Davis v. Texas Co.

• Decision Date: 25 March 1921
• Docket Number: (No. 8008.)
• Citation: 232 S.W. 549
• Parties: DAVIS et al. v. TEXAS CO. et al.
• Court: Texas Court of Appeals

232 S.W. 549

DAVIS et al. v. TEXAS CO. et al.

(No. 8008.)

Court of Civil Appeals of Texas. Galveston.

March 25, 1921.

Dissenting Opinion April 6, 1921.

Rehearing Denied June 16, 1921.

COPYRIGHT MATERIAL OMITTED

Appeal from District Court, Brazoria County; R. L. Cole, Special Judge.

Suit in trespass to try title by Nelson Davis and others against the Texas Company and others. Judgment on a directed verdict for defendants, and plaintiffs appeal. Reversed and remanded, with instructions.

Presley K. Ewing, W. J. Howard, and Ewing Werlein, all of Houston, and A. R. Rucks, of Angleton, for appellants.

Baker, Botts, Parker & Garwood, of Houston, Louis J. Wilson, of Angleton, Ballinger Mills, of Galveston, C. K. Lee, of Fort Worth, and C. C. Wren, of Houston, for appellees.

GRAVES, J.

On February 23, 1901, W. F. Arnold and Kate Arnold, his wife, were occupying as part of their homestead 81½ acres of land in the northeast part of the J. H. Bell league in Brazoria county, Tex. On that date they executed and delivered to John C. Underwood the following contract or conveyance affecting the 81½ acres:

"The State of Texas, County of Brazoria.

"Know all men by these presents: That I, W. F. Arnold, of Brazoria county, Texas, the party of the first part, in consideration of the sum of $1.00 paid by John C. Underwood, party of the second part, the receipt of which is hereby acknowledged, and the further consideration hereinafter mentioned, have granted, bargained, sold and conveyed, and do by these presents grant, bargain, sell and convey, unto the said party of the second part, heirs and assigns, all of the oil, gas, and coal, and other minerals in and under the following described land, together with the right of ingress and egress at all times for the purpose of drilling, mining, and operating for minerals, and to conduct all operations and lay all pipe necessary for the production, mining, and transportation of the oil, gas, water, coal, or other minerals, with the right to use sufficient water, gas, or oil to operate said property, and shall have the right to remove all machinery, fixtures, and improvements placed thereon at any time, reserving, however, to the party of the first part the equal one-tenth of all oil produced and saved upon said premises, to be delivered in the pipe line to the credit of the party of the first part free of charge. If coal is found, the parties of the second part agree to pay the first party four cents per ton for every ton of the same that is mined and marketed, payable quarterly; if gas or other minerals are found, second parties agree to pay the first party one-tenth for the product each year, payable quarterly for the product of each well, while the same is being used off the premises; and the party of the first part by furnishing his own pipe and connections shall have sufficient gas free of cost for use in one dwelling house on the premises, so long as gas is utilized off the premises, but at his own risk. Whenever first party shall request it, second party shall bury all oil and gas lines and pay all damage done to the growing crops by reason of burying and removing the same. No well shall be drilled within 200 feet from any building now on said premises without the consent of the first party. Said land being of the following description, to wit: In the league of land originally granted to Josiah H. Bell in said Brazoria county, Tex., fully described in deed of John Q. Jackson to me, which said deed is recorded in Book M, pages 142 and 143 of the deed records of Brazoria county, Tex., reference to which is hereby made for a full description of said land, containing eighty-one and one-half acres, more or less.

"To have and to hold the above-described premises, unto the said parties of the second part, their heirs and assigns, upon the following conditions: In case operations for either the drilling of a well for oil, gas, or other minerals is not commenced and prosecuted with due diligence within two years from this date, then this grant shall immediately become null and void as to both parties; provided that said second party may prevent such forfeiture from year to year by paying to the first party the sum of $10.00 per year until such well is commenced or until shipments from such mine have begun, and it is agreed that the completion of a well shall operate as a full liquidation of all rental under this provision during the remainder of the term of this lease, which payments can be made at the Bank of ____ or payable direct to the party of the first part.

"In case the parties of the second part should bore and discover either oil or other minerals, then in that event this grant, incumbrance, or conveyance shall be in full force and effect for twenty-five years from the time of the discovery of said product, and as much longer as oil, water, gas, or other minerals can be produced in paying quantities thereon. Whenever sales are being made of the product produced on the land above described, a settlement thereof shall be made at the end of each quarter. This grant is not intended as a mere franchise, but is intended as a conveyance of the property above described for the purpose herein mentioned, and it is so understood by both parties to this agreement. It is understood between the parties to this agreement that all conditions between the parties hereunto shall extend to their heirs, executors, administrators and assigns. It is agreed and understood that there shall be no interference with my farming operations unless full remuneration shall be paid to me for such interference.

"Witness our hands this twenty-third day of February, 1901

                    "[Signed]         W. F. Arnold
                                     "Kate Arnold
                                     "Jno. C. Underwood."
                

Subsequently, on November 1, 1901, one of Underwood's assignees reconveyed or released to the Arnolds 5 acres out of the 81½-acre tract, leaving 76½ acres as the net effect of their conveyance to Underwood.

By later transfers, assignments, and other means not material here, whatever rights and interests in this net 76½ acres that passed to Underwood under the instrument between him and the Arnolds vested in the appellants in this case, and all their claims in this suit are referable to and based upon it.

Afterwards Arnold and wife, ignoring this pre-existing contract or conveyance they had made to Underwood, which had been shortly after its date duly recorded, by deeds dated, respectively, November 21, 1906, December 11, 1908, December 26, 1908, and August 25, 1917, each of which acknowledged the receipt of a good and valuable consideration, and had been shortly after its date duly recorded, conveyed in different parcels the whole of the fee in the entire 81½ acres to certain persons, all of whose interests thereafter passed to and became vested in the appellees in this cause, and upon their rights as therein and thereby acquired the appellees depended as against the title and interests asserted in the 76½ acres of land by appellants.

Arnold and wife were therefore the common source of title between the rival claimants, and that fact was shown and the cause was tried below upon that theory.

Appellants on May 8, 1919, in the form of trespass to try title, brought this suit against the appellees to recover "all of the oil, gas, coal, or other minerals in and under" the 76½ acres of land referred to, which they claimed to own in fee simple, together with certain surface rights, including the right of ingress and egress for mining purposes, subject, however, to certain specified reservations, among them one-tenth of all the oil produced and saved upon the premises.

The appellees, who were the defendants below, answered with pleas of not guilty, and specifically pleaded the further defenses relied upon, which included limitation, estoppel, and innocent purchaser. All of them except McGary further set up a cross-action by which they sought a rescission and cancellation of the instruments under which the appellants claimed title.

The cause was tried before a jury, and at the close of all the evidence the court peremptorily directed a verdict in favor of the appellees, which was duly returned, and thereupon judgment that appellants take nothing by their suit, and that the appellees have in their favor a cancellation of the instruments of title declared upon by appellants followed. From that judgment this appeal proceeds.

It was evidently the view of the trial court that this grant from Arnold and wife to Underwood in legal effect was a mere option or right to prospect upon the land and did not invest Underwood or his assigns with the legal title to "the oil, gas, coal, or other minerals in and under the land," and that the long nonuser by them of the property, which is hereinafter more fully referred to operated as a forfeiture or abandonment of any right they might originally have had under that instrument, and such is the contention of the appellees upon this appeal.

The appellants, upon the other hand, insist that there passed to Underwood and his assignees by that instrument, and as a result of their substantial performance of all obligations and duties incumbent upon them thereunder, an interest in the land itself to the extent of "all the oil, gas, coal, or other minerals in or under the land," subject to a reservation of one-tenth of all oil produced and saved upon the premises, and that they showed a regular and sufficient chain of title to it as such, first in time and superior in right, under the common source.

Apart from this difference between the opposing litigants as to the intrinsic nature and consequent legal effect of the quoted contract, the further claims urged in their briefs by the appellees of a failure of right or interest in appellants are: (1) That a release executed January 5, 1909, by A. J. Eilers reinvested the Arnolds with all such title, if any, as at that time remained in the Equitable...