Page:Arrington v. United Royalty Co.pdf/5

274 192, 235 S. W. 757. We have examined these cases, and have reached the conclusion that they do not support the rule contended for, but rather hold to the contrary view. The case of Merredith v. Merredith, supra, merely held that, while neither a life tenant, nor the remainderman, acting alone, has power to make a valid lease of land for oil and gas production, they may jointly execute such an agreement among themselves on an apportionment of the profits, and, in the absence, of an agreement between them, when the lease is jointly executed, as to what disposition shall be made of the income from the royalties,that the same will go to the life tenant and the corpus after his death to the remaindermen.

The case of Walla Oil Co. v. Valentine, supra, decided by the Supreme Court of the State of Washington, held that an ordinary oil and gas lease permitting the lessee to prospect for oil and gas establishes a mere chattel interest and not within any rule against conveyance of land except by writing and the real beneficial owner of the property right might be shown by parol. This case does not discuss the character of the estate in the owner of the royalty.

There seems to be some confusion in the decisions in failing to distinguish between accrued and unaccrued royalties, but it is clear from all of the decisions that ordinarily accrued royalties, strictly speaking, are a mere chose in action and therefore personal property. But, according to Mills-Willingham on the Law of Oil & Gas, page 179, unaccrued royalties are a part of the estate remaining in the lessor, and as such pass to the heirs, and are therefore an interest in land. It seems also that whether the royalty, when severed from the reversion, is to be deemed real or personal property depends upon the duration of the lease. If the oil and gas lease is for a term of years expiring at a certain time, it is a chattel real, and the severed royalty would be personal property, but where the lease may endure for an indeterminate period, it creates an estate in the nature of a qualified fee, and the royalty reserved would be an interest in realty.