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### NO. 04-15-00617-CV

________________________________________________________________

IN THE FOURTH DISTRICT COURT OF APPEALS

SAN ANTONIO, TEXAS

________________________________________________________________ 

## Toni Combest, Appellant,

v. Mustang Minerals, LLC, Appellee.

________________________________________________________________

On Appeal From the 218 th 

### District Court La Salle County, Texas Trial Court Cause No. 14-08-00144-CVL

________________________________________________________________ Brief of Appellant

________________________________________________________________ Sameer Mandke Kevin Schield Texas State Bar No. 24065670 Attorney at Law sameer@gkmpllc.com Texas State Bar No. 24075025 Robert F. Gilbert kevin.schield@schieldlaw.com Texas State Bar No. 24059321 3611 Leadville Drive gilbert@gkmpllc.com Austin, TX 78749 GILBERT MANDKE PLLC Telephone: (512) 910-5095 10100 Kleckley #15-B Houston, TX 77075 Telephone: (832) 316-5322 Fax: (713) 341-9062 COUNSEL FOR APPELLANT



## ORAL ARGUMENT REQUESTED ACCEPTED 04-15-00617-CV FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 11/25/2015 11:17:13 PM KEITH HOTTLE CLERK

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## TABLE OF CONTENTS Page Identities of the Parties and Counsel .............

................................................... .......... 3 Index of Authorities ..............................

................................................... .................. 4 Statement of the Case .............................

................................................... ................. 6 Issues Presented ..................................

................................................... .................... 7 Statement of Facts ................................

................................................... ................... 8 Summary of the Argument ...........................

................................................... ......... 15 Argument...........................................

................................................... .................... 17 Standard of Review ................................

................................................... ............ 17 I. The trial court erred by denying the Intervenor’ s/Appellant’s Motion for Summary Judgment and granting in part Defendant/App ellee’s Motion for Summary Judgment ..................................

................................................... ......... 18 A. Under Texas law, the Combest Deed gave the Grant ee at least some portion of the mineral estate. ............................

................................................... ........... 18 B. The Grantors reserved one-half of the mineral in terest they owned, not from the land described.. ..............................

................................................... ........... 21 II. Alternatively, the trial court erred in grantin g Mustang’s Motion for Summary Judgment because the Combest Deed is ambiguous. ... ........................................ 28 III. Defendant/Appellee Mustang Minerals, LLC’s cap acity as an unregistered foreign entity is a fact issue that made summary ju dgment in its favor improper.29 Prayer ............................................

................................................... ........................ 36 Certificate of Compliance .........................

................................................... ............ 39 Certificate of Service ............................

................................................... ................ 39

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## IDENTITY OF PARTIES AND COUNSEL Appellant: Toni Combest, Intervenor
Appellate Counsel: Sameer Mandke Robert F. Gilbert GILBERT MANDKE PLLC 10100 Kleckley #15B Houston, TX 77075 Kevin Schield 3611 Leadville Drive Austin, TX 78749 Trial Counsel: Andrew G. Pate NIX, PATTERSON & ROACH, LLP 205 Linda Dr. Daingerfield, TX 75638
Appellee: Mustang Minerals, LLC, a Delaware limited liabilit y company

Trial and Appellate Counsel: David Rapp EGGLESTON KING, LLP 102 Houston Avenue Weatherford, TX 76086

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## INDEX OF AUTHORITIES
Page Cases Averyt v. Grande , 717 S.W.2d 891, 893 (Tex. 1986) ................. ............................. 24 Clack v. Garcia , 323 S.W.2d 468 (Tex.Civ.App.—San Antonio 1959, no writ)

.................................................. ................................................... ........................ 25,26 Garza v. Prolithic Energy Co., L.P. , 195 S.W.3d 137 (Tex.App. – San Antonio 2006) .............................................

................................................... .................. 21,28 Gore Oil Company v. Roosth , 158 S.W.3d 596 (Tex.App.–Eastland 2005, no pet.)

.................................................. ................................................... ............................. 28 Hejl v. Wirth , 343 S.W.2d 226 (Tex. – 1961) .................... ...................................... 33 Hooks v. Neil , 21 S.W.2d 532 (Tex.Civ. App.—Galveston 1919, writ ref’d) ... 24,26 Hunsaker v. Brown Distrib. Co. , 373 S.W. 3d 153 (Tex.App. – San Antonio 2012)

.................................................. ................................................... ............................. 17 Johnson v. Conner , 260 S.W.3d 575 (Tex.App. –Tyler 2008) ........... ..................... 22 King v. National Bank of Wichita Falls , 192 S.W.2d 260 (Tex. 1946) ................... 24 Luckel v. White , 819 S.W.2d 459 (Tex. 1991) ...................... ................................... 22 Middleton v. Broussard , 504 S.W.2d 839, 842 (Tex. 1974).................. .................. 26 My-Tech, Inc. v. University of North Texas , 166 S.W.3d 880 (Tex. 2005) ............. 33 Reeves v. Towery , 621 S.W.2d 209 (Tex. App.—Corpus Christi 1981, wr it ref'd n.r.e.) ...........................................

................................................... .......................... 23 Sharp v. Fowler , 252 S.W.2d 153 (Tex. 1952) ...................... ............................. 19,20
State v. Dunn , 574 S.W.2d 821 (Tex.App.–Amarillo 1978, writ ref' d n.r.e.) .......... 23

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## Statutes Tex. Bus. Org. Code §1.002(29) ....................

................................................... ....... 31 Tex. Bus. Org. Code §9.001 ........................

................................................... ......... 30 Tex. Bus. Org. Code §9.051(b) .....................

................................................... ........ 30 Tex. Bus. Org. Code §9.051(c)(2) ..................

................................................... ...... 31 Tex. Bus. Org. Code §9.052(a) .....................

................................................... ........ 31 Tex. Prop. Code §22.001 ...........................

................................................... ........... 32

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## STATEMENT OF THE CASE Nature of the case: Trespass to try title case concerning ownership of oil, gas, and other minerals. Specifically, whether a warranty deed conveying lan d to the Appellant also transferred minerals underlying the tract. Judgment signed by: Hon. Donna Rayes. Trial court: 218th Judicial District, La Salle County, Texas. Trial Court Disposition: Take Nothing Summary Judgement in favor of Defendant, Mustang Minerals, LLC. Parties on appeal: Intervenor/Appellant Toni Combest. Defendant/Appellee Mustang Minerals, LLC.

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## ISSUES PRESENTED

I. Whether the court erred in partially granting Defen dant Mustang Minerals, LLC’s Motion for Summary Judgment and entering a ta ke-nothing judgment on Intervenor Toni Combest’s claims when the warran ty deed in question (the “Combest Deed”):

a. on its face shows an intention to convey minerals; and

b. the Combest Deed’s reservation is from what the gra ntor owned at the time, not from the land described.

II. Whether the Combest Deed is susceptible to more tha n one reasonable interpretation and therefore ambiguous on its face.

III. Whether a foreign entity that is doing business in Texas, but has refused to register with the Secretary of State of Texas, is n onetheless allowed to receive a take-nothing judgment in its favor in a t respass-to-try-title suit, which effectively renders title in its favor, when it would not otherwise be allowed to bring such a suit without registering wi th the Secretary of State.

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## STATEMENT OF THE FACTS
Overview This appeal concerns title to oil, gas, and mineral s underlying real property located in La Salle County, Texas. Both the Appell ant, Toni Combest, and the Appellee, Mustang Minerals, LLC, have claimed title to some portion of the disputed minerals. The dispute arose when Chesapea ke Exploration, LLC, the lessee of the minerals, stopped payment to Toni Com best at the behest and in favor of Mustang Minerals, LLC, which claims that Toni Co mbest has no interest in the disputed minerals. CR: 47-48. Toni Combest, howeve r, in fact has title to at least one-fourth of the minerals underlying the tract in the Combest Deed.

History of Title to the Disputed Minerals Horace Combest and Inga Combest, husband and wife, acquired a tract of land in La Salle County, Texas in 1967 through the following conveyances:

a. Warranty Deed from Lottie Edna Burton to Horace Edw in Combest and wife, Inga Mable Combest, dated Novembe r 28, 1967, recorded in Volume 145, Page 105, of the Prop erty Records of La Salle County;
b. Warranty Deed from Robert L. Burton and wife, Ann M . Burton,

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## to Horace Edwin Combest and wife, Inga Mable Combes t, dated November 28, 1967, recorded in Volume 145, Page 107 , of the Property Records of La Salle County; and

c. Warranty Deed from Mrs. Charles L. Cunningham, to H orace Edwin Combest and wife, Inga Mable Combest, dated N ovember 21, 1968, recorded in Volume 151, Page 94, of the P roperty Records of La Salle County. The above referenced deeds shall be referred to col lectively hereafter as the “Source Deeds”. CR:66-67; 69-70; 72-73. The Sour ce Deeds each contains an exception and reservation clause reserving an undiv ided one-half in and to the oil, gas, and minerals underlying the tracts conveyed to the grantors. Id . Under the Source Deeds, and undisputed in this case, Horace a nd Inga Combest received the surface of the tracts described and an undivided on e-half interest in and to the oil, gas, and other minerals underlying the tract descri bed. Id . The undivided one-half mineral interest passed to Horace and Inga Combest is the basis of the underlying suit and the disputed minerals (hereinafter the “Di sputed Mineral Estate”). By Warranty Deed dated September 18, 2003, recorded in Volume 436, Page 5 of the Property Records of La Salle County, Texas, Horace and Inga Combest conveyed the property they received from th e Source Deeds to Preston and Toni Combest, husband and wife (hereinafter ref erred to as “the Combest

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## Deed”). CR:64. The property conveyed under the Com best Deed was described as follows: Property situated in La Salle County, Texas, being situated in the A. J. Toutant Beauregard Survey No. 62, Abstract No. 959, also known as Tracts 9, 10, 23, & 24, all in Block 62 of the Gardendale Colony Lands as shown in Plat recorded in Volume U, Pages 134 and 135, Prope rty Records of La Salle County, Texas, containing 80 (eighty) acres o f land more or less and more fully described in the Combest Deed. Preston Combest passed away, leaving Toni Combest a s his surviving spouse. On or about March 22, 2012, Chesapeake Exp loration, LLC, as lessee, executed an oil and gas lease with Toni Combest as lessor. CR:3, ¶ 10. Next, by Correction Mineral Deed dated September 5, 2013, re corded in Volume 735, Page 58, of the Property Records of La Salle County, Tex as, Toni Combest conveyed half of her interest in and to the Disputed Mineral Estate to Mountain Laurel Minerals, LLC. CR: 81-82. Meanwhile, Horace and Inga Combest both passed away , leaving as their sole heir their son, David Combest. CR:3 ¶ 9. Che sapeake Exploration, LLC, as lessee, also executed an oil and gas lease with Dav id Combest, as lessor, on or about March 22, 2012. Id . ¶ 10. Subsequently, David Combest conveyed all o f his interest in and to the Disputed Mineral Estate to U S Mineral Resources, LLC by Mineral Deed dated November 14, 2012, and US Minera l conveyed all of its interest in the Disputed Mineral Estate to Mustang Minerals, LLC by Mineral Deed

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## dated November 20, 2012. CR: 3, ¶ 11. Chesapeake pooled the leases by Toni Combest and Da vid Combest into a unit and proceeded to commence drilling operations on the unit. CR: 4 ¶ 13.

The Title Dispute Fortunately, Chesapeake was successful in drilling a producing oil well from the units into which the Disputed Mineral Estate wa s pooled. Toni Combest and Mountain Laurel received royalty payments for their undivided one-half interest in the Disputed Mineral Estate for three months. CR: 4: ¶ 13. Suddenly and abruptly, Chesapeake stopped making royalty payment s to Toni Combest and Mountain Laurel. When Mountain Laurel investigated why payments had been stopped, Chesapeake informed them that Mustang Mine rals had complained that they owned all of the Disputed Mineral Estate, incl uding the undivided one-half interest in the Disputed Mineral Estate claimed by Toni Combest and Mountain Laurel Minerals. Id

. In order to clear the cloud on title created by Mus tang, on or about August 19, 2014, Mountain Laurel instituted the underlying trespass to try title suit, which was joined by Toni Combest as Intervenor on or abou t November 12, 2014. CR: 1- 16; CR: 26-36. Both Toni Combest and Mountain Laur el pled that Toni Combest and Preston Combest had received either all of the Disputed Mineral Estate, or

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## one-half of the Disputed Mineral Estate under the C ombest Deed. Mustang filed an answer in response and entered a g eneral denial. CR: 21-
22. Summary Judgment Proceedings Given that all the parties claimed their interest i n the Disputed Mineral Estate on the basis of a single deed, the Combest D eed, which interpretation of the deed, if it is unambiguous, is a matter of law, all parties subsequently filed competing Motions for Summary Judgment, and a heari ng was held on the matter on January 29, 2015. CR: 97.
Plaintiff Mountain Laurel Minerals filed a Motion f or Summary Judgment, and Intervenor Toni Combest joined in the motion. CR: 44-87; CR: 100. In the Motion for Summary Judgment, Mountain Laurel and To ni Combest urged an interpretation of the Combest Deed under the Duhig Doctrine, that if the grantors under the Combest Deed intended to reserve and exce pt their then owned undivided one-half in the minerals but not the one- half interest owned by their predecessors, then the Duhig Doctrine requires that the grantees under the Combest Deed received the grantors’ undivided one-half inte rest in the minerals. CR: 50-55 ¶ IV. A.-L. Both Mountain Laurel and Toni Combest filed togethe r a response to Mustang’s Motion for Summary Judgment. CR: 121-132. In the response, both

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## urged that, if the Duhig Doctrine is inapplicable, then, in the alternative, the grantors effectively reserved one-half of the miner al interest they owned at the time. CR: 125-128 ¶ IV. A-C. The response also in cluded a Motion to Strike Mustang’s Motion for Summary judgment due to the fa ct that Mustang, a Delaware limited liability company, has failed to r egister in the State of Texas, despite the fact that it is doing business in Texas . CR: 127-130 ¶ VI. A.-K. The trial court took the competing motions under ad visement and rendered judgment in favor of Mountain Laurel and Toni Combe st, granting their Motion for Summary Judgment. CR:142. On May 1, 2015, the tria l court ordered that Mountain Laurel’s attorney draft an order, present it to Mustang’s attorney, and then submit to the trial court for signature. However, Mustang filed motions to reconsider, and a hearing was had on June 2, 2015. CR:153. Despite presenting no new ca se law, or any authority in favor of its proposition that no minerals were conv eyed under the Combest Deed, on June 22, 2015, the trial court reversed its prio r ruling, signing the order submitted by Mustang’s attorney to enter a take-not hing judgment against Mountain Laurel, without approval as to form by Mou ntain Laurel’s or Toni Combest’s attorneys. CR:159-161. The order submitt ed by Mustang only disposed of Mountain Laurel, and an additional hearing was h ad on a motion to reconsider by both Mountain Laurel and Toni Combest, and a Mot ion for Summary Judgment

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## against Toni Combest on September 2, 2015. CR:188. In this hearing, Toni Combest and Mountain Laurel again urged the trial c ourt that the grantors under the Combest Deed reserved at most half of the miner als they owned at the time. CR:196—197 ¶ IV. B. Also, at the hearing, Mountain Laurel’s counsel raised the issue that Mustang, a Delaware limited liability co mpany, is doing business in Texas but is not registered with the Texas Secretar y of State, and therefore is not entitled to any kind of affirmative relief. RR:12/ 15- RR:13/1. Mustang’s counsel responded that Mustang does not have to register to do business in Texas and confirmed that Mustang is not registered with the S ecretary of State. RR:13/12-
RR:13/17. The trial court, on September 2, 2015, denied the M otion for Reconsideration by Toni Combest and Mountain Laurel , and granted Mustang’s motion for a take-nothing judgment against Toni Com best. CR:201-202. These orders finally disposed of all the parties thus mak ing this case appealable.

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## SUMMARY OF THE ARGUMENT
The Combest Deed is an unusually drafted deed, wit h several definition paragraphs preceding the actual grant, habendum, an d warranty clauses. Nonetheless, the Combest Deed granted and warranted the property to the grantee. The term “property” in the Combest Deed contains bo th a description of an eighty acre tract and an exception and reservation of an u ndivided one-half of “all the oil, gas, and/or other minerals.” The reservation does n ot specify that it was made from the above-described land and, under Texas law, is t herefore a reservation of onehalf from the interest the grantor owned at that ti me. Further, since “property” included the grantors’ re servation in interest, the reservation, as well as the property described, was made “subject to” the items in the reservation/exception language. So, to the ext ent that the property conveyed was reduced by such “subject to” language, the gran tors’ reservation was equally reduced. So, if only one-half of the minerals unde rlying the tract was available to be conveyed, thanks to the “subject to” language, t hen the grantors’ were only able to reserve half of what remained.
In any case, a determination that the grantees unde r the Combest Deed obtained no interest in the minerals fails to read the Combest Deed in accordance

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## with fundamental principles of Texas law and should be rejected. The grantee received at a minimum a one-fourth interest in the mineral estate.
Finally, a take-nothing judgment in Mustang’s favor is to give Mustang title to the Disputed Mineral Estate. However, Mustang M inerals, LLC, a foreign entity formed under the laws of the State of Delawa re, is required to register with the Texas Secretary of State in order to do busines s in Texas and be afforded the same immunities and privileges as a domestic entity in good standing. If Mustang is doing business in Texas, then it would not be pe rmitted to bring a suit for trespass to try title itself until it registers wit h the Texas Secretary of State and pays its franchise taxes. As such, Mustang is not then permitted to receive affirmative relief even as a defendant when it could not otherw ise request such relief because of its deliberate refusal to register with the Secr etary of State and follow the laws of Texas. To that extent, a fact issue was raised by Mustang’s counsel when he confirmed that Mustang is not registered with the S ecretary of State, and discovery should be permitted to determine if Mustang is doin g business in Texas, and therefore required to register with the Secretary o f State.

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## A RGUMENT

Standard of Review
The standard of review for competing motio ns for summary judgment is de novo, as stated in Hunsaker v. Brown Distrib. Co. , 373 S.W. 3d 153 (Tex.App. – San Antonio 2012):
“We review a summary judgment de novo. Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). We must therefore consider all the evidence in the lig ht most favorable to the respondent, indulging all reasonab le inferences in favor of the respondent, and determine whether t he movant proved that there were no genuine issues of materia l fact and that it was entitled to judgment as a matter of law

. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.1985). When competing motions for summary judgment are filed, a nd one is granted and the other denied, we must review all is sues presented and render the judgment the trial court s hould have rendered. Comm'rs Court v. Agan, 940 S.W.2d 77, 81 (Tex.1997).” Id. at 155.

In the case at hand, the trial court erred in parti ally granting the Defendant/Appellee’s Motions for Summary Judgment. The trial court should have denied the Defendant’s/Appellee’s Motions for Summary Judgment and partially granted the Intervenor’s/Appellant’s Moti on for Summary Judgment. Additionally, the trial court should have denied th e Defendant’s/Appellee’s

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## Motions for Summary Judgment because a fact questio n was raised as to Mustang Minerals, LLC’s capacity as an unregistered foreign entity.

I. The trial court erred by denying the Intervenor’s/A ppellant’s Motion for Summary Judgment and granting in part Defendant /Appellee’s Motion for Summary Judgment
For the reasons discussed below, the Trial Court er red by granting Mustang’s Motion for Summary Judgment in part and rendering a take nothing judgment against Toni Combest and Mountain Laurel. Toni Com best and Mountain Laurel both pled claims that they owned some portion of th e Disputed Mineral Estate, and it was improper for the Trial Court to rule, by way of a take-nothing judgment, that Toni Combest and Mountain Laurel could not succeed on any of their claims. Further, the Trial Court erred by not granting in p art the Motions for Summary Judgment by Toni Combest and Mountain Laurel, since Toni Combest and her late husband received at least one-half of the Grantors’ interest in the minerals under the Combest Deed.

A. Under Texas law, the Combest Deed gave the Grantee at least some portion of the mineral estate.
Based on the fundamental principles of Texas real property law and the canons of construction, on the face of the Combest Deed the Grantor intended to

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## convey some portion of the mineral estate underlyin g the land. The property described in the Combest Deed is as follows:

Property (including improvements): Property situated in LaSalle County, Texas, being in ABST 959 SUR 62 J T Beauregard Survey, Tracts 9, 10, 23, & 24, AB Blk: 0959, Lot 0 062, 80 (eighty) acres of land. The grantor herein, Horace Combest, and Inga Combe st excepts from this conveyance and reserves unto themselves, their heirs and assigns an undivided one-half (1/2) interest in and to all of the oil, gas, and/or other minerals.

The property description includes both a legal desc ription of the tract of land followed by a fractional exception and reservation. Therefore, the property
described includes the surface of the tracts and th at fraction of the minerals that were not excepted from the property description, an d this is the land that was intended to be conveyed by the Grantors under the C ombest Deed.

It is well settled in Texas that t o describe land in a deed is to purport to convey both the surface and the minerals underlying the tr act described, unless an intent to convey a lesser estate is expressed on the face of the deed. Illustrative of this principle is
the case of Sharp v. Fowler , 252 S.W.2d 153 (Tex. 1952). In Sharp v. Fowler , the Texas Supreme Court was tasked with determining whether m inerals underlying a tract of land were conveyed when the deed described the land as “ being the same land” described in a prior deed that conveyed the surface only. Id. at 153. The question was whether the

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### grantor under the deed had, by reference to a prior surface only deed effectively reserved
all the minerals. The Sharp Court held that the grantor had not made such a res ervation
of all the minerals. The Sharp Court analyzed the deed as follows:

“Analyzing the description in that deed, it will be observed in the first place that it contains a grant of 'land.' That is a term which on its face includes the minerals in and under the land. The broad scope of the meaning of the word 'land' is well ill ustrated by our decision in Holloway's Unknown Heirs v. Whatley, 13 3 Tex. 608, 131 S.W.2d 89, 123 A.L.R. 843. Following the grant there is designated the number of acres granted and the coun ty and survey in which the land is located. That language, standing alone, is insufficient to constitute a legal description of t he land. Smith v. Sorelle, 126 Tex. 353, 87 S.W.2d 703; Admas v. Dunc an, 147 Tex. 332, 215 S.W.2d 599. But the description is made ce rtain by the language 'being the same land described in' the For st deed. To describe land is to outline its boundaries so that it may be located on the ground, and not to define the estate conveyed therein. It is to be observed that the reference in the Jor dan deed is not to the land conveyed [151 Tex. 494] in the Fros t deed but to the land described in that deed. [emphasis added]” Id . at 154.

When land is described in a deed, the grantor is pu rporting to convey both the
surface and the minerals in and under the land desc ribed, unless otherwise expressly
indicated. The Sharp Court went on to state, “A reservation of minerals to be effective must be by clear language. Courts do not favor rese rvations by implication.” Id . at 154 (Tex. 1952) (citing Sellers v. Texas Central Ry. Co. , 81 Tex. 458, 17 S.W. 32, 13 L.R.A. 657; State v. Black Bros. , 116 Tex. 615, 297 S.W. 213, 53 A.L.R. 1181).
Thus, we do not imply a reservation on behalf of th e grantor when none is expressed on the face of the deed. Mere reference to another instrument in the

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### description in Sharp v. Fowler did not suddenly impute all of the reservations an d exceptions of that instrument into the deed in ques tion. Similarly, the Combest Deed does not contain an express exception, reservation, or other exclusion of ALL of the minerals from the deed. The Grantors under the Com best Deed could have used the words “excepting and reserving ALL minerals,” “no m inerals,” “surface only” or similar language, but purposefully chose not to. The only logical conclusion, then, is that they had every intention of granting to the Grantee some portion of the mineral estate. Thus, the Grantee under the Combest Deed received some po rtion of the mineral estate under
the deed.



## B. The Grantors reserved one-half of the mineral inter est they owned, not from the land described.

Given that the Grantors under the Combest Deed int ended to convey some portion of the minerals underlying the land, the qu estion remains: what portion of the minerals were reserved and conveyed? In order t o answer this question, we must first address the accepted rules of constructi on in Texas. When interpreting a deed just as in interpreting a contract, the intent of the parties is to be determined from the express langua ge found within the four corners of the document. Garza v. Prolithic Energy Co., L.P., 195 S.W.3d 137,141 (Tex.App. – San Antonio 2006) (citing Luckel v. White , 819 S.W.2d 459, 461-63 (Tex. 1991); Walker v. Foss , S.W.2d 701, 704 (Tex.App. – San Antonio 1996, no

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## writ)). The construction of an unambiguous deed is a question of law for the court. Luckel v. White, 819 S.W.2d 459, 461 (Tex. 1991) (citing Altman v. Blake , 712 S.W.2d 117, 118 (Tex. 1986)). The primary duty of a court when construing a deed is to ascertain the intent of the parties from all of the language in the deed by the fundamental rule of construction known as the “four corners” rule. Id . (citing Garrett v. Dils Co. , 157 Tex. 92, 94-95, 299 S.W.2d 904, 906 (1957); 1 E. KUNTZ, THE LAW OF OIL AND GAS, § 16.1 (1987); 6A R. POWELL , THE LAW OF REAL PROPERTY, p. 899, at 81A-108 (P. Rohan ed. 199 1)). A deed will be construed to confer upon the grantee the greatest estate that the terms of the instrument will permit. Johnson v. Conner , 260 S.W.3d 575 (Tex.App. –Tyler 2008) (citing see Lott v. Lott, 370 S.W.2d 463, 465 (Tex. 1963); see also Jasper State Bank v. Goodrich, 107 S.W.2d 600, 602 (Tex.Civ.App.- Beaumont 1937, writ dism. w.o.j.)). A warranty deed will pa ss all of the estate owned by the grantor at the time of the conveyance unless there are reservations or exceptions that reduce the estate conveyed. Id. (citing Sharp v. Fowler, 151 Tex. 490, 493, 252 S.W.2d 153, 154 (Tex. 1952); Cockrell v. Tex. Gulf Sulphur Co., 157 Tex. 10, 15, 299 S.W.2d 672, 675 (Tex. 1956); Lewis v. Midgett, 448 S.W.2d 548, 551 (Tex.Civ.App.–Tyler 1969, no writ). See also Melton v. Davis, 443 S.W.2d 605, 608 (Tex.Civ.App. –Tyler 1969, writ ref'd n.r.e.)). “As a general rule, exceptions are strictly constru ed against the grantor.”

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## State v. Dunn , 574 S.W.2d 821, 824 (Tex.App.–Amarillo 1978, writ ref'd n.r.e.) (citing Stroud v. Hunt Oil Co. , 147 S.W.2d 564, 567 (Tex.Civ.App.–Eastland 1941, no writ). “It is a familiar rule in the constructi on of deeds that a reservation in favor of the grantor therein is to be most strongly const rued against the grantor.” Reeves v. Towery , 621 S.W.2d 209, 212 (Tex. App.—Corpus Christi 198 1, writ ref'd n.r.e.) (citing Settegast v. Foley Bros. Dry Goods Co. , 114 Tex. 452, 270 S.W. 1014 (Tex.Comm'n App.1925, opinion adopted); Collier v. Caraway , 140 S.W.2d 910 (Tex.Civ.App.–Beaumont 1940, writ ref'd)). The exception and reservation language within the P roperty Section in the Combest Deed reads as follows:

“The grantor herein, Horace Combest, and Inga Comb est excepts from this conveyance and reserves unto themselves, their heirs and assigns an undivided one-half (1/2) inter est in and to all of the oil, gas, and/or other minerals. [emphasis adde d]” The plain language of the reservation clause indic ates that the Grantors intended to reserve from the conveyance “an undivided one-half (1/2) interest in and to all of the oil, gas, and/or other minerals.” What the Grantors failed to plainly state was whether they intended to reserve one-half of all the minerals from the land conveyed

or one-half of the minerals from the lands described

.

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## In Averyt v. Grande, 717 S.W.2d 891, 893 (Tex. 1986), the Texas Supreme Court encountered the same issue in a deed that con tained descriptions of several tracts of land, followed by the following “subject to” and reservation provisions: “LESS, HOWEVER, AND SUBJECT TO an undivided 1/2 int erest in the oil, gas, sulphur, and all other minerals, desc ribed in that deed from Rubie Keilers and Annie Keilers, to Texas Osag e Cooperative Royalty Pool, et al, dated May 2, 1930, and recorde d in Volume 152, Pages 75-76, Deed Records of Fayette County, Texas.

.... There is hereby excepted from this conveyance and r eserved to Grantor, its successors and assigns, an undivided 1 /4th of the royalty covering all of the oil, gas and other minerals, in cluding but not limited to uranium, coal, lignite, iron, gold, silv er, and all other minerals, whether or not now known to be valuable a nd whether by drilling, strip mining, or any other method, in, to and under or that may be produced from the lands above described

.... ....[emphasis added]” Averyt at 892-93.

The court identified the issue as whether “Grande r eserved one-fourth of the royalty from the entire 86.82 and 0.003 acres or on e-fourth of the royalty from the undivided one-half mineral interest Grande owned at the time of the conveyance.” Averyt at 893. The Court looked to the rules of construct ion as described in Hooks v. Neil , 21 S.W.2d 532 (Tex.Civ. App.—Galveston 1919, writ ref’d) and King v. National Bank of Wichita Falls , 144 Tex. 583, 192 S.W.2d 260 (1946). In Hooks , the grantor reserved “a one-thirty second part of a ll oil on and under the said land and premises herein described and conveyed . [emphasis added]” Averyt at 893 (citing Hooks at 538). The court then looked to King for the other rule of

### - 25 -



## construction. In King , the grantor reserved “an undivided one eighth of the usual and customary one eighth royalty ... in oil and gas and other minerals that may be produced from the hereinabove described land . [emphasis added]” Averyt at 893 (citing King at 262). The Averyt Court then noted that “[t]his court focused on the word "described" to hold that the grantor reserved an undivided one eighth of the royalty from the minerals under the entire describe d tract, not just the grantor's undivided one-half.” Averyt at 893 (citing King at 262). The pertinent deed in Averyt “reserves one-fourth of the royalty from minerals ‘that may be produced from the lands above described ’” and the court finds that this language “places the reservation wi thin the King rule.” Averyt at 894 (emphasis added). Similarly, in Clack v. Garcia , 323 S.W.2d 468 (Tex.Civ.App.—San Antonio 1959, no writ), the grantor owned one-eighth of the surface and one-sixteenth of the minerals of a one hundred acre tract. He convey ed his surface interest to the grantee and reserved a non-participating royalty in terest as follows: “There is excepted from this conveyance, not herein conveyed, but expressly retained and reserved by grantors, an und ivided onesixteenth (1/16th) interest (same being one half ofthe usual oneeighth royalty) in and to all the oil, gas and othe r minerals in, to, under and that may be produced from the interest of said grantors in said land.” Clack

at 469.
The Clack

Court held that the grantor reserved a royalty des cribed as onesixteenth of his interest. Id. (citing Hooks v. Neil ). Like in Clack , the Combest

### - 26 -



## Deed has the same “from this conveyance” language a nd has no language indicating the reservation was from the “lands abov e described.” See Id. Without the words “produced from the above describ ed lands” following the reservation, the controlling case is Hooks v. Neil , and the reservation in the Combest Deed turns on the meaning of “conveyance,” since th e Grantors “excepts from this

conveyance and reserves unto themselves... [emphasis added]” See Hooks v. Neil , 21 S.W.2d 532 (Tex. Civ. App. 1929, writ refused); see also Middleton v. Broussard , 504 S.W.2d 839, 842 (Tex. 1974) (analyzing Hooks , the court stated the rule as follows: “Where a fraction designated i n a deed is stated to be a mineral interest in land described in the deed, the fractio n is to be calculated upon the entire mineral interest; conversely, where a fracti on designated in a reservation clause is stated to be a mineral interest in land c onveyed by the deed, the fraction is to be calculated upon the grantor’s fractional mine ral interest.” (citing B ARBER 

## , D UHIG TO 

## D ATE 

## : P ROBLEMS IN THE 

## C ONVEYANCING OF 

## F RACTIONAL 

## M INERAL 

## I NTERESTS 

## , 13 SW. L.J. 320, 322-23 (1959); and see 1 H. W ILLIAMS AND 

## C.
M EYERS 

## , O IL AND 

## G AS 

## L AW 

## § 312.2 (1972 ed.); 1 E. K UNTZ 

## , O IL AND 

## G AS 

## § 14.5, at 331 (1962).) Doing a quick internet search for the common legal definition of “conveyance”, one finds the word to be defined as f ollows:

a. From http://www.merriam-webster.com/dictionary/conveyanc e -

### - 27 - 

## i. “the action of conveying” ii. “a means or way of conveying: as 1. An instrument by which property is conveyed 2. A means of transport” b. From http://dictionary.reference.com/browse/conveyance : “3. Law 1. The transfer of property from one person to another

. 2. The instrument or document by which this is effecte d.”

c. From http://legal-dictionary.thefreedictionary.com/conve yance - “n. a generic term for any written document which transfe rs (conveys) real estate property or real property interests from one party to another. A conveyance must be acknowledged before a notary (or if a court judgment be certified as the same as the document o n file) and recorded with the County Recorder or Recorder of De eds.”

As is demonstrated above, the word “conveyance” ref ers to that which is conveyed. Since one cannot convey that which one d oes not own, despite describing the entire tract of land in the Combest Deed, the largest estate that the Grantor could convey at the time was the surface an d an undivided one-half of the minerals. Therefore, when the Grantors excepted fr om the “conveyance”, they were excepting one-half of one-half of the minerals , and then reserving the excepted one-half of one-half. This passed the oth er one-half of one-half, or onequarter, of the minerals to the Grantee.

### - 28 -



## II. Alternatively, the trial court erred in granting Mu stang’s Motion for Summary Judgment because the Combest Deed is ambigu ous. When interpreting a deed just as in interpreting a contract, the intent of the parties is to be determined from the express langua ge found within the four corners of the document. Garza v. Prolithic Energy Co., L.P., 195 S.W.3d 137,141 (Tex.App. – San Antonio 2006) (citing Luckel v. White , 819 S.W.2d 459, 461-63 (Tex. 1991); Walker v. Foss , S.W.2d 701, 704 (Tex.App.–San Antonio 1996, no writ)). Construction of an unambiguous deed is a qu estion of law to be resolved by the court. Id. (citing Luckel , 819 S.W.2d at 461; Walker , 930 S.W.2d at 704). All parts of the deed are to be harmonized, construing the instrument to give effect to all of its provisions. Id. (citing Luckel , 819 S.W.2d at 462; Walker , 930 S.W.2d at 704). However, if a written instrument remains reasonably susceptible to more than one meaning after the established rules of int erpretation have been applied, then the instrument is ambiguous and extrinsic evid ence is admissible to determine the true meaning of the instrument. Gore Oil Company v. Roosth , 158 S.W.3d 596, 599 (Tex.App.–Eastland 2005, no pet.) (citing R & P Enterprises v. LaGuarta, Gavrel & Kirk, Inc., supra; see Sun Oil Company (De laware) v. Madeley, 626 S.W.2d 726 (Tex. 1981); Cherokee Water Company v. Forderhause, 641 S.W.2d 522, 525 (Tex. 1982)) . “When a written instrument is determined to be ambiguous,

### - 29 -



## extrinsic evidence may be introduced to show the in tent of the parties.” Id. at 601 (citing Smith v. Allison, 157 Tex. 220, 301 S.W.2d 608, 612 (1956)). As argued above, the only valid interpretation foll owing Texas law results in at least some portion of the mineral estate granted to the Grantees. See supra Argument Part I. However, should a different interp retation of the Combest Deed be accepted as valid, we alternatively argue, that the Combest Deed was ambiguous on its face. The trial court should have then set the matter for trial and allowed the admission of parol and extrinsic eviden ce to explain the intent of the parties.

III. Defendant/Appellee Mustang Minerals, LLC’s capacity as an unregistered foreign entity is a fact issue that ma de summary judgment in its favor improper.

Appellee Mustang Minerals, LLC is a foreign entity that is not currently registered to do business in the State of Texas. It requested the trial court grant it a traditional motion for summary judgment under Rule 166(a) of the Texas Rules of Civil Procedure, alleging that there were no genuin e issues of fact that would preclude summary judgment. However, at the hearin g on September 2, 2015, Mountain Laurel’s counsel at the time, Mr. Mandke, raised the issue of Mustang’s

### - 30 -



## lack of registration with the Secretary of State as a preclusion to relief:

“And finally Your Honor, since this is a trespass t o try title suit and the Defendant -- Mr. Rapp, Defendant's attorney admitted at our f irst hearing in this matter that [Mustang] has not registered in the State of Texas but is doing business in the State of Texas and is therefore, not entitled to affirmat ive relief in a trespass to try title suit, a take nothing judgment necessarily vest the defendant with a title to the property in question, and we contend that that is a ffirmative relief and they get the benefit of the Texas Court system without having pa id the franchise taxes and are not entitled to a take nothing judgment.” RR:12/15 -RR/13/1. Mustang’s counsel, Mr. Rapp, responded with: “I guess I'll start with refuting what I purportedl y agreed to at the last hearing. I definitely did not agree that Mustang did not have the right to seek affirmative relief. What I did was withdraw the request in my M otion for Summary Judgment for affirmative relief because I had not pled for i t in my motion and so I could not therefore, get it. Just like any born individual in this state, we don 't have to register to do business and we have property rights here. So Mustang is certainly entitled to ask the courts to enforce them without having to register to do business . [emphasis added]” RR:13/6-RR:13/17. Mustang’s counsel did not deny that Mustang is a fo reign entity that has not registered with the Texas Secretary of State and ra ised a fact issue as to Mustang’s capacity to participate in the suit, let alone rece ive relief. Under Sec. 9.001 of the Texas Business Organizations Code, Defendant, a for eign Delaware Limited Liability Company with its principle offices in Shr eveport, Louisiana, was required to register with the Texas Secretary of State in or der to transact business within the State of Texas. Further, under Sec. 9.051 (b) of the Texas Business Organizations Code,

### - 31 -



## Defendant is not permitted to "maintain an action, suit, or proceeding in a court of this state, ... on a cause of action that arises out of the transaction of business in this state unless the foreign filing entity is registere d in accordance with this chapter." A "foreign filing entity" is defined under Sec. 1.002 (29) as "a foreign entity,... that registers or is required to register as a foreign e ntity under Chapter 9 [of the Texas Business Organizations Code]." Sec. 9.051 (c)(2) o f the Texas Business Organizations Code provides that failure to registe r does not affect a foreign filing entity's ability to defend itself from suit. It is apparent from the Texas Business Organization s Code that the purpose of registration of foreign entities is to prevent fore ign entities from doing and profiting from business in Texas without paying franchise tax es and other fees and taxes owed to the state. Sec. 9.052 (a) demonstrates this noti on, as it states:

"(a) A foreign filing entity that transacts busine ss in this state and is not registered under this chapter is liable to this state for a civil penalty in an amount equal to all: (1) fees and taxes that would have been imposed by law on the entity had the entity registered when first required and filed all reports required by law; and (2) penalties and interest imposed by law for fail ure to pay those fees and taxes."

### - 32 -



## A foreign filing entity, like a domestic entity whi ch fails to pay its franchise taxes, is not permitted to have the advantages of a ll the immunities and rights of entities that are otherwise in good standing.

Mustang transacted business without registering wit h the Texas Secretary of State when it attempted to purchase the mineral int erest in the Combest Deed. In fact, the underlying Trespass to Try Title suit is based upon that very transaction. However, a general denial or request for relief in a Trespass to Try Title suit is, by the nature of the suit, a request for relief and no t a mere defense. Toni Combest, when Chesapeake decided to stop payin g her royalties, had no choice but to file a Trespass to Try Title suit. A Trespass to Try Title suit is the exclusive method by which litigants may receive a d etermination of title by the court
in Texas: “TRESPASS TO TRY TITLE. (a) A trespass to try tit le action

is the method

of determining title to lands, tenements, or other real property. (b) The action of ejectment is not available in th is state. [emphasis added]” TEX.PROP.CODE §22.001.

However, unlike other suits where a plaintiff being denied relief does not automatically mean the defendant receives relief, t he result of a Trespass to Try Title suit is to vest title with the prevailing party. “ If the plaintiff under the circumstances

### - 33 -



## fails to establish his title, the effect of a judgm ent of take nothing against him is to vest title in the defendant. The rule is a harsh on e, but it also has been well established as a rule of land law in this State.” Hejl v. Wirth , 343 S.W.2d 226 (Tex. – 1961) (citations omitted). This necessarily mea ns that, unlike in other suits, a general denial and receiving a take-nothing judgmen t is affirmative relief for the defendant in a Trespass to Try Title suit, as if th e defendant has asserted a counterclaim for title, not just a mere defense aga inst the claims asserted. “To determine whether a defendant's answer asserts a counterclaim or an affirmative defense, courts should analyze the fact s alleged.” My-Tech, Inc. v. University of North Texas , 166 S.W.3d 880, 884 (Tex. 2005) (citing Flukinger v. Straughan , 795 S.W.2d 779, 787 (Tex.App.-Houston [14th Dist. ] 1990, writ denied). “We ask whether the defendant could have maintained the claim as an independent
suit.” Id. (citing See id .). “However, to determine if a defendant's prayer for general relief is a counterclaim or an affirmative defense, we look at the general purpose of the pleadings.” Id . (citing Thomason v. Sherrill , 118 Tex. 44, 45, 10 S.W.2d 687, 687 (1928)). The purpose of a general denial in a Trespass to Try Title suit is to request a determination of title in one’s favor by the very nature of the suit. The effect of the take nothing judgment against the Toni Combest in the underlying case was to vest title in Mustang. Must ang is now able to file the judgment in the property records to give notice to the world of their rights in the

### - 34 -



## mineral property. However, the Texas Legislature d id not imagine or envision that a foreign entity should be allowed to take advantag e of the Texas Judicial system by waiting for Texans to file a necessary suit that they otherwise would not be able to file themselves, and then receive all the relief they seek thereby. Mustang sat on its heels and deliberately waited for Toni Combest and Mountain Laurel to file their Trespass to Try Title suit because it could n ot. To now allow Mustang to acquire a judgment granting it definite title when it could not have obtained such a judgment of its own initiative, is to allow Mustang to skirt the spirit and letter of the law and place it in a better position than the citizens of Texas. The Trial Court should have denied Mustang’s Motion for Summary Judgment and allow discovery to determine if Mustan g is doing business in the State of Texas. Mustang, as far as we know, has ac quired mineral property for the purpose of collecting royalty payments. In fact, t his is the core issue surrounding this entire case: Mustang wants to get paid royalti es. It is easy to imagine that Mustang, is substantially involved in several more such transactions in the State of Texas, receiving or attempting to receive hundreds of thousands, or even millions, of dollars of royalty income, and none of it is bei ng paid to into the coffers of the State of Texas. If a domestic company doing such a business is required to file franchise taxes and pay its share in Texas, then a foreign entity should not be

### - 35 -



## allowed a higher privilege of dodging the payment o f tax simply because it was formed in a different state. Mustang’s attorney, at a hearing dated September 2, 2015, did not deny that Mustang Minerals, LLC is a foreign entity doing bus iness within the State of Texas without registering, as required by statute. In fa ct, Mustang’s attorney further asserted that “like any person or individual born, a foreign corporation does not have to register to do business in the State of Tex as.” RR:13/12-RR:13/15. This statement is in clear opposition to the law. Thus, it would appear that Mustang Minerals, LLC did not have capacity to participate in the underlying suit for failure to register with the Secretary of State of Texas, a nd discovery should be permitted at least to the extent of ascertaining if Mustang i s doing business in the State of Texas and is required to register. If it is the ca se that Mustang is doing business in the State of Texas without registering as the Busin ess Organizations Code requires, then it cannot avail itself of the rights and privi leges of domestic entity that is properly registered. Having title affirmatively de termined in favor of a party is a privilege reserved for persons and entities in comp liance with the laws of the State of
Texas. Should it be found that Mustang in fact is doing bu siness within the State of Texas and is required to register, then Mustang’s p leadings should all be stricken

### - 36 -



## from the record and Appellant should be allowed to move for default judgment against Mustang.

CONCLUSION AND PRAYER
Texas Law is quite clear on the interpretation of r eservations of interest, and the Appellant’s pleadings were correct in claiming the Appellant had an interest in the Disputed Mineral Estate. The Trial Court was c learly in error and contravened well-established mineral law when it determined, er roneously, that the Appellant could not prevail on ANY of her claims by way of a take-nothing judgment. In accordance with Texas Law, as stated above, the Com best Deed must be read as conveying at least a one-fourth mineral interest to the Grantee. For these reasons, the Appellee’s motion for summary judgment should h ave never been granted. Toni Combest respectfully asks this Court to:

1. reverse the District Court’s Order partially granti ng Mustang Minerals, LLC’s Motion for Summary Judgment and den y Mustang Minerals, LLC’s Motion for Summary Judgment, and

2. reverse the denial of Plaintiff’s and Intervenor’s Motions for Summary Judgment and render a partial judgment in f avor of Appellant on her Motion for Summary Judgment granti ng Appellant

### - 37 - 

## an undivided one-quarter in and to the minerals und erlying the tract of land described in the Combest Deed; or,

3. in the alternative, reverse the trial court’s rulin g and remand the case for further proceedings and allowance of extrinsic and parol evidence because the Combest Deed is ambiguous; or

4. in the alternative, reverse the trial court’s rulin g and remand for discovery on the issue of Appellee Mustang’s capaci ty to participate in the underlying trespass to try title suit for do ing business in Texas and failing to register with the Secretary of State

. Respectfully submitted, Gilbert Mandke PLLC /s/ Sameer Mandke /s/ Sameer Mandke Texas State Bar No. 24065670 sameer@gkmpllc.com Robert F. Gilbert Texas State Bar No. 24059321 gilbert@gkmpllc.com 10100 Kleckley #15-B Houston, TX 77075 Telephone: (832) 632-4886 Fax: (713) 341-9062

Kevin Schield Attorney at Law

### - 38 - 

## Texas Bar No. 24075026 Email: kevin.schield@schieldlaw.com 3611 Leadville Drive Austin, Texas 78749 Telephone: (512) 910-5095 Attorneys for Appellant Toni Combest

### - 39 - 

## CERTIFICATE OF COMPLIANCE Based on a word count run on Microsoft Word 2013, this brief contains 7,745 words, excluding the portions of the brief ex empt from the word count under Texas Rule of Appellate Procedure 9.4(i)(1). /s/Sameer Mandke/s/ Sameer Mandke

CERTIFICATE OF SERVICE On November 25, 2015, I electronically filed this Brief of Appellant with the Clerk of Court using the electronic filing system w hich will send notification of such filing to the following: Eggleston King, LLP David Rapp Texas Bar No. 24027764 Brett F. Gunter Texas Bar No. 24041023 102 Houston Avenue Weatherford, TX 76086 Phone: 817.596.4200 Fax: 817.596.4269 Email: david@ektexas.com Attorneys for Appellee Mustang Minerals, LLC

/s/Sameer Mandke/s/

Sameer Mandke

# APPENDIX

TAB ITEM 1 “Combest Deed” - Warranty Deed dated September 18, 2003,

recorded in Volume 436, Page 5 of the Property Reco rds of La Salle County, Texas, from Horace and Inga Combest, husband and wife, to Preston and Toni Combest, husband and wife (CR:64)
2 “Source Deed A” - Warranty Deed from Lottie Edna Bu rton to

Horace Edwin Combest and wife, Inga Mable Combest, dated November 28, 1967, recorded in Volume 145, Page 105 , of the Property Records of La Salle County (CR:66-67)
3 “Source Deed B” - Warranty Deed from Robert L. Burt on and

wife, Ann M. Burton, to Horace Edwin Combest and wi fe, Inga Mable Combest, dated November 28, 1967, recorded in Volume 145, Page 107, of the Property Records of La Salle County (CR:69-70)
4 “Source Deed C” - Warranty Deed from Mrs. Charles L

.

Cunningham, to Horace Edwin Combest and wife, Inga Mable Combest, dated November 21, 1968, recorded in Volum e 151, Page 94, of the Property Records of La Salle County (CR:72- 73)
5 Trial Court’s Order and Judgment against Mountain L aurel on

June 22, 2015 (CR:159-161)
6 Trial Court’s Order and Judgment against Appellant on

September 2, 2015 (CR:201)
7 Statements by Mountain Laurel’s and Mustang’s Couns el at

Hearing on September 2, 2015 (RR:12-13)

## 8 Sharp v. Fowler , 252 S.W.2d 153 (Tex. 1952)

9 Averyt v. Grande, 717 S.W.2d 891, 893 (Tex. 1986)
10 Hooks v. Neil , 21 S.W.2d 532 (Tex.Civ. App.—Galveston

1919, writ ref’d)
11 King v. National Bank of Wichita Falls , 144 Tex. 583, 192

S.W.2d 260 (1946)
12 Tex. Prop. Code §22.001
13 Tex. Bus. Org. Code §9.051
14 Tex. Bus. Org. Code §9.052
15 Tex. Bus. Org. Code §1.002 (29)     ### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 



















 



 



 



 



 



 



 



 



 



 



 



 



 



 



  

### 11

property subject to all these other interests which includes the Grantors attempted reservation. One t hing that's distinct is, of course, the Grantor hasn't included the words "reserving an undivided one-half interest from the above described property." The statement is "only one-half undivided interest in a ll the oil and gas and other minerals." Of course whe n we get to the point where we're determining the Granto rs reservation, if we accept that that general languag e regarding other interests, prior interests is valid -- which we contend it's not -- well, now you have the surface, plus, whatever the Grantors owned in the minerals. So at best they could have only reserved what they owned -- half of what they owned at the time.

And finally Your Honor, since this is a trespass to try title suit and the Defendant -- Mr. Rapp, Defendant's attorney admitted at our first he aring in this matter that the Defendant has not registere d in the State of Texas but is doing business in the Sta te of Texas and is therefore, not entitled to affirmative relief in a trespass to try title suit, a take noth ing judgment necessarily vest the defendant with a titl e to the property in question, and we contend that that is affirmative relief and they get the benefit of the Texas Court system without having paid the franchise taxe s and

### 1

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25  

 

 

 

 

 

 

            



 



 



 



 



 



 

 

### 12

are not entitled to a take nothing judgment.

For all those reasons we pray that you reconsider your prior ruling and reinstate your ini tial ruling. Thank you.

THE COURT: All right. Your response. MR. RAPP: I guess I'll start with refuting what I purportedly agreed to at the last hearing. I definitely did not agree that Mustang did not have the right to seek affirmative relief. What I did was withdraw the request in my Motion for Summary Judgm ent for affirmative relief because I had not pled for i t in my motion and so I could not therefore, get it. Ju st like any born individual in this state, we don't ha ve to register to do business and we have property rights here. So Mustang is certainly entitled to ask the courts to enforce them without having to register t o do business. I wanted to respond briefly that the deed in Duhig did not contain a reservation and exceptio n clause, nor did it have a "subject to" language. T he whole Duhig Doctrine applies when there's a failure to title. A failure cannot occur when there is "subje ct to" limiting language. When it's more than what yo u are conveying, and when you have "subject to" language in your deed saying, hey, we're conveying this subject toSharp v. Fowler, 151 Tex. 490, 252 S.W.2d 153 (Tex. , 1952)

- 1 - Page 153 252 S.W.2d 153 151 Tex. 490 SHARP v. FOWLER et ux. No. A-3662. Supreme Court of Texas. Nov. 5, 1952.
[151 Tex. 491] LeRoy LaSalle and Thos. H. S harp, Carthage, for petitioner. Long & Strong, Carthage, Steve Miller, Tyle r, Ghent Sanderford, Austin, for respondents. [151 Tex. 492] HICKMAN, Chief Justice. This suit was brought by petitioner against respondents in the form of an action in trespass t o try title to an undivided 1/4th mineral interest in a 29.7-ac re tract of land in Panola County. A trial before t he court sitting without a jury resulted in a judgment that petitioner take nothing, which judgment was affirmed by the Court of Civil Appeals. 248 S.W.2d 322. Petitioner's claim of title comes through a de ed from the heirs of A. D. Cockrell, and respondents' claim of title comes through a prior deed from the administrator of Cockrell's estate to their predece ssor in title. If the administrator's deed was effe ctive to pass the 1/4th mineral interest along with the surf ace of the land to respondents' predecessor in titl e, there is no basis for petitioner's claim. A brief recital of the transactions leading up to this controversy is necessary to an understa nding of the precise question before us for decision. On Feb ruary 4, 1935, Frost Lumber Industries, Inc. (hereinafter referred to as Frost), conveyed to A. D. Cockrell 50 acres of land, being a 20.3-acre tra ct out of the John Simpson Survey (not involved in this su it), and the 29.7-acre tract out of the Texas Centr al Railway Survey No. 13 involved in this suit. Each t ract was described by metes and bounds. The mineral s in the 29.7-acre tract belonged at that time to Lou is Werner Sawmill Company (hereinafter referred to as Werner), and they were excepted from the grant in t he Frost deed. On September 10, 1935, Page 154 Werner conveyed those minerals to Frost, who, in tu rn, by deed dated September 16, 1935, conveyed them to Cockrell. Thereafter, Cockrell conveyed awa y 3/4ths of those minerals, with the result that at the time of his death he had title to the surface and a n undivided 1/4th interest in the minerals in the 2 9.7-acre tract. On July 17, 1939, A. A. Jordan, as administ rator of the estate of A. D. Cockrell, deceased, co nveyed the 29.7-acre tract to J. A. Browning, respondents' predecessor in title. In that deed the land was de scribed as follows: '50 acres of land situated in Panola County, Texas, and being [151 Tex. 493] 20.3 acres of the John Simpson Headright Survey, and 29.7 acres of the T. C. Railway Company No. 13, and being the same land described in a deed from Frost Lumber Industri es, Inc. of Texas, to A. D. Cockrell, dated the 4th day of February, A. D. 1935, and of record in Vol. 102, page 462, Deed Records, Panola County, Texas.' The sole question for decision is whether t he grant of land in the Jordan deed, which normally would include both the surface and the minerals, was limi ted to the surface only by virtue of the reference forSharp v. Fowler, 151 Tex. 490, 252 S.W.2d 153 (Tex. , 1952)

- 2 -

description to the Forst deed, in which all of the minerals were excepted and only the surface conveye d. Stated in other language, the question is: Did the reference to the Frost deed operate to qualify the estate conveyed and in effect reserve the 1/4th mineral in terest to the Cockrell estate, or did that referenc e serve only to define the area and boundaries of the land conveyed? Both courts below held that the reference in the Jordan deed to the Frost deed was merely descri ptive of the boundaries of the land conveyed and di d not serve to except the 1/4th mineral interest from the grant or reserve it to the grantor. Their conc lusions were based upon the broad ground that a deed passes whatever interest a grantor has in the land, in th e absence of Language showing an intention to grant a less estate. That is a sound elementary principle of conveyances. Our inquiry, then, is limited to the q uestion of whether words were used in the Jordan de ed which show an intention to convey an interest less than that owned by the Cockrell estate. Analyzing the description in that deed, it will be observed in the first place that it contain s a grant of 'land.' That is a term which on its face includes t he minerals in and under the land. The broad scope of the meaning of the word 'land' is well illustrated by o ur decision in Holloway's Unknown Heirs v. Whatley, 133 Tex. 608, 131 S.W.2d 89, 123 A.L.R. 843. Follow ing the grant there is designated the number of acres granted and the county and survey in which th e land is located. That language, standing alone, i s insufficient to constitute a legal description of t he land. Smith v. Sorelle, 126 Tex. 353, 87 S.W.2d 703; Admas v. Duncan, 147 Tex. 332, 215 S.W.2d 599. But the description is made certain by the language 'being the same land described in' the Forst deed. To describe land is to outline its boundaries so th at it may be located on the ground, and not to define the estate conveyed therein. It is to be observed that the reference in the Jordan deed is not to the land con veyed [151 Tex. 494] in the Frost deed but to the l and described in that deed. (Italics ours.) A reservation of minerals to be effective m ust be by clear language. Courts do not favor reser vations by implication. Sellers v. Texas Central Ry. Co., 8 1 Tex. 458, 17 S.W. 32, 13 L.R.A. 657; State v. Bla ck Bros., 116 Tex. 615, 297 S.W. 213, 53 A.L.R. 1181. The most that could be said of the reference to the Frost deed for description of the land conveyed by the Jordan deed is that it carried the bare implica tion that only the surface was being conveyed. That impl ication, if in fact it be one, should not be held t o overcome the unconditional grant of land expressed in other language in that deed, and limit that gran t to the surface of the land. From a consideration of th e Jordan deed in all its parts, it is our conclusio n that its language evidences no intention to reserve the 1/4t h mineral interest owned by the Cockrell estate. Much of the argument in the briefs is cente red around three cases: Duhig v. Page 155 Peavy-Moore Lumber Co., 135 Tex. 503, 144 S.W.2d 87 8, affirming the Court of Civil Appeals opinion in 119 S.W.2d 688; Winters v. Slover, Tex.Sup., 251 S.W.2d 726; and Coffee v. Manly, Tex.Civ.App., 166 S.W.2d 377, error refused. Each of those cases is distinguishable from the instant case. It is unnecessary to point out all of the grounds of dist inction, but this obvious one applies to all three cases: The Jordan deed contains but one adequate descripti on of the boundaries of the land; that is the description supplied by the reference to the Frost deed; whereas, each of the other deeds contains bot h a particular description and a general description, a nd there was some question as to which description should prevail. Although distinguishable, the Duhig case announces principles which support our conclusion above announced. The case is affirmed.Averyt v. Grande, Inc., 717 S.W.2d 891 (Tex., 1986)

- 1

- Page 891 717 S.W.2d 891 James R. AVERYT, Individually and as Trustee for R.M.

Hopkins, Jr., Petitioner,

v. GRANDE, INC., Respondent. No. C
- 4009. Supreme Court of Texas. July 2, 1986. Rehearing Denied Nov. 5, 1986.

Page 892
Christie Condara, Krist, Kinney, Pucket & Riedmueller, Houston, for petitioner. William J. Ehlert, Spinn, Ehlert, Spinn, Weisler & Weisler, Brenham, for respondent. SPEARS, Justice. The issue in this declaratory judgment action is whether a mineral reservation in a general warranty deed reserves a fraction of the entire mineral estate or only a fraction of the undivided one

- half mineral interest owned and conveyed by the grantor. The trial court held that the reservation reserved a fraction of the entire mineral estate. The court of appeals affirmed. 686 S.W.2d 632. We affirm. On September 30, 1977, Respondent Grande, Inc. conveyed the real property in question to the Fogelmans . The Fogelmans then conveyed the property to Petitioner James R. Averyt, trustee for R.M. Hopkins, Jr. Averyt, individually and as Hopkin's trustee, sued to determine what portion of the mineral interest Grande conveyed to the Fogelmans. The Grand e to Fogelman deed contains the following pertinent provisions: [T]hat Grande, Inc. ... have GRANTED, SOLD and CONVEYED, ... unto the said Gordon V. Fogelman and wife, Clarice E. Fogelman, ... the following described real estate: FIRST TRACT: All that cert ain tract or parcel of land, situated in Fayette County, Texas, ....

.... [C]ontaining 86.82 acres of land. SECOND TRACT: An undivided 1/2 interest in and to all that certain tract or parcel of land, situated in Fayette County, Texas, ....

.... [C]ontainin g 0.03 acres of land.Averyt v. Grande, Inc., 717 S.W.2d 891 (Tex., 1986)

- 2

-

LESS, HOWEVER, AND SUBJECT TO an undivided 1/2 interest in the oil, gas, sulphur, and all other minerals, described in that deed from Rubie Keilers and Annie Keilers, to Texas Osage Cooperative Royalty Pool, et al, dated May 2, 1930, and recorded in Volume 152, Pages

Page 893 75

- 76, Deed Records of Fayette County, Texas.

.... There is hereby excepted from this conveyance and reserved to Grantor, its successors and assigns, an undivided 1/4th of the royalty covering all of the oil, gas and other minerals, including but not limited to uranium, coal, lignite, iron, gold, silver, and all other minerals, whether or not now known to be valuable and whether by drilling, strip mining, or any oth er method, in, to and under or that may be produced from the lands above described....

.... TO HAVE AND TO HOLD the above described premises, together with all and singular, the rights and appurtenances thereto in any wise belonging unto the said Gordon V. Fogelman and wife, Clarice E. Fogelman, their heirs and assigns, forever. And Grande, Inc., does hereby bind itself and its successors, to warrant and forever defend, all and singular, the said premises unto the said Gordon V. Fogelman and wife, Clarice E . Fogelman, their heirs and assigns, against every person whomsever lawfully claiming, or to claim the same or any part thereof. (emphasis added) The question presented is whether Grande reserved one

- fourth of the royalty from the entire 86.82 and 0.003 acres or one

- fourth of the royalty from the undivided one

- half mineral interest Grande owned at the time of the conveyance. Grande argues that the deed reserves one

- fourth of the royalty of the entire mineral estate. Averyt argues that the deed reser ves one - fourth of the royalty only from the undivided one - half mineral interest Grande owned at the time of the conveyance to the Fogelmans. Because neither party contends that the deed is ambiguous, we construe the language of the deed to ascertai n the intent of the parties without considering parol evidence. Middleton v. Broussard, 504 S.W.2d 839 (Tex.1974). Courts give legal meaning to the language of the deed by construing all of its provisions in harmony and only if deed provisions irreconcilab ly conflict, apply one provision to the exclusion of another. Benge v. Scharbauer, 152 Tex. 447, 259 S.W.2d 166 (1953). Specific rules of construction apply to cases in which a grantor owns an undivided mineral interest and reserves a fraction of t he minerals under the land in the deed. If the deed reserves a fraction of the minerals under the land conveyed, then the deed reserves a fraction of the part of the mineral estate actually owned by the grantor and conveyed in the deed. Hooks v. Neill, 21 S.W.2d 532 (Tex.Civ.App.

-- Galveston 1929, writ ref'd). In Hooks, the grantor conveyed all of his undivided one

- half interest in a tract of land. He then reserved "a one

- thirty second part of all oil on and under the said land and premises herein described and conveyed." The Hooks court focused on the word "conveyed" to hold that the reservation clause applied "only to the interest which [grantors] have in the land and ore which they conveyed." Hooks, 21 S.W.2d at 538. If, on the other hand, the deed reserves a fraction of the minerals under the land described, the deed reserves a fraction of the minerals under the entire physical tract, regardless of the part of the mineralAveryt v. Grande, Inc., 717 S.W.2d 891 (Tex., 1986)

- 3

-

estate actually conveyed. King v. First National Bank of Wichita Falls, 144 T ex. 583, 192 S.W.2d 260 (1946). In King, the grantor conveyed all of his undivided one

- half interest in the described land. The deed later reserved "an undivided one eighth of the usual and customary one eighth royalty ... in oil and gas and other minerals that may be produced from the hereinabove described land." This court focused on the word "described" to hold that the grantor reserved an undivided one eighth of the royalty from the minerals under the entire described tract, not just the grantor's undiv ided one

- half. King, 192 S.W.2d at 262. We distinguished Hooks on the basis that the deed in that case limited the reservation to part of the estate conveyed while the King deed contained

Page 894 no such restricting language. Id. See Masterson, Double Fraction Problems In Instruments Involving Mineral Interests, 11 Southwestern L.J. 281, 281 (1957) (disapproves distinction but states that King better effects intent of parties). This court applied this same rule to a grant of a fractional mineral interest in Middleton v. Broussard, 504 S.W.2d 839 (Tex.1974). In Middleton, the grantors' deed conveyed undivided fractional interests in several tracts of land, reserving all of the min erals to the grantor. The deed then granted a one

- sixty

- fourth royalty interest "in and to all of the oil, gas and other minerals in and under and that may be produced from all of the described land and premises." We relied on the phrase "described land an d premises" and King to hold that the deed granted a one

- sixty

- fourth royalty in the entire mineral estate under the land, not just in the fractional interest conveyed. Middleton, 504 S.W.2d at 842. The Grande to Fogelman deed reserves one

- fourth o f the royalty from minerals "that may be produced from the lands above described." This places the reservation within the King rule. Averyt argues, however, that the exception of one

- half of the minerals in the "subject to" clause is part of the descriptio n of the land. Averyt asserts that the "lands above described," therefore, are the two tracts minus the one

- half mineral interest excepted from the grant in the "subject to" clause. Averyt relies on Bass v. Harper, 441 S.W.2d 825 (Tex.1969), for his positi on, arguing that Bass controls our decision by holding that the "subject to" clause limits the description of the land. In Bass, Bass owned the entire surface and eight

- fourteenths of the one

- eighth royalty in a tract of land. Bass conveyed an undivided on e - half interest in the land to Miller. The deed's "subject to" clause excepted from the conveyance various mineral interests totaling six

- fourteenths of the royalty. This court held that the granting clause conveyed one

- half of the one

- eighth royalty becau se it contained no language limiting the grant to one

- half of the interest Bass owned. This court then held that the grant of seven

- fourteenths of the royalty was subject to the exception of six

- fourteenths, leaving Miller with one

- fourteenth of the royalt y. 441 S.W.2d at 827

- 28. In reaching this decision, the court held that the exception of six

- fourteenths of the royalty in the "subject to" clause operated to limit the estate granted and did not just protect Bass on his warranty. 441 S.W.2d at 827. Bass is readily distinguishable and does not control our decision. Bass only holds that the "subject to" clause limits the estate granted in the land, it does not reach the question here: whether the "subject to" clause forms part of the description of t he land. We hold that a "subject to" clause which excepts fractional mineral interests from lands and minerals conveyed does not form part of the description of the land. The "subject to" clause does limit the estate granted and warranted. Bass, 44 1 S.W.2d at 827. There is a difference, however, between the estate granted and the land described. "Land" is the physical earth in its natural state, while an estate in land is a legal unit of ownership in the physical land. 1 Thompson, Thompson on Real P roperty § 51 (1939). ToAveryt v. Grande, Inc., 717 S.W.2d 891 (Tex., 1986)

- 4

-

define the estate granted is to set out the portion of the physical land conveyed. In contrast, "[T]o describe land is to outline its boundaries so that it may be located on the ground, and not to define the estate conveyed therein. " Sharp v. Fowler, 151 Tex. 490, 252 S.W.2d 153, 154 (1952). Because "land" includes the surface of the earth and everything over and under it, including minerals in place, Thompson at § 51, a description of land includes the land and all the miner als naturally existing underneath. Holloways Unknown Heirs v. Whatley, 133 Tex. 608, 131 S.W.2d 89, 92 (Tex.Comm'n App. 1939, opinion adopted). In other words, minerals under "the lands described" refers to all the minerals under the entire land because mi nerals "would necessarily be produced from the whole land, irrespective of the

Page 895 ownership of undivided shares thereof." King, 192 S.W.2d at 263. The "subject to" clause affects "the ownership of the undivided shares" of the minerals, not the des cription of the land containing them. Id. Thus, when the Grande to Fogelman deed reserved a fraction of the minerals in the "lands above described," it meant the minerals under the entire physical tracts described in the deed by metes and bounds. Id. at 26 2. The dissent correctly notes that here the interest conveyed is the same as the interest described. However, Grande reserved one

- fourth of the royalty from the lands described, not from the interest described. The deed further evidences an intent to reserve one

- fourth of the royalty from the minerals under the entire land when it reserved " 1/4th of the royalty covering all of the oil, gas and other minerals ... in and under and that may be produced from the lands above described" (emphasis added) . Middleton, 504 S.W.2d at 843; King, 192 S.W.2d at 263. We therefore hold that the Grande to Fogelman deed reserved to Grande an undivided one

- fourth of the royalty from the minerals produced from the whole of the tracts described in the deed. Reg ardless of the appeal of Averyt's argument that the "subject to" clause is part of the description of the land, its adoption now would disturb the ownership of all minerals granted or reserved in deeds prepared according to the long standing rule here appl ied. King was written in 1946. Since then, numerous cases have relied on the King rule to apportion ownership of minerals. Middleton, 504 S.W.2d at 843; Gibson v. Turner, 156 Tex. 289, 294 S.W.2d 781 (1956); McElmurray v. McElmurray, 270 S.W.2d 880 (Tex.Ci v.App.

-- Eastland 1954, writ ref'd); Miller v. Speed, 259 S.W.2d 235, 236 (Tex.Civ.App.

-- Eastland 1952), no writ); R. Lacy, Inc. v. Jarrett, 214 S.W.2d 692 (Tex.Civ.App.

-- Texarkana 1948, writ ref'd). For other states relying on the King rule, see Price v. A tlantic Refining Co., 79 N.M. 629, 447 P.2d 509 (1968); Williams v. Sohio Petroleum Co., 18 Ill.App.2d 194, 151 N.E.2d 645 (1958); Ferguson v. Morgan, 220 Miss. 266, 70 So.2d 866 (1954); Pollock v. McAlester Fuel Co., 215 Ark. 842, 223 S.W.2d 813 (1949). C f. Krauss v. Fry, 209 La. 250, 24 So.2d 464 (1946) ("land described" held ambiguous, parol evidence considered). Also, virtually all of the commentators set out the King rule as governing this type of situation. Hemingway, Law of Oil and Gas § 3.2, pp. 113

- 14 (2nd ed. 1983); 1 Kuntz, Oil and Gas § 14.5, p. 331 (1960); 1 Williams and Meyers, Oil and Gas Law § 312, p. 600 n. 4 (1970); Barber, Duhig to Date: Problems in the Conveyancing of Fractional Mineral Interests 13 Sw. L.J. 321, 323 (1959); Masterson, Do uble Fraction Problems in Instruments Involving Mineral Interests 11 Sw. L.J. 281, 282

- 83 (1957). Undoubtedly, numerous deeds, in addition to the one in this case, were prepared according to these rules. We should be loathe to change long

- standing rules in the oil and gas field when doing so would alter the ownership of minerals conveyed in deeds which rely on the law established by this court and followed by lower courts, commentators, and especially lawyers advising their clients.Averyt v. Grande, Inc., 717 S.W.2d 891 (Tex., 1986)

- 5

-

Averyt also comp lains that the trial court erred in failing to file findings of fact and conclusions of law. Averyt properly requested findings of fact and conclusions of law, which the trial court did not file. However, the record does not reveal a complaint filed "in wr iting, within five days after" the findings were due as required by Tex.R.Civ.P. 297. Averyt waived this complaint. We overrule all of Averyt's points of error. Accordingly, we affirm the judgment of the court of appeals and that of the trial court

. KILGARLIN, J., joined by RAY and WALLACE, JJ., dissents. KILGARLIN, Justice, dissenting. I respectfully dissent. How can Grande, Inc. reserve to itself a one

- fourth royalty interest in the half of the mineral estate in which it ha d no interest? The Grande to

Page 896 Fogleman deed clearly evidences that Texas Osage already owned the other one

- half mineral interest. The court purports to rely on King v. First National Bank of Wichita Falls, 144 Tex. 583, 192 S.W.2d 260 (1 946), and Middleton v. Broussard, 504 S.W.2d 839 (Tex.1974), yet it ignores the reasoning used in these cases. The court cites King for the proposition that the reservation refers only to the land described, not the land conveyed. However, in King, this co urt looked "forward from the granting clause and backward from the reservation clause" to determine the land described. 144 Tex. at 587, 192 S.W.2d at 263. In this case, the intervening paragraphs between these clauses contain the "subject to" clauses; the refore, they are part of the description. Accordingly, the "subject to" clauses limit and define the land described to that which Grande owned. This limitation is also in accord with our decision in Bass v. Harper, 441 S.W.2d 825 (Tex.1969), which the court attempts to distinguish. In Bass, the deed also contained a "subject to" clause. While the court correctly notes that in Bass, the "subject to" clause was held to limit the estate granted, it also limited the description of the estate of the gran tor. The court's reliance on Middleton is similarly misguided. While the court appears to be following Middleton, the court overlooks an important fact. The grantors in Middleton owned all of the surface and mineral estate and conveyed "a lesser un divided surface estate," reserved all of the minerals, and granted a "one sixty

- fourth royalty 'in and to said tracts of land'." 504 S.W.2d at 842. Thus, the description of the land necessarily included all that was owned by the grantors. From that descrip tion of the land owned by the Broussards, the deed conveyed the lesser included surface estate and the royalty interest in all of the land owned by the Broussards. Here, Grande only owned a one

- half mineral interest. Grande could not have possibly reserved a royalty in the one

- half mineral interest of Texas Osage. This case is clearly on point with Hooks v. Neill, 21 S.W.2d 532 (Tex.Civ.App.

-- Galveston 1929, writ ref'd). In Hooks, Mrs. Neill conveyed her one

- half

undivided interest in a certain trac t of land and reserved a "one thirty

- second of all oil on and under said land and premises herein described and conveyed." 21 S.W.2d at 538. The court attempts to distinguish Hooks by arguing that the key language in Hooks was the word "conveyed" i n the reservation clause, while in this case, the reservation referred to the land "described." What the court misses is that both are one and the same. The interest described in the Grande deed is theAveryt v. Grande, Inc., 717 S.W.2d 891 (Tex., 1986)

- 6

-

interest conveyed. Accordingly, I would reverse the ju dgment of the court of appeals and hold that the deed reserved a one

- fourth royalty from the one

- half mineral interest Grande owned at the time of the conveyance. RAY and WALLACE, JJ., join in this dissent. KILGARLIN, Judge, dissenting on r ehearing. In order to elaborate on my earlier views, I further respectfully dissent. An unambiguous deed "must be given the legal effect resulting from a construction of the language contained within the four corners of the instrument. All parts of the instrument must be given effect, if possible to do so, without violating any legal principle." Benge v. Scharbauer, 152 Tex. 447, 259 S.W.2d 166, 167 (1953) (emphasis added). Therefore, we must determine the parties' intent by construing the language of the deed. Id. 259 S.W.2d at 168. Although the deed is lengthy, analysis of all provisions within "the four corners" is necessary to justly construe this instrument. The Grande

- Fogleman deed commenced with the general granting language: THE STATE OF TEXAS, COUNTY OF FAYETTE. KNOW ALL MEN BY THESE PRESENTS, that Grande, Inc., a Texas Corporation, acting by and through its

Page 897 Vice

- President, Terry Frazee, hereunto authorized by Resolution of the Board of Directors of said Grande, Inc., for the consideration hereinafter stated, paid and to be paid by Gordon V. Fogleman and wife, Clarice E. Fogleman, have GRANTED, SOLD and CONVEY ED, and by these presents do GRANT, SELL and CONVEY, subject to the Vendor's Lien retained, unto the said Gordon V. Fogleman and wife, Clarice E. Fogleman, of Harris County, Texas, the following described real estate: Texas adheres to the ownership in place concept, which recognizes that a corporeal estate in realty may be created in the minerals apart from the surface. Therefore, the real estate described in the deed included both the surface estate and the mineral estate. The deed's descri ption of that which was granted states: FIRST TRACT: All that certain tract or parcel of land, situated in Fayette County, Texas, a part of the Franklin Lewis League, A

- 64, and the John Eblin League, A

- 42, same being a part of a 128.21 acre tract of land c onveyed from Malisia Rivers, et al, to Grande, Inc., in a deed dated August 3, 1977, and recorded in Volume 507, Pages 109

- 112, Deed Records of Fayette County, Texas, and described by metes and bounds as follows, to

- wit: BEGINNING at an iron pin for the No rth corner, same being the North corner of the said Grande, Inc. 128.21 acres;Averyt v. Grande, Inc., 717 S.W.2d 891 (Tex., 1986)

- 7

-

THENCE South 47? 01' East 1856.0 feet to an iron pin for the East corner, same being the East corner of the said Grande, Inc., 128.21 acres; THENCE South 42? 46 1/4' West 1415.3 feet to an iron pin for a corner, same being a corner of the said Grande, Inc. 128.21 acres; THENCE North 47? 18 1/4' West 782.9 feet to an iron pin for an interior corner, same being an interior corner of the said Grande, Inc. 128.21 acres; THENCE South 41? 57 3/4' West 2082.3 feet to an iron pin for the South corner, same lying in the Southeast boundary of the said Grande, Inc. 128.21 acres; THENCE North 52? 39 1/4' West 39.1 feet to an iron pin, North 33? 39 1/4' East 112.1 feet to an iron pin, North 10 ? 22 3/4' East 81.8 feet to an iron pin, North 26? 46 1/2' East 144.7 feet to an iron pin, North 31? 12 1/4' East 628.1 feet to an iron pin, North 10? 21 3/4' West 1068.0 feet to an iron pin for the West corner, same being an interior corner of the said Gr ande, Inc. 128.21 acres; THENCE North 43? 18 3/4' East 1934.1 feet along the Northwest boundary of the said Grande, Inc. 128.21 acres to the place of beginning, containing 86.62 acres of land. SECOND TRACT: An undivided 1/2 interest in and to all that cert ain tract or parcel of land, situated in Fayette County, Texas, a part of the John Eblin League, A

- 42, same being a part of a 128.21 acre tract of land conveyed from Malisia Rivers, et al, to Grande, Inc., in a deed dated August 3, 1977, and recorded in Vo lume 507, Pages 109

- 112, Deed Records of Fayette County, Texas, and described by metes and bounds as follows, to

- wit: BEGINNING at an iron pin for the South corner, same being the South corner of the said Grande, Inc., 128.21 acres, same lying in the North east margin of a County Road; THENCE North 43? 59' West 34.0 feet along the Northeast margin of the said County Road to an iron pin for the West Corner; THENCE North 33? 39 1/4' East 34.8 feet to an iron pin for the North corner; THENCE South 52? 39 1/4' E ast 39.1 feet to an iron pin for the East corner, same lying in the Southeast boundary of the said Grande, Inc. 128.21 acres; THENCE South 41? 57 3/4' West 40.0 feet along the Southeast boundary of the said Grande, Inc. 128.21 acres to the place of beginni ng, containing 0.03 acre of land. LESS, HOWEVER, AND SUBJECT TO an undivided 1/2 interest in the oil, gas, sulphur, and all other minerals, described

Page 898 in that deed from Rubie Keilers and Annie Keilers, to Texas Osage Co

- operative Royalty Pool, e t al, dated May 2, 1930, and recorded in Volume 152, Pages 75

- 76, Deed Records of Fayette County, Texas.Averyt v. Grande, Inc., 717 S.W.2d 891 (Tex., 1986)

- 8

-

LESS, ALSO, AND SUBJECT TO certain rights granted to Fayette Electric Cooperative, Inc., by an instrument in writing from David Rivers, et ux, dated Ju ne 7, 1945, and recorded in Volume 217, Page 271, Deed Records of Fayette County, Texas. This description was followed by a reservation clause excepting one

- fourth of the minerals from the lands above described: There is hereby excepted from this c onveyance and reserved to Grantor, its successors and assigns, an undivided 1/4th of the royalty covering all of the oil, gas and other minerals, including but not limited to uranium, coal, lignite, iron, gold, silver, and all other minerals, whether or no t now known to be valuable and whether by drilling, strip mining, or any other method, in, to and under or that may be produced from the lands above described to be paid or delivered unto the Grantor, its successors and assigns, free of cost to it from roy alty oil, gas, and other minerals, as above defined, forever. Said interest hereby reserved is a non - participating royalty interest and shall not participate in the bonuses paid for any oil, gas and other minerals lease, as above defined, covering said lan ds, nor shall it participate in the money rentals which may be paid to extend the time within which a well may be begun under the terms of any lease covering said lands. It shall not be necessary for the Grantor, its successors or assigns, to join in the e xecution of any lease covering said royalty interest herein reserved and the said Grantees, their heirs or assigns, shall have the right to lease said lands for oil, gas and other minerals, as above defined, provided, however, that all such leases shall pr ovide for a royalty of not less than 1/8th. Because the reservation clause excepts one

- fourth of the minerals from the lands described rather than one

- fourth of the minerals from the lands conveyed, we are called upon to determine what constitutes the "above described lands." We were confronted with this question in King v. First National Bank of Wichita Falls, 144 Tex. 583, 192 S.W.2d 260 (1946). In King, the pertinent portions of the deed were as follows: That J.E. Duncan, a single man, having never been married, of the County of Young, State of Te xas, for and in consideration of the sum of Ten and No/100 Dollars, and other good and valuable consideration, all cash to me in hand paid by B.W. King, the receipt of which is hereby acknowledged, have Granted, Sold and Conveyed, and by these presents do Grant, Sell and Convey unto the said B.W. King, of the County of Young, State of Texas, all that certain undivided one

- half ( 1/2) interest (being all of the interest owned by the grantor) in and to the following described land situated in Young County, Te xas, to

wit: 1st Tract

-- West one

- half of T.E. & L. Company Survey No. 461, Abstract No. 668, containing 160 acres more or less. 2nd Tract

-- Southeast one

- fourth of T.E. & L. Company Survey No. 460, Abstract No. 667, containing 80 acres, more or less. The Grantor hereby reserves unto himself, his heirs, successors and assigns for a period of ten (10) years only from this date an undivided one

- eighth ( 1/8) of the usual and customary one

- eighth royalty interest reserved by the land

- owne r in oil and gas and othe minerals that may be produced from the hereinabove described land; 192 S.W.2d at 261 (emphasis added). To determine what constituted the "hereinabove described land," this court looked "forward from the granting clause and backward from the reservation clause," finding it "evident that the terms 'following described land,' 'hereinabove described land,' 'said land,' and 'premises' ... relateAveryt v. Grande, Inc., 717 S.W.2d 891 (Tex., 1986)

- 9

-

Page 899 to the intervening paragraphs of the deed." Id. at 263 (emphasis added). There is logic in the King court's conclusion. The granting clause concludes with the words "the following described land, ... to

- wit:." The reservation clause applies to the "above described land." The provisions which appeared between the granti ng clause and the reservation clause were therefore meant to constitute the description. In the case at bar, the court has rejected this theory by holding that one of the provisions appearing between the granting clause and the reservation clause i n the Grande

- Fogleman deed is not part of the land description. This particular portion is: Less, however, and subject to an undivided one

- half interest in the oil, gas, sulphur and other minerals, described in that deed from Rubie Keilers and Annie Keiler s, to Texas Osage Co

- operative Royalty Pool, et al, dated May 2, 1930, and recorded in Volume 152, pages 75 and 76, Deed Records of Fayette County, Texas. In reaching its decision, the court has failed to clearly construe the meanings of the terms "land" and "described" as viewed in the context of a deed. "Land" is a term which on its face includes both the surface and the minerals in and under the land. The broad scope of the meaning of the word "land" is well illustrated by our decision in Holloway's Unknown Heirs v. Whatley, 133 Tex. 608, 131 S.W.2d 89 (1939). In Holloway, this court held a mineral estate, when constructively severed from the surface, is still "land." See Sharp v. Fowler, 151 Tex. 490, 252 S.W.2d 153, 154 (1952), and Hollo way, 131 S.W.2d at 92. The term "description" refers to: [T]he subject matter of a deed, including all reservations and exceptions contained therein. The term can also be applied to the language defining the size of the interest conveyed. Thus, the 'description' determines the scope of the notice given by the deed to, and the scope of the proper reliance on the deed by, bona fide purchasers of land. A description must be sufficiently full and definite to afford some means of identification of the pr operty or refer to something extrinsic by which the land may be identified with certainty. These criteria are usually applied with liberalty. 6A, Powell on Real Property § 887 (emphasis added). "Descriptions are commonly phrased in terms of monumen ts, maps and lot numbers, stated occupancies, metes and bounds, or quantity, " id. at 887; see Canter v. Lindsey, 575 S.W.2d 331 (Tex.Civ.App.

-- El Paso 1978, writ ref'd n.r.e.); and the description part of a deed has been described by this court as "an ide ntifying reference to the interest in land which was the subject of the conveyance." Rutherford v. Randal, 593 S.W.2d 949 (Tex.1980). A severed mineral estate is land. Land is subject to a description, as a means of identification. In order to iden tify a mineral interest, it is necessary to give a description of the surface under which it is located and the quantity of the minerals below. In the Grande

- Fogleman deed, the description began with the leagues, quantity, and metes and bounds of t he land, which on its face included the surface of the earth and everything over and under it, including minerals in place. Thompson on Real Property at § 1531 (1934). This description was immediately followed by language limiting the mineral description t o one - half of the surface "less anAveryt v. Grande, Inc., 717 S.W.2d 891 (Tex., 1986)

- 10

-

undivided one

- half described in" a prior deed. Only when we include this limiting language is, as Professor Powell stated, the description "sufficiently full and definite to afford [a] means of identification of the prope rty," property which consisted of all the surface and one

- half of the minerals. In Middleton v. Broussard, 504 S.W.2d 839 (Tex.1974), the Broussards owned all of the surface estate and the mineral estate. The granting clause and the questioned desc riptions in their deed to Middleton were as follows:

Page 900 The Broussard

- Middleton Deed ... have GRANTED, SOLD and CONVEYED, and by these presents do GRANT, SELL and CONVEY unto the said R.M. Middleton, of the County of Chambers, State of Texa s, (subject, however, to the exception and reservation of all the oil, gas and other minerals, also a certain right

- of

- way deed for a ditch, as hereinafter specifically indicated) all those certain tracts or parcels of land situated in Chambers County, Tex as, about seven or eight miles southeast of the town of Anahuac, and also a one

sixty

- fourth ( 1/64) royalty right and interest in and to said tracts of land, and both the said tracts of land and the said one

- sixty

- fourth ( 1/64) royalty right and interest therein, being particularly described as follows: FIRST: An undivided twenty

- two

- thirty

- seconds ( 22/32) interest (795.5 acres) in and to 1157 acres of the R.E. Booth League, which was patented to R.E. Booth by Patent No. 368, Volume 7, dated April 24th, 1848, [then follows a description of the 1157 acres by deed and record references]. SECOND: An undivided three

- fourths ( 3/4) interest (99.4 acres) in and to that certain tract of land containing 132.6 acres, and known as Survey No. 178, which was patented to Erastus Moss by Patent No. 177,. Volume 9, dated December 12th, 1883, and of record in Vol. D, page 255, of said deed records. THIRD: An undivided three

- fourths ( 3/4) interest (480 acres) in and to Survey No. 74, containing 640 acres, patented to H & TC Ry. Co. by Patent No. 421, [then follows a description by deed and record references]. FOURTH: An undivided three

- fourths ( 3/4) interest (480 acres) in and to Survey No. 76, containing 640 acres, patented to H & TC Ry. Co. by Patent No. 423, [then foll ows a description by deed and record references]. FIFTH: An undivided three

- fourths ( 3/4) interest (480 acres) in and to Survey No. 80, containing 640 acres, patented to H & TC Ry. Co. by Patent No. 418, [then follows a description by deed and record refe rences]. SIXTH: An undivided three

- fourths ( 3/4) interest (615.2 acres) in and to Survey No. 82, containing 820.3 acres, patented to E. Moss by Patent No. 419, [then follows a description by deed and record references]. SEVENTH: An undivided three

- fourths ( 3/4) interest (692.5 acres) in and to that certain 923 acres of Survey No. 180, containing 1023 acres, patented to John B. Murray by Patent No. 72, [then follows a description by deed and record references]. EIGHTH: All of that certain 100 acre tract of land, a part of the said J.B. Murray survey No. 180, and being the same 100 acre tract which was conveyed by E. Moss to J.T. Moss by deed dated June 14th, 1897, and of record in Vol. I, page 515, of said deed records.Averyt v. Grande, Inc., 717 S.W.2d 891 (Tex., 1986)

- 11

-

NINTH: An u ndivided one

- sixty

- fourth ( 1/64) royalty interest in and to all of the oil, gas and other minerals in and under and that may be produced and saved from all of the above described land and premises, and the said one

- sixty

- fourth ( 1/64) royalty interest to be delivered free of expense to the grantee herein, his heirs or assigns, on the land at the well or wells producing the same into the tanks or pipe lines in the usual manner to the credit of the grantee, his heirs or assigns. The Broussards began with the severance of the mineral estate from the surface estate in the tracts of land by reserving to themselves all of the mineral estate. They then granted the Middletons a one

- sixty

fourth royalty in the minerals on the tracts of land. A description o f the tracts followed. Confusion was created in Broussard because the language sets out a description of the surface of each tract for identification purposes and carves out undivided fractional surface interests in each tract. The conveyance of surface in terests

Page 901 was out of the described tracts, and the conveyance of a royalty interest was out of the described tracts. This court therefore concluded that the grantors intended that the one

- sixty

- fourth royalty in the lands described referred to th e tracts which were described in entirety. In the Grande

- Fogleman deed, a description by metes and bounds was given of the land. Standing alone, this description covered both the surface and the minerals. Since Grande did not own all the minerals, the description was modified by subtracting the one

- half previously severed mineral interest ("land" under Holloway ) from the description. The intent of the parties to have the above

- described land refer to all of the surface and one

- half the mine rals is further evidenced by language appearing at the conclusion of the Grande

- Fogleman deed: But it is expressly agreed that the Vendor's Lien is hereby retained against the above described premises and improvements until the indebtedness above m entioned, as evidenced by said promissory note, both principal and interest is fully paid, it being understood that when said note is paid in full this deed shall thereupon become absolute. If we are to accept the argument proffered by the court, t heoretically Grande retained and the Foglemans gave a vendor's lien on the half mineral interest which neither one of them ever owned. Certainly this was neither of the parties' intention. To determine the intent of these parties, we should constru e the language contained within the four corners of the Grande

- Fogleman deed. We can give effect to all parts of the instrument without violating any legal principles by holding that the provision in question was meant to be part of the description of the land in this deed. My regret is that my brethren have chosen not to do so. RAY, J., joins in this dissent.Hooks v. Neill, 21 S.W.2d 532 (Tex. App. - Galvesto n, 1929)

- 1 - 21 S.W.2d 532 HOOKS et al. v. NEILL et al. (No. 9320.) Court of Civil Appeals of Texas. Galveston.

July 18, 1929. Rehearing Denied October 24, 1929.

Page 533 Appeal from District Court, Harris County; Walter E. Monteith, Judge. Action by Charles G. Hooks and others again st Robert T. Neill and others, in which defendant named filed a cross-action against the Oxford Oil C ompany, R. H. Ward, and another. From the judgment, Hooks and the named cross-defendants appe al. Reformed and affirmed. Gordon O. McGehee and R. H. Ward, both of H ouston, for appellants. Kennerly, Williams, Lee, Hill & Sears, of H ouston, and Hill, Smith & Neill, of San Angelo, for appellees. LANE, J.
On the 18th day of November, 1902, Stephen Jackson, who owned 43 acres of land, a part of the Stephen Jackson league, near the town of Sour Lake, Tex., executed a deed wherein it is recited that " for and in consideration of the sum of twelve hundred ( $1,200) dollars to me in hand paid by Mrs. M. J. Mackey and Mrs. Dora M. Neill, and C. C. Todd, have granted, sold and conveyed, and by these pres ents do grant, sell and convey unto the said Mrs. M. J. Mackey and Mrs. Dora M. Neill of San Antonio [here a 1-acre tract of land, a part of the 43-acre tract, is described by metes and bounds], "to have and to hold the above described premises together with all and sing ular the rights and appurtenances thereto in anywis e belonging unto the said Mrs. M. J. Mackey and Mrs. Dora M. Neill, their heirs and assigns forever. And I do hereby bind myself, my heirs, executors and admi nistrators to warrant and forever defend all and singular the said premises unto the said Mrs. M. J. Mackey and Mrs. Dora M. Neill, their heirs and assigns against every person whomsoever lawfully claiming o r to claim the same or any part thereof." (Italics ours.) It will be noticed that, while the conveyan ce recites that C. C. Todd paid a part of the consi deration therefor, the land was in fact Page 534 conveyed to Mrs. Mackey and Mrs. Neill only. On the 29th day of April, 1903, C. C. Todd executed and delivered to Mrs. Mary Mackey a deed, wherein it is recited: "That I, C. C. Todd, a citizen of Beaumont, Texas, of the county of Jefferson, state of Texas, for and in consideration of the sum of two hundred sixty-si x and two-thirds ($266 2/3) dollars by Mrs. Mary J. Mackey of San Antonio, Texas and Co. of Bexar, have granted, sold and conveyed, and by these presents do grant, sell and convey unto the said Mary J. Mac key of the County of Bexar and State of Texas, all of my interest in that certain lot or parcel and tract of land being situated near Sour Lake, Texas, and which is a part of a 43-acre survey of land deeded to me in a subdivision among the heirs of Stephen Jackson , Sr., deceased, and which is a part of the Stephen J ackson league, and the metes and boundaries are mor e fully described as follows, to wit: [Same descripti on as contained in previous deed, to which referenc e is made.] Including within said bounds all of my inter est, that interest being one-third of an acre (1/3) and no more.Hooks v. Neill, 21 S.W.2d 532 (Tex. App. - Galvesto n, 1929)

- 2 -

"To have and to hold the above described pr emises together with all and singular the rights an d appurtenances thereto in anywise belonging unto the said Mary J. Mackey, her heirs and assigns forever ; and I do hereby bind myself, my heirs, executors an d administrators to warrant and forever defend all and singular the said premises unto the said Mary J. Ma ckey, her heirs and assigns against every person whomsoever lawfully claiming or to claim the same o r any part thereof." This recital is followed by the habendum an d general warranty clauses. Upon the death of Mrs. Mackey, such interest as she owned in the one acre of land became vested in James Mackey, and upon the death of Mrs. Dora Neill such interest in said land as she owned became vested in Robert T. Neill, and his sister, Mrs. Dora Neill Raymond. On the 30th day of July, 1925, James Mackey by special warranty deed conveyed all title and interest he owned in the one acre of land to R. L. Durham, trustee. On the 11th day of August, 1925, Robert T. Neill and Mrs. Dora Neil l Raymond by special warranty deed conveyed to R. L. Durham, trustee, all title and interest they own ed in the one acre of land, except such as was rese rved by the recital in the deed as follows: "It is hereby expressly agreed and understo od and made a part of this deed that there is excep ted and reserved to the grantors herein a one thirty-second part of all oil on and under the said land and pre mises herein described and conveyed, which shall be deliv ered to the grantors on the part of the land where produced. The grantors, however, give the grantee a nd his assigns the privilege of buying said one thi rtysecond part of said oil at the market price which i s paid for oil of like character in the same vicini ty. Settlement shall be made with the grantors on or be fore the 20th day of each month for oil extracted a nd saved during the preceding calendar month." On the 2d day of October, 1925, R. L. Durha m, trustee, by warranty deed conveyed the one acre of land involved to C. A. Kelly, wherein it is recited as follows: "Whereas, heretofore, to wit, on the 30th d ay of July, 1925, James R. Mackey, of Bexar county, Texas, conveyed to R. L. Durham, trustee, a certain tract or parcel of land hereinafter described; and "Whereas, on the ____ day of August, A. D. 1925, Robert T. Neill and Dora Neill Raymond _____ to R. L. Durham, trustee, a certain tract or parcel of land, both of said deeds being duly recorded in the Deed Records of Hardin county, Texas. [Here follows description]; "Whereas, said title to said above describe d premises was placed in the name of R. L. Durham, trustee, for the use and benefit of C. A. Kelly, of Harris County, Texas; and, "Whereas, said C. A. Kelly has paid the pur chase money for same: "Now, therefore, know all men by these pres ents that I, R. L. Durham, trustee as aforesaid, fo r and in consideration of a good, valid, and valuable consid eration to me in hand paid by C. A. Kelly, have bargained, sold, and conveyed, and by these present s do bargain, sell, and convey unto the said C. A. Kelly all the right, title and interest that I acqu ired as trustee by virtue of said deed from Frank B . Warner to R. L. Durham, trustee. * * * "It is expressly understood, however, that there is reserved from this conveyance a one-sixtee nth (1/16) of all oil and gas produced, saved and sold off of said premises, which one-sixteenth (1/16) of said oil and gas is to be run to the credit of the said Frank B. Warner in any pipe lines with which any we lls drilled on said premises may be connected." This deed was filed for record October 23, 1925. On the 21st day of October, 1925, R. L. Durha m, trustee, conveyed by his special warranty deed all his right, title, and interest in and to the one ac re of landHooks v. Neill, 21 S.W.2d 532 (Tex. App. - Galvesto n, 1929)

- 3 -

to the Oxford Oil Company. Such deed was filed for record December 19, 1925. The Oxford Oil Company conveyed a one-fourth interest in the one a cre to R. H. Ward. On the 9th day of December, 1925, R. L. Dur ham executed and delivered to C. A. Kelly a correct ion deed to the one acre, wherein it is recited that he (Durham) held the title to the land in trust for K elly, who paid the purchase money for same, and wherein it is recited as follows: "Whereas, in the last paragraph of said dee d from R. L. Durham, trustee, to the said C. A. Kel ly, it is stated that there is reserved from said conveyance one-sixteenth of all the oil and gas produced, save d and sold off of said premises, which one-sixteenth of s aid oil Page 535 and gas is to be run to the credit of Frank B. Warn er in any pipe line to which said wells drilled on said premises may be connected; and "Whereas, said recitation in said deed is a mistake, and that the said paragraph should read t hat there is reserved a one thirty-second royalty to Robert T . Neill and Dora Neill Raymond, instead of Frank B. Warner: "Therefore, know all men by these presents, that I, R. L. Durham, trustee, of the county of Ha rris and state of Texas, for and in consideration of a good, valid, and valuable consideration to me in hand pa id by the said C. A. Kelly, receipt of which is hereby ac knowledged, and for the purpose of correcting the e rror heretofore described, have bargained, sold, and con veyed, and by these presents do bargain, sell, and convey, unto the said C. A. Kelly all that certain tract or parcel of land hereinbefore described. "It is however expressly understood that th ere is reserved from this conveyance a one thirty-s econd of all oil and gas produced, saved and sold off of said premises, which one thirty-second of said oil and gas is to be run to the credit of said Robert T. Ne ill and Dora Neill Raymond in any pipe lines to whi ch any well drilled upon said premises may be connecte d." As both the Oxford Oil Company and Kelly we re claiming the one acre under their respective dee ds from Durham, and as both desired to have the land d eveloped for the discovery of oil, they, on the 14t h day of June, 1926, by agreement between them, made separate lease contracts with the Humphreys Corporation for such development; by the terms of s uch contracts Humphreys Corporation was to pay to Kelly and the Oxford Oil Company a one-sixteenth ro yalty of all oil and gas produced from the land. It was also agreed among said parties that the oil com ing to Kelly and the Oxford Company should be deposited with the Guaranty Trust Company until the ir respective rights to the land should be determin ed by the courts or by compromise. Immediately after s uch agreement the Humphreys Corporation took possession of the land, produced large quantities o f oil therefrom, which it sold to the Gulf Pipe Lin e Company. On or about the 12th day of July, 1926, Kel ly and the Oxford Company adjusted and settled thei r differences by an instrument in writing, whereby it was agreed that the Oxford Oil Company should convey to Kelly all of its right, title, and intere st in the land subject to the rights of the Oil Com pany to receive an undivided one-third of all the royalties coming from the development made of the land by th e Humphreys Oil Company. Such agreement was carried o ut by them, and the land was conveyed by the Oxford Oil Company to Kelly, and on July 26, 1926, Kelly conveyed all of his right in and to the land to Charles G. Hooks, subject to the rights of the Oxfo rd Company to the one-third royalties above mentioned. It is agreed by the parties that, while R. H. Ward was not a party to the agreement and settlement entered into between Kelly, the Oxford C ompany, and the Humphreys Company, he ratifiedHooks v. Neill, 21 S.W.2d 532 (Tex. App. - Galvesto n, 1929)

- 4 -

the same with the understanding that he was to be t he owner of one-fourth of the one-third royalties w hich were to go to the Oxford Company. At the time of the institution of the suit hereinafter mentioned the Humphreys Company was dri lling an additional well for oil on the land, and if oil is produced therefrom it will be delivered to the G ulf Pipe Line Company and held by it for those entitled to t he same. Charles G. Hooks instituted this suit again st the Gulf Pipe Line Company, the Oxford Oil Compa ny, Robert T. Neill, Mrs. Dora Neill Raymond, a feme so le, and R. H. Ward, and among other things alleged the matters stated above as facts, and further alle ged that he and the Oxford Oil Company and R. H. Ward, by virtue of the deed from Stephen Jackson to Mrs. Mary J. Mackey and Mrs. Dora M. Neill, and by virtue of the deed from C. C. Todd to Mrs. Mary J. Mackey, claimed that the said defendants Robert T. Neill and his sister, Mrs. Dora Neill Raymond, only owned a one-third interest in this tract of land, and when they conveyed all of their right, title, and i nterest in this land to said Durham, trustee, the o nly interest they conveyed to Durham was their undivide d one-third interest in the land, and the exception and reservation in the deed to R. L. Durham, trustee, h ereinabove set out, only reserved to Robert T. Neil l and Mrs. Dora Neill Raymond a one thirty-second interes t of the oil in their one-third interest in the land and premises conveyed

to R. L. Durham, trustee, and did not have the effect of reserving to them a one thirtysecond interest in the entire oil produced and to b e produced from the land and premises set forth and described in the petition; that, notwithstanding th e plain purport and intent of said exception and reservation in the deed, defendants Robert T. Neill and his sister, Mrs. Dora Neill Raymond, are claim ing and insisting that by virtue of said exception or r eservation in their deed they are entitled to recei ve a one thirty-second interest in all of the oil produced o n the land in controversy, whereas plaintiff and defendants Oxford Oil Company and R. H. Ward conten d that the interest of Robert T. Neill and Mrs. Dora Neill Raymond amounts only to one ninety-sixth of the oil produced and to be produced from said land and premises; that he endeavored to get divisi on orders signed by defendants Robert T. Neill and Mrs. Dora Neill Raymond, whereby they would be enti tled to receive a one ninety-sixth of the oil produced on the land, in order that plaintiff and t he other defendants might receive their proper prop ortion of the royalties, but that the defendants Robert T. Neill and Dora Neill Raymond refused to sign such division Page 536 orders, and insist that they are entitled to receiv e from the Gulf Pipe Line Company their one thirtysecond interest of all the oil produced and to be p roduced by the Humphreys Corporation and run throug h the pipe line of defendant Gulf Pipe Line Company; that the Gulf Pipe Line Company has no interest in this suit, and is a mere stakeholder, and is perfec tly willing to pay for all the oil received and run by it to the parties to this suit in proportion to their res pective interests, whenever the same can be adjuste d between the parties to this suit, and the defendant Robert T. Neill and his sister, Mrs. Dora Neill Raymond; that, in consequence of the claim of the d efendants Robert T. Neill and Mrs. Dora Neill Raymond, the defendant Gulf Pipe Line Company has r etained in its possession a one thirty-second interest of all the oil produced from the land, and will continue in the future to so do, until the cl aim of the defendants Robert T. Neill and Mrs. Dora Neill Raym ond can be settled; that if he be wrong in his clai m that defendants Robert T. Neill and Mrs. Dora Neill Raymond are only entitled to a one ninety-sixth of the oil produced and to be produced from the land i n controversy by virtue of said reservation or exception to the deed to Durham, trustee, then, in the alternative, plaintiff avers that under no circumstances were the defendants Robert T. Neill a nd Mrs. Dora Neill Raymond the owners of more than one-half of the land and premises, and were on ly entitled, by virtue of the reservation or except ion in their deed to Durham, trustee, to claim and receive a one sixty-fourth of the oil produced or to be produced and run through the pipe line of the defen dant Gulf Pipe Line Company.Hooks v. Neill, 21 S.W.2d 532 (Tex. App. - Galvesto n, 1929)

- 5 -

The plaintiff further alleged that, while R obert T. Neill and Mrs. Dora Neill Raymond were onl y entitled to one ninety-sixth of the oil produced fr om the one acre of land, the Gulf Pipe Line Company is unlawfully retaining and refusing to account for an d pay to the Oxford Oil Company, R. H. Ward, and plaintiff their respective portions of such oil, an d will continue such refusal until the provisions o f the deed from the Neills to Durham, trustee, can be con strued by the court. He further alleged that the Humphreys Corporation had produced from the land 40 ,000 barrels of oil, of the market value of $1.90 per barrel, and that it will continue to produce la rge quantities of oil from the land. The plaintiff asked that the court determin e by a decree that Robert T. Neill and Mrs. Dora Ne ill Raymond are only entitled to one ninety-sixth of th e oil produced and to be produced from the land; th at he have judgment against the Gulf Pipe Line Company , requiring it to pay to him his proper proportion of the one thirty-second of the oil now in possession of said company, together with that which it may receive in the future, and that an accounting be ha d in order to determine the exact amount of oil to which he might be entitled. The Oxford Oil Company and R. H. Ward adopted the allegations and prayer made by the plaintiff, and asked that they be adjudged t heir respective interests in the oil, and that they be awarded a judgment against the Gulf Pipe Line Compa ny for their respective interests in said oil. The defendants Robert T. Neill and Mrs. Dor a Neill Raymond, hereinbefore referred to as the Ne ills, answered by general demurrer, general denial, and b y averments that they jointly owned a one thirtysecond of all the oil on and under the one acre of land in controversy and the proceeds of the sale of the one thirty-second part of such oil sold by the Gulf Pipe Line Company, which are being held by said company and which amounted to the sum of $2,435.66 on December 1, 1927. They prayed for a decree establishing their rights, title, and interest in a nd to a full undivided one thirty-second of all oil theretofore produced and to be thereafter produced from the lan d in controversy, and for judgment against the Pipe Line Company for the full amount of the proceeds of the sale of said one thirty-second part of said oi l sold by the Pipe Line Company, and for a decree est ablishing in them title and ownership to the one thirty-second part of such proceeds as against plai ntiffs, Charles G. Hooks, the Oxford Oil Company, a nd R. H. Ward. These defendants also filed their cross-act ion against the Gulf Pipe Line Company, the Oxford Oil Company, R. H. Ward, and R. L. Durham, individually and as trustee under the deed executed by them to Durham, trustee. They alleged that said deed was ex ecuted and delivered by them pursuant to an explici t understanding between them and R. L. Durham that th ere should be reserved to them and excepted from the conveyance a full one thirty-second part of all oil on and under the land conveyed, and that such reservation and exception should be expressed in th e deed. They averred that, if such understanding is not clearly and adequately expressed in the deed or exp resses some contrary purpose, a failure to have wor ds clearly expressing such understanding written into the deed was the result of mutual mistake, by reaso n whereof the deed should be so reformed and correcte d as to express the true intent and agreement of th e parties. They averred that R. L. Durham, trustee, w as acting for and in behalf of all the parties to t he suit, except the Gulf Pipe Line Company. They prayed for an entry of judgment correcting and reforming the deed in the particulars above specified. The Gulf Pipe Line Company answered that it had in its possession the sum of $2,435.66, claime d by Robert T. Neill and Mrs. Dora Neill Raymond on t he one side, and the plaintiff Hooks and the defendants Oxford Oil Company, and R. H. Ward on th e other side, and that on account of such respective claims, it (the Gulf Pipe Line Company) could Page 537Hooks v. Neill, 21 S.W.2d 532 (Tex. App. - Galvesto n, 1929)

- 6 -

not make payment of such sum, and it asked the cour t to determine by a decree to whom the same should be paid. Plaintiff Charles G. Hooks, by supplemental petition, answering the cross-action of Neill and Mrs. Raymond, averred that the deed from Neill and Mrs. Raymond to Durham, trustee, is plain and unambiguous upon its face, and conveys only the rig ht, title, and interest in the land in controversy owned by such grantors, which he alleges was a one-third interest, or at most a one-half interest, dependent upon whether Mrs. Mackey owned a half interest only, or a two-thirds interest thereof; that the legal effec t of the exception and reservation clause in said deed w as to reserve to the grantors a one thirty-second o r a one ninety-sixth interest in the oil on and under t he land and premises conveyed, dependent upon the interest held and owned by them in such land. The O xford Oil Company and R. H. Ward adopted the allegations of the plaintiff's supplemental petitio n. On the 4th day of October, 1928, upon a req uest by Robert Neill and Mrs. Raymond, an interlocutory judgment by default was rendered in t heir favor as against R. L. Durham, individually an d as trustee, on their cross-action. The cause was tr ied by the court without a jury, and judgment incorporating the aforesaid interlocutory judgment rendered against Durham was rendered. By such judgment it was decreed that the plaintiff Charles G. Hooks take nothing by his suit against the defendants Gulf Pipe Line Company, Oxford Oil Compa ny, R. H. Ward, Robert T. Neill, and Mrs. Dora Neill Raymond; that the defendants Oxford Oil Compa ny and R. H. Ward take nothing as against Robert T. Neill, Mrs. Dora Neill Raymond, and the Gulf Pip e Line Company; and that Robert T. Neill and Mrs. Dora Neill Raymond recover on their cross-action ag ainst R. L. Durham, individually and as trustee, Charles G. Hooks, Oxford Oil Company, R. H. Ward, a nd Gulf Pipe Line Company for the sum of money in the possession of the Gulf Pipe Line Company as the proceeds of a sale of the one thirty-second of all the oil produced from the land in controversy. It is recited in the judgment that Robert T . Neill and Mrs. Dora Neill Raymond made, executed, and delivered their certain deed conveying all their ri ght, title, and interest in the land in controversy , describing the same by metes and bounds, pursuant t o an explicit agreement, theretofore made by and between them and R. L. Durham, individually and as trustee, that there should be reserved to grantors and excepted from such conveyance a full one thirty-sec ond part of all the oil on and under the land in controversy, and that such oil should be delivered to grantors, etc. It was further decreed that the d eed executed by Neill and Mrs. Raymond be corrected and reformed as of date August 11, 1925, so as to expressly reserve to Neill and Mrs. Raymond a full one thirty-second part of all the oil on and under the one acre of land. From the judgment so rendered, Charles G. H ooks, Oxford Oil Company, and R. H. Ward have appealed. The first contention of appellants is that by the deed of Stephen Jackson to Mrs. Neill and Mr s. Mackey they took a one-third interest each in the l and in controversy, and that C. C. Todd, who paid a part of the consideration to Jackson for the convey ance, took the other one-third interest therein, wh ich he passed to Mrs. Mackey by his deed to her; that the respective interests so acquired remained in Mrs. N eill and Mrs. Mackey at the time of the deaths of both o f them, and upon their deaths such title passed to their heirs hereinbefore named, but that in no event coul d it be held that, by the deed of Jackson to Mrs. N eill and Mrs. Mackey, Mrs. Neill took more than a one-ha lf undivided part interest in the land and premises conveyed. Upon such contention they base the further contention that, by the reservation clause in the d eed of Robert T. Neill and Mrs. Dora Neill Raymond to Durh am, trustee, such grantors reserved and exceptedHooks v. Neill, 21 S.W.2d 532 (Tex. App. - Galvesto n, 1929)

- 7 -

from the conveyance only a one ninety-sixth of all the oil on and under the entire tract of land, or o ne thirty-second of the oil on or under the premises c onveyed, which was an undivided one-third of the la nd; but, if it be conceded that the Neills took one-hal f undivided interest in the land under the Jackson deed, then, in that event, Robert T. Neill and Mrs. Raymo nd, by the reservation clause in their deed to Durh am, reserved and excepted from such conveyance a one si xty-fourth part or interest in all the oil on or un der the whole tract of land, or one thirty-second part of the oil on or under the premises conveyed, which was an undivided one-half part of the land. Upon such contention they further contend t hat the court erred in awarding to Robert T. Neill and Mrs. Raymond a one thirty-second of all the oil on or under the whole tract of land, or the proceeds o f the sale of such one thirty-second part of the oil take n from the whole tract. Appellees, on the other hand, contend that, by the deed of Jackson to Mrs. Neill and Mrs. Mack ey, title to an undivided one-half of the land in contr oversy passed to and was vested in each of the gran tees, to the exclusion of C. C. Todd, but that by virtue of the reservation clause in their deed to Durham a one thirty-second interest in the entire minerals, incl uding oil, on and under the whole acre tract belong ed to them. After a careful consideration of the provis ions of the deed of Jackson to Mrs. Neill and Mrs. Mackey, we have reached the conclusion that by such deed ti tle to the land Page 538 conveyed vested one-half in Mrs. Neill and one-half in Mrs. Mackey, each owning a one-half undivided interest therein; and after a careful examination a nd consideration of the undisputed evidence we have also reached the conclusion that, in the negotiatio ns between Durham and those representing the Oxford Oil Company and C. A. Kelly and the Neills, all par ties were negotiating under the understanding that the Neills were selling and the grantees were purchasin g a one-half undivided interest in the land, subjec t to the reservation clause inserted in the deed of the Neills to Durham. Having reached the conclusions above stated , we shall, in the decision and disposition of the other issues presented, do so under the holding that by t he deed of the Neills to Durham they conveyed to Durham, trustee, a one-half undivided interest in t he land in controversy, subject only to the reserva tion clause set out in said deed. We are now brought to a consideration of th e effect of such reservation clause; that is, as to whether by such clause the Neills reserved to themselves a one thirty-second part of all the oil on and under the whole tract of land, or whether they reserved there by only a one thirty-second part of the oil to be produced from the interest or premises owned and co nveyed by them, which was a one-half undivided interest in the land in controversy, and of the que stion as to the right of appellees, the Neills, und er their pleadings and the evidence, to a decree reforming t he deed by which they conveyed their interest in th e land to Durham, by inserting therein a clause clear ly stating that a one thirty-second of all the oil on and under the whole of the land is reserved and excepte d from the conveyance. We shall dispose of these tw o questions in the reverse order as mentioned. Appellants contend that the deed as a whole , including the reservation or exception clause, is free from ambiguity and uncertainty, and that according to the plain import and meaning of the language employed therein it should be, as a matter of law, construed as only reserving and excepting, at most, from the conveyance, a one sixty-fourth interest of the minerals on or under the land, as the deed pur ports to convey only an undivided one-half interest in th e land, and did not purport to convey a greater int erest than the Neills actually held, for it is expressly stated in the deed that "there is excepted and rese rved toHooks v. Neill, 21 S.W.2d 532 (Tex. App. - Galvesto n, 1929)

- 8 -

the grantors herein a one thirty-second of all of t he oil on and under said land and premises herein described and conveyed. " The appellees, however, while contending th at the language used is not uncertain or ambiguous, and that it clearly imports that grantors reserved and excepted from the conveyance one thirty-second of a ll oil on and under the entire tract of land, insist that, if in fact it does not clearly import such reserva tion and exception, they are entitled to the reformation the reof prayed for by them. We feel disposed to agree with the contenti on of both appellants and appellees that the langua ge used in the reservation clause of the deed in question i s not uncertain and ambiguous. The language so used clearly imports— in fact, it clearly states—that gr antors reserve and except from the conveyance one thirty-second part of all oil on and under the land and premises thereby conveyed. Now, it is clear, f rom all the facts and circumstances confronting the par ties at the time of the execution of the deed, that the premises conveyed was at most not more than a one-h alf undivided part of the land in controversy. In Harris v. Cobb, 49 W. Va. 350, 38 S. E. 559, a case wherein a Mrs. Meyers, who owned 52 acres of land, sold the same to a Mrs. Harris and in the deed rese rved to herself one-half of the usual royalties of oneeighth or one-sixteenth of all the oil on and under the land conveyed. In that case the court said: "A conveyance by Mrs. Harris of the whole t ract without mention of the reserved and excepted o nesixteenth part of the oil retained by Mrs. Meyers w ould in no wise disturb or affect the right or titl e of Mrs. Meyers. Mrs. Harris' deed was a matter of reco rd. The fifteen-sixteenths of the oil was vested in fee absolutely in Elizabeth J. Harris, and a sale by he r of the same with a reservation and exception of a ny designated part or proportion of it could not apply to that which she never had, but was still vested in her vendor. Any reservation or exception made to hersel f must be of her own. How could she reserve to herself that which she never owned? In Baker v. McD owell, 3 Watts & S. (Pa.) 358, B., who was seized in fee of a tract of land, subject to an outstandin g title to one-half of all iron ore found in the pr emises, conveyed the same to H. in fee, excepting and reser ving to the said B. his heirs and assigns, the one half of all iron ore found on the land. Held to be a res ervation to the grantor himself of that half of the ore which was vested in him, and not a mere notice or r eservation of the other half which was outstanding. " We think the holding in the case from which we have quoted is sound and should be followed, an d, as it is not contended by appellees that they owned any part of the tract of land in controversy in ex cess of one-half thereof, the exceptions or reservations em braced in their deed to Durham must be held to refe r only to the interest which they have in the land an d ore which they conveyed. The clear import and meaning of the words u sed by the Neills in their deed to Durham, the titl e to all their right, title, and interest in the land, which was a one-half undivided interest thereof, such de ed passed the title to Page 539 such interest to Durham, subject only to the reserv ation of a one thirty-second of one-half of the oil on and under the tract of land in controversy, or a on e sixty-fourth of all the oil on and under the enti re tract, and unless appellees have shown, by competent evide nce, under their plea of mutual mistake, that befor e the execution and delivery of their deed to Durham it was agreed and understood between them and Durham that they were to retain, reserve, and excep t from the conveyance a full one thirty-second of a ll oil on and under the entire tract in controversy, a nd that the failure to insert in the deed a clause to that effect was omitted by a mutual mistake of the grant ors and grantee, they are not entitled to a recover y of more than a one sixty-fourth part of all of the oil on and under the entire one acre of land, or its v alue, if taken from the land.Hooks v. Neill, 21 S.W.2d 532 (Tex. App. - Galvesto n, 1929)

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We have been unable to find in the record a ny evidence to support appellees' asserted mutual mistake. The negotiations between Robert T. Neill, for himself and his sister, on the one side, and R. H. Ward, attorney for Oxford Oil Company, acting for R . L. Durham, trustee, is shown by the several lette rs which passed between Robert T. Neill and R. H. Ward . It is shown by such letters and the testimony of Neill that Ward prepared a deed for Neill and his s ister to sign, conveying the interest held by Rober t T. Neill and his sister, Mrs. Raymond, in the one acre of land in controversy, which contains no reservat ion whatever. After receipt of such deed, and after sev eral letters had passed between Ward and Neill, Nei ll added to the deed sent to him by Ward the reservati on appearing in the deed from the Neills to Durham, which we have hereinbefore set out and many times r eferred to. Neill testified on direct examination t hat he adopted deed as prepared by Ward; that he took t hat deed and used it, by adding thereto the excepti on or reservation appearing in the deed which he and M rs. Raymond executed, and which he delivered to Durham; that, before the deed was executed and deli vered to Durham, he (Durham) agreed to give the Neills a one thirty-second of the oil on and under the land, and that he (Neill) agreed to this propos ition. Continuing, he said: "I then got hold of a blank deed, and I explained to Mr. Durham how I was going to draw that exception, and he said that was satisfactory." Now, following this conversation, Ne ill wrote into the deed the words there found, signifyi ng the understanding of the agreement entered into between him and Durham relative to the proposition of the oil to be reserved and excepted from the conveyance. The deed, however, was not delivered to Durham, but was mailed to R. H. Ward at Houston, after he had sent Neill two checks of the Oxford Oi l Company for $67.50 in payment for the interest in the land held by the Neills, which they conveyed to Durham as trustee. On cross-examination, Robert T. Neill testified that he did not deliver the deed to Durham in person; that Durham was not present at t he time the deed was drawn; that when he stated on dir ect examination that he had delivered the deed to Durham, he meant he delivered it to Durham by forwa rding it to his attorney; that he sent it to Judge Ward at Houston by mail. It is shown that the date on which Durham n egotiated with Neill in person was August 10, 1925. In a letter written by Neill to Judge R. H. Ward, of dat e August 26, 1925, he said: "I am in receipt of you rs of the 24th, returning cashier's check in the sum of $ 67.50, with request that I indorse it over to you. In view of the fact that I sent you the deed yesterday, rec iting a consideration of twice that amount, it occu rs to me that you may * * * send me another one [check] in l ike amount. I am, therefore, holding this check of $67.50 for the present, as it seems the expedient c ourse." It is apparent from this letter that the de ed was not delivered to Durham at the time he saw Neill on August 10, or at any other time, but that it was s ent to Judge Ward on the 25th of August, 1925, 15 days aft er Neill saw Durham and told him what exception he (Neill) would insert in the deed relative to the oi l, and to which exception, as written, Durham agree d. Appellees assume that appellants hold under the correction deed from Durham to C. A. Kelley, wherein the exception and reservation claimed by ap pellees is specially recognized, and wherein it is recited that it is "expressly understood that there is reserved from the conveyance a one thirty-secon d (1/32) of all oil and gas produced, saved and sold off of said premises," and upon such assumption contend that appellant took title subject to the re servation recited in such correction deed. In such assumption and contention appellees are in error. T he correction deed has reference to the original de ed of Durham to Kelley, only it in no way undertakes to c orrect the recitals in the deed from Durham to the Oxford Oil Company. It is elementary that the declarations of a grantee after he has parted with his title and pos session are never admissible, and a grantee cannot make an admi ssion, after he has sold his interest in the land, in disparagement of the deed by which he acquired titl e. Lott v. Kaiser, 61 Tex. 665; Lacoste v. Bexar County, 28 Tex. 420, at page 224; Thompson v. Herri ng, 27 Tex. 285; Smith v. Gillum, 80 Tex. 126, 15 S. W. 794; Clark v. Wells, 215 Ky. 128, 284 S. W. 9 1, 93.Hooks v. Neill, 21 S.W.2d 532 (Tex. App. - Galvesto n, 1929)

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The letters and telegrams from Durham to Ne ill, after he had parted with the title to the land , in disparagement of the deed by which he acquired the title, were inadmissible and incompetent to prove t he intention Page 540 of the parties in the execution of the deed; so, al so, was the correction deed to Kelley, especially s o as against appellants, who hold under the Oxford Oil C ompany title. There is no evidence to support appellees' plea of mutual mistake in the preparatio n of the deed from the Neills to Kelley. Robert T. Neill wrote the deed, and wrote into it the very words he intended to write, and which he even new contends clearly expresses the agreement entered into betwee n him and Durham, trustee, prior to the preparation of the deed. The deed was executed and delivered just as he prepared it. If, however, we should concede that the rec itals made by Durham in his correction deed to Kell ey in disparagement of his title acquired from the Neills , after he had parted with his title, were admissib le and competent evidence as against Kelley, we would neve rtheless hold that would not affect the title of appellants, who hold under the deed from Durham to the Oxford Oil Company. The deed from Durham to Kelley, though executed prior to the execution of h is deed to the Oxford Oil Company, was void as to t he Oxford Company, as Kelley's deed had not been filed for record until after Durham had, for a valuable consideration, conveyed the land to the Oxford Comp any. By article 6627, Revised Statutes of 1925, it is provided as follows: "All bargains, sales and other conveyances whatever, of any land, tenements and he reditaments, whether they may be made for passing any estate of freehold of inheritance or for a term of years * * * shall be void as to all creditors a nd subsequent purchasers for a valuable consideration without notice, unless they shall be acknowledged o r proved and filed with the clerk, to be recorded as required by law." By virtue of such statute, the Ox ford Company acquired title to the interest of the Neill s in the one acre of land, superior to any title th ereto conveyed to Kelley by Durham. It is agreed that one fourth of the oil res erved to the Oxford Company in its conveyance to Ke lley passed to, and is owned by, R. H. Ward. Such being the state of the title to the oil property or premi ses and the oil thereunder or thereon, conveyed by the Neills to Durham, up to the time Kelley conveyed al l his interest to Charles G. Hooks, he (Hooks) holds title to the whole of the property or premises, and the oil thereon or thereunder, together with the money in possession of the Gulf Pipe Line Company, subjec t only to that reserved by the deed of the Neills to Durham, which we have found, from the undisputed evidence, to be a one sixty-fourth part of the oil on and under the entire one acre of land, and one-h alf of the proceeds of the sale of oil taken from the land now in possession of the Gulf Pipe Line Company, a nd to that reserved to the Oxford Oil Company, in its conveyance to Kelley, which we have found from the undisputed evidence to be one-third of 63/64 of the oil on and under the land, and one-third of one-ha lf of the money in possession of the Gulf Pipe Line Compa ny as the proceeds of a sale made of oil taken from the land, which said one-third of such oil and mone y is owned, three-fourths by the Oxford Oil Company and one-fourth by R. H. Ward. Having reached the conclusions above expres sed, it is ordered that the judgment of the trial c ourt be and the same is here reformed, so as to decree to t he several parties their respective interests in th e oil on and under the premises in controversy, and their re spective portions of the funds in possession of the Gulf Pipe Line Company as proceeds of the sale of oil pr oduced from the land, as indicated by what we have said above, and that the judgment, as so reformed, be affirmed. Reformed and affirmed.Hooks v. Neill, 21 S.W.2d 532 (Tex. App. - Galvesto n, 1929)

- 11 -King v. First Nat. Bank of Wichita Falls, 192 S.W.2 d 260, 163 A.L.R. 1128 (Tex., 1946)

- 1 - 192 S.W.2d 260 KING v. FIRST NAT. BANK OF WICHITA FALLS.

No. A-705. Supreme Court of Texas. January 30, 1946. Rehearing Denied February 27, 1946.

Page 261 Error to Court of Civil Appeals of Second S upreme Judicial District. Action involving construction of a deed by B. W. King against the First National Bank of Wichita Falls, as executor and trustee. A judgment adverse to plaintiff was affirmed by the Court

of Civil Appeals, 189 S.W.2d 347, and plaintiff bri ngs error. Judgments of the trial court and the Court of Civil Appeals affirmed. Marshall & King, of Graham, and Critz, Kuyk endall, Bauknight, Mann & Stevenson and Richard Critz, all of Austin, for petitioner. Harris & Martin, of Wichita Falls, for resp ondent.

FOLLEY, Justice.

This suit involves the construction of a de ed dated June 7, 1939, wherein J. E. Duncan, now deceased, was the grantor and the petitioner, B. W. King, the grantee. The respondent, First National Bank of Wichita Falls, is the trustee and executor under the will of J. E. Duncan and appears in this suit in that capacity. At the time of the conveyance Duncan and Ki ng were the joint owners in fee simple of two tract s of land in Young County, totaling 240 acres, each owni ng an undivided one-half interest. In the deed Duncan conveyed his half interest to King, reservin g or excepting a royalty interest therein. The amou nt of such interest reserved is the sole controversy i n this suit. The pertinent portions of the deed are as f ollows: "That J. E. Duncan, a single man, having ne ver been married, of the County of Young, State of Texas, for and in consideration of the sum of Ten a nd No/100 Dollars, and other good and valuable consideration, all cash to me in hand paid by B. W. King, the receipt of which is hereby acknowledged, have Granted, Sold and Conveyed, and by these prese nts do Grant, Sell and Convey unto the said B. W. King, of the County of Young, State of Texas, all t hat certain undivided one-half (1/2) interest (bein g all of the interest owned by the grantor) in and to the following described land situated in Young County, Texas, to-wit: "1st Tract—West one-half of T. E. & L. Comp any Survey No. 461, Abstract No. 668, containing 16 0 acres more or less. "2nd Tract—Southeast one-fourth of T. E. & L. Company Survey No. 460, Abstract No. 667, containing 80 acres, more or less. "The grantor hereby reserves unto himself, his heirs, successors and assigns for a period of t en (10) years only from this date an undivided one-eighth ( 1/8) of the usual and customary one-eighth royalty interest reserved by the land-owner in oil and gas and other minerals that may be produced from the hereinabove described land; the grantee, his heirs and assigns shall have the right and privilege of m aking, executing and delivering oil and gas leases on said land and shall receive all bonuses, rentals and re newals derived from the giving of or execution of any such oil and gas leases provided, however, any oil and gasKing v. First Nat. Bank of Wichita Falls, 192 S.W.2 d 260, 163 A.L.R. 1128 (Tex., 1946)

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lease so given shall provide for a royalty of not l ess than one-eighth of the oil and gas and other mi nerals produced, saved and sold from the said land. "The grantor, his heirs and assigns, shall never be required or entitled to join in the execut ion of any oil and gas lease on said land but the grantee, his heirs and assigns shall give such oil and gas leas es. "(By the term royalty as used in this reser vation is meant the usual and customary one-eighth of all oil and gas and other minerals produced, saved and sold from the premises.) "This reservation shall terminate at the ex piration of ten (10) years from this date and the r eserved estate shall revert to the grantee, his heirs and a ssigns." The petitioner contends that since a one-ha lf interest was conveyed in the land, the grantor r eserved only one eighth of one half of the usual one-eighth royalty in the entire 240 acres. The respondent contends that the reservation covers and includes o ne-eighth of the one-eighth royalty in the entire 2 40 acres. The trial of this issue in the district cour t resulted in a judgment for respondent decreeing t hat the grantor reserved an undivided one-eighth of the usu al one-eighth royalty upon the whole land and not a n undivided oneeighth Page 262 of one-half of such royalty. The judgment granted p etitioner King the fee-simple title to all the land less an undivided one-eighth of the usual one-eighth roy alty derived from the total production of oil, gas or other minerals from the entire land for the ten-yea r period stipulated in the deed, which interest so reserved was granted to the respondent bank. The ju dgment of the trial court was affirmed by the Court of Civil Appeals. 189 S.W.2d 347. The inquiry in this case does not call for a discussion of the refined and subtle distinctions between a reservation and an exception in a deed, which terms are frequently used interchangeably and indiscriminately. Reynolds v. McMan Oil & Gas Co., Tex.Com.App., 11 S.W.2d 778; 26 C.J.S., Deeds, § 137, p. 439. It is sufficient to note that the prop erty excepted or the estate reserved is never inclu ded in the grant. Each is something to be deducted from the th ing granted, narrowing and limiting what would otherwise pass by the general words of the grant. I n this instance, however, at the time of the convey ance, the grantor actually owned one-half or four-eighths of the minerals under the entire land, or all or e ighteighths of his undivided one-half interest, and thu s, without incongruity, the one-eighth portion of t he royalty reserved could relate either to the whole o r the one-half interest in the land, depending upon the intention of the parties from the language of the e ntire instrument. In support of his contention that the lesse r interest was excepted from the deed the petitione r cites and relies upon only one case involving a reservati on of royalty in a deed conveying a fractional inte rest, and that is Hooks v. Neill, Tex.Civ.App., 21 S.W.2d 532, 534, writ refused. In that case the grantors, who owned an undivided one-half interest in an acre of land, conveyed all the title and interest they owne d, subject to a reservation of a "one thirty-second pa rt of all oil on and under the said land and premis es herein described and conveyed * * *." (Italics ours.) It was there held that the deed reserved one thirtysecond of one-half of the oil of the entire land, o r one sixty-fourth of the oil on and under the whol e acre, and not one thirty-second thereof as contended by g rantors. The decision turned upon the words "and conveyed" used in the reservation clause of the dee d. Such words were emphasized by italics in the court's opinion, and in connection with the languag e used the court said: "* * * The language so used clearly imports—in fact, it clearly states—that gra ntors reserve and except from the conveyance one thirty-second part of all oil on and under the land and premises thereby conveyed. Now, it is clear, f romKing v. First Nat. Bank of Wichita Falls, 192 S.W.2 d 260, 163 A.L.R. 1128 (Tex., 1946)

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all the facts and circumstances confronting the par ties at the time of the execution of the deed, that the premises conveyed was at most not more than a one-h alf undivided part of the land in controversy." The case cited may be clearly distinguished from the instant suit in that we have no language in the deed before us which restricts or limits the reserv ation to the land described "and conveyed." We think the true intention of the parties to the conveyance herein is clearly and affirmative ly expressed in the deed. The granting clause specifie s that the grantor is conveying an undivided one-ha lf interest, which was all he owned, "in and to the following described land situated in Young County, Texas." (Italics ours.) This language points forwar d to what immediately follows in the instrument whi ch is a description of each tract of land as a whole. Then comes the reservation clause which points backward to the same land described as a whole. In such clause grantor excepts from the "hereinabove described land" an undivided one-eighth of the "usu al and customary one-eighth royalty reserved by the landowner", which, as a matter of judicial knowledg e, we know is one-eighth of the oil and gas produce d from land as a whole. State Nat. Bank of Corpus Chr isti v. Morgan, 135 Tex. 509, 143 S.W.2d 757. Such clause further provides that the grantor, his heirs and assigns shall have the right to execute oil an d gas leases upon "said land", and receive all bonuses, r entals and renewals derived therefrom, which author ity, however, is limited in that any lease so executed m ust provide for a royalty of not less than one-eigh th of the oil, gas or other minerals produced from "said land". These provisions obviously refer to the enti re land. It is further provided that the grantor, his heirs and assigns, shall never be required or entit led to join in the execution of any oil and gas lease on "said land", which in our judgment necessarily refers to the entire land. Lastly, the parties define the term "r oyalty" as used in the reservation as being the usu al and customary oneeighth Page 263 of all oil, gas and other minerals produced from th e "premises", which again refers to the whole inter est, since oil or other minerals would necessarily be pr oduced from the whole land irrespective of the ownership of undivided shares thereof. Therefore, l ooking forward from the granting clause and backward from the reservation clause it seems evide nt that the terms "following described land", "hereinabove described land", "said land", and "pre mises", refer not to the one-half interest actually conveyed, as in Hooks v. Neill where the reservatio n was so limited, but relate to the intervening paragraphs of the deed wherein the "1st Tract" and the "2nd Tract" are particularly described as a who le in units of 160 acres and 80 acres, respectively. By the language used the contracting partie s clearly designate the dividend, the divisor and t he quotient of royalty with which they were dealing in the reservation clause. They had in mind the entir e 240 acres when they referred to the "usual and cust omary one-eighth royalty" from which the one-eighth portion was to be reserved, and consequently the di vidend is the entire royalty, the divisor of course is eight, and the quotient follows as a matter of simp le division. Thus in the same manner they measured the interest conveyed in the granting clause, which was one-half of the entire land, the parties used the entire royalty of all the land as the quantity from which the fractional portion of one-eighth should be deri ved, which method of computation resulted in a quotient of one-eighth of the royalty from the entire land. The judgments of the trial court and Court of Civil Appeals are affirmed.

### PROPERTY CODE

TITLE 4. ACTIONS AND REMEDIES
CHAPTER 22. TRESPASS TO TRY TITLE

SUBCHAPTER A. GENERAL PROVISIONS Sec. 22.001. TRESPASS TO TRY TITLE. (a) A trespa ss to try title action is the method of determining title to lands, tenements, or other real property. (b) The action of ejectment is not available in th is state. Acts 1983, 68th Leg., p. 3509, ch. 576, Sec. 1, eff . Jan. 1, 1984.
http://www.statutes.legis.state.tx.us/Docs/PR/htm/P R.22.htm

### BUSINESS ORGANIZATIONS CODE
TITLE 1. GENERAL PROVISIONS
CHAPTER 9. FOREIGN ENTITIES

SUBCHAPTER B. FAILURE TO REGISTER
Sec. 9.051. TRANSACTING BUSINESS OR MAINTAINING CO URT PROCEEDING WITHOUT REGISTRATION. (a) On applicati on by the attorney general, a court may enjoin a foreign fili ng entity or the entity's agent from transacting business in thi s state if:

(1) the entity is not registered in this state; o r (2) the entity's registration is obtained on the basis of a false or misleading representation. (b) A foreign filing entity or the entity's legal representative may not maintain an action, suit, or proceeding in a court of this state, brought either directly b y the entity or in the form of a derivative action in the entity 's name, on a cause of action that arises out of the transaction of business in this state unless the foreign filing entity is r egistered in accordance with this chapter. This subsection does not affect the rights of an assignee of the foreign filing ent ity as:

(1) the holder in due course of a negotiable instrument; or

(2) the bona fide purchaser for value of a warehou se receipt, security, or other instrument made negotia ble by law. (c) The failure of a foreign filing entity to regi ster does not: (1) affect the validity of any contract or act of the foreign filing entity;

(2) prevent the entity from defending an action, suit, or proceeding in a court in this state; or

(3) except as provided by Subsection (d), cause an y owner, member, or managerial official of the foreig n filing entity to become liable for the debts, obligations, or liabilities of the foreign filing entity.

### (d) Subsection (c)(3) does not apply to a general partner

of a foreign limited partnership. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
http://www.statutes.legis.state.tx.us/Docs/BO/htm/B O.9.htm

### BUSINESS ORGANIZATIONS CODE
TITLE 1. GENERAL PROVISIONS
CHAPTER 9. FOREIGN ENTITIES

SUBCHAPTER B. FAILURE TO REGISTER Sec. 9.052. CIVIL PENALTY. (a) A foreign filing entity that transacts business in this state and is not re gistered under this chapter is liable to this state for a ci vil penalty in an amount equal to all:

(1) fees and taxes that would have been imposed by law on the entity had the entity registered when fi rst required and filed all reports required by law; and

(2) penalties and interest imposed by law for fail ure to pay those fees and taxes. (b) The attorney general may bring suit to recover amounts due to this state under this section. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006.
http://www.statutes.legis.state.tx.us/Docs/BO/htm/B O.9.htm

### BUSINESS ORGANIZATIONS CODE
TITLE 1. GENERAL PROVISIONS

CHAPTER 1. DEFINITIONS AND OTHER GENERAL PROVISIONS

SUBCHAPTER A. DEFINITIONS AND PURPOSE
Sec. 1.002. DEFINITIONS. In this code: (29) "Foreign filing entity" means a foreign entity , other than a foreign limited liability partnership, that registe rs or is required to register as a foreign entity under Chapter 9. http://www.statutes.legis.state.tx.us/Docs/BO/htm/B O.1.htm