South-Western Legal Studies in Business

Payments for Mineral Royalties Are Personal, Not Real, Property
Description Mississippi high court held that a claim for unpaid mineral royalties comes under the law of personal property. As such, a three-year statute of limitation applied, not the ten-year statute of limitation that applies to interests in land.
Topic Real and Personal Property
Key Words Mineral Rights; Royalties; Statute of Limitations
C A S E   S U M M A R Y
Facts In 1993, Nygaard received some royalties from gas wells. After payments ceased, he asserted in 1996 that he was owed more, but nothing happened after he made that claim. In 2002 he sued Getty Oil for unpaid royalties he claimed he was owed. Getty claimed that the statute of limitations on the claim had run. The trial court agreed and dismissed the suit. Nygaard appealed.
Decision

Affirmed. The statute of limitations for an interest in land is ten years. Nygaard contends that limitation applies here as unpaid royalties on mineral rights are at issue. That is not correct. The general three-year limitation applies, as an interest in future royalties is an interest in personal property, not real property. Hence, the statute of limitations had tolled and Nygaard cannot bring suit.

Citation Nygaard v. Getty Oil Co.,, ---So.2d--- (2005 WL 1712979, Sup. Ct., Miss., 2005)

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