Biggs v. Poling, No. 5072.

• Court: Court of Appeals of Texas
• Writing for the Court: Folley
• Citation: 134 S.W.2d 801
• Decision Date: 06 November 1939
• Docket Number: No. 5072.
• Parties: BIGGS v. POLING et al.

134 S.W.2d 801 BIGGS
v.
POLING et al. No. 5072. Court of Civil Appeals of Texas. Amarillo. November 6, 1939. Rehearing Denied December 18, 1939.

Page 802

Appeal from District Court, Carson County; Curtis Douglas, Judge.

Suit by E. R. Biggs against J. M. Poling and others in the nature of an action in trespass to try title to recover a portion of the non-participating royalty interest in land. From the judgment rendered the plaintiff appeals.

Judgment affirmed.

H. H. Cooper, of Amarillo, for appellant.

Adkins, Pipkin, Madden & Keffer, Wm. L. Darrah, and Shannon, Ochsner & Little, all of Amarillo, for appellees.

FOLLEY, Justice.

This suit is resolved into a controversy as to the effect of a royalty deed executed by E. S. Poling on July 20, 1925 in favor of J. A. Wyrick. E. S. Poling died December 24, 1928 leaving a will devising to his widow and children all of the land hereinafter mentioned. E. R. Biggs, the appellant herein and successor in interest to Wyrick in the deed mentioned, filed this suit on June 13, 1938 in the District Court of Carson County, Texas. The E. S. Poling devisees and legal representatives were made parties defendant. The Navajo Oil Company, the Canadian River Gas Company, the Parcomis Oil and Gas Company, other holders of leases and many persons holding small royalty interests, which we deem unnecessary to mention, were also made parties defendant. Such trial court defendants are appellees in this court.

The suit was in the nature of an action in trespass to try title. It was to recover 1587/3072 of 1/8 of the minerals, or 1587/3072 of the non-participating royalty interest in some four and one-half sections of land in Carson County, Texas. The evidence is uncontroverted that E. S. Poling held the fee simple title to the four and one-half sections of land and that beginning in July, 1925 he sold some of the royalty interest in the minerals in these lands. These sales were made on the basis of so many "units", a unit being 1/1536 of 1/16 of the minerals. The instruments by which such units were conveyed reserved to the grantor, E. S. Poling, all right to make and control leases, to collect and retain bonuses and rental payments, and thus the royalty interests, conveyed were non-participating in so far as the lease money and rentals were concerned. The royalty deeds conveyed only an undivided interest in and to all the oil, gas or other minerals that should be produced and removed from the lands. No issue was raised as to the nature of the royalty interests conveyed by these various conveyances in so far as they were non-participating, and no issue presented as to whether the 1/16 referred to meant so many units in 1/16 of the minerals in place, it being assumed that 1/16 was one-half of the royalty.

The evidence showed that E. S. Poling was offering for sale one-half of his royalty in small units of 1/1536 of 1/16 at the rate of $100 per unit. One J. A. Waybourn, now deceased, was employed as broker to sell these units and it was largely through his efforts that the royalty was sold not only to Wyrick but to all others who purchased. On July 1, 1925, Waybourn as salesman and presumably the agent of E. S. Poling, entered into a written contract with J. A. Wyrick to convey to the latter two units of the minerals or an undivided 2/1536 of an undivided 1/16 interest for $200. In pursuance to this agreement the deed of July 20, 1925 from E. S. Poling to J. A. Wyrick was executed. Printed forms had been prepared and were used in this transfer

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and in all the other sales of such royalty interest, such forms having blank spaces in which to fill in the number of units conveyed by such instruments. We here quote such portions of the deed in question as we deem germane to the present controversy:

"That I, E. S. Poling, residing in the County of Potter and State of Texas, for and in consideration of the sum of $200/00 Dollars cash to in hand paid by J. A. Wyrick, have bargained and sold, and by these presents do grant, bargain, sell, convey and deliver unto the said J. A. Wyrick, of the County of Childress and State of Texas, an undivided 1536 Fifteen Hundred Thirty-sixth ( -1536) interest in and to an undivided One-Sixteenths (1-16) interest in and to all the oil, gas and mineral substances, in and under the surface of that certain parcel of land situated and being in Carson County, Texas, and particularly described as Sections Numbers 22, 24, 26, 27 and the East One-half of Section Number 12, all in Block Y-2, Carson County, Texas, containing 2560 acres more or less.

"To have and to hold, all and singular, such minerals and mineral rights, unto him, the said J. A. Wyrick, his heirs and assigns, forever, subject, however, to all existing and valid leases thereon, it being intended and purposed hereby that the said grantee is to have the right to have the above described interest if taken out under existing or subsequent lease contracts, the equal ------ -1536 of 1-16 royalty or that portion of the oil, gas, or minerals, or proceeds from same, taken from said land, which right inures to the benefit of him and his assigns forever."

It is apparent from an examination of the above deed that there are two blank spaces which were not filled in at all and that the first "1536" appearing above was inserted before the words "Fifteen Hundred Thirty-sixth" instead of the figure "2" or the word "two" as agreed upon, which purportedly was 1534 more units than called for in the contract. These 1534 units form the basis of the present controversy.

Numerous other conveyances were made thereafter of various units of this royalty. On November 20, 1925 E. S. Poling conveyed five additional units to J. A. Wyrick for $500, about which transaction no question is raised. On September 5, 1925 the appellant himself contracted to purchase fifty units of this royalty but the deed in connection therewith was not delivered until after the death of E. S. Poling. This contract recited a cash consideration of $500 and the execution of a note by Biggs in the sum of $4500, making a total of $5000 for the fifty units. The testimony shows that Biggs paid only $1200 to Poling on this contract and further shows that Poling requested his legal representatives before his death to deed Biggs twelve units of the royalty in satisfaction of the $1200 paid by him. The independent executors of the Poling Estate by an instrument of the date of May 27, 1930 deeded these twelve units to Biggs and such deed recited that the conveyance was in satisfaction of the royalty contract made during the lifetime of E. S. Poling.

In addition to the twelve units he acquired under the 1925 contract with Poling, in 1938 the appellant purchased thirty-four other units from grantees of Poling other than Wyrick. Twenty-eight of these thirty-four units were purchased in January, 1938 and the other six in June, 1938. By his own testimony Biggs admitted that he purchased these thirty-four units at about 10% of their original value. On February 24, 1938 Biggs purchased from J. A. Wyrick all the right, title and interest that the latter held in the royalty of such land by virtue of the deed to Wyrick from Poling of the date of July 20, 1925 purporting to convey the units in controversy and by virtue of the deed between the same parties of the date November 20, 1925 conveying the five units not in dispute. The consideration paid to Wyrick by Biggs in this transaction was shown to have been $304.

Under the above facts it is conceded by the appellees that the appellant owns fifty-three units of the royalty in question, fifty-one of which having been acquired by him in deeds and assignments regular in every respect, and the other two units the appellees admit were passed to the appellant under the deed of July 20, 1925 upon his acquisition of the rights of Wyrick therein. The real controversy in the case narrows down to the conveyance from E. S. Poling to J. A. Wyrick purporting to convey "1536 Fifteen Hundred Thirty-sixth" interest in and to an undivided 1/16 interest in the minerals of the land. Biggs, who claims through Wyrick, asserted that such deed passed a full 1/16 (one-half) of the royalty and that having acquired Wyrick's interest on February 24, 1938 he was the owner of one-half of the royalty in

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the land plus fifty-one units, or 1587/3072 of 1/8 of the royalty.

The evidence shows that the instrument of July 20, 1925 was not recorded until after E. S. Poling's death, it having been filed for record February 13, 1929. J. A. Wyrick testified that he kept the deed in a tin can in his dugout in Childress County until he heard that E. S. Poling's will was being probated, whereupon he sent the deed to Carson County to be recorded. J. A. Wyrick further testified that in the deed of July 20, 1925 he understood that he was buying only two units for the $200 paid therefor and that he did not know that such deed purported to convey to him more than two units until after he had sold what he thought was seven units to E. R. Biggs in February, 1938. Wyrick never at any time made any claim to more than two units under the deed of July 20, 1925.

Production of gas was begun on the land in 1928 under leases held by various companies. At the time Biggs acquired Wyrick's title in 1938 it was shown that the 1534 units of the royalty now claimed by Biggs would have been worth about $24,000 in accrued royalties or moneys for gas that had been produced and never paid to Wyrick, which necessarily would have been due to the appellant if he should prevail in this suit. In addition to such amount the mineral interest yet to be produced exceeded in fair market value...