Benge v. Scharbauer

• Decision Date: 17 June 1953
• Docket Number: No. A-3939,A-3939
• Citation: 152 Tex. 447,259 S.W.2d 166
• Parties: BENGE et al. v. SCHARBAUER et al.
• Court: Texas Supreme Court

Page 166

259 S.W.2d 166

152 Tex. 447

BENGE et al. v. SCHARBAUER et al.

No. A-3939.

Supreme Court of Texas.

June 17, 1953.

Rehearing Denied July 15, 1953.

Naman, Howell & Boswell, Waco, Wilson, Wilson & Logan, San Angelo, C. Douglas Forde, Jr., and Robertson, Jackson, Payne, Lancaster & Walker, Dallas, A. W. Walker, Jr., Dallas, for petitioners.

Turpin, Kerr & Smith and Stubbeman, McRae & Sealy, Midland, for respondents.

GRIFFIN, Justice.

This cause involves the construction of a paragraph in a deed from Clarence Scharbauer, Sr., et ux. (predecessors in title) as grantors to A. H. Benge, who with the heirs of his deceased wife, are the petitioners. The deed is dated December 17, 1941, and was delivered shortly thereafter and immediately recorded in Midland County, Texas, where the land was located. At the time of the trade, and the negotiations between the parties leading up to the execution and delivery of the deed, it was understood by all parties that there was an outstanding 1/4th full mineral interest in all the lands, and the trade was made subject to such 1/4th mineral interest as outstanding, and no contention has ever been made regarding such 1/4th interest.

On April 18, 1942 A. H. Benge and wife executed to Holt Jowell an oil, gas and mineral lease on the six sections of land conveyed to them by the Scharbauers on December 17, 1941. This lease covered the title to all of the oil, gas and other minerals in, on and under the six sections, but contained the usual paragraph reducing the bonuses, rentals and royalties, etc., in proportion to lessors' ownership of the whole of the title. The bonus under this lease was paid 3/8ths to Benge, 3/8ths to the Scharbauers, and 1/4th to the owners of the outstanding mineral interest. All parties took their money. Jowell duly assigned the lease to Magnolia Petroleum Company, who paid the annual delay rentals to the parties and in the proportions set out above, and without any complaint on the part of any party, for the years 1943 to 1950, both inclusive. On December 27, 1950, as a result of a claim on the part of Benge, Magnolia Petroleum Company paid to Benge the difference between the 3/8ths interest for which he had been theretofore paid, and the 5/8ths interest he then claimed to own under the deed from the Scharbauers. Shortly thereafter the Magnolia Petroleum Company filed this suit in the nature of an interpleader and called on the court to determine the ownership of 1/4th mineral interest claimed by both Benge and Scharbauer and to determine who was entitled to receive the bonuses, delay rentals, royalties, etc. due under the lease. Benge, et al answered claiming title to 5/8ths mineral interest and 5/8ths of all bonuses, delay rentals and royalties under the lease. The Scharbauers answered claiming they were entitled to receive 3/8ths of all these benefits under the lease. Trial was before a jury, but at the conclusion of the testimony, the trial court instructed a verdict in favor of the Scharbauers for their claimed 3/8ths mineral interest and overruled the motion for instructed verdict filed by Benge. On appeal this judgment of the trial court was affirmed by the Court of Civil Appeals. 254 S.W.2d 236.

We have decided that the deed in question is not ambiguous, and must be given the legal effect resulting from a construction of the language contained within the four corners of the instrument. There are certain well settled rules governing us in our construction of this instrument.

All parts of the instrument must be given effect if possible to do so without violating any legal principles. Even though different parts of the deed may appear to be contradictory and inconsistent with each other-if possible, the court must construe the language of the deed so as to give effect to all provisions thereof and will harmonize all provisions therein, and not strike down any part of the deed, unless there is an irreconcilable conflict wherein one part of the instrument destroys in effect another part thereof. Associated Oil Co. v. Hart, Tex.Com.App., 277 S.W. 1043(3); Watkins v. Slaughter, 144 Tex. 179, 189 S.W.2d 699(3); Fleming v. Ashcroft, 142 Tex. 41, 175 S.W.2d 401, 406; Hester v. Weaver, Tex.Civ.App., 252 S.W.2d 214(1), writ refused; 14 T.J. 919, et seq., Sec. 140.

It is well settled that the owners of land may reserve to themselves minerals or mineral rights, including the oil or any right or ownership therein. Humphreys-Mexia Co. v. Gammon, 113 Tex. 247, 254 S.W. 296; 29 A.L.R. 607; Hoffman v. Magnolia Petroleum Co., Tex.Com.App. 273 S.W. 828(4); Watkins v. Slaughter, supra; Curry v. Texas Company, Tex.Civ.App., 18 S.W.2d 256, writ dismissed; 31-A T.J. 64, Sec. 32, and authorities therein cited.

A grantor may reserve unto himself mineral rights, and he may also reserve royalties, bonuses and rentals-either one, more or all. Schlittler v. Smith, 128 Tex. 628, 101 S.W.2d 543; King v. First Nat. Bank of Wichita Falls, 144 Tex. 583, 192 S.W.2d 260, 163 A.L.R. 1128; State Nat. Bank of Corpus Christi v. Morgan, 135 Tex. 509, 143 S.W.2d 757; Collier v. Caraway, Tex.Civ.App., 140 S.W.2d 910, writ refused; Curry v. Texas Co., supra; Kokernot v. Caldwell, Tex.Civ.App., 231 S.W.2d 528, writ refused.

An instrument may convey two separate estates in the minerals, one of which may be a full mineral interest and the other a royalty, or other interest in the minerals. Richardson v. Hart, 143 Tex. 392, 185 S.W.2d 563, 565; Countiss v. Baldwin, Tex.Civ.App., 151 S.W.2d 235, writ dismissed, correct judgment; MacDonald v. Sanders, Tex.Civ.App., 207 S.W.2d 155, refused, N. R. E.; Acklin v. Fuqua, Tex.Civ.App., 193 S.W.2d 297, N. R. E.

It is also well settled that where the conveyance represents that the grantor is the owner of a particular interest in property and such interest is conveyed by the deed, the grantor is estopped by his covenant of general warranty to claim that the deed conveyed a less estate than grantor's ownership. Duhig v. Peavy-Moore Lumber Co., Inc., 135 Tex. 503, 144 S.W.2d 878.

The covenant of general warranty extends only to what is granted, or what purports to be granted by the deed. Clark v. Gauntt, 138 Tex. 558, 161 S.W.2d 270; Adams v. Duncan, 147 Tex. 332, 215 S.W.2d 599, 603; Nye v. Bradford, 144 Tex. 618, 193 S.W.2d 165(3), 169 A.L.R. 1.

Keeping in mind the above rules of law, let us examine the deed governing the rights of the parties therein. The deed, except for the reservation of an interest in the minerals and the provision as to the grantee's power to execute leases and for payment of bonuses, rentals and royalties under such leases, is an ordinary general warranty deed. It purports to convey to the grantee the several sections of land with reservation to the grantors of an undivided 3/8ths interest in the oil, gas and other minerals, and gives to the grantee and his assigns sole power to execute all future oil, gas and other mineral leases without joinder of the grantors, 'but said leases shall provide for the payment of three-eights (3/8ths) of all the bonuses, rentals and royalties to the grantors'. The warranty is a general warranty of title to 'the said premises'. At the time when the deed was executed and delivered the grantors did not own the entire mineral interest in the land, there being outstanding in third parties a 1/4th mineral interest which was not mentioned in the deed. Disregarding for the present the clause above quoted about bonuses, rentals and royalties to be paid the grantors in all future leases, the deed purported to convey to the grantee the surface and 5/8ths of the minerals in the land and to reserve to the grantors a 3/8ths mineral interest, and it warranted the title to what it purported to convey.

Under the decision in Duhig v. Peavy-Moore Lumber Co., 135 Tex. 503, 144 S.W.2d 878, the effect of the deed, by reason of the outstanding 1/4th interest in the minerals and the general warranty, was that the grantee acquired by the deed the surface and a 5/8ths mineral interest, and the grantors reserved only a 1/8th mineral interest. On account of the outstanding 1/4th mineral interest in third parties the warranty was breached at the very time the deed was executed and delivered, and a 1/4th mineral interest required to remedy the breach was taken from what the grantors undertook to reserve to themselves leaving them only a 1/8th mineral interest.

The difficult question in the case arises because of the provision above quoted that the mineral leases to be executed by the grantee shall provide for payment of 3/8ths of all bonuses, rentals and royalties to the grantors. But for that provision the grantors, as owners of but 1/8th interest in the minerals as the effect of the deed, would be entitled to only a like interest, 1/8th, of bonuses, rentals and royalties under leases executed by the grantee. One-eighth of the bonuses, rentals and royalties normally would go to the grantors as owners of a 1/8th interest in the minerals and 5/8ths of bonuses, rentals and royalties would normally go to the grantee as the owner of a 5/8th interest in the minerals. But are not the onwers of such interests in the minerals free to agree, if they desire to do so, that their fractional interests in bonuses, rentals and royalties under leases to be executed shall be in different amounts from what they normally would be?

The fractional part of the bonuses, rentals and royalties that one is to receive under a mineral lease usually or normally is the same as his fractional mineral interest, but we cannot say that it must always be the same. The parties owning the mineral interests may make it different if they intend to do so, and plainly and in a formal way express that intention. Here that intention is expressed by clear language in the deed that leases executed by the grantee under the power given shall provide for the payment of 3/8ths of all bonuses, rentals and royalties to the grantors. The provision is...