In re Williams Petroleum Corp.

On January 12, 1935, Fred Wiese and others, the owners of the land, granted to Williams Petroleum Corporation a fee-simple title, subject to certain taxes and recorded restrictions, but “reserving unto the grantors and heirs and assigns 17%% of all gas, oil and hydrocarbon substances.” The deed was recorded a few days thereafter. Later, on March 28, 1935, and as part of the same transaction, the parties to the deed entered into a separate written agreement which, after reciting the making of the deed and the reservation mentioned, provided that the first party, the corporation, would pump, remove, and produce from the real property the 17% per cent, of oil “belonging to parties of the second part,” the grantors in the deed, without any expense to the second parties.

As a means of raising money with which to prosecute the development of the property, the Williams Petroleum Corporation determined, and so advised the grantors, that it intended to sell per cents, or undivided interests in the property, which it did. The interests thus sold were represented by grant deeds, all made after the recording of the deed to the corporation.

The Williams Petroleum Corporation, being…