The Texas Co. v. State, 12585
| Decision Date | 10 March 1954 |
| Docket Number | No. 12585,12585 |
| Citation | 267 S.W.2d 456 |
| Parties | THE TEXAS CO. et al. v. STATE. |
| Court | Texas Court of Appeals |
Wm. E. Loose, Houston, Black & Stayton, Austin, for appellant, The texas co.
Joseph W. Moore, Houston, E. G. Lloyd, Jr., Jacob S. Floyd, Alice, for appellant, Duval County Ranch Co.
John Ben Shepperd, Atty. Gen., Phillip Robinson, Asst. Atty. Gen., John Peace and Charles D. Mathews, Sp. Assts. Atty. Gen., for appellee.
This case concerns the validity of an instrument executed by a surface owner, as tested against the owner's agency powers under the Relinquishment Act. Acts 36th Leg. 2d C.S., Ch. 81, pp. 249-254, Vernon's Ann.Civ.St. art. 5367 et seq.
The State of Texas instituted this suit against The Texas Company and the Duval Ranch Company, and asked for title to and possession of the minerals in four thousand acres of land, for the cancellation of a mineral deed given by Duval Ranch Company (hereinafter called Duval) to The Texas Company, and for the recovery of the value of all oil that has been produced from those lands. There has been production on the land since 1937, and 14/16 of the production has gone to The Texas Company, 1/16 to the State of Texas, and 1/16 to Duval, the surface owner. The central issue is whether Duval, as surface owner of the lands, gave an oil and gas lease as authorized by the Relinquishment Act, or whether it gave a deed absolute to the minerals, in violation of the Relinquishment Act. The trial court, without the intervention of a jury, upheld the State's claim that the instrument was a mineral deed and void, but the court awarded Duval a 1/16 past and future interest in the production on the lands as damages to the surface. The State recovered judgment against The Texas Company in the sum of $666,687.75. We affirm that part of the judgment, but hold further that the State should have been awarded interest before judgment in the sum of $278,073.48, for the detention of the State's money. We also hold that the State owns the full 16/16 of the oil and gas estate. The Texas Company was given judgment against Duval on its warranty in the sum of $9,940, which we affirm.
In 1922, Duval executed an instrument to R. E. Breeding, which sought to convey all of the oil, gas, and other minerals under 16,000 acres of land, 12,000 acres of which were privately owned in fee by Duval and 4,000 acres of which were minerally classified lands belonging to the Public Free School Fund. Within two days Breeding by a like instrument, conveyed the property to The Texas Company. This case concerns only the 4,000 acres of minerally classified land.
We shall set forth the first instrument in full, omitting the land descriptions:
Know All Men By These Presents:
That the Duval County Ranch Company, a private corporation duly incorporated under the laws of the State of Texas, with its principal office in Houston, Harris County, Texas, acting herein for itself and as agent and representative of the State of Texas, as provided in Article 5904o-16 et seq., of the Complete Texas Statutes of 1920, acting herein by and through its Vice President, Robert E. Goree, hereinafter called Grantor, for and in consideration of the sum of Twenty-eight Thousand and No/100 ($28,000) Dollars cash in hand paid by R. E. Breeding, receipt of which is hereby acknowledged, hereby Grants, Bargains, Sells and Conveys, and by these presents does Grant, Sell, Bargain and Convey unto the said R. E. Breeding, hereinafter called Grantee, all the oil, gas and other mineral (whether similar or dissimilar) in and under the following described tracts of land, situated in the Counties of Webb and Duval in the State of Texas, described as follows, to-wit:
The following tracts are included in this instrument: (Here follows description the one hundred tracts of land.)
And the Grantee shall have the exclusive right to prospect, drill and mine on said land and remove said products therefrom; to erect and maintain thereon and remove therefrom all necessary or proper structures and equipment, including the right to pull the casing from wells; and to install and maintain thereon and remove therefrom all tanks and other means of storage and all pipes and other means of transportation; also the right of ingress and egress at all times for any of said purposes.
In the event the Grantee shall produce oil or gas or any other minerals from said tracts of land in paying quantitles, then there shall be paid to Grantor, its successors and assigns, a royalty of one-eighth (1/8) of all the oil, gas and other minerals so produced and saved, except as to sulphur the royalty shall be fifty cents (50cents) per ton for each ton mined and marketed. Any royalties due the State hereunder shall be deducted from grantor's royalties.
The Grantee shall have the free use of oil, gas and water from said tracts of land only out of wells or tanks made by him for all purposes of operation on said tracts of land, and the royalty on oil, gas and other minerals, except sulphur, shall be in the net quantity saved after deducting any so used.
It shall be optional with the Grantee to drill or mine or carry on other operations on said tracts of land, or to refrain from doing so wholly or partially at any or all times, both before and after production; it being expressly agreed by the Grantor that the down cash payment recited in this instrument, receipt of which is hereby acknowledged, to Grantor is adequate to compensate and does compensate the Grantor for this right and privilege of Grantee.
It is further distinctly understood and agreed that no use of the surface of the above described tracts of land by anyone shall be construed as adverse to the rights of Grantee, his heirs and assigns, in and to the oil, gas and other minerals herein conveyed, as well as the right to mine and to produce the same.
No well shall be drilled nearer than 200 feet to any house or barn now on said land, unless by consent of the Grantor, and nothing herein contained shall deprive the Grantor of the full use and enjoyment of said land, subject to the privileges and estate hereby granted, and when requested by the Grantor the Grantee shall bury his pipe lines so that they will not interfere with cultivation.
Should the interest owned by the Grantor in said land prove to be less than the entire fee the royalties herein provided for shall be paid to the Grantor in the proportion only that the interest of the Grantor bears to the entire fee.
If the estate of either party hereto be assigned the covenants hereof shall extend to the assigns and successive assigns; but no change or division in the ownership of the Grantor, by purchase or otherwise, shall be binding on the Grantee for any purpose until the Grantee shall have been furnished with proper evidence thereof.
To Have and To Hold the above described oil, gas and other minerals, and the rights herein granted, all and singular, unto said grantee, his heirs and assigns forever; and the Grantor hereby binds itself its successors and assigns, to warrant and forever defend the same unto said Grantee, his heirs and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof.
It is expressly understood and agreed that this instrument is to be construed as a conveyance in fee of all the oil, gas and other minerals in and under the above described tracts of land.
In Witness Whereof, the Grantor aforesaid has caused these presents to be signed by Robt. E. Goree, its Vice President, thereto duly authorized, and its common seal hereunto affixed; and in witness whereof, these presents are also signed by the Grantee herein this 23 day of May A.D. 1922.
An examination of the instrument itself convinces us that it violates the Relinquishment Act, and is null and void for many reasons. The Relinquishment Act contemplates an oil and gas lease, but not an absolute fee simple sale. Greene v. Robison, 117 Tex. 516, 8 S.W.2d 655; Empire Gas & Fuel Co. v. State, 121 Tex. 138, 47 S.W.2d 265; Norman v. Giles, 148 Tex. 21, 219 S.W.2d 678; Lewis v. Oates, 145 Tex. 77, 195 S.W.2d 123; Lemar v. Garner, 121 Tex. 502, 50 S.W.2d 769; Hinson v. State, Tex.Civ.App., 245 S.W.2d 755; State v. Magnolia Petroleum Co., Tex.Civ.App., 173 S.W.2d 186; McDonald v. Dees, Tex.Civ.App., 15 S.W.2d 1075.
(1) The parties by the instrument expressly declared to us what they were conveying, and they did so when their intentions were clearest and their memories freshest. We need look no further than those written declarations, for they say without equivocation: 'It is expressly understood and agreed that this instrument is to be construed as a conveyance in fee of all the oil, gas and other minerals in and under the above described tracts of land.' Since the decision in Greene v. Robison in 1928, The Texas Company has endeavored to convince itself and now this Court, that the deed did not mean what it said at all. If, as The Texas Company urges, it did not intend to convey a fee in all the oil, gas and other minerals, we are rather at a loss to understand why they chose such strong language to say they did. Subsequent events do not erase those words from the deed.
(2) The instrument was a deed, absolute in form. It meets all the requirements for a deed absolute, as set forth in Article 1292, Vernon's Ann.Civ.Stats. Its granting clause states that it 'grants, bargains, sells and conveys.' Its habendum clause is, 'To Have and To Hold * * * forever.' Its warranty clause is, 'to warrant and forever defend.' Ralph v. Margnolia Petroleum Company, Tex.Civ.App., 95 S.W.2d 222. The consideration for the instrument was a cash and paid consideration, and looked to no delay rentals nor royalty flowing from production, for the instrument expressly stated that the 'down cash payment * * * to Grantor is adequate to compensate and does...
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Texas Co. v. State
...The State of such 1/16th theretofore paid to and retained by Duval. Chief Justice Murray dissented from this last phase of the judgment. 267 S.W.2d 456. The position of The State is that the instruments are invalid because they effected a conveyance by deed of an estate in fee simple absolu......