Lemar v. Garner

• Decision Date: 01 June 1932
• Docket Number: No. 6007.,6007.
• Citation: 50 S.W.2d 769
• Parties: LEMAR et al. v. GARNER.
• Court: Texas Supreme Court

Page 769

50 S.W.2d 769

LEMAR et al. v. GARNER.

No. 6007.

Supreme Court of Texas.

June 1, 1932.

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

Suit by J. W. Garner against H. E. Lemar and others. Judgment for defendants was reversed by Court of Civil Appeals, which rendered judgment for plaintiff [38 S.W.(2d) 161], and defendants bring error.

Judgment of Court of Civil Appeals reversed, and judgment of trial court affirmed.

Rex G. Baker and R. E. Seagler, both of Houston, W. B. Silliman, of Fort Stockton, and W. H. Francis, A. S. Hardwicke, and Walace Hawkins, all of Dallas, for plaintiffs in error.

B. F. Howell, of Rankin, and J. A. Thomas, Louis D. Gayer, Lloyd Kerr, and Kerr & Gayer, all of San Angelo, for defendant in error.

SHARP, C.

We adopt the statement of the nature and result of this case made by the Court of Civil Appeals in its opinion as follows:

"G. S. White et al., the then owners of the soil, on November 30, 1925, executed a ten-year mineral lease on the west half of section 112, block 11, H. & G. N. Railway Company lands in Pecos county, Tex., to John Sealy and others, as trustees for the Magnolia Petroleum Company, with undivided delay rental at 25 cents per acre and a one-eighth oil and gas royalty reserved.

"On October 9, 1925, White et al. leased to F. J. Ellyson for ten years the north half of section 122, block 11. This lease provided that 10 cents per acre of the delay rental should be paid to the land commissioner and 15 cents per acre to the landowners, and reserved a one-sixteenth royalty each to the state and owner of the soil.

"A like lease was executed on the same date by the same parties on the south half of said section. John Sealy and the other trustees, on April 19, 1926, conveyed the lease on section 112 to the Magnolia Petroleum Company, a corporation. Ellyson, on November 21, 1925, assigned his lease on the south half of section 122 to the Pure Oil Company, and on January 4, 1926, assigned his lease on the north half of said section to the Gulf Production Company.

"On October 6, 1926, G. S. White et al. conveyed the above lands, together with others, to the White Land & Cattle Company.

"The following January the White Land & Cattle Company executed a mineral deed conveying the mineral estate in said land to H. E. Lemar, and assigned to him the unaccrued rentals and royalties.

"Later Lemar conveyed by mineral deeds a one-fourth mineral interest and royalty in sections 112 and 122 to Humble Oil & Refining Company, a one-half mineral interest and royalty and all delay rental on the west half of section 112 to Magnolia Petroleum Company, a one-eighth mineral interest and royalty and one-eighth delay rental in section 122 to A. C. Butler, and a one-eighth mineral interest and royalty in section 122 to Gar-Tex Oil Company.

"On January 19, 1929, the White Land & Cattle Company conveyed the above sections to F. B. Carter, who, on the 2d day of April, following, conveyed the land to appellant, J. W. Garner.

"The deeds from the White Land & Cattle Company to Carter and from Carter to appellant both provided that they did not include the mineral rights on the land; it being understood that they had been theretofore conveyed.

"Appellant filed this suit in the district court of Pecos county against Lemar, Butler, Humble Oil & Refining Company, Magnolia Petroleum Company, and Gar-Tex Oil Company.

"He alleged that he was the `owner of the soil' within the meaning of articles 5367 and 5382, Revised Statutes of 1925; that on December 9, 1911, and January 30, 1907, respectively, the lands in question were a part of the public free school lands of the state of Texas and had been classified as mineral and grazing lands; that thereafter they were sold with a reservation of the minerals to the state of Texas; that appellees had caused to be recorded in the deed and lease records of Pecos county certain pretended conveyances, transfers, and assignments to them of all the oil, gas, and mineral rights appurtenant to said lands, including the pretended right to collect all lease moneys, bonuses, rentals, and royalties; that, acting under said conveyances, they have collected all the rentals accruing thereunder; that they are still claiming various interests in the mineral rights on the lands and claim the right to continue collecting the rentals on said lands and to appropriate the same to their own use and benefit; that at the time of such pretended conveyances, appellees were not the `owners of the soil'; that, by reason thereof, such conveyances are null and void; that a cloud is cast upon the title of appellant by the pretended claims of appellees, thereby depriving him of his rights in connection with the ownership of the lands, and that he has no adequate legal remedy, because the amount of his damages could not be accurately determined; that appellees never paid to the owners of the soil more than $24,560 for the twenty-four sections, and that he was ready, able, and willing to pay to appellees the sum of $918 as full compensation which they had paid the owners of the soil for the minerals in the lands in question.

"He prayed for judgment quieting his title, together with all the rights and privileges to which he is in any way entitled in connection therewith, and for the removal of all clouds cast thereon.

"Appellees answered by general demurrers, general denial, and pleas of not guilty, and alleging that the oil and gas leases executed by G. S. White et al. to Magnolia Petroleum Company and to Ellyson are in full force and effect, that all covenants and conditions therein, including the payment of rentals and royalties to the state, have been complied with, and that appellant purchased the surface estate subsequent to and with full knowledge of the mineral deeds, and that the surface estate was impressed by express reservation with their rights, titles, and interests. The case was submitted to the court without the intervention of a jury and upon hearing, the court rendered judgment that appellant take nothing."

From the judgment of the trial court, J. W. Garner appealed to the Court of Civil Appeals at El Paso, and that court reversed the judgment of the trial court and rendered judgment in favor of J. W. Garner that he recover of and from Magnolia Petroleum Company the sum of $11.31, from A. C. Butler the sum of $8, and from H. E. Lemar the sum of $56. 38 S.W.(2d) 161. From this judgment, Lemar et al. applied to the Supreme Court for a writ of error which was granted.

Plaintiffs in error contend: (1) That the Court of Civil Appeals erred in holding that the Relinquishment Act, and particularly articles 5367, 5368, and 5379, R. S. 1925, prohibits the owner or purchaser of the surface estate of public school lands who has contracted with the state's oil and gas lessee thereon for rental and royalty payments from severing and separating such surface owner's payments from the surface estate and transferring and conveying such payments and surface estate into separate and different ownerships. (2) That the Court of Civil Appeals erred in holding that plaintiffs in error's title and right to the rental and royalty paid and contracted to be paid by the state's oil and gas lessee under existing oil and gas leases terminated and vested in defendant in error upon his purchase of the surface estate, because the uncontradicted evidence is that plaintiffs in error acquired and held under valid assignments from the owner of the soil such rental and royalty payments accrued or accruing under said oil and gas leases, and thereafter defendant in error purchased the surface estate only, the so-called rentals and royalties being expressly excepted and reserved from his purchase. (3) That the Court of Civil Appeals erred in holding that the Relinquishment Act, and particularly article 5379, R. S. 1925, limits the owner of the surface and his assigns to a so-called rental of 10 cents per acre per annum, and that all rental contracted for by the owner of the surface in excess of such amount is payable to the state, and no part thereof may be collected and received by the owner of the surface or his assigns, the plaintiffs in error.

The Court of Civil Appeals held:

"Appellant, in his brief, presents seven propositions of law upon which he depends for a reversal of the judgment; but, as we view the record, the rights of the parties can be determined by ascertaining the correct answer to the following questions: (1) Are the rights secured to the surface owner of land by the `Relinquishment Act' (Rev. St. 1925, arts. 5367-5382) the subject of assignment? (2) Do his rights to rentals and royalties terminate upon a sale by him of the surface estate? and (3), Is a subsequent owner of the surface estate entitled to the rentals and royalties which accrue subsequent to his acquisition of the surface estate?

"We are of the opinion that these questions should be answered in the affirmative."

The questions presented in this case involve the construction of the Relinquishment Act (articles 5367-5382, R. S. 1925). The pertinent parts thereof read as follows:

"Art. 5367. The State hereby constitutes the owner of the soil its agent for the purposes herein named, and in consideration therefor, relinquishes and vests in the owner of the soil an undivided fifteen-sixteenths of all oil and gas which has been undeveloped and the value of the same that may be upon and within the surveyed and unsurveyed public free school land and asylum lands and portions of such surveys sold with a mineral classification or mineral reservation, subject to the terms of this law. The remaining undivided portion of said oil and gas and its value is hereby reserved for the use of and benefit of the public school fund and the several asylum funds.

"Art. 5368. The owner of said land is hereby authorized to sell or lease to any person, firm or corporation the oil and gas that may be thereon or...