BLACKSTONE V. MOORE – OHIO SUPREME COURT HOLDS THAT REFERENCE TO MINERAL INTEREST CONTAINING TYPE OF INTEREST AND NAME OF RESERVING PARTY IS SUFFICIENT TO PRESERVE UNDER MARKETABLE TITLE ACT
On December 13, 2018, in Blackstone v. Moore, 2018-Ohio-4959, the Ohio Supreme Court held that a reference in a deed to a severed oil and gas royalty interest that included the type of interest created and to whom the interest was granted is sufficiently specific to preserve the interest in record title under the Marketable Title Act (“MTA”).
This case involved the ownership of a royalty interest underlying a sixty-acre tract located in Seneca Township, Monroe County. In 1915, Nick and Flora Kuhn conveyed the tract to W. D. Brown, reserving an undivided one-half interest in the oil and gas royalty. In 1969, David Blackstone acquired the property via a deed containing the following language: “Excepting the one-half interest in oil and gas royalty previously excepted by Nick Kuhn, their [sic] heirs and assigns in the above described sixty acres.”
In 2012, Blackstone filed a complaint against the heirs of Kuhn, seeking to quiet title and a declaration that the royalty interest reserved by Kuhn had been abandoned under the 1989 and 2006 versions of the Dormant Mineral Act (“DMA”), as well as the Marketable Title Act. The trial court granted summary judgment in favor of Blackstone under both the DMA and MTA. On appeal, the Seventh District Court of Appeals reversed the trial court judgment as to both claims, and concluded, as to the MTA, that the royalty interest was preserved by the language in the 1969 deed.
On appeal, the Supreme Court accepted two propositions of law:
- The specific identification contemplated in R. C. 5301.49(A) requires sufficient reference that a title examiner may locate the prior conveyance by going directly to the identified conveyance in the recorder’s office without checking conveyance indexes.
- The exception to a person’s marketable record title under R.C. 5301.49(A) does not include interests and defects, created by a recorded title transaction prior to the root of title, of which the person has actual knowledge if the reference to such recorded title transaction is general rather than specific.
The MTA “operates to extinguish such interests and claims, existing prior to the effective date of the root of title.” R.C. 5301.47(A). The root of title is defined as “that conveyance or other title transaction in the chain of title of a person, purporting to create the interest claimed by such person, upon which he relies as a basis for the marketability of his title, and which was the most recent to be recorded as of a date forty years prior to the time when marketability is being determined.” R.C. 5301.47(E). Accordingly, the MTA provides that any person who has an unbroken chain of title of record to any interest in land for forty years or more has a marketable record title to such interest. R.C. 5301.48.
In Blackstone, the root of the title was determined to be the 1969 conveyance into Blackstone. Appellants argued that the reference language in the 1969 deed was not specific enough to preserve the interest, such that Blackstone’s title was not subject to the Kuhn interest. Appellees argued that the description of the interest, as well as the specific reference to Nick Kuhn in the deed, was specific enough to prevent extinguishment of the interest under the MTA.
In declining to create a bright-line rule stating what must be included in a reference to preserve it under the MTA, the Court looked to the plain language of the MTA. R. C. 5301.49 states, in relevant part:
Such record marketable title shall be subject to:
(A) All interests and defects which are inherent in the muniments of which such chain of record title is formed; provided that a general reference in such muniments, or any of them, to easements, use restrictions, or other interests created prior to the root of title shall not be sufficient to preserve them unless specific identification be made therein of a recorded title transaction which creates such easement, use restriction, or other interest
Accordingly, the Court determined that the MTA presents a three-step inquiry: (1) Is there an interest described within the chain of title? (2) If so, is the reference to that interest a “general reference”? (3) If the answers to the first two questions are yes, does the general reference contain a specific identification of a recorded title transaction?
The 1969 deed clearly referenced the royalty interest, so the Court then assessed whether the reference was general or specific. The court defined the terms “general” and “specific” according to their respective Webster definitions as follows:
- General: Marked by a broad overall character without being limited, modified, or checked by narrow precise considerations: concerned with main elements, major matters rather than limited details, or universals rather than particulars: approximate rather than strictly accurate.
- Specific: Characterized by precise formulation or accurate restriction (as in stating, describing, defining, reserving): free from such ambiguity as results from careless lack of precision or from the omission of pertinent matter.
The Court then noted that the reference to the Kuhn royalty interest included details and particulars about the interest, and was not ambiguous. The 1969 deed clearly references the type of interest created (“one-half interest in oil and gas royalty”) as well as specifying the reserving party (“Nick Kuhn, their [sic] heirs and assigns”). Because of this, there was no question as to what interest was referenced, such that the reference was specific in nature. Therefore, the court did not have to answer the third question, determining that the reference to the Kuhn interest was specific in nature and preserved under the MTA.
The Court also deflected the Appellants’ policy arguments to the legislature, noting that the MTA was not enacted solely to limit the length of time required for title searches, but instead to simplify and facilitate land title transactions by allowing persons to rely on a record chain of title, pursuant to R.C. 5301.55. The Court noted that, while the DMA includes a requirement that notice to mineral holders include the volume and page under which the surface owner claims the title, the MTA does not contain a similar requirement. The Court refused to read into the MTA a requirement that a reference list the specific volume and page or the date that the interest was recorded when the statute does not include such language. Thus, the Court rejected the Blackstones’ first proposition of law, holding that a reference that includes the type of interest and to whom the interest was granted is sufficient to preserve the interest in record title. As this holding was dispositive of the issues at hand, the Court did not consider the second proposition. In a concurring opinion, Justice DeGenaro set forth her opinion that the MTA should not apply to severed mineral interests, in light of the DMA, but that the issue of applicability was not before the Court.
NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.