Central Pipe Line Co. v. Hutson

Emma Tyler owned 114 acres of land in Illinois. In July 1936, Tyler leased all 114 acres for oil-and-gas production in a 74-acre tract and a 40-acre tract. The lease contained no royalty-proration clause, which would have provided that in the event the 114 acres were subsequently owned in separate portions, all royalties accruing under the lease would be divided among all owners based on the proportion of each owner’s acreage to the entire acreage. Two years later, before any wells had been drilled on the land, Tyler conveyed the 114 acres to her children in various portions. In December 1945, wells were drilled on the 74-acre tract. The wells produced oil, and Central Pipe Line Company (Central) (plaintiff) held $4,726.95 in royalties from oil sales. At that point, the 74-acre tract belonged to Elsie Mae Cornstubble (defendant), half of the 40-acre tract belonged to Geneva Hutson (defendant), and the other half of the 40-acre tract belonged to Cecil Tyler subject to a mineral interest reserved by Lucille Coil. Central brought an interpleader action against Cornstubble and Hutson, among others, to determine who was entitled to the oil royalties. The trial court issued a decree in favor of Cornstubble as the owner of the 74-acre tract. Hutson appealed, arguing that the royalties should be split among all owners in proportion to their acreage.