Mineral Acre — Fractional Grant Conflicts

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 Mineral deeds frequently contain two different descriptions of the mineral interest that the grantee hopes to acquire. Different descriptions result when the granting clause describes the mineral interests as a fractional interest and another clause in the deed describes the interest as a certain number of mineral acres. Usually, the mineral acre description appears in an “intention clause,” such as: “The parties hereto intend for 20 net mineral acres to be hereby conveyed.” Occasionally, however, the mineral acre description appears in a second granting clause in the same deed. Many purchasers insert the alternate “mineral acre” expression when the purchase price is based on the net mineral acres conveyed. See Dudley v. Fridge, 443 So.2d 1207 (Ala. 1983); Thibodeaux v. American Land & Exploration, Inc., 450 So.2d 990 (La. Ct. App. 1984), cert. denied, 458 So.2d 118 (La. 1984).   Describing the mineral interest by both fractions and mineral acres can render a deed ambiguous and give rise to serious consequences when:

 

1)The deed conveys less than the entire mineral estate in a tract of land containing more or less area than the parties contemplated; or

 

2)The deed conveys a mineral interest in multiple tracts of land and the grantor’s title fails as to some of the tracts.

 

 Recognizing the effects of the fractional formula and the mineral acre formula is important because the results of the two formulas can be significantly different. Consider a conveyance of an  undivided one-eighth mineral interest in a quarter section surveyed according the Rectangular Survey System. See 2 Stat. 324 (1805) (applied the Rectangular Survey System to United States lands south of Tennessee, which included what is now Alabama); C. WHITE, A HISTORY OF THE RECTANGULAR SURVEY SYSTEM (1982).  If the quarter-section is regular and contains exactly 160 acres, the undivided one-eighth mineral interest would be equivalent to 20 mineral acres. If the quarter-section is enlarged and contains 162 acres, the undivided one-eighth mineral interest would be equivalent to 20.25 mineral acres. Correspondingly, if the quarter-section is diminished and contains only 158 mineral acres, the undivided one-eight mineral interest would be equivalent to 19.75 mineral acres. Only when the quarter section is regular will the fractional description and the mineral acre description agree.

 

 As the examples show, the fractional formula yields a higher net interest for enlarged tracts and a lower net interest for diminished tracts. On the other hand, the acreage formula yields the same interests regardless of the tract size, so long as there is sufficient title to satisfy the grant.

 

 Conflicts between a fractional formula and an acreage formula can occur when:

 

1)Accretion enlarges a riparian tract. Wade v. Roberts, 346 P.2d 727 (Okla. 1959).

 

2)An accurate survey reveals a size discrepancy in the tract.  [Governmental sections are rarely staked to contain exactly 640 acres. For example, of the 36 sections contained in Township 7 North, Range 5 East of St. Stephens Meridian in Alabama, only four sections contain exactly 640 acres. White, supra, note 167, at 34.]

 

3)The grantor suffers a partial title failure. See Williams v. Phillips Petroleum Co., 453 F.Supp. 967 (S.D. Ala. 1978), aff’d, 614 F.2d 293 (5th Cir. 1980).

 

 The case of Dudley v. Fridge, 443 So.2d 1207 (Ala. 1983), involved a royalty conveyance where the royalty deed conveyed an undivided one-tenth royalty interest. The grantors contended that the deed should have conveyed five royalty acres, which the court defined as an “1/8 royalty on one mineral acre.” Id. at 1209.  Under the facts in Dudley v. Fridge, the difference between the one-tenth royalty interest and five royalty acres was five royalty acres. The court disagreed with the grantors and let the deed stand as conveying an undivided one-tenth royalty interest.

Copyright 2011 by Edward G, Hawkins. All rights reserved.