## Facts

- McKellar heirs owned land subject to oil, gas, and mineral leases and believed the lessees had failed to develop and had effectively abandoned the leases, causing drainage and damages.
- On May 13, 1940, several heirs executed instruments labeled “CONTRACT” employing attorneys J. H. Carmichael, Jr. and J. C. Stevens to pursue lease-related claims, clear title, and recover interests and damages.
- The instruments included operative conveyancing language (“grant, bargain, sell, and convey”) and provided compensation as “two-eighths (2/8) of their seven-eighths (7/8) interest,” leaving the heirs the remaining interest.
- Carmichael and Stevens performed substantial legal services consistent with the engagement.
- Abe Schnitt later acquired interests from certain heirs who had executed the 1940 instruments and disputed the attorneys’ claimed mineral interest.
- The chancery court held the instruments conveyed to the attorneys an undivided one-fourth working interest in the oil, gas, and minerals and denied Schnitt’s request for partition.

## Issues

1. Whether the 1940 instruments, though styled as contracts for legal services, operated as deeds conveying a present undivided one-fourth interest in oil, gas, and minerals to the attorneys.
2. Whether the attorneys’ interests, if recognized as property interests, violated the rule against perpetuities.
3. Whether mineral cotenants were entitled to partition and whether the trial court erred in denying partition.

## Decision

- The court held the instruments were intended to, and did, convey a present undivided one-fourth interest in the oil, gas, and minerals to Carmichael and Stevens.
- The court rejected the rule-against-perpetuities challenge because the attorneys received a present vested estate rather than a remote future interest.
- The court affirmed the determination of ownership but modified the decree to allow partition of the mineral interests and remanded for further proceedings.

## Legal Principles

- The intent of the parties is determined from the instrument’s “four corners”; labels such as “contract” are not controlling.
- The legal effect of an instrument is governed by substance over form; conveyancing language can create a present transfer of a mineral interest even if the document also describes an employment arrangement.
- The rule against perpetuities does not apply to an interest that vests immediately as a present estate, even if its economic value depends on future production or recovery.
- Cotenants of mineral interests generally have a right to partition absent proof that partition would be inequitable or impracticable.

## Conclusion

The Arkansas Supreme Court construed the 1940 attorney-fee instruments as deeds that immediately conveyed a one-fourth mineral interest to the attorneys, held the rule against perpetuities inapplicable because the estate vested at once, and ordered that partition of the mineral interests be permitted on remand.


Schnitt v. McKellar, 244 Ark. 377, 427 S.W.2d 202 (Ark. 1968)