Future Interests – Oil and Gas – Applicability on the Rule Against Perpetuities to Remote Future Interest Following Reserved Oil and Gas Interest

A grantor conveyed real property to defendant reserving “all oil and gas and all minerals” in and under the land “for the period of twenty-five years… and as long thereafter as oil or gas or petroleum products” should be produced. Following this reservation, but in another clause of the deed, the grantor provided, “Subject to the reservations and conditions aforesaid, [grantor] hereby grants … all of said real property …to the [defendant], together with …the reversion and reversions thereof.” Some years later, the same grantor quitclaimed to the plaintiff “all oil and gas in and under” the same property. The plaintiff sued to quiet title in the oil and gas, arguing that because the defendant’s interest, which was to begin on the termination of the grantor’s reserved interest, was void for remoteness under the Rule against Perpetuities, the entire interest in oil and gas remained in the grantor and was effectively transferred to the plaintiff by the quitclaim deed. Judgment was entered quieting title in the defendant. On appeal, held, affirmed. Even if the common grantor’s attempt to grant a future interest in oil and gas to the defendant was void under the Rule against Perpetuities, the common grantor thereupon “held” that interest as a reversion and this reversion was effectively conveyed to the defendant by the last clause in the same deed. Brown v. Terra Bella Irrigation District, 51 Cal. (2d) 33, 330 P. (2d) 775 (1958).