More Trespass and Loss of Mineral Ownership (Spring 2021 Course Notes - GULC Evenings)

Slander of Title

Slander of title claims associated with the continuing validity of oil and gas leases generally require five elements: publication by the defendant, falsity of the publication, malice, financial damage, and an estate or interest in the property slandered (with a sixth element in states such as Texas requiring that proof of a lost sale be shown). The malice element of this claim is used to determine which of two policies applied: protecting the slanderer’s ability to freely assert his property rights without penalty (of damages) and protecting property owners from the loss of impairment of merchantability of their property titles / value of their ownership. When assertions of the property right are made with malice, they are wrongful.

Loss of Mineral Ownership through Non-Use

Common law is available to outline the rights of previous owners and new owners in regards to oil and gas property. Abandonment is based on the intent of the previous owner and can be applied for personal property or non-possessory real property interests. Adverse possession is based on how long the new owner adversely possessed the property (i.e. for the time required by the applicable statute of limitations) and can apply to possessory property interests. If an interest is governed by statutory procedure, then neither of these doctrines will apply over the statutory language. Adverse possessions requires objective notice by the adverse occupant’s claim and a failure of the prior owner to respond in a timely manner (within the statute of limitations, usually between 5-25 years).

For adverse possession of a surface which has not been severed from its subsurface mineral interests, severance post-adverse possession will not stop or suspend the statute of limitations period as to the subsurface interests. For entry after severance of mineral interest, activities on the surface will not establish title to the severed mineral interest (in some jurisdictions, the right to mine for minerals does not equate to a “severance,” however).

To acquire mineral interest rights, there must be adverse possession of the mineral for the statutory period. This raises three issues: what will cause a severance of a mineral interest from surface ownership; when minerals have been severed prior to entry by the adverse claimant, what must the claimant do to provide notice to claim the mineral interest adversely; when a claimant successfully possesses a mineral interest adversely for the statutory period, what is the scope and nature of the mineral interest acquired?

References: https://www.amazon.com/Cases-Materials-Oil-American-Casebook/dp/1683288327