22 Feb 2019

Ohio Supreme Court Opinion in Blackstone v. Moore: Oil and Gas Royalty Reservation is Preserved under the Ohio Marketable Title Act

Ohio Supreme Court Opinion in Blackstone v. Moore: Oil and Gas Royalty Reservation is Preserved under the Ohio Marketable Title Act

By Aimee LeCuyer, Esq.

The Supreme Court of Ohio recently issued a slip opinion regarding the sufficiency of a reference to a prior oil and gas reservation in a deed to preserve that interest pursuant to the Ohio Marketable Title Act (OMTA) in a decision dated December 13, 2018.

The OMTA provides that any person who has an unbroken chain of title of record to an interest in land for forty (40) years or more, has marketable record title to such interests regardless of defects in the chain of title prior to the root of title. Ohio Revised Code § 5301.48. Thus, the OMTA can have the effect of extinguishing any interests or claims in a property prior to the “root of title,” which could potentially include reservations of oil and gas. Marketable title is generally defined as title that is reasonably free from defects such that a prudent buyer would accept it.

In Blackstone v. Moore (Slip Opinion No. 2018-Ohio-4959) the issue reviewed by the Court was whether the reference in a 1969 conveyance to an oil and gas royalty interest reservation that was included in a prior, 1915 deed was sufficient under the 1915 OMTA to preserve that royalty interest. Specifically, the Court contemplated 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 record in the recorder’s office without checking conveyance indexes (i.e., deed book and page number); and
  • 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.

On December 13, 2018, the Court ruled that “a reference in a deed to an oil-and-gas royalty that includes the type of interest created and to whom the interest was granted is sufficiently specific to preserve the interest in the record title.”

The plaintiff argued that the language contained in a 1969 deed 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” to a prior conveyance in 1915 was insufficient to preserve the interest under the OMTA because this language did not include the deed book and volume, or the date, grantors, and grantees of said deed.

The Court found that this language sufficiently identified the interest to be preserved. The Court rejected the plaintiff’s argument providing that “the plain language of the act does not require such specificity” but only a “general reference,” and further that “[t]he reference to the Kuhn royalty interest includes details and particulars about the interest in question . . . There is no question which interest is referenced in the 1969 deed.” Therefore, the Court ruled that the oil and gas royalty interest had not been extinguished pursuant to the OMTA.

In her concurring opinion, Justice DeGenaro emphasized the narrow scope of their holding which is simply that under the OMTA “a reference that includes the type of interest created and to whom the interest was granted is sufficiently specific to preserve the interest in the record title.” Further, that the majority opinion should not be read to implicitly hold that the OMTA is applied to oil and gas interests in light of the “more specific” Ohio Dormant Mineral Act (ODMA).