Humphreys-Mexia Co. v. Gammon

• Decision Date: 30 June 1923
• Docket Number: (No. 3899.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 254 S.W. 296
• Parties: HUMPHREYS-MEXIA CO. et al. v. GAMMON et al.
• Court: Texas Supreme Court

254 S.W. 296

HUMPHREYS-MEXIA CO. et al. v. GAMMON et al.

(No. 3899.)^*

Supreme Court of Texas.

June 30, 1923.

Error to Court of Civil Appeals of Fifth Supreme Judicial District.

Suit by J. L. Gammon and others against the Humphreys-Mexia Company, the Shear Company, and others. The Court of Civil Appeals reversed judgment for defendants except the Shear Company (244 S. W. 162), and they bring error. Judgment of the Court of Civil Appeals reversed in so far as it changed or modified the decree of the trial court, and judgment rendered affirming judgment of the trial court.

W. J. Bryant, of Wortham, Vinson, Elkins, Wood & Pollard, of Houston, and C. S. & J. E. Bradley, of Groesbeck, for plaintiffs in error.

J. D. Williamson, of Waco, for Shear Co.

J. L. Gammon, of Waxahachie, Callicutt & Johnson, of Corsicana, De Leon Harp, of San Antonio, and Templeton, Beall, Williams & Worsham and A. S. Rollins, all of Dallas, for defendants in error.

CURETON, C. J.

This suit was filed in the district court of Limestone county by J. L. Gammon, John F. Wyatt, R. J. Colburn, M. B. Ray, and A. H. Paillett, against Humphreys-Mexia Company, a corporation, C. A. Kennedy, H. W. Freeman, W. D. Freeman, H. C. Freeman, J. E. Winans, J. W. McLendon, Jack Womack, Max Guteman, and the Shear Company, defendants, in the form of trespass to try title to part of the Pedro Varilla 11-league grant, situated about 1½ miles west of the town of Mexia, in Limestone county.

In the trial court judgment was rendered in favor of the defendants named, except the Shear Company. On appeal, the Court of Civil Appeals reversed and rendered the judgment in favor of the defendants in error here, who were plaintiffs below. 244 S. W. 162. The case is here on writ of error.

Defendants in error owned the land in dispute, except the oil and minerals in the same. C. A. Kennedy was the common source of the title to the whole of the land, including the oil and minerals, and all parties claim under him.

On September 30, 1899, C. A. Kennedy executed and delivered a general warranty deed in the usual form to the land in controversy to F. M. Sanches; the consideration being $1,500, evidenced by five promissory vendor's lien notes, each for the sum of $300, payable as therein specified. The deed, after describing the land by field notes, and preceding the habendum and warranty clauses, contained an exception reading as follows:

"But it is expressly agreed and understood that said C. A. Kennedy reserves all the oil and minerals in said land and he and his heirs assigns and legal representatives shall have the right at all times to enter on the above-described lands and to bore wells and make excavations and to remove all the oil and minerals found thereon."

The deed also contained an express reservation of the vendor's lien to secure the payment of the purchase-money notes.

At the time of the execution of this deed, Kennedy, who was, or had been, a merchant, was indebted to the Rotan Grocery Company, which was crowding him for settlement of his account. A short time after the execution of the deed, Kennedy carried the notes received by him therefor to Mr. Shear, the president of the company, who accepted them and gave him credit on his account therefor. Kennedy states that Mr. Shear "knew full well the reservations in the deed, and he told me it was not worth one cent to me or anybody else." Some three or four months thereafter Kennedy, at the request of the company, and without any additional consideration therefor, executed and delivered a transfer of the notes to the company. This instrument reads as follows:

"The State of Texas, County of Limestone.

"Whereas heretofore, to wit, on the 30 day of September, A. D. 1899, F. M. Sanches, made, executed and delivered to C. A. Kennedy his five several promissory notes payable to the order of said C. A. Kennedy as follows: Dated September 30, 1899, due November 1st, respectively, 1900, 1901, 1902, 1903, and 1904, for $300.00 each, bearing 10 per cent. interest per annum from January 1, 1900, with interest on each of said notes at the rate of 10 per cent. per annum and providing for the payment of 10 per cent. additional as attorney's fees upon the contingency therein specified.

"And whereas, said notes were given in payment of the purchase money for the following described parcel of land, situated in Limestone county, Tex., viz., being two tracts or parcels land out of the Pedro Varilla Eleven League grant this day sold to F. M. Sanches on September 30, 1899.

"And whereas, a vendor's lien is reserved and retained on said land to secure the payment of said notes and each thereof:

"Now, therefore, know all men by these presents, that I, the said C. A. Kennedy, for a valuable consideration, have assigned, transferred and delivered said five notes to the Rotan Grocery Company and in consideration of the premises and the sum of one dollar to me in hand paid, the receipt of which is hereby acknowledged, have bargained, sold and conveyed, assigned and set over to the said the Rotan Grocery Company my lien on said land and have and do hereby bargain, sell and quitclaim all my right, title, interest, estate, claim and demand, both legal and equitable, in and to said land and every part thereof, together with all and singular the hereditaments and appurtenances thereunto appertaining. To have and to hold unto the said the Rotan Grocery Company successors and assigns and his heirs and assigns forever.

"In testimony whereof, witness my hand at Mexia, this 29th day of January, A. D., 1900.

                                            "C. A. Kennedy."
                

On February 24, 1903, Sanches and wife conveyed the land described in the deed to him from Kennedy to the Rotan Grocery Company, the consideration being the cancellation of the notes shown in the deed. This conveyance contained a recitation as follows:

"The land herein conveyed being the same land deeded to F. M. Sanches by C. A. Kennedy by deed recorded in volume 36, page 547, Deed Records of Limestone County, Tex., and this conveyance is subject to the mineral rights reserved in said conveyance."

On March 30, 1905, the Rotan Grocery Company conveyed the land to Mrs. Jasper K. Smith, with the following in the deed:

"This land herein conveyed being the same land deeded to F. M. Sanches by C. A. Kennedy by deed recorded in volume 36, page 547, Deed Records of Limestone County and afterwards conveyed to Rotan Grocery Company by said F. M. Sanches by deed dated February 24, 1903, recorded in deed records of Limestone county and is subject to the mineral rights reserved in said conveyance."

On September 4, 1908, the Rotan Grocery Company released the lien reserved in its deed to Mrs. Jasper K. Smith to secure the purchase-money notes therein described, which release, among other things, recited:

"Said Rotan Grocery Company has no other or further claim against said land or any part thereof."

The word "minerals" is sufficiently broad to include "oil and minerals," the words used in the reservation in Kennedy's deed to Sanches, and for convenience will be used in this opinion as comprehending both oil and minerals.

The plaintiffs in error Humphreys-Mexia Company et al., claim the minerals in the land in controversy under the exception in the deed above described from Kennedy to Sanches.

The defendants in error claim by mesne conveyances solely under Mrs. Jasper K. Smith. The Shear Company, successor to the Rotan Grocery Company, claims that it took title to the minerals by reason of the transfer of the vendor's lien notes to it by Kennedy, set out above.

The Shear Company and the defendants in error both contend that the title to the minerals passed out of Kennedy by virtue of the transfer of the vendor's lien notes heretofore described, and that thereafter when Sanches conveyed the land to the company, the latter had title to not only the surface, but to the minerals as well. Defendants in error, Gammon et al., assert, however, that the deed and release of the purchase-money notes to Mrs. Jasper K. Smith transferred the title to both the minerals and surface to her, and they claim the whole under her. The Shear Company denies this, and insists that the reference to the mineral reservation contained in the Rotan Grocery Company's deed to Mrs. Smith was sufficient to keep the title to the minerals in the company, and that the release executed by it to her, described above, did not convey the title to the minerals. Plaintiffs in error, the Humphreys-Mexia Company et al., assert that the title to the minerals never passed out of Kennedy by the assignment of the notes executed by the latter.

The contention of defendants in error and the Shear Company is that the transfer of the vendor's lien notes, in the light of a proper construction of the deed to Sanches, conveyed the minerals in the land, as well as transferred the vendor's lien notes, to the Rotan Grocery Company. In view of our conclusion, this is the only question necessary for us to discuss.

It is elementary that the minerals in place may be severed from the remainder of the land by appropriate conveyances. Stephens County v. Mid-Kansas Oil & Gas Co., 254 S. W. 290, by this court, but not yet [officially] reported; Texas Co. v. Daugherty, 107 Tex. 226, 235, 176 S. W. 717, L. R. A. 1917F, 989; State v. Downman (Tex. Civ. App.) 134 S. W. 787, 795 (writ of error denied); Downman v. Texas, 231 U. S. 353, 34 Sup. Ct. 62, 58 L. Ed. 264; Washburn on Real Property (5th Ed.) vol. 2, pp. 400, 401; Tiffany on Real Property, vol. 1, §§ 252, 253.

The severance may be made by an exception or reservation in the deed. Lyles v. Dodge (Tex. Civ. App.) 228 S. W. 316, 317; Luse v. Parmer (Tex. Civ. App.) 221 S. W. 1031, 1032; Luse v. Boatman (Tex. Civ. App.) 217 S. W. 1096; Wallace v. Hoyt (Tex. Civ. App.) 225 S. W. 425; DeMoss v. Sample, 143 La. 243, 78 South. 482; Snoddy v. Bolen, 122 Mo. 479, 24 S. W. 142, 25 S. W. 932, 24 L. R. A. 507, 510...