Kaiser v. Love, A-8844

• Decision Date: 27 June 1962
• Docket Number: No. A-8844,A-8844
• Parties: Katherine KAISER et al., Petitioners, v. Clara C. LOVE et al., Respondents.
• Court: Texas Supreme Court

Page 586

358 S.W.2d 586

163 Tex. 558

Katherine KAISER et al., Petitioners, v. Clara C. LOVE et al., Respondents.

No. A-8844.

Supreme Court of Texas.

June 27, 1962.

Warren W. Shipman, III, McGown, Godfrey, Logan & Decker, Forth Worth, for petitioners.

Hugh D. Reed, Jr., fairfield, for respondents.

GREENHILL, Justice.

This oil and gas case involves the construction of a reservation in a deed. In that deed, the grantors reserved 'all the oil and gas rights in the above tract of land hereby conveyed in the full terms as set forth' in a particular oil and gas lease. The question is whether this provision reserved to the grantors only the royalty under the lease referred to or whether it reserved to the grantors the mineral estate upon the termination of the oil and gas lease; i. e., whether it reserved the royalty only under the particular lease or whether it reserved also the possibility of reverter. In a suit for declaratory judgment, the trial court, sitting without a jury, held that reservation reserved only the royalty under the existing lease. The action was affirmed by the Waco Court of Civil Appeals. 352 S.W.2d 885.

The facts are not disputed. No evidence was introduced in the trial court except the stipulations of the attorneys and the written instruments. It was stipulated that the land was owned by T. R. Collard and B. F. Love. Each owned a one-half interest. The Petitioners here, Katherine Kaiser et al., are the heirs and devisees of T. R. Collard and his wife. The Respondents here, Clara Love et al., are the heirs and devisees of B. F. Love. In February, 1915, T. R. Collard, joined by his wife F. R. Collard, and Love executed an oil and gas lease to Breeding. The lease provided for a primary term of five years during which the lessee could defer the drilling of a well by the payment of delay rentals. It was an 'unless' lease: after the first year, the lease terminated unless the lessee drilled or paid the delay rentals. And, as applicable here, it provided that if a well were drilled and production were had, the lease would continue as long thereafter as oil or gas was produced in paying quantities. The conveyance was made 'subject to the royalties hereinafter mentioned.' The royalties were 1/8th on oil and $200 per year on gas.

Under such an oil and gas lease, the lessee is conveyed a determinable fee. Stephens County v. Mid-Kansas Oil and Gas Co., 113 Tex. 160, 254 S.W. 290, 29 A.L.R. 566 (1923); Waggoner Estate v. Sigler Oil Co., 118 Tex. 509, 517, 19 S.W.2d 27 (1929); Walker, 'The Nature of the Property Interests Created by an Oil and Gas Lease in Texas,' 7 Tex.L.Rev. 1, at 8 (1928), and 8 Tex.L.Rev. 483, at 492 et seq. (1930). Upon the termination of such lease, the mineral estate ordinarily reverts to the grantors of the lease, their heirs or assigns. Thus, the 'possibility of reverter,' while ot expressly described in the lease, is created by the lease.

Up to this point, there could be no question but that the grantors, Collard and Love, owned not only the rents and royalties under the lease but also the possibility of reverter. Had the lease terminated without further conveyance or occurrences, Collard and Love would have again owned equally the full mineral estate.

In 1916, after the execution of the above oil and gas lease, Collard, joined by his wife, executed to Love the deed in question. Under this instrument, Collard conveyed the land to Love with this reservation:

'But we F. R. Collard and T. R. Collard do hereby reserve to ourseives all the oil and gas rights in the above tract of land hereby conveyed in the full terms as set forth in a oil and gas lease executed and entered into by B. F. Love, F. R. Collard and T. R. Collard of the first part and _____ Breeding of the second part on the 18th day of February A.D. 1915.'

The oil and gas lease from Love and Collard was assigned ultimately to The Texas Company. There is no evidence that a well was drilled. In 1923, The Texas Company executed a release and quitclaim of its rights under the lease. The release was to B. F. Love et al., and referred to the original lease by the book and page in which it was recorded. Thus the lease was terminated. The question is, to whom did the...