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Thornhill v. System Fuels, Inc.
Supreme Court of Mississippi
523 So. 2d 983 (Miss. 1988)
Hardy and Joseph McLeod conveyed to C. L. Thornhill (plaintiff) an interest in the minerals in a tract of land. The deed stated that the McLeods were conveying “twenty (20) full mineral acres of land of said tract.” The deed reserved for the McLeods bonuses and delay rentals from future oil and gas leases. Thornhill brought suit in chancery court, seeking a declaratory judgment that the interest the McLeods conveyed to Thornhill was an interest in minerals in place. System Fuels, Inc. (System Fuels) (defendant), which operated wells on the land, argued that by reserving bonuses and delay rentals in future oil and gas leases, the McLeods reserved the executive right to lease the mineral interest and thus conveyed to Thornhill only a royalty interest. The chancery court held that the conveyance was of a royalty interest rather than a mineral interest. Thornhill appealed.
Rule of Law
Holding and Reasoning (Hawkins, J.)
Concurrence (Robertson, J.)
Dissent (Lee, J.)
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