Tuesday, November 6, 2012

Deed Provisions and Timber and Mineral Rights

Ralston, et. ux. v. Ralston, et. al, 2012 PA Super 234, 2012 Pa. Super. LEXIS 3467 (2012)
 
Frank Kosir, Jr., Esquire
fk@muslaw.com
This matter addressed the issue of whether a provision in a deed retaining the grantors’ interest in timber and minerals constituted an exception or reservation of those rights and whether, upon the grantee’s violation of a restriction on alienation set forth in the deed, those timber and mineral rights reverted to the heirs of the grantors.  Walter Francis Ralston, Sr. and his wife Elverta Ralston (“Grantors) held title to a parcel of real property (“Property”) situated in Decatur Township, Clearfield County, Pennsylvania.  By deed dated June 30, 1984, the Grantors conveyed the surface estate of the Property to their son, Walter Francis, Jr. (“Junior”), with the deed excepting and reserving in the Grantors, inter alia, “all timber, coal, gas, oil, and all other minerals in and upon the said property together with the right of ingress, egress, and regress, in cutting, digging for, drilling for, or any other appropriate method of removal for said timber, coal, gas, oil or any other minerals, and the carrying away of the same.”  The deed also included a restraint on alienation stating that the surface could not be conveyed during the natural lifetime of the Grantors and that, upon the death of both the Grantors all reservations and exceptions set forth in the deed would be null and void, and title to the timber, coal, gas, oil, and all other minerals in and upon the Property would pass to Junior.
 
Upon the 1986 death of Walter Francis Ralston, Sr., Junior conveyed the surface to himself and his wife, Patricia L. Ralston (“Patricia”) as Tenants by the Entireties. Junior died in 1993 and, by operation of law, title to the surface passed to Patricia as the surviving tenant by the entireties. The original Grantor, Elverta Ralston, died in 1996 and, in 1999, Patricia conveyed her interest in the Property to her son, Bernard R. Ralston (“Bernard.”) In 2011, Bernard and his wife Marissa commenced a quiet title action in the Clearfield County Court of Common Pleas seeking to be declared sole owners of the surface of the Property, as well as the timber, coal, gas, oil, and all other minerals excepted and reserved in the June 30, 1984 deed.  In response, several heirs of the Grantors (“Heirs”) filed a counterclaim alleging a 5/7 ownership interest in the timber, coal, gas, oil, and all other minerals reserved and accepted.  The trial court entered summary judgment for the Heirs concluding that the 1986 deed from Junior to himself and Patricia violated the restraint on alienation clause set forth in the June 30, 1984 deed.  The court further concluded that the provision relating to title in the timber, coal, gas, oil, and all other minerals was an exception to the grant and that, as a result of Junior’s breach of the restraint on alienation, the rights in timber, coal, gas, oil, and all other minerals remained in the Grantors and passed to their heirs upon death.
 
On appeal, our Superior Court affirmed in part and reversed in part. The court affirmed with regard to the restraint on alienation provision concluding that, as the provision was limited in duration, it was a reasonable restraint on alienation and enforceable under Pennsylvania law.  However, with regard to the provision relating to timber, coal, gas, oil, and all other minerals, the court reversed.  In issuing its ruling, the court agreed with the trial court’s conclusion that the language constituted an exception, not a reservation.  However, in reviewing the language of the June 30, 1994 deed as a whole, the court found no provision indicating that a violation of the restraint on alienation would work as a forfeiture of Junior’s rights in the timber, coal, gas, oil, and all other minerals, and there was no evidence that the Grantors ever sought such a forfeiture after Junior conveyed title to the Property to himself and Patricia.  Rather, the “null and void” language evidenced an intention by the Grantors that the exception would terminate upon their respective deaths, and that title to the timber, coal, gas, oil, and all other minerals would pass to Junior.  As such, the trial court erred in concluding that Junior’s violation of the restraint on alienation resulted in a forfeiture of the timber, coal, gas, oil, and all other mineral rights and, upon the death of Elverta Ralston, title to the timber, coal, gas, oil, and all other minerals passed to Patricia as the surviving entireties tenant.

1 comment:

  1. This is an issue where the application of the state and local laws should be enforced. Each state has laws regarding mining/drilling activities and the sale of surface and mineral property. Good thing the court had a fair trial to resolve this dilemma.

    Regards,
    Queenie

    ReplyDelete