Robinson v. Humble Oil & Refining Co., 6927

• Decision Date: 04 April 1957
• Docket Number: No. 6927,6927
• Citation: 301 S.W.2d 938
• Parties: Ash ROBINSON, Appellant, v. HUMBLE OIL & REFINING COMPANY, et al., Appellees.
• Court: Texas Court of Appeals

Page 938

301 S.W.2d 938

Ash ROBINSON, Appellant, v. HUMBLE OIL & REFINING COMPANY, et al., Appellees.

No. 6927.

Court of Civil Appeals of Texas, Texarkana.

April 4, 1957.

Rehearing Denied May 9, 1957.

Wm. H. Watts, Frank G. Dyer, W. J. Knight, Houston, for appellant.

Nelson Jones, Dillard Baker, Walter B. Morgan, Rex G. Baker, Baker, Botts, Andrews & Shepherd, J. C. Hutcheson, III Wm. R. Choate, Houston, C. M. Gaines, San Antonio, for appellees.

FANNING, Justice.

Appellant, Ash Robinson, sued to establish title to an undivided 11/128 part of the royalty on oil, gas and other minerals due and to be paid under the terms of an oil and gas lease dated August 12, 1936, from The Dallas Joint Stock Land Bank of Dallas, as Lessor, to Humble Oil & Refining Company, as Lessee, as allegedly amended by an instrument dated September 20, 1944, and for an accounting and recovery of the proceeds of such royalty. The appellees in the case are Humble Oil & Refining Company, George H. Coates, Edwin L. Cox, Jake J. Hamon, Edwin B. Cox and Elizabeth L. Cox, Louis B. O'Neil, individually and as Independent Executor of the Will and Estate of John T. O'Neil, deceased, I. P. O'Neil, individually and in his capacity as Independent Executor of the Will and Estate of John T. O'Neil, deceased, Arnold D. Larson, individually and in his capacity as Independent Executor of the Will and Estate of John T. O'Neil, Mary Ellen O'Neil Doherty, and husband Emmett E. Doherty, and Martelia A. Selman. The issues with recepect to accounting were severed from the case. The case was tried to a jury.

Defendants made a motion for instructed verdict and the trial court reserved a ruling on the law questions involved in the case. The jury answered the five special issues submitted with reference to certain matters, favorably to plaintiff. Defendants' motion for judgment was sustained. Plaintiff has appealed.

In 1936, John F. Sinclair acquired from Dallas Joint Stock Land Bank the Sutherland Ranch containing some 21,000 acres of land in Duval County, Texas. In this deed the Land Bank reserved 1/4 of the royalty in fee on the lands conveyed and a $25,000 oil payment out of the remaining royalty acquired by Sinclair, and a deed of trust lien was retained to secure the unpaid balance of the purchase price. Two of the surveys included in this ranch were S. K. & K. Survey 504 and B. S. & F. Survey 562. At the time Sinclair acquired the ranch, some 11,746 acres of it, including Survey 562 and some other 24 sections, were under an oil and gas lease previously executed by the Land Bank to Humble Oil & Refining Company. Survey 504 was at that time subject to another lease originally executed by the Land Bank to Ray B. Campbell, but such lease had been assigned by him to H. H. Weinert, Inc., and it was stipulated that this lease expired on August 12, 1940.

Shortly prior to November 18, 1936, a syndicate, of which plaintiff Ash Robinson was a member, entered into negotiations with Sinclair through his agent H. W. Ferguson, President of the Land Bank, to purchase certain mineral interests in some of the Sutherland Ranch properties.

As hereinafter stated, the great weight and overwhelming preponderance of the evidence was to the effect that these negotiations related only to Surveys 504 and 562, and that these negotiations resulted in an agreement to purchase a 1/4 interest in the minerals in these two sections at a price of $50 per acre.

On November 18, 1936, a written contract was entered into between Sinclair and E. C. Terrell, who was the nominee of the Syndicate, which contract provided among other things that Sinclair should execute a deed and procure a subordination of the Land Bank's lien to 'the interest hereby contracted to be sold.'

The deed in question from Sinclair to E. C. Terrell was executed on November 21, 1936. We quote from this deed as follows:

'The State of Texas

'County of Duval}

Know All Men By These Presents:

'That John F. Sinclair, of Washington, D. C. has granted, bargained sold and conveyed and by these presents does grant, bargain, sell and convey unto E. C. Terrell of the County of Colorado, State of Texas, the following, to-wit: 1/4 interest in and to all the oil, gas and other minerals on, in and under and that may be produced from the following described lands situated in Duval County, Texas, to-wit:

All of Survey No. 504, Abstract No. 1254, Certificate No. 81, Original Grantee S. K. & K., containing 640 acres of land, more or less. (Now under lease to H. H. Weinert)

All of Survey No. 562, Abstract No. 1256, Certificate, No. 1/951, Original grantee B. S. & F., containing 640 acres of land, more or less. (Now under lease to Humble Oil & Refining Company) together with the right of ingress and egress at all times for the purpose of mining, drilling and exploring said lands for oil and gas and other minerals and producing, storing, treating, marketing and removing the same therefrom.

'There above described lands are now under and embraced in and covered by an oil and gas mineral lease originally executed in favor of the above named lessees, and now held and owned by the said lessees; and it is understood and agreed that this sale and conveyance is made subject to said lease but covers and includes 1/4 part of the royalty on oil, gas and other minerals due and to be paid under the terms of said lease.

'It is agreed and understood that no part of the money rentals which may be paid to extend the term within which a well may be begun under the terms of said lease is to be paid to the said E. C. Terrell. In the event that the above described lease for any reason becomes terminated, cancelled or forfeited, then and in that event a full 1/4 interest in and to the oil, gas and other minerals on, in and under and that may be produced from said lands shall be owned by the said E. C. Terrell.' * * *

The subordination agreement called for in the contract was also executed on November 21, 1936, and the deed and subordination agreement were delivered contemporaneously. The subordination agreement, executed and delivered as a part of the same transaction, specifically described Survey 6504 and Survey 562, and contains, amont others, the following provision:

'* * * The Dallas Joint Stock Land Bank of Dallas * * * does hereby subordinate said vendor's and deed of trust lien, and said oil payment to the rights acquired by said E. C. Terrell in and to above described land by virtue of aforesaid mineral and royalty deed; * * * but nothing herein contained shall be construed as a release or subordination of any other rights owned or held by the undersigned nor shall anything in this instrument be construed as affecting in any way any land described in said deed of trust except said Surveys 504 and 562 more particularly described above.' (Emphasis added.)

By an instrument dated December 3, 1936, which was indentical in all respects with the form of the Sinclair-to-Terrell deed except for the change of fractional interests, Terrell conveyed to plaintiff Ash Robinson a 9/64 interest out of the interests conveyed to him under the Sinclair-Terrell deed. It was stipulated that plaintiff Ash Robinson had made conveyances out of the interest vested in him under the above-mentioned deed from Terrell to Robinson to the extent of 7/18 of whatever interest and estate vested in him under said deed. (Sinclair conveyed to H. H. Weinert certain non-participating royalty in Surveys 504 and 562, and Weinert conveyed to plaintiff a portion of this royalty.

The plaintiff's title to this interest he acquired from Weinert is not in issue in this suit and the judgment entered by the trial court so provides.)

By a deed dated October 8, 1938, John F. Sinclair executed a deed reciting that he had acquired title to the lands conveyed to him by the Land Bank for the benefit of himself, Gladys E. Sinclair, Frances Sinclair and Gladys Sinclair in the proportion of 1/4 to each and conveyed to the other parties named each a 1/4 interest therein. This deed was duly filed for record October 20, 1938, and duly recorded.

Under date of September 20, 1944, John F. Sinclair, Gladys E. Sinclair, Gladys S. Brooks, Frances Sinclair Larson, Wright W. Brooks and Harold W. Larson, therein referred to as Lessor, and Humble Oil & Refining Company, therein referred to as Lessee, executed an instrument designated Change of Lease Description, covering the 11,746 acres in question plus additional lands, which instrument is later in this opinion more fully noted and referred to.

In 1947, John F. Sinclair and wife, Gladys E. Sinclair, Gladys Sinclair Brooks and husband, Wright W. Brooks, and Frances Sinclair Larson and husband, Harold W. Larson, conveyed to John T. O'Neil 8/8 of the oil, gas and other minerals in and under or that may be produced from 21,360.58 acres of land in Duval County, Texas, including the 11,746 acres leased to Humble. John T. O'Neil conveyed portions of said interest (as shown by the record) to Edwin B. Cox, Jake L. Hamon and George H. Coates.

Plaintiff contends that the deed from Sinclair to Terrell conveyed, not only 1/4 of the minerals under Surveys 504 and 562, together with 1/4 of any royalties attributable to this 1/4 mineral interest, but also 1/4 of the royalties payable on production from the entire 11,746 acres covered by the Land Bank-Humble lease of August 12, 1936, as allegedly amended by the 1944 lease instrument. Plaintiff contends that such is a result required by the decision in the case of Hoffman v. Magnolia Petroleum Co., Tex.Com.App., 1925, 273 S.W. 828, and by other cases which follow the Hoffman v. Magnolia case.

Defendants interposed five main defenses to plaintiff's suit which were:

'1. That plaintiff's attempt to construe to Sinclair-Terrell deed as a conveyance of any interest in lands other than the two sections specifically described must fail for want of a valid description of such lands.

'2. That the Sinclair-Terrell deed,...