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Edwards v. Carter Oil Co.
Citations: 226 Ark. 215; 288 S.W.2d 954; 1956 Ark. LEXIS 418Docket: 5-887
Court: Supreme Court of Arkansas; April 9, 1956; Arkansas; State Supreme Court
Ownership of mineral rights on 65 acres of land is at issue, particularly concerning a disputed claim over 16.1 acres of minerals. The legal terminology used in oil fields refers to mineral ownership in terms of "mineral acres." The Chancellor ruled that the parties involved have the same percentage of the 11.8 mineral acres available as they would have had in the disputed 26.1 acres. Appellants, including Jewel Edwards, J. M. Passwater, and L. L. McDonald's family, assert they own 9 acres of minerals, while The Carter Oil Company claims entitlement to 16.1 acres but acknowledges only 11.8 acres exist. The mineral rights stem from Ben Wheeler's estate, which left twelve heirs. Five heirs initially transferred half of their mineral interest to Jack Machen. Later, four of those heirs and two others conveyed additional interests to L. L. McDonald. However, two heirs had already transferred their interests to Wade Kitchens. A lawsuit was initiated by the heirs to cancel McDonald's deed, claiming fraud, which was resolved through a consent decree. McDonald transferred 26.1 mineral acres to attorney W. D. McKay, who then conveyed 16.1 acres to O. D. Boreing, reserving 10 acres for himself. McKay subsequently transferred 9 acres to McDonald, Edwards, and Passwater. The crux of the dispute lies in the fact that McDonald never held more than 11.8 mineral acres, despite claims to the contrary, stemming from a misunderstanding regarding the number of heirs and miscalculations in the deeds. The deeds' language indicates a mutual mistake regarding the conveyed interests. The deed from McKay to Boreing aimed to transfer all interests acquired from McDonald, excluding 10 royalty acres, illustrating the complexity and confusion surrounding the mineral rights involved. McDonald, who owns part of the minerals and serves as trustee for Edwards and Passwater, attempted to convey 26.1 acres of minerals to McKay for redistribution among the concerned parties. However, it was later determined that only 11.8 acres were available, leading to a dispute over the allocation of the mineral rights. The Mc-Donalds, Passwater, and Edwards cannot claim a reallocation of the minerals based on a mistake, as the Carter Oil Company is not an innocent purchaser without notice; it was aware of the title issues. To validate the conveyance of 26.1 acres, it was crucial to ascertain if McDonald had a deed from all the Wheeler heirs. An investigation revealed that only eight of the twelve heirs had conveyed their interests to McDonald, with two having transferred portions to Machen and Kitchens, respectively. The oil company had notice of these prior conveyances, indicating McDonald lacked the title necessary to convey the full 26.1 acres. Furthermore, McKay’s attempt to convey 16.1 acres to Boreing as trustee was invalid, as he only possessed 11.8 acres. The record indicated sufficient grounds for the oil company to realize McKay could not legally convey the stated acreage, implying it had a duty to investigate further, which would have uncovered the mutual mistake made by the Wheeler heirs and McDonald, trustee. Thus, the court concluded that the oil company was not an innocent purchaser without notice, reaffirming prior case law that stipulates notice arises when circumstances necessitate inquiry. The ruling was affirmed on appeal and cross-appeal.