Case Name: BENGE et al. v. SCHARBAUER et al.
Court: Supreme Court of Texas
Jurisdiction: Texas
Decision Date: 1953-06-17
Citations: 259 S.W.2d 166
Docket Number: No. A-3939
Parties: BENGE et al. v. SCHARBAUER et al.
Judges: GARWOOD and CULVER, JJ., dissenting.
Reporter: South Western Reporter Second Series
Volume: 259
Pages: 166–172

Head Matter:
BENGE et al. v. SCHARBAUER et al.
No. A-3939.
Supreme Court of Texas.
June 17, 1953.
Rehearing Denied July 15, 1953.
Ñaman, Howell & Boswell, Waco, Wilson, Wilson & Logan, San Angelo, C. Douglas Forde, Jr., and Robertson, Jackson, Payne, Lancaster & Walker, Dallas, A. W. Walker, Jr., Dallas, for petitioners.
Turpin, Kerr & Smith and Stubbeman, McRae & Sealy, Midland, for respondents.

Opinion:
GRIFFIN, Justice.
This cause involves the construction of a paragraph in a deed from Clarence Schar-bauer, Sr., et ux. (predecessors in title) as grantors to A. H. Benge, who with the heirs of his deceased wife, are the petitioners. The deed is dated December 17, 1941, and was delivered shortly thereafter and immediately recorded in Midland County, Texas, where the land was located. At the time of the trade, and the negotiations between the parties leading up to the execution and delivery of the deed, it was understood by all parties that there was an outstanding ½⅛ full mineral interest in all the lands, and the trade was made subject to such ½⅛ mineral interest as outstanding, and no contention has ever been made regarding such ¼⅛ interest.
On April 18, 1942 A. H. Benge and wife executed to Holt Jo well an oil, gas and mineral lease on the six sections of land conveyed to them by the Scharbauers on December 17, 1941. This lease covered the title to all of the oil, gas and other minerals in, on and under the six sections, but contained the usual paragraph reducing the bonuses, rentals and royalties, etc., in proportion to lessors' ownership of the whole of the title. The bonus under this lease was paid %ths to Benge, %ths to the Scharbauers, and ¼⅛ to the owners of the outstanding mineral interest. All parties took their money. Jowell duly assigned the lease to Magnolia Petroleum Company, who paid the annual delay rentals to the parties and in the proportions set out above, and without any complaint on the part of any party, for the years 1943 to 1950, both inclusive. On December 27, 1950, as a result of a claim on the part of Benge, Magnolia Petroleum Company paid to Ben-ge the difference between the %ths interest for which he had been theretofore paid, and the %ths interest he then claimed to own under the deed from the Scharbauers. Shortly thereafter the Magnolia Petroleum Company filed this suit in the nature of an interpleader and called on the court to determine the ownership of ½⅛ mineral interest claimed by both Benge and Schar-bauer and to determine who was entitled to receive the bonuses, delay rentals, royalties, etc. due under the lease. Benge, et al answered claiming title to %ths mineral interest and %ths of all bonuses, delay rentals and royalties under the lease. The Scharbauers answered claiming they were entitled to receive %ths of all these benefits under the lease. Trial was before a jury, but at the conclusion of the testimony, the trial court instructed a verdict in favor of the Scharbauers for their claimed %ths mineral interest and overruled the motion for instructed verdict filed by Benge. On appeal this judgment of the trial court was affirmed by the Court of Civil Appeals. 254 S.W.2d 236.
We have decided that the deed in question is not ambiguous, and must be given the legal effect resulting from a construction of the language contained within the four corners of the instrument. There are certain well settled rules governing us in our construction of this instrument.
All parts of the instrument must be given effect if possible to do so without violating any legal principles. Even though different parts of the deed may appear to be contradictory and inconsistent with each other — if possible, the court must construe the language of the deed so as to give effect to all provisions thereof and will harmonize all provisions therein, and not strike down any part of the deed, unless there is an irreconcilable conflict wherein one part of the instrument destroys in effect another part thereof. Associated Oil Co. v. Hart, Tex.Com.App., 277 S.W. 1043(3); Watkins v. Slaughter, 144 Tex. 179, 189 S.W.2d 699 (3); Fleming v. Ashcroft, 142 Tex. 41, 175 S.W.2d 401, 406; Hester v. Weaver, Tex.Civ.App., 252 S.W.2d 214(1), writ refused; 14 T.J. 919, et seq., Sec. 140.
It is well settled that the owners of land may reserve to themselves minerals or mineral rights, including the oil or any right or ownership therein. Humphreys-Mexia Co. v. Gammon, 113 Tex. 247, 254 S.W. 296; 29 A.L.R. 607; Hoffman v. Magnolia Petroleum Co., Tex.Com.App., 273 S.W. 828(4); Watkins v. Slaughter, supra; Curry v. Texas Company, Tex.Civ.App., 18 S.W.2d 256, writ dismissed; 31-A.T.J. 64, Sec. 32, and authorities therein cited.
A grantor may reserve unto himself mineral rights, and he may also reserve royalties, bonuses and rentals—either one, more or all. Schlittler v. Smith, 128 Tex. 628, 101 S.W.2d 543; King v. First Nat. Bank of Wichita Falls, 144 Tex. 583, 192 S.W.2d 260, 163 A.L.R. 1128; State Nat. Bank of Corpus Christi v. Morgan, 135 Tex. 509, 143 S.W.2d 757; Collier v. Caraway, Tex.Civ.App., 140 S.W.2d 910, writ refused; Curry v. Texas Co., supra; Kokernot v. Caldwell, Tex.Civ.App., 231 S.W.2d 528, writ refused.
An instrument may convey two separate estates in the minerals, one of which may be a full mineral interest and the other a royalty, or other interest in the minerals. Richardson v. Hart, 143 Tex. 392, 185 S.W.2d 563, 565; Countiss v. Baldwin, Tex.Civ.App., 151 S.W.2d 235, writ dismissed, correct judgment; MacDonald v. Sanders, Tex.Civ.App., 207 S.W.2d 155, refused, N. R. E.; Acklin v. Fuqua, Tex.Civ.App., 193 S.W.2d 297, N. R. E.
It is also well settled that where the conveyance represents that the grantor is the owner of a particular interest in property and such interest is conveyed by the deed, the grantor is estopped by his covenant of general warranty to claim that the deed conveyed a less estate than grantor's ownership. Duhig v. Peavy-Moore Lumber Co., Inc., 135 Tex. 503, 144 S.W.2d 878.
The covenant of general warranty extends only to what is granted, or what purports to be granted by the deed. Clark v. Gauntt, 138 Tex. 558, 161 S.W.2d 270; Adams v. Duncan, 147 Tex. 332, 215 S.W.2d 599, 603; Nye v. Bradford, 144 Tex. 618, 193 S.W.2d 165(3), 169 A.L.R. 1.
Keeping in mind the above rules of law, let us examine the deed governing the rights of the parties therein. The deed, except for the reservation of an interest in the minerals and the provision as to the grantee's power to execute leases and for payment of bonuses, rentals and royalties under such leases, is an ordinary general warranty deed. It purports to convey to the grantee the several sections of land with reservation to the grantors of an undivided %ths interest in the oil, gas and other minerals, and gives to the grantee and his assigns sole power to execute all future oil, gas and other mineral leases without joinder of the grantors, "but said leases shall provide for the payment of three-eights (%ths) of all the bonuses, rentals and royalties to the grantors". The warranty is a general warranty of title to "the said premises". At the time when the deed was executed and delivered the grantors did not own the entire mineral interest in the land, there being outstanding in third parties a ¼⅛ mineral interest which was> not mentioned in the deed. Disregarding for the present the clause above quoted about bonuses, rentals and royalties to be paid the grantors on all future leases, the deed purported to convey to the grantee the surface and %ths of the minerals in the land and to reserve to the grantors a %ths mineral interest, and it warranted the title to what it purported to convey.
Under the decision in Duhig v. Peavy-Moore Lumber Co., 135 Tex. 503, 144 S.W.2d 878, the effect of the deed, by reason of the outstanding ¼⅛ interest in the minerals and the general warranty, was that the grantee acquired -by the deed the surface and a %ths mineral interest, and the grantors reserved only a ⅛⅛ mineral interest. On account of the outstanding ¾,⅛ mineral interest in third parties the warranty was breached at the very time the deed was executed and delivered, and a ¾⅛ mineral interest required to remedy the breach was taken from what the grantors undertook to reserve to themselves leaving them only a ⅛⅛ mineral interest.
The difficult question in the case arises because of the provision above quoted that the mineral leases to be executed by the grantee shall provide for payment of %ths of all bonuses, rentals and royalties to the grantors. But for that provision the grantors, as owners of but ⅛⅛ interest in the minerals as the effect of the deed, would be entitled to only a like interest, ⅛&, of bonuses, rentals and royalties under leases executed by the grantee. One-eighth of the bonuses, rentals and royalties normally would go to the grantors as owners of a ⅛⅛ interest in the minerals and %ths of bonuses, rentals and royalties would-normally go to the grantee as the owner of a ⅝⅛ interest in the minerals. But are not the owners of such interests in the minerals free to agree, if they desire to do so, that their fractional interests in bonuses, rentals and royalties under leases to be executed shall be in different amounts from what they normally would be ?
The fractional part of the bonuses, rentals and royalties that one is to receive under a mineral lease usually or normally is the same as his fractional mineral interest, but we cannot say that it must always •be the same. The parties owning the mineral interests may make it different if they intend to do so, and plainly and in a formal express that intention. Here that intention is expressed by clear language in the deed that leases executed by the grantee under the power given shall provide for the payment of %ths of all bonuses, rentals and royalties to the grantors. The provision is not an agreement that the parties to the deed shall participate in the bonuses, rentals and royalties in proportion to their ownership of mineral interests. It is rather a contractual provision that the grantors shall receive a specified part of the bonuses, rentals and royalties; namely, %ths.
The warranty and its breach on account of the ½⅛ mineral interest outstanding in third parties reduced the %ths mineral interest which the grantors undertook to reserve from %ths to ⅛⅛, and in so doing it left to the grantee the surface and the %ths mineral .interest that the deed purported to convey to him. There is seeming inconsistency between the parts of the deed that give the grantors a ⅛⅛ and the grantee a %ths mineral interest and the provision that the grantors' share in bonuses, rentals and royalties shall be %ths, but there is no fatal repugnancy.
The warranty extends to what the deed purports to grant; namely, the surface and the %ths interest in the minerals, and the application of the rule in the Duhig case assures the grantee of title to what the deed purports to grant to him. But the warranty does not extend to the provision in the deed as to the interest in bonuses, rentals and royalties. The deed does not purport to convey the right given by that provision.
The position taken by petitioners cannot be sustained unless it is held that the amount of bonuses, rentals and royalties to be received by the grantors under leases to be executed must be reduced from the %ths specified in the deed to ⅜⅛ because the grantors' mineral interest is by reason of the doctrine of the Duhig case reduced to ⅛⅛. That would be to hold that the fractional part of bonuses, rentals and royalties to be received must always be the same as the fractional mineral interest owned, and that the parties are powerless otherwise to provide.
The stipulation that all leases shall provide for payment of %ths of all bonuses, rentals and royalties to the grantors is part of and a limitation upon the power given to the grantee to execute leases. The rule of the Duhig case, in order to remedy the breach of warranty, takes from the grantors part of what the deed purported to reserve to them, but that, rule should not be extended to change the express agreement as to what interests the grantors shall receive in bonuses, rentals and royalties under leases to be executed by the grantee.
Such stipulation being a valid provision and having been in the deed at the time of its delivery and acceptance is binding on all parties. Benge accepted the deed and recorded it promptly and is holding title to his lands under the deed and by virtue of its provisions. He received his mineral interests in this land under and by virtue of this deed. He made an oil and gas lease on all the lands, without the joinder of the Scharbauers under and by virtue of the second clause of this paragraph of the deed, and he now cannot be heard to say that he is not bound by the third clause of thisparagraph which gives to the Scharbauers %ths of all bonuses, delay rentals and royalties under such lease, or future leases. Talley v. Howsley, 142 Tex. 81, 176 S.W.2d 158; Adams v. Duncan, supra; Nye v. Bradford, supra.
Petitioners argue that by the first clause of this paragraph they receive %ths of all the minerals and therefore the third clause is void as repugnant to the 'grant. Under deeds which in one clause convey all of the mineral interests, effect has been given to ⅝ reservation on the part of the grantor of the right to drill an oil well. Collier v. Caraway, supra. In another case the deed conveyed all of the mineral interest grantor owned in the land, and it was held that there was nothing inconsistent with this provision, and a provision reserving to the grantor an undivided ¼6⅛ royalty interest. Countiss v. Baldwin, supra. In Odstrcil v. McGlaun, Tex.Civ.App., 230 S.W.2d 353, no writ history, Odstrcil deeded a tract of land to one Birdwell and reserved an undivided one-half of the mineral rights. Also in the deed Birdwell was given the right to execute leases without the joinder of Odstrcil, but this power to lease was limited as to the royalty to be reserved in the lease and the payment of delay rentals to Odstrcil. The Court of Civil Appeals at Eastland held the power to lease must be exercised in accordance with the limiting provision, and a lease of Odstrcil's reserved mineral interest without complying was of no effect.
Under the construction of the paragraph involved herein as sought by the petitioners the last clause would be disregarded and held for naught, while under our construction of this paragraph, all clauses are given effect. Under petitioners' contentions, the third clause has no meaning and its insertion was a useless act on the part of the grantors. ,The parties meant something by the third clause and our construction harmonizes it with the other parts of the paragraph and gives a meaning to the whole paragraph.
The trial court erred in its judgment that the petitioners, A. H. Benge, et al, owned only an undivided %ths interest in and to all of the oil, gas and other minerals in and under the six sections of land described in the court's judgment. The trial court's judgment is modified, and A. H. Benge, et al. are here adjudged to be the owners of an undivided %ths mineral interest in said land; and the Scharbauers, et al. are adjudged to own an undivided %th mineral interest in that land but that the Schar-bauers are entitled to receive %ths of all bonuses, delay rentals and royalties payable under the existing and all future leases on said land. Except as above set out the judgment of the trial court and Court of Civil Appeals is in all things affirmed.
GARWOOD and CULVER, JJ., dissenting.