John T. Boy d, C hie f Just ic e ( Ret .) , Se ven th C o urt of Appea ls , s itti ng by 1 ass ig nment. Tex . G ov ’tC ode An n. §7 5.002( a) (1 ) (V er non 200 8)

. NO. 07-08 -035 5-CV IN THE CO UR T OF APPEA LS FO R THE S EVEN TH D ISTRI CT O F TEXAS

AT AM AR ILLO PAN EL E JU NE 23, 2009

_________

_________

_________

___ CAMBRIDGE PRODUCTI ON, INC., APPE LLA NT
v. GEOD Y NE N OM IN EE C OR PORATION , W ILLIA M L. ARRINGT ON AND AMARILLO NAT IONAL BANK, AND CO LUM BU S T. H ELTON , ET A L., APPEL LEES

_________

_________

_________

______ FRO M T HE 31 DIS T RI CT COU RT OF HE MP HI L L COU NT Y; ST NO. 593 3; HON. ST EVE N RAY EMMERT, PRES IDING

_________

_________

_________

____ Before HANCOCK and PIRT LE, JJ., and BOYD, S.J. 1 OPIN ION This appeal ar is es from a s ummary j udg ment rendered in a sui t f il ed by appel lan t Cambr idg e Product ion , I nc. ( h e rein Cambr idg e) ag ain st appel lee s G eody ne N ominee Cor porati on ( herein Geod y ne) , Amarillo N a tional Bank ( herein AN B) , and W il li am L. Ar ri ng ton ( herein Ar ri ng ton)

. The s uital so named as defendants numerous mineral and/or2

ro ya lt y in t e re s to wn e rs in S e c t io n 3 3 , B lo c kM- 1 , H & G N R y. S u rve y, He m p h il l C o u n t y, Tex as, full y

enumerated in Cambr idg e’s pl eadi ng i n the under ly ing su it( herein Secti on 33
neces sar

y de f e n dants ) and Ve rn eal Prater and w ife J uani ta P ra ter ( herein Secti on 39
nece ssarydefend ant s). A recitat ion of the som ewhat com plicate d proce dura l history is
neces sar

y to our di sc uss ion of the a ppeal

. In t he s uit , C ambri dg e s oug ht t he te rm inati on of forty -four ( 44) oi l and g as lea ses (the Se ction 3 3 lease s) and a relat ed p oole d un it (the Prate r un it ) as w ell as dam ages. Cam bridge is the lessee u n d e r new oil and g as lease s (the ne w Section 33 lease s)
cov er ing the same l eased premis es as the S ect ion 33 l eases
. The defendants w ere the
ow ners o f the Secti on 33 lea ses
. The nece ss a ry d e f e ndants w ere the ow ners o f the mineral int erest s i n Secti on 33 and t he l ess ors i n bot h the Secti on 33 lea ses and the n ew Sect ion 33 l eases
. The Sec ti on 39 neces sar y defendan ts we re t h e ow ners o f mineral int erest s u nder

Secti o n 3 9 with w hic h the Secti on 33 lea ses had been po ole d i nto t he Prater U nit

. The Sec ti on 33 lea ses prov ide d for a pr imar y term of f iv e y ears f ro m thei r date and for as long therea f

ter as oil, gas or ot h e r h yd ro carbo ns, or oth er mine rals or lease subs tanc es w ere produce d from t he l eased premis es or from l ands w it h w hic h the l eased premis es w ere pool e d or uni ti z ed. The fiv e y ear pr imar y ter m of the Se cti on 33 lea ses ex pired on Jul y

18, 1983, and there w as no producti on of oi l, g as, or othe r minerals dur ing that ter m from Secti on 33. In mat er ial par

t, the p ool ing prov is ion s i n al l but o n e o f t h e Secti on 33 lea ses prov ide d:3

7. P ool ing

. Less ee is hereby g ra nted the ri g ht, at any ti me and from ti me to ti me, w hether before or af

ter produc ti on, to pool thi s l ease for th e product ion of oil , g as or co ndens ate, or

any or ei ther of them.

. . . Such pool ing sh all be e ffect ed bythe fili ng byLessee of a w ri tten desi g nati on i n the county or co unti es, in w hic h the premis es are locat ed, i denti fyi ng and desc ri bin g the poo led un it. Th e prod uction of oil, g as or cond ensa te f rom a ny z one of the land so pool ed and the d ev e lop ment and operati on on suc h l and, inc lud ing the commen c e me n t , d r i l l i n g , c o mp l e t i o n a n d o p e ra t i o n o f a w e l l t h e re o n , o r the existence th ereo n of a shut -in gas w ell, shall be conside red an d con strued and shall hav e the same effect , ex ceptfor the pay ment of roy alty , as product ion , dev elo pment and ope rat io n , or the existence of a shut-in gas w ell on the leased prem ises, re g ardle ss of the l ocat ion of the w ell on t he uni t. Thir ty -n ine ( 3 9 ) of these forty -four l eases w ere s ubseq uentl y amended to prov ide that Sect ion 33 coul d be pool ed w it h other la nds to for m a consol ida ted p ro ra ti on uni t, prov ide d that the l ess ee mus t poo l at l easttw o- thi rd s o f the l ands cov ered by sa id lea se. In pe rt ine nt pa rt , t he pool ing prov is ion i n the remaini ng Secti on 33 lea ses prov ide d: 7. Le ss ee i s h ereby

granted the ri g ht to pool or unit iz e this lease, the la nd c ov ered by i t w it h any

othe r lan d, l ease, l eases , mi neral est ates o r p a rt s t hereof for the p ro d u c t io n o f o il , li qu id h yd ro c a rb o n s a n d a ll ga s s e s a n d t h e i r r e s p e c t ive cons ti tuentproduct s o r any of t hem.

. . . Less ee shal l file w ri tten uni t des ig nati ons in the c ounty

i n w hic h the premis es are l ocat ed. Such uni ts m a y b e des ig nated eit her before or

after the compl eti on o f

we lls , and l ess ee may reduce , enl arg e, modify or di ss olv e s uch uni ts at an y ti me pr ior

to the d is cov er

y of oil or g as on th e pool ed ac re ag e, or , after di sc o very o f

o il or g as at an y

ti me sub seq uent to t he ces sat ion of product ion thereof byfil ing a w ri tten decl arati on to such ef fect in t he sa m e co u n ty. Drilli n g op e ra ti o n s a n d pro d u ct io n on an y pa rto f th e po o le d ac re a ge shal l be treated as if su ch dr il li ng operati ons w ere upon or su ch product io n w as from the lan d des cr ibe d i n thi s l ease w hethe r th e w ell or w ell s b e l ocat ed on the lan d c ov ere d b y thi s l ease or not. The en ti re ac re ag e pool ed i nto a uni t s hal l be treated for al l purp o se s, ex ceptthe pay ment of roy alt ies on p ro duct ion from t he pool ed uni t, as if i t w ere i ncl uded i n thi s l ease
. . . . On J anuar

y 3, 1980, the P ra ter

1- 39 w ell ( herein Prater N o. 1 w ell ) w as compl eted in the interval betw een 14,3 64 feetand 14,3 72 feet , and it has cont inue d to prod uce so lely from thati nter

v al si nce it s compl eti on. On Ma y 9, 1980, Geody ne’ s p re deces sor-i n- ti tl e, Northe rn Natural Gas Com pan y , execu t e d a n d f iled in the Deed Reco rds of Hemp hill4

Cou nty , t he D esi g nati on of the Prater No. 1 Uni t w hic h pool ed the Sect ion 33 lea ses w it h the S ect ion 39 l eases
. In pe rt ine nt pa rt , t hat u nitdes ig nati on prov ide d: . . . Declarant h ereb y

designate s a unit to be know n as the Prate r No. 1 Unit (the “Unit”) for the purp oses of exploring, drilling , minin g and ope rating fo r, produci ng and ow nin g hy drocar bons produce d f ro m w ell s c las si fied as “ g as w ell s” by

the Rai lro a d Commis si on of Tex as, I NS OF ARAN D ON LY IN SOF ARas the Lease s cov er and appl y

to that cer

tai n 704 acres of land in Hemph ill County , Tex as, more par ti cul ar ly des cr ibe d on Ex hib it“ B” attac hed hereto a nd made a par t hereof for a ll pur poses and the strati g ra phi c e q uiv ale nt be tw een t he dept hs of 14,634 feet and 14,929 feet bel ow the sur face encountered i n the Prater N o.1 W ell l ocat ed th ereon ( the “Unit Acreage”). The uni t des ig nati on also incl uded a prov is ion allo w ing its amendment “a t any ti me and from ti me to ti me i n order to (1 ) cor re ct any

er ro r herein , . . . . ” Geody ne’ s p re deces sors- in- ti tl e fil ed an Amended Des ig nati on of Prat er U nitN o. 1 (Unit Desig nat ion N o
. 2 ) wh ich am end ed Unit Designatio n No. 1 to include a lease
ow ned by Ar ri ng ton and Georg e W

. Ar ri ng ton. Bey ond addi ng the ne w le a se , no subs tanti v e c hang es w ere made t o U nitD esi g nati on N o. 1 by the sec ond uni t des ig nati on. On F ebr uar

y 3, 1982, appel lee s’ predece ss ors- in- ti tl e fil ed an a m e nded de si g nati on of Prater Uni t No. 1 (U nit Des ig nati on No. 3) w hic h amended the desc ri pti o n of th e Prater Uni t t o i ncl ude add it ion al lan ds in Sect ion 33 b ut di d notch ang e the referenc e to the stratigraphic equiv alen t betw een the dep ths of 14,6 34 feetand 14,9 29 feetconta ined in Uni t D esi g nati on N o. 1. An other uni t des ig nati on ( Uni t D esi g nati on N o. 4) dated M ay 10, 1990, w as prepared by the then ow ners o f th e Secti on 33 lea ses w hic h pur por ted t o am end the Prat er Unit No. 1 to includ e the stratigraph ic equiv alen t of the inte rv al in w hich the p ro duci ng per

forati ons w ere l ocat ed, i .e., 14,3 64 and 14,372 feet bel ow the s ur face. Ho we ve r, t h is in s t ru m e n twa s n e ve r f il e d in t h e De e d Re c o rd s o f He m p h il l C o u n t y.5

It is undi sput ed th at si nce Janua ry 1, 1980, no oi l, g as, or othe r minerals hav e been produce d from t hat p art of S ect ion 39 l ocat ed i n the areal extent of the Prater U nit , ot her than from the Prater 1- 39 w ell , and t hat p ro duct ion has been from per forati ons loc ated at a de pth of

1 4,3 64 feett o 14, 372 feetsu bsurface. It is a lso und ispute d tha t since Jan uary 1, 19 80, n o del ay

rental s o r shut -i n roy alty pay ments hav e been made i n c onnec ti on w it h app ellees’ oil and g as lease s cov ering Section s 33 or 39, no oil, ga s , o r o t h e r m inerals hav e been produce d from S ect ion 33, and no dr il li ng or rew or ki ng operati ons hav e been condu cte d on Sect ion 33. It is al so undi sput ed th at s inc e J anuar y 1, 1980, the P ra ter

1-39 w ell has co nti nued to p ro d u ce f ro m the per forati ons loc ated at a depth of 14,364 t o 14, 372 feet. The
neces sar

y defendants hav e been pai d and acc epted ro y alt ies from t hat p ro d u ct ion to
w hic h the y

w oul d notothe rw is e be enti tl ed inas much as the w ell is not loc ated on Secti on 33. On M arch 18, 1 999, Geody ne and Ar ri n gton ex ecut ed, a nd fil ed i n the D eed Records of

Hemp hill County, an am end ed d esignati o n o f Prater Unit No. 1 (Unit D e s i g n a t i o n N o
. 5 ) w h i c h re c i t e d t h a t t h e d e s c r i p t i o n o f t h e s t ra t i g ra p h i c e q u i v ale nt of dep ths be tw een 14,6 34 a nd 1 4,9 29 encou nte red i n the Prater No.1 W ell w as the result of a scriv ene r error and the de signati o n s “ s hou ld have bee n limited to the correct stratigraphic equiv alen t of dep ths be tw een 14,3 64 a nd 1 4,9 29 b elow the surface encou ntered i n the Prater N o. 1 W ell .” O n D ecember 30, 2 005, AN B ( suc ces sor to G e o rg e W

. A r r i n g t o n ) e x e c u t e d a n d fi l e d i n t h e D e e d R e c o rd s o f H e mp h i l l C ounty , an Am e n d e d D e s i g n a t i o n o f P ra t e r U n i t N o
. 1 , ( U n i t D e s i g n a t i o n N o
. 6 ) t h a t ra t ified and confir med U nitD esi g nati on N o. 5.6

In ea rl y 1999, Cambri dg e obtaine d f ro m the mineral in terestow ners i n Secti on 33, oil , g as, and mineral top l eases ( the n ew Secti o n 3 3 l e a se s). Each of thes e l eases cont ain ed a prov is ion thati n the ev ent t here w as a present ly ex is ti ng oi l and g as lea se on the prem ises, the lease covered th e lessor’s rev ersiona ry intere st but w as subje ct to “such pr ior l ease, l ease modific ati on or uniti z ati on ag re ement, ins ofar as the same i s v ali d .

. . .” T hey also provi ded thatCa mb ridge was giv en “the right to ma ke w ritten de ma nd o n be half of Less or

. . . to re lea se of rec ord s uch ex is ti ng oi l and g as lea se and to tak e suc h oth er and furt her

ac ti on as may

be n eces sar

y to obtai n s uch re lea se
. . . .” On c ro ss -mot ion s for

su mmary jud g ment, the tr ial cour t g ra nted appel lee s’ moti on for sum ma ry

judgmen t and ente red judgm entdeclaring the Se ction 3 3 lease s and the unit desi g nati ons creati ng the Prater U nitw ere i n full forc e and effect and that the n ew Secti on 33 l eases w ere c ancel ed. In pu rs uin g the appeal , C ambri dg e present s t hree i ss ues for our deci si on. In t he f irst issue, it conte nds: (a ) In int er preti ng the Uni t D esi g nati ons, the tr ial co urt er re d i n i g nor ing the pla in meanin g of the c lea r and una mbig uous lan g uag e descr ibi ng the Prater Unit by imp ermissib ly u s in g extri nsic evi den ce (not referred to in the Unit Des ig nati ons) to (i ) find an all eg ed obv iou s e rror i n the des cr ipt ion of the Prater U nit , as w ell as ( ii ) prov ide a ba si s for co rrect ing the all eg ed er ro r. (b) The trial court erred in hold ing the Unit Designation s Nos. 5 an d 6 w ere ef fective to am end the Unit Designatio ns so as to includ e the stratigraph ic eq uiv ale nt of 14, 634 feet an d 14, 929 feet be low the sur face enc ountered in the Prater No.1 W ell. (c ) The tr ial co urt er re d i n hol din g thatsi nce the Pra ter U nitcreated by

the Uni t Des ig nati ons must be cons tr ued to inc lud e the produci ng i nter v al in the Prate r 1-39 W ell, produ ction f rom th at w ell perp etu ate d bot h the Prater Unit and t he Sect ion 33 L ease s, and Camb ridge has no cau se of action against the Defend ant s.7

In its secon d issue, Camb ridge conten ds: (a ) The summar

y j udg ment ev ide nce conc lus iv ely es ta bli shed that the Sect ion 33 L eases ter minat ed pr ior to Ma rc h 3, 1999. (b) The summ aryjudgmen t evi den ce con clusiv el y e s ta bl i s he d tha t any claim by the Defend ant s for re for m ati on of the U nitD esi g nati ons is bar re d by the four y ear

st atute of li mita ti ons cont ain ed i n T EX
. C IV
. P R AC
. & R EM
. C ODE §16.051

. (c) T he su mm aryjudgmen t evi den ce con clusiv ely esta blished tha t the Unit Des ig nati ons w ere notambi g uous, but must be const ru ed as descr ibi ng the Prater U nitas the strati g ra phi c eq uiv ale nt betw een the depths of 14,634 a nd 14, 929 feetbelow the surface a s enco unt ered in the Prat er No. 1 W ell. (d) The summ aryjudgmen t evi den ce con clusiv ely esta b li s h e d tha t Unit Des ig nati ons No. 5 an d 6 w ere v oid and w it hout effectas to Sect ion 33. (e ) Geody ne and Ar ri ng ton fai led to meet thei r summar y j udg ment burden o f p roof on th e i r

a ffi r ma t i v e d e fe n s e o f quasi es toppel , s o as to precl ude Cambr idg e’s Sec ond M oti on for Summary Ju dg ment. In i ts thi rd i ss ue, Cambr idg e cont ends: “B ased on the summar y j udg ment ev ide nce, the Cou rtsh oul d reve rse the F ina l Judg ment t o the extent itg ra nts D efendants’ M oti on for Summary

Ju d gm e n t and render j udg ment g ra nti ng C ambri dg e’s Sec ond M oti on for Sum ma ry

Judgme nt on Ground s No. 1, 2, 5 a nd 6 .” The first ground of C ambri dg e’s Sec ond M oti on for Summary Ju dg ment pos it ed tha t Camb ridge w as en titled to ju dgme nt beca use it was u ndisp ute d tha t the primary term of the Se ction 3 3 lease s ex pired prior to July 19, 198 3, an d, since Janu ary1, 198 0, no oil, g as, or othe r minerals had been produce d from S ect ion 33 o r from l ands pool ed th erew it h and t hat no del ay

rental s o r shut -i n roy alty pay ments w ere made i n c onnec ti on w it h Sect ion 33 l eases
. Ground N o. 2 arg ued that the las t of the Ini ti al Uni t D esi g nati ons w as ex ecut ed on Febr uar

y 2, 1982, and t hat b y

June 12, 1990, the ow ners of the Secti on 33 lea ses kn ew

thatthe ini ti al Uni t D esi g nati ons did not inc lud e the perforate d inter v al in the8

Prater N o.1- 39 W ell , w hic h w as loc ated in the i nter v al of 14,364 feet to 14 ,372 subs ur face, and any

cl aims of th e a p p ell ees w ere bar re d by the four y ear

st atute of li mita ti ons cont ain ed i n Tex . C iv . Prac. & R em. C ode §16.051

. Ground N o. 6 arg ued t hat the u ncont ro v erted s ummary j udg ment ev ide nce est abl is hed as a matter of law thatat the ti me appel lee s e x ecut ed and filed the Amended Uni t Des ig nati ons of record, the S ect ion 33 l eases had ter minat ed. In respon din g , app ell ees presentfour is sues for o ur rev iew

. Those i ss ues are: Iss ue One : The Tri al Cou rtac ted w it hin i ts dis creti on i n dec lar ing thatthe Prate r Gas Unit (i nclud ing the origi nal Unit Designation , the Initial Unit Des ig nati ons, and all Amended Uni t D esi g nati ons) and Sect ion 33 L eases are i n F ull F orce and Effect. A. The Tri al Cou rtcorrect ly found an obv iou s error i n the des cr ipt ion of the Prate r Unit and a ba sis fo r correcting the obvious error. B. Th e T rial Court correctly held th at Unit De s ig n a tions 5 and 6 w ere ef fective to am end the Uni tDe signation to include the strat igraph ic eq uiv ale nt of 14, 364 feet t o 14, 929 feet be low the sur face. C. The Trial Court correctly he ld tha t prod uction f rom th e Prate r 1-39 W ell perp etu ate d the Prater Unit and the Se ction 3 3 Le ases. I s s u e Two : The Tri al Cou rtco rrect ly dec lared th at t he N ew Secti on 33 Lea ses con sti t u t e clo uds o n App ellees’ title an d are void and o f no force and effect. A. Cambr idg e di d notco ncl usi v ely es tabl is h tha t t he S e ct ion 33 L eases ter minat ed pr ior

to Ma rc h 3, 1999. B. The is sue of the four- y ear sta tute of l imi tati ons bar ri ng reformati on of the Uni t D esi g nati ons is i rrele v ant. C. The Unit Desig nat ions w ere pa ten tly amb iguous. D. U nitD esi g nati ons 5 and 6 are v ali d and in full force as to S ect ion 33. Issu e T hree : The Tri al cour t c or re ctl y deni ed App ell ant’ s M oti on for Par ti al Sum ma ry

Judgme nt as to q uasi est opp el.9

(a ) Geody ne and Ar ri ng ton metthei r summar y j udg ment burden of proof on the ir aff irmative defense of Quasi Esto ppe l. Iss ue Four : The T rial C our t w as cor re ct in re fusing to find th at A ppel lan t w as a bo na f ide pu rchase r v is-a-v is the New Sect ion 33 Lea ses.
T he sta nda rds to be used in rev iew ing sum ma ry judgme nts are, bynow, ax iom atic. In rev iew ing cross -mot ion s for summar y jud g ment, the rev iew ing co urt c onsi ders w hether
a mo v ant esta blishes th at th ere is no genuin e issue of mat erial fact so th at th e mo v antis enti tl ed to j udg ment as a matter of law

. W

ester n Inv est m ent, Inc . v . Ur

ena , 162 S.W .3d 547, 550 ( Tex . 200 5)

. W hen par ti es f ile c ro ss-mot ion s for su mmary

j udg ment and the
cour t g ra nts one moti on and deni es the o ther , t he rev iew ing co urt s houl d rev iew both si des’ su mmary

j udg ment ev ide nce and deter m in e all q uest ion s p re sent ed. FM Props. Ope rating Co. v. City of Austin , 22 S.W .3d 868, 872 ( Tex . 200 0)

. If the t ri al cour t’ s o rd er does not s peci fy the g ro unds upon w hic h i t g ra nted summar y j udg ment, the a ppel lat e court m ust af

f irm the summ ary

judgmen t if

any of t h e sum ma ry

judgmen t groun ds are meri tor iou s. Id

. Beca use it is dispositive of this a ppe al, w e proce ed d irectly to consid er app ellees’ is sue three i n w hic h theyarg ue that they m et thei r summar

y j udg ment burden of proof on thei r aff ir mati v e defense of q uasi es toppel , and i ss ue number four in w hic h the y

co ntend the t ri al cour

t w as cor re ct in re fusing to find C ambri dg e w as a bona fide purchas er v is -a v is the new

Secti on 33 lea ses
. Qua si estop pel is sim ilar to b ut dif feren t f rom e quitable e stop pel. W hile equitab le est oppel req uires proof of a false sta tement or detr iment a l re li ance, q uasi es toppel
re q u i re s n o s u c h s h o w i n g
. R a t h e r , i t p re c l u d e s a p a rt y fro m a c c e p t i n g t h e b e n e fi t s o f a10

transacti on and then taki ng a s ubseq uent inc onsi ste nt po si ti on to av oid co rrespon din g obl ig ati ons or

effect s. Ita p p lies w hen i t w oul d be uncon sc ion abl e to all ow a pe rs on or party to main tain a p osition in consiste nt w ith one in which h e acquiesced o r from w hich he accept ed a benefit. Se e Sta ble En ergy, L. P. v. New berry , 9 9 9 S

. W

. 2 d 5 3 8 , 5 4 8 (T e x. App.–A ust in 1999, pet. deni ed) ; Atk ins on Gas C o. v

. Al br echt , 8 7 8 S

. W

. 2 d 2 3 6 , 2 4 0 (T e x. App.–C or pus Ch ris ti 1994, w ri t den ied ); Steubn er R ealty 19, L td. v. Cr

avens R oad 88, Ltd., 817 S.W .2d 1 60, 1 64 ( Tex . Ap p.–H oust on [1 4 D is t.] 1991, no w ri t.) th Beca use Cambr idg e has no r ig hts i n Secti on 33 as a top l ess ee ex ceptsuch r ig hts
as itmig ht ha v e ac q uired unde r the new Secti on 33 lea ses , i t c annot ter minat e the Prater Unit if the ne cessary defend ant s (the Sect ion 33 mine ral interest owners) have no such rig ht. T he summ ary judgme nt ev iden ce is und ispute d tha t the Sect ion 33 mine ral interest owners have accepte d the ben ef it of rev enu es of

produ ction f rom the P rater No. 1 w ell. It is al so undi sput ed th at t he Prater N o. 1 w ell i s n ot loc ated on Secti on 33. Thus , t he S e c t io n 3 3 m in e ra l i n t e re s to wn e rs wo u ld n o th a ve re c e ive d t h e ro ya lt ie s t h e y h a ve received over the years butfor t he Unit Designation o f Prater No. 1. Camb ridge’s cl aim to t it le under

the new Secti on 33 lea ses m ustrestupon re pudi ati on bythe top les sors o f Geody ne’ s S ect ion 33 lea ses
. In doi ng so, they w oul d, of ne ces si ty , be as ser ti ng a r ig ht inc onsi ste nt w it h the benefit s t hat w ere prev iou sl y accept ed bythem. Thus, appel lee s met thei r summar

y j udg ment burden of proof and es tabl is hed q uasi -e sto p p e l a s a matte r of la w. Addi ti onal ly , und er thi s record, t he t ria l co urt di d noter r in re fusing to find th at Cambr idg e w as a bona fide purchas er i n connect ion w it h the newSecti on 33 lea ses
. A bon a f ide purch aser of

rea l p rope rty

is one w ho b uys prop erty in good faith for v alua ble11

cons ide ra ti on and w it hout noti ce (actual or imputed) of outs tandi ng cl aims i n a t hird par ty and is an af

firmat iv e defense to a ti tl e di sput e. Ma dis on v . G or don, 39 S. W .3d 6 04, 6 06 (Tex . 200 1) ; Hou sto n Oi l Co. v. Hayden , 104 Te x . 175 , 1 3 5 S

. W

. 1 1 4 9, 11 52 (19 11). Notice m ay be co nstruct iv e or actu al. Fl ack v. F ir st Nat ’ l Bank , 148 Tex. 495, 226 S.W .2d 628, 631 ( 1950)

. Act ual noti ce re sts upon personal i nformati on or know led g e. Id. at 631. Con str uct iv e not ic e i s n oti ce the l aw i mputes to a person not h av ing personal kn ow led g e. Id. at 632

. One p urcha sing lan d ma y b e charged w ith const ructiv e no tice of an occu pan t’s cl aims

. Ma dis on v

. G or don, 3 9 S

. W

. 2 d a t6 06. This imp l i e d n o t i c e d o c t r i n e a p p l i e s i f a
cour t det er mine s th a t the purchas er has a du ty

to asc ertai n the r ig hts of a thi rd par ty poss ess or
. Id.; see also Collum v. San ger Bros. , 98 T ex. 16 2, 82 S.W

. 459 , 460 (1904 ). W he n th i s d uty

a r i s es , th e pu r c ha s er

i s c ha rg ed w i th no ti c e of a l l t he o c c up an t’ s c l ai ms that the p urchas er

mig ht ha v e rea so n a b ly di sc ov ered on proper i nq uir y . Madison v. Gor don, 39 S. W .2d a t 606 ; see al so Di xon v. Car

gil l, 104 S. W .2d 1 01, 1 02 (Tex

. Ci v . Ap p. –Eas tl and 193 7, w ri t ref’d) . Th e d u ty ar is es, how ev er , onl y i f the pos ses si on i s v is ibl e, open, ex cl usi v e, an d uneq uiv ocal

. Ma dis on v . G or don , 39 S.W .3d a t 606 ; Stron gv. Str ong , 128 Te x . 470 , 98 S. W .2d 346 , 350 (1936 ). Indeed, i n Str

ong , t h e co u rtd e s c ri b e d t h e p o s s e s s io n n e c e s s a ry t o gi ve const ructiv e no tice as consistin g “of o pen , v isible, and une quiv ocal act s of occup ancy in thei r nature re ferabl e to ex cl usi v e domini on ov er the p ro per ty , s uff ic ien t upo n obs er v ati on to pu t an inte ndin g purch aser on inquiry as to th e rig hts of

such po ssessor . . . . “ Str ong
v. Str ong , 98 S.W . 2d at 35 0. “P oss ess ion that meets thes e req uirements – v is ibl e, op en,12

ex cl u s i v e , a n d u n e q u i v o c a l p o s s e s s i o n –a ffo rd s n o t i c e o f t i t l e e q u i v a l e n tt o the const ructiv e no tice de ed registration af fords.” Ma dis on v

. G or don , 39 S.W . 3d at 60 7. Th e c a s e o f Albright

v. Hoyt , 57 S. W .2d 342 (Tex. Civ . App .–T exarkana 19 33, w rit
re f’d) , i s a ls o i nst ru cti v e i n det er mini ng w hether posses si on by

a l and purchas er ’s tena nt
w as suffici ent t o gi v e c onst ru cti v e not ic e to an oi l and g as lea se purchas er ’s bona fide purch aser claim

. In that case , Hoyt had brought suit againstAlbrig ht to enforce a con tract for th e s a le of

l and. After

the dis cov er

y of oil on t he l and, alt houg h H oyt had pai d the purch ase p rice of

the lan d, Albright ref used t o surrend er t itle to him a nd e x ecut ed a n oil and gas lease t o Jam es S. Sm ith. No ting th at atthe tim e w hen Smith obta ined the lea se from Al br ig ht, Hoyt’ s t enant w as in poss ess ion of the la nd, t he c our

t hel d tha t t he poss ess ion by

the tenantco nst it uted noti ce to S mith “ of all ti tl es cl aimed by H oyt t o the land .” Id. at 34 5. Thus, itaff ir med the tr ial co urt’ s v erdict i n fav or of Hoyt. At the time Cam bridge obta ined i t s “ t o p lease s,” Geod y ne, as a w orking interest owner, w as in posse ssion of the Prat er Unit, w as op eratin g a prod ucing well on t he Unit and was p aying a nd had b een p aying royalties f rom prod uction o n tha t Unit to Geo dyne’s les sors. H ad C ambri dg e made reason abl e i nq uir y as to the b asi s u pon w hic h Geo dy ne
w as “in posse ssion” of

the well and w as pa y ing roya lt ie s f rom p rodu ction to Geod y ne’s les sors, it w oul d hav e di sc ov ered th e bas is upon w hic h Geo dy ne c lai med i n c onnec ti on
w ith the Unit Desig nat ion an d the Section 33 lease s. Addi ti onal ly , w e not e the prov is ion s i n the new Secti on 33 lea ses that in the ev ent “t here i s a present ly

ex is ti ng oi l a n d g as lea se, modi ficat ion thereof or uni ti z ati on ag re ement c ov er ing the Leas ed Premi ses ,” that the newleases w oul d be subj ectthereto and w ould v est up on th e term inatio n of su ch prior le ases, in sofar a s t hey m ight b e v alid13

as w ell as the p rov ision tha t the lessee might take w hat ever action s tha t w ere ne cessary to ob ta in rel e a se s o f

su ch pri o r le a se s. Th o se pro visio n s in d ica te th a t Ca m b rid ge recogniz ed th at it stoo d in the position of the ne cessary parties insofar as the ex istence of the Sect ion 33 lease s and could claim no great er rig hts than its lessors

. Tho se prov is ion s a ls o mi li tate ag ain st any bona fide purchas er

cl aim by C ambri dg e. In sum , for t he rea sons we have articulated abo v e, th e trial court’s sum ma ry jud g ment mus t be, and is hereby , affirmed.

J o h n T

. B o yd Sen ior Justice