#### WEST v. SEIGLER.

No. 15478.

Court of Civil Appeals of Texas. Fort Worth.

Jan. 22, 1954.

Rehearing Denied. Feb. 26, 1954.

*619Rogers & Eggers. and. Guy Rogers, Wichita Falls, for appellant.

Bullington, Humphrey, Humphrey & • Fillmore and Lee Humphrey, Wichita Falls, for appellee.

BOYD, Justice.

Appellee'.Dave .H. -Seigler filed this suit.against .appellant .Gordon T. West under. art. 2524-1, V.A.T.S., - for a declaratory judgment establishing his interest in Jieth of -%ths of the minerals-in-86.675 acres of land, until he has received $75 per acre from 3⁄461⁄8 of %ths of' the minerals produced therefrom. Judgment was for ap-pellee, and appeal was perfected.

On January 1, 1944, the United States of America conveyed to appellee 86.675 acres, reserving from said conveyance %ths of the oil, gas, coal and other minerals upon, in and under said land.

On June 5, 1947, appellee and his wife conveyed to appellant all their interest in and to the oil, gas and. other minerals in said tract, which was an undivided 3⁄4,1⁄8 interest, reserving therefrom 1⁄41⁄8 of the usual 1⁄81⁄8 royalty. In said deed of conveyance there áppeared thé following provisions :

> “The grantors herein further contract and agree that should they subsequently acquire title to the remaining undivided 3⁄4 interest in and to the oil, gas’ and othér minerals in and under the land above described, or to any fractional part thereof, .that in. such event and immediately thereupon they will grant, sell, convey and deliver, and by these. presents for the same-consideration hereinbefore recited, they do hereby grant, sell, convey and deliver unto the said Gordon T. West all of such after acquired interest sub-, ject to the following reservation from such after ac<juire.d interest:

> “A." 'The grantors out :of such after acquired mineral interest, reserve to’ themselves their heirs and assigns, three-fourths • (3⁄4) (or such fractional' part thereof as may be hereafter ac~ qúired of the' usual one-eighth (3⁄8). royalty) which covers oil royalty, gas royalty, casinghead or gasoline royalty and royalty in other' minerals which might be produced from any of the-above’ described land.

> “The grantors further reserve to themselves, their heir.s. and assigns, 3⁄46 of 7⁄8 of all oil, gas or other min-*620erais which may be .produced and saved from the land herein described; free of cost of operation and production and free.of gross production arid pipeline taxes, until such reserved minerals, at their market value at the time the same ■ are delivered to the pipeline, aggregate the sum of $75.00 per acre for the acreage which shall have vested in the grantees as herein described, no more and no less, whereupon this reservation: shall cease and title to such reserved minerals shall then -.vest in the' grantees,, their heirs and assigns.”

On July 1, 1948, appéllant acquired,an oil and gas lease,' covering the Government’s %ths mineral interest in the tract of land involved in this suit, subject to a royalty ‘ reservation of 3⁄4/ths of 3⁄81⁄8. Oil in paying quantities is being produced from the land..

On February 19,. 1952, the United States conveyed to appellee all the mineral interest reserved in its conveyance dated January 1, 1944..

It is appellant’s position that he has acquired nothing by virtue of the provision in appellee’s deed to him whereby appellee undertook to convey any and all interest in the minerals that appellee might subsequently acquire, because he says that he had already bought from the Government and paid for %ths of the minerals reserved by the Government in its first deed to ap-pellee ; and that appellee, after the Government executed, the. lease to appellant, acquired by the. last conveyance only the Government’s royalty interest and possibility of reverter. Appellant contends, therefore, that if he is-compelled to pay to appellee 3⁄4eth of 7⁄81⁄8-S of .the minerals, he would in effect be paying twice for that interest.

Appellee, on the other hand, insists that appellant now owns all the minerals subject to the 1⁄81⁄8 royalty reservation and the reservation of the %eth of the %ths, and the lease is now merged with the full fee simple title in appellant, and is therefore terminated.

An oil and gas lease is a conveyance of tninerals and the lessee holds a determinable fee. Shell Oil Co., Inc., v. Howth, 138 Tex. 357, 159 S.W.2d 483; Texas Co. v. Davis, 113 Tex. 321, 254 S.W. 304, 255 S.W. 601; Stephens County v. Mid-Kansas Oil & Gas Co., 113 Tex. 160, 254 S.W. 290, 29 A.L.R. 566; 31 Tex.Jur., p. 590, sec. 46; W. T. Waggoner Estate v. Sigler Oil Co., 118 Tex. 509, 19 S.W.2d 27. The title reverts to the- lessor when the lessee fails to perform his obligations' under- the lease. By his lease from the Government, ' appellant acquired title to 7⁄8-ths of the minerals reserved by the United States in its first conveyance to appel-lee. He owed, .however, -the duty faithfully to perform the covenants of the lease and the failure to do so would terminate' his interest in the property. Without- setting out his obligations under his lease, we find that they were onérous. When appel-lee purchased the Government’s remaining interest in the' minerals, all- the title he thereby acquired passed to appellant by virtue of appellee’s deed dated June 5, 1947. Although on July 1, 1948, appellant paid the Government the full consideration for the lease, by the acceptance of the deed from appellee of June 5, 1947, he agreed to pay to appellee *Vieth*- of %ths of the-minerals -produced from the premises ■ in consideration of the conveyance to him by appellee of; any. title he might thereafter acquire in the minerals. Had appellant not acquired the lease, it appears that he would now ,own all the minerals, subject to the reservation ,of %th as royalty' and 3⁄4eth of %ths for the consideration expressed in appellee’s-deed to him. But we do not believe that his act in purchasing a lease from the Government, after entering into the contract with appellee, relieved appellant of the obligation to pay appellee the consideration thereupon agreed to, should appellee thereafter acquire any additional interest in the minerals.

We are not unmindful of the rule that the doctrine of merger of estates is not favored. Generally, it does not apply where it is the intention of the parties that it should not and when it is to the *621interest of the holder of the twq estates to keep them separate. Humphreys-Mexia Co. v. Gammon, 113 Tex. 247, 254 S.W. 296, 29 A.L.R. 607; 31 C.J.S., Estates § 124, p. 143. It must be borne in mind, however, that when a greater and lesser estate unite in the same person, in the .same right, and without any intervening estate, merger is accomplished, except in some instances where it is shown that it .was the intention of the holder that the estates remain separate. York v. Robbins, Tex.Civ.App., 240 S.W. 603.

Appellant now. owns all the mineral interest that was reserved by the United States in its first conveyance to appel-lee, subject to appellee’s royalty, reservation and the reservation of 3⁄46& of %ths of the minerals; whereas before acquiring such interest he owned a determinable fee .in %ths of the-minerals. We believe that appellant’s determinable fee acquired by the lease is now merged in his full and perpetual mineral estate, free of any obligations except to pay the royalty and 1⁄46th of %ths of the minerals produced from the ' land. Smith v. Cooley, Tex.Civ.App., 164 S.W. 1050, writ refused; Hoover v. General Crude Oil Co., Tex.Civ.App., 206 S.W.2d 139; Thornton, The Law of .Oil and Gas, sec. 118.

If it could be s'áid that appellant’s determinable and perpetual- mineral estates have not merged, and that the leasehold ■estate is still separate and intact and' the ■duty to perform the obligations of the lease still preserved, appellant owes that duty to himself.' ITe is both obligor and obligee. We do not believe that the anomalous situation of a person in a position to' forfeit lights to himself, or to sue himself to enforce the performance of obligations, •should be recognized to prevent a merger ■of estates in this case.

For the same consideration recited in the deed to him from appellee, appellant ¡bought “any fractional part” of the minerals theretofore reserved, by the United States which appellee might thereafter acquire; and by the acceptance of the deed appellant agreed that appellee should reserve the royalty and *Yieth*of %ths of any subsequently acquired mineral interest. The court found that such acquisition and transfer had been accomplished.

Appellant says and appellee concedes that in no event is appellee entitled to more than *Vieth.*of %ths of the minerals until such interest .equals $75: per acre for 54ths o-f 86.675--acres. 'The- judgment-is therefore, reformed to adjudge .that appel-lee: is entitled to 1⁄461⁄8 of %ths of the. minerals produced from this .tract of land until he ¡has -received $75 per acre covering an aggregate of 65.00625 acres, and as reformed, the . judgment is affirmed. The costs in the trial court are .adjudged against appellant, and the costs of- the appeal are adjudged against appellee. ■

On Motion for Rehearing.,

Appellant calls attention to some inaccurate statements in our opinion. Where we said that on Feb. 19, 1952, the United States conveyed to appellee all the mineral interest reserved in its deed' of Jan. 1, 1944, we should have said that it conveyed all the mineral interest owned by it on Feb. 19, 1952. And appellant did not by his lease acquire “%ths of the minerals reserved' by the Government in ’its first, deed to appel-lee,”-but he bought only a fee simple determinable title to such seven-eighths. -It is thought that the other recitations- in our' opinion make our meaning. clear, but we are glad to clarify the points as requested by appellant.. •

In his able motion for rehearing appellant insists that we erred in holding that appellee’s right to 3⁄46t'h of %ths of the minerals has accrued. The question is riot free from difficulty, but we are not convinced that we should recede from ,our original view; and accordingly the motion for rehearing is overruled.