This case dealt with a reservation of minerals in an 1843 Deed. In particular, the court determined that an 1848 reservation of the “coal and mineral privileges” under a tract of land did not include the oil and gas minerals. Holding that the intent of the parties was to reserve only the non-migratory minerals, the court disregarded the general rule that the definition of “minerals” includes oil and gas, and instead described key factors to consider when analyzing whether a deed reserves all minerals or only certain minerals.
In 1848, Thomas and Sophia Day executed a deed (hereinafter “the 1848 Deed”) conveying their Belmont County, Ohio property, but reserving “the sole and exclusive right to all the mineral & coal under the tract of land . . . with the right & privilege to mine the same.”43 George Sheba came to own the property conveyed in the 1848 deed, subject to the Days’ reservation.44
In May 2013, Mr. Sheba executed an oil and gas deed to Ridgetop Resources, LLC (hereinafter “Ridgetop”), granting Ridgetop an undivided mineral interest in the lands, subject to the Days’ reservation. On July 24, 2013, Mr. Sheba published a notice of abandonment, and on September 3, 2013, he filed an affidavit for abandonment. On September 23, 2013, Patricia Kautz and three heirs of Thomas and Sophia Day (hereinafter “the Day heirs”) filed a claim to preserve the mineral interest. Mr. Sheba and Ridgetop filed suit to quiet title against the Day heirs in October 2013, giving rise to this dispute.45
At the trial level, Mr. Sheba and Ridgetop filed a motion for summary judgment arguing the Days’ reservation did not include oil and gas, and the mineral interest was automatically abandoned under the 1989 Ohio Dormant Mineral Act (hereinafter “1989 ODMA”). The trial court granted summary judgment in favor of Mr. Sheba and Ridgetop. The Day heirs appealed contending that the trial court erred in applying the 1989 Dormant Mineral Act to this case, and that the trial court erred in determining the reservation did not include oil and gas.46
With regards to the trial court’s application of the 1989 ODMA, the court of appeals found that the trial court’s decision to apply the 1989 ODMA was erroneous because suit was filed in 2013, and the 1989 ODMA could no longer be applied at that time.47 In upholding the trial court’s decision that the reservation did not include oil and gas, the appellate court applied the Ohio Supreme Court’s holding in Detlor.48 The appellate court focused on the analysis in Detlor, advising that several principles should be considered when reviewing mineral reservations in older deeds. The court suggested that reviewing courts should consider (1) the time of the deed execution; (2) the locality of the property to define minerals; (3) easement language in the deed particular to mining of coal and hard minerals; and (4) the lack of language relevant to the capture of oil and/or gas when making their analysis.49 The court emphasized that the deed must be construed in the light of oil developments in the vicinity of the property at the time the deed was drafted.
Based on this analysis and applying the aforementioned factors, the court held that Thomas and Sophia Day only intended to reserve “non-migratory” minerals like coal; therefore, the oil and gas minerals passed with the surface estate and were owned by Mr. Sheba and Ridgetop. In making this determination, the court reasoned that the language in the 1948 deed indicated the Day’s intent to reserve only mined minerals.50 The court also noted the 1848 deed pre-dated the development of oil and gas in Ohio, demonstrating that the parties’ intent at the time of execution could not have been to reserve the oil and gas.51 This case illustrates that title examiners and landmen should not always apply the general rule that “minerals” includes oil and gas, but should look at the intent of each mineral reservation independently, particularly when dealing with older deeds.
42 Sheba v. Kautz, 7th Dist. Belmont No. 15 BE 0008, 2017-Ohio-7699.
43 Id. at ¶ 3.
44 Id. at ¶ 4.
45 Id. at ¶ 4-5.
46 Id. at ¶ 7-9.
47 Id. at ¶ 11.
48 Detlor v. Holland, 57 Ohio ST. 492, 49 N.E. 690 (1898).
49 Sheba at ¶ 11.
50 Id. at ¶ 1.
51 Id. at ¶ 16.