In this deed interpretation case, the court determined whether a clause contained in a 1966 deed was an effective exception of the coal, oil, and gas. The court was faced with the question of whether the clause in question merely conditioned the transfer on what the grantor had the ability to grant and limited the warranty in the deed or whether the clause amounted to an exception of the minerals.106
In 1966, John and James Johnson sold their collective 2/3 undivided interest in the tracts of land, including “Tract 3” being the land at issue in this case to Appellant, Gary Rubel. Appellee, Sheila Johnson, is the widow and successor of James Johnson. The 1966 deed contained the following language:
“Subject, however, to all right, title and interest of the grantor herein in the above three tracts in all minerals rights thereunder including coal, gas and oil.”107
In 2011, John Johnson filed a claim to preserve minerals under the tract in question for himself, his mother, and his brother James.108 The parties filed agreed upon stipulations in December of 2016 that the sole issue was whether the “subject to” language in the 1966 deed was effective as a reservation of mineral rights.109 On April 12, 2017, the trial court ruled in favor of Appellee, Sheila Johnson, declaring that she was the owner of the disputed 1/3 mineral interest under the tract.110
In a lengthy discussion about the nature of property rights and the myriad ways to interpret deed language (including numerous references to cases from other states interpreting similar “subject to” clauses), the court emphasized that there is no magic language required to create either an exception or a reservation, and that prefacing a clause with “subject to” does not preclude the clause from containing an exception or reservation. In determining the intent of the parties to the deed, the court states that it must look to the context of the clause in the contract to make its determination.111
The Appellants claimed that the “subject to” clause was a mere limitation on the warranty granted in the deed in case there were other mineral reservations in existence. However, the court noted that the use of the words “grantor herein” after “subject, however, to” was a significant factor weighing in favor of the clause being a reservation or exception from the conveyance as opposed to a mere limitation on the warranty. Even more importantly, the court pointed out that the clause appeared immediately after the legal description rather than connected to the warranty provisions.112
Ultimately, the court held that the mineral rights were clearly and unambiguously excepted or reserved by the particular “subject to” clause and affirmed the trial court’s judgment. The court concluded by quoting the Nebraska Supreme Court in Bulger v. McCourt:
An “ordinary person would readily interpret the conveyance as a retention by the grantor of … mineral rights” and to hold the clause was “solely a limitation on the liability of the grantors under the warranties in the deed, would actually be a strained and unnatural construction.”113
At the time of writing, this case had not yet been appealed. This case should be read as a warning to any attorney or landman reading or drafting deeds, as the court made it very clear that context is important when determining the intent of the parties, and “magic words” are never required to create an exception or reservation.
105 Rubel v. Johnson, 7th Dist. Monroe No. 17 MO 0009, 2017-Ohio-9221.
106 Id. at ¶ 1.
107 Id. at ¶ 3.
108 Id. at ¶ 5.
109 Id. at ¶ 8.
110 Id. at ¶ 14.
111 Id. at ¶ 28, 29, and 39.
112 Id. at ¶ 40.
113 Bulger v. McCourt, 179 Neb. 316, 138 N.W.2d 18 (1965).