Averyt v. Grande, Inc.

• Decision Date: 02 July 1986
• Docket Number: No. C-4009,C-4009
• Citation: 717 S.W.2d 891
• Parties: James R. AVERYT, Individually and as Trustee for R.M. Hopkins, Jr., Petitioner, v. GRANDE, INC., Respondent.
• Court: Texas Supreme Court

Page 891

717 S.W.2d 891

James R. AVERYT, Individually and as Trustee for R.M Hopkins, Jr., Petitioner, v. GRANDE, INC., Respondent.

No. C-4009.

Supreme Court of Texas.

July 2, 1986.

Rehearing Denied Nov. 5, 1986.

Christie Condara, Krist, Kinney, Pucket & Riedmueller, Houston, for petitioner.

William J. Ehlert, Spinn, Ehlert, Spinn, Weisler & Weisler, Brenham, for respondent.

SPEARS, Justice.

The issue in this declaratory judgment action is whether a mineral reservation in a general warranty deed reserves a fraction of the entire mineral estate or only a fraction of the undivided one-half mineral interest owned and conveyed by the grantor. The trial court held that the reservation reserved a fraction of the entire mineral estate. The court of appeals affirmed. 686 S.W.2d 632. We affirm.

On September 30, 1977, Respondent Grande, Inc. conveyed the real property in question to the Fogelmans. The Fogelmans then conveyed the property to Petitioner James R. Averyt, trustee for R.M. Hopkins, Jr. Averyt, individually and as Hopkin's trustee, sued to determine what portion of the mineral interest Grande conveyed to the Fogelmans.

The Grande to Fogelman deed contains the following pertinent provisions:

[T]hat Grande, Inc. ... have GRANTED, SOLD and CONVEYED, ... unto the said Gordon V. Fogelman and wife, Clarice E. Fogelman, ... the following described real estate:

FIRST TRACT:

All that certain tract or parcel of land, situated in Fayette County, Texas, ....

....

[C]ontaining 86.82 acres of land.

SECOND TRACT:

An undivided 1/2 interest in and to all that certain tract or parcel of land, situated in Fayette County, Texas, ....

....

[C]ontaining 0.03 acres of land.

LESS, HOWEVER, AND SUBJECT TO an undivided 1/2 interest in the oil, gas, sulphur, and all other minerals, described in that deed from Rubie Keilers and Annie Keilers, to Texas Osage Cooperative Royalty Pool, et al, dated May 2, 1930, and recorded in Volume 152, Pages 75-76, Deed Records of Fayette County, Texas.

....

There is hereby excepted from this conveyance and reserved to Grantor, its successors and assigns, an undivided 1/4th of the royalty covering all of the oil, gas and other minerals, including but not limited to uranium, coal, lignite, iron, gold, silver, and all other minerals, whether or not now known to be valuable and whether by drilling, strip mining, or any other method, in, to and under or that may be produced from the lands above described....

....

TO HAVE AND TO HOLD the above described premises, together with all and singular, the rights and appurtenances thereto in any wise belonging unto the said Gordon V. Fogelman and wife, Clarice E. Fogelman, their heirs and assigns, forever. And Grande, Inc., does hereby bind itself and its successors, to warrant and forever defend, all and singular, the said premises unto the said Gordon V. Fogelman and wife, Clarice E. Fogelman, their heirs and assigns, against every person whomsever lawfully claiming, or to claim the same or any part thereof. (emphasis added)

The question presented is whether Grande reserved one-fourth of the royalty from the entire 86.82 and 0.003 acres or one-fourth of the royalty from the undivided one-half mineral interest Grande owned at the time of the conveyance. Grande argues that the deed reserves one-fourth of the royalty of the entire mineral estate. Averyt argues that the deed reserves one-fourth of the royalty only from the undivided one-half mineral interest Grande owned at the time of the conveyance to the Fogelmans.

Because neither party contends that the deed is ambiguous, we construe the language of the deed to ascertain the intent of the parties without considering parol evidence. Middleton v. Broussard, 504 S.W.2d 839 (Tex.1974). Courts give legal meaning to the language of the deed by construing all of its provisions in harmony and only if deed provisions irreconcilably conflict, apply one provision to the exclusion of another. Benge v. Scharbauer, 152 Tex. 447, 259 S.W.2d 166 (1953).

Specific rules of construction apply to cases in which a grantor owns an undivided mineral interest and reserves a fraction of the minerals under the land in the deed. If the deed reserves a fraction of the minerals under the land conveyed, then the deed reserves a fraction of the part of the mineral estate actually owned by the grantor and conveyed in the deed. Hooks v. Neill, 21 S.W.2d 532 (Tex.Civ.App.--Galveston 1929, writ ref'd). In Hooks, the grantor conveyed all of his undivided one-half interest in a tract of land. He then reserved "a one-thirty second part of all oil on and under the said land and premises herein described and conveyed." The Hooks court focused on the word "conveyed" to hold that the reservation clause applied "only to the interest which [grantors] have in the land and ore which they conveyed." Hooks, 21 S.W.2d at 538.

If, on the other hand, the deed reserves a fraction of the minerals under the land described, the deed reserves a fraction of the minerals under the entire physical tract, regardless of the part of the mineral estate actually conveyed. King v. First National Bank of Wichita Falls, 144 Tex. 583, 192 S.W.2d 260 (1946). In King, the grantor conveyed all of his undivided one-half interest in the described land. The deed later reserved "an undivided one eighth of the usual and customary one eighth royalty ... in oil and gas and other minerals that may be produced from the hereinabove described land." This court focused on the word "described" to hold that the grantor reserved an undivided one eighth of the royalty from the minerals under the entire described tract, not just the grantor's undivided one-half. King, 192 S.W.2d at 262. We distinguished Hooks on the basis that the deed in that case limited the reservation to part of the estate conveyed while the King deed contained no such restricting language. Id. See Masterson, Double Fraction Problems In Instruments Involving Mineral Interests, 11 Southwestern L.J. 281, 281 (1957) (disapproves distinction but states that King better effects intent of parties).

This court applied this same rule to a grant of a fractional mineral interest in Middleton v. Broussard, 504 S.W.2d 839 (Tex.1974). In Middleton, the grantors' deed conveyed undivided fractional interests in several tracts of land, reserving all of the minerals to the grantor. The deed then granted a one-sixty-fourth royalty interest "in and to all of the oil, gas and other minerals in and under and that may be produced from all of the described land and premises." We relied on the phrase "described land and premises" and King to hold that the deed granted a one-sixty-fourth royalty in the entire mineral estate under the land, not just in the fractional interest conveyed. Middleton, 504 S.W.2d at 842.

The Grande to Fogelman deed reserves one-fourth of the royalty from minerals "that may be produced from the lands above described." This places the reservation within the King rule. Averyt argues, however, that the exception of one-half of the minerals in the "subject to" clause is part of the description of the land. Averyt asserts that the "lands above described," therefore, are the two tracts minus the one-half mineral interest excepted from the grant in the "subject to" clause. Averyt relies on Bass v. Harper, 441 S.W.2d 825 (Tex.1969), for his position, arguing that Bass controls our decision by holding that the "subject to" clause limits the description of the land. In Bass, Bass owned the entire surface and eight-fourteenths of the one-eighth royalty in a tract of land. Bass conveyed an undivided one-half interest in the land to Miller. The deed's "subject to" clause excepted from the conveyance various mineral interests totaling six-fourteenths of the royalty. This court held that the granting clause conveyed one-half of the one-eighth royalty because it contained no language limiting the grant to one-half of the interest Bass owned. This court then held that the grant of seven-fourteenths of the royalty was subject to the exception of six-fourteenths, leaving Miller with one-fourteenth of the royalty. 441 S.W.2d at 827-28. In reaching this decision, the court held that the exception of six-fourteenths of the royalty in the "subject to" clause operated to limit the estate granted and did not just protect Bass on his warranty. 441 S.W.2d at 827.

Bass is readily distinguishable and does not control our decision. Bass only holds that the "subject to" clause limits the estate granted in the land, it does not reach the question here: whether the "subject to" clause forms part of the description of the land.

We hold that a "subject to" clause which excepts fractional mineral interests from lands and minerals conveyed does not form part of the description of the land. The "subject to" clause does limit the estate granted and warranted. Bass, 441 S.W.2d at 827. There is a difference, however, between the estate granted and the land described. "Land" is the physical earth in its natural state, while an estate in land is a legal unit of ownership in the physical land. 1 Thompson, Thompson on Real Property § 51 (1939). To define the estate granted is to set out the portion of the physical land conveyed. In contrast, "[T]o describe land is to outline its boundaries so that it may be located on the ground, and not to define the estate conveyed therein." Sharp v. Fowler, 151 Tex. 490, 252 S.W.2d 153, 154 (1952).

Because "land" includes the surface of the earth and everything over and under it, including minerals in place, Thompson at § 51, a description of land includes the land and all the minerals naturally existing underneath. Holloways Unknown Heirs v. Whatley, 133 Tex. 608, 131 S.W.2d 89, 92 (Tex.Comm'n App. 1939, opinion adopted). In other words, minerals under "the lands described" refers to all the minerals under the entire land because minerals "would necessarily be produced from the whole land, irrespective of the ...