Can an oil company legally just stop paying royalties?

Hi, first time poster here. Back in 1945 my grandparents sold their home in Los Angeles County but retained the mineral rights. Sometime in the mid 1980's my grandmother turned the royalties over to my brother and I. I have never seen any paperwork on the transaction. Over the decades the monthly checks had been going to my brother's address with both of our names on the checks. I let him keep the money and never really thought much about it. My brother recently passed away and his widow sent me the last two checks that had come in and told me to contact the Texas based oil company and have the address changed to mine along with deleting his name. After requesting the changes, I was told that although we had been "credited" with the royalties, they could find no proof of ownership. They have put the account in a "suspend" state until I can provide proper paperwork to prove ownership. This company took over the lease about ten years ago and has been sending out checks regularly ever since. I told them that this sounded like it was their problem to me, as the documents must have existed at some point and were lost during the transistion with their predecessor. Although they agreed, they stated that there was nothing they could do until they had the proper documents in place. My brother's widow could find nothing in her home regarding the royalties. This is going to cost me money now to have someone research all this. I really don't want to 'lawyer up' on this issue, as we're only talking about $200.00 or so a month. To me it seems like a classic case of the 'tail wagging the dog', although the tail is quite large. Any suggestions on how to handle this? Thanks, Bob

Bob, If the documents existed at some point then they still exist in the office of the County Clerk where the mineral lease is located. Maybe the transfer of ownership was never properly recorded with the county. If the deed is still in your Grandmother's name you may be able to file an Affidavit of Heirship with the County Clerk.

I would gather as much information as you can, such as check stubs or royalty statements that came with the checks and call the Clerks office and ask if they can locate your Grandmothers deed and get them to send you a copy. You may have to make your request by mail and pay a small fee for the copy. If you can get a copy of the deed then a lawyers role in this may be limited to just drawing up an affidavit for you or you might even be able to do that yourself.

Thank you Michael.. I have talked with L.A. County and they basically wanted me to send them a blank check to initiate the search. They charge based upon how many years they are seaching through and I'm not sure of the dates. They thought it would be a good idea for me to visit beautiful downtown L.A. and search the archives personally. Whatever they charge, it would sure be cheaper than a 1500 mile trip down there, so I guess that's the route I'll take. It just rubs me the wrong way, that the oil company is able to stop paying for the lease but retain the use of it. Bob

Just a thought, but L.A. may have comprehensive electronic records. If you have the names you may be able to search it yourself for a subscription fee.

Bob,

Just a thought, but if both you and your brother sign the Division Orders to switch the payments from your Grandmothers name to yours the previous company should still have a copy of the Mineral Deed Quit Claiming her interest to the both of you. If I were you, I'd check with the previous company before forking out any money to the county to search their records.

Otherwise, if there's no luck with finding anything recorded you might want to search the "Affidavit of Heirship" or "Proof of Heirship" forms on-line for the county that the mineral rights are in and record that if you are the sole survivor. As you're aware, you'll need to have an attorney look this over or read up on the California laws before you do this.

Sorry about the loss of your brother! Hope you can get things straightened out without a lot of additional stress!

Good Luck!!


Thank you Kaye,

I did ask the oil company to check with their predecesser and was told that they no longer exist. From what I can find out, it appears that the previous company was a small entity known as CHEVRON, hmmmm... I have a friend in the L.A. area that is going to search the records for me. In the enterem I am visiting my brothers widow to go through files with her. We'll see what we come up with there. I have also contacted my grandmother's old lawyer and he still has her will that states that the rights were to be left to my brother and I. So, I believe and affidavit of heirship should be easy once I collect some other documents. Once ownership is established, I fully intend to research the lease further to assure myself that they are paying the proper amount based upon production in the area. From what I've read about this company's dealing with leasors, their reputation is less than flattering. Bob
Kaye said:

Bob,

Just a thought, but if both you and your brother sign the Division Orders to switch the payments from your Grandmothers name to yours the previous company should still have a copy of the Mineral Deed Quit Claiming her interest to the both of you. If I were you, I'd check with the previous company before forking out any money to the county to search their records.

Otherwise, if there's no luck with finding anything recorded you might want to search the "Affidavit of Heirship" or "Proof of Heirship" forms on-line for the county that the mineral rights are in and record that if you are the sole survivor. As you're aware, you'll need to have an attorney look this over or read up on the California laws before you do this.

Sorry about the loss of your brother! Hope you can get things straightened out without a lot of additional stress!

Good Luck!!

Hi Bob -I'm not a lawyer, but have talked to one regarding my mom's interests. Although she is still alive and to date we have not seen any royalties, just the lease check four years ago, she had to put it in her Will that when she passes, her six children will be passed ownership in equal shares. It would be my belief that depending on your brother's Will, legally, all rights would pass to her and she would need to then pass them on to you. Did your grandmother go through a lawyer to turn the checks over to your brother? There are a lot of variables it sounds like. I hope this helps.

rgrswife,

Both of our names (Brother and I) have been on the checks since the mid-eighties. I've never seen any paperwork and both Grandma and Brother are deceased. My Brother had no will. I'll get to the bottom of it, but it will take some time. Thanks, Bob

rgrswife said:

Hi Bob -I'm not a lawyer, but have talked to one regarding my mom's interests. Although she is still alive and to date we have not seen any royalties, just the lease check four years ago, she had to put it in her Will that when she passes, her six children will be passed ownership in equal shares. It would be my belief that depending on your brother's Will, legally, all rights would pass to her and she would need to then pass them on to you. Did your grandmother go through a lawyer to turn the checks over to your brother? There are a lot of variables it sounds like. I hope this helps.