In a December 18, 2017 Opinion for Talbot v. Ward (2017-Ohio-9213), the Ohio Seventh District Court of Appeals found the reasoning set forth in the Texas case, Duhig v. Peavey-Moore, 135 Texas, 503, 144 S.W.2d 878 (1940), “persuasive” when deciding the validity of a reservation of 1/2 royalties, bonuses and rentals contained in a 1943 Warranty Deed. The Court indicated that Duhig is not precedent and the case had not been applied or discussed by any Ohio Appellate Courts or the Ohio Supreme Court. However, the Court also noted that the Duhig rule has been accepted by seven states and other states have developed their own versions of said rule. Therefore, Talbot is the first reported Ohio appellate decision to utilize the Duhig rule.
The relevant facts of Talbot are as follows: By a 1936 Warranty Deed, E. M. Ward conveyed 117.33 acres to Dow Mellott, excepting 1/2 of the oil and gas royalty and 1/2 of all rentals and bonuses. Then, by a 1943 Warranty Deed, Dow Mellott conveyed the same tract of land to John and Minnie Tomolonis, excepting 1/2 of the oil and gas royalty and 1/2 of all rentals and bonuses. Subsequently, the Tomolonises conveyed a 1/2 oil and gas interest to Nova and Dollie Christman, being predecessors-in-interest to the Appellants.
One of the main issues on appeal was whether Dow Mellott validly reserved an oil and gas interest from the conveyance to John and Minnie Tomolonis. The Court mainly relied on ordinary rules of deed construction to hold that Dow Mellott did not successfully reserve an oil and gas interest for himself and that an interest in the oil and gas estate was conveyed to John and Minnie Tomolonis. However, the Court conceded that the facts in Talbot are similar to the facts in Duhig and found the reasoning behind the Duhig rule persuasive.
Under Duhig, a reservation must fail if both the grant and reservation in a deed cannot be given effect. The Court in Talbot noted how the facts before it required the same result as Duhig. Therefore, even if the ordinary rules of deed construction yielded an interpretation that Dow Mellott reserved a 1/2 interest in the oil and gas royalty, bonuses and rentals in the Mellott-Tomolonis Deed, said reservation must fail because Dow Mellott breached his warranty of title due to the earlier reservation by his predecessor, E. M. Ward.
At Gordon & Rees, we have consistently noted the Ohio Courts’ reluctance to address Duhig, prior to the Talbot. However, as the Duhig rule is based on estoppel by deed theory, we have regularly discussed Duhig in our opinions while also citing Thompson v. McVey, 2006 Ohio 7036 (12 App. Dist.) which indicates that estoppel by deed theory “prevents a party to a deed from denying anything recited in that deed if the party has induced another to accept or act under the deed.” The adoption of the Duhig rule by several other states and the rule’s foundation in estoppel by deed theory led us to anticipate Ohio’s acceptance of Duhig as persuasive authority. The Talbot Court was the first in Ohio to formally apply the Duhig rule, but it will not be the last.
If you have any questions concerning the Talbot and Duhig decisions or any other related oil and gas title questions, please contact Gordon & Rees attorneys Brant Miller or Chris Haselhoff at 412-577-7400.