## Facts

- In 1966, Herbert S. Mayberry and co-owners conveyed the surface estates in two Logan County, Oklahoma tracts by warranty deed, reserving an undivided one-half mineral interest for 20 years and as long thereafter as production continued.
- The reservation specified the retained mineral interest would be “non-participating in bonus and rental rights on oil and gas leases.”
- Robert C. Anderson later obtained oil and gas leases from the surface grantees (and other mineral holders) but did not obtain a lease from Mayberry.
- Anderson’s leases reserved a 3/16 royalty to the mineral owners.
- Mayberry claimed he retained the executive right to lease his reserved one-half mineral interest despite the non-participation language; Anderson claimed the executive right was impliedly conveyed to the grantees.
- Anderson brought a quiet title action to confirm exclusive leasing authority under the existing leases and to limit Mayberry’s interest to a non-participating share of production.
- Mayberry demurred to Anderson’s evidence and stood on the demurrer; the trial court quieted title in Anderson, held the executive right had been impliedly conveyed, and fixed Mayberry’s entitlement at 3/32 of production.

## Issues

1. Whether a deed reservation of an undivided one-half mineral interest described as “non-participating in bonus and rental rights on oil and gas leases” leaves the grantor with the executive right to lease, or impliedly conveys that right to the grantee.
2. If the executive right is not retained, what economic interest the reserving grantor retains under leases executed by the grantee, including the proper proportion of royalty.

## Decision

- The appellate court affirmed the quiet title judgment for Anderson.
- The court held Mayberry’s reservation of a mineral interest expressly made “non-participating” in bonuses and delay rentals impliedly conveyed the executive right to execute leases to the grantees (and thus to Anderson as their lessee).
- The court held Mayberry retained a right to share in production under grantee-executed leases and was entitled to 3/32 of production under the 3/16 royalty reserved in Anderson’s leases.

## Legal Principles

- A reservation of a mineral interest expressly made “non-participating” in bonus and rental rights is construed to exclude the executive right to lease and to place leasing authority in the grantee.
- Interpreting a “non-participating” retained mineral interest to include the executive right is inconsistent with the function of a non-participating interest.
- When the grantee (or successor lessee) executes a lease reserving a stated royalty to mineral owners, a non-participating owner receives a proportionate share of that royalty based on the fraction of minerals owned (here, one-half of 3/16 equals 3/32).

## Conclusion

The court construed the deed language reserving a “non-participating” mineral interest as an implied conveyance of the executive right to the grantees, leaving the reserving grantor without leasing power but entitled to a proportionate royalty share of production under leases executed by the executive-right holder.


Anderson v. Mayberry, 661 P.2d 535 (Okla. Civ. App. 1983)