Rio Bravo Oil Co. v. McEntire

• Decision Date: 29 March 1933
• Docket Number: No. 7736.,7736.
• Citation: 59 S.W.2d 962
• Parties: RIO BRAVO OIL CO. v. McENTIRE et al.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

59 S.W.2d 962

RIO BRAVO OIL CO. v. McENTIRE et al.^*

No. 7736.

Court of Civil Appeals of Texas. Austin.

March 29, 1933.

Rehearing Denied May 3, 1933.

Appeal from District Court, Sterling County.

Suit by George H. McEntire against the Rio Bravo Oil Company, wherein the Gulf Production Company intervened. From judgments in favor of the plaintiff and the intervener, the defendant appeals.

Affirmed.

W. A. Wright, Chas. G. Russell, and C. H. Tupper, Jr., all of San Angelo, and Baker, Botts, Andrews & Wharton, of Houston, for appellant.

Kerr & Gayer and Smith & Neill, all of San Angelo, and P. O. Settle and Wm. L. Wise, both of Fort Worth, for appellees.

BLAIR, Justice.

Appellee George McEntire sued appellant, Rio Bravo Oil Company, in trespass to try title to recover sections 13, 23, and 25 in block 23, Houston & Texas Central Railway Company lands in Sterling county (formerly a part of Tom Green county). Appellant filed a general denial and general demurrer, and a plea of not guilty; but on the trial claimed only the minerals in the land with certain surface rights for the development and production of minerals. The Gulf Production Company intervened, claiming the oil and gas in sections 13 and 23, under a lease executed by appellee McEntire, which lease McEntire admitted to be valid. A trial to the court without a jury resulted in a judgment for appellee as prayed, and a judgment for the Gulf Production Company establishing the validity of its oil and gas lease; hence this appeal.

Appellant attacks the judgment in favor of appellee McEntire as not being supported by the evidence adduced; and the appeal therefore involves an analysis of the evidence and the construction of certain instruments in the light of the facts and circumstances surrounding their execution, as links in the chain of McEntire's title. We have reached the conclusion that the evidence sufficiently supports the judgments rendered.

The Houston & Texas Central Railway Company, hereinafter designated railway company, is the admitted common source of title, the 3 sections of land having been duly patented to it by the state of Texas in 1877, by virtue of surveys made under land scrip issued to it in 1867. In 1872 the railway company mortgaged these lands to the Farmers' Loan & Trust Company, trustee, the mortgage providing that said trustee shall sell the lands "at public or private sale," in default of the payment of the indebtedness secured; and that said trustee "shall execute a deed in fee simple" to purchaser, which "shall be a bar against * * * all claims * * * and all right of redemption" of the mortgagor and its successors and assigns; and that the deed "shall convey full and absolute title therein to the purchaser free and clear of all encumbrance." Thereafter, on June 24, 1882, the railway company contracted to sell section 23 to Jos. M. Kelley; and on August 12, 1882, it contracted to sell Kelley sections 13 and 25, the contracts reciting that the consideration was paid partly in cash and partly by notes secured by a lien upon the lands; and both of the contracts contained the following stipulations and reservations:

"In case the party of the second part, his legal representatives or assigns shall pay the said notes according to their tenor and effect, then the said railway company will make or cause to be made and executed unto the said party of the second part, his heirs or assigns (upon request at the general office of the party of the first part and the surrender of this contract) a deed conveying said premises with special warranty, but made subject to the following rights of the said railway company, each and all of which rights are hereby reserved and are not to pass by the deed to be made by said railway company. * * *

"The Houston and Texas Central Railway Company reserves the right at all times hereafter to enter upon the land hereby conveyed and prospect for and make surveys at will, and any part of it, for coal, mineral, stone, or any other valuable deposits, and to open upon said land and operate with all machinery, appliances and attachments which it may deem necessary, mines, borings and quarries, and the coal, mineral, stone, or other valuable deposits found in and taken from all such mines, borings and quarries shall be the property of said Houston and Texas Central Railway Company, and it shall have the right to remove the same, and for the purpose of ingress and egress to and from such mines, borings and quarries a further right of way over the land hereby conveyed sixty feet in width to and from such mines, borings and quarries is hereby reserved. * * * "The said Joseph M. Kelley, by accepting this deed, agrees to the reservation aforesaid and to the entire contract hereinbefore specified, and covenants to and with the said railway company and its assigns that it and they shall have and enjoy all the reservations, rights and privileges contained and contracted for in this deed, and further agrees that this covenant shall run with the land hereby sold, and it is stipulated in this agreement that no assignment of the premises shall be valid unless the same shall be endorsed hereon."

It may here be noted that appellee contended, and the trial court found, that these contracts of sale did not include in the reservations petroleum or natural gas.

The June 24, 1882, contract was filed for record December 17, 1886; but the August, 1882, contract was not filed for record until October 4, 1929. On the June, 1882, contract there was indorsed: "Duplicate No. 12,781, Contract No. 31½C. Houston & Texas Central Ry. Co. With Joseph M. Kelley. For Sale of whole Sec. 23, Block 23, Tom Green County, 640 acres."

The notes referred to in the June, 1882, contract each recited:

"This note is given in part payment for 640 acres of land, being the whole of Section No. 23, Block No. 23, in the County of Tom Green, sold and conveyed to me by the said Houston & Texas Central Railway Company, by Contract No. 31½C, bearing date the 24th day of June, 1882, and is secured by a vendor's lien on said property as retained in said contract. No. L106, Due June 24, 1883."

Note No. 1 of this series of notes was paid June 25, 1883. The August, 1882, contract bears the following indorsement: "No. 12,781, Contract No. 58C, Houston & Texas Central Ry. Co. With Joseph M. Kelley. For sale of Whole Sect. 13 and 25, Block 23, Tom Green County, 1280 Acres."

The notes referred to in the August, 1882, contract each recite: "This note is given in part payment for 1280 acres of land, being the whole of Section Nos. 13 and 25, Block No. 23, in the County of Tom Green, sold and conveyed to me by said Houston & Texas Central Railway Company, by contract No. 58C, bearing date the 12 day of August, 1882, and is secured by a Vendor's Lien on said property, as retained in said contract. No. L203, due Aug. 12, 1883."

The first of these notes was paid on August 16, 1883.

In 1885 several suits were filed in the federal court, seeking to foreclose mortgages executed by the railway company, one of which was filed by the Farmers' Loan & Trust Company, trustee; and these suits were all consolidated by order of the court and a receiver appointed.

On May 7, 1885, the court ordered the Farmers' Loan & Trust Company, trustee, to sell the lands in controversy, and to report to the receiver of the railway company all such sales. The said trustee was further ordered to execute deeds for lands theretofore sold by the railway company in all instances where the purchase-money notes had been paid; and that, in instances where contracts of sale had been made by the railway company and approved by the trustee, he should execute deeds to the respective purchasers; and that such deeds were to be held in escrow by the receiver for delivery to the purchasers whenever they had paid for the lands in full. On August 20, 1885, in pursuance of this order, the Farmers' Loan & Trust Company, trustee, acting under the deed of trust of October 1, 1872, executed to J. M. Kelley two instruments, each of which read in part as follows: "Now, Therefore, This Indenture Witnesseth, that the party hereto of the first part, in consideration of the premises and of the payment made to it by the said Receivers in pursuance of the above order, and of the sum of one dollar to it in hand paid by the party hereto of the second part, the receipt whereof is hereby acknowledged, hath granted, demised, released and quitclaimed, and, by these presents, doth grant, demise, release and quitclaim unto the party of the second part, and to his heirs and assigns forever, all that certain lot, piece or parcel of land and property situate, lying and being in the County of Tom Green in the State of Texas, known and described as follows, namely."

The instrument relating to the June, 1882, contract described the land conveyed as follows: "All of Section 23, Block 23, Certificate 1012, containing 640 acres, deeded to party of second part by the Houston and Texas Central Railway Company on the 24th day of June, 1882, by deed No. 31½C, at the price of Two dollars and fifty cents per acre, together with all and singular the rights, members, hereditaments and appurtenances to the same belonging or in anywise incident or appertaining."

The instrument relating to the August, 1882, contract described the land conveyed as follows: "All of Sections 13 and 25, Block 23, Certificates 1007 and 1013 containing 1280 acres, deeded to party of the second part by the Houston and Texas Central Railway Company on the 12th day of August, 1882, by deed No. 58C at the price of two dollars and twenty-five cents per acre, together with all and singular the rights, members, hereditaments, and appurtenances to the same belonging or in anywise incident or appertaining."

These two instruments were placed in escrow with the receiver of the railway company. The evidence is undisputed that the railway company had defaulted in the payment...