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Mineral Rights Preserved by Reference to Specific, Identifiable Reservation

A reference to a prior reservation of oil, gas, and coal rights in a land title need not identify the name of the mineral rights owner if the language in the reference is sufficiently specific to identify the owner in the chain of title, the Ohio Supreme Court ruled today.

Repeated references in a Guernsey County couple’s chain of title to a reservation of mineral rights as they acquired the property and transferred it from one form of ownership to another preserved the mineral rights owned by others, the Supreme Court ruled, even though the mineral rights owners were not named in the recorded documents.

The decision reversed a Fifth District Court of Appeals decision, which concluded that the reservation without a name was not specific enough to preserve the rights under the Ohio Marketable Title Act.

Writing for the Court majority, Justice Sharon L. Kennedy stated that nothing in the plain language of the Ohio Marketable Title Act required a prior interest to be extinguished if it did not name the mineral interest’s owner. She noted that when the act was revised in 1988, lawmakers changed one section to require naming the owners when recording a notice to preserve preexisting mineral rights, but at the same time did not add similar language requiring a reference to mineral rights to name the owner to preserve them.

Chief Justice Maureen O’Connor and Justices Patrick F. Fischer, R. Patrick DeWine, Melody J. Stewart, and Jennifer Brunner joined Justice Kennedy’s opinion. Justice Michael P. Donnelly concurred in judgment only.

Surface and Mineral Rights Split
In 1926, James and Rose Logan conveyed the surface property of 139 acres in Guernsey County to Edward and Alta Riggs. The Logans retained the mineral rights through language in the deed that stated,  “Excepting and reserving therefrom all coal, gas, and oil with the right of said first parties, their heirs and assigns, at any time to drill and operate for oil and gas and to mine coal.”

In 1941, the mineral rights were transferred to C.L. Ogle through a deed that referenced the 1926 transaction. Sally Tonning and W. Randall and Kathleen Erickson are Ogle’s heirs.

From 1926 to 1975, the surface property was transferred to various owners five times, each time containing the same “excepting and reserving” language in the original 1926 deed but omitting the word “said” before “first parties” in four of the documents.

In 1978, Paul and Vesta Morrison purchased the 139 acres, which included the reservation language in the deed. The Morrisons then made transfers in their “chain of title,” conveying the property to a joint tenancy in 1983 and then, in 1998, to two trusts in their names. In each transfer, the Morrisons included the “excepting and reserving rights” language that was essentially the same as the original 1926 transfer.

Heirs Seeks to Claim Mineral Rights Below Couple’s Land
In 2017, Tonning and the Ericksons sought a declaratory judgment in Guernsey County Common Pleas Court to establish the ownership of the mineral rights under the Morrisons’ property by virtue of the reservations recorded in the Morrisons’ property title. The Morrisons responded to the claim , asking the trial court to rule that the Marketable Title Act extinguished the Ericksons’ claim and that the mineral rights belong to them.

The trial court found that Tonning and the Ericksons owned the mineral rights. The Morrisons appealed to the Fifth District. The appellate court ruled in favor of the Morrisons, noting that the reference to the reservation was not specific enough to preserve the mineral rights because it “does not state by whom the interest was originally reserved, nor to whom the interest was granted.”

The Ericksons appealed to the Supreme Court, which agreed to hear the case. Tonning has since died.

Supreme Court Explains Title Law
Justice Kennedy explained that the General Assembly had enacted the Ohio Marketable Title Act in 1961 to extinguish stale interests and claims in land with the purpose of “simplifying and facilitating land title transactions.” The law allows a property owner to rely on a “record chain of title” and generally permits the owner to hold the land free and clear of prior interests in the property that do not appear in the record chain of title within the preceding 40 years.

The law provides for the preservation of certain older interests.  In particular, R.C. 5301.49(A) states that “general references” to land restrictions such as easements and mineral interests are not sufficient to preserve them unless “specific identification” is included in the title transaction. The opinion noted that the statute sets up a three-step process for determining whether a reference to a prior interest preserves that interest. First it asks if an interest is described in the chain of title – and then if the reference is a “general reference.” Last, if it is a general reference, then does it contain specific identification of a recorded title transaction?

Landowner’s Title Transactions Examined
Using the test, the Court explained that the “excepting and reserving” language created an interest described in the Morrisons’ chain of title. The Court then had to determine if the interest was a general or specific reference.

The Morrison’s relied on the Court’s 2018 Blackstone v. Moore to support their proposition that when a reference to a preexisting interest does not provide the relevant conveyance index’s volume and page, the reference is sufficient to preserve the interest only if it includes both the type of interest created and the name of its owner.

The interest at issue in Blackstone did not identify where to find it in the county recorder’s books, but the Court determined that it was a specific reference because it included the type of interest that was created and specified by whom the interest originally was reserved. The Morrisons argued, and the Fifth District agreed, that under Blackstone, the reference to the Ericksons’ mineral rights was a general reference that did not preserve those rights because it did not name their owner.

In today’s opinion, the Court explained that Blackstone had determined that a reference including the type of interest and the name of the owner was sufficiently specific to preserve that preexisting interest.  The Court pointed out, however, that Blackstone had not held that “a reference is required to identify both the type of interest and by whom it is reserved to preserve the interest.” Instead, the Court noted, nothing in the statute’s language provides that a recital of a prior interest is a general reference subject to being extinguished if it does not name the interest’s owner.

Other Sections of Title Act Require Names
The Court’s opinion not only looked to the language of R.C. 5301.49(A), but also it considered the language and design of the Ohio Marketable Title Act as a whole, including the legislature’s 1988 revisions to the act. In the 1961 act, R.C. 5301.51(A) created a method to preserve interests created prior to the root of title by recording a notice that stated the nature of the claim.

The provision was amended in 1988 to require the recording method to include the name of the interest’s owner, a description of the property affected, and the recording information creating a property interest. However, the amendment did not change R.C. 5301.49(A), which delineates what is required for a reference to a preexisting interest to be sufficiently specific to preserve that interest.

“In enacting R.C. 5301.49(A), the General Assembly did not require a reference to an interest predating the root of title to name the interest’s owner in order to preserve the interest.  The legislature could have added that requirement as a condition on preserving a preexisting interest, as it did in R.C. 5301.51(A) and 5301.52(A).  But the General Assembly chose not to do so, and we may not impose such a requirement by judicial fiat,” the opinion stated.

The language in the Morrisons’ title did not include boilerplate language such as “subject to easement and use restrictions of record,” which were commonly used to protect a person transferring the property under a warranty deed from liability, even if the interests were never created, the Court stated. The repeated reference to a specific, identifiable reservation of property rights using the same language that reserved those rights was specific enough to be preserved by the act, the Court concluded.

2020-0244. Erickson v. Morrison, Slip Opinion No. 2021-Ohio-746.

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