Miles v. Martin, 3351

• Decision Date: 07 February 1958
• Docket Number: No. 3351,3351
• Citation: 310 S.W.2d 635
• Parties: Carl MILES, Appellant, v. J. O. MARTIN, Appellee.
• Court: Texas Court of Appeals

Page 635

310 S.W.2d 635

Carl MILES, Appellant, v. J. O. MARTIN, Appellee.

No. 3351.

Court of Civil Appeals of Texas, Eastland.

February 7, 1958.

Rehearing Denied February 28, 1958.

Whitten, Harrell & Wilcox, Abilene, for appellant.

King & Willoughby, Yates & Yates, Abilene, for appellee.

GRISSOM, Chief Justice.

J. O. Martin obtained a judgment against Carl Miles and others for one-fourth of the minerals in two tracts of land, subject to the power to execute leases and to existing leases. Miles has appealed.

The court concluded, among other things, that a deed from Martin to the Pratts transferred title to the land, subject to two mineral reservations, one-fourth by Wall and one-fourth by Martin; that the Pratts' deed of trust, which was of record when Miles bought from the Pratts, showed there was a mineral reservation by Wall and an additional reservation of one-fourth of the minerals by Martin in Martin's deed to the Pratts; that same constituted a contractual stipulation of record as to the amount of minerals retained by Martin; that it was a conclusive admission of record against interest by the Pratts and a recognition of Martin's one-fourth mineral reservation in addition to a prior mineral reservation by Wall; that the stipulation in the Pratts' deed of trust recognizing both reservations, by virtue of which deed of trust the Pratts obtained the money to pay Martin, created an estoppel of record against the Pratts to assert an esstoppel against Martin on account of his warranty and constituted a waiver; that the recognition of a reservation by Martin of a one-fourth mineral interest, in addition to that reserved by Wall, was shown in Pratts' deed of trust and became a part of Pratts' deed to Miles by reason of the reference therein to said deed of trust and, further, that Pratts' deed to Miles was only a quitclaim of the minerals and royalties and Miles acquired only the interest then actually owned by the Pratts.

Miles first two points assert that the court erred in (1) awarding Martin one-fourth of the minerals and royalties and in (2) concluding that Martin reserved one-fourth of the minerals in addition to the one-fourth reserved by Wall.

It was agreed that Wall was the common source of title; that in November, 1950, Wall and wife owned the land in fee simple and on November 8, 1950, executed a lease with Martin and wife to Viking Oil Corporation; that this lease was aissigned to Woodley Petroleum Company and oil is now being produced thereon and sold to Onyx Refining Company, who is withholding payment of the one-fourth of the royalty in dispute; that on December 22, 1950 Wall and wife were the owners of the land, subject only to said lease, and on said date the Walls executed and delivered a warranty deed to Martin.

Said deed contained the following exception:

'There is, however, excepted from this conveyance and reserved to the grantors herein, their heirs and assigns, the following:

"First: An undivided one-fourth of the royalty that may be provided for in any oil, gas or mineral lease or contract which may hereafter be executed by the grantee herein, his heirs and assigns, for the exploration and development of said land or any part thereof, for oil, gas or other minerals. It being specifically understood and agreed, however, that the said grantee, his heirs and assigns, shall not make or enter into any lease or contract for the exploration and development of said land or any part thereof, for oil, gas and other minerals, unless each and every such lease or contract shall provide for a royalty of at least one-eighth of all the oil, gas or other minerals produced therefrom;

"And, in the event grantee, his heirs or assigns, as in the status of fee owners of said land and minerals, shall explore, develop and operate the said land or any part thereof for oil, gas or other minerals, grantors herein, their heirs or assigns, shall own and be entitled to receive as a free royalty not less than one-thirty-second of the total production of oil, gas and othere minerals produced therefrom.

"Second: An undivided one-fourth of all of the bonuses or other down payments received by grantee, his heirs and assigns, from any lease or other contract for the exploration or development of said land, or any part thereof, for oil, gas and other minerals.

"Third: An undivided one-fourth of all delay rentals which shall become due and payable under any lease or contract executed by grantee, his heirs or assigns, for the exploration or development of said land, or any part thereof, for oil, gas and other minerals.

"The grantors' 1/4 of the bonuses and rentals or other down payments that may be paid under any such lease or contract, as above provided for shall be paid to grantors, their heirs and assigns, by depositing the same to the credit of said grantors, their heirs and assigns, in the Farmers & Merchants National Bank of Abilene, Texas, or its successors.

"In this connection, it is agreed that the grantors, their heirs and assigns, need not be named as lessors in any such lease or contract, nor shall it be necessary for such grantors, their heirs and assigns, to join in the execution of any such lease or contract, executed by the grantee herein, his heirs and assigns, for the exploration and development of said land or any part thereof for oil, gas and other minerals, but any bonuses or rentals which may become due and payable under the terms of any such lease or contract shall be deposited in the depository above named, to the credit of grantors, their heirs and assigns, in accordance with the terms hereof, until written notice in recordable form, of a change in the depository shall be given to the grantee, his heirs or assigns, and recorded in the office of the County Clerk of Taylor County, Texas."

All parties agree that Wall intended to except one-fourth of the minerals and royalty and that said amount of royalty has been properly paid to him. We shall, therefore, regardless of what may be the proper interpretation of Wall's exception, treat Wall's deed as excepting one-fourth of the minerals and royalties payable under all leases now producing, whether they were then in existence or thereafter executed.

On January 12, 1951, Martin executed a deed to J. M. and Carl P. Pratt conveying the same land. This deed contained an exception in exactly the same language as that in Wall's deed to Martin. On January 8, 1955, the Pratts conveyed the surface of the same land to Carl Miles and O. B. Haley. This deed recited the assumption by the grantees and their promise to pay $4,322.50 to Kansas City Life Insurance Company, which debt was secured by the Pratts' deed of trust. The deed to Miles and Haley contained the following provisions:

"It is the intention of the grantors herein to convey and they do hereby convey all the land enclosed by the two sets of field notes set out above regardless of whether such land is situated within the two surveys named, or elsewhere.

"It is agreed and understood, however, that this conveyance is made subject to any outstanding mineral or royalty interest now owned of record by persons who are not parties to this conveyance, but grantors herein have and do hereby...