusion in Allen to other provisions in the deed. This

is so because Panhandle appears to have been accepted as

clothing the phrase “all oil, gas and other minerals” with

a fixed meaning. Panhandle’s construction of the phrase

was not intended as a per se definition for use in all cases.

Rather, the holding there doubtless was meant to be of

limited application to instances where the meaning of the

language is clear from the construction of the instrument as a

whole.

Allen also refers to another case in which the ejusdem

generis canon was applied ~ Cronkhite v. Falkenstein.?7

Cronkhite involved a dispute over whether the phrase

“oil, gas and other minerals” included gypsum rock.

There, ejusdem generis was applied to conclude that gyp-

sum was not within the grant. Extrinsic evidence was

also considered in a search for the parties’ intent. The

opinion emphasized that ejusdem generis is not to be

applied when the result reached would be contrary to the

parties’ intent.28 The use of ejusdem generis, together with

the admission of extrinsic evidence, both led in Cronkhite

to the conclusion that the parties did not intend to

include gypsum in the reservation. Allen’s and West’s

27 See supra note 19 at 399.

28 Cronkhite v. Falkenstein, supra note 19 at 399.

A-28

reliance on Cronkhite to support the proposition that

ejusdem generis could be used in every case to the exclusion

of extrinsic evidence is clearly misplaced. Cronkhite

stands for the principle that, when applicable, ejusdem

generis may be used together with extrinsic evidence to

arrive at the the parties’ intention.

D. Early Case law Provides Guidance to Proper Applica-

tion of Ejusdem Generis

A much earlier case, Wolf v. Blackwell Oil & Gas Co.,?9

demonstrates an approach similar to that used in Cron-

khite. In Wolf a lease granted the right to produce all of

the “oil, gas and other minerals.” Elsewhere in the lease,

the lessor reserved the rights to “1/10 of all the oil and

other minerals” produced. Yet another clause gave the

lessor the right to $100 per year for every well producing

gas only. Although the ejusdem generis canon of construc-

tion was applied to determine what minerals were

encompassed within the phrase “all oil, gas and other

minerals,” it is clear that the lease was considered in its

entirety to then arrive at the conclusion that gas was

excluded. Although Wolf may have left unclear the pre-

cise effect of ejusdem generis, that decision gives no

ground for assuming that the rule may be used to the

exclusion of the four-corners’ doctrine.

Ejusdem generis was again invoked in Vogel v. Cobb%°

to ascertain if water was included in a grant of “oil,

29 77 Okl. 81, 186 P. 484, 485 [1920].

30 193 Okl. 64, 141 P.2d 276, 280 [1943].

A-29

petroleum, gas, coal, asphalt, and all other minerals.” The

court considered extrinsic evidence as to the parties’

intent.

None of the cases discussed thus far has dealt with

the specific issue of whether coal is included within the

phrase “oil, gas and other minerals.” Most of them

involve minerals very different in nature from oil and

gas, i.e. metallic minerals.31 A recent federal case, Sloan v.

Peabody Coal Co.,32 addressed itself to the specific ques-

tion whether coal is embraced in the quoted language. No

doubt relying on a flawed analysis of Panhandle, the

federal court was led to conclude that coal was excluded

from a reservation of “oil, gas and other minerals.” Sloan,

a federal case, is of course not binding on us here.

While today’s opinion appears to verbally clad

ejusdem generis as a canon of construction, the court applies

the doctrine as though it were an inflexible and universal rule

of law. Its pronouncement gives the phrase “oil, gas and

other minerals” a fixed meaning that excludes every min-

eral other than the constituents and components of oil

and gas. The very ascription of a fixed meaning to the

phrase makes it one of universal application and hence a

rule of law rather than a canon of construction. The

purpose of ejusdem generis is not to accord fixed and

unalterable meaning to some particular verbiage, but

31 Allen v. Farmers Union Co-Operative Royalty Co., supra

note 26 and West v. Aetna Life Ins. Co., supra note 25.

32 547 F.2d 115, 116 [10th Cir. 1977].

A-30

rather to use it as an aid in construing language where

specific things are named in a series that follow a general

term. By its very nature, ejusdem generis must be

employed only on a case-by-case basis. There is no

authority for our acceptance of ejusdem generis as a uni-

versal rule of law. In fact, Panhandle specifically rejects

the notion of the maxim’s universality.

The court intimates today that the phrase “oil, gas

and other minerals” is attributable to early litigation over

rights to other distinct substances produced at the well-

head, particularly casinghead gas. Its account, which

attempts to explain how the phrase has developed, is of

doubtful historicity. I am persuaded that the verbiage

might have been fashioned in the aftermath of Barker v.

Campbell-Ratcliff Land Co.,33 where the court treated a

reservation of “all mineral rights” as ambiguous and

hence subject to further probing by parol evidence. It was

after Barker that cautious conveyancers in the 1920s and

1930s began drafting “oil, gas and other minerals” to

denote in deeds that oil and gas rights were either

granted, excepted or reserved.*4

33 64 Okl. 249, 167 P. 468, 469 [1917].

34 See Bell, The Continuing Problem of ‘Other Minerals:’

Oklahoma Needs a Uniform Rule of Construction, 56 OBJ 2919

(footnote 4 a: page 2928)[1985] and Emery, What Surface is

Mineral and What Mineral is Surface, 12 Okla.L.Rev. 499, 512

[1959].

A-31

IV

ACTS OF COMMISSIONERS CONTROL OVER

NOTICE OF SALE

Another reason exists for concluding that the Com-

missioners did not have the power to alienate more than

fifty percent of the coal rights. The provisions of § 82(a)

require the Commissioners to adopt a resolution authori-

zing the sale of any land pursuant to this statute. The

record in this case contains a certified copy of the min-

utes of the Commissioners’ meeting held on September

11, 1938. A resolution adopted at that meeting approved

the sale of the land involved in this suit. The resolution,

which had been voted upon and approved by the Com-

missioners, stated that the State shall retain fifty percent of

the mineral rights in and under the lands sold. When the

notice of sale was published, it included language differ-

ent from that found in the resolution. The phrase “all

mineral rights” had been changed to “oil, gas and other

mineral rights.” The patents and certificates of sale used

verbiage similar to that in the notice of sale. The Commis-

sioners’ official action and their intent with respect to this

property’s sale clearly was to retain fifty percent of all

minerals.

The notice of sale and the patents issued cannot be

allowed to control over the specific actions of the Com-

missioners. The Commission staff was without authority

to act in contravention of the Commissioners’ intent

clearly expressed in their resolution. One who purchases

an interest in school lands without making inquiry as to

the Commissioners’ compliance with the terms of their

trust, is charged with notice of all defects and irregu-

larities which exist in the sale proceedings and hence

A-32

cannot claim the status of a bona fide purchaser.*> The

original purchasers of this land were deemed to have

notice of the discrepancy between the official action by

the Commissioners and the language of the reservation

contained in the notice of sale and in the patents. They

cannot be said to have acquired more than fifty percent of

the rights in all minerals, including coal. Subsequent

purchasers also are charged with notice of those defects

or irregularities in sale proceedings which are apparent

upon examination of the records. The law draws here a

close analogy to the principles that apply in guardianship

sales.%¢

The court today rejects out of hand the long-held

view that the permissible search for the quantum of

interest conveyed by the State may extend beyond the

four corners of the State’s conveyance to include the

notices as well as the Commission minutes. Its refusal to

allow an examination of critical and foundational instru-

ments dehors the patents is entirely without support in

legal precedent and appears to be contrary to all extant

jurisprudence.%7

35 State v. Phillips Petroleum Co., supra note 10 at 1199;

State v. Duggins, supra note 21 at 894 and State v. Bright, supra

note 21 at 877-878.

36 State v. Phillips Petroleum Co., supra note 10 at 1199;

Selement v. Gibson, 171 Okl. 513, 43 P.2d 759, 760-761 [1935];

Lowery v. Richards, 120 Okl. 261, 248 P. 622, 624-625 [1926]; In

re Standwaitie’s Estate, 73 Okl. 255, 175 P. 542, 543-544 [1918]

and Burton v. Compton, 50 Okl. 365, 150 P. 1080, 1082 [1915].

37 See State v. Phillips Petroleum Co., supra note 10.

A-33

Because I cannot countenance the court’s mistaken

reliance on ejusdem generis for its conclusion that the

phrase “oil, gas and other minerals” has a universally

fixed legal meaning whose definitional perimeter

embraces only oil, gas and only those minerals that are

produced as their constituents and components, J] must

stand in dissent from today’s pronouncement.

IN THE SUPREME COURT OF

THE STATE OF OKLAHOMA

THE STATE OF OKLAHOMA, ) FOR OFFICIAL

ex rel., COMMISSIONERS OF OS PUBLICATION

THE LAND OFFICE, ) No. 51,609

Appellant, i ats

) (Filed May 24, 1988)

Vv. )

CLAUDE R. BUTLER, )

Appellee. ‘

ALMA WILSON, Justice, dissenting:

Appellee brought this action seeking to establish

ownership rights to coal underlying land acquired from

the Commissioners of the Land Office of the State of

Oklahoma by Appellee’s predecessors in interest.

By virtue of 64 O.S. 1981 § 1, Appellant, the Commis-

sioners of the Land Office of the State of Oklahoma,

administers a federally created trust as set out in the

Oklahoma Enabling Act. This trust originated from lands

and monies which were engifted to the State at the time it

aati nile

A-34

was admitted to the Union in 1907. Investment of perma-

nent trust funds includes first mortgages upon improved

farm land within the State of Oklahoma. In the event that

such mortgaged property is foreclosed, the title to the

land is vested in the State and this land becomes a part of

the corpus of the trust. The beneficiaries of this trust are

the common schools of the State of Oklahoma.

As a condition of statehood the State of Oklahoma

pledged its faith to preserve the lands and monies of this

sacred trust for the beneficiaries to whom it is dedicated.

Article XI, §:1 of the Oklahoma Constitution, provides as

follows:

“... The principal shall be deemed a trust fund held

by the State, and shall forever remain inviolate. It

may be increased, but shall never be diminished. The

State shall reimburse said permanent school fund for

all losses thereof which may in any manner

occur. .. .” [Emphasis added.]

The Commissioners, as trustees of the school land trust,

thus, do not stand in the same shoes as an ordinary

landowner, but must carry out their constitutional duty

to the trust in a way which will maximize revenue to

uphold their obligations to the sacred trust. Oklahoma

Education Association, Inc. v. Honorable George Nigh, 642

P.2d 230 (Okla. 1982). Although the Commissioners are to

be guided by the legislative enactments in the adminis-

tration of the trust, these statutes cannot contravene the

constitutional mandate to preserve the trust. Indeed, it

must be presumed that the Legislature predicated these

statutes upon the constitutional conditions imposed upon

the trust and intended to maximize the preservation of

valuable rights for the benefit of the common schools of

A-35

this State. The express designation of the school lands

and funds as a “sacred trust” has the effect of irrevocably

incorporating into the Enabling Act, the Oklahoma Con-

stitution, and conditions of the grant, all the rules of law

and duties governing the administration of trusts. No act

of the Legislature can validly alter, modify or diminish

the State’s duty as Trustee of the school land trust to

administer it in a manner most beneficial to the trust

estate and in a manner which obtains the maximum

benefit in return from the use of trust property or loan of

trust funds.

In the present case, the Commissioners’ authority to

sell state school lands or any interest in them must be

viewed, first, within the mandate of the constitutional

grant; and secondly, within the context of statutory pro-

cedures for the administration of the trust construed in a

manner consistent with the constitutional trust mandate;

and thirdly, within the terms of the sale contract and

certificate of purchase. According to statutory pro-

cedures, the following offer appeared in the notice for the

sale of the state owned property which is the subject of

this appeal:

“At such sale there shall be reserved and retained

unto the state forever, title to fifty percentum of all

the oil, gas and other mineral rights in and under all

lands that may be sold. The purchaser will receive an

undivided fifty per centum oj all the oil, gas, and other

mineral rights in and under all tracts hereby offered. . . .”

Taking into consideration the constitutional trust man-

date, consisterit legislative enactments pertaining thereto,

and the language in the granting clause under the doc-

trine of ejusdem generis, the only mineral rights received

by Appellee upon acceptance of the offer amounted to

A-36

50% of oil, gas and the constituents thereof. Appellee was

not offered and did not receive any interest in coal upon

his purchase of the tracts in question. The majority’s

holding to the contrary results in a deprivation of valu-

able minerals owned by the school land trust estate and

diminishes the corpus of the trust funds in violation of

the Enabling Act, the Constitution and the laws of the

State of Oklahoma.

I dissent.

B-1

APPENDIX B

IN THE SUPREME COURT OF

THE STATE OF OKLAHOMA

CLAUDE R. BUTLER,

Appellee, No. 51,609

v. FOR OFFICIAL

PUBLICATION

THE STATE OF OKLAHOMA )

ex rel. The Commissioners of ) (Filed Jan. 19, 1982)

the Land Office of said State,

Appellant.

APPEAL FROM THE DISTRICT COURT,

CRAIG COUNTY, OKLAHOMA

Hon. William J. Whistler, Judge

Owner sought to remove a cloud on his estate in coal and

on minerals other than oil-and-gas, its constituents and

components. The trial court sustained owner’s motion for

summary judgment. The State ex rel. Commissioners of

the Land Office appeals.

REVERSED AND REMANDED

Paul DeGraffenreid and

R.R. Williamson, Jr., Esqs.

Oklahoma City, Oklahoma For Appellant

John S. Athens, Russell H.

Harbaugh, Jr. and Douglas L.

Inhofe, Esqs.

Conner, Winters, Ballaine,

Barry and McGowen

Tulsa, Oklahoma

Jack L. Rorschach, Esq.

Vinita, Oklahoma For Appellee

B-2

Lee R. West, J. Clayton La Grone,

Richard A. Paschal and James E.

Green, Jr., Esqs.

Hall, Estill, Hardwick, Gable,

Collingsworth and Nelson

Tulsa, Oklahoma For Amicus Curiae

OPALA, J.:

The issue presented is whether the reservation by the

Oklahoma Commissioners of the Land Office [Commis-

sioners] of a fifty percent interest in all the “oil, gas and

other mineral rights” in state lands includes all minerals

thereunder or is limited to oil-and-gas, its constituents

and components. We hold that since the Commissioners

were statutorily empowered to convey no more than fifty

percent of “all minerals” in the state-owned land, the

, reservation was not limited to oil-and-gas, its constitu-

ents and components.

FACTS

The appellee, Claude R. Butler [Owner], sought to

quiet title in the coal rights in certain land he owned in

fee simple. His predecessors in interest acquired title to

the property from the Commissioners by three separate

patents.! The first patent contained a reservation to the

state of “an undivided fifty percentum of all the oil, gas

and other mineral rights”. The reservation in the other

two patents was of “an undivided fifty percentum of all

oil, gas and other minerals and mineral rights”. The

property was sold to the owner’s predecessors in interest

through a public sale of state-owned lands. In the notice

of sale it was stated that the land would be sold subject to

B-3

a reservation in the state of an undivided fifty percent of

“all the oil, gas and other mineral rights”.

The owner sought summary judgment contending

that the sole issue tendered was the construction of the

phrase “oil, gas and other minerals” and that the mean-

ing of this phrase was fixed as a matter of law. The

Commissioners urged extrinsic evidence should be

allowed to show the intention of the parties. The trial

court granted summary judgment and quieted title to all

the coal rights in the owners. Finding no significant dis-

tinction between the language of the reservations in the

three patents, the trial court held that the state reserved

only fifty percent of the oil, gas and minerals produced as

constituents and components thereof, whether hydrocar-

bon or nonhydrocarbon, but failed to reserve any other

minerals, including coal. The court further held that the

language in the patents and in the notice of sale was

clear, explicit and unambiguous and the intention of the

parties could be ascertained from the writings alone,

without resort to extrinsic evidence to determine the

intent of the parties. The court took under consideration

the pleadings, briefs of the parties and certified copies of

pertinent documents on file in the court clerk’s office.

These documents included the minutes of the Commis-

sioners’ meeting at which a resolution was adopted

authorizing the sale of the lands in suit. 3

The Commissioners appeal from the adverse sum-

mary judgment.

1 The first patent was dated November 29, 1943, the sec-

ond August 20, 1957 and the third December 5, 1961.

B-4

This court has the power to review a lower court’s

ruling on a pure question of law and to correct any

misinterpretation or misapplication of the applicable

legal norm. This error stands preserved and is properly

before this court.?

The property in suit was acquired by the State

through foreclosure proceedings and became a part of the

corpus of the permanent school fund.’ Art. 11 § 2, Okl.

Const. The fund may be invested in first mortgages upon

farmlands within the state. Art. 11 § 6, Okl. Const. The

land came to be sold in accordance with the authority

conferred by a 1937 statute.4

The validity of a sale of public land by the Commis-

sioners is dependent upon the authority and power con-

ferred by the legislature. The applicable statute, 64 O.S.

1941 § 82, must be examined and construed to determine

the scope of the legislatively-conferred power. The statu-

tory provisions empowering the Commissioners to issue

patents become a part of the contract involved in the

conveyance of the land. The rights of the parties thereto

212 O.S. 1971 § 630; Southard v. Oil Equipment Corp.,

Okl., 296 P.2d 780, 782 [1956].

3 Included in the permanent school fund are proceeds of

the sale of public lands that have been or may be given by the

United States government for the use and benefit of the com-

mon schools. Art. 11 § 2, Okl. Const.

4 Okla.Sess.L. 1937, ch. 28, Art. 1 § 6 [later codified in 64

O.S. 1941 § 82].

B-5

must hence be determined in light of the statutory

provisions.®

The provisions of 64 O.S. 1941 § 96 set forth the terms

of sales contracts and certificates of purchase for the sale

of State land such as the land involved in this case. This

section provides in part, that “the Commissioners of the

Land Office shall, in all cases, reserve and retain forever

title to fifty (50%) per centum of all the oil, gas and other

mineral rights in and under lands so sold”. In State v.

Phillips Petroleum Co., Okl., 258 P.2d 1193 [1953] we held

that both this section and § 82(d)¢ are to be given effect,

even though the sections are somewhat contradictory. In

order to give effect to both of these sections, the require-

ment in § 96(c) of a fifty percent reservation should be

controlling. This construction neither contradicts the pro-

visions of § 82(d) nor does it fail to give necessary effect

to the unmistakable intent expressed by the legislature in

the language of § 96(c).

5 Hoover Equipment Co. v. Board of Tax Roll Corrections

of Adair County, Okl., 436 P.2d 645, 649 [1967]; Baker v. Tulsa

Bldg. & Loan Ass’n., 179 Okl. 432, 66 P.2d 45, 50 [1936].

6 The terms of 64 O.S. 1941 § 82(d) provide in pertinent

part: “The Commissioners of the Land Office shall reserve and

retain forever the title to not less than forty [40%] per centum

of all the oil, gas and other mineral rights in and under all

lands to be sold; provided further, that the Commissioners of

the Land Office are empowered to join in the execution of any

oil, gas, or mineral lease on school lands, which have been sold

and in which they have retained mineral interest, at their own

(Continued on following page)

B-6

The ascertainment of legislative intent is the cardinal

rule of statutory construction.” That intent is determined

from the whole act in light of its general purpose and

object. All of the statutory provisions dealing with the

same general subject should be construed together and

their provisions harmonized.? A statute should also be

construed to render every word, sentence and provision

operative, for it is presumed that every provision of a

statute was intended to have some useful purpose and

should be given effect.1° The title to an act is a proper

guide in ascertaining legislative intent.”

(Continued from previous page)

discretion and without the necessity of advertising as required

on State-owned lands. Such reservation is to be set out and

included in all Certificates of Purchase and Patents issued to

cover lands hereafter sold by the Commissioners of the Land

Office.”

7 Riffe Petroleum Co. v. Great National Corp., Inc., OKl.,

614 P.2d 576, 579 [1980]; Lekan v. P & L Fire Protection Co.,

Okl. 609 P.2d 1289, 1292 [1980]; Stemmons, Inc. v. Universal

C.L.T. Credit Corp., Okl., 301 P.2d 212, 216 [1956].

8 Midwest City v. Harris, Okl., 561 P.2d 1357, 1358 [1977];

Adams v. Fry, 204 Okl. 407, 230 P.2d 915, 917 [1951].

9 Melton v. Quality Homes, Okl., 312 P.2d 476, 479 [1957];

Becknell v. State Industrial Court, Okl., 512 P.2d 1180, 1183

[1973].

10 Matter of Ernest, James C., Okl., 578 P.2d 352, 355

[1978]; Street v. Bethany Firemen’s Relief and Pension Fund

Board, Okl., 555 P.2d 1295, 1298 [1976].

11 Phillips v. Oklahoma Tax Commission, Okl., 577 P.2d

1278, 1282 [1978]; Perry v. City of Oklahoma City, Okl., 470

P.2d 974 [1970].

B-7

Section 82 is one in a cluster of statutes under Title 64

which deal with sales, leases and deficiency judgments

relating to real property owned by the State and adminis-

tered by the Commissioners.!2 These statutes must all be

construed together in order to arrive at the legislative

intent in any particular section. The Commissioners’

authority vis-a-vis mineral rights in state lands is also

dealt with in this chapter, although some of the statutes

refer to these rights in different terms.

In § 92 the Commissioners are authorized to sell “oil,

gas or other mineral leases” on state lands. This language

suggests that the sale of mineral interests unrelated to oil

and gas is covered by this statute. Reference is also made

in § 82(d) to the execution of “oil, gas or mineral” leases

by the State in the minerals reserved to it under this law.

Another statute in this group, § 99, provides that the

Commissioners shall reserve “all oil, gas and minerals”.

The title of the original Act, codified as § 99, provides

that “ail mineral rights [are] to be retained by the State”.

The title of the 1939 Act amending § 82 also provides in

general terms that the amendments relate to the preserva-

tion of mineral rights. The titles to these acts and the

references to mineral rights in general throughout this

grouping of related statutes strongly indicate a legislative

design to require the retention by the State of a percent-

age of all minerals.

12 See also 64 O.S. 1941 §§ 80-100.

B-8

A statute must also be construed so as to advance the

beneficial purposes manifested by the legislature.!> It

seems clear that the reservation required by these statutes

was designed to preserve in the State and its citizenry a

valuable interest in the minerals underlying state-owned

lands. This purpose is met by construing the reservation

in § 82 to include all minerals.

The owner contends that the rule of ejusdem generis

should be applied in construction of the phrase “oil, gas

and other minerals”. Under this well-known principle of

statutory construction, when a general phrase follows a

list of specific items, the general phrase is restricted by

the nature of the specific items listed.1* Applying this

rule to the language of § 82(d), the owner argues, the use

of words “oil and gas” before the general phrase “and

other minerals” requires that the “other minerals” be

limited only to those closely related to oil and gas, i.e.

those which are constituents or components of oil and

gas.

The ejusdem generis principle is one of many rules of

statutory construction. It may not be applied automat-

ically to every problem of statutory interpretation. Other

rules of construction are equally potent. The doctrine of

ejusdem generis yields to the rule that an act should be so

construed as to carry out the object sought to be accom-

plished by it, so far as that object can be collected from

the language of the statute. If the use of the rule ejusdem

13 McGannon v. State, 33 Okl. 145, 124 P. 1063, 1067 [1912].

14 Cronkhite v. Falkenstein, Okl., 352 P.2d 396, 399 [1960].

re Renae

B-9

generis would hinder or defeat the plain legislative pur-

pose or intent, it may not be applied in statutory con-

struction.?> It is clearly apparent in the instant case that

the application of this doctrine would defeat the intent

expressed by the legislature in § 82(d) to retain for the

State a percentage of all mineral rights. Insofar as the rule

of ejusdem generis is held to be inapplicable here, our

pronouncement rejecting that interpretative device is, of

course, limited to conveyances by the Commissioners.

In construing the terms of §§ 82(d) and 96(c) in our

prior case law, we have implicitly recognized that the

reservation contemplated therein encompassed all min-

erals.16 Although the issue of what minerals were

included in the reservation was not specifically before us

in those cases, it is clear that we viewed the plain and

ordinary meaning of the statutory language to include

not only oil-and-gas, its constituents and components,

but all other minerals as well.

In the case at bar, the Commissioners were required

to reserve fifty percent of all minerals. They were power-

less to convey to the owner all of the coal rights in the

15 Couch v. State, 71 Okl.Cr. 223, 110 P.2d 613, 616 [1941];

Baccus v. Banks, 199 Okl. 647, 192 P.2d 683, 687, appeal dis-

missed 68 S.Ct. 743, 333 U.S. 858, 92 L.Ed. 1138, reh. den. 68

S.Ct. 911, 333 U.S. 883, 92 L.Ed. 1158 [1948].

16 State v. Duggins, Okl., 258 P.2d 891 [1953]; Penner v.

State, Okl., 302 P.2d 144 [1955]; State v. Phillips Petroleum Co.,

Okl., 258 P.2d 1193 [1953]; State v. Bright, Okl., 261 P.2d 875

[1953].

B-10

property in suit. Because the conveyance could not alien-

ate more than the quantum authorized by statute, the

owner’s predecessors in interest acquired only fifty per-

cent of the coal, the remaining interest having been

retained by the State.

There also exists another ground for concluding that

the Commissioners did not have the power to grant more

than fifty percent of the coal rights. The provisions of

§ 82(a) require the Commissioners to adopt a resolution

authorizing the sale of any land under this statute. The

record in the instant case contains a certified copy of the

minutes of the meeting of the Commissioners on Septem-

ber 11, 1938, at which a resolution was adopted approv-

ing the sale of the land involved in this case. The

resolution stated that the State shall retain fifty percent of

the mineral rights in and under lands sold. This resolu-

tion was voted upon and approved by the Commis-

sioners. When the notice of sale was published, it

included language different from that in the resolution.

The phrase “ail mineral rights” had been changed to “oil,

gas and other mineral rights”. The patents and certifi-

cates of sale contained language similar to that in the

notice of sale. The Commissioners’ official action and

intent with respect to this property was clearly to retain

fifty percent of all minerals. Their intent was not reflected

with the same clarity in the notice of sale.

The notice of sale and patents cannot be allowed to

control over the specific actions of the Commissioners.

The Commission staff had no power to act in contraven-

tion of the clear intent of the Commissioners, as

expressed by their resolution. One who purchases an

interest in school lands, without making inquiry as to

B-11

compliance of the Commissioners with the terms of their

trust, is charged with notice of such defects and irregu-

larities as exist in the proceedings of the Commissioners

and cannot claim the status of a bona fide purchaser.’”

The original purchasers of this land were deemed to have

notice of the discrepancy between the official action by

the Commissioners and the language of the reservation

contained in the notice of sale and the patents. They

hence cannot be said to have received more than fifty

percent of the rights in all minerals, including coal. Sub-

sequent purchasers are charged with notice of any defects

or irregularities in proceedings before the Commissioners

which are apparent upon examination of the records. The

law draws here a close analogy to the principles applica-

ble in guardianship sales."

Summary judgment is reversed and cause remanded

with directions to enter a judgment not inconsistent with

this opinion.

After Irwin, C.J. and Williams, J. certified their disqual-

ification, Barnes, V.C.J. assigned Hon. Joe Young and

Hon. Alma Wilson, both judges of the district court, to sit

as special justices in this case.

17 State v. Phillips Petroleum Co., supra note 16 at 1199;

State v. Duggins, supra note 16 at 894; State v. Bright, supra

note 16 at 877-878.

18 State v. Phillips Petroleum Co., supra note 16 at 1199;

Selement v. Gibson, 171 Okl. 513, 43 P.2d 759, 760-761 [1935];

Lowery v. Richards, 120 Okl. 261, 248 P. 622, 624-625 [1926]; In

re Standwaitie’s Estate, 73 Okl. 255, 175 P. 542, 543-544 [1918];

Burton v. Compton, 50 Okl. 365, 150 P. 1080, 1082 [1915].

B-12

BARNES, V.C.J., LAVENDER and HARGRAVE, J.J. and

WILSON, S.J. concur. HODGES, SIMMS and DOOLIN, J.J.

and YOUNG, S.J. dissent.

IN THE SUPREME COURT OF

THE STATE OF OKLAHOMA

Claude R. Butler, )

Appellee, FOR OFFICIAL

sc PUBLICATION

7 No. 51,609

)

)

)

The State of Oklahoma, ex rel. ) ;

The Commissioners of the Land ) (Filed Jan. 19, 1982)

Office of Said State, )

Appellant.

HARGRAVE, J., Concurring Specially:

The majority finds, through statutory construction, a

plain meaning for the phrase, “oil, gas and other min-

erals.” Such a result affords the State, and only the State,

protection from what amounts to a rule of property law,

elevated from the humble origins of a simple rule of

construction, i.e., ejusdem generis.

While the result reached by the majority is correct in

determining the statutory intent requires reservation of a

portion of all minerals, the majority ignores the broader

implications of our past decisions which apply to all

citizens of the state and were presented in this appeal. I

would not salvage the State’s interest here while relegat-

ing private parties to the unfortunate position of dealing

with “oil, gas and other minerals” terminology solely

B-13

through the doctrine of ejusdem generis, without the aid of

other methods of construction. Once a conveyarnice is

determined to be ambiguous, the Court should allow the

parties to utilize all traditional avenues of construction to

resolve the ainbiguity, rather than singling out ejusdem

generis as the only available aid to resolution.

Answering plaintiff's second cause of action, the

State alleged plaintiff was not entitled to a declaratory

judgment determining the meaning of the words “oil, gas

and other minerals” standing alone because the facts of

this action demonstrate the existence of relevant admiss-

ible extrinsic evidence bearing upon the intent of the

parties at the time of this transaction, including the statu-

tory authority for the sale, and the notice issued pursuant

thereto; as well as the balance of the language contained

within the four corners of the patent.

Plaintiff thereafter filed a motion for judgment where

facts are not controverted, including with the motion

copies of the three patents, a notice of public sale, and a

copy of Chapter 28, Article 1, Section 6 of the Oklahoma

Session Laws of 1937.1 His brief accompanying that

1 Section 6. Sale of Lands - Deficiency Judgments.

(a) Upon resolution adopted by the Commissioners of the

Land Office, any and all lands acquired by foreclosure of

mortgage or the acceptance of deeds or lands heretofore sold

under Certificate of Purchase Contract, where said Certificate

of Purchase has been canceled, er all land acquired by original

(Continued on following page)

B-14

(Continued from previous page)

grant, except original grant land which can be used for grazing

purposes only, may be sold by the Commissioners of the Land

Office for cash or on Sales Contracts to be denominated, “Cert-

ificates of Purchase, providing for an initial payment of not

less than ten (10%) per centum of the total purchase price, at

the discretion of the Commissioners, the balance to be paid in

not more than forty (40) equal annual payments with deferred

payments drawing interest at the rate of three (3%) per cent

per annum. Notice of the sale of such lands as may be offered

for sale shall be published in five (5) consecutive issues in at

least one weekly newspaper of general circulation in the

county in which such tract or tracts of land are situated. Such

notice shall give a brief description of the lands and improve-

ments located thereon and the appraised value of both such

lands and improvements, the time, place and terms of sale.

Said lands shall be sold to the highest responsible bidder at

public auction. No tract shall be sold for less than ninety (90%)

per centum of the appraised value thereof, and the same shall

be appraised prior to sale by three duly authorized appraisers

of the Commissioners of the Land Office. In all cases the

Commissioners of the Land Office shall have the right to reject

any and all bids. Said Commissioners are hereby authorized to

pay for the cost of conducting said sales from the proceeds

thereof.

(d) The Commissioners of the Land Office shall reserve

and retain forever title to not less than forty (40%) per centum

of all the oil, gas and other mineral rights in and under all

lands to be sold. Provided further, that the Commissioners of

the Land Office are empowered to join in the execution of any

oil, gas or mineral lease on school lands, which have been sold

and in which they have retained mineral interest, at their own

discretion and without the necessity of advertising as required

on State-owned lands. Such reservation is to be set out and

included in all Certificates of Purchase and Patents issued to

(Continued on following page)

B-15

motion states the statutory authority for sale requires the

State to reserve unto itself “40 per centum of the oil, gas

and other mineral rights in and under all lands to be

sold.” Plaintiff states that this Court’s interpretation of

grants and reservations of oil, gas and other mineral

rights has been that such a grant or reservation affects

only oil, gas ard other minerals produced as a compo-

nent or constituent of that oil or gas. The position taken

in plaintiff's trial brief is that this result is dictated by our

prior application of ejusdem generis to the phrase “other

minerals.” Plaintiff also contended the use of the phrase

“other minerals” is, in large part, a result of litigation

concerning by-products of oil and gas as found at the

wellhead. Among those distinct but integral substances -

are casinghead gas? and helium.? The State’s response to

(Continued from previous page)

cover lands hereafter sold by the Commissioners of the Land

Office. Provided, that the provisions of this Section shall not

apply to any State-owned lands which the Commissioners of

the Land Office may, by resolution duly adopted, find to be

suitably situated for townsite developmental purposes. Any

such land may be by the Commissioners of the Land Office,

platted and sold in separate town lots or in entire tracts at the

discretion of the Commissioners, without reservation as to the

mineral rights, and Patent conveying the full fee simple title

may be given the purchaser upon full payment of the purchase

price; provided that in the case of any lands being sold without

the reservations of any mineral rights thereto, such sale shall

be held only upon resolution adopted by a unanimous vote of

the Commission.

2 Withington v. Gypsy Oil Co., 68 Okla. 138, 172 P. 634

(1918).

3 Northern Nat. Gas Co. v. Grands, 441 F.2d 704 (10 Cir.

1971).

B-16

the motion for summary judgment admitted all facts in

the pleadings save the meaning of the phrase “oil, gas

and other minerals.” The State ex rel. Commissioners of

the Land Office also alleged summary judgment was

improper because that phrase last quoted as it appeared

in the patent should be construed in the light of extrinsic

evidence of the intent of the parties at the time of the

transaction — the issuance of the patent.

The trial court sustained the motion for summary

judgment on plaintiff’s first cause of action; removing the

cloud on plaintiff’s title, but denied judgment on the

second cause, which sought a declaratory judgment

establishing the meaning of the phrase “oil, gas and other

minerals.” The trial authority’s findings of fact echo the

pleadings summarized above, there being no contest

thereto. The conclusions of law made in the judgment

dispose of the issues raised by the parties in the trial

court. First, the judge concluded that there is no material

distinction between the reservations contained in the

notice of sale and the mineral deed subsequently issued.

The notice stated the State would reserve an interest in

“all the oil, gas and other mineral rights,” while the

patents reserved an interest in all the oil gas and other

minerals and mineral rights. Furthermore, the court con-

cluded that the statutory authority for the sale, the notice

and the resultant patent were unambiguous and the

intent of the parties was ascertained from the writings

alone without resort to other extrinsic evidence of the

parties’ intent. The judgment holds the patents’ reserva-

tion effects a reservation of only 50% of the oil, gas and

other such minerals as are produced as a component or

constituent of oil and gas from a drilled oii and gas well,

B-17

whether hydrocarbons or not, but does not operate to

reserve to the state any other minera! or the right to

produce the same, including coal. From the judgment and

order, the State ex rel Commissioners of the Land Office

perfected a timely appeal, designating all pleadings,

orders and a “complete transcript of all proceedings”

together with all evidence, stipulations and exhibits

offered and introduced at pretrial and trial of the cause.

Subsequently, the Commissioners of the Land Office

struck from the designation the “transcript of

proceedings.”

The findings of fact recite that the notice given states

in pertinent part:

At such sale there shall be reserved and retained

unto the State forever 50 per centum of all oil, gas

and other mineral rights in and under all lands that

may be sold. The purchaser shall receive an

undivided fifty per centum of all the oil, gas and

other mineral rights in and under all tracts hereby

offered...

This notice was filed of record in Craig County affording

constructive notice to all of the interest to be sold. In the

past, we have held that the purchaser receives no title to

minerals by reason of the issuance of a patent purporting

to convey minerals when the notice of sale specifically

excluded those rights under a previous codification of 64

O.S. 1971 § 95, State ex rel Commissioners of Land Office v.

Phillips Petroleum, 258 P.2d 1193 (Okla. 1953); State ex rel

Commissioners of Land Office v. Bright, 261 P.2d 875 (Okla.

1953), Commissioners of Land Office v. Duggins, 258 P.2d

891 (Okla. 1953). The principle is applicable here, and the

notice of sale is the measure of the interest which was

offered, bid upon and sold by the State.

B-18

The trial court’s determination that the patent and

notice were unambiguous and conveyed only the oil, gas

and their constituents arises from this Court’s discussion

in Allen v. Farmers Union Co-op Royalty, 538 P.2d 204

(Okla. 1975). In Allen, the tria! court had refused an offer

to prove by extrinsic evidence the intent of the parties at

the time of the transaction because it held the conveyance

by Spears to Farmers was clear and unambiguous thereby

limiting a determination of the parties’ intent to the four

corners of the instrument. This Court affirmed the trial

court’s refusal to admit extrinsic evidence of intent stat-

ing that “in view of our holding above, Spears had no

interest in the metallic ores or minerals, and consequently

could not convey an interest in those minerals to

Farmers.” After holding Spears had no interest to convey,

the Court added the surplus observation that:

... Furthermore, we held in the Panhandle case

supra (495 P.2d 108, 111 and 113) that a deed grant-

ing the same mineral interest (“oil, gas and other

minerals) with other subsequent provisions almost identi-

cal to that in the present deed...

The emphasized portion of the preceding quote is the

sole acknowledgment in Allen of the correct reading of

Panhandle and it is dicta in an alternative ruling. In Allen,

the initial determination that Spears had no interest to

convey to Farmers resulted from the determination that

Spears’ conveyance to the bank reserving “one half inter-

est in and to all oil, gas and mineral rights” reserved only

oil and gas and other components of the ferae naturae as it

arrives at the mouth of the well. Allen’s discussion of the

reservation and the law applicable is quoted fully in

B-19

pertinent part in the margin.* Consideration of that mar-

ginal note discloses that in Allen the Court found Spears’

reservation was ambiguous. This is so because the Court

applied the doctrine of ejusdem generis to arrive at the

meaning of the reservation. Where a deed or contract is

reduced to writing, the intent of the parties is to be

ascertained from the writing alone. Bryan v. Everett, 365

4 ... The problem is to determine the meaning therof

when used in the phrase “all oil, gas & mineral rights.” We

conclude that the solution to this problem is to be found in the

same manner as was used in determining the meaning of “all

oil, gas and other minerals.” In the latter situation we used the

rule of ejusdem generis. In Cronkhite v. Falkenstein, Okla., 352

P.2d 396, 399, we quoted the rule as follows:

“Under the rule of ejusdem generis, where a party or author

in a contract or conveyance makes use first of terms each

evidently confined and limited to a particular class or species

of things, and then, after such specific enumeration, subjoins a

term of very extensive signification, this term, however gen-

eral and comprehensive in its possible import, yet, when thus

used, embraces things only ejusdem generis, i.e., of the same

kind or species, with those comprehended by the preceding

limited and confined terms.”

[1] It is our opinion that the Spears’ reservation, “all oil,

gas & mineral rights” has essentially the same meaning as “all

oil, gas and other minerals” as set forth in the Panhandle case

(495 P.2d 108, 113) i.e., oil, gas and other minerals produced as

a component or constituent thereof, whether hydrocarbon or

nonhydrocarbon, and does not convey any other mineral or the

right to produce any other mineral including copper, silver,

gold or any other types of metallic ores or metallic minerals.

Under this definition of the Spears’ reservation, Baines-

Bowman have no interest in the metallic ores or minerals.

B-20

P.2d 146, (Okla. 1961), 15 O.S. 1971 §154,155. The para-

mount consideration of the Court is to determine the

intent of the parties at the time of contracting. 15 O.S.

1971 § 152. Public Service Co. of Okla. v. Home Builders

Ass'n of Realtors, Inc., 554 P.2d 1181, (Okla. 1976). At the

outset, that consideration is limited to the four corners of

the written agreement. 12 O.S. 1971 § 154. Rules of con-

struction and interpretation of contracts are available to

remove uncertainty WHEN AN AMBIGUITY EXISTS, but

if the language used by the parties is clear and explicit

then that language governs the determination of the

intent of the parties in the absence of fraud, accident,

mistake or absurdity. Frensley v. White, 208 Okla. 209, 254

P.2d 982 (1953); Van Zant v. State Ins. Fund, 203 Okla. 421,

223 P.2d 111 (1950); Continental Casualty v. Wear, 185 Okla.

245, 91 P.2d 91 (1939). Conversely, if the language used

shows the intent of the parties, there is no need to apply

rules of construction, for where there is no doubt, there is

no room for construction. Romans v. Shannon, 80 Okla.

199, 195 P. 298 (1921); Strange v. Hicks, 78 Okla. 1, 188 P.

347 (1920). The doctrine of ejusdem generis is a rule of

construction and not a rule of property law, as was noted

in Panhandle, supra. Therefore, it is certain the implication

from the application of the doctrine to the reservation

made by Spears in Allen, Supra, is that such reservation

was ambiguous. Counsel attempted to introduce evi-

dence extrinsic to the document of the parties’ intent. The

trial court refused that offer as was noted in Allen, supra,

in the first new paragraph on page 207, now quoted:

At the trial of the cause the above instruments

were introduced in evidence. The trial court also

permitted Flag, as an offer of proof, to introduce

testimony and evidence designed to show that, at the

Fal

B-21

time Spears conveyed the mineral interest to Farmers

and during their later relationship and dealings con-

cerning the same, Spears and Farmers thought and

believed they owned a mineral interest consisting of

more than an interest in the oil, gas and constituents

thereof. This evidence was offered, as we understand it,

to show the intentions of the parties in connection with

the reservation and conveyances. The court permitted

this evidence only as an offer of proof, refused to

consider it, held the instruments were clear and

unambiguous, and rendered judgment agaimst the

Appellants quieting title in the Allen Heirs to all the

metallic minerals specifically and generally described

above. (E.A.) -

As noted in Rush v. Champlin Refining Company, 321

P.2d 697, (Okla. 1958), at pp. 700, 701, unless a deed is

ambiguous it is the duty of the court to interpret it, and

parol evidence is not competent to explain it or vary its

terms. However, when a deed possesses an element of

ambiguity or uncertainty, parol evidence, the admissions

of the parties, and other extraneous circumstances may

be proved to ascertain the true intent of the parties when

the ambiguity is intrinsic and is shown on the face of the

instrument. Allen, therefore, is internally inconsistent.

The language of the Spears’ reservation was ambiguous

enough to require interpretation by the application of the

rule of construction known as ejusdem generis to establish

the reservation reserved only the oil and gas to the gran-

tor. Despite that fact, the trial court’s refusal to admit

parol evidence relating to the intent of the parties was

affirmed. It is my view that where a grant or reservation

is ambiguous enough to require the application of such

an arbitrary rule of construction, the parties should be

allowed to introduce parol evidence to explain their

intent at the time of the transaction. Title 15, O.S. 1971

B-22

§§ 152, 153, 154 and 155, all refer to determining the

intent of the parties to the transaction. We have said the

chief object to be furthered in the interpretation of a

contract is to ascertain the intent of the parties. McDowell

v. Droz, 179 Okla. 199, 64 P.2d 1210 (1937). The Tenth

Circuit Court of Appeals has paraphrased that statement,

saying that under Oklahoma law the paramount object of

construing a contract is ascertaining the intent of the

parties if it can be done consistent with legal principles.

Kelso v. Kelso, 225 F.2d 918, 10 CCA, (Okla. 1955). It is

therefore my opinion that at any time a deed is held to be

ambiguous enough to require the application of the rule

of ejusdem generis, the Court should also entertain parol

evidence as to the intent of the parties, if an offer thereof

is made. To do otherwise would in effect apply an arbi-

trary legal principle to create certainty where it does not

exist within the four corners of the document, and at the

same time refuse parol evidence of high probative value

establishing the parties’ intent. Such a result is contrary

to the clear mandate of the legislative enactments of Title

15 cited above. The Court should not strain to find a clear

meaning in an ambiguous document, and having done so

thereby exclude extrinsic evidence on the ground that no |

ambiguity exists. In re Tucker’s Estate, 279 P.2d 760, (Cal. |

1955).

ae ee ee eee

Insofar as Allen, supra, can be read to establish a

definite meaning to the phrase “oil, gas and other min-

erals,” and similar phrases, through the use of thc doc-

trine of ejusdem generis without allowing the parties to

elicit evidence as to the actual intent, I would disapprove

of that ruling. Once a conveyance is determined to be

ambiguous rules of construction and interpretation are to

B-23

be used in conjunction with extrinsic evidence of the

intent of the parties. Allen is the only instance this Court

has found which requires disapproval for the above rea-

son. All past decisions of this Court are solidly based on

the premise that the doctrine of ejusdem generis is a rule of

construction — not a rule of property law, and is to be

used to resolve an ambiguity in the conveyance in con-

junction with other methods of determining the intent of

the parties.

Panhandle Cooperative Royalty Co. v. Cunninghan, 495

P.2d 108, (1972) aptly illustrates the fact that the doctrine

of ejusdem generis is nothing more than a rule of construc-

tion. Moreover, Panhandle flatly so states at p. 114,

although the preceding page states:

It is indeed apparent from a consideration of the

cases we have just cited that in contracts dealing with

the production of oil and gas, the expression “and

other minerals” has a special purpose in extending

the connotation of “oil and gas” only.

It must be noted that the quotation refers, not to mineral

deeds, but to “contracts dealing with the production of

oil and gas.” The cases cited before the quotation were all

oil and gas leases, and the character of an oil and gas

lease leaves but small chance that an ambiguity as to the

subject of the instrument’s conveyance will arise. Oil and

gas leases commonly speak of burying pipelines below

plow depth; provide for royalty in terms of percentages

of gross product at the mouth of the wellhead; and fre-

quently vary the royalties to be paid according to

whether or not gas or oil is produced. These examples

suffice, for all practitioners are aware of the myriad of

provisions currently in use in the oil and gas leasing

industry. Looking at the four corners of such a lease it

B-24

would be unusual that doubt would arise as to what

mineral was leased. The situation differs when we look at

the typical mineral deed which is more apt to be a short

document simply conveying or reserving all oil, gas and

other minerals free of the customary baggage that accom-

panies a lease. Panhandle does clearly demonstrate that

the rule of ejusdem generis is a rule of construction to be

used in determining the parties’ intent. Two quotations

from pages 114 and 155, read together, demonstrate that

fact:

Concluding that this intention of the parties as

revealed within the four corners of the Farmers-Flag

deed is clear, we did not use “ejusdem generis” in

our interpretation of this deed.

We agree that the Panhandle deeds are ambig-

uous and that parol evidence is permissible to clarify

the ambi Briggs V. Waggoner, Okla., 375 P.2d

896 (1962 Sin light of the rule announced in Hill v.

Anderson et al., Okla., 363 P.2d 849 (1961) the plead-

ings are adequate to require the trial court to hear

and consider evidence that bears on the intention of

the parties concerning the scope of the grant.

Panhandle is a correct exposition of the law as

announced in previous decisions of this Court from the

early case of Wolf v. Blackwell Oil & Gas, 77 Okla. 81, 186

P. 484 (1920). Therein the discussed portion of the con-

veyance discloses it is ambiguous. Cronkhite v. Falkenstein,

352 P.2d 396 (Okla. 1960), expressly recognizes the princi-

ple reiterated here, and that is that the rule of ejusdem

generis is simply a rule of construction to be utilized

when the four corners of the document does not disclose

the intent of the parties. At p. 399, Justice Jackson stated:

We agree that the rule of adjusdem generis (sic)

is not properly applicable where the result would be

B-25

contrary to the plain and clear intention of the par-

ties. However, after carefully reviewing the extrinsic

evidence, including the preliminary negotiations, the

relationship of the parties, the purpose of the trans-

action, and other relevent matters, we are of the

opinion that the judgment of the trial court was not

clearly against the weight of the evidence.

The balance of the instances where this Court has

applied the aforementioned rule disclose that the instru-

ment examined was ambiguous and that extrinsic evi-

dence as well as the rule of construction considered here

were used in determining the intent of the parties.

Although certain of the cases do not expressly hold the

documents to be ambiguous, the context of the opinions

demonstrate that fact.

Other than Allen, supra, the case of Sloan v. Peabody

Coal Co., 547 F.2d 115 (CA10 1977), is noted as contra to

the views expressed herein. In that action, the Federal

10th Circuit Court of Appeals expressly noted that there

was no direct Oklahoma authority on the point at issue

and held that the statement “oil, gas and other minerals”

was to be construed in light of the doctrine of ejusdem

generis, not to convey or reserve coal. I do not find that

statement to be a correct exposition of the law in this

jurisdiction, although the case is procedurally correct in

that the opinion notes that the parties stipulated the issue

was solely a matter of law. Thus, the intent of the parties

as disclosed by extrinsic evidence was not an issue, and

the court was left with the application of ejusdem generis

without other evidence of the parties’ intent in a sum-

mary judgment proceeding. The opinion additionally

notes the trial court correctly refused to admit extrinsic

evidence despite the fact that the opinion also notes that

at trial, the parties agreed the issue was one of law.

B-26

Whenever a conveyance of an interest in land is so

ambiguous that the intent is not so clearly expressed that

the rule of construction denominated ejusdem generis is

utilized, the trial court should be able to entertain evi-

dence outside the four corners of the instrument in deter-

mining the intent of the parties.

I am authorized to state that LAVENDER, J., concurs

in the view expressed herein.

IN THE SUPREME COURT OF THE

STATE OF OKLAHOMA

CLAUDE R. BUTLER,

~~

Appellee, '

vs. No. 51,609

)(Filed Jan. 19, 1982)

THE STATE OF OKLAHOMA ex rel.,

THE COMMISSIONERS OF THE

LAND OFFICE OF SAID STATE,

Appellant. )

— ~~"

DISSENTING OPINION

SIMMS, J:

I must respectfully dissent.

The majority holds that the reservation “oil, gas and

other mineral rights” includes coal and all other

unknown and unspecified minerals because the Commis-

sioners of the Land Office were “powerless” to convey

B-27

them away. The majority bases this lack of power on

three points:

(1) The presence of the phrase “oil, gas and other

mineral rights” in § 82(d) shows the intent of the

legislature that in such sales the commissioners

should reserve for the state 50% of all minerals, not

just oil and gas and the components and constituents

thereof, and the Commissioners therefore could not

effect a lessor reservation;

(2) The words of reservation reflected in the minutes

taken when the Commissioners decided (resolved) to

sell the land — fifty per cent of “the minerals” — are

substantially different from, and prevail over, the

words of the patent as well as the certificate of pur-

chase and notice of sale, because the resolution is the

“official action” of the Commissioners;

(3) Purchasers take with notice of a discrepancy in

language between minutes of a resolution to sell land

and the language used in the ensuing notice of sale,

certificate of purchase and patent. Additionally

those, such as Mr. Butler, who subsequently purchase

from them also take with notice of the minutes.

I find none of these grounds valid.

As to the “minutes of resolution”, it should go with-

out saying that by arguing the position at ail, the majority

concedes the point that a reservation of “oil, gas and

other mineral rights” set out in a patent, certificate of

purchase and notice of sale does not retain minerals other

than oil and gas.

Next, even assuming, which I don’t, that in Okla-

homa “the minerals” has a meaning different from “oil,

gas and other mineral rights” (and “oil and gas”)!, there

1 See, e.g., State v. Phillips, Okl., 258 P.2d 1193 (1953).

B-28

is no basis for holding these minutes of the resolution

control over the patent. It is not surprising that the

majority cites no support for doing so.

It is fundamental that a patent is solemn evidence of

title; it is a written public grant of the highest character

and high evidence of its own validity. Where government

officers have issued a patent in due form of law, which on

its face is sufficient to convey title to land described, it is

to be treated as valid in actions of law. The recitals of the

patent are conclusive as to the estate conveyed and no

evidence can be received for construction thereof. A pat-

ent is deemed to have been issued regularly and the

presumption exists that all usual necessary steps were

taken before the title was perfected by the patent.?

Looking behind this patent to give any import to the

minutes of the meeting is unsupported in law and por-

tends great mischief.

The majority’s suggestion that somehow the “staff”

acted contrary to law or the intent of the commissioners

is unfounded. The notice, certificate of purchase and

patent were the specific and official acts of the Commis-

sioners. The entire sale process was regular (64 O.S.1941,

§ § 95,96), and the patents duly executed by the proper

officers of the Commission. In fact, the words of the

patents follow the statute, § 82(d).

2 See e.g., Sharp v. City of Guthrie, 49 Okl. 213, 152 P. 403

(1915); Bagness v. Broderick, 38 U.S. 436, 13 Pet. 436, 10 L.Ed 235

(1839); Colorado Coal & Iron Co. v. United States, 123 U.S. 307, 85

S.Ct. 131, 31 Lawyer’s Ed. 182 (1887). CSEE, 1 O.S. 1971, § 11.

B-29

I do not agree that words of minutes, even if dissimi-

lar in effect, constitute the type of a defect or irregularity

which could have charged the original purchaser with

notice.

The decisions cited in support of that notion by the

majority are inapposite.> Even if the majority were correct

as to the original purchaser, Mr. Butler would be an

innocent purchaser who took without notice.

3 State v. Phillips, Okl., 258 P.2d 1193 (1953); State v. Bright,

Okl., 261 P.2d 875 (1953); and State v. Duggins, 258 P.2d 891

(1953), involve situations where the published offering of sale -

the notice of sale — expressly stated the purchaser would

receive no mineral interest, but the certificate of purchase was

issued on a standard printed form not conforming to the terms

of the sale as shown in the notice; reading instead “purchaser

will receive an undivided fifty per centum of all oil, gas and

other mineral rights in and under” the land. The point of

those decisions was that there was no dispute as to the terms

of the offer of sale and the purchaser knew or should have

known, the terms of the sale as published in the notice.

4 See, e.g., Lynch v. United States, 13 Okl. 142, 73 P. 1095

(1903); Colorado Coal & Iron Co. v. United States, supra, note 2.

The majority’s additional reliance on State v. Phillips, supra,

as supporting the notion that Mr. Butler would take with

notice and could not claim to be bona fide purchaser is in error.

In Phillips, the holding of the Court as to the lack of availability

of the defense of bona fide purchaser for Phillips, the holder of

an oil and gas lease, was based on the fact that its assignor

held only bare equitable title at the time of the assignment.

Additionally, Phillips’ assignor had not received the required

approval of the Commissioners before the transfer under the

Certificate of Purchase. Mr. Butler and his predecessors in

title, however, held full legal title - the patent.

B-30

As to the statutory provisions relied on by the major-

ity to support its conclusion that the Commissioners were

“powerless” to convey away unknown coal and all other

unknown and unspecified minerals in addition to oil and

gas — it is my belief that the majority, in picking a few

words from a few statutes, has reached a sweeping con-

clusion which is in total contradiction to the whole of the

law on the subject and its history. I will attempt to limit

this discussion to only the most essential points.

First, there is a very simple reason that 64 O.S.1941,

§ 82(d) pertaining to the percentage reservation of inter-

est on land sold after foreclosure of mortgages contains

the phrase “oil, gas and other mineral rights in and

under” the land. The statute was enacted in 1935 as part

of an entire Act “prescribing rules and regulations for the

Commissioners of the Land Office”, Laws 1935, ch.28,

Art. 3, §§ 1-35, § 19(d). Originally, 50% was the required

reservation. As part of that same Act, the Legislature

provided that with certain exceptions, an applicant for a

first mortgage on improved farm lands must have owned

the fee simple record title for one year and that “(i) .. . no

loan shall be made on any lands where more than one

half of the oil, gas or mineral rights therein or thereunder

are not owned by the applicant.”5

As to the meaning of “oil, gas or (and) other mineral

rights” in the provisions, the majority is clearly wrong.

The requirement means ownership of the oil and gas and

5 That requirement was changed to 1/4 in 1957 (Laws

1957, p. 479) and has since been abolished. Compare 64

O.S.1971, § 52, and 64 O.S.Supp. 1981, § 52.

B-31

J

constituents and components thereof. It does not mean

oil, gas, coal and all other assorted minerals which might

be present and discovered in the future.”

¢ The requirement may even have been satisfied by the

loan applicant’s ownership of other interest, such as royalty.

This royalty issue generally has itself been a fertile field of

litigation. See for example: Simpson v. Burris, Okl., 365 P.2d 134

(1961); Swearingen v. Oldham, Okl., 159 P.2d 247 (1945), and

cases cited therein.

7 It is true that in prior cases construing §§ 82(d) and 96(c)

the precise issue of what minerals were included in the reser-

vation was not before us. It is not true, however, that the Court

ever viewed the reservation as including anything but oil and

gas and its components and constituents.

In State v. Phillips, supra, note 3, for example, the Court

began its analysis with the Enabling Act, noted the Constitu-

tional provision creating the Commissioners, set forth the pro-

visions discussed here by the majority — §§ 96(c), 82(d), and 92,

as well as §§ 281 and 282, and set forth the following conclu-

sion in its syllabus:

“2. Section 32, Art. VI, of the Oklahoma Constitution,

creates the Commissioners of the Land Office and grants

to them full power over the sale, rental, disposal, and

management of school lands of the State, under rules and

regulations prescribed by the Legislature. When all acts of

the Legislature affecting the disposition or reservation of

mineral interests in land sold are considered together, they

vest in the Commissioners of the Land Office authority to

retain and reserve for the State all minerals underlying

land found or deemed by the Commissioners to be valu-

able for oil and gas. Otherwise, the per cent of the mineral

rights reserved rests in the sound discretion of the Com-

missioners of the Land Office.”

(Continued on following page)

B-32

Section 82(d) does not create, and does not purport to

create, some new power on the part of the Commis-

sioners to protect and reserve interests in oil and gas.

Those powers have always been present under the chap-

ter entitled “Segregation and Lease of Oil and Gas

Lands”, §§ 281, et seq. § 82(d) merely extended that

existing power to additional lands - those acquired by

foreclosure. The reservation of § 82(d) (and § 96) is

entirely consistent with the constitutional and statutory

scheme pertaining to oil and gas on public lands.®

In holding that § 82 applies to unknown coal deposits

and all other undiscovered minerals, however, the major-

ity has overlooked another entire chapter of Title 64

which has also existed since Statehood, enacted as part of

the original public lands provision, and historically enti-

tled “Segregation and Lease of Mineral Lands.? This is

(Continued from previous page)

This exact language was again used by the Court in State v.

Bright, supra, note 3.

Inasmuch as the majority has linited its consideration to

the power of the Commissioners and avoided general discus-

sion of the meaning of “oil, gas and other mineral rights” in a

grant or reservation by one other than the Commissioners, |

shall do the same. But, see, e.g., Allen v. Farmers Union Co-

Operative Royalty Co., Okl., 538 P.2d 204 (1975); Panhandle Co-

Operative Royalty Co. v. Cunningham, Okl., 495 P.2d 108 (1972);

and see, Hinkle v. Gauntt, Okl., 206 P.2d 1001 (1949)

8 Our interpretation of same, set forth in Phillips, supra,

and Bright, supra, is found in note 7.

9 Repealed in 1955, (Laws 1955, p.373), now 64 O.S.1971,

§§ 451, et seq., entitled “Mineral Leases and Prospecting

Permits.”

B-33

the separate and independent counterpart of the oil and

gas lands chapter. It is from this chapter that the Com-

missioners’ power to protect and reserve interests in min-

erals other than oil and gas arises. The majority’s holding

that the Commissioners were required to retain interests

in unknown and unspecified minerals - based on the

unstated assumption that they had the power to do so -

is at absolute odds with the statutes. That is, in fact, the

very thing they were truly “powerless” to do.

Chapter 69, R.L.1910,!° authorized the Commis-

sioners generally to sell and lease land subject to certain

procedures. It specifically authorized them to segregate

lands valuable for oil and gas and also to segregate/other

mineral lands.

The first sections of these chapters provided:

“7195. Commissioners to segregate public land containing

oil and gas. When any tract of the school or other

public lands, granted to the State of Oklahoma under

the act of congress known as the ‘Enabling Act’ is

known by the commissioners of the land office of the

State to contain oil or gas, or where such lands are,

by said commissioners, deemed valuable for oil and

gas purposes, such commissioners shall enter of

record in their office their finding, declaring that

such oil or gas character exists, and further declaring

that the oil and gas deposits are segregated from the

surface use and interest therein, and such segraga-

tion of such deposits shall conclusively withhold the

same from sale, lease or other alienation, except as

provided in this article.

10 The historical background of these statutes is revealed

by the Enabling Act, sections 7-10, art. 11, §§ 1-6 and art. 6,

§ 32 of the Oklahoma Constitution.

B-34

7204. Segregation of mineral deposits. When any tract of

land belonging to the State is known by the commis-

sioners of the land office to be mineral in character,

the commissioners of the land office shall enter of

record, in their office, their findings, declaring that

such mineral character does exist, and further declar-

ing the minerals thereof segregated from the surface

uses and interests therein; and all such mineral inter-

ests shall be reserved from sale until the year 1915,

and for such additional period of time as may be

determined by law.”

The entire mineral lands chapter is set out in Appen-

dix 1.

A comparison of the two chapters shows obvious

differences in import and specificity. These differences

are undoubtedly a result of the unparalleled importance

of oil and gas production in the history of this state. As

minerals other than oil and gas have been comparatively

less important until very recently, they have received

relatively little attention generally in our history and law.

In keeping with this general lack of interest, the “mineral

lands” statutes have been largely ignored. Not one case

has been litigated in this Court under them, and the only

explicit mention of their existence which I found is in

Magnolia Petroleum Co. v. Price, 86 Okl. 105, 206 P. 1033

(1922).

We have, for example, a constitutional provision con-

cerning the proceeds of oil and gas leases, royalties,

rentals, etc., on our public lands which does not even

mention leases for other minerals. Section 32, Art. 10,

adopted April 5, 1955, provides:

“* * * any royalties, bonuses, rentals, or other monies

derived from oil and gas leases on lands that have

been or may be granted by the United Siates to the

B-35

State for the use and benefit of the common schools,

or lands tha are or may be held by the Commis-

sioners of the Land Office for the use and benefit of

the common schools, the proceeds of the sale of

easements, improvements and sand and gravel on

any such lands, the proceeds of all property that shall

fall to the State by escheat, penalties for unlawful

holding of real estate by corporations, and capital

gains on assets of the permanent school fund; * * *”

shall be deposited in the “State Public Common School

Building Equalization Fund”'! and that said fund “shall

be used to aid school districts in acquiring buildings.

Mineral interests on segregated land known to be

mineral in character were reserved from sale only until

1915, and any additional period required by law. The law

never required an additional period. In fact, in 1933, the

legislature repealed § 7204 but left the other provisions

intact (including § 7206 which directed the Commis-

sioners to segregate mining claims in the manner pro-

vided by the repealed section.)

I’m happy to say that it is not my purpose here to

interpret the provisions of our mineral land statutes for

the first time. Many obvious questions are presented but

none of them need be addressed in this case. It is clear,

however, that if it is assumed that the Commissioners

had a duty to segregate known mineral lands after 1915,

then the 1933 repeal of § 7204 had one of two effects.

Either it did not change anything and the Commissioners

11 But see, State ex rel., Williamson v. Commissioners of the

land Office, Okl., 301 P.2d 655 (1956) as to proper fund for

disposition of proceeds.

B-36

still had a duty to segregate lands known to be mineral in

character or the repeal relieved them of that duty.

In either case, whatever their duties were, or should

have been, toward known mineral lands in 1941, the date

in question, the Commissioners were not “powerless” to

convey away rights to coal or any other mineral not

known to be present on the land at the time of sale. The

effect of the interpretation of § 82(d) to the opposite

result is in direct conflict with our statutes and the settled

mineral land law.

The key to mineral lands provisions lies in the

knowledge of the existence of specific minerals in suffi-

ciently valuable quantities. It was never the purpose of

the Commissioners to offer land for sale and yet retain

rights to unknown minerals which might in the future be

found to exist.

As stated, we have no decisions on point. There have

been decisions precisely in point by the United States

Supreme Court, however.'!2

r

In Deffeback v. Hawke, 115 U.S. 392, 6 S.Ct. 95, 29 L.Ed

423 (1885) the Court determined that where land was

known to be mineral in character (gold, silver, cinnabar

or copper), title must be acquired under the mineral land

provisions, not under townsite or homestead, or pre-

12 There are some obvious differences between our min-

eral land laws and those of the United States. Those differences

make the substance of the Supreme Court holdings even stron-

ger here, however, for under our statutes the burden of knowl-

edge rests on the Commissioners at a voluntary sale rather

than the purchaser in an ex parte proceeding.

B-37

emption laws. The Court reviewed the mineral land legis-

lation at some length and declared the essential elements

to be as follows:

“We say ‘land known at the time to be valuable for its

minerals,’as there are vast tracts of public land in

which minerals of different kinds are found, but not

in such quantity as to justify expenditures in the

effort to extract them. It is not to such lands that the

term ‘mineral,’ in the sense of the statute, is applica-

ble. * * * We also say lands known at the time of their

sale to be thus valuable, in order to avoid any possi-

ble conclusion aginst the validity of titles which may

be issued for other kinds of land, in which years

afterwards rich deposits of mineral may be discov-

ered. It is quite possible that lands settled upon as

suitable only for agricultural purposes, entered by

the settler and patented by the government under the

pre-emption laws, may be found years after the pat-

ent has been issued to contain valuable minerals.

Indeed, this has often happened. We therefore use

the term ‘Known to be valuable at the time of sale,’ to

prevent any doubt being cast upon titles to lands

afterwards found to be different in their mineral

character from what was supposed when the entry of

them was made and the patent issued.”

U.S., at 404.

In Davis v. Wiebold, 139 U.S. 507, 11 S.Ct. 628, 35 L.Ed

238 (1891), the Court held that where entry of a town site

was had, sale made and patent issued, a subsequent

discovery of minerals could not deprive the purchaser of

the premises.

Considering the question and the controlling stat-

utes, the Court stated:

“It is true the language of the Revised Statutes touch-

ing the acquisition of title to mineral lands withing

the limits of town sites is very broad. The declaration

B-38

that ‘no title shall be acquired’ under the provisions

relating to such town sites, and the sale of lands

therein ‘to any mine of gold, silver, cinnabar or cop-

per; or to any valid mining claim or possession held

under existing laws,’ --would seem on first impres-

sion to constitute a reservation of such mines in the

land sold, and of mining claims on them, to the

United States; but such is not the necessary meaning

of the terms used; in strictness they import only that

the provisions by which the title to the land in such

town sites is transferred shall not be the means of

passing a title also to mines of gold, silver, cinnabar

or copper in the land, or to valid mining claims or

possessions theron. They are to be read in connection

with the clause protecting existing rights to mineral

veins; and with the qualification uniformly accom-

panying exceptions in Acts of Congress of mineral

lands from grant or sale. Thus read they must be

held, we think, merely to prohibit the passage of title

under the provisions of the Town-Site Laws to mines

of gold, silver, cinnabar or copper, which are known

to exist, on the issue of the town-site patent, and to

mining claims and mining possessions, in respect to

which such proceedings have been taken under the

law or the custom of miners, as to render them valid,

creating a property right in the holder, and not to

prohibit the acquisition for all time of mines which

then lay buried unknown in the depth of the earth.

The exceptions of mineral lands from pre-emption

and settlement and from grants to States for univer-

sities and schools, for the construction of public

buildings and in aid of railroads and other works of

internal improvement, are not held to exclude all

lands in which minerals may be found, but only

those where the mineral is in sufficient quantity to

add to their richness and to justify expenditure for its

extraction, and known to be so at the date of the

_ There are vast tracts of country in the mining

tates which contain precious metals in small quan-

tities, but not to a sufficient extent to justify the

expense of their exploitation. It is not to such lands

ES a —e

ee eee

B-39

that the term ‘mineral’ in the sense of this Statute is

applicable.”

The Court noted the uniformity of the decisions of

state and federal courts on the subject and rulings by the

Land Department and set for the the following from

Cowell v. Lammers, 10 Sawy. 246, 247, which is particularly

relevant in the action before us as it concerned the mean-

ing of mineral lands in a patent which “excepted and

excluded all mineral lands, should any be found to exist”:

“The Land Department in this very case, as in cases

of patents to pre-emptioners, homestead claimants

and other purchasers of the public lands, have acted,

and I think correctly, upon the idea that patents to

lands, not known to be mineral lands at the time the

patent issued, carry the title to all mines subse-

quently discovered in the lands, notwithstanding the

reservation from sale of mineral lands in the Acts of

Congress. By the words ‘mineral lands’ must be

understood lands known to be such, or which there is |

satisfactory reason to believe are such, at the time of

the grant or patent. And the United States courts,

which have had occasion to act upon this subject, so

far as I am aware, have adopted that idea. * * * There

must be some point of time when the character of the

land must be finally determined, and, for the interest

of all concerned, there can be no better point to

determine this question than at the time of issuing

the patent. The supreme court has not yet had occa-

sion to decide the point as to the effect on a patent of

a discovery of a valuable mine in lands subsequently

to the issue of a patent. Any other construction

would be disastrous in the extreme to the holders of

lands in California under United States patents. If

land, which a party has actually occupied, possessed

and peaceably enjoyed for a long series of years,

claiming title under a patent of the United States

fifteen years old, can be entered upon and pros-

pected for a mine by any trespasser who chooses to

B-40

do so, and a mine being found, the mine can be

located, and taken out of the patent on the vague and

uncertain exception in the patent in question, it can

be done fifty or a hundred years hence, and the

patent, instead of being a muniment of title upon

which the patentee or his grantees can rest in secu-

rity, would be but a delusion and a snare.” 139 US.,

at 520, 521.

See, also, Colorado Coal & Iron v. United States, supra, note

PA

We recognized long ago that the Commissioners have

the “power” to convey away legal title to lands which

they knew to be valuable for oil and gas and we recog-

nize the effect of such a conveyance: title passes.

In Magnolia Petroleum v. Price, 86 Okl. 105, 206 P. 1033

(1922), aff'd 267 U.S. 415, 45 S.Ct. 312, 69 L.Ed 689, we

stated:

“The Commissioners of the Land Office could not

have acted in good faith to the trust imposed in them

by the Constitution and by the statute if they had

advertised this land, believing that it contained oil

and gas products which would pay a hundredfold

more to the state than the sale of the land would pay;

but, as a matter of course and as a matter of law, had

the state sold and conveyed such land to the lessee,

then the lessee would have had the right to the oil

and gas therein, but the state has not sold it and the

lessee has not purchased it, and until the land is sold

and purchased by the lessee and fee-simple title con-

veyed to the lessee, such lessee has no right to the oil

and gas or other minerals therein.

* * *

cide sth dae

DM RR! CG OND: ade

B-41

Nor is it necessary to decide that if the lands had

been sold and conveyed to Price by the Commis-

sioners of the Land Office, knowing that it was swim-

ming in rich pools of oil and gas, whether they could

have been criminally prosecuted for making such

sale, knowing such state of facts. The fact is that they

were apprised of the oil values of the land, and in

consonance with the trust reposed in them, they

acted for the better interest of the state.”

The reservation here includes only oil and gas and

the components and constituents therof. Only those inter-

ests expressly reserved do not pass with the fee. 16

O.S.1971, §§ 19,29.1% The majority’s holding today places

every land title in jeopardy by allowing minutes of a

meeting to control over a patent. By allowing the Com-

missioners to claim rights to coal and all other minerals

unknown at the time of sale, the majority has opened

never ending areas of litigation and created problems of

unimaginable magnitude. While minerals other than oil

and gas may have been relatively unimportant in Okla-

homa in the past, they are not now.

This is one of at least two actions now before us

arising from the Commissioners’ recent attempts to claim

coal on land sold many years ago. In State, ex rei., Com-

missioners of the Land Office v. Barnett, No. 52,252, the

Commissioners were unsuccessful at trial and before the

Court of Appeals (unpublished opinion, Oct. 30, 1979).

That action is now pending before us on certiorari.

13 See: Cutright v. Richey, 208 Okl. 413, 257 P.2d 286 (1953);

Rose v. Cook, 207 Okl. 582, 250 P.2d 848 (1952). See, also: Tansel v.

Storm, 40 Okl. 363, 138 P. 168 (1913); Wise v. Tabor, 201 Okl. 428,

206 P.2d 970 (1979).

B-42

Given the economic realities of today’s world and

our energy problems, we can now expect more and more

litigation over coal and all other minerals. With every

new discovery of any mineral or technological advance in

recovery techniques, the Commissioners may now re-

claim what they once voluntarily sold for valuable

consideration.

It may be that the time has come for the Legislature

to provide for the reservation of minerals other than oil

and gas on public lands sold by the Commissioners. But

it is not our proper function to create that power

retroactively.

According to the briefs filed with this Court by the

Commissioners in the Barnett appeal, the Commissioners

have-by their own count-executed 11,000 patents con-

taining this same reservation and those 11,000 patents

affect between 1.5 and 2.5 million acres.

It should be of interest to this Court, and it certainly

will be of interest to the many thousands of land owners

whose chain of title includes a patent similar to this one,

that the standard coal lease form prepared by the Com-

mission after they passed rules for leasing coal in 1978,

specifically allows strip mining.

That may be the first issue we are asked to resolve as

a result of today’s decision, but it certainly won’t be the

last.

I am authorized to state that Hodges, J., and Joe

Young, S.J., concur with the views expressed in this dis-

senting opinion.

ee Ge ee ee Te ee

C-1

APPENDIX C

IN THE DISTRICT COURT

WITHIN AND FOR CRAIG COUNTY

STATE OF OKLAHOMA

CLAUDE R. BUTLER, )

Plaintiff, No. C-77-58

VS. (Filed Dec. 21, 1977)

STATE OF OKLAHOMA, ex

rel, The Commissioners

of the Land Office, et al.,

Defendants.

~~ eee Ne Ne ee Oe

ORDER SUSTAINING MOTION FOR

JUDGMENT WHERE FACTS NOT CONTROVERTED

NOW on this 5th day of October, 1977, there comes

on to be heard the motion of plaintiff, Claude R. Butler,

for judgment where facts are not controverted pursuant

to Rule 13 of the Rules promulgated by the Supreme

Court of Oklahoma for District Courts. Plaintiff appeared

by his attorneys Jack L. Rorschach, John S. Athens and

Russell H. Harbaugh, Jr. and defendants, State of Okla-

homa ex rel The Commissioners of the Land Office,

appeared by their attorneys R. R. Williamson, Jr. and Paul

DeGraffenreid.

The Court, having considered said motion, together

with the verified pleadings, the briefs of the parties,

certified copies of pertinent documents recorded in the

office of the County Clerk of Craig County, Oklahoma,

and on file in the office of defendants and the arguments

of counsel, finds that plaintiff’s motion should be sus-

tained and judgment should be granted to plaintiff as

prayed for in the First Cause of Action of the Petition.

C-2

The plaintiff’s motion for judgment in the Second Cause

of Action should be denied.

FINDINGS OF FACTS

The Court finds from the evidence presented that

there is no substantial controversy as to the following

facts:

1. Pursuant to Section 6, Article 1, Chapter 28, Ses-

sion Laws of Oklahoma, 1937, the defendants by Notice

of Public Sale of state-owned lands in Craig County,

Oklahoma, offered for sale to the highest bidder at public

auction to be held on October 24, 1938, various tracts of

land including the following described property, to-wit:

NW1/4 and N?/2 N?/2 SW1/4 of Section 10 and NW?/4

less one square acre for a school in Section 11, all in

Township 25 North, Range 18 East of the Indian Base

and Meridian, Craig County, State of Oklahoma,

according to the United States Government Survey

thereof.

Said notice is recorded in Book 202 at Page 513 of the

records of the County Clerk of Craig County, Oklahoma

(plaintiff's Exhibit No. 1), and states in pertinent part:

“At such sale there shall be reserved and retained

unto the State forever title to fifty percentum of all

the oil, gas and other mineral rights in and under all

lands that may be sold. The purchaser will receive an

undivided fifty percentum of all the oil, gas and

other mineral rights in and under all tracts hereby

offered...”

2. Pursuant to said Notice and sale conducted

there-under, plaintiff’s predecessors acquired title to the

above described property by Patent from the defendants

as follows:

sy Ni Beall Lal el cnt Ni AS el

C-3

(a) Patent, dated November 29, 1943, to T. T. Cooper

as recorded in Book 189 at Page 228 of the records of

the County Clerk of Craig County, State of Okla-

homa, on December 22, 1943, covering in addition to

other lands the following described property, to-wit:

NW!/4 and N?!/2 of N?/2 of SW'/4 in Section 10,

Township 25 North, Range 18 East, Craig County,

State of Oklahoma,

(plaintiff’s Exhibit No. 2)

(b) Patent dated August 20, 1957, to Mark Davis, as

recorded in Book 230 at Page 685 of the records of the

County Clerk of Craig County, State of Oklahoma, on

September 11, 1957, covering the following described

property, to-wit:

N1/2 of NW?/a (less one acre) in Section 11,

Township 25 North, Range 18 East, Craig County,

State of Oklahoma,

(plaintiff’s Exhibit No. 3)

(c) Patent dated December 5, 1961, to Francis Mar-

ion Davis, as recorded in Book 244 at Page 630 of the

records of the County Clerk of Craig County, State of

Oklahoma, on January 3, 1962, covering the fol-

lowing described property, to-wit:

S'/2 of NW'/s in Section 11, Township 25 North,

Range 18 East, Craig County, State of Oklahoma,

(plaintiff's Exhibit No. 4)

In the Patent described at (a) above, the defendants

reserved and retained:

“fifty percentum of all the oil, gas and other mineral

rights.”

In the Patents described at (b) and (c) above, the defen-

dant’s excepted:

C-4

“an undivided fifty percentum of all the oil, gas and

other minerals and mineral rights.”

3. By mesne conveyances, plaintiff acquired for good

consideration all of the interest of the grantees in the

above described Patents in and to the property therein

described.

CONCLUSIONS OF LAW

There being no dispute as to the foregoing facts, the

Court concludes as a matter of law as follows:

The reservations by defendants of an undivided

interest in all of the oil, gas and other mineral rights in

the Patents of the above described real property to plain-

tiff’s predecessors reserves only the stated interest in and

to all the oil, gas and other minerals produced as a

component or constituent of oil or gas from a drilled oil

or gas well, whether hydrocarbon or nonhydrocarbon,

and does not reserve any interest in any other mineral or

right to produce any other mineral including coal in and

under such property. There is no significant distinction

between the reservation stated in the Notice of Public

Sale (plaintiff’s Exhibit No. 1) of an interest in “all the oil,

gas and other mineral rights” and the reservation of an

interest in “all the oil, gas and other minerals and mineral

rights” as reserved and retained by the defendants in the

Patents of the above described real property to plaintiff’s

predecessors (plaintiff’s Exhibit Nos. 3 and 4). The lan-

guage of reservation in (i) the statute providing for said

reservation, (ii) the Notice by Public Sale and (iii) the

Patents is clear, explicit and unambiguous and the inten-

tion of the parties may be ascertained from such writings

alone without resort to any other evidence and it is not

necessary to consider any other evidence relating to the

intention of the parties.

C-5

IT IS THEREFORE ORDERED, ADJUDGED AND

DECREED that there is no substantial controversy as to

any material fact and judgment should be and is hereby

entered for plaintiff as prayed for in the First Cause of

Action of the Petition.

IT IS FURTHER ORDERED, ADJUDGED AND

DECREED that the claim of defendants to an interest in

the coal in and under the real property described above is

without merit and constitutes a cloud upon plaintiff's

title to such property which should be and is hereby

removed.

IT IS FURTHER ORDERED, ADJUDGED AND

DECREED that as against defendants and all persons

claiming or to claim by, through or under them, plaintiff

is the owner of good and perfect title to the above

described real property subject only to the reservation in

defendants of an undivided fifty per centum (50%) of all

the oil, gas and such other minerals as are produced as a

component or constituent of oil or gas from a drilled oil

or gas well, whether hydrocarbon or nonhydrocarbon,

but not reserving any other mineral or the right to pro-

duce any other mineral, including coal.

EXCEPTION ALLOWED to defendants.

APPROVED AS TO FORM: /s/ William J. Whistler

District Judge

/s/ R. H. Harbaugh, Jr.

Attorney for Plaintiff

Attorney for Defendants

D-1

APPENDIX D

ENABLING ACT

§7. Grant of lands for schools—Appropriation for

school in lieu of Indian Territory lands-Sulphur

Springs reservation

That upon the admission of the State into the Union

sections numbered sixteen and thirty-six, in every town-

ship in Oklahoma Territory and all indemnity lands here-

tofore selected in lieu thereof, are hereby granted to the

State for the use and benefit of the common schools,

Provided, That sections sixteen and thirty-six embraced

in permanent reservations for national purposes shall not

at any time be subject to the grant nor the indemnity

provisions of this Act, nor shall any land embraced in

Indian, military or other reservations of any character,

nor shall land owned by Indian tribes or individual mem-

bers of any tribe be subjected to the grants or to the

indemnity provisions of this Act until the reservation

shall have been extinguished and such lands be restored

to and become a part of the public domain: Provided,

That there is sufficient untaken public land within said

State to cover this grant; And Provided, That in case any

of the lands herein granted to the State of Oklahoma have

heretofore been confirmed to the Territory of Oklahoma

for the purposes specified in this Act, the amount so

confirmed shall be deducted from the quantity specified

in this Act.

There is hereby appropriated, out of any money in

the treasury not otherwise appropriated, the sum of five

million dollars for the use and benefit of the common

schools of said State in lieu of sections sixteen and thirty-

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six; and other lands of the Indian Territory. Said appro-

priation shall be paid by the treasurer of the United

States at such time and to such person or persons as may

be authorized by said State to receive the same under the

laws to be enacted by said State, and until said State shall

enact such laws said appropriation shall not be paid, but

said State shall be allowed interest thereon at the rate of

three per centum per annum, which shall be paid to said

State for the use and benefit of its public schools. Said

appropriation of five million dollars shall be held and

invested by said State, in trust, for the use and benefit of

said schools, and the interest thereon shall be used exclu-

sively in the support and maintenance of said schools:

Provided, That nothing in this Act contained shall repeal

or affect any Act of Congress relating to the Sulphur

Springs Reservation as now defined or as may be hereaf-

ter defined or extended, or the power of the United States

over it or any other lands embraced in the State hereafter

set aside by Congress as a national park, game preserve,

or for the preservation of objects of archaeological or

ethnological interest; and nothing contained in this Act

shall interfere with the rights and ownership of the

United States in any land hereafter set aside by Congress

as national park, game preserve or other reservation, or

in the said Sulphur Springs Reservation, as it now is or

may be hereafter defined or extended by law; but exclu-

sive legislation in all cases whatsoever, shal! be exercised

by the United States which shall have exclusive control

and jurisdiction over the same: But nothing in this pro-

viso contained shall be construed to prevent the service

within said Sulphur Springs Reservation or national

parks, game preserves, and other reservations hereafter

D-3

established by law of civil and criminal processes law-

fully issued by the authority of said State, and said State

shall not be entitled to select indemnity school lands for

the thirteenth, sixteenth, thirty-third, and thirty-sixth sec-

tions that may be embraced within the bounds of the

national park, game preserve,’ and other reservation, or

the said Sulphur Springs Reservation, as now defined or

may be hereafter defined. June 16, 1906, c. 3335, §7, 34

Stat. 272.

§8. University, etc., grants-Allotments—Use of lands

and proceeds-Lands for public institutions and

buildings—Mineral and oil lands

That section thirteen in the Cherokee Outlet, the

Tonkawa Indian Reservation and the Pawnee Indian Res-

ervation, reserved by the President of the United States

by proclamation issued August nineteenth, eighteen hun-

dred and ninety-three,! opening to settlement the lands,

and by any Act or Acts of Congress since said date and

section thirteen in all other lands which have been or

may be opened to settlement in the Territory of Okla-

homa, and all lands heretofore selected in lieu thereof, is

hereby reserved and granted to said State for the use and

benefit of the University of Oklahoma and the University

Preparatory School, one-third; of the normal schools now

established or hereafter to be established, one-third; and

of the Agricultural and Mechanical College and the Col-

ored Agricultural Normal University, one-third: The said

1 No. 5, 2% Stat. 1222.

D-4

lands or the proceeds thereof as above apportioned shall

be divided between the institutions as the Legislature of

said State may prescribe: Provided, That the said lands so

reserved or the proceeds of the sale thereof shall be safely

kept or invested and held by the said State ard the

income thereof, interest, rentals or otherwise, only shall

be used exclusively for the benefit of said educational

institutions. Such educational institutions shall remain

under the exclusive control of said State and no part of

the proceeds arising from the sale or disposal of any

lands herein granted for educational purposes, or the

income or rentals thereof, shall be used for the support of

any religious or sectarian school, college or university.

That section thirty-three, and all lands heretofore

selected in lieu thereof, heretofore reserved under said

proclamation, and Acts for charitable and penal institu-

tions and public buildings, shall be apportioned and dis-

posed of as the Legislature of said State may prescribe.

Where any part of the lands granted by this Act to

the State of Oklahoma are valuable for minerals, gas and

oil, such lands shall not be sold by the said State prior to

January first, nineteen hundred and fifteen; but the same

may be leased for periods not exceeding five years by the

State officers duly authorized for that purpose, such leas-

ing to be made by public competition after not less than

thirty days advertisement in the manner to ve prescribed

by law, and all such leasing shall be done under sealed

bids and awarded to the highest responsible bidder. The

leasing shall require and the advertisement shall specify

in each case a fixed royalty to be paid by the successful

bidder, in addition to any bonus offered for the lease, and

all proceeds from leases shall be covered into the fund to

D-5

which that shall properly belong, and no transfer or

assignment of any lease shall be valid or confer any right

in the assignee without the consent of the proper State

authorities in writing: Provided, however, That agri-

cultural lessees in possession of such lands shall be reim-

bursed by the mining lessees for all damage done to said

agricultural lessees’ interest therein by reason of such

mining operations. The Legisiature of the State may pre-

scribe additional legislation governing such leases not in

con

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